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Lean: What is it and how to use it?An introduction to applying Lean to improve service quality and cost
William FellApril 4th, 2012 Exceptional people delivering exceptional results
The challenges of ‘traditional’ change in the workplace
Limited delivery following after months of work and the production of long reports
Lack of engagement generating resistance to change Flavour of the month feeling so your people ignore it The organisation staggers from one initiative to the next, never
delivering the planned results Focus on the next big new idea – lots of up front cost and no real
benefit – built on existing process rubble Customer service damaged In summary lots of cost, time and effort with little real
improvement.
Some of the challenges for universities today
Increased student expectations Harsher competitive environment Scarcer resources New fees regime (England) and uncertain funding futures Newly emergent competitors – domestic and international Identifying and securing new income streams
People and change
For an organisation to change successfully the people within it have to change and make the transition associated with change
It has been estimated that 80% of change projects that fail do so because ‘leaders’ fail to manage the people issues associated with change
To minimise the risks of failure, leaders need to understand how people react to change but more importantly if change is to be successful people need to be given the opportunity to be involved.
Lean – what is it?
A methodology for achieving excellence in customer service, by eliminating waste and optimising the flow of customer value through the workplace
It also gives employees on the front line the motivation, tools and freedom to make major improvements to their daily work
A people-based approach to implementing Lean can help organisations achieve a radical improvement in productivity very quickly and build a sustainable incremental growth thereafter.
Lean – what is it?
Effective improvement and change management Engages all of the organisations people Focuses on the customer and what they value Based on understanding the operational data and the process
demand Defines new processes Designs processes to flow across functional / organisational
interfaces Eliminates non value adding steps Generates short term and long term improvements Based around focused and intensive interventions Delivering continuous improvement.
Lean – what it is not!
Short-term cost reduction programme Process to support headcount reduction Only for front line staff Based on using qualitative metrics to define impact Deployed without clearly defined ownerships, roles and
responsibilities A diet A computer thing A silver bullet Just about the process.
A brief history of Lean
Lean Service & Lean Systems
Thinking
Lean Frontiers:Green lean
Lean accountingLean IT
Lean Frontiers:Green Lean
Lean accountingLean IT
Six Sigma(GE & Motorola)
(Lean) Six Sigma
Lean Manufacturing
Vanguard “Check Model”
Toyota Production System
(Ohno, Shingo)
Deming Management
Method / Joseph Juran
Scientific Management
Walter Shewhart(Bell Telephone)
TQM (1980s/90s)
Ford & GMMass Production
Scientific Management
Taylorism
Sakichi Toyoda Father of Japan’s
Industrial Revolution
1890s – early 1900s
early 1900s – 1950s
1950s – 1980
1980s – 2000
2000 – present
Deming’s 14 principles
1. Create constancy of purpose towards improvement
2. Adopt the new philosophy
3. Cease dependence on inspection
4. Move towards a single supplier for any one item
5. Improve constantly and forever
6. Institute training on the job
7. Institute leadership
8. Drive out fear
9. Break down barriers between departments
10.Eliminate slogans
11. Eliminate management by objectives
12.Remove barriers to pride of workmanship
13. Institute education and self-improvement
14.The transformation is everyone’s job
Examples of how Lean thinking differs from the norm
‘Command & Control’ **
Who is in charge? What’s my job description? Let’s get economies of scale Let’s standardise the process What does the contract say? What’s the target? Whose fault is this error? We need a quick win ‘Good enough’.
** Adapted from John Seddon (2003) Freedom from Command and Control
‘Lean Thinking’ Who is the customer and how do I
add value? How much demand is there? Let’s get economies of flow Let’s standardise the quality of the
outcome Let’s cooperate How capable are we at delivering
what the customer wants? Let’s learn from mistakes Let’s adapt over time Let’s aim for perfection.
Purpose – Measures - Method
Seddon J. (2008) ‘Systems Thinking in the Public Sector’
The core of Lean
Define who are the customers – recipients, payers and / or other stakeholders (e.g. owners of interfacing processes)
Define desired outputs and value in customer terms Define current process (value stream) - as it really is, not as it is
supposed to be Identify & eliminate waste - all steps should directly contribute to
satisfying the need of the customer Make the process flow so the customer can ‘pull’ (i.e. demand
from the customer).
Lean and waste
Remember though…..Waste is a sensitive issue
It is critical to eliminate ‘waste’ It is also critical to recognise that the non value adding activities
may have been a core part of someone’s job for many years It is the activities that are non value adding.....not the person.
Some Lean tools………
Here’s a list of some of the tools developed for Lean improvements: 7 / 8 wastes A3 thinking VA / NVA identification Kaizen (blitz, blast) / Rapid
Improvement Event (RIE) Control charts PDSA / PDCA Poka Yoke (mistake proofing) Root Cause Analysis / 5 Whys SPC (Statistical Process Control) 5S
Theory of constraints Value / failure demand Value stream map / mapping Voice of the customer SIPOC Whole systems check.
Other complementary tools Cooperative inquiry Appreciative inquiry Clean language Symbolic modelling.
