Course Agenda

Lean office overview

Definition of waste

Orientation to YESCO Hawaii

Round one of simulation

Value Stream Mapping (current state)

Implementing lean tools

Round two of simulation

Value Stream Mapping (future state)

Round three final simulation

Final Evaluation

Introductions

Who are you?

Where are you from?
What do you want to learn
today?
?s

What is Lean Office?

Lean Office is a systematic
approach applied to the value
chain with an aim to streamline
the business processes by:
Eliminating waste
Utilizing lean techniques
Resulting in: Lead time
reduction and Productivity
improvement

Why Lean Office?

In America today we have good people
working in poor processes. What we want
is good people working in great processes

Michael Hammer

Why Lean Office?

Toyota Production System will not work unless it
is used as an overall management system. TPS
is not something that can only be used on the
Production floor.

Taiichi Ohno

Lean Office

LEAD TIME REDUCTION

Waste Elimination
Business as Usual
Customer
Contact

Lean Systems

Customer
Delivery

Waste

Lead-Time
Eliminate Non-Value Added Activities
Customer
Contact

Customer
Delivery

Lead-Time
(Shorter)
7

Value Added vs. Non-Value Added Activities

Value Added (VA)

The customer is willing to pay for it

Physically transforms the product (or document
or information)
Is done right the first time

Non-value Added (NVA)

Consumes resources, but does not add value to

the product or service

Necessary Non-value Added (N-NVA)

Does not add value to the product or service but

are

CURRENTLY NECESSARY

Customer Contract or specification

QS 9000 or customer standard
Government regulation
Current state-of-the-art work method or technology

Why Lean Office?

Only 30% of the total
costs are directly
manufacturing
Where is the rest of
the money being
spent?

Lean Organization
Process View
Business Operations

Customer
Delight

A streamlined flow of goods or services through an organization in concert

with customer demand and requirements

We can begin to reduce the complexity

of an organization by implementing
Lean Tools and Techniques in support
processes. We can gain a competitive
advantage by streamlining the
organization, focusing on these four
areas

1) Identify, manage or break the constraints

2) Eliminate waste and non value added work
3) Synchronize all activities toward customer
delight
4) Apply an employee based cross functional
continuous improvement plan

Streamline,
Synchronize, and
Integrate
10

Business Activities

11

Sites of Waste
Policies
Organizational structure
Management policies and
methods
Macroscopic wastes
Supply chain
Office layout
Major wastes
Process and cell level
Microscopic wastes
Operator and computer level

12

Lean = Eliminating the Waste

ValueAdded

Defects
Overproduction
Waiting
Non-utilized talent
Transportation
Inventory
Motion
Extra processing
Typically 95% of Total Lead Time is Non-Value Added!!!

2006 MMTC

13

Waste of Defects
Money and time wasted to find
and fix mistakes
Lack of process controls
Poor work instructions
Inadequate training
Data entry error
Missing information
Missed specifications
Pricing error

14

Waste of Overproduction
Making multiple schedules due to system
incompatibilities
E-mails/memos to everyone
Printing extra documents just-in-case
More information than the process requires
More information than the customer needs
Creating reports no one reads

15

Waste of Waiting
Time lost when people and resources are
waiting:
Unbalanced workload
Equipment break downs
Batch processing
Waiting for information
Waiting for copiers/faxes
Waiting for customer response
Waiting for an internal response

16

Waiting Waste

2006 MMTC

17

Waste of Non-Utilized Talent

Unclear job descriptions

Lack of training
Lack of synergy and collaboration
No feedback loop for continuous
improvement
Suggestions for improvements
that are not investigated/utilized

18

Waste of Non-Utilized Talent

19

Waste of Transportation
Poor office layout
Walking around to correct
mistakes and find answers
Retrieving or storing files
Carrying documents to and
from shared equipment
Going to get signatures
Taking files to another person

20

Waste of Inventory

Storing of obsolete prints and specs

Obsolete databases/files and folders
Files pile up between work desks
Open projects (WIP)
Office supplies
E-mails waiting to be read
Unused records in a database

21

Inventory Waste

22

Waste of Motion

Looking for items because they are out

of place
Mis- or unfiled papers
Saving files everywhere
Handling paperwork that could be
electronic
Extra clicks or keystrokes
Working around other open files on
desk

23

Waste of Extra Processing

Doing more than is required to meet

customer requirements
Unnecessary paperwork
Redundant approvals
Repeated manual entry of data
Use of outdated standard forms
Use of inappropriate software
Creating hard copies of reports

24

Above the Shop Floor

This pile
represents
over a
dozen jobs.
How many
labor hours
to produce
this paper?

