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Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
Lean Enterprise Initiative
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Lean Enterprise Initiative

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Willowtree Advisors has designed a Lean Enterprise Initiative that includes a Lean transformation framework and a philosophy for Lean Six Sigma and Change Management approaches that could translate to …

Willowtree Advisors has designed a Lean Enterprise Initiative that includes a Lean transformation framework and a philosophy for Lean Six Sigma and Change Management approaches that could translate to any industry.

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  • 1. Lean Enterprise InitiativeOverview and Approach
  • 2. Agenda  Overview  Approach  Timeline  Pricing  Summary Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 2
  • 3. Overview
  • 4. s Lean Enterprise Initiative “Words”Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 4
  • 5. Company Overview  Denver Based Business Consulting Firm Recent Customers • Business and technology strategy Local Customers • Transformation State of Colorado OIT • Optimization of internal assets (people and Arapahoe County Public Works technologies) Arapahoe County IT  Our goal: provide access to expert knowledge Western Disposal and consulting at a reasonable price Denver Water  Certified WOSB CO Dept of Natural Resources National Customers  Over 30 professional consultants Tate and Lyle • Certified in Lean, Six Sigma, PMI, TQM EMC • Experienced w/industry standards such as Regis Corp ITIL, CMMI, ISO 9000/9001 and Baldrige Acadia GSA (MOBIS) Fast Flexible Focused Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 5
  • 6. Lean Project Experience Private Escapes BNSF s Veterans Affairs BHP Billiton Medical Center Center Partners Teleflex General Medical Dynamics Covidien Denver Health Rainbird INTREX Brambles Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 6
  • 7. Desired Outcomes Increased Customer Satisfaction and Increased Employee Engagement Engagement s Satisfied and Reduced Waste Supportive Increased Productivity Customers Strategically Quantifiable Results Effective Tied to the Strategy Relationships and Reputation Financially An Efficient, Strong and Effective and Stable Strategically Orgnization Driven Organization * Source : Client 2011 Strategic Plan Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 7
  • 8. Current Situation  Rising Operating Costs  Sluggish Economy  Wage Pressures  Risk of Reduced Service Levels  Flat /Decreasing Revenues s Increasingly Population Stringent Growth Regulations Conservation Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 8
  • 9. The Challenge “70% of change initiatives fail.” Michael Beer, and Nintin Nohria, Harvard Business Review s Leadership Employee Commitment Engagement Success Stakeholder Solid Communication Execution Choose Your Team Wisely Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 9
  • 10. The “Words”  Lean – An approach for business  Black Belt or Lean Facilitator – An process improvement with a focus on expert in Lean methods who works reducing waste in time, inventory and with teams to help them apply Lean manpower methods and tools to business process improvement activities  Sensei or Lean Expert – A person who has significant training and experience  Value Stream – A key business with Lean tools, implementations and process that delivers a value (service strategy or product) to the customer.  A3 or Storyboard - A format for telling  Kaizen Event/RIE or Focus Event – a story, or reporting results and/or One of several kinds of business status on a single page improvement projects – focused on a weeklong improvement workshop Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 10
  • 11. WTA Lean Transformation Framework - FLEX TM JumpStart Traction Expand Sustain • Assess and Align • Conduct Value • Conduct VSAs for • Conduct VSAs Strategy • Identify and Stream 50% for 100% Prioritize Value Analyses for • Calibrate Strategic • Review and Streams 25% Alignment Renew • Define KPIs s • Design • Form VS Teams • Expand VS Governance • Expand VS Infrastructure • Implement Teams Teams • KPI/Metrics Governance • Track and • Track and • Governance Structure Report Results Report Results Structure • Track /Report • Update Pgm • Accountability • Templates • Complete ` • Design Approach • Implement • Expand Training Adoption • Training Adoption and Training Rollout • Communication Approach Communication • Employee • Change Mgmt • Rollout Comm, • Professional Engagement/ • Conduct Training Training Development Recognition Deployment • Conduct Pilot • Rollout Lean • Rollout Lean • Rollout Lean • Evaluate Process to Process to Process to Results 25% of Scope 50% of Scope 100% of Scope • Followup Program Management 18-24 months+ Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 11
  • 12. Phase One - Alignment Alignment Phase Duration Activities/ Deliverables Target Completion Date Jump Start 8 Weeks  Program/Phase Logistics s Month 2  Review of Key Materials  Executive Alignment Session • Identify Key Business Processes • Identify, Select & Prioritize Value Streams  Infrastructure Design • Governance • Communications • Training and Change Mgmt  Implementation Approach  Conduct Pilot  Phase One Summary Report What starts right, stays right. Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 12
