TRIM DOWN UP FRONT

Lean Office

Minnesota Council for Quality

Performance Improvement Network
October 7, 2004
 Executive Overview

• Purpose—Understand how Value Stream Mapping

tool can highlight and eliminate waste in the office.

• Process—Review waste in the office, value stream

mapping, and how companies have successfully
applied lean office techniques.

• Payoff—See how your organization can save time,

money, and headaches to become more competitive.
 Lean Enterprise

Using lead time, quality, and flexibility

to create competitive advantage.
 Lean Thinking

The quicker you can convert customer

interest to cash, the more successful
your organization will be.
 Lean Thinking
• Define value from the customer’s
perspective.
• Identify which process steps create value
and which are waste.
• Eliminate sources of waste and flow the
process through the entire organization.
• Create the most value while consuming
the fewest resources.
 Lean = Eliminating Waste
Value-Added Non-Value-Added
• Defects, Errors
• Overproduction
• Waiting
• Not Utilizing Employees K,S,A
• Transportation
• Inventory
• Motion
• Excess Processing

Typically 95% of all lead time is non-value-added.

 Office Waste Examples
• Over production • Printing paperwork too soon
• “Inventory” • Filled “In-boxes”
• Waiting • System downtime
• NVA Processing • Re-entering data
• Defects • Data Entry errors
• Excess Motion • Walking to central filing
• Transportation • Movement of paperwork
• Underutilized People • Limited, functional, responsibility
 Lean Tools
• Standardized work
• Quality at the Source
• Workplace Organization
• Visual Controls and Management
• Batch Reduction or Elimination
• Pull Systems
• Cellular/Team Concepts
• Equipment Reliability
Lean off the shop floor

• Subway
• Digi-key
• Banking
 Value Streams
• “Whenever there is a product or service
for a customer, there is a value stream.
The challenge lies in seeing it.”
Key Value Streams
– Raw Materials to Customer—Manufacturing
– Concept to Launch—Engineering
– Order to Cash—Support Processes
 CEO

Sales Design Production Distribution

Functional
Management
Value Stream Management
Value Steam Mapping
process family Similar inputs
and outputs

current state Understanding the

drawing current process

future state Planning the way it

drawing should be

plan and Action and

implementation improvement
 Mapping Example
• DISTRIBUTION • ISSUES
– Outside sales –Long lead times
– Order Entry –Frequent Expediting
– Technical support –High Overhead Costs
– Warehouse –Repetitive Errors
– Shop
– Delivery
– Accounting
 Basic Process
Service ORDER
---------------------- ENTRY
-- ---------------------- CUSTOMER
Check Inv entory Enterorder
Ack.ToService
Schedule CheckStock
Verif y Specs. VerifyData

MECHANIC
WAREHOUSE Schedule
----------------------
----------------------
Setup delivery
Pick/Stage
- Uncrate
Locate
-Assembly
Delivery
 Current State
10-30% verbal 5-10%
Change promised Dt

60%

ORDER
40% SCHEDULE Order CONFIRM
----------------------
ENTRY ------------------
Recheck ---------------------- Form Orders CUSTOMER
Sched 10 Check Inventory 1-2 Order Data
Stock Enter order
1 min LT 4-5
Verify Check Stock Dates
--------------------- Days
5 minutes 10%
C/T = 25 - 30 min. C/T = 20 Min Order Rate
C/T = 15 min. C&A = 90% C&A = 90%
C&A = 90% 100%
Copy

Copy
VENDOR
Excel Copy of Receiving Enterprise
10 Schedule BOM ------------------- Purchasing
Software
`

SALES
Schedule SOURCING
-------------
STATUS
C/T = 5 min. MEETING LOGISTICS
SHOP

Status
Board

Costing Coordinator
Order ---------------------- Job
to MANUAL ------------------- Receipt
Order Packet Documens
Coordinator Update

Invoice
C/T 5 min C/T = 20 min.

Q/C Staging Close

WAREHOUSE Technician Prep Invoice
Schedule ----------------
-------------
---------------------- ---------------------- --------------------- --------------------- --
Packet
2-3 7 3 3 10 delivery 4-6 --
Pick/Stage Setup Change order
Locate -Assembly Daily
status
1 Day
Delivery
C/T = 20 min. C/T = 20 min C/T = 5 min
C/T = 5-6 Hrs C/T = 15-30 min.
l/t ½ Days (2-3) Quality 4%
Rew ork 10% L/T = 1-4 Hrs
Quality 3-5% LT = 12 Days
Start-Over Inside Sales
10% Ship hold Value Added 290 Min
5% 3 Units Current State Suport 155 Min
Re-prep 5%
Service First Pass Yield = 64%
 Ideal State
ORDER Tech
ENTRY Order
---------------------- CUSTOMER
Form

VENDOR
Receiving
------------------- Order/Inventory
Purchasing
Receiving 2x/ Software
w eek

S R X
S R X
S R
S X
R
S
S X
WORK
ORDER
/

Invoice
Coordinator
/ ---------------------
Manual F I F O Assemble delivery BOL
Packet
Print pick ticket
/

Packet

WAREHOUSE F I F O
---------------------- MECHANIC & QC PREP
Pick/Stage ---------------------- ---------------------
F I F O Setup F I F O F I F O
Locate
- Uncrate
1
C/T = 20 min. F I F O
-Assembly 2
LOAD Delivery FUTURE
l/t ½ Days (2-3) Orders C/T = 20 min
1 Quality 4% STATE
Order C/T = 5-6 Hrs
 Improvement Projects

• Value stream map prioritizes

• 90 Day Plans
• No capital expenditures first round
• Apply Lean Tools
 Keys to Value Stream Mapping

• Tie to business objectives

• Cross-functional team 6-8
• Complete the current state
• 90 day window for future state
 E-S-S-A

• E _______________________
• S _______________________
• S _______________________
• A _______________________

Avoid “Perfuming the Pig.”

 Organizational Transformation

• Top down support--planning, training,

resources, and time
• Value stream management
• Lean Metrics
• Change management
• Continuous improvement
• Promote results, celebrate the wins
 Competitive Advantages

• Trash Compactor Company

• Flexible Circuit Manufacturer

• Store Fixture Manufacturer

 Recommended Readings
• Becoming Lean: Inside Stories of U.S. Manufacturers,
Jeffrey Liker
• Lean Thinking, Womack and Jones
• The Complete Lean Enterprise, Keyte and Locher
• Making the Numbers Count, Brian Maskall,
• Real Numbers: Management Accounting in a Lean
Organization, Fiume and Cunningham
• Developing Products in Half the Time, Smith and
Reinertsen
Minnesota Technology Inc.
Helping industry develop, apply, and commercialize technology

David Ahlquist
Lean Enterprise Consulting
dahlquist@mntech.org
www.minnesotatechnology.org