lean enterprise initiative
Post on 12-Apr-2017
2.990 Views
Preview:
TRANSCRIPT
Lean Enterprise Initiative Overview and Approach
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 2
Agenda
Overview
Approach
Timeline
Pricing
Summary
Overview
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 4
s
Lean Enterprise Initiative
“Words”
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 5
Company Overview
Denver Based Business Consulting Firm
• Business and technology strategy
• Transformation
• Optimization of internal assets (people and
technologies)
Our goal: provide access to expert knowledge
and consulting at a reasonable price
Certified WOSB
Over 30 professional consultants
• Certified in Lean, Six Sigma, PMI, TQM
• Experienced w/industry standards such as
ITIL, CMMI, ISO 9000/9001 and Baldrige
Recent Customers
Local Customers
State of Colorado OIT
Arapahoe County Public Works
Arapahoe County IT
Western Disposal
Denver Water
CO Dept of Natural Resources
National Customers
Tate and Lyle
EMC
Regis Corp
Acadia
GSA (MOBIS)
Fast Flexible Focused
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 6
s
Lean Project Experience
Teleflex Medical
Center Partners
Veterans Affairs
Medical Center
BHP Billiton
Private Escapes
General Dynamics
Covidien Denver Health
BNSF
Rainbird
Brambles
INTREX
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 7
s
Desired Outcomes
Satisfied and Supportive Customers
Financially Strong and
Stable Orgnization
Strategically Effective
Relationships and
Reputation
An Efficient, Effective and Strategically
Driven Organization
* Source : Client 2011 Strategic Plan
Increased Customer Satisfaction and
Engagement Increased Employee Engagement
Reduced Waste Increased Productivity
Quantifiable Results Tied to the Strategy
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 8
s
Current Situation
Increasingly
Stringent
Regulations Population
Growth
Conservation
Rising Operating Costs
Wage Pressures
Flat /Decreasing Revenues
Sluggish Economy
Risk of Reduced Service Levels
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 9
s
The Challenge
“70% of change initiatives fail.”
Michael Beer, and Nintin Nohria, Harvard Business Review
Success
Leadership
Commitment
Solid
Execution
Stakeholder
Communication
Employee
Engagement
Choose Your Team Wisely
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 10
The “Words”
Lean – An approach for business
process improvement with a focus on
reducing waste in time, inventory and
manpower
Sensei or Lean Expert – A person who
has significant training and experience
with Lean tools, implementations and
strategy
A3 or Storyboard - A format for telling
a story, or reporting results and/or
status on a single page
Black Belt or Lean Facilitator – An
expert in Lean methods who works
with teams to help them apply Lean
methods and tools to business
process improvement activities
Value Stream – A key business
process that delivers a value (service
or product) to the customer.
Kaizen Event/RIE or Focus Event –
One of several kinds of business
improvement projects – focused on a
weeklong improvement workshop
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 11
s
`
De
plo
yme
nt
Ad
op
tio
n
Go
vern
an
ce
S
tra
teg
y
18-24 months+
WTA Lean Transformation Framework - FLEX TM
JumpStart Traction Expand Sustain
• Form VS Teams
• Implement
Governance
Structure
• Track /Report
• Assess and Align
• Identify and
Prioritize Value
Streams
• Define KPIs
• Conduct Value
Stream
Analyses for
25%
• Design
Infrastructure
• KPI/Metrics
• Governance
Structure
• Templates
• Design Approach
• Training
• Communication
• Change Mgmt
• Conduct Training
• Complete
Training Rollout
• Employee
Engagement/
Recognition
• Conduct Pilot
• Evaluate
Results
• Followup
• Implement
Adoption
Approach
• Rollout Comm,
Training
• Rollout Lean
Process to
25% of Scope
• Rollout Lean
Process to
50% of Scope
• Rollout Lean
Process to
100% of Scope
• Expand Training
and
Communication
• Professional
Development
• Conduct VSAs for
50%
• Calibrate Strategic
Alignment
• Conduct VSAs
for 100%
• Review and
Renew
• Expand VS
Teams
• Track and
Report Results
• Update Pgm
• Expand VS
Teams
• Track and
Report Results
• Accountability
Program Management
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 12
s
Phase One - Alignment
Alignment Phase Duration Activities/ Deliverables Target
Completion Date
Jump Start
8 Weeks Program/Phase Logistics
Review of Key Materials
Executive Alignment Session
• Identify Key Business Processes
• Identify, Select & Prioritize Value
Streams
Infrastructure Design
• Governance
• Communications
• Training and Change Mgmt
Implementation Approach
Conduct Pilot
Phase One Summary Report
Month 2
What starts right, stays right.
