It

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Lean Office Business Processes Not Just for
Manufacturing
Michelle Manary Deb Harcus
Manary Harcus Consulting Corp
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Agenda

• Organizational Effectiveness Lean
• What is Lean how does it work?
• Lean Office Tools Terminology
• Success Strategies
• Role(s) of HR in Lean Initiatives
• 8 Service Industry Wastes
• Value Stream Mapping
• Case Study
• Debrief, QA

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Organizational Effectiveness Lean
Source Queens University
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What is Lean?

• Lean is a system that continually searches for
  and eliminates waste throughout the total
  enterprise and value chain
• Lean applies to office and administrative
  environments
• In Service industries, there are 8 types of waste
• Eliminating waste results in
• Shorter lead times
• Reduced costs
• Less inventory
• Higher throughput
• Higher return on assets
• Six Sigma is a system focused on the elimination
  of defects.

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Some Lean Office Tools

• Value Stream Mapping
• Pull vs Push

• 5S Visual Controls
• Kaizen Event

The Language of Lean
5S
Kaizen
Gemba
Pitch
VSM
Value Add
SIPOC
Mapping Symbols
Takt
Pull vs Push
Hansei
Heijunka
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Strategies for Success with Lean

• Grow leaders who thoroughly understand the work,
  and can teach it to others
• Respect your extended network by helping them
  improve
• Go and see for yourself (get in the gemba)
• Make decisions slowly, by consensus and implement
  rapidly
• Become a learning organization through relentless
  reflection (hansei) and continuous improvement
  (kaizen)

• Base decisions on long-term, system-wide goals
• Create continuous flow to bring problems to the
  surface
• Level the workload (Heijunka)
• Build a culture of stopping to fix problems
• Standardized work
• Use visual controls
• Use reliable, thoroughly tested technology that
  serves your people and processes

Source The Toyota Way, Liker 2004
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Various Role(s) of HR in Lean Initiatives

• Ensuring top down support alignment
• Review/revise HR strategy to support Business
  strategy
• Change Management
• Organizational Effectiveness
• Develop Managers who are Lean Facilitators
• Redefine Jobs to support Value Stream Manager
  role
• Lean Participant

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8 Service Industry Wastes

• Approval process
• Excess motion
• Backlog in work queues
• Underutilized employees

• Corrections
• Transportation
• Extra processing
• Inventory

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5S Visual Controls
Sort What is not needed. Sort through, then
sort out. Set in Order What must be kept, make
it visible and self explanatory. Shine
everything that remains. Standardize Set
standards for the first 3Ss Sustain Requires
discipline, stick to the rules and make them a
habit
5S is not free, but it does have accuracy and
efficiency benefits
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A Successful Office Kaizen Blitz (pronounced
Ki-zen)

• Kaizen Means Continuous Improvement
• A Kaizen Event is normally 3 days long
• Starts with a SIPOC map
• Using Value Stream Mapping techniques
• - Map the current state
• - Analyze kaizen blitz possible
  improvements
• - Map future state
• Begin to implement changes measure results

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SIPOC Map

• Suppliers Inputs Processes Outputs Customers
• Defines the practical limits of your mapping
  activity (scope)
• Ensures you gather all the information youll
  need
• Identifies the processes (which may have
  sub-processes)
• Captures the voice of the customer.

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SIPOC Map Example
New Employment Process SIPOC Map
Suppliers
Inputs
Outputs
Process
Requirements
Customers
Exec Committee
Hiring Budgets
Recruitment Selection
Benefits Enrolment
Orientation Training
New Employee
Manager
Qualified
Payroll Tax Setup
Job Descriptions
Dept Managers
Fits XYZ Culture
Candidates
Recruiters
Co-workers
Oriented to Business
Customers
Setup for Payroll, Benefits
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Value Stream Mapping

• VSMThe assessment and planning tool of lean
  practitioners
• 3 states exist Current, Perceived, Future
• The only way to ensure you capture the true
  current state is to walk the process
• Current state map
• Future state map
• Implementation plan

Drawing

• Risk of not mapping the current state is that you
  have no baseline or justification for making
  changes.

