Michigan Manufacturing Technology Center ©2014 MMTC

Ten Ways Lean Systems Can Improve Your Organization

MicroSkills Session:

Lean Systems?

• What is it?– A philosophy that demands short lead times to

deliver defect-free low cost products and/or services– A Lean system is achieved by eliminating waste in

all aspects of product or service delivery processes.• What it is not….

– A headcount reduction strategy – Demanding more from workers without providing

the tools and strategies to achieve more

Lean Systems Improve Profits by Decreasing Time and Costs!2

The Pricing Model Today

Price(Fixed)

Any increase in these areas of cost

squeezes the profit!

Fixed (Set By The Customer)

Our Goal Our Challenge!

Profit

Burden

Labor

Materials

Profit = Price - Cost

3

Why Lean Systems?

4

MicroSkill 1Strategic Planning

Company

Vision

Company

VisionBreakthrough

Objective

TODAY

• A Measurable Strategic Plan is lacking in most organizations.

• It is impossible to ‘begin with the end in mind’ if the end hasn’t been defined.

• When people know what is truly important, their behaviors can help you close the ‘execution gap’.

• A strategic plan can typically be crafted in a day and can fit on one piece of paper.

8 Types of Waste in ANY Process

Defects

Overproduction

Waiting

Non-utilized talent

Transportation

Inventory

Motion

Extra processing

Would it be difficult to train everyone to recognize these wastes in their daily work? Would memorizing this be asking too much?

Value Added

5

MicroSkill 2

What Is Meant by Value Added?Value Added (CPR):Those activities that deliver a product or create a service or information that meets customer requirements.

1. Work that the Customer is willing to pay for (will they ever see it?)

2. Work that Physically transforms the product, service or information (Are the before and after ‘pictures’ any different?)

3. Work that is done Right the first time

Non-Value Added ActivitiesThose activities that consume time, resources or space, but do not add to the value of the product or service itself.

Non-Value Added but Necessary ActivitiesThose activities that do not add value but are CURRENTLY NECESSARY (legal, statutory, regulatory, etc.)

6

MicroSkill 3

Would it be difficult to train everyone to recognize this in their daily work? Would memorizing this be asking too much?

Why is Process Mapping Important?

“If you can’t describe what you’re doing as a process, you don’t know what you’re doing.”

MicroSkill 4

W. Edwards Deming

• A process map is the best way to understand a process all the way through… not just the pieces that we are already experts on.

• Every step in every process probably made perfect sense at one time, but rarely are they questioned in terms of value added.

• We trust everyone is doing their best and they don’t try to make errors, however the ‘magic’ is often what happens in-between the value added work.

Process Mapping Example:Hospital Inpatient Surgery

MicroSkill 4

Yes

No

No

Yes

No

Review Patient Equipment Needs

1.0RAI Units

x.xxCycle Time Mins

NoYes

No

YesYes

No

No

CCC/Rehab Assessment

1.0RAI Units

x.xxCycle Time Mins

Yes

Yes

Yes

x.xx

Wait Time

Mins

Transport Patient to Medicine

1.0NNVA Units

x.xxCycle Time Mins

YesYes

No

No

Yes

No

Yes

No

Yes Yes

Yes

No

Yes

Review patient info, chart and confer

with staff

1.0RAI Units

x.xxCycle Time Mins

Discharge Planning

Required?

Obtain Discharge Planning Order

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins

No

Yes

Test Completed

1.0VA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Results Obtained

1.0NNVA Units

x.xxCycle Time Mins

Call Porter or Unit Aide

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

yes

NO

yes

CC

AC

CC

AC

Dis

ch

arg

e P

lan

nin

g

Dis

ch

arg

e P

lan

nin

g

So

cia

l W

ork

So

cia

l W

ork

La

b

La

b

YesYes

No

YesYes

Yes

No

NO

Yes

Yes

No

Yes

No

No

Yes

Yes

Yes

NO

Yes

No

YES

No

Yes

MR

I/C

T

MR

I/C

T

Ult

ras

ou

nd

Ult

ras

ou

nd

Ph

arm

ac

y

Ph

arm

ac

y

SD

A

SD

A

No

No

Yes

No

Yes

Su

rgic

al

Flo

or

Ad

mit

tin

gE

D /

Am

bu

lato

ry C

are

/ D

ay

Su

rge

ry

Po

rte

r

Su

rgic

al

Flo

or

Admit Patient to Inpatient

Surgical Unit?

Order Entered

Call Surgical Unit

Review Bed available/

AppropriateAppropriate

Bed Available?

Assign Staff Nurse – Tell admitting right

then

Move patients and call back to admitting

Call ED Ward Clerk re: Room #

Is Bed Ready?

Weekday > 7p.m.,

Weekend > 2 p.m.