  • 13. Phase Two - Implementation Implementation Duration Activities/ Deliverables Target Completion Phase Date Traction 12 - 18 Program Framework, Governance and s Month 3 - 20 months Infrastructure Implementation • Communications, Training and Change Management Plans • Tracking /Measurement/ Reporting/ Problem Solving Tools, Templates and Processes Value Stream Analysis and Mapping Workshops Lean Team/Facilitators Training Focus Event Facilitation and Report Outs Workforce Orientation Quarterly Reviews / w Lean Expert (s) Early traction drives success. Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 13
  • 14. Phase Two - Implementation Implementation Phase Duration Activities/ Deliverables Expand 18 - 24 Continuation of Traction Deliverables, as requested s months Periodic/on-request support, coaching, training and quality reviews as requested Quarterly Reviews / w Lean Expert (s) Sustain 18 - 24 Periodic/on-request support, coaching and quality months+ Quarterly Reviews / w Lean Expert (s) “Do or do not. There is no “try”.” -- Yoda Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 14
  • 15. Benefits of Our Approach  We understand the challenge  We have an approach that works  We can get the job done  We’ve price our services reasonably  We have a vested interest in helping you be successful Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 15
  • 16. Approach
  • 17. “A true Lean transformation must begin with people.” s Carey and McConnellCopyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 17
  • 18. What Does the Client Require? Manage Change Plan for dealing with the impact that implementation of Lean practices has on the culture Focus Improvements A method to identify and prioritize value streams and business processes for improvement s Assistance with the identification of specific and measurable key performance indicators Measure Results Development of a leadership team representative of all company employees and functions, Develop Leaders empowered and capable of implementing the Lean Enterprise Initiative Training in and use of a method for quickly evaluating and implementing changes to business Proceed with Speed processes/RIE/Kaizen Events A training plan and program for key staff members that allows for a gradual transition to Train Effectively employee-led process improvement efforts. A method to track and report hard dollar savings that result from Lean exercises and Validate Contribution improvements to business processes Assist client’s Communication team to provide clear messaging about the Lean Initiative and its Communicate Clearly results through key internal and external stakeholders Although efficiencies can be achieved through attrition or reassignment of personnel, the Lean Eliminate Waste not People Initiative will not be a tool or justification for layoffs or reductions in force. The Lean Program should not be a “canned” version of initiatives completed for other Tailor Initiatives organizations and should be flexible and adaptable for the company’s mission Although the consultant will have a direct and significant role in developing and leading the Transfer Knowledge program initially, the long term goal is to train and transition skills to company employees Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 18
  • 19. Tailor InitiativesWTA Lean Approach Our Philosophy  The basics are the same, but the  Choose the tool that works best for details vary. - Recognize that each the situation. - Start with basic Lean client and each culture is different. templates and approaches.  Be on the leading edge, not bleeding  What worked somewhere else is a edge. Focus on leveraging lessons good starting point, not necessarily learned from other industries and the end point. Modify standard incorporate best practices from approaches to fit the specific client previous projects. environment and objectives Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 19
  • 20. Tailor InitiativesWTA Lean Approach What we have learned…  “Brand” the initiative to create internal and external interest and ownership.  Pay attention to other initiatives, and learn from their experiences.  Don’t worry about getting it “perfect”, just do what is right for your business and your customer.  Coordinate with current projects so as to optimize resources and ensure alignment.  Don’t take on too much at once.  Have fun! Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 20
  • 21. Change Management Approach Manage Change  Our approach embodies aspects of change management throughout the methodology: • Quick Wins • Coaching, mentoring • Transparency • Communications • Accountability • Governance • Sustainability • Employee Empowerment Results = Quality Solutions x  Our approach Acceptance • Tailor the change approach in Phase One • Deploy in Phase Two Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 21
  • 22. Develop LeadersDeveloping a Lean Leadership Team  Identify and involve leaders from all levels of the organization  Transfer Knowledge through Observation, Participation, Repetition and Ownership  Develop a Recognition Program for Leaders and Teams Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 22