Lean – how to use it…….a 5-step method
Senior stakeholders Service Managers Sponsor owned; project team designed and led
Whole system information
Customer - the beneficiary of the service / processes Roles (participants / staff) - the people / roles who perform the tasks
/ activities in the service / processes (includes capacity available) Purpose – what is the main purpose of the department / service for
the team (and also for individuals) Work - what are the core activities carried out in the delivery of the
service (functions / processes) (includes demand on the system) Stakeholders – where / how the service fits into the larger
perspective and which other organisations are involved (includes suppliers)
Environment - IT systems / software and paper / electronic forms used to deliver the service / processes
Specifications / policies – what exists to define the service delivered, policies that apply and service level agreement with clients/ suppliers.
Finding the quick wins
Should have minimal impact on separate business areas Be quick and inexpensive to implement Have strong support through the team / organisation Require clear and simple changes by the participants Be low risk Quick to implement – ideally less than one month Measurable – outcome saves time Solves frustrating issue that has hung around for a long time Get as close to the root cause as possible Must not cause any knock-on effects.
Finding the focus areas
Bigger work streams to get something done / changed Mini-project or big project Utilises ‘strengths and opportunities’ to overcome any
‘weaknesses and threats’ Gets to the root cause Usually found in P2T2 areas (always related to ‘purpose’):
Policies / specifications Process improvement / streamlining Training Technology.
Lean and culture
Lean challenges command and control management behaviours It encourages all staff to develop improvements It encourages the organisation to trial improvements in a
controlled environment It is action orientated not report orientated.
Lean and leadership
Lean challenges many of the traditional leadership styles in organisations
It requires the leadership team to: Set the direction Define the parameters for the work Commit the resource Support the delivery of the outputs
Within those limits the leadership teams hands responsibility to the front line team to Redesign the process Identify waste Develop actions that will reduce waste Design the team structures Deliver continuous improvement.
Lean and your customers
Lean focuses on what the customer values It deals with the processes that produce outputs not areas of
functional responsibility It seeks to eliminate non value adding activities from the
processes It uses measures to drive the desired organisational behaviours It understands customer demands It uses data to develop improvement actions.
Lean and your people
Lean change is a way of operating not a one off change programme
Your people are engaged directly in delivering the results The required outputs are based on what your customer values The parameters and direction are defined by the leadership team The people who do the work design the changes Lean creates a structure which encourages ongoing improvement.
Lean….the journey
1Efficiencyactivities
2ProcessAware
3ServiceImprovement
4ServiceTransformation
5Culture Change
6Lean Systems Aware
Phase of maturity
Lev
el o
f L
ean
S
yste
ms
Mat
uri
ty
♦
♦
♦
♦
♦
♦
Broad &shallowprocessreviews
Set-upBPI team
♦
Make efficiency& capacity savings
Choose toolsand beginreviews acrossthe Organisation
♦
BeginLeantraining
Check benefits are being realised?
Start Lean reviewsacross theCouncil
Include behaviour shift capability in approach
♦Confirm people-basedapproach
♦ ♦
Lean culture embedded
Continuousimprovementcycle in place
Lean and your university……size of the prize!
Many organisations are good at the things that add value Many organisations are not good at reducing the non value
adding steps in processes Lean defines this non value adding activity as waste Lean releases the resources that are taken up with that wasteful
activity The resource prize in eliminating the waste is significant – 40% to
70% reductions in resource time are possible and achieving.
References
Aligning processes to competitive needs using lean practices - Professor David Stockton, De Montford University, Leicester.
Analysis of Lean Implementation in UK Business Schools and Universities - Zoe Radnor & Giovanni Bucci, AtoZ Business Consultancy.
Website and associated collaterals – University of St. Andrews. Freedom from Command and Control – John Seddon Systems Thinking in the Public Sector – John Seddon Out of the Crisis – W. Edwards Deming The machine that changed the world – Womack & Jones (and Roos) Lean Management Masterclass – Myles, Scottish Executive.
Where to go for more information?
Core Principles Freedom from Command and Control (John Seddon) The Toyota Way (Jeffry Liker) Out of the Crisis (W.E. Deming)
Tools & process The Lean Service Toolbox (John Bicheno)
Historical context The Machine that Changed the World (Womack and
Jones)
Operations management and strategic lean
Understanding Variation (Donald Wheeler)
Specialist: Critical Chain (Eliyahu Goldratt) Lean IT ( Steven Bell & Michael Orzen) Practical Lean Accounting (Brian Maskell & Bruce
Baggaley) Open Space Technology (Harrison Owen) Clean Language (Wendy Sullivan & Judy Rees)
iTunes (free podcasts):
The Systems Thinking Review Lean Summit 2010 Profit through process (Six Sigma IQ) and many others…
Useful (free) clips Why Targets are Dangerous
http://www.youtube.com/watch?v=pfcVwIcRxxM Deming Library excerpt
http://www.youtube.com/watch?v=GHvnIm9UEoQ Trabant Quality Control
http://www.youtube.com/watch?v=mIAYxWCXF8A
Your speaker today William Fell [email protected] 07557 004 307
QUESTIONS?