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WCBF Lean Six Sigma Summit   Chicago Transferring Lean Principles to the Front Office Mike Shuck, Manufacturing Specialist...
<ul><li>Toyota  Production  System </li></ul><ul><li>Lean  Manufacturing </li></ul><ul><li>Can just as easily be: </li></u...
<ul><li>Manufacturing versus Transactional </li></ul><ul><li>It really does not matter……..? </li></ul><ul><li>Does the Hou...
Lean Building Blocks Manufacturing Value Stream Mapping Continuous Improvement Quick Changeover Standardized Work Batch Re...
Lean Building Blocks Admin/Office Value Stream Mapping Continuous Improvement Voice of Customer Standardized Work Problem ...
<ul><li>Everyone  is in the Value Stream </li></ul>Transferring Lean Principles to the Front Office Accounting Scheduling ...
<ul><li>Everyone is in the Value Stream </li></ul><ul><li>Where do you start? </li></ul><ul><li>Where would your customer ...
Transferring Lean Principles to the Front Office <ul><li>Some will say  </li></ul><ul><li>“ I agree, this is good stuff….....
<ul><li>During your lean journey, you’ll encounter  </li></ul><ul><li>four types of people: </li></ul><ul><li>See it and g...
Transferring Lean Principles to the Front Office <ul><li>What happens if you do not start with the VSM? </li></ul>Bosses f...
<ul><li>-And by the way…..silos will always exists </li></ul><ul><li>-You can only lower the height </li></ul><ul><li>-Or ...
Lean = Eliminating Waste Value Added Typically 95% of all lead time is non value-added <ul><li>Non-Value Added </li></ul><...
Overproduction Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Misuse of automation </li></ul><ul><li>Lo...
Waiting Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Unbalanced workload </li></ul><ul><li>Unplanned ...
Transportation Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Poor plant layout </li></ul><ul><li>Large...
Non-Value-Added Processing Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Product changes without proce...
Excess Inventory Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Inefficiencies and unexpected problems ...
Defects Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Weak process controls </li></ul><ul><li>Poor qua...
Excess Motion Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Poor people/machine effectiveness </li></u...
Underutilized People Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Low or no investment in training </...
<ul><li>Start closest to the customer. </li></ul><ul><li>Are you invoicing correctly? </li></ul><ul><li>Are you price list...
<ul><li>How long does it take to develop a new product? </li></ul><ul><li>Are you offering the best freight options? </li>...
<ul><li>Information Technology </li></ul><ul><li>How reliable are your systems? </li></ul><ul><li>Are all your reports use...
<ul><li>Finance </li></ul><ul><li>How long does it take to process Capital Expenditures? </li></ul><ul><li>How long is the...
<ul><li>6 minutes video of Western Union Current State </li></ul>Transferring Lean Principles to the Front Office
<ul><li>Discuss video </li></ul>Transferring Lean Principles to the Front Office
<ul><li>2 minutes video of Future State </li></ul>Transferring Lean Principles to the Front Office
Western Union Changes <ul><li>Cross training of office personnel </li></ul><ul><li>Contract was signed later – after sched...
Western Union Results $1.7 million - EBIT 122,500 More days of potential revenue $3.1 Million - Revenue Increase (12 month...
<ul><li>Explain the following, including your rationale: </li></ul><ul><ul><li>Takt? </li></ul></ul><ul><ul><li>Where will...
<ul><li>Don’t Wait! </li></ul><ul><li>You need a plan! </li></ul><ul><ul><li>Tie it to business objectives.  </li></ul></u...
<ul><li>Use the Value Stream Map to interrupt the data </li></ul><ul><li>Without data, you only have opinions and everyone...
Current State VSM Example
Transferring Lean Principles to the Front Office Prioritize your to do list / projects / Kaizens Easy to do High impact 1 ...
