WCBF Lean Six Sigma Summit Chicago Transferring Lean Principles to the Front Office Mike Shuck, Manu

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WCBF Lean Six Sigma Summit ChicagoTransferring
Lean Principles to the Front OfficeMike Shuck,
Manufacturing SpecialistChicago Manufacturing
CenterManufacturing Extension Partnership
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Transferring Lean Principles to the Front Office

• Toyota Production System
• Lean Manufacturing
• Can just as easily be
• Toyota Transactional System
• Lean Transactions

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Transferring Lean Principles to the Front Office

• Manufacturing versus Transactional
• It really does not matter..?
• Does the House of Lean look any different?

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Lean Building BlocksManufacturing
Continuous Improvement
Continuous Improvement
Cellular/Flow
Pull/Kanban
TPM
Quick Changeover
Quality at Source
POUS
Standardized Work
Batch Reduction
Teams
Value Stream Mapping
5S Workplace Organization
Visual
Plant Layout
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Lean Building BlocksAdmin/Office
Continuous Improvement
Continuous Improvement
Cellular/Flow
Pull/Kanban
IT

Voice of Customer
Quality at Source
Leveling


Standardized Work
Problem Solving
Teams

Value Stream Mapping
5S Workplace Organization
Visual
Office Layout
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Transferring Lean Principles to the Front Office

• Everyone is in the Value Stream

Marketing
Sales
Receiving
Engineering
Quality
Accounts Payable
Accounts Receivable
Information Technology
Manufacturing
Accounting
Scheduling
Shipping
Supply Chain
Human Resources
Inside Sales
Maintenance
Order Entry
Credit
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Transferring Lean Principles to the Front Office

• Everyone is in the Value Stream
• Where do you start?
• Where would your customer want you to start?
• Where are you difficult to do business with?
• Friction points
• Let the data lead you there
• Just start. SOMEWHERE

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Transferring Lean Principles to the Front Office

• Some will say
• I agree, this is good stuff..Start

Just start somewhere else because I have enough
to do as it is!!!
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Transferring Lean Principles to the Front Office

• During your lean journey, youll encounter
• four types of people
• See it and get it
• Dont see it.eventually do
• Dont see it good employees
• Dont see it and dont want you to get it !

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Transferring Lean Principles to the Front Office

• What happens if you do not start with the VSM?

Bosses favorite project Feel good
projects Projects which can be completed
quickly Projects which cause the least
friction Im relieved..it might not include our
department A hit and miss approach And the silo
mentality can continues..
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Transferring Lean Principles to the Front Office

• -And by the way..silos will always exists
• -You can only lower the height
• -Or decrease the wall thickness

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Is VA and NVA any different in the office?
Lean Eliminating Waste

• Non-Value Added
• Overproduction
• Waiting
• Transportation
• Non-Value Added Processing
• Excess Inventory
• Defects
• Excess Motion
• Underutilized People

Value Added
Typically 95 of all lead time is non value-added
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Overproduction WasteDefinition Causes
Making more, earlier and/or faster than required
by the next step in the process

• Manufacturing
• Misuse of automation
• Long setup time
• Unleveled scheduling
• Over-engineered

• Admin/Office
• Wrong priority
• Ineffective communication
• Unbalanced workload
• Not focusing on company objective

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Waiting WasteDefinition Causes
Idle time created when waiting for

• Manufacturing
• Unbalanced workload
• Unplanned maintenance
• Long setup time
• Upstream quality problems
• Misuse of automation

• Admin/Office
• Unbalanced workload
• Redundant approval
• Unreliable software or hardware
• Unavailable documents
• Incomplete and/or incorrect information

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Transportation WasteDefinition Causes
Transporting parts, materials, documents, and
information around the facility.

• Manufacturing
• Poor plant layout
• Large batch sizes
• Large storage areas
• Long lead times

• Admin/Office
• Poor location of offices
• Multiple file storage areas systems
• Multiple approvals
• Lack of identification

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Non-Value-Added Processing WasteDefinition
Causes
Effort that adds no value to the product or
service from the customers viewpoint.

• Manufacturing
• Product changes without process changes
• True customer requirements not clearly defined
• Redundant approvals
• Rework

• Admin/Office
• Lack of communication
• Redundant approval
• Too many information systems
• Repetition of same information in different
  documents

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Excess Inventory WasteDefinition Causes
Any supply in excess of one piece flow.

