cordial lean study 2008 final

8/7/2019 Cordial Lean Study 2008 Final

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By Cordial Business Advisers

Stockholm, September 2008

Lean Study 2008Nordic service industry


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2008 Cordial Business Advisers AB12008-05-08 Pro ektnamn och konsult Fil: filnamn. t

This Lean Study was carried out during April July 2008

targeting different industries within the service sector andservice related processes at manufacturing companies, e.g.procurement, sales and business development units.

The study aims to get a pulse check regarding state-of-the-art development of Lean at selected service companiesin the Nordic and Japan.

The study is based on 44 interviews with key persons at thecompanies, e.g. business developers, process owners, VicePresidents, Lean Managers etc.

About Cordial Lean Study 2008

79% of the companies working with Lean said to have achieved bottom line results, compared to 47% of the companies workingwith other continuous process improvements.

53% of the companies currently not working with Lean are planning to implement Lean in the future.

Lean is regarded as a mean to achieve cost efficiency and customer satisfaction.

Lean is a well recognized concept in the Nordic Service industry: 95% are familiar with Lean as a concept.

Various Lean tools are used when working with Lean, 5 S and Value Stream Mapping being the most common tools.

Main challenges when working with Lean incorporate having the right leadership, creating a sustainable employee commitment,

having the right communication, establishing clear work process, roles & a toolbox as well as linking the bottom line effect to theLean work.

Key findings

A selection of participating companies


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2008 Cordial Business Advisers AB22

Table of contents

About Cordial

About the study

A few words about Lean

Results of the Lean Study 2008

Conclusions and reflections

Contact information


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About us Cordial enhances clients own ability todevelop

Cordial Business Advisers AB is a modern managementconsultancy with the ambition of setting a new standard fordeveloping businesses

Cordial started in 2000 and currently consists of 35consultants and a turnover of 50 MSEK

Our ambition is to become the leading managementadvisor with a Swedish origin

Cordial concretizes strategies and guarantees execution

Cordials starting point in all we do is: All business is human

Focus on customers that have a service based businesslogic and actively look for change

We have been entrusted more than 300 projects for someof the largest companies in the Nordic region, privateequity companies and growth companies

Our customers do not become dependent, they become enriched



Our four service areas

Strategy & Market Business strategy

Market- and customer-strategy

Transactions

Structure & Process Organizational design Process development Lean management Business control

Business Architecture

Design of flexible business models

Service oriented business and IT-architecture

Structure and control for efficient IT

Culture & Leadership

Successful Change

Performance culture

Efficient leadership


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Cordials Lean Offering

Lean Proof-of-Concept for a selectedprocess/area

Support prioritization of process scopeby heat-mapping

Conduct waste analysis, and summarize intoa business case that shows potential values

1-3 day workshop defining As-Is state, To-Be state as well as a GAP-analysis,including an Action plan

Establish measurement to follow-up of theresults after 30, 60 and 90 days

Develop and support initiation of Lean programs

Training of Lean-coaches/facilitators

If you are considering to start working with Lean If you already work with Lean

Companies already working with Lean face variouschallenges. Cordial can offer the following support:

Conduct/support Customer value analysis,using interviews, filming techniques

Help develop useful KPIs for processmeasurement, and link to overall businesstargets

Analysis and modeling support for complexvalue streams/processes, for example statisticalanalysis (six sigma)

Develop customized training programs for Lean,train-the-trainer concept and Lean ambassadors

Lean seminars Lean Thinking and TPS byToyota

Leadership coaching and educational journeysto Japan

Process improvements with the DMAIC-method

Visualization tools, Lean-games among othercommunication tools

5


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Cordials Lean Service Management modelfor continuous improvements