<ul><li>Thank You </li></ul>Transferring Lean Principles to the Front Office
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Transferring Lean Principles to the Front Office

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  • Transcript of "Transferring Lean Principles to the Front Office"

    1. 1. WCBF Lean Six Sigma Summit Chicago Transferring Lean Principles to the Front Office Mike Shuck, Manufacturing Specialist Chicago Manufacturing Center Manufacturing Extension Partnership
    2. 2. <ul><li>Toyota Production System </li></ul><ul><li>Lean Manufacturing </li></ul><ul><li>Can just as easily be: </li></ul><ul><li>Toyota Transactional System </li></ul><ul><li>Lean Transactions </li></ul>Transferring Lean Principles to the Front Office
    3. 3. <ul><li>Manufacturing versus Transactional </li></ul><ul><li>It really does not matter……..? </li></ul><ul><li>Does the House of Lean look any different? </li></ul>Transferring Lean Principles to the Front Office
    4. 4. Lean Building Blocks Manufacturing Value Stream Mapping Continuous Improvement Quick Changeover Standardized Work Batch Reduction Teams Quality at Source 5S Workplace Organization Visual Plant Layout POUS Cellular/Flow Pull/Kanban TPM Continuous Improvement
    5. 5. Lean Building Blocks Admin/Office Value Stream Mapping Continuous Improvement Voice of Customer Standardized Work Problem Solving Teams Quality at Source 5S Workplace Organization Visual Office Layout Leveling Cellular/Flow Pull/Kanban IT Continuous Improvement
    6. 6. <ul><li>Everyone is in the Value Stream </li></ul>Transferring Lean Principles to the Front Office Accounting Scheduling Accounts Payable Accounts Receivable Inside Sales Marketing Human Resources Supply Chain Shipping Receiving Engineering Sales Manufacturing Credit Order Entry Quality Maintenance Information Technology
    7. 7. <ul><li>Everyone is in the Value Stream </li></ul><ul><li>Where do you start? </li></ul><ul><li>Where would your customer want you to start? </li></ul><ul><ul><li>Where are you difficult to do business with? </li></ul></ul><ul><ul><li>Friction points </li></ul></ul><ul><ul><li>Let the data lead you there </li></ul></ul><ul><li>Just start…………. SOMEWHERE </li></ul>Transferring Lean Principles to the Front Office
    8. 8. Transferring Lean Principles to the Front Office <ul><li>Some will say </li></ul><ul><li>“ I agree, this is good stuff…..Start……” </li></ul>Just start somewhere else … because I have enough to do as it is!!!
    9. 9. <ul><li>During your lean journey, you’ll encounter </li></ul><ul><li>four types of people: </li></ul><ul><li>See it and get it </li></ul><ul><li>Don’t see it….eventually do </li></ul><ul><li>Don’t see it …good employees </li></ul><ul><li>Don’t see it and don’t want you to get it ! </li></ul>Transferring Lean Principles to the Front Office
    10. 10. Transferring Lean Principles to the Front Office <ul><li>What happens if you do not start with the VSM? </li></ul>Bosses favorite project Feel good projects Projects which can be completed quickly Projects which cause the least friction I’m relieved…..it might not include our department A hit and miss approach And the silo mentality can continues…………….. Sales Marketing Order Entry Scheduling Manufacturing Supply Chain Shipping
    11. 11. <ul><li>-And by the way…..silos will always exists </li></ul><ul><li>-You can only lower the height </li></ul><ul><li>-Or decrease the wall thickness </li></ul>Transferring Lean Principles to the Front Office
    12. 12. Lean = Eliminating Waste Value Added Typically 95% of all lead time is non value-added <ul><li>Non-Value Added </li></ul><ul><ul><li>Overproduction </li></ul></ul><ul><ul><li>Waiting </li></ul></ul><ul><ul><li>Transportation </li></ul></ul><ul><ul><li>Non-Value Added Processing </li></ul></ul><ul><ul><li>Excess Inventory </li></ul></ul><ul><ul><li>Defects </li></ul></ul><ul><ul><li>Excess Motion </li></ul></ul><ul><ul><li>Underutilized People </li></ul></ul>Is VA and NVA any different in the office?
