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Lean Thinking

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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go …

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/lean-thinking-827


Lean Thinking is a management philosophy based on the Toyota Production System (TPS). With Lean Thinking, you will be able to enhance value for your customers by improving service delivery and eliminating waste. Simply put, by becoming a Lean organization, you will be able to improve personal effectiveness, increase productivity and create greater customer value with less resources.

LEARNING OBJECTIVES

1. Understand the principles and key concepts of Lean
2. Acquire knowledge on the key Lean methods and tools and their applications to improve personal effectiveness, value creation and waste elimination
3. Identify ways to develop "Kaizen eyes" to look for improvement opportunities
4. Describe the various Lean roles

CONTENTS

1. Introduction to Lean Thinking
- What is Lean
- What Lean is not
- Lean vs traditional thinking
- Lean management framework
- Lean applications in service environments
- Benefits of Lean thinking

2. Key Concepts of Lean Thinking
- Value and waste
- Eight types of waste
- Value-added activities
- Non-value-added activities (waste)
- Lean thinking philosophy
- Lean principles

3. Overview of Lean Methods & Tools
- Muda, Mura & Muri
- Gemba framework
- 5S principles
- Visual management
- Office layout
- Spaghetti diagram
- Value stream mapping
- Standard work
- Heijunka (Load leveling)
- Fexible workforce
- Quality at source
- Poka yoke (mistake proofing)
- Kaizen
- PDCA problem solving
- Pareto chart
- Cause and effect diagram
- Five whys

4. Ways to develop "Kaizen Eyes"
- What are "Kaizen eyes"?
- Ways to develop "Kaizen eyes"

5. Lean Roles
- Lean steering committee
- Lean deployment leader
- Lean champions
- Process owner
- Lean coach
- Team leader
- Team members