  • 23. Communicate ClearlyCommunications Approach  Communicate early and often  Communicate to both internal and external stakeholders s  Plan communication using stakeholder management tools Stakeholder Map and Alignment Plan Stakeholder Groups Key Stakeholders in this Hot Buttons, Concerns, Interests How will we engage What do they expect from Communication Communication Group them? us? Opportunities Timeline Stakeholder Group 1 Executives Overall Information on governance Face to face Same as Hot Buttons Governance Workshop One off event responsibilities, process changes, discussions roll-out, dry run & on-going metrics Stakeholder Group 2 Mid Level Management Process changes directly affecting Calls and/or emails Contact List Governance Workshop One off event employees & stakeholders; New Processes interaction with new team; roll-out, dry run & on-going metrics, escalated issues Communication is the foundation of organizational buy-in. Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 23
  • 24. “Waste is a tax on the whole people.” Albert Atwood sCopyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 24
  • 25. Proceed with SpeedProjects Overview Overview  Annually, Value Stream Analyses are performed to identify and prioritize projects for the upcoming year. • Just Do Its • Focus Events • Short Term Projects • Long Term Projects  Focus Events (i.e. RIE, Kaizen) are focused process improvement events intended to be completed in one week. Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 25
  • 26. Focus ImprovementsLean Improvement Approach Value Stream Analysis s Projects Prepare for Conduct VSA VSA Follow-up Workshop Workshop Prepare for Conduct Follow-up Leadership/ Event Event Value Stream Alignment Prepare for Conduct VSA VSA Follow-up Workshop Workshop Prepare for Conduct Follow-up Event Event Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 26
  • 27. Focus ImprovementsLean Initiative Structure Example Leadership Team Lean Program Manager/PMO Value Stream Lean Team Value Stream Exec Exec Sponsor Sponsor Lean Facilitator Lean Facilitator WTA Lean Experts Project Team Project Team Project Team Project Team Project Team Project Team Project Team Project Team Project Team Project Team Project Teams include: • Process Owner •Team Lead Value Stream A •Team Members Value Stream B • SMEs • Customers Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 27
  • 28. Focus ImprovementsLeadership/Value Stream Alignment Process s Prepare Conduct Alignment Followup Workshop 2 Weeks Prior to Workshop 3 Days During Next 1-2 Years  Review strategic plan and budget  Introduction, approach  Conduct Value Stream  Interview senior leaders  Process mgmt fundamentals Analyses for Key Business  Define Key Business Processes Processes  Finalize meeting logistics  Metrics system  Perform followup activities, (e.g. input to strategic plan)  Strategic plan correlation  Select Key Business Process and potential Value Streams  Select high level metrics (KPIs) Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 28
  • 29. Focus ImprovementsMapping Levels Organization-wide Key Business Processes (KBPs) and Metrics sZZ Value Streams Processes/Metrics Project Processes/Metrics Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 29
  • 30. Focus Precisely Focus ImprovementsValue Stream Analysis Process s Prepare Conduct Workshop Followup 6-8 Weeks Prior to Workshop 2.5 Days 2-4 Weeks After Workshop  Identify, validate and invite team  Introduction, approach, tools  Notify and debrief Event Team members training Lead and Team members  Finalize meeting logistics  Review key business processes/VS  Schedule Focus Events  Establish workshop guidelines map  Perform followup action items  Review key Value Stream  Define scope of VSA focus documents:  Identify and prioritize Events • Mission, Strategy  Identify Event Participants • Org structure  Develop High Level Event Maps • Procedures manuals  Draft Event Charters  Gather and review data/metrics Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 30
  • 31. Focus ImprovementsFocus Event Process s Prepare Conduct Event Followup 2-3 Weeks Prior to Event One Week1 1-3 Months After Event  Finetune Preliminary Charter  Day 1 – Educate and Analyze  Complete documentation of developed during VSA  Day 2 – Brainstorm, Design event and appropriate  Conduct working session(s) with Improvements “sharing” stakeholders to identify high-level  Day 3 – Implement Changes  Observe Implementation requirements and perspectives. and Test/Simulate  Finish any open action items  Gather & perform cursory analysis of  Day 4 – Finalize Documentation,  Ensure Data Collection data to provide guidance to focus  Day 5 – Present Results  Conduct periodic (30/60/90 event day) reviews of metrics  Finalize logistics of Event 1 One Week if Focus Event ,additional weeks if a project Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 31
  • 32. “Several things must be done to move from Lean Six Sigma capacity to Lean Six Sigma s culture. Knowledge transfer may be the most important.” Carey and McConnell - Knowledge Transfer is the Key to Lean Six Sigma CultureCopyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 32
