LEAN 101 Mike NugentPrevention Services Division CDPHE
“At Toyota we get brilliant results from average people managing abrilliant process. Others get average results from brilliant people managing broken processes.” Source: Toyota Motor Co.
Toyota Production System• Approach to Production – Build only what is needed – Stop if something goes wrong – Eliminate anything which does not add value• Philosophy of Work – Respect for Workers – Full utilization of workers’ capabilities – Entrust workers with responsibility & authority Taiichi Ohno 3
Core Concepts of Lean• Create continuous process flow to bring problems to the surface• Use “pull” to avoid overproduction• Level out the workload (hejunka)• Get quality right the first time• Standardize tasks• Use visual controls so no problems are hidden• Use only reliable, thoroughly tested technology that serves your people and processes• In pursuit of perfection
Customer Define Value• Value-Added (VA): – Any activity performed during the production of a product or service that increases the value to the customer or citizen• Non-Value-Added (NVA): – Any activity that does not add value to the customer or citizen, or that is not necessary in support of the main purpose. (These activities should be eliminated, simplified, reduced, or integrated.)
Waste• Waste is disrespectful of humanity – Because it squanders scarce resources• Waste is disrespectful of individuals – Because it asks them to do work with no value - President Toyota• Waste is disrespectful to Colorado citizens – By asking them to endure processes with no value
7 Wastes CharacteristicsOverproduction • Processing that the customer does not need or wantInventory • Staff Members waiting • Multiple applications awaiting approvalExtra Processing • Duplication • Processing a small deal the same as a large deal • Navigating multiple screens to input dataMotion • Printing material • Looking/researching for data/info • Incorrect data on applicationDefects/Rework • Missed customer due dates • Rework • Application waiting approvalWaiting • Waiting on information from customer • Waiting on information from 3rd party • Receiving hardcopies from customerTransportation • Shipping hard copies for customer signature • Manually walking the application for approval
Kaizen- Rapid Improvement Event (RIE) • Goal: Generate ideas for improvements and test changes at the work site • Typically 4 days and report out event • Appropriate scope • Prework and data gathering key • Cross-functional team (8-10) – Black Belt team leader – Process owner – 1/3 fresh eyes – 1/3 Lean experience – 1/3 team doing the work
Kaizen- Rapid Improvement Event (RIE)Day 1 Examine a process/function or area Identify areas of waste, non-customer value and metricsDay 2 Develop new process, standard work and communication to eliminate identified waste and increase valueDay 3 Implement the new processes, standard work Monitor production board and communicate standards Observe new process and any change in metricsDay 4 Adjust and fine tune new standards
5S• Sort (does it belong here)• Set in Order (organize)• Shine (clean)• Standardize (repetition process)• Sustain (metrics posted, accountability)
How 5S will be used at PSD• Reduce searching • Gain flow• Trigger an activity • Enable communication• Define standards for and information sharing consistent results • Mistake-proof tasks
Push and Pull method of Work Flow Push Method: A method in which production of the item begins in advance of customer needs. Example: A buffet where food is prepared in advance.Pull Method: A method in which customer demand activates production of the service or item. Example: A restaurant where food is only prepared when orders are placed. Lean systems use the pull method of work flow.
KANBAN Kanban means “card” or “visiblerecord” in Japanese & refers tocards used to control the flow ofproduction through a factory.KANBAN is a PULL System .
Process Mapping• Diagram that visually displays a series of events, activities or steps that occur within a given process – Helps to define and analyze a process – Identifies deviations from the norm – Shows relationships between steps or departments involved – Highlights value-added and non value-added step in a process
Versions of a Process 1. What you think it is...2. What it actually is... 3. What you would like it to be...