1. Understandcustomer needs

3. Establishbenchmarks and

ideals

5. Visualize and

measure

4. Remove wasteand transform

LeanThinking

2. Describe thevalue stream and

analyze

6. Educate andtrain everyone

New needs

Re-calibrate Re-visualize

Educate

- coaching leadership

and culture

Motivate

6



Investors/owners

PublicAuthorities

LargeCompanies

GrowthCompanies

Selected Client References



Table of contents

About Cordial

About the study




Contact information



Background and purpose of Cordials Lean Study 2008

Purpose

Definition ofLean in this

study

Background

To perform a pulse check regarding state-of-the-art development of Lean in selectedservice companies in Nordic and Japan to get an understanding of how these companies

work with process improvements

Pinpoint overall trends, challenges and success factors for companies working with Lean

Lean is one of the most far-reaching management philosophies when it comes to processimprovement. The manufacturing industry has for a long time been the pioneering industry inwhich Lean has been developed and successfully implemented.

In recent years Lean has made the leap to the service industry. In order to support ourcustomers in further developing their businesses, we wish to gain an understanding of thestatus of Lean programs and the relation to other process improvement initiatives at Nordic

service companies.

Continuous process improvement work based on Lean principles or Lean inspired methods

Th d i l d id f i d i i h



The study includes a wide range of industries in theNordic service sector

Comments:

Focus lies on the service sectorand service related processes atmanufacturing companies, e.g.procurement, sales and

business development unitsThe interviewed companies

represent 11 different industrysegments

At each company, Cordial hasinterviewed key persons, e.g.

business developers, processowners, vice presidents, LeanManagers etc.

44 interviews with key persons of Nordic companies have been conducted

Total: 44 companies

15%

14%

11%

9%7%

7%

7%

7%

11%

5%7%

Healthcare

Telecom & Media

Retail

Public organizations

IT Consulting

Transport & Logistics

ManufacturingConstruction

Banking

Energy

Hospitality & travel

d i t i h b d t d ith


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and interviews have been conducted with somemajor players in each segment

Healthcare Retail Banking

Telecom & Media Transport & Logistics Other

All 44 ti i ti i i i


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Healthcare:Centralsjukhuset i Kristianstad

Universitetssjukhuset MAS

Karolinska Universitetssjukhuset

Kronans Droghandel

Capio S:t Grans sjukhus

Universitetssjukhuset i LundSATS

Telecom & Media:

Ericsson

Teracom

3

Canal Digital

Talentum

Tele2

Transport & Logistics:

SJ

Scania

Volvo Logistics

Manufacturing:

Perstorp ABPartnertech

Sandvik Materials Technology

Public organizations:Vara kommun

Mittuniversitetet

Migrationsverket

Apoteket

Retail:

Indiska

Coca-Cola

Dagab

COOP

Oriflame

IT & Consulting:

Solectron

FujitsuServices

SWECO

Construction:

Skanska

ArconaNCC Construction

All 44 participating companies in variousindustry segments

Banking:Swedbank

GE Money Bank

Nordnet

Nordea

SEB

Energy:

Telge Energi

Fortum

Hospitality & Travel

Sheraton

Fritidsresor

Granvia


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Table of contents

About Cordial

About the study




Contact information


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What is Lean all about?

Lean is about optimizing a companys processes and workingmethods by counteracting waste, focusing on the value-adding

activities and creating a culture characterized by continuousimprovements.


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Leans basic principles Lean Thinking

Place the customer asnumber 1

Always doing or making the choices that are best forthe customer

Remove obstacles Remove all obstacles that are preventing the customer

to get what they want.

Competence & mandate

Make sure that all employees have the relevant skillsand competence which makes it possible to meet thecustomers expectations.

Involvement Leaders involve their co-workers in the decisions that

affect their work and coach them on a daily basis.

Eliminate waste!!! Always be on the look out for waste and when the

waste is discovered it must be eliminated.

Source: Cordial research


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Where is Lean applicable in the service industry?