6. Sustaining a Lean Culture
- Critical success factors
- Lessons from other adopters

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  • 1. © Operational Excellence Consulting. All rights reserved. LEAN THINKING Eliminate Waste, Create Value
  • 2. © Operational Excellence Consulting. All rights reserved. 4 Outline • Introduction to Lean Thinking • Key Concepts of Lean Thinking • Overview of Lean Methods & Tools • Ways to develop “Kaizen Eyes” • Lean Roles • Sustaining a Lean Culture This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 3. © Operational Excellence Consulting. All rights reserved. 7 What Lean IS NOT • Laying off employees by the bus load • Offshoring or outsourcing • Delivering less or working harder • Being mean to people • Automation or implementing an IT system • Narrow focus on unit cost management • Another “extracurricular activities” This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 4. © Operational Excellence Consulting. All rights reserved. 10 Lean Enterprise Framework (a.k.a. Toyota Production System) Stability Standardization Just-In-Time Jidoka Involvement 1 2 3 4 5 Stability Heijunka Standardized Work Kaizen Just-In-Time • Continuous flow • Takt time • Pull system • Flexible workforce Jidoka • Separate man & machine work • Abnormality Identification • Poka yoke Goals: highest quality, lowest cost, shortest lead times Involvement 1 2 3 4 5 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 5. © Operational Excellence Consulting. All rights reserved. 13 What does Lean in a service environment look like? (2/2) Hospitals •Emergency, operating room •Resource management Application Common Issues Typical Solutions •“Unpredictable” nature •On-demand service •Highly skilled surgeons, varied backgrounds •Historical pattern planning •Visual management of resources Airlines • Airport operations • Call centers for priority travellers •Unpredictable weather •Network effect •Unique customer segments •Weather response SOPs •Customer resolution based on severity and frequency Public Services • Social services • Legal services • Funds administration •Variability in demand by volume and types of services •Capability building to provide consistent services •Resource management Source: Operational Excellence Consulting Research This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 6. © Operational Excellence Consulting. All rights reserved. 16 Methods to Increase Productivity How to Increase Productivity? Quantitative Approach More Staff More Machines Work Longer Qualitative Approach Work Harder Eliminate Waste & Simplify Focus of Lean Let’s work smarter! This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 7. © Operational Excellence Consulting. All rights reserved. “There is nothing so useless as doing efficiently that which should not be done at all.” - Peter Drucker This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 8. © Operational Excellence Consulting. All rights reserved. 22 Types of Waste • Creating reports that no one needs or making extra copies • Exceeding customer needs (“gold- plating”) • Exceeding scope of agreement • Purchasing items before they are needed (e.g. items on sale) • Providing more information than the customer needs Over-Production This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 9. © Operational Excellence Consulting. All rights reserved. 25 Types of Waste • Poor office layouts and workplace organization (5S) • Insufficient use of tele-/video- conferencing • Double or triple handling • Sub-optimal dispatch and routing • Retrieving or storing files • Taking files to another person, or going to get signatures Transportation This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 10. © Operational Excellence Consulting. All rights reserved. 28 Types of Waste Defects • Data entry errors, mistakes or rework • Missing information, missed specifications, or lost records • Poor process controls • Managing subcontractors to correct mistakes • Incorrect schedules and information • Inadequate trials before full implementation • Lost or damaged goods This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 11. © Operational Excellence Consulting. All rights reserved. 31 Non-Value Added activities in service environments 1. Checking 2. Signatures 3. Asking 4. Approving 5. Reviewing 6. Filing 7. Copying 8. Reporting 9. Monitoring 10. Rework 11. Transporting 12. Double or multiple handling 13. Searching 14. Gathering This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 12. © Operational Excellence Consulting. All rights reserved. 34 Lean Principles 1. Specify value from the customer’s perspective 2. Identify the value stream for each service family 3. Make the service flow 4. Deliver when the customer pulls from your operations (just in time delivery) 5. Manage towards perfection Source: Lean Thinking by James P. Womack and Daniel T. Jones This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 13. © Operational Excellence Consulting. All rights reserved. 37 Activities that do not add value Workload that is not balanced Overloading creates burden for the team members or processes Source: Toyota Motor Company The 3 MU’s: Muda, Mura, Muri This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 14. © Operational Excellence Consulting. All rights reserved. 40 What is 5S? 5S Is… • Daily organization, maintenance and cleaning of an area • Cornerstone for visual management • The building blocks for developing a Lean culture • Setting up an area in the most efficient manner possible 5S Is Not… • A thorough spring cleaning • A way of getting ready for an upcoming tour • A way to keep employees busy during slow periods • Organizing and cleaning everything that currently resides in a work area This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 15. © Operational Excellence Consulting. All rights reserved. 43 What is the purpose of 5S? Immediately make problems visible This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 16. © Operational Excellence Consulting. All rights reserved. 46 Attach Red Tags • Fill in everything except disposition • Perform tagging swiftly • Place tags on all items in question • Move “tagged items” to a holding area G42 Not in Use 3 06/13/2007 Hydraulic Motor This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 17. © Operational Excellence Consulting. All rights reserved. 