Office Simulation

Lets learn by doing!

27

YESCO Hawaii
A New Division

28

YESCO Hawaii Orientation

You are all employees of YESCO Hawaii
Positions to be filled:
- Sales
- Material Control
- Business Office
- Scheduling
- Engineering
- Production/Installation
- Process Engineer

We will work in batches of 5 at Sales and 1

everywhere else
We will measure the following
- # of orders shipped
- # of invoices faxed
- # of quote drawings completed
- Work in process
29

YESCO Hawaii Company Policies

Work shift is 10 minutes
Keep busy at all times
The goal is to Install and invoice 14 orders
and complete 3 new business quotes

30

YESCO Hawaii

Round 1

31

Metrics Scorecard

32

YESCO Hawaii

Round 2
Make some improvements!

33

Metrics Scorecard

34

LETS GET LEAN

Learn the tools to recreate
your WORLD

35

DVD

Its all about

Time
36

Characteristics of a Lean Process

1.
2.
3.
4.
5.
6.
7.

People arranged in process order

One-piece flow processes
Ergonomically-correct work areas
Pull system discipline
Standard operations defined and implemented
Cross-functional, multi-process associates
Process intolerant of abnormalities

37

7 Steps for Value Stream Mapping with Swim Lanes

1.
2.
3.
4.
5.
6.
7.

Create a macro level flow of process

Select a functional area to map
Detail the steps
Identify NVA and N-NVA steps
Analyze the process
Develop a future map
Develop and implement action plan
38

1. Create Flow of Process

2. Select Functional Area or value stream

Break up departments into swim lanes

YESCO Hawaii Value Stream Map of business process

Scheduling

Material Control

Business Ofce

Sales

Swim Lane border

(divides departments)

2006 MMTC

40

3. Detail the Steps

Process Mapping Guidelines

Gather the information from the actual process - go
see where the work is being performed
Get the real data versus the theoretical way it should be
done or the way people think it is done
Use the experts (people doing the work) to develop
the maps
Use the maps as a microscope on the process to allow
you to see where to make improvements

42

Use the Experts

43

Explanation of Flow

Diagram Symbols & Colors

D
O

Describe
the process
step

Color in:

Value Added
Non-Value Added
Necessary Non-Value Added

N
T
I
M
E

If the step is
Non-Value
Added, which
DOWNTIME
waste(s) does it
represent?
What is the
walk/travel
distance?

How much time does

it take to complete the
process step?
44

Explanation of Flow

Diagram Symbols & Colors

I
Represents Inventory
45

Explanation of Flow

Diagram Symbols & Colors

Yes or
No?

Represents a Decision
46

Explanation of Flow

Diagram Symbols & Colors

Connects a process
within a swim lane

47

Explanation of Flow
Colors

Diagram Symbols &

Connects steps that cross

swim lanes

48

Explanation of Flow
Symbols & Colors

Diagram

Represents electronic
work/data transmission
49

Explanation of Flow

Diagram Symbols & Colors

RAI
Represents document Reviews,
Approvals or Inspections (RAI)
50

4. Identify NVA & N-NVA Steps

N-NVA

NVA

VA

Examples of NVA Activities

Traveling (excess transportation or motion of
people or materials)
Inspecting or checking (review-approvalauthorization cycles)
Work reporting (done right the first time rule)
Redundant or unnecessary data entry
Supervising
Counting
Reformatting or creating duplicate copies
Filing and file maintenance

52

5. Analyze the Value Stream Map

1. Total each of the different process events

Value
Added

Non
Value
Added

Non Value
Added
Necessary

Delay

Approve
or Inspect Hand Off

Inventory

Totals

Time

Steps

53

5. Analyze the Value Stream Map (using

Starbursts)
NOTE: Paste a bright green post-it near improvement opportunities
that you have identified from you current state value stream map.
Write a small description of the waste and how to fix it.