Lean can be used to improve people and information intensiveprocesses such as:

Sales processes

Service (delivery) process

After-sales / customer support processes

Front-office processes (meeting customers)

Administrative processes

IT processes

Example: Visualization of the workflowat a Japanese fabrics manufacturer inKansai 2005


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The 7+1 wastes: the manufacturing industry

Overproduction

Waiting

Stock

Motion

Re-work

Overwork

Transports

The unexploitedcreativity of the staff

Manufacturing

To manufacture more or earlier than necessary

To wait for something to happen

To keep larger stock than necessary

Unnecessary movements and actions which are

performed in order to fulfill a task

Repairs and re-work which do notadd value to the customers

To do more work than the customer requires

Unnecessary transports

This was not part of the original wastes,but has been added as the eight waste


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People

Performing a task that a colleague is going toperform anyhow

Waiting for answers from customers, partners or for

a decision to be taken by management

Hiring more employees than there is occupation for

Educating new people when senior people leave

Constantly recapitulating results from the lastmeeting if too much time has elapsed between fromthe previous one

Over-working delivery to a new customer

Traveling to different meetings instead of e.g. usingtelephone conferences

Unexploited knowledge among the staff as forinstance language skills, earlier experience,

academic records

Information

Producing too much information related to a givenpurpose

Waiting to receive important information

Scattered information which is stored in differentlocations but which is not compiled for optimal use

Sending documentation physically instead of using

digital formats

Discarding already collected information andcompiling new information if needs have changed

Performing too much research for a given objective

Information transport through long office turnaround

time, several authorization levels etc

Unexploited information of already performed

studies, earlier experience, reuse of ideas etc

The 7+1 wastes in the service industry - examples

Overproduction

Waiting

Stock

Motion

Re-work

Overwork

Transports

The unexploited

creativity of the staff


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There is currently a large interest for Lean Services

Source: www.google.com [2008-09-03]

Lean65 million hits

Lean Management

735 000

Lean Services

17 200 000

LeanManufacturing

2 800 000

Toyota received 600 000suggestions for improvementduring 2006 from theiremployees. 91 per cent of thesewere implemented.

How many suggestedimprovements has yourcompany implemented?
http://www.flickr.com/photos/75268503@N00/279017522/


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Lean is also a hot topic in the business press

Lean Management Lean Production

1022 articles

286 FT comment &analysis

626 articles


1023 articles


Lean Services

Lean Management Lean Production

186 articles 113 articles 188 articles

Lean Services

FinancialTimes*

HarvardBusinessReview**

* Archive search Jan 1st 2003 and onwards

** Complete online publications about Lean


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Table of contents

About Cordial

About the study




Contact information

Lean is a well recognized concept in the Nordic


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Lean is a well recognized concept in the NordicService industry

Comments

Most of the respondents arefamiliar of the Lean origin fromthe manufacturing industry andToyota

The curiousness for Leanservices is high in generalamong the respondents

95% are familiar with Lean as a concept

Are you familiar with the concept of Lean?

95%

5%

Yes

No

Quotations from interviews:

I have heard about The Toyota

way and Lean in the manufacturingindustry sector

Im familiar with the concept and itis exciting to see what results it canbring

Total: 44 companies

Lean is used by 65% of the companies working with


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2%

98%

Lean is used by 65% of the companies working withcontinuous process improvements

Comments

Nearly all companies (98%) claim to work with continuous improvements (not always expressed as Lean)

A majority (65%) work with continuous process improvements based on Lean principles/methods

35%

65%

Yes

No

Do you currently work with continuous process improvementsbased on Lean principles?

Continuous process improvement

Optimized processes

Do you feel that your processes are optimized today or doyou work with continuous process improvements?

Total: 43 companiesTotal: 44 companies

Lean is also of high interest for companies currently not


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g p yworking with Lean methods

53% of the companies not currently working expressed with Lean are planning to implement Lean in thefuture

Plats fr diagram eller tabell

Comments

Out of the 15 companies (35%)that doesnt work with Lean,53% plan to start work with Leanin the future

53%

47%Yes

No

Are you planning to work with Lean in the future?

