bfbm(5-2016) lean in (lean transformation)

TRANSFORMATIONPresented By

U TIN ZAN KYAW

Principal

Device Business Management Academy

tzk.device@gmail.com

LeanLeastLow

EffectiveEfficientEquity

AchieveAwardsAttain

NormsNoNice

- William Hazlitt (English writer, 1778-1830)

“Prosperity is a great teacher; adversity a

greater.”

What is Core ValueValue is always defined from the customer’s perspective

Value-Adding ActivitiesTransform products or information into products and services the customer wants

Non-Value-Adding Activities/WasteConsume resources, but don’t directly contribute value to the customer

Speed is achieved by identifying and eliminating waste… in processes, innovation and decision making

4 P’Shilosophy

olicy

rocedure

PPP

racticeP

Creating LEAN Processes

Get People Engaged

Leading LEAN Improvements 1. To creates unwavering Passion

2. To create excitement for a Vision

3. To drives cultural transformation across the enterprise

4. resulting in Sustained Competitive Advantage

5. To increase Stakeholder Value.

Building Blocks to Engagement 1. Create a sense of urgency

2. Change the focus

3. Develop leaders

4. Communicate openly and often

5. Focus on your customers

Building Blocks to Engagement 6. Encourage and sustain innovation

7. Align through shared accountability

8. Allocate resources to ensure success

9. Promote continuous improvement

10. Maintain discipline and focus

Performance Improvement Arena

Development Planning Arena

“Should”

“Actual”

“Actual”

Time

Perf

orm

ance

IMPROVEMENT VS. DEVELOPMENT

Your Role

Set the Tempo Set the business vision and strategies

Create passion for leading the change

Set stretch goals

Define the critical few objectives

Establish metrics and incentives

Leverage Kaizen Breakthrough Events for engaging

associates in collaborative problem solving

Lean ProductionLean Thinking

Lean PracticeLean Learning

The LEAN Global Network

A Simple Definition of Lean Thinking & Practice

Systemically develop people and continuously improve

processes to create value and prosperity while consuming

minimum resources.

Every Organization Must AddressPurpose – Provide value to customers (cost-effectively to prosper, etc.).

Process – Through value streams that are designed, operated, improved.

People – By engaging and respecting employees and other stakeholders.

Aligning purpose, process, and people.

People & Process Balanced by Leaders

Lean as a Social & Technical System

Social

Lean as a Social & Technical System

Technical

People & Process – aligned by leaders to achieve purpose

Lean TransformationAligning:PurposeProcessPeopleto create value

WHAT is our

PURPOSE?What situational problemdo we need to address?

How to improve the work?

How to develop

the people?

What is our BASIC THINKING??

What leadership

behavior and management

system do we need?

Lean Transformation

PROCESSIMPROVEMENT

Continuous, practical

changes to improve the way the work is done

CAPABILITY DEVELOPMENT

Sustainable improvement

capabilityin all people at all levels

VALUE-DRIVEN PURPOSE - Situational Approach -

“WHAT PROBLEM ARE WE TRYING TO SOLVE?”

Basic Thinking, Mindset, AssumptionsThat drive this transformation

Behaviors

MANAGEMENTSYSTEM

EmployeeFulfillment

Quality Principles

OrganizationalPractices

EffectiveBusiness

CustomerSatisfaction

Attitudes(e.g. commitment)

How to Do

What to Do

Achieving Lean Transformation

Organizational practicesLeadershipMission statementEffective operating ProceduresStaff supportTrainingYield: What is important and what is to be accomplished.Quality principles

Customer focusContinuous improvement

Employee empowerment Benchmarking Just-in-time Tools of TQM Yield : How to do what is important and to be accomplished.Employee fulfillment

Empowerment Organizational commitmentYield: Employee attitudes that can accomplish what is important Customer satisfaction

Winning ordersRepeat customersYield: An effective organization with a competitive advantage.

The Flow of Activities in Lean Transformatio

Purpose/Problem At Each LevelEach person with responsibility for his or her situational problem to solve!

Process Improvement at ALL LevelsMacro Enterprise System Level

Value Stream level

Factory, Hospital, Office, Department Level

Micro Level of Each Individual Job

LEVELS OF GOALS / PLANS AND THEIR IMPORTANCECorporate Decision

Strategic Decision

Tactic Decision

Operational Decision

Vision/Top Management

Senior Management

Middle Management

Lower Management

Lean Capability Development“Make people as you make product…”

How to Transform?

It’s easier to act your

way to a new way of

thinking than to think

your way to a new way

of acting.