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 13
s
Phase Two - Implementation
Implementation
Phase
Duration Activities/ Deliverables Target Completion
Date
Traction 12 - 18
months
Program Framework, Governance and
Infrastructure Implementation
• Communications, Training and Change
Management Plans
• Tracking /Measurement/ Reporting/
Problem Solving Tools, Templates and
Processes
Value Stream Analysis and Mapping
Workshops
Lean Team/Facilitators Training
Focus Event Facilitation and Report Outs
Workforce Orientation
Quarterly Reviews / w Lean Expert (s)
Month 3 - 20
Early traction drives success.
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 14
s
Phase Two - Implementation
Implementation Phase Duration Activities/ Deliverables
Expand 18 - 24
months
Continuation of Traction Deliverables, as requested
Periodic/on-request support, coaching, training and
quality reviews as requested
Quarterly Reviews / w Lean Expert (s)
Sustain 18 - 24
months+
Periodic/on-request support, coaching and quality
Quarterly Reviews / w Lean Expert (s)
“Do or do not. There is no “try”.” -- Yoda
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 15
Benefits of Our Approach
We understand the challenge
We have an approach that works
We can get the job done
We’ve price our services reasonably
We have a vested interest in helping you be successful
Approach
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 17
s
“A true Lean transformation must begin with people.”
Carey and McConnell
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 18
s
Plan for dealing with the impact that implementation of Lean practices has on the culture
A method to identify and prioritize value streams and business processes for improvement
Assistance with the identification of specific and measurable key performance indicators
Development of a leadership team representative of all company employees and functions,
empowered and capable of implementing the Lean Enterprise Initiative
Training in and use of a method for quickly evaluating and implementing changes to business
processes/RIE/Kaizen Events
A training plan and program for key staff members that allows for a gradual transition to
employee-led process improvement efforts.
A method to track and report hard dollar savings that result from Lean exercises and
improvements to business processes
Assist client’s Communication team to provide clear messaging about the Lean Initiative and its
results through key internal and external stakeholders
Although efficiencies can be achieved through attrition or reassignment of personnel, the Lean
Initiative will not be a tool or justification for layoffs or reductions in force.
The Lean Program should not be a “canned” version of initiatives completed for other
organizations and should be flexible and adaptable for the company’s mission
Although the consultant will have a direct and significant role in developing and leading the
program initially, the long term goal is to train and transition skills to company employees
What Does the Client Require?
Validate Contribution
Eliminate Waste not People
Communicate Clearly
Tailor Initiatives
Transfer Knowledge
Manage Change
Measure Results
Proceed with Speed
Develop Leaders
Focus Improvements
Train Effectively
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 19
WTA Lean Approach
Our Philosophy
The basics are the same, but the
details vary. - Recognize that each
client and each culture is different.
Be on the leading edge, not bleeding
edge. Focus on leveraging lessons
learned from other industries and
incorporate best practices from
previous projects.
Choose the tool that works best for
the situation. - Start with basic Lean
templates and approaches.
What worked somewhere else is a
good starting point, not necessarily
the end point. Modify standard
approaches to fit the specific client
environment and objectives
Tailor Initiatives
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 20
WTA Lean Approach
What we have learned…
“Brand” the initiative to create internal and
external interest and ownership.