Total: 15 companies*


We will definitely work withsomething Lean-inspired in the future

It is an interesting method and we willdefinitely evaluate it later on

We will start working with Lean nextyear. We are currently working withan extensive overview of ourprocesses

* 15 companies doesnt work with Lean principles today

Lean puts a greater emphasis on customer focus as


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p g popposed to other continuous improvement initiatives

30%

42%

0%

16%

0%

12%

Cost eff iciency

Increased cust omer f ocus

Str ong competit ion

Quality

All of t he above

Ot her

20%12%

16%

8%

12% 32%C os t ef f i c i e nc y

Incr eased customer f ocus

Str ong competi t i on

Qual i ty

A l l of the above

Other

Whats the main reason(-s) for your Lean work?* Whats the main reason(-s) for your continuous processimprovements work?

Comments

Main reason for the Lean work is increased customer focus (42%)

and continuous process improvements concentrates mainly on cutcosts

Other reasons include: increased productivity, reduced waste,engage workers etc.


Everything we do aims to increase customer focus

Management is pushing hard on costs, but for mecustomer focus is most important

Bottom line results can be achieved through general


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g gcontinuous process improvement work

Comments

Cost efficiency and increasedrevenues are some examples ofsuccess gained through usingcontinuous process

improvements work

67% have achieved bottom line results from their work with continuous process improvements


Have you achieved bottom line effects due to your work with continuous processimprovements?


Increased revenues thanks toLean!

Cut costs have resulted in

increased profitability

We have achieved better managedcosts as well as cost efficiency

We have reduced waiting-time inour emergency room which leads toreduced costs

67%

14%

19%

Yes

No

Don't know , don't

measure

* One company does not work with continuous improvements

but its more likely to achieve bottom line results working


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y gwith Lean!

79%

21%

0%

Yes

No

Don't know/don't measure

Comments

Among the 29 companies working with Lean, 79% have seen bottom line results

Out of the 21% who hasnt seen bottom line results, some have not yet started to measure and some dont measure fiscalresults

Among the companies working with general continuous process improvements only 47% achieved bottom line results

79% of the companies working expressed with Lean achieved bottom line results compared to 47%

working with ordinary continuous process improvement work

0%

53%

47%

Yes

No

Don't know/don't measure

Bottom line results achieved by Lean Bottom line results achieved by general processimprovements work (a part from Lean)

Employees are overall positive towards the implementation


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of continuous process improvements

Comments

A vast majority, 84%, claims thatthe continuous processimprovement work has beenpositively received by theemployees

Some companies have receivedboth reactions

84 % believe that their employees are positive towards continuous process improvement work

Total: 43 companies**

*

How does your employees react to continuous process improvements?*


If the workers are part of theprocess change and have the ability

to influence it, the change is receivedmuch better

Initially we get a negative reactionbut when the employees see that thechange works the reactions turnpositive

How the process change is receiveddepends on what kind of change itis

14%

2%

84%

Positively

Negatively

Mixed

* Only key persons have been interviewed except from 7 companies where in depth interviews have been made with employees** One company does not work with continuous improvements

Frga Linda B!!

Checka titel!!!


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Greater involvement of employees in Lean initiatives

50%

11%

39% Employee driven

Management driven

Both

47%

33%

20%

Employee driven

Management driven

Both

How does your organization seek improvement of processes?

Companies working with Lean Companies working with general processimprovements

Comments

Management-only-driven improvement work is less common

among companies working with Lean

It is common for the management to setup guidelines but theemployees execute and optimize specific processes

Checka titel!!!

Quotes from interviews:

The decision to work with Lean came from management but

the pull from employees keep on increasing

Each employee can make a suggestion directly to a processowner who evaluate and decide on what to do

Process improvement work is more prioritized by


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Management in companies working with Lean

10%3%

87%

High

Average

Low

87% consider their continuous process improvement work to be highly prioritized by management inLean companies compared to 53% in companies working with general process improvements

27%

20%

53%

High

Average

Low

Priority on the Management agenda incompanies working with Lean

Priority on the Management agenda with general processImprovements

How is the work with continuous process improvements prioritized on the managements agenda?