    13. 13. Overproduction Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Misuse of automation </li></ul><ul><li>Long setup time </li></ul><ul><li>Unleveled scheduling </li></ul><ul><li>Over-engineered </li></ul><ul><li>Admin/Office </li></ul><ul><li>Wrong priority </li></ul><ul><li>Ineffective communication </li></ul><ul><li>Unbalanced workload </li></ul><ul><li>Not focusing on company objective </li></ul>Making more, earlier and/or faster than required by the next step in the process
    14. 14. Waiting Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Unbalanced workload </li></ul><ul><li>Unplanned maintenance </li></ul><ul><li>Long setup time </li></ul><ul><li>Upstream quality problems </li></ul><ul><li>Misuse of automation </li></ul><ul><li>Admin/Office </li></ul><ul><li>Unbalanced workload </li></ul><ul><li>Redundant approval </li></ul><ul><li>Unreliable software or hardware </li></ul><ul><li>Unavailable documents </li></ul><ul><li>Incomplete and/or incorrect information </li></ul>Idle time created when waiting for …
    15. 15. Transportation Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Poor plant layout </li></ul><ul><li>Large batch sizes </li></ul><ul><li>Large storage areas </li></ul><ul><li>Long lead times </li></ul><ul><li>Admin/Office </li></ul><ul><li>Poor location of offices </li></ul><ul><li>Multiple file storage areas & systems </li></ul><ul><li>Multiple approvals </li></ul><ul><li>Lack of identification </li></ul>Transporting parts, materials, documents, and information around the facility.
    16. 16. Non-Value-Added Processing Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Product changes without process changes </li></ul><ul><li>True customer requirements not clearly defined </li></ul><ul><li>Redundant approvals </li></ul><ul><li>Rework </li></ul><ul><li>Admin/Office </li></ul><ul><li>Lack of communication </li></ul><ul><li>Redundant approval </li></ul><ul><li>Too many information systems </li></ul><ul><li>Repetition of same information in different documents </li></ul>Effort that adds no value to the product or service from the customer’s viewpoint.
    17. 17. Excess Inventory Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Inefficiencies and unexpected problems </li></ul><ul><li>Unleveled scheduling </li></ul><ul><li>Poor forecast </li></ul><ul><li>Poorly designed reward system </li></ul><ul><li>Unreliable suppliers </li></ul><ul><li>Admin/Office </li></ul><ul><li>Poor scheduling </li></ul><ul><li>Unbalanced workload </li></ul><ul><li>Buying too many office supplies </li></ul><ul><li>Lack of system to manage inventory </li></ul><ul><li>Batch processes </li></ul>Any supply in excess of one piece flow.
    18. 18. Defects Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Weak process controls </li></ul><ul><li>Poor quality </li></ul><ul><li>Deficient planned maintenance </li></ul><ul><li>Poor product design </li></ul><ul><li>Admin/Office </li></ul><ul><li>Under-trained employees </li></ul><ul><li>High employee turnover </li></ul><ul><li>Doing process in a rush </li></ul><ul><li>Confusing procedures </li></ul>Inspection and correction of parts, materials, or information.
    19. 19. Excess Motion Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Poor people/machine effectiveness </li></ul><ul><li>Inconsistent work methods </li></ul><ul><li>Poor facility or cell layout </li></ul><ul><li>Poor workplace organization </li></ul><ul><li>Admin/Office </li></ul><ul><li>Poor workplace organization </li></ul><ul><li>Lack of training </li></ul><ul><li>Nonstandard work methods </li></ul><ul><li>Poor office layout </li></ul>Any unnecessary work movements of people or equipment.
    20. 20. Underutilized People Waste Definition & Causes <ul><li>Manufacturing </li></ul><ul><li>Low or no investment in training </li></ul><ul><li>Low pay, high turnover </li></ul><ul><li>Poor hiring practices </li></ul><ul><li>Not asking “What do you think?” </li></ul><ul><li>Low expectations </li></ul><ul><li>Penalizing experimentation </li></ul><ul><li>Admin/Office </li></ul><ul><li>Low or no investment in training </li></ul><ul><li>Low pay, high turnover </li></ul><ul><li>Poor hiring practices </li></ul><ul><li>Not asking “What do you think?” </li></ul><ul><li>Low expectations </li></ul><ul><li>Penalizing experimentation </li></ul>The waste of not using people’s creative abilities.
    21. 21. <ul><li>Start closest to the customer. </li></ul><ul><li>Are you invoicing correctly? </li></ul><ul><li>Are you price lists current? </li></ul><ul><li>Do you use Voice of the Customer (VOC)? </li></ul><ul><li>How long to replace a incorrect shipment? </li></ul><ul><li>How long to correct the credit adjustment? </li></ul><ul><li>How long to answer the phone? </li></ul><ul><li>Are your lead times too long? </li></ul><ul><li>How long to get a quote? </li></ul><ul><li>How many customers are you gaining? </li></ul><ul><li>How many customers are you losing? </li></ul>Transferring Lean Principles to the Front Office So where do you focus in the office?
