2 breakout session # 205 tim ortel, cpcm, intuitive surgical date 15 april 2008 time 2:10 pm –...

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Breakout Session # 205

Tim Ortel, CPCM, Intuitive Surgical

Date 15 April 2008

Time 2:10 PM – 3:10 PM

Can Contracting Be “Leaned”?

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What is Lean?

• No “Fat”• Streamline flow• Optimized process• Promotes Value Add• Reduces

– Cost– Lead time

• A philosophy?• A process?• An end result?• Continuous

improvement• “Good enough is not

good enough”

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Lean application

• Typically in manufacturing• Promotes pull versus push• Integrates people, process, tools to avoid

waste• At work in:

– Automotive, electronics, medical– Aerospace, construction

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Lean in non-production?

• Insurance claims

• Invoice payments

• Order management

• Purchase order process

• Is there “lean”ed contracting?– Yes!!

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No more “Muda”

無駄

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Tools that support lean

• Flow charts• Value stream maps• Pareto charts• Failure analysis• Cross training• Fishbone charts• COMMWIP

• 5 Whys• Just In Time• Kanban• Kaizen/Blitz• Force Field Analysis• Single Piece Flow• 5S

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Sample “Fishbone” Ishikawa Chart

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Pareto Chart

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Flow Chart Example

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Flow Chart Example

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Sample Value Stream Map

...

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Sample Value Stream Map (www.sme.org)

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Force Field Analysis

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Why take the lean journey?

• Takes care of customers – adds value• Improves enterprise processes• Develops employees, enhances teamwork• Makes improvement a way of life, not a fad• Reduces lead times, costs, variation• Makes processes simple, repeatable, sustainable• Competitors will go lean if you don’t (and are?)

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Let’s COMMWIP-Proof the process

• Do you want to achieve “lean”ed?

• Why?

• No more “MUDA” – waste

• Build up trust in process

• Improve (& simplify) process

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What is waste (MUDA)

• Why eliminate waste?

– Customers don’t want to pay for it– Employees don’t like it– Suppliers don’t understand it

– “Any element of processing or distribution that adds no value to the final product (service) – waste only adds cost & time” (& frustration)

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COMMWIP – the 7 deadly wastes

• Correction• Overproduction• Motion• Material Movement• Waiting• Inventory• Process

• Overproduction • Waiting • Transportation • Inventory • Motion • Over processing • Defective units

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Sizing up COMMWIP wasters

• How you identify waste– Brainstorming, flow charts, pareto charts

• How you document it– Fishbone (Ishikawa), pareto charts

• How you fix it– Brainstorm, failure mode analysis – Flow chart, force field analysis

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Correction (COMMWIP)

• Doing things over again, rework, repeat• Leads to added waiting, motion?• Types of contract waste

– Wrong specification– Wrong approvals– Wrong metrics, measures– Wrong process design

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Overproduction (COMMWIP)

• Building too many – Poor yields, bad forecast, variation

• Types of contract wasters– Unnecessary, & too many reports– Excessive copies– Process redundancy– Too many drafts before final– Over-specification

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Motion (COMMWIP)

• Unnecessary work movements• Extra steps which don’t add value• Multiple repeat steps in process• Contract wasters

– Excessive, unnecessary approvals– Extra process steps (reviews, emails)– Excessive meetings (or wrong focus)

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Waiting (COMMWIP)

• Lots of handoffs in process

• Queues, buffers

• Reviews, approvals

• Waiting due to meetings, decisions signoffs

• Unnecessary meeting participation

• Lacking a “KISS” perspective

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Processing (COMMWIP)

• Long process flow

• Complex process design

• Serial versus concurrent steps

• Redundant steps and/or approvals

• Extra time to rework, fix

• “We’ve always done it this way”

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Kaizen 改善• 改 ('kai') KAI - “change” “action to correct”• 善 ('zen') ZEN - “good”, “for better”

• A culture of sustained continuous improvement• Eliminate waste in systems and processes• Begins & ends with people • Involved leadership guidance• Continuously improve: quality, low cost, & delivery• Transforms companies to 'Superior Competitors'

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Kaizen – what is this? 改善

• Cross functional improvement team

• A project – to solve a problem, improve

• Evaluate and measure “as is”, “before”

• Brainstorm “could be, should be”

• Prototype solutions, measure “after”

• Cross train, then implement

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Kaizen sequence of events• Define problem• Define root cause: (fishbone)• Research root cause: (brainstorm, paretos)• Define “as is” process – draw it: (flow chart)• Brainstorm fixes, improvements (force field)• Structure “could be” process – draw it (flow chart)• Prototype a “should be” process – cross training• Change process (use force field analysis)• Measure before & after – define metrics!!!

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The PDCA cycle

PLAN

DO

CHECK

ACT/ADJUST

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Value Stream Map Example(www.lean.org)

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From “muda” to “shinrai”

無駄

価値

信頼

Muda “waste”

Kachi “value”

Shinrai “trust”

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No more “Muda”

無駄

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Intuitive Surgical

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Buying a robotics surgery system

Customer Need

Legal Review

SalesContract

ShipInstall

Service

BuildMake To

Stock

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Why “lean”ed

• Lean is a tool: leverages process, projects

• COMMWIP-proofing enhances lean

• Kaizen: a project tool (within lean)

• “Good enough is not good enough”

• It’s not just enough to win –– Better yourself in the process also!

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Checking out “lean”ed contracting

• “Applying Lean Thinking to Govt Contracting”– Dr. Rose M. Smith (On Line Powerpoint)

• Air Force Smart Operations 21 (AFSO21)– http://www.newsblaze.com/story

• DAU – Lean Enterprise Model– http://www.dau.mil/educept

• 754th Electronics Systems Group– http://integrator.hanscom/af.mil/2007

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You can “lean” your contracts

• Use kaizen (“KISS”) to simplify, optimize• Yet comply with legal policy/guidelines

– FAR, State, Local, Sarbanes Oxley

• When processes are “discretionary”– “Think out of the box”– “Draw outside of lines”– No more “That’s the way we always have..”“That’s the way we always have..”

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Remember

• Process should be “value add”

• Process should serve customers

• Do users trust the process?

• Be a change agent (vs. an observer)

• Think from a “clean” whiteboard

• Keep a Plan, Do, Check, Adjust focus

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Closing

• Questions?

• Tim Ortel, CPCM, CFCM, CPIM

• tlortel@yahoo.com

• Thank you!