Without the strong commitment from the management it

wouldn't been possible to launch Lean so widely

Lean is a top priority by our management, it is a criticalsuccess factor

Comments

A vast majority consider their continuous process

improvement work as a top issue by management

Only 3% consider the work with Lean as a low priority byManagement compared to 20% in companies working withgeneral process improvements

There is an equal share in how companies choose to


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implement their Lean work

Comments

The most common processes tostart with are core processes,product & service developmentand administrative processes

but many plan to expand their process improvement work to other units/the entire organizationutilizing the power of successes



How extensive is your Lean work?


Weve used pilots so far but havea very good impression and ourambition is to take it to the whole

organizationWeve started with Lean in ouremergency rooms and now we willexpand to other departments aswell

* 29 companies work with Lean

48%52%

Selected processes

Whole organization

5S and VSM are the most common tools fori ki i h L


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Comments

More than 60% are using Leantools

Value Stream Mapping(VSM) & 5S are the most

common toolsDMAIC is the most common tool

when working with Six Sigma

64 % of the companies working with a given method in their process improvement work choose Leanbasic tools

* Not all companies work with Lean, possible to chose multiple alternatives for the ones who did reply on this question


Total: 43 responses*

Do you follow a given method within your process improvement work? If yes, which one?


We use a combination of both

methods, we choose what fits ourorganization best

The two systems (Lean, SixSigma) complement each otherwell

We have our own methods based

on the more traditional Lean tools

companies working with Lean

359

2

4

9

11

Lean Tools Six Sigma Other

Numbe

rofresponses

5S

VSM

Standards

Whiteboard meetings

OtherDMAIC

Other

64%

28%8%

There are challenges and success factors to considerh ki ith th i l t ti f L


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Having the right leadership

To have a coaching leadership that makes room for a Leanculture to grow as well as creating a leadership characterizedby trust toward the employees.

Achieving a sustainable organisational commitment

To break down the process KPI to an individual level.

Invest in long-term employee development

Having the right communication

To communicate early and in the right way to both direct andindirect involved stakeholders.

Establishing clear work process, roles & a toolbox

To establish proper structure (roles, responsibilities andmandate) before, during and after the Lean implementation inorder to achieve permanent effects.

To know which tools to use and how to apply them effectivelyin the work process

Linking the bottom line effect to the Lean work

To be able to link the process KPIs to the bottom line effectresulting from the Lean work.

100% management attention & commitment

Management needs to understand, support and believe inLean for successful implementation.

Keeping the employees motivated

Share success stories, good impressions and experiencesfrom customer meetings with the rest of the organization.To answer Whats in it for me?

Education & training

Continuously train and educate during the implementationand tailor it for every phase of the implementation.

Communication Strategy & Plan

A well thought-through communication plan (top-downapproach), connected to a stakeholder analysis, willminimize resistance and maximize acceptance within the

organization.

Let the customers be one of the driving forces

Continuous improvements should not be driven bycustomer complaints but rather by a understanding ofcustomer needs.

when working with the implementation of Lean

CHALLENGES SUCCESS FACTORS

S f lt f th L St d 2008 (1/2)


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There iscurrently a

large interest

for LeanServices

Lean is a well recognized concept in the Nordic Service industry

95% are familiar with Lean as a concept

There is currently a high interest in Lean Services in the Nordic service sector

65% of the companies working with continuous process improvements are usingLean principles

Lean is also an up-and-coming opportunity for companies currently not working with Leanmethods

53% of the companies not currently working with Lean are planning to implementLean in the future

Summary of results from the Lean Study 2008 (1/2)

Lean puts a greater emphasize on customer focus opposed to general processimprovements

General continuous process improvements is foremost used for cost efficiency

Its more likely to achieve bottom line results working with Lean

79% of the companies working with Lean achieved bottom line results compared to47% working with general process improvement work (not Lean)

The Lean workoften show

great results



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Employees arefrequently

involved in theLean work andthe priority on

theManagement

Agenda is high

VSM and 5S arethe most

commonlyused Lean

tools

64% of the companies working with continuous process improvement use methodscommonly recognized as Lean tools

5S and VSM are the most common tools

28 % of the companies use Six Sigma method

Process improvements are mainly suggested by employees in a Leanenvironment

Management-only driven approach is less common in Lean cases.