Pay attention to other initiatives, and learn
from their experiences.
Don’t worry about getting it “perfect”, just
do what is right for your business and your
customer.
Coordinate with current projects so as to
optimize resources and ensure alignment.
Don’t take on too much at once.
Have fun!
Tailor Initiatives
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 21
Change Management Approach
Our approach embodies aspects of
change management throughout the
methodology:
• Coaching, mentoring
• Communications
• Governance
• Employee Empowerment
Our approach
• Tailor the change approach in Phase One
• Deploy in Phase Two
Results = Quality Solutions x
Acceptance
Manage Change
• Quick Wins
• Transparency
• Accountability
• Sustainability
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 22
Developing a Lean Leadership Team
Identify and involve leaders from all levels
of the organization
Transfer Knowledge through
Observation, Participation, Repetition
and Ownership
Develop a Recognition Program for
Leaders and Teams
Develop Leaders
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 23
s
Communications Approach
Communicate early and often
Communicate to both internal and external stakeholders
Plan communication using stakeholder management tools
Communicate Clearly
Communication is the foundation of organizational buy-in.
Stakeholder Map and Alignment Plan
Stakeholder Groups Key Stakeholders in this
Group
Hot Buttons, Concerns, Interests How will we engage
them?
What do they expect from
us?
Communication
Opportunities
Communication
Timeline
Stakeholder Group 1 Executives Overall Information on governance
responsibilities, process changes,
roll-out, dry run & on-going metrics
Face to face
discussions
Same as Hot Buttons Governance Workshop One off event
Stakeholder Group 2 Mid Level Management Process changes directly affecting
employees & stakeholders;
interaction with new team; roll-out,
dry run & on-going metrics, escalated
issues
Calls and/or emails Contact List
New Processes
Governance Workshop One off event
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 24
s
“Waste is a tax on the whole people.”
Albert Atwood
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 25
Projects Overview
Overview
Annually, Value Stream Analyses are
performed to identify and prioritize projects
for the upcoming year.
• Just Do Its
• Focus Events
• Short Term Projects
• Long Term Projects
Focus Events (i.e. RIE, Kaizen) are focused
process improvement events intended to be
completed in one week.
Proceed with Speed
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 26
s Value Stream Analysis
Prepare for
Event
Conduct
Event
Follow-up
Leadership/
Value Stream
Alignment
Projects
Prepare for
Event
Conduct
Event
Follow-up
Conduct
VSA
Workshop
Prepare for
VSA
Workshop
Follow-up
Conduct
VSA
Workshop
Prepare for
VSA
Workshop
Follow-up
Lean Improvement Approach Focus Improvements
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 27
Leadership Team
Lean Program Manager/PMO
Lean Team
WTA Lean Experts
Value Stream A Value Stream B
Value Stream
Exec
Sponsor
Lean Facilitator
Project Teams include:
• Process Owner
•Team Lead
•Team Members
• SMEs
• Customers
Project Team
Value Stream
Exec
Sponsor
Lean Facilitator
Project Team
Project Team
Project Team
Project Team
Project Team
Project Team
Project Team
Project Team
Project Team
Lean Initiative Structure Example Focus Improvements
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 28
s
Leadership/Value Stream Alignment Process
2 Weeks Prior to Workshop
Review strategic plan and budget
Interview senior leaders
Finalize meeting logistics
3 Days
Introduction, approach
Process mgmt fundamentals
Define Key Business Processes
Metrics system
Strategic plan correlation
Select Key Business Process and
potential Value Streams
Select high level metrics (KPIs)
During Next 1-2 Years
Conduct Value Stream
Analyses for Key Business
Processes
Perform followup activities, (e.g.