  • 33. Transfer KnowledgeKnowledge Transfer Philosophy  We focus on skills acquisition  Classroom Training is just one of many ways to transfer knowledge  Hands On, Experiential Learning and Coaching is preferable to Classroom Training  Classroom Training is best as a supplement to hands on learning (not the other way around!) • Reserve classroom training for Project Participants and Champions • Train “just in time” – don’t overwhelm participants with unnecessary training • Create excitement around projects through access to formal training Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 33
  • 34. Transfer KnowledgeKnowledge Transfer Process Observe • Attend the orientation and observe the methodologies. s Participate • Participate in the Value Stream Mapping and Focus Events led by WTA Lean Experts Repeat Own • Repeat the learning by leading portions of Focus Events in conjunction with WTA Lean Expert Repeat Participate • Attend formal training Observe Own • Own the process, lead all Focus Events with participation and/or review of WTA Lean Expert • Attend formal training Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 34
  • 35. WTA Lean Transformation Framework - FLEX TMLean Transformation Framework Transfer Knowledge JumpStart Traction Expand Sustain • Assess and Align • Conduct • Conduct VSAs for • Conduct VSAs Strategy • Identify and Value Stream 50% for 100% Prioritize Value Analyses for • Review/Calibrate • Review and Streams 25% Strategic Renew • Define KPIs Alignment Responsibilities: s • Design • Form VS Teams  WillowTree Leads, with support Governance • Expand VS • Expand VS and participation from Denver Infrastructure • Implement Teams Teams Water • KPI/Metrics Governance • Track and • Track and • Governance Structure Report Results Report Results Structure • Track /Report • Update Pgm  Denver Water leads, with support • Accountability • Templates and participation from WillowTree Focus • Design Approach • Implement • Expand Training • Complete Adoption • Training Adoption and  Denver Water leads Training Rollout • Communication Approach Communication • Employee • Change Mgmt • Rollout Comm • Professional Engagement/ • Conduct Training • Training Development Recognition • Conduct Pilot • Rollout Lean Deployment • Evaluate Results Process to • Rollout Lean • Rollout Lean • Followup 25% of Scope Process to Process to • Lead Focus 50% of Scope 100% of Scope Events Program Management Alignment Implementation 18-24 months+ Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 35
  • 36. Train EffectivelyRecommended Training Training Level Overview Duration Suggested Attendees Target Phase Lean  Overview of Lean Principles, Tools and 4 Hours • Pilot Event participants, Phase One and Two Orientation Methods sponsoring manager(s) of (Included in Pilot, the Pilot Event and Pilot  Introduction to Tools s and all Focus Event Project leaders Events)  Examples Executive  Overview of Lean Concepts, Principles, 8 Hours  Executive Team Early Phase Two Orientation Methods  Lean Executive Sponsor,  Developing, Managing and Nurturing a  Lean Program Manager Lean Culture  Lean Project Manager  Bringing Benefits to Bottom Line  Value Stream Sponsors  Hands-On Examples  Your Role as a Champion of Lean  Establish expectations as sponsors of Lean projects Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 36
  • 37. Train EffectivelyRecommended Training Training Level Overview Duration Suggested Attendees Target Phase Employee  Overview of Lean at Company 30 Minutes  All employees and stakeholders Phase Two Orientation  What it means to my job  How I can contribute s Foundational  Overview of Lean Principles and Methods 8 hours  Project Teams/Participants Phase Two  Understanding Lean Communication Strategy  Project Leaders Training and Change Management  Sponsoring Managers  Detailed Tools and Methods Training with Examples and Case Studies  Identifying Opportunities, Prioritizing Projects, and Achieving Results  Basic Project Management Mainstream  Intermediate Tools Understanding 16 Hours  Company Project Leaders who Phase Two have successfully completed Training  Introduction to Advanced/Six Sigma Tools that Foundational Training and at complement Lean least one Lean Event and want  Advanced Project and Change Management to become a Lean Facilitator  Facilitation  Organizational Leaders charged with driving the Lean Enterprise Initiative to the next level Formal Training Focuses on the Participants of Lean Projects Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 37
  • 38. “Routinely collecting, compiling, and communicating data on the performance of key s aspects of a process—including data not typically collected by environmental agencies — is an important aspect of Lean and Six Sigma implementation. “ Environmental Protection AgencyCopyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 38