Call for Report Call Porter

Transfer Patient

Call for Report

Short Stay

Call/Find second nurse

2 Nurses pick up patient

Patient Arrives

Compile list of SDA’s (next Day)

Fax SDA list to surgical floor

Clinical Assessment

Patient ready for discharge

from PCU?

Cont. Patient Assessment

Call PACu (SDA)

ED

/ A

mb

ula

tory

Ca

re /

Da

y S

urg

ery

Ad

mit

tin

g

Med Recon. Unsigned?

Review Orders

Call unit to confirm & send recon back

Find Nurse Find Dr

Is physician still here?

Find/Call for Alternate physician

for orders

Physician signs and return orders to

nursing units

Pharmacy Open?

Call Pharmacy, Re-fax orders

Verify, Dispense & Deliver Drugs

Admin patient own meds

Meds received and administeredAccomodation

s/Isolation precautions accurate?

Provide Patient care

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Po

rte

r

1.0NNVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0RAI Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0NVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins 1.0NNVA Units

x.xxCycle Time Mins

1.0RAI Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins

1.0NVA Units

x.xxCycle Time Mins

1.0NVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0RAI Units

x.xxCycle Time Mins

1.0NVA Units

x.xxCycle Time Mins

1.0VA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins 1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins 1.0NVA Units

x.xxCycle Time Mins

1.0NVA Units

x.xxCycle Time Mins

1.0NVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

1.0NVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0VA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

OT/PT Required?

Lab Required?

Reassign patient accommodation/location, contact

housekeeping

1.0NVA Units

x.xxCycle Time Mins

STOP

Obtain OT/PT Order

1.0NNVA Units

x.xxCycle Time Mins

Order Obtained

1.0NNVA Units

x.xxCycle Time Mins

1.0NNVA Units

x.xxCycle Time Mins

1.0VA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Ultrasound Required?

Ultrasound Order obtained

1.0NNVA Units

x.xxCycle Time Mins

Review Orders

1.0RAI Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Complete & Accurate

CT or MRI Required?

Order and Requisition

1.0NNVA Units

x.xx

Wait Time

Mins

Review and Prioritize

1.0RAI Units

x.xxCycle Time Mins

Call Porter or Unit Aide

1.0NNVA Units

x.xxCycle Time Mins

Test Completed

1.0VA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins x.xx

Wait Time

Mins

Results Obtained

1.0NNVA Units

x.xxCycle Time Mins

Complete Accurate and

Legible?

Myco Mist Order

Required?

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins

Nurse Collect

x.xx

Wait Time

Mins

Nurse Collects

1.0NNVA Units

x.xxCycle Time Mins

Send via tube & call (every time)

1.0NNVA Units

x.xxCycle Time Mins

Phleb. Collect specimen

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Obtain Results

1.0VA Units

x.xxCycle Time Mins

Review and Prioritize

1.0RAI Units

x.xxCycle Time Mins

Call Required?

Call Re: Results

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Contact Physician Orders obtained

1.0NNVA Units

x.xxCycle Time Mins

Results entered in the Computer

1.0NNVA Units

x.xxCycle Time Mins

Review patient info, chart and confer

with staff

1.0RAI Units

x.xxCycle Time Mins

Social Work Required

Obtain Social Work Order

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins

x.xxCycle Time Mins

Review and Prioritize

1.0RAI Units

x.xxCycle Time Mins

Receive Phone Calls

1.0NNVA Units

x.xxCycle Time Mins

Can Patient Return Home w/ Support? x.xx

Wait Time

Mins

Coordinate Home Services

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Review Options

1.0RAI Units

x.xxCycle Time Mins

CCAC Required?

CCAC Required? x.xx

Wait Time

Mins

Review Patient Info

1.0RAI Units

x.xxCycle Time Mins

Is Order Required?

x.xx

Wait Time

Mins

Obtain Order

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

CCAC Assessment

1.0NNVA Units

x.xxCycle Time Mins

Review Patient Info

1.0RAI Units

x.xxCycle Time Mins

EquipmentRequired? x.xx

Wait Time

Mins

Equipment Arranged

1.0NNVA Units

x.xxCycle Time Mins

LTC Application Required?

Services Arranged

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

LTC Application Started

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

CCAC Assessment(MDS)

1.0RAI Units

x.xxCycle Time Mins

Bed Available?

x.xx

Wait Time

Mins

Patient Accepted?

Review Options

1.0RAI Units

x.xxCycle Time Mins

Patient Appropriate for

Medicine?

Medicine Bed Available?

x.xx

Wait Time

Mins

Medicine Bed Ready? x.xx

Wait Time

Mins

Inform Physician Re : Transfer of Care

1.0NNVA Units

x.xxCycle Time Mins

Inform Admitting , Family, Staff

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

Call For Porter

1.0NNVA Units

x.xxCycle Time Mins

Porter Available? x.xx

Wait Time

Mins

Transport Patient to Medicine via

Nursing

1.0NNVA Units

x.xxCycle Time Mins

CCC/Rehab Appropriate?