Taking a business to higher levels of performance is best described as jumpshifting.

Ingredients: Clear Vision

Stretching Goals

Powerful Strategies

Operating Imperatives

+Lean Managers

Traditionally, results are thought of a Trend Line Growth.

But, Company is looking to do a lot better than Trend Line Growth and has introduced the LEAN

MANAGERS Program to take the business to a whole new level.

THINKING DIFFERENTLY

A Passion for Growth

A Passion for Change

A Passion for Sustained Momentum

THINKING DIFFERENTLYSmall changes to small thingsa waste of time

Is This Essential?

Small changes to big things necessary, but frustrating good, but need many

Big changes to big things the key to growth

No âNecessary Â

VITAL Â Â

How do we do it?LEAN MANAGEMENT means ...

Individual Practice and Mindset

Transforming the organization and aligning the

people in order to dramatically improve the

business and sustain long-term momentum

É Ê

LEAN MANAGER BEHAVIORS

1. Provides a clear vision2. Thinks outside the box3. Creates an aligned team4. Builds a strong, empowered organization5. Set and maintains high standards6. Demonstrates integrity

LEAN MANAGER Results (The Acid Test)1. Dramatic change2. Developed and empowered employees3. Sustained momentum4. improved competitive/financial position

Design of Process,

Design of Work Experience

Basic Thinking – Lean Thinking

Principle of “Just Enough”

Practice of Questioning and Experimenting

• Structured Questions and Experiments

Lean Thinking Principle of Respect for PeoplePractice of Continuous Improvement ( Kaizen)

Never ending learning…to make things better…

in everything…everywhere

Lean Thinking Philosophy

Current State

Future State

Eliminate Waste

Identify Waste “True North”

Value Added Time = Lead Time

Full of Waste, Variation, and

Rigidity

Identify and eliminate all activities that are waste.Focus on optimal flow throughout the process.

Focus on creating value for customers.

Growing Your Business Through

Lean Process Improvement

COMPETITIVE ADVANTAGE

Quality

Service

Innovation

Excellence

Profit

Superior

Cost Selli

ng P

riceResources

Competence

Capabilities

Talent

The Cost Reduction Principle

Cost

Profit

Price

Price

Traditional ThinkingCost + Profit = Price

Cost

Profit

Price Price

Lean ThinkingPrice – cost = profit

What is Lean Process Improvement?

What is Lean?

Is it skinny?Is it less people?

Is it working harder?Is it making less?

Impact of SFM on Effectiveness of Company’s OperationCompany A

ProcessA

ProcessB

ProcessC

ProcessD

ProcessE

99% 99% 99% 99% 99%Total Effectiveness = (99%) x (99%) x (99%) x (99%) x (99%) = 95%

Company BProcess

AProcess

BProcess

CProcess

DProcess

E

95% 95% 95% 95% 95%Total Effectiveness = (95%) x (95%) x (95%) x (95%) x (95%) = 77%

Goals of Lean Process ImprovementImprove Quality

Eliminate Waste

Reduce Lead Time

Reduce Total Costs

IMPORTANCE OF QUALITYMarket GainsReputationVolumePrice

Lower CostsProductivityRework/ScrapWarranty

IncreasedProfits

ImprovedQuality

Wheel playing changes beliefs.Wagon must stop.People must play.

How things really work in some organizations!

Or, maybe more like this:

What Do You See in the Picture?

Wagon LeaderFollowers

Square Wheels

Round WheelsRope

The Seven Deadly Wastes

The ultimate lean target is the total elimination of waste. Waste, or muda, is anything that adds cost or time without adding value. Seven deadly waste have been identified over the years. Recently an eighth waste has been identified—underutilization of people.

OPERATING PROFIT

OPERATING EXPENSES

PRODUCT VARIABLECOST (PVC)/COGS

REVENUE

Gross SalesLess Discount & Allowances

= Net Revenue

Less Product Variable Cost /COGS= Net Revenue

Less Total Operating Expenses= Operating Profit

Major contributors to business health and growth are Leverage Points relating to volume and revenues.

Examples of Volume Drivers:• Quality• Pricing• Advertising• New Products• New Brands• Distribution Systems• Customer Service

• Merchandising• Channel Development• Organization• Functional Support• Operating Knowledge• Packaging Consumer Activity

• Media• Promotions• Merchandising• Public Relations• Special Events

Consumer Activity• Ordering• Delivery• Merchandising• Joint Promotions• Customer Services

Product Variable Cost (PVC) – Leverage Points like Quality, Purchasing and

Manufacturing Efficiency, play a major role.