  • 39. Measure ResultsMetrics Approach Metrics Description Target Number of KPIs Examples Begin in Phase One with KPIs at the 3- 5 High Level KPIs, Tangible and Metric: Customer Satisfaction Tier 1 Enterprise program/enterprise level. These KPIs support and Intangible Metrics/ KPIs Level: Enterprise align with Strategic Plan and overall objectives of s the Lean Initiative. Target: Improve Customer Satisfaction by 5% each year These KPIs are addressed in Phase Two, after 3-5 Metrics (VSIs) per Value Metric: Customer Satisfaction Tier 2 Value Value Streams are identified and chartered. These Stream, linked to the Enterprise Stream Level: Accounting Value Stream KPIs link Enterprise KPIs to those associated with KPIs Metrics/VSIs each Value Stream. Each KPI supports or relates Target: Reduce Customer Billing to an Enterprise KPI. Complaints by 15 % in 6 months These KPIs are addressed as part of each project 1-3 Project Level Metrics per Metric: Customer Satisfaction Tier 3 Project and support and link to both the Value Stream VSIs Project/Event, linked to one or Level Metrics Level: Customer Billing Errors and the Enterprise KPIs. more VSIs. Project Target: Reduce Billing Errors due to mis-keyed information by Specific Measureable Achievable Relevant Timeline 20% within 30 days. Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 39
  • 40. Measure ResultsMetric Definition and Data Collection Project Name: Billing Errors Project Leader: Susan Smith Value Stream Name: Customer Service Associated Tier 1 KPI: Improve Customer Satisfaction Associated Tier 2 VSI: Reduce Customer Complaints s Metric Name: Reduce Billing Errors Measurement and Data Collection Plan Measurement Plan Metric Information What do you want to Measure? Billing errors due to mis-keyed information Operational Definition: How will measure be expressed Type 23 Billing Errors/All Billing Errors in One Calendar Month Stratification: By variables By customer type Target Improvement Date 30 days from start of project Target Improvement % Reduce Error Type 23 by 50% Data Collection Plan Data Source: database or sample Customer Billing System ( CBS1) Target number of units/samples 50% sample of Type 23 errors from each month Time period of collection June 2011 - Dec 2011 Person Responsible John Rath Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 40
  • 41. Eliminate WasteLean Process Improvement Approach Philosophy Lean is the reason….  Lean initiatives focus on an organization’s  An Iowa business can now get a clean water work and operations, helping groups think permit in 4.5 months instead of 28 differently about the way they work, while  In S. Carolina, lead time for processing storm increasing capacity and adding value for water applications dropped from 47 to 10 days those they serve.  In Michigan, the application process time for  Lean focuses on eliminating administrative major permits is reduced from 422 to 98 days and transactional waste.  In Iowa, a backlog of 600 clean air permits was  Lean helps the organization design and eliminated implement its processes by directly focusing on achieving desired outcomes  At BAE Systems, ERP system upgrade time reduced from historical highs of 24 to 10 months What is Lean Government? It is a mindset and a discipline to increase our capacity to do more good.” Ken Miller, Extreme Government Makeover Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 41
  • 42. Financial Validation s “CEOs want to know the return on investment of Lean projects, and CFOs want to compare real financial results to “powerpoint dollars”. A rigorous approach to calculating an improvement project’s impact is important to every organization.” R. Copercini – Calculating Financial Impact of Lean Six Sigma Projects Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 42
  • 43. Validate ContributionProject Lifecycle Accurate Reporting s Idea Lean Track Generation Event Benefit Event Event and P&L Event/Project work Event and Triage Charter Assessment Approval Prioritization Report Reconciliation (controls & tollgates) Complete Benefits Model Establish Locate Tangible ROI Auditing Savings on Parameters P&L Statement = automated portfolio system elements for financial validation process Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 43
  • 44. Validate ContributionProject Benefits Savings Categories Tangible Operating Income Working Capital Cost Reduction Receivable Reduction Inventory Reduction Asset Productivity Payable Increase Revenue Growth Cost of Services Sold Indirect COSS Selling, General, & Admin Cost Service Cost Other Cost RD&E Cost SG&A Cost Labor Material Labor Material Other Labor Material Other Labor Material Other Intangible Other Risk Mitigation Reduce NVA Cost Avoidance Employee Satisfaction Customer Satisfaction Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 44
  • 45. Validate ContributionKey Elements for Financial Validation  Financial Guidelines • Financial Definitions for Project Benefits • General Rules For Benefit Calculation  Project Benefit Governance Process  Specific Benefit Categories and Calculations  Tools & Templates • Return on Investment Templates and Models • Reference Guides • Financial Statements Reconciliation Templates • Auditing Documents  Financial Network Representatives • Roles and Responsibilities Definition  Training • Financial Process and Accountability Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 45
  • 46. 3773 Cherry Creek North DriveSuite 575Denver, Colorado 80209888.998.0008

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