input to strategic plan)
Conduct Alignment
Workshop
Followup
Prepare
Focus Improvements
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 29
sZZ
Mapping Levels
Organization-wide Key Business
Processes (KBPs) and Metrics
Value Streams
Processes/Metrics
Project
Processes/Metrics
Focus Improvements
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 30
s
6-8 Weeks Prior to Workshop
Identify, validate and invite team
members
Finalize meeting logistics
Establish workshop guidelines
Review key Value Stream
documents:
• Mission, Strategy
• Org structure
• Procedures manuals
Gather and review data/metrics
2.5 Days
Introduction, approach, tools
training
Review key business processes/VS
map
Define scope of VSA focus
Identify and prioritize Events
Identify Event Participants
Develop High Level Event Maps
Draft Event Charters
2-4 Weeks After Workshop
Notify and debrief Event Team
Lead and Team members
Schedule Focus Events
Perform followup action items
Conduct Workshop
Followup
Prepare
Value Stream Analysis Process Focus Precisely Focus Improvements
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 31
s
Conduct Event Followup
2-3 Weeks Prior to Event
Finetune Preliminary Charter
developed during VSA
Conduct working session(s) with
stakeholders to identify high-level
requirements and perspectives.
Gather & perform cursory analysis of
data to provide guidance to focus
event
Finalize logistics of Event
One Week1
Day 1 – Educate and Analyze
Day 2 – Brainstorm, Design
Improvements
Day 3 – Implement Changes
and Test/Simulate
Day 4 – Finalize Documentation,
Day 5 – Present Results
1 One Week if Focus Event
,additional weeks if a project
1-3 Months After Event
Complete documentation of
event and appropriate
“sharing”
Observe Implementation
Finish any open action items
Ensure Data Collection
Conduct periodic (30/60/90
day) reviews of metrics
Prepare
Focus Event Process Focus Improvements Focus Improvements
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 32
s
“Several things must be done to move from Lean Six Sigma capacity to Lean Six Sigma
culture. Knowledge transfer may be the most important.”
Carey and McConnell - Knowledge Transfer is the Key to Lean Six Sigma Culture
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 33
Knowledge Transfer Philosophy
We focus on skills acquisition
Classroom Training is just one of many ways
to transfer knowledge
Hands On, Experiential Learning and
Coaching is preferable to Classroom Training
Classroom Training is best as a supplement
to hands on learning (not the other way
around!)
• Reserve classroom training for Project
Participants and Champions
• Train “just in time” – don’t overwhelm
participants with unnecessary training
• Create excitement around projects through
access to formal training
Transfer Knowledge
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 34
s
Knowledge Transfer Process
• Attend the orientation and observe
the methodologies.
Observe
Ob
se
rve
Pa
rtic
ipa
te
Re
pe
at O
wn
Participate
• Participate in the Value Stream
Mapping and Focus Events led by
WTA Lean Experts
Repeat
• Repeat the learning by leading
portions of Focus Events in
conjunction with WTA Lean Expert
• Attend formal training
• Own the process, lead all Focus
Events with participation and/or
review of WTA Lean Expert
• Attend formal training
Own
Transfer Knowledge
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 35
Lean Transformation Framework
s
Fo
cu
s
JumpStart Traction Expand Sustain
De
plo
yme
nt
Ad
op
tio
n
Go
vern
an
ce
S
tra
teg
y
Program Management
Alignment Implementation
18-24 months+
WTA Lean Transformation Framework - FLEX TM Transfer Knowledge
Responsibilities:
WillowTree Leads, with support
and participation from Denver
Water
• Assess and Align
• Identify and
Prioritize Value
Streams
• Define KPIs
• Conduct
Value Stream
Analyses for
25%
• Design
Infrastructure
• KPI/Metrics
• Governance
Structure
• Templates
• Design Approach
• Training
• Communication
• Change Mgmt
• Conduct Training
• Conduct Pilot
• Evaluate Results
• Followup
• Rollout Lean
Process to
25% of Scope
• Lead Focus
Events
• Training
Denver Water leads
• Complete
Training Rollout