Process improvement work is higher prioritized by Management in companies workingwith Lean

87% consider their continuous process improvement work to be highly prioritized bymanagement in Lean companies compared to 53% in companies working withgeneral process improvements


Quotations from the interviews (1/2)


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Working with Leanmade it possible to

expand withouttaking on new staff

Healthcare

Dramatic cut in costsand increased control

at the same

Retail

The management has towork in it themselves tofully understand whatLean is about in reality

Retail

Weve seen a prominent

improvement inproductivity as a result of

Lean


At the same time as the costshave been reduced, the quality

has increased

Telecom & Media

The easier it is to see concreteresults, the higher interest in

the organization


Revolutionary results!

Healthcare

Our productivity has increased with5-10% per year and during the sametime the complaints have diminished

Retail

A critical success factor isthe interest and high priority

from management

IT & Consulting

Weve managed toattract contracts thanks

to our Lean-thinking

IT & Consulting

Management has theirown result board for their

Lean work

Energy

As long as the staff can be part ofthe planning of a change they are

satisfied when it arrives

Manufacturing



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Quotations on employee level Quotations on PL and Top Management level

I was stripped ofmy responsibilitywhen the Lean

implementationstarted

The project leadersmust possessempathy andexperience

The successof Leandepends

75% on theleadership

and 25% onthe project

leaders

Working with Leanhas given us a new

mindset even inother areas

The goal is to create anew culture standing

above quick fixes(delivering bottom line

results)

Lean has had asmall effect on the

culture

We dont seeLean as a

mindset butrather as a tool

The halo must change: ithas to sit on the person

that who finds and

solves problems and noton the person who hides

them away

Lean in our company is moreabout cutting costs than

creating satisfied customers

We have to findtime outside regular

working hours(evenings,

weekends) in order

to work with Lean it is difficult

Service in is all abouttiming e.g. to know when

it is suitable to refill thewater to a restaurantcustomer, that is what

makes the difference in thecustomer experience!

800 opinions fromcustomers in 3-4

months whichstimulate thecontinuous

improvements

It is important toknow HOW tomotivate others

We plan to include EQ tests inour recruitment process

Table of contents


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Table of contents

About Cordial

About the study

A few words about Lean Results of the Lean Study 2008


Contact information

The study indicates two principal approaches when itcomes to the implementation of Lean


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2008 Cordial Business Advisers AB

comes to the implementation of Lean

Process oriented

This approach is about streamliningprioritized processes which areconsidered to generate the largestimpact on the overall performance.

All-embracingThis approach is about establishing aplan for how the total enterprise shallbe transformed in order to increaseoverall performance.

Early

Enterprises that have worked withLEAN and process improvement lessthan one year.

Mature

Enterprises that have worked withLEAN and process improvement

more than five years.

The common denominator is to increase customer orientation and to obtain cost rationalization.

Early phase

All-embracing

approach

Processoriented

approach

Mature phase

39


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Table of contents


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Table of contents

About Cordial

About the study

A few words about Lean Results of the Lean Study 2008


Contact information


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2008 Cordial Business Advisers AB422008-05-08 Pro ektnamn och konsult Fil: filnamn. t

42

StockholmKungsgatan 26111 35 StockholmTel: 08 723 87 00Fax: 08 723 87 01

Gteborg

Rosenlundsgatan 3411 20 GteborgTel: 031 711 04 50Fax: 031 750 90 99

Tokyo3-31 Kioicho n-KI1, Chiyoda-kuTokyo 102-0094 JAPANTel: +81 (0)3 3556 0481 (building reception)www.cordialasia.com

www.cordial.se

Contact information about

the Lean Study 2008:

Project leader:

Sanja Miteva

[email protected]

+46 706 10 45 33

Responsible for Lean atCordial:

Linda Bradley

[email protected]+46 708 50 55 22

+81 80 5512 9722 (Japan)


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cordial lean study 2008 final

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