    22. 22. <ul><li>How long does it take to develop a new product? </li></ul><ul><li>Are you offering the best freight options? </li></ul><ul><li>Are you expediting when you don’t need to? </li></ul><ul><li>Who controls expediting? </li></ul><ul><li>How much friction is there in you AR/AP? </li></ul><ul><li>What are you spending your freight on? </li></ul><ul><li>Are there visuals indicators as to how we are doing? </li></ul><ul><li>Can customers track their order online? </li></ul><ul><li>Can they order, get samples online? </li></ul><ul><li>Is there repetition of same information in different documents? </li></ul>Transferring Lean Principles to the Front Office
    23. 23. <ul><li>Information Technology </li></ul><ul><li>How reliable are your systems? </li></ul><ul><li>Are all your reports used? </li></ul><ul><li>Do others ask for specific reports or do you give the them data to sort themselves? </li></ul><ul><li>Are all your forms accessible via an intranet? </li></ul>Transferring Lean Principles to the Front Office Other office areas to focus
    24. 24. <ul><li>Finance </li></ul><ul><li>How long does it take to process Capital Expenditures? </li></ul><ul><li>How long is the budgeting process? </li></ul><ul><li>How many days does it take you to close month end? </li></ul>Transferring Lean Principles to the Front Office
    25. 25. <ul><li>6 minutes video of Western Union Current State </li></ul>Transferring Lean Principles to the Front Office
    26. 26. <ul><li>Discuss video </li></ul>Transferring Lean Principles to the Front Office
    27. 27. <ul><li>2 minutes video of Future State </li></ul>Transferring Lean Principles to the Front Office
    28. 28. Western Union Changes <ul><li>Cross training of office personnel </li></ul><ul><li>Contract was signed later – after scheduling training during delivering training & equipment </li></ul><ul><li>Excessive volume and phone call backlog led to the salesperson, customer and order entry person gathering the information real time – this required 15 continuous  minutes but the tradeoff was no call backs/phone tag </li></ul><ul><li>Took 5-6 months to implement and done with week long kaizen events </li></ul>
    29. 29. Western Union Results $1.7 million - EBIT 122,500 More days of potential revenue $3.1 Million - Revenue Increase (12 month) 99 % 1 % 15 % Attrition 79 % 19 days 90 days Total Lead Time 65 % 17 hrs 49 hrs Cycle Time 79 % 17 80 Number of Delays 70 % 69 229 Number of Steps 75 % 18 73 Number of Handoffs %(+/-) After Before
    30. 30. <ul><li>Explain the following, including your rationale: </li></ul><ul><ul><li>Takt? </li></ul></ul><ul><ul><li>Where will you flow, where do you need to pull? </li></ul></ul><ul><ul><li>What is the pacemaker process? </li></ul></ul><ul><ul><li>Will you level the workload? </li></ul></ul><ul><ul><li>Are supporting improvements necessary? </li></ul></ul><ul><ul><li>Resulting lead time improvement? </li></ul></ul>Team Tips: Presenting Your Future State Map
    31. 31. <ul><li>Don’t Wait! </li></ul><ul><li>You need a plan! </li></ul><ul><ul><li>Tie it to business objectives. </li></ul></ul><ul><ul><li>Break your Future state into “loops.” </li></ul></ul><ul><ul><li>Make a Value Stream Plan: What to do by when. </li></ul></ul><ul><ul><li>Relate the Future State Map to your layout. </li></ul></ul><ul><ul><li>Conduct Value Stream Reviews by walking the flow. </li></ul></ul>Implementation A Plan to Get There
    32. 32. <ul><li>Use the Value Stream Map to interrupt the data </li></ul><ul><li>Without data, you only have opinions and everyone has one! </li></ul><ul><li>Don’t let perfect get in the way of better! </li></ul><ul><li>Start somewhere…………… </li></ul>Transferring Lean Principles to the Front Office
    33. 33. Current State VSM Example
    34. 34. Transferring Lean Principles to the Front Office Prioritize your to do list / projects / Kaizens Easy to do High impact 1 Easy to do Low impact 2 Hard to do Low impact 4 Hard to do High impact 3
    35. 35. <ul><li>Thank You </li></ul>Transferring Lean Principles to the Front Office
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