Introduction to Lean

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Transactional Change in Action - Using Lean
Principles
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Presenter

• Karen Kusler
• Process Improvement for UCO
• Formerly with Institutional Assessment
• Lean Facilitator

University of Central Oklahoma 100 N. University
Drive Edmond, OK 73034 [phone] khenderson_at_u
cok.edu
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Lean Enterprise is.

• A systematic approach to identifying and
  eliminating waste (non-value-added activities)
  through continuous improvement.

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History

• Began in the Manufacturing Industry
• Executive VP Kreidler introduced Lean to UCO in
  2002
• Methodology to improve efficiency, reduce waste,
  and streamline processes
• Result in employee satisfaction, clarity of role
  in process, and standardize work where appropriate

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Words To Live By

• Do not believe that it is very much of an
  advance to do the unnecessary three times as
  fast
• Peter Drucker
• Bureaucracy defends the status quo long past the
  time when the quo has lost its status
• Laurence Peter

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Lean Thinking

• Fundamental Objective
• To create the most value while consuming the
  fewest resources
• Define value from the customers perspective
• Identify which process steps create value and
  which are only waste
• Work to eliminate the root causes of the waste
  and allow for continuous flow of work and tasks

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Lean is Not

• A headcount reduction program
• A toolbox
• A method for reducing resources that are needed
  to support the customer

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Goal is Quality of Service

• Quality is not a program it is an approach.
• Qualitys goal is excellence anything less is
  an improvement opportunity.
• Quality implemented properly increases customer
  satisfaction, reduces time and cost.

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• Waste (Muda) anything that is more than the
  minimum amount of
• process,
• workers time,
• materials, space, or
• equipment
• and adds no value to the product or service for
  the customer.

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Lean and Eliminating Waste
Typically 95 of lead time is non value-added
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8 Wastes in Processes

• Overproduction producing more sooner, or faster
  than is required by the next process.
• Office examples printing paperwork out before
  needed, purchasing items before needed (results
  in inventory storage, processing paperwork before
  the next person is ready for it

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8 Wastes in Processes

• Inventory (Inbox) any form of batch processing
• Office examples filled in boxes (electronic and
  paper), office supplies, sales literature, batch
  processing transactions and reports.

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8 Wastes in Processes

• Waiting
• Office examples System downtime, system
  response time, approvals from others, information
  from customers

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8 Wastes in Processes

• Extra Processing
• Office examples Re-entering data, extra copies,
  unnecessary or excessive reports, transactions,
  cost accounting, expediting, labor reporting,
  budget processes, travel expense reporting,
  month-end closing activities

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8 Wastes in Processes

• Correction any form of defects
• Office examples Order entry errors, design
  errors and engineering change orders, invoice
  errors, employee turnover

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8 Wastes in Processes

• Excess Motion movement of people
• Office examples Walking to/from copier, central
  filing, fax machine, other offices

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8 Wastes in Processes

• Transportation movement of paperwork
• Office examples excessive email attachments,
  multiple hand-offs, multiple approvals.

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8 Wastes in Processes

• Underutilized People peoples abilities, not
  their time
• Office examples Limited employee authority and
  responsibility for basic tasks, management
  command and control, inadequate business tools
  available

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Lean Project Phases Lean Team!
Agreeing on the process to study, how to map it,
who will participate, and logistics.
Preparation
Agreeing on a well understood map of the current
situation.
Current State
Agreeing on a shared vision of a Lean future
state.
Future State
Agreeing on how to implement the future state
vision.
Planning
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Project Preparation

• Select potential project with sponsor/Champion
• Scope effort with functions represented in the
  selected value stream
• Confirm business objective
• Identify measures of success
• Develop SIPOC
• Identify participants decision panel
• Confirm scope with Decision Panel
• Walk the flow

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Case Study Fixed Assets

• Reason Selected
• The current process results in undocumented and
  over-documented assets in the computer system.
• Customer
• Accounting staff that needs the information to
  prepare end of year reports and respond to
  external auditors is the customer.

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Case Study Goals

• Capitalize all qualified fixed assets.
• Create processes to capture qualified fixed
  assets.
• Identify miscoded fixed assets when ordered.
• Validate Procard purchases of qualified fixed
  assets.
• Define the process to write-off disposed assets.

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Current State

• Whenever there is a product or service for a
  customer, there is a value stream. The challenge
  lies in seeing it.
• Draw a Current State Value Stream Map (VSM)
• Visualize work
• Point to problems
• Focus direction
• Ask the 7 review questions

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Review Questions

1. What does the customer really need?
2. How often will we check our performance to
   customer needs?
3. Which steps create value and which are waste?
4. How can we flow work with fewer interruptions?

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Review Questions

1. How do we control work between interruptions?
   How will work be prioritized?
2. How will we balance the work load and/or
   different activities?
3. What process improvements will be necessary?

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Future State

• Draw a Future State Value Stream Map based on
  responses to the review questions

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One Change through Teamwork

• Commodity Codes were not being used effectively
• Train staff on consistent coding
• Expand and clarify description codes used to
  determine commodity codes

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Finding

• Sources of University Assets Vary
• Foundation
• Purchases
• Grants
• Items under 2500 not captured for capitalization

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Response

• Consistent information gathered
• Foundation link form to document donations
• Purchases expand inventory management input to
  include as capitalized items (even under 2500)
• Grants train staff to document assets

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Result

• End of year report and asset capitalization is
  more accurate

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Making the Change in a Process

• Establish the main objectives
• Kaizen bursts
• Create master plan (Lean Team)
• Create detail plan (breakout groups)
• Emphasis who, what, when, and why
• Establish project review dates
• Present the plan to the Decision Panel

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No Pain No Gain

• When the pain of staying put is greater than the
  pain of changing, then you have a chance to make
  cultural change. Can you find employee and
  customer pain and help them out of it in a less
  painful way?
• The pain I know is almost always less than the
  pain I dont know. But I can imagine that it is
  pretty bad.

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Learn More About Lean

• UCO offers educational programs on Using Lean
  Principles for Transactional Change
• Next seminar is April 12 (registration fee 49)
• For details go to http//administration.ucok.edu/u
  cocsi or call [phone]

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Some Books That Helped Us Along the Way
Execution

• The Agenda

Good to Great

• By Larry Bossidy,
• Ram Charan

By Michael Hammer
By Jim Collins
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Some Books That Helped Us Along the Way
Using Lean For Faster Six Sigma Results
Leadership On The Line
Lean Thinking
By Ronald Heifetz, Marty Linsky

• By James Womack, Daniel Jones

• By Mark Nash, Sheila Poling Frony Ward

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QUESTIONS