• Employee
Engagement/
Recognition
• Rollout Lean
Process to
50% of Scope
• Rollout Lean
Process to
100% of Scope
• Expand Training
and
Communication
• Professional
Development
• Conduct VSAs for
50%
• Review/Calibrate
Strategic
Alignment
• Conduct VSAs
for 100%
• Review and
Renew
• Expand VS
Teams
• Track and
Report Results
• Update Pgm
• Expand VS
Teams
• Track and
Report Results
• Accountability
Denver Water leads, with support
and participation from WillowTree
• Form VS Teams
• Implement
Governance
Structure
• Track /Report
• Implement
Adoption
Approach
• Rollout Comm
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 36
s
Recommended Training
Training Level Overview Duration Suggested Attendees Target Phase
Lean
Orientation
Overview of Lean Principles, Tools and
Methods
Introduction to Tools
Examples
4 Hours • Pilot Event participants,
sponsoring manager(s) of
the Pilot Event and Pilot
Event Project leaders
Phase One and Two
(Included in Pilot,
and all Focus
Events)
Executive
Orientation
Overview of Lean Concepts, Principles,
Methods
Developing, Managing and Nurturing a
Lean Culture
Bringing Benefits to Bottom Line
Hands-On Examples
Your Role as a Champion of Lean
Establish expectations as sponsors of
Lean projects
8 Hours Executive Team
Lean Executive Sponsor,
Lean Program Manager
Lean Project Manager
Value Stream Sponsors
Early Phase Two
Train Effectively
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 37
s
Recommended Training
Training Level Overview Duration Suggested Attendees Target Phase
Employee
Orientation
Overview of Lean at Company
What it means to my job
How I can contribute
30 Minutes All employees and stakeholders Phase Two
Foundational
Training
Overview of Lean Principles and Methods
Understanding Lean Communication Strategy
and Change Management
Detailed Tools and Methods Training with
Examples and Case Studies
Identifying Opportunities, Prioritizing Projects,
and Achieving Results
Basic Project Management
8 hours Project Teams/Participants
Project Leaders
Sponsoring Managers
Phase Two
Mainstream
Training
Intermediate Tools Understanding
Introduction to Advanced/Six Sigma Tools that
complement Lean
Advanced Project and Change Management
Facilitation
16 Hours Company Project Leaders who
have successfully completed
Foundational Training and at
least one Lean Event and want
to become a Lean Facilitator
Organizational Leaders charged
with driving the Lean Enterprise
Initiative to the next level
Phase Two
Formal Training Focuses on the Participants of Lean Projects
Train Effectively
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 38
s
“Routinely collecting, compiling, and communicating data on the performance of key
aspects of a process—including data not typically collected by environmental
agencies — is an important aspect of Lean and Six Sigma implementation. “
Environmental Protection Agency
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 39
s
Metrics Approach
Metrics Description Target Number of KPIs Examples
Tier 1 Enterprise
Metrics/ KPIs
Begin in Phase One with KPIs at the
program/enterprise level. These KPIs support and
align with Strategic Plan and overall objectives of
the Lean Initiative.
3- 5 High Level KPIs, Tangible and
Intangible
Metric: Customer Satisfaction
Level: Enterprise
Target: Improve Customer
Satisfaction by 5% each year
Tier 2 Value
Stream
Metrics/VSIs
These KPIs are addressed in Phase Two, after
Value Streams are identified and chartered. These
KPIs link Enterprise KPIs to those associated with
each Value Stream. Each KPI supports or relates
to an Enterprise KPI.
3-5 Metrics (VSIs) per Value
Stream, linked to the Enterprise
KPIs
Metric: Customer Satisfaction
Level: Accounting Value Stream
Target: Reduce Customer Billing
Complaints by 15 % in 6 months
Tier 3 Project
Level Metrics
These KPIs are addressed as part of each project
and support and link to both the Value Stream VSIs
and the Enterprise KPIs.
1-3 Project Level Metrics per
Project/Event, linked to one or
more VSIs.
Metric: Customer Satisfaction
Level: Customer Billing Errors
Project
Target: Reduce Billing Errors
due to mis-keyed information by
20% within 30 days.