• Manufacturing
• Inefficiencies and unexpected problems
• Unleveled scheduling
• Poor forecast
• Poorly designed reward system
• Unreliable suppliers

• Admin/Office
• Poor scheduling
• Unbalanced workload
• Buying too many office supplies
• Lack of system to manage inventory
• Batch processes

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Defects WasteDefinition Causes
Inspection and correction of parts, materials, or
information.

• Manufacturing
• Weak process controls
• Poor quality
• Deficient planned maintenance
• Poor product design

• Admin/Office
• Under-trained employees
• High employee turnover
• Doing process in a rush
• Confusing procedures

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Excess Motion WasteDefinition Causes
Any unnecessary work movements of people or
equipment.

• Manufacturing
• Poor people/machine effectiveness
• Inconsistent work methods
• Poor facility or cell layout
• Poor workplace organization

• Admin/Office
• Poor workplace organization
• Lack of training
• Nonstandard work methods
• Poor office layout

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Underutilized People WasteDefinition Causes
The waste of not using peoples creative
abilities.

• Manufacturing
• Low or no investment in training
• Low pay, high turnover
• Poor hiring practices
• Not asking What do you think?
• Low expectations
• Penalizing experimentation

• Admin/Office
• Low or no investment in training
• Low pay, high turnover
• Poor hiring practices
• Not asking What do you think?
• Low expectations
• Penalizing experimentation

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Transferring Lean Principles to the Front Office
So where do you focus in the office?

• Start closest to the customer.
• Are you invoicing correctly?
• Are you price lists current?
• Do you use Voice of the Customer (VOC)?
• How long to replace a incorrect shipment?
• How long to correct the credit adjustment?
• How long to answer the phone?
• Are your lead times too long?
• How long to get a quote?
• How many customers are you gaining?
• How many customers are you losing?

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Transferring Lean Principles to the Front Office

• How long does it take to develop a new product?
• Are you offering the best freight options?
• Are you expediting when you dont need to?
• Who controls expediting?
• How much friction is there in you AR/AP?
• What are you spending your freight on?
• Are there visuals indicators as to how we are
  doing?
• Can customers track their order online?
• Can they order, get samples online?
• Is there repetition of same information in
  different documents?

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Transferring Lean Principles to the Front Office
Other office areas to focus

• Information Technology
• How reliable are your systems?
• Are all your reports used?
• Do others ask for specific reports or do you give
  the them data to sort themselves?
• Are all your forms accessible via an intranet?

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Transferring Lean Principles to the Front Office

• Finance
• How long does it take to process Capital
  Expenditures?
• How long is the budgeting process?
• How many days does it take you to close month
  end?

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Transferring Lean Principles to the Front Office

• 6 minutes video of Western Union Current State

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Transferring Lean Principles to the Front Office

• Discuss video

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Transferring Lean Principles to the Front Office

• 2 minutes video of Future State

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Western Union Changes

• Cross training of office personnel
• Contract was signed later after scheduling
  training during delivering training equipment
• Excessive volume and phone call backlog led to
  the salesperson, customer and order entry person
  gathering the information real time this
  required 15 continuous minutes but the tradeoff
  was no call backs/phone tag
• Took 5-6 months to implement and done with week
  long kaizen events

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Western Union Results
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Team Tips Presenting Your Future State Map

• Explain the following, including your rationale
• Takt?
• Where will you flow, where do you need to pull?
• What is the pacemaker process?
• Will you level the workload?
• Are supporting improvements necessary?
• Resulting lead time improvement?

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A Plan to Get There
Implementation

• Dont Wait!
• You need a plan!
• Tie it to business objectives.
• Break your Future state into loops.
• Make a Value Stream Plan What to do by when.
• Relate the Future State Map to your layout.
• Conduct Value Stream Reviews by walking the flow.
  

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Transferring Lean Principles to the Front Office

• Use the Value Stream Map to interrupt the data
• Without data, you only have opinions and everyone
  has one!
• Dont let perfect get in the way of better!
• Start somewhere

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Current State VSM Example
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Transferring Lean Principles to the Front Office
Prioritize your to do list / projects / Kaizens
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Transferring Lean Principles to the Front Office

• Thank You