Process MappingYellow notes: steps in the processPink notes: identify opportunities for improvement
CURRENT STATE PM Actions: -Verifies info on claim form -Checks supporting document Mgr Actions: Control Analyst Actions: -Verify math accuracy -Verifies expenses fall within -Verifies expenses fall -Verify match & local claim period within contract periodPM receives benefit Yes -Verifies travel expenses Yes Sends to -Checks claim against Data PM PM enters PM routes Manager claim form -Verify expenses are Accurate? -Verifies eligibility of Accurate? Control prior expenses stamp signs into SAP to Mgr signsfrom grantee eligible expenses Analyst -Checks SAP against -OTS contract mgmt -Reviews match/local claim manual No benefits on claim form -Completes all PM and -NHTSA federal finance -Verifies spending rate No Mgr steps document PM Add to Response Keep old When new -CONUS/Travel info Need to Yes Start contacts pending from until new received, Fiscal rules (state & OTS) resubmit? over Send back grantee file grantee received check pile to PM PM No contacts mgr Move forward PM contacts control analyst Yes CA initials Original claim PM copies Accurate? and returns goes to Teri claim for file Paul logs to PM for logging MOST claims No and walks upstairs Janet pulls copy Some claims: Take purchase order Al receives Al date Janet Janet logs all Write claim # Check vendor of purchase order/ enter match/local and claim form to claims from stamps and receives all claims and down and and remittant contract and benefit info into assure correct fund/ Submit claim mailbox distributes claims assigns # sign address Type claim Copy claim File claim attaches to claim spreadsheet performance period return form Teri walks claims return form return form return form upstairs to to Mgr business office mail box PM resolves Mgr goes to PM closes and forwards to PM for claim loop with Control Analyst resolution Mgr for initials Hand packet View document Janet separates Batch claim Scan page 1 Yes Enter into SAP Compare Paid next Mike K. File original claim to Michael K. # and compare Before Yes Return to claim form forms, copy & 2 of claim Accurate? (“parking” contract “Post it” business signs claim (hard copy) (2-3 times/ with claim and 2pm? Janet purchase order page 1 & 2, and form and file invoice) period day form (Business office) day) contract and returns to file return to PM in EDM (OTS) No No Hold claim Paid and contact businessPM via email/ day plus 1 phone
FUTURE STATE Send claim to No Compile Yes Claim Proj Mgr Controls Additional Add errors Accurate? list ofsubmitted reviews claim Analyst for errors? to list errors review Yes No Send claim to Controls Analyst for review No Compile Return claim Proj Mgr Errors Accurate? list of form to Proj contacts corrected errors Mgr vendor Yes Put claim in Jenn takes Business office Check Yes Return outbox for claim(s) to receives claim(s) Park Claim to Form to remittant Accurate? Mgr Review Post invoice original claim business business invoice Mike Janet address to PM office office Distribute - Tech No Contact PM W9
LEAN Goals April 1, 2012-March 31, 2013• Create a general awareness and enthusiasm regarding LEAN process improvement amongst PSD employees• Provide managers and supervisors opportunities to attend training in LEAN process improvement philosophy, methods, and tools• Provide mentorship and coaching to PSD managers and supervisors in the application of LEAN process improvement principles• Demonstrate measurable improvements in PSD program delivery, business practice, and Division efficiency and efficacy• Leverage PSD LEAN expertise in facilitating cross departmental improvement initiatives
LEAN Activities April 1, 2012-March 31, 2013• Provide LEAN 101 presentation to PSD managers, supervisors, and employees• Provide training to managers and supervisors related to LEAN tools including but not limited to 5S, standard work, process mapping, and waste walks• Develop and regularly update LEAN tracking sheet for PSD operations documenting cost savings, cost avoidance, and improvements in efficiency and customer service• Provide representation and support to CDPHE’s LEAN Advisory Group• Conduct Rapid Improvement Events (RIE) with an emphasis on strong baseline metrics and process improvement sustainability• Conduct Program Reviews in an effort to improve program efficacy and customer service
Measures for Activities• A minimum of 125 employees attend LEAN 101 presentation during performance period• A minimum of 50 employees attend at least one training related to the use of LEAN tools such as 5S, standard work, process mapping, and waste walks.• Using the PSD LEAN tracking sheet, document at least $500,000 in cost savings, cost avoidance, and/or waste reduction during the performance period• Provide PSD representation to at least 75% of CDPHE LEAN Advisory Group meetings• Conduct at least two PSD Rapid Improvement Events (RIE)• Conduct at least two PSD Program Reviews