Measure Results
Specific Measureable Achievable Relevant Timeline
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 40
s
Metric Definition and Data Collection
Project Name: Billing Errors
Project Leader: Susan Smith
Value Stream Name: Customer Service
Associated Tier 1 KPI: Improve Customer Satisfaction
Associated Tier 2 VSI: Reduce Customer Complaints
Metric Name: Reduce Billing Errors
Measurement and Data Collection Plan
Measurement Plan Metric Information
What do you want to Measure? Billing errors due to mis-keyed information
Operational Definition: How will measure be expressed Type 23 Billing Errors/All Billing Errors in One Calendar Month
Stratification: By variables By customer type
Target Improvement Date 30 days from start of project
Target Improvement % Reduce Error Type 23 by 50%
Data Collection Plan
Data Source: database or sample Customer Billing System ( CBS1)
Target number of units/samples 50% sample of Type 23 errors from each month
Time period of collection June 2011 - Dec 2011
Person Responsible John Rath
Measure Results
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 41
Lean Process Improvement Approach
Philosophy
Lean initiatives focus on an organization’s
work and operations, helping groups think
differently about the way they work, while
increasing capacity and adding value for
those they serve.
Lean focuses on eliminating administrative
and transactional waste.
Lean helps the organization design and
implement its processes by directly
focusing on achieving desired outcomes
Lean is the reason….
An Iowa business can now get a clean water
permit in 4.5 months instead of 28
In S. Carolina, lead time for processing storm
water applications dropped from 47 to 10 days
In Michigan, the application process time for
major permits is reduced from 422 to 98 days
In Iowa, a backlog of 600 clean air permits was
eliminated
At BAE Systems, ERP system upgrade time
reduced from historical highs of 24 to 10
months
Eliminate Waste
What is Lean Government? It is a mindset and a discipline to increase our
capacity to do more good.”
Ken Miller, Extreme Government Makeover
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 42
s
Financial Validation
“CEOs want to know the return on investment of Lean projects, and CFOs want
to compare real financial results to “powerpoint dollars”. A rigorous
approach to calculating an improvement project’s impact is important to
every organization.”
R. Copercini – Calculating Financial Impact of Lean Six Sigma Projects
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 43
s
Project Lifecycle
Lean
Event
Charter
Benefit
Assessment
Event
Approval
Track
and
Report
Benefits
Idea
Generation
and Triage
Event
Prioritization P & L
Reconciliation
= automated portfolio system elements for
financial validation process
Model
ROI
Event/Project work
(controls & tollgates)
Establish
Auditing
Parameters
Locate Tangible
Savings on
P&L
Statement
Accurate
Reporting
Event
Complete
Validate Contribution
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 44
Project Benefits Savings Categories Validate Contribution
Working Capital
Inve
nto
ry Re
du
ctio
n
Re
ce
ivab
le R
ed
uctio
n
Pa
yab
le In
cre
ase
Tangible
Re
ven
ue
Gro
wth
Cost Reduction
Cost of Services Sold Indirect COSS
Service Cost Other Cost RD&E Cost SG&A Cost
Labor
Other
Labor
Material
Other
Labor
Other
Material
Material
Selling, General, & Admin Cost
Asse
t Pro
du
ctivity
Material
Operating Income
Labor
Intangible
Other
Reduce NVA Cost Avoidance Employee Satisfaction Risk Mitigation Customer Satisfaction
Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 45
Key Elements for Financial Validation
Financial Guidelines
• Financial Definitions for Project Benefits
• General Rules For Benefit Calculation
Project Benefit Governance Process
Specific Benefit Categories and Calculations
Tools & Templates
• Return on Investment Templates and Models
• Reference Guides
• Financial Statements Reconciliation Templates
• Auditing Documents
Financial Network Representatives
• Roles and Responsibilities Definition
Training
• Financial Process and Accountability
Validate Contribution
3773 Cherry Creek North Drive Suite 575 Denver, Colorado 80209
888.998.0008
top related