STARBURST

5. Analyze the Process Map

2. Identify opportunities to combine steps that occur between two or
more people
In order to eliminate handoffs or delays
3. Identify opportunities to perform work simultaneously instead of
sequentially
In parallel instead of serially. What is the earliest a
particular work step can occur?
Identify opportunities where work (documents or information)
can be delivered to the next person or operation one piece at
a time instead of delivering work in a Batch
Identify opportunities to build into the process signals or
advanced notice to downstream departments to prepare to
receive or produce work

55

Parallel vs. Serial Processing

56

5. Analyze the Process Map

4. Identify opportunities to co-locate people doing work:
To improve communication
To reduce the effects of handoffs and of transportation
distances.
5. Identify opportunities to automate any of the work
Electronically capture and transmit documents (scan-mail)
Replace manual handoff with an electronic handoff
Electronically capture and report process events and work
status
Replace hard copy forms, worksheets, or spreadsheets with
electronic versions, accessible from the network
Electronically combine several documents into a single
database

57

5. Analyze the Process Map

6. Identify problems which if solved will reduce time or error rate
7. Determine whether the entire process is a candidate for
reengineering

58

6. Develop Future Map

Now that opportunities for
improvement have been identified
through the analysis step, start a new
map incorporating the improvements
you identified. Remember to take a
picture of your before and after states.

59

7. Develop & Implement Action Plan

Create a list of actions

Prioritize the list Impact-Difficulty Grid

Assign responsibility

Define due dates

60

Impact/Difficulty Matrix
Difficult
y
Easy

Hard

Impact

High

Low

61

Sustaining Improvements
Recognize that several follow-up activities
may be necessary:
Implementing and refining a measurement or
performance monitoring system
Initiating additional improvements or corrections
based on the measured results of the improved
process

Reconvene Team representatives until the

projected levels of improvement have been
achieved and sustained for at least three
months
62

Exercise Map the process!

Exercise

63

Symbols & Colors for Process Mapping

Process
Step

Same
Person Step

Between Process
Step

I
RAI
Inventory
Decision

Review, Approve Inspect

64

Lean Tools

Fill up your Tool Box!

65

Takt Time is the pace needed

to meet customer demand.

Establishing Takt
Time

If you have a Takt Time of two

minutes, that means every two
minutes the process is completed
once.
Every two hours, two days or two
weeks, whatever your sell rate
(customer demand) is your Takt
Your Operating Time per Shift
Time.
Takt Time

Customer Requirement per Shift

GOAL:
=60sec Produce to
Demand!

27,600 sec (7.67 hours)

460 orders

66

5S & Visual Management

A proven method used to
systematically organize, clean, and
standardize the workplace

If you cant do 5S,

you cant do Lean!
67

5S & Visual Management

Seiri
Sort

Saiton

Seiso

Seiketsu

Shitsuke

Set-In-Order Shine Standardize Sustain

Clear out Configure Clean

Custom

Conformity

68

Elements of a 5S Program

Sort - what is not needed, sort through, then sort out; When in
doubt, throw it out!
Set-in-order - what must be kept; make visible and self-explanatory
so everyone knows where everything goes
Shine - everything that remains. Clean equipment, tools and
workplace
Standardize - implement best practices to keep the workplace clean
and organize
Sustain - making a habit of properly maintaining correct procedures

5S

69

What is Standardized Work?

Standardized Work is a method enabling employees to

improve their control of operations and measure their
performance against documented standards

Performance is optimized by reducing variation and waste in

operations by the efficient arrangement of people, products,
and machines, thus improving product quality

70

Cellular / Flow Processing

Arrange people and workspace to achieve one-piece

flow
Transportation
Minimizes
wastes of:
Defects
Overproduction
Waiting
Non-utilized Talent

Inventory
Motion
Extra Processing

Single piece flow

Pull process control
Reduced waste
Improved floor space

71

One Piece Flow

Consider these conditions for flow in the office
setting:
1. One piece processing versus batch
2. People in process sequence
3.
4.
5.

