LEAN

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• LEAN
• Eliminating waste to add value from the
  customers perspective
• Damian Ritossa, Department of Sustainability and
  Environment
• August 7, 2008

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Agenda

• Lean Overview
• Lean Explained
• Five Lean Principles
• Overview of Some Common Lean Tools
• How to Make Lean Successful at Your Department
• Discussion / Questions

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Lean Explained
Lean A principle driven, tool based philosophy
that focuses on eliminating waste so that all
activities/steps add value from the customers
perspective.
Lean is all about continuous waste elimination
Strive for State Government processes with

• Higher customer satisfaction
• Shorter lead time
• Higher flexibility
• Higher quality
• Lower costs
• Higher employee satisfaction

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Lean Benefits
Cycle Time
Wait Time (non value add)
Before
After
Work Time (value add)
Same work completed in less time

• Productivity
• Customer satisfaction
• Profit
• Customer responsiveness
• Capacity
• Quality
• Cash flow
• On time delivery

• Cost
• Defects
• Lead time
• Inventory
• Space
• Waste!

Cost/Chaos
Cycle time
Relentlessly focus on reducing non-value adding
activities
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Five Lean Principles
Map all of the steps value added and non-value
added that bring a product of service to the
customer
Define value from the customers perspective and
express value in terms of a specific product
2 Map the Value Stream
1 Specify Value
3 Establish Flow
5 Work to Perfection
The continuous movement of products, services and
information from end to end through the process
The complete elimination of waste so all
activities create value for the customer
4 Implement Pull
Nothing is done by the upstream process until the
downstream customer signals the need
The tools get you there the principles keep you
there
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Five Lean Principles
A capability provided to a customer at the right
time at an appropriate price, as defined in each
case by the customer.
1. Specify Value

• Waste
• Activities that add no value, add cost and time
• Symptoms need to find root causes and eliminate
  them
• 7 types of waste
• (Unnecessary) inventory
• Overproduction
• Waiting
• Transporting
• Inappropriate processing
• Unnecessary motion
• Defects

• Specify value from the standpoint of the end
  customer
• Ask how your current products/services and
  processes disappoint your customers value
  expectation
• price?
• quality?
• reliable delivery?
• rapid response to changing needs?
• fundamental definition of the product?

Typical operation 1-10 of activities are
value-adding
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Five Lean Principles
Whenever there is a product or service for a
customer, there is a value stream. The challenge
lies in seeing it. (Womack, Learning To See)
2. Map the Value Stream
Value stream

• Identify all of the steps currently required to
  move products from order to delivery
• Challenge every step Why is this necessary?
  Would the customer think the product is worth
  less if this step could be left out?
• Many steps are only necessary because of the way
  firms are organised and previous decisions about
  assets and technologies

All activities, both value added and non-value
added, required to bring a product (or provide a
capability) from raw material (initialisation)
into the hands of the customer

• Pure Waste

Map the value stream see the whole and improve
the system
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Stage 2 continued Value Stream Mapping
Current
Future





Identify opportunities from the value stream map
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Five Lean Principles
3. Establish Flow
Line up all steps that truly create value in a
rapid sequence

• Require that every step in the process be
• Capable right every time (six sigma)
• Available always able to run (TPM)
• Adequate with capacity to avoid bottlenecks and
  overcapitalisation (right-sized tools)

• Continuous movement of products, services and
  information through the various transactions from
  end to end in the process
• Flow appears impractical and illogical because we
  have been trained to think in terms of
• departments, silos
• batches, queues
• efficiencies and backlogs

Batch Processing 1 minute per piece
Continuous Flow Make One Move One
Cycle Time 30 min
Cycle Time 12 min
Apply the right tools at the right stage
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Five Lean Principles
4. Implement Pull
Nothing is done downstream until required upstream

• Through lead time compression correct value
  specification, let customers get exactly whats
  wanted exactly when its wanted
• At the pull of the customer/next process
• Using signals (kanbans)

• A system of cascading production and delivery
  instructions in which nothing is done by the
  upstream supplier until the downstream customer
  signals the need

Okay
Pull customer-centric
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Five Lean Principles
5. Work to Perfection
A continual cycle of process improvements

• There is always some waste that can be removed
• People learn and exercise more creativity
• - Involve employees in the process, training them
  as you proceed
• Continuous improvement leads to innovation
• Use root cause analysis to solve problems
  promptly and permanently.
• Make objectives visible

Next Future State
Future State
Current State
Original State
Continuous Improvement never stops
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Common Lean Tools 5S
5S a framework to create and maintain your
workplace
1. S SORT (Organisation)Distinguish between
what is and is not needed
2. S SET IN ORDER (Orderliness)A place for
everything and everything in its place
3. S SHINE (Cleanliness)Cleaning and looking
for ways to keep it clean
4. S STANDARDISE (Adherence)Clearly define
Tasks and Procedures
5. S SUSTAIN/SYSTEMISE (Self-Discipline)Stick
to the rules, scrupulously
Implementing the 5S is often the first step in
lean transformation
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Common Lean Tools Standardised Work
Why have standardised work? Waste
Elimination

• To make process rules explicitEstablish the
  explicit methods for manual tasks with respect to
  quality, quantity, cost and safety.

prevent wastes

• A tool for improvementThere can be no
  improvement in the absence of standards. Abnormal
  situations show that something is going on.

expose wastes
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Common Lean Tools Standardised Work
The devil is in the details. If you do not
specify the standard, you allow wastes to occur
that could be eliminated. But more important, it
hinders learning and improvement in the
organization. Specify content, sequence, timing
and outcome to prevent and to expose waste.
However, keep in mind that the details have to
improve the flow of value as drawn in a value
stream map.
Perfect example of standardised work

• Each worker understands their task.
• All tools and equipment are at arms length
• Standard work has been practiced to perfection
• Continuous observation and analysis drives
  continuous improvement
• Types of Waste Eliminated
• Searching
• Finding
• Selecting
• Transporting
• Waiting

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How to How to Make Lean Successful at Your Dept
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Success Factors

• Organisations maintaining long-standing,
  comprehensive process improvement programs share
  common features that enhance their ability to
  sustain the efforts. They have
• Been inspired by influences emanating outside of
  the public sector, usually a leader with business
  experience
• Experienced little leadership turnover
• Paved the way for the programs implementation by
  removing organizational barriers and modifying
  its culture
• Focused on certain underlying principles and
  maintain a consistent conceptual framework
• Begun by employing a full-time administrator to
  oversee the programs implementation
• Offered a guarantee to employees that no layoffs
  will result from a process improvement project
• Made conscious efforts to communicate program
  successes internally
• Maintained reasonable expectations did not
  achieve success overnight, with most taking
  several years to create a culture that
  characterizes and sustains their program.

Active leadership in both words and actions is a
must
Source IBM Center for the Business of Government
2007, Improving Service Delivery in Government
with Lean Six Sigma
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How Has the Improvement Program been Sustained?

• These organisations create an infrastructure
  supporting the combined Lean/Six Sigma program
  with attention to four goals
• 1. deploy a sound, consistent, and robust
  methodology
• 2. build trust by removing fear
• 3. initiate long-term cultural change
• 4. communicate the vision to all stakeholders.

Source IBM Center for the Business of Government
2007, Improving Service Delivery in Government
with Lean Six Sigma
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Discussion / Questions