409 - 'Lean', what it is and how to use it

Lean: What is it and howto use it?An introduction to applying Lean toimprove service quality and costWilliam 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 Frontiers: 2000 – Lean Service & Lean Systems Green Lean Green lean (Lean) Six Sigma Lean accounting present Thinking Lean IT 1980s – Vanguard “Check Lean Six Sigma Model” Manufacturing (GE & Motorola) 2000 Toyota Production TQM 1950s – System (1980s/90s) (Ohno, Shingo) 1980 Deming early 1900s – Ford & GM Management 1950s Mass Production Method / Joseph Juran Sakichi Toyoda Scientific 1890s – Father of Japan’s Scientific Management Management Industrial Walter Shewhart early 1900s Revolution Taylorism (Bell Telephone)

Deming’s 14 principles1. Create constancy of purpose towards improvement2. Adopt the new philosophy3. Cease dependence on inspection4. Move towards a single supplier for any one item5. Improve constantly and forever6. Institute training on the job7. Institute leadership8. Drive out fear9. Break down barriers between departments10. Eliminate slogans11. Eliminate management by objectives12. Remove barriers to pride of workmanship13. Institute education and self-improvement14. The transformation is everyone’s job

Examples of how Lean thinking differs from the norm‘Command & Control’ ** ‘Lean Thinking’ Who is in charge?  Who is the customer and how do I What’s my job description? add value? Let’s get economies of scale  How much demand is there? Let’s standardise the process  Let’s get economies of flow What does the contract say?  Let’s standardise the quality of the outcome What’s the target?  Let’s cooperate Whose fault is this error?  How capable are we at delivering We need a quick win what the customer wants? ‘Good enough’.  Let’s learn from mistakes  Let’s adapt over time** Adapted from John Seddon (2003) Freedom from Command and  Let’s aim for perfection. Control

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 toolsdeveloped for Lean improvements:  Theory of constraints 7 / 8 wastes  Value / failure demand A3 thinking  Value stream map / mapping VA / NVA identification  Voice of the customer Kaizen (blitz, blast) / Rapid  SIPOC Improvement Event (RIE)  Whole systems check. Control charts PDSA / PDCA Other complementary tools Poka Yoke (mistake proofing)  Cooperative inquiry Root Cause Analysis / 5 Whys  Appreciative inquiry SPC (Statistical Process Control)  Clean language 5S  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 Phase of maturity 1 2 3 4 5 6 Efficiency Process Service Service Culture Lean Systems activities Aware Improvement Transformation Change Aware Systems Maturity Check benefits are being realised? Level of Lean Choose tools Lean culture and begin embedded reviews across Confirm the Organisation people-based approach Make efficiency Continuous Set-up & capacity improvement Broad & BPI team Start Lean savings Include cycle in place shallow reviews behaviour shift process across the capability in reviews Council approach Begin Lean training

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  iTunes (free podcasts): Freedom from Command and Control (John Seddon)  The Systems Thinking Review The Toyota Way (Jeffry Liker)  Lean Summit 2010 Out of the Crisis (W.E. Deming)  Profit through process (Six Sigma IQ) Tools & process  and many others… The Lean Service Toolbox (John Bicheno)  Useful (free) clips Historical context  Why Targets are Dangerous  http://www.youtube.com/watch?v=pfcVwIcRxxM The Machine that Changed the World (Womack and Jones)  Deming Library excerpt  http://www.youtube.com/watch?v=GHvnIm9UEoQ Operations management and  Trabant Quality Control strategic lean  http://www.youtube.com/watch?v=mIAYxWCXF8A Understanding Variation (Donald Wheeler)  Your speaker today Specialist:  William Fell Critical Chain (Eliyahu Goldratt)  william.fell@capita.co.uk Lean IT ( Steven Bell & Michael Orzen)  07557 004 307 Practical Lean Accounting (Brian Maskell & Bruce Baggaley) Open Space Technology (Harrison Owen) Clean Language (Wendy Sullivan & Judy Rees)

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409 - 'Lean', what it is and how to use it

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