What other leverages would you consider important for your market?

Retail as we know it

retailer home

home

internet comparisonand online purchase distributor

Emerging retail

retailer home

Customer Journey

Awareness Consideration Purchase Activation Usage Support

Relationships+

Engagement( Airlines Business Class)

PreviouslyRetailers owned the relationship with the customer

Retailer Customer

Previously

Retailer Customerservice provider

Master Distributor

manufacturer

Nowthe retailer becomes a mediator between customers & brands

Customerservice provider

aggregator

manufacturer

“Stores”become places to manage customer relationships

Customerservice provider

aggregator

manufacturer Showrooms

Webfronts

Solution boutiques

Shoperiences

Experatail

Adapting to changeTo create a customer experience that is…

FasterEasierCheaperMore Personal

What Customers WantThanks to digital, customers now expect a shopping experience that is:

FASTER EASIER CHEAPERMORE

PERSONAL

How Retailers Can RespondThanks to digital, customers now expect a shopping experience that is:

TIMELY RELEVANT CONTEXTUAL TARGETED

The Future of Retail

One Thing Has Stayed The Same

The CUSTOMER Pathway to PurchaseNeed Enquire Browse Search Shortlist Compare Order Pay Reward

Market Order

Attract Entertain Engage Transact Reward

The RETAILER Pathway to PurchaseMarket Order

In the Home

At the Store

On the Go

THE RETAIL

“STORE” OF THE FUTURE

WHAT CUSTOMERS REALLY NEED, WANT AND EXPECT

1. HELP

2. RESPECT AND RECOGNITION

3. COMFORT, COMPASSION AND SUPPORT

4. EMPATHIC LISTENING

5. SATISFACTION

6. TRUST

7. FRIENDLY AND SMILING FACE

8. UNDERSTANDING

9. FEELING OF IMPORTANCE

10. QUALITY PRODUCT OR SERVICE AT A FAIR PRICE

BenefitsReach more customersReduce costsImprove cash flowIncrease sales more rapidlyFocus on area of expertise

Retail Functions in Distribution contd..

The Basic Supply Chain

Finance Flow

SupplierRaw material packaging warehouse Manufacturer

Manufacturer warehouse

Retailer warehouseRetailer

Physical Flow

TQM Go and SeeChall

enge

Kaizen

7 Process Wastes (TIMWOOD)1. Transportation: Unnecessary movement things (parts or machines)

between processes

2. Inventory: Raw material, work in progress or finished goods which

is not having value added to it

3. Movement: Unnecessary movement of people within a process

4. Waiting: People or parts that wait for a work cycle to be complete

7 Process Wastes (TIMWOOD)5. Overproduction: To produce sooner, faster or in greater quantities

than the customer demands

6. Over processing: Processing beyond the standard required by the

customer

7. Defects: Not right first time, repetition or correction of a process

Decisions—Decisions—Decisions Is my company too small for Lean Process Improvement?

Isn’t Lean a manufacturing process? I am a service business.

Can I afford to implement Lean Process Improvement?

All of these industries have successfully applied Lean to their processes

Value Stream MappingA Popular Lean Process Tool

Infographics Process

1 Selection the Topic

2 Surveying & Researching

3 Gathering the Data

4 Analyzing the Data

5 Finding the Narrative

6 Sketching the Idea

7 Editing

8 Designing9 Testing

10 Completing the Infographic

Workplace 5SSort

Systematize

Sweep

Standardize

Self-Discipline

5S is a workplace organization technique composed for five primary phases:Sort, Set In Order, Shine, Standardize, and Systematize.

Lean Six Sigma: 5S

Specify Value

Identify Value

Streams

Create Flow

Leverage Pull

Seek Perfection

Lean Supply Chain

Current Position 5 Principles of Lean

Key Elements of a

Lean Management

System(LMS)

Apply strong Leadership

and Governance

Engage Staff Fully in Daily Improvement

Coach The Staff and

Transfer Lean Skills

Measure The Right Things

and Make Results Visible

Embed Standard

Work Into The Culture

Conclusion If you are the low cost producer of a good or service you have

a competitive advantage and will be able to grow your

business. Lean is the tool to reduce your costs.

WITHIN FIVE YEARS, IF YOU’RE IN THE

SAME BUSINESS YOU ARE IN NOW, YOU’RE GOING TO BE OUT OF

BUSINESS.

DO NOT BE AFRAID, MY

FRIEND

Leading Through Turmoil

…use time as your focus and LEAN as your

foundation.

Thank you and good luck!