49 2S : Set In Order • Functional placement of documents, supplies and tools • Quick and easy retrieval or placement of documents, supplies and tools Test: Can you find an item in less than 30 seconds? • Clearly designated names and places • Easy-to-read notice boards This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 18. © Operational Excellence Consulting. All rights reserved. 52 2S : Set In Order - Examples 5S on desk top drawer5S on desk top drawer Cabinet filing with labelsCabinet filing with labels Files are color-coded and neatly arranged Files are color-coded and neatly arranged A diagonal stripe was taped on to the spines of a set of binders. At a glance, anyone can tell if any file is missing. A diagonal stripe was taped on to the spines of a set of binders. At a glance, anyone can tell if any file is missing. Marker pens sorted by colorMarker pens sorted by color This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 19. © Operational Excellence Consulting. All rights reserved. 55 4S : Standardize • Principle 5S standardization Visual management • Meaning Establish standards and guidelines, and make them visual Maintain the workplace at a level in which deviations become obvious “If you can’t see, you don’t know; and if you don’t know, you can’t control.” “If you can’t see, you don’t know; and if you don’t know, you can’t control.” This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 20. © Operational Excellence Consulting. All rights reserved. 58 5S : Sustain • Principle Habit formation Disciplined workplace • Meaning Make 5S a habit Conduct regular ‘gemba’ walks Schedule for 5S audits Communicate“Maintain the gain, forget the blame.” “Maintain the gain, forget the blame.” This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 21. © Operational Excellence Consulting. All rights reserved. 61 Board is filled by hand. Checklists (beside board) are also made manually. Example: 5S Activity Board This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 22. © Operational Excellence Consulting. All rights reserved. 64 Why Visual Management? • Visual measures allow everyone to “know the score” and they make abnormal situations immediately obvious • Enables everyone to ‘see’ how we’re performing • Helps highlight problems, or variances from standard • Encourages employee involvement and open discussions This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 23. © Operational Excellence Consulting. All rights reserved. 67 Example of Visual Metrics Process Costs Product Profitability 100% Revenue Rework On TimeCycle Time Reduction WIP Backlog Internal Quality This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 24. © Operational Excellence Consulting. All rights reserved. 70 5S Implementation Roadmap 1 Phase 1: Prepare the Project 1. Get management involvement 2. Identify target areas 3. Form an implementation team Office Scan Phase 2: Perform an Office Scan 4. Select project measures and collect baseline data 5. Photograph current conditions 6. Apply the office scan checklist 7. Post a project storyboard Phase 3: Sort Through & Sort Out 8. Determine criteria for sort 9. Prepare a holding area 10. Apply Sort Phase 4: Set Things in Order & Set Limits 11. Map the current state 12. Create a Set-In-Order plan 13. Apply Set-In-Order • Define 5S zones • Assign responsibilities • Develop publicity materials • Educate everyone • Purchase cleaning equipment as needed • Red tagging• Set up 5S activity board • Define 5S project charter This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 25. © Operational Excellence Consulting. All rights reserved. 73 Why Office Layout? • Ensures most efficient layout for employees and work flow • Reduce or eliminate excess travel and motion wastes • Allows for workforce flexibility via sharing of work when necessary • Provides foundation for small lot work flow • Can be U-shaped or L-shaped, depending on area • Facilitates communication and reinforces team work • Increases organizational process knowledge, versus individual process knowledge This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 26. © Operational Excellence Consulting. All rights reserved. 76 Why Value Stream Mapping? • To set strategy before diving into tactics • Visualize the process at multiple levels • Provides a common language for analyzing processes • Enables us to see the flow and sources of waste • Provides a blueprint for creating flow This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 27. © Operational Excellence Consulting. All rights reserved. 79 Current State Value Stream Map Purchasing – Non-repetitive purchases less than $5,000 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 28. © Operational Excellence Consulting. All rights reserved. 82 What is Standard Work? • Standard work is an agreed-upon set of work procedures that establish the best and most reliable methods and sequences for each process and each staff • Standard work aims to maximize performance while minimizing waste in each person’s operation and workload • Standard work is the fluctuating level of optimum work to be done by people and equipment each day to meet customer demand This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 29. © Operational Excellence Consulting. All rights reserved. 85 Takt Time = 10 seconds Standardization This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 30. © Operational Excellence Consulting. All rights reserved. 88 Heijunka by Service Type Traditional service provider Lean service provider SERVICE DELIVERY SEQUENCE Order A Order B Order C Order D Demand per week This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 31. © Operational Excellence Consulting. All rights reserved. 91 Philip Crosby: Law of 10 Minimal defects due to prevention- based activities Defects found within the service provider and corrected internally External customer finds defects and makes complaints 1 10 100 IncreasingCostsIncreasingCosts This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 32. © Operational Excellence Consulting. All rights reserved. 94 Dealing with Root Causes • Solutions must deal with root causes, not symptoms • Make use of the fishbone diagram • Ask “Why?” five times to get to the root cause The system for quality is prevention.The system for quality is prevention. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 33. © Operational Excellence Consulting. All rights reserved. 97 Poka Yoke – Dual Focus DefectsMistakesProcess Prevention Poka-Yoke that focuses here works on mistake prevention or making mistakes impossible. Detection Poka-Yoke that focuses here works on mistake detection, or making sure mistakes do not turn into defects. People and systems do make mistakes. A portion of mistakes turn into defects. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 34. © Operational Excellence Consulting. All rights reserved. 100 What is Kaizen? • Kaizen means improvement. Improvements without spending much money, involving everyone from managers to employees, and using much common sense. • The aspect of Kaizen is that it is on-going and never-ending improvement process. • Examples of Kaizen activities: Process improvement (WITs, Just-Do-Its, etc.) This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 35. © Operational Excellence Consulting. All rights reserved. 103 Kaizen Event • Rapid, focused application of Lean to reduce waste to improve cost, quality, delivery, speed, flexibility and responsiveness to customer needs • 3-5 day dedicated event • Clear objective and scope • Continuous small improvements • Changes are implemented quickly • Everyone gets involved Source: "The Idea Generator” by Norman Bodek This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 36. © Operational Excellence Consulting. All rights reserved. 106 Example of A3 Storyboard Source: Lean Enterprise Institute This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 37. © Operational Excellence Consulting. All rights reserved. 109 Pareto Chart • Purpose To show relative importance of a set of measurements Also called the “80/20” rule • When to use To differentiate the ‘vital few’ from the ‘trivial many’ After improving a process, to show relative change in a measured item Sorting a set of measurements to emphasize their relative sizes This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 38. © Operational Excellence Consulting. All rights reserved. 112 How to Construct a Pareto Chart 1. Set the method and time period for the data collection. Collect the data and classify them according to problems, causes or subject matter. 2. Arrange the data of the items in the order of the most data, and enter each item’s data respectively. At the same time, add up the cumulative figure. 3. Create the framework for the horizontal and vertical axes. Horizontal axis is for categories, problems or causes. The left vertical axis represents frequency whereas the right vertical axis represents the percentage scale. 4. In the order of the most data, draw the bar graphs from the left. Using the cumulative figure, draw the cumulative curve. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 39. © Operational Excellence Consulting. All rights reserved. 115 Example: Cause and effect diagram used in solving the problem of “Late Payment of Invoices” Computer System Internal Mail System Staff Finance Policy Documentation Older System Downtime Excess Demand Access Limitations Low Priority Manual Sort ProcessNew Maintenance Contractor Excess Demand Cost-Reduction Program One Pick-Up Daily Workspace Equipment Lost/Misplaced Mail Turnover Inexperienced Staff Manual Files Crowded Space Resigned No Limit Manager Missing Documentation Branch Offices Forward Payments Weekly Reorganization of Purchase Org. Centralized Payment Authorization Audit Recommendation for Tighter Control Missing Purchase Orders Maximize Cash Payment Delays Increased Workload Turnover Hiring Freeze Access Limitations Low Priority Morale Paycuts Overtime Reduced Productivity Deadlines Validated root causes Legend Late Payment of Invoices This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 40. © Operational Excellence Consulting. All rights reserved. 118 How to Complete the 5 Whys 1. Write down the specific problem. Writing the issue helps you formalize the problem and describe it completely. It also helps a team focus on the same problem. 2. Ask Why the problem happens and write the answer down below the problem. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 41. © Operational Excellence Consulting. All rights reserved. Ways to Develop “Kaizen Eyes”This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 42. © Operational Excellence Consulting. All rights reserved. 124 Ways to Develop “Kaizen Eyes” 2 21.Record annoyances 22.Look from different frame (i.e. quality, safety, materials) 23.Follow the flow 24.Do an experiment 25.Swim up the process 26.Test a theory 27.Ask a child 28.Look for patterns 29.Understand the financials 30.Imagine what the activity would look like with different staffing 31.Build something 32.Specify value through the eye of the customer 33.Start to Kaizen something 34.Join an improvement team 35.Create a poka-yoke 36.Brainstorm possibilities 37.Study other Kaizens 38.Collect examples of improvements from all parts of life 39.Practice at home 40.Teach to a child This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 43. © Operational Excellence Consulting. All rights reserved. 127 Role of Lean Steering Committee • Create a vision for the Lean initiative • Define Lean implementation roadmap • Define the strategic goals and measures • Create an environment within the organization that will promote the use of the Lean techniques and tools • Create awareness and publicity • Identify and track projects/Kaizens • Establish rewards and recognition system • Make resources available – team members and budget This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 44. © Operational Excellence Consulting. All rights reserved. 130 Role of Process Owner • Takes ownership of the project when it is complete • Is responsible for maintaining the project gains • Removes barrier for Lean project teams • Support the project team, e.g. make resources available • Maintain the countermeasures and ensure that they are active and compliant • Participate in Lean project reviewsThis document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 45. © Operational Excellence Consulting. All rights reserved. 133 Role of Lean Team Members • Is trained in the subset of the Lean methodology and tools • Works small scope projects, typically in his/her respective work area • Can be an effective team member on a Lean team This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 46. © Operational Excellence Consulting. All rights reserved. “Whether you think you can, or you think you can’t, you’re right.” - Henry Ford This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
  • 47. © Operational Excellence Consulting. All rights reserved. About Operational Excellence Consulting This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/lean-thinking-827
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