Multi-process work sequence

Multi-process skilled people
Synchronization of operations
(work balance)

72

Poka-Yoke / Mistake-Proofing
Poka-Yoke is the
removal of all
potential causes of
error either through
design, process, or
mistake-proofing
devices, to ensure
consistent process
results

Poka-Yoke helps build quality into processes to achieve Zero

Defects

73

Kaizen
Kai = Change
Zen = Good (for the better)
Kaizen = Continuous Improvement

Kaizen has a bias for

action!

74

Yesco Hawaii

Round 3
Remember to think
outside the box!

75

Metrics Scorecard

76

Customer Service
Request IT Provider
Old Process Average 50 days
Define
order

Customer

New Process - Average 7 days

Waste removed

Service Rep
defines order
Customer

Mgr verifies
order

Customer Service
Prepares form

Mgr approves
quote

No

Admin inputs
To data base

Quote
Needed?

No

Mgr approves
quote

Yes

Purchasing
quotes order
Quote above
$8,000?

Mgr
approval

Mgt Board
approval

Purchasing fills
order

Admin inputs
to data base

Yes

Account VP
approval
Admin sends
Approval notice

Service Rep

Purchasing fills
order

Order processing
Receives and
Signs off

Order processing
Receives and
Signs off

77

YESCO Las Vegas Success Story

The business office has reduced
Node 5 (last day of labor to date of
invoice) from an average of 15 to 20
days to 5 to 12 days for the Exteriors
Branch.
The same concepts are being used to
streamline the billing process for
Interiors eliminating several hand offs
and reducing Node 5 as well.

78

YESCO Electronics Success Story

79

Lending Process Financial Institution

Time spent by Loan Processor Old Process
10/15% 10/20%

5%

Adm/clerical General phone Fill in for

-filing
Inquiries from Other staf
-typing
members
-mailing
-gathering data

60/75%

Loan Processing

New Lean Process after Kaizen Event

5% 5%
Phoneinquiries
Loansonly

Fill in for
Other staf

90%

Loan Processing

80

Keys to Success

Create a sense of urgency

Have a vision, communicate it continuously
Focus on key process drivers
Remove all obstacles to achieve the vision
Create short term victories
Dont declare victory too soon
Speak with data
Dont assume
Analyze data doubt it
Make decisions with data
Take action based on data
Check results
81

The ideal first project

is clearly and unambiguously

measurable. This is not always
possible for administrative Kaizens.
satisfies a widely-perceived need.
is a repeatable process.
is self-contained, not subject to
uncontrollable external influence.

82

Administrative Process Improvement

Administrative Kaizens are often discontinuous miniKaizens.
The team meets first to understand the nature of the
project and decide what they will need to know. The
current state is described. A process map may be
developed.
Any information unavailable at the first meeting is
provided prior to the second meeting.
The second meeting is generally one day. The project
is analyzed and a complete action plan is developed.
The plan is implemented and the outcomes are
monitored.
If necessary, a follow up meeting is held.

83

The Kaizen Project Team

Team members are selected on a project-byproject basis.
There is a team leader chosen to facilitate and
coordinate. The leader is not in charge in the
traditional sense.
The team can be comprised of:
Subject matter experts in the target area.
Others in the same segment of the organization.
Individuals from other areas of the organization.
This includes technical staff.
Individuals from outside the organization.

84

The Kaizen Project Team

An open, egalitarian structure is
important.
When Kaizen project work is
underway, organizational position is
irrelevant and disregarded.
All team members are considered
equal within the team.

85

Key Kaizen Tenets

An open atmosphere is critical. Free

thinking and contribution are
necessary.
Everything is open to question. No
assumptions are made.
A Kaizen event is not developing a list
of ideas or recommendations to be
studied. The outcome is
implemented.

86

Now Recreate that World

Map it with the experts

Study your map
Implement changes
Celebrate
Study and implement more changes
Celebrate
Repeat, Repeat, Repeat

87

Questions?

88