Obtain Order

1.0NNVA Units

x.xxCycle Time Mins

x.xx

Wait Time

Mins

x.xx

Wait Time

Mins

Patient Accepted?

CC

C/R

eh

ab

CC

C/R

eh

ab

CCC/Rehab Bed

Available? x.xx

Wait Time

Mins

Patient Transferred

1.0NNVA Units

x.xxCycle Time Mins

Ready for Discharge?

Order Written?x.xx

Wait Time

Mins

Obtain Order

1.0NNVA Units

x.xxCycle Time Mins

Equipment Arranged?

x.xx

Wait Time

Mins

Review Patient Transportation

Needs

1.0RAI Units

x.xxCycle Time Mins

Family Available to Transport?

x.xx

Wait Time

Mins

Transport Patient

1.0NNVA Units

x.xxCycle Time Mins

P10 P20

E10 E20 E30

E40 E50

E60

E70

A10 A20 A30 A40 A50

S10

S20

S30 S40

S50

S60 S70 S80

S90

S100

S110 S120

S130 S140 S150

S160

S170

S180 S190 S200 S210

S220 S230

S240 S250 S260 S270 S280 S290

S300

S310 S320 S330 S340

Y10 Y20

H10 H20

U10 U20 U30 U40 U50

M10 M20 M30 M40

L10 L20 L30

L40

L50

W10

D10 D20

D30

C10 C20 C30

C40

C50

C60

C70

X10

X20

Red = Non-Value AddedYellow = Necessary, but Non-Value AddedGreen = Value AddedPurple = Review, Approve or InspectBlue (diamond) = Decision point

Impact of Batch Size Reduction

30+ minutes for total order

12 min. for total order3 min. for first part

ProcessProcess Process

• One-Piece Flow Processing “Make one - Move one!”

BA C

10 minutes

10 minutes

• Batch & Queue Processing

Lead Time: 21+ minutes for first piece

10 minutes

ProcessA

ProcessB

ProcessC

9

MicroSkill 5

Local departmental efficiencies often come at the expense of the system…

5S Workplace Organization

10

MicroSkill 6

A Simple Concept:

If we expect our people to be as efficient and effective as possible, we must ensure that the workplace is as efficient and effective as possible.

The 5S Recipe:SortSet-in-OrderShineStandardizeSustain

The ‘Hidden’ Week: What if we waste 10 minutes per

day because we are disorganized..?

10 Minutes Per Dayx 5 Days Per Week= 50 Minutes Per Weekx 50 Weeks Per Year= 2,500 Minutes Per Year÷ 60 Minutes Per Hour= 42 Hours Per Year

Standardized Work

11

MicroSkill 7

The Scientific Method:A method or procedure that has characterized natural science since the 17th century, consisting in systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses.

Standardization

WorldClass

Continuous

Improvement

Change

Standardized Work:The documented best known method or procedure to produce quality outcomes. When our process deviates from it’s standard, we should expect variable outcomes. Variation is the enemy of any process…

Error Proofing

12

MicroSkill 8

Assumption: People do not intentionally make errors, but they are capable of them.

Three States of an Error:

State 3

The Error has resulted in a defect.

State 2The Error occurred but no defect was recognized (yet).

State 1The Error is about to occur

Lots of attention is usually paid here, because this is where the “pain” occurs.

Where we should be focusing

Activity-Based CostingMicroSkill

9

Objects of Work

Activities

ResourcesBuilding, Wages, Benefits, Vehicles, Machines,

Offices, Computers, Warehouses, Quality Lab, etc.

Case Management, Order Taking, Workforce Training, Documentation, Meetings, Making Something,

Performing a service , etc.

Case # 12345, Job # 6789, Customer XYZ,Service ABC

Not understanding true costs at the activity level often leads to poor decision making and excessive expense. Most accounting systems are not designed to answer these questions, therefore critical business questions are typically never truly answered.

KaizenMicroSkill

10

Assumption: There is always room for improvement

Realities: • There is rarely an established improvement methodology in most

organizations. • This is typically because there is no strategic plan that dictates what must be

improved (i.e. ‘how much’ and ‘by when’ is never discussed or written down).• Most people already have great ideas and they are DYING for you to ask!!!

Kaizen is a rapid process improvement methodology with a simple premise... Improvement cannot be made and sustained without the full cooperation of the people who must do the work. Dictating improvement is what most organizations do… and it rarely works.

QUESTIONS?

15

Robert StaufferLean Program Manager

The Michigan Manufacturing Technology Center (MMTC)rstauffer@mmtc.org

734-634-8296