Drawing
Plan Implement
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Value Stream Mapping Symbols
xcel
IN
Customer or Supplier
Information Flow
Delay Time
Inventory/Inbox
Process Box
P/T2min
1 Day
L/T0 days
C/A99
Schedule
Electronic Information Flow
Other
Electronic Inbox (queue)
Data Box
Material (Paper) Movement
Workflow
Iterations or Rework
Worker
Wor
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Value Add, Process Lead Time
Process 1
Rework, Checking, Revisions Non-Value Add Time
Value Add Time
Queue/Wait Time
Process Time
Lead Time
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Map Current State

• Document customer information need
• Identify main processes to deliver service
• Start with customer and work backwards
• Collect data on main processes (attributes/metrics
  )
• Perform value stream walkthrough and fill in the
  data boxes, including work-in-process
• Identify process boxes where flow stops and batch
  or queue occurs
• In the office, inventory is information in a
  queue (paper or electronic)
• Establish how each process knows what to process
  next (information flow)
• Can be formal or informal how is work
  prioritized?
• Calculate lead time vs process time
• Calculate accurate complete
• Calculate value add

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Example - Current State VSM Map
Insurance Claim Processing
Timeline
Value Stream Metrics - Process Time (P/T) 75
min Lead Time (L/T) 26-39 days Complete
Accurate (C/A) 29
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Typical Data Attributes/Metrics

• Process available time
• Set up time (eg between computer systems)
• Lead time/turnaround time (LT)
• Typical batch size or frequency
• Complete and Accurate (CA)
• Rework/revisions
• Number of people involved
• Downtime (eg information systems)
• Inventory queues of information (eg
  electronic, paper)
• Demand
• Team needs to decide which attributes/metrics
  will work best for tracking progress toward the
  targets.

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Value Stream Managers

• Each Value Stream needs a Value Stream Manager
• For product and/or service ownership beyond the
  function
• Assign responsibility for future state mapping
  and implementing lean value streams to line
  managers with the capability to make change
  happen across functional and departmental
  boundaries
• Value Stream Managers should make their progress
  reports to the senior manager on site.

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Which Steps Add Value and Which are Waste?

• Now that the process is visible, what problems do
  you see?
• Challenge every step ask the following
• What is really needed by the customer? (Takt)
• How often do we need to check our performance?
  (Pitch)
• Why are the current steps performed?
• What can be done differently or not at all?
• Is the order of the steps creating waste?
• Can we eliminate certain steps or do others more
  intelligently?
• What assumptions underlie the current process?
• Are existing tools and guides appropriate?
• Go back to the 8 wastes to see if the step is a
  waste.

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Future State Questions

• What does the customer need and how are we doing
  in serving this need?
• Takt timeDemand rate
• Which steps create/add value and which are waste?
• How can we flow work with fewer
  interruptions/handoffs?
• How can we control work between
  interruptions/handoffs?
• How will we balance the work load and/or
  different activities?
• How do we set pitch?
• Pitch is the tempo of the output
• Ideal Takt Pitch
• What process improvements will be necessary?
• Can we establish a pace or rhythm that improves
  processing?

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Project Tracking Center
What gets measured gets monitored. What gets
monitored, gets done.

• A document board in a highly visible area, and as
  close to the work area as possible
• Post the Current and Future state maps
• Show Implementation Timelines
• Key measures of progress and success
• Value stream performance indicators
• Implementation progress impact
• Other documents as required (as few as possible)

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Case Study 1

• Identify map developer spokesperson for your
  group
• Read case then map the current state process
• You have 2 colors of sticky notes use one color
  for a process step, the other color for time
  spent waiting for something to happen
• Utilize the mapping symbols
• Identify waste and problems
• Gather and measure a variety of attributes, such
  as
• PT process time
• LT lead time
• VA - percent of process that adds value
• C/A percent of process that is correct
  accurate
• D/T delay time
• of people involved
• of process steps required
• Brainstorm kaizen opportunities
• Stop

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Case Study Debrief

• What do you see?
• What problems are pointed out?
• Where were some of the lean opportunities?
• Discuss areas in your business that could benefit
  from lean thinking

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Process Improvements

• Identify all process improvements that could be
  done or will be necessary to implement the future
  state (Kaizen bursts or opportunities)
• Prioritize the list for quick hits and big
  hitters based on data or consensus
• Decide which attributes will be the best ones to
  use
• Map the desired future state estimate expected
  results
• Consider Six Sigma for projects with unknown
  solutions and the root cause is unknown

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Measure The Impact
Attribute Current State Performance Future State Goal Future State Expected Result Actual Result



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• Questions?

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Not The End

• Lean is a new beginning
• Reinventing your business, increasing your
  competitive position, a differentiator
• Its a continuous improvement journey
• Not an event or a project
• Lean is a way of thinking that all employees
  ultimately learn and continue themselves. It
  becomes part of the company culture and an
  organizational commitment