A brief introduction to Lean Management and how it can increase your competitive advantage and why Lean Management is one of the hot topics of the CEO Agenda

1. CONFIDENTIAL
Business Operations Excellence
Strategy Success
www.equable.fr
CONFIDENTIAL
Lean Management explained to CEOs
… and Others
or How to increase your Competitive Advantage?
Franck Strub Paris - 11 july 2017
1

2. CONFIDENTIAL
CONTENT
Creating and Increasing your Competitive Advantage
Lean Origins
Lean in Services Example
Appendices
03
08
16
18

3. CONFIDENTIAL
What will be your life at work if?
• Operating margin increases by 1% each year?
• Costs to serve increase by only half your revenue growth each year?
• Customers complain less & are more satisfied? And their willingness to pay
increases?
• Employees “complain less” when doing their job and Employee satisfaction survey
increases each year?
• Shareholders have a big smile each year after the annual results are published?
Lean
Management
Value
PropositionCost to Serve
Willingness to pay
Actual Value Creation

4. CONFIDENTIAL
Let’s take a look at a Japanese company after
World War II

5. CONFIDENTIAL
Toyota Recovering post World World II
A Study from Womack and Jones (MIT): “A Machine that changed the world”
Ranking 1950 1970 2008 2015*
Revenue in billon
USD
1 GM GM Toyota Volkswagen 236.6
2 Ford Ford GM Toyota 236.59
3 Chrysler Chrysler Ford Daimler 165.8
4 Studebaker Volkswagen Volkswagen General Motors 152.36
5 Nash Fiat Daimler Ford 149.56
6 Kaiser – Fra. Toyota Honda Honda 121.62
7 Morris Nissan Peugeot Fiat Chrysler 120.92
8 Hudson Renault Fiat SAIC Motor 106.68
9 Austin BL Hyundai BMW 102.25
10 Renault Peugeot Renault Nissan 101.54
… Toyota
en Milliards USD
*https://www.statista.com/statistics/232958/revenue-of-the-leading-car-manufacturers-worldwide/

6. CONFIDENTIAL
Introducing the Toyota Production System
TOYOTA HISTORY (WORLDWIDE COVERAGE AND SALES)
0
2000000
4000000
6000000
8000000
10000000
12000000
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
TOYOTA PRODUCTION (Nb of cars
produced)
Toyota's global network: Red – Japan Green – Official dealership(s)
present. Blue – Localized manufacturing plant(s) Cyan – Regional
headquarters (HQ) Dark Blue – Regional headquarters (HQ) and
localized manufacturing plants

7. CONFIDENTIAL
Establishing the Lean Management Business Case
Revenue growth:
increased customer satisfaction
introduction of quality products & services at right price with reduced lead time
Margin increase:
less non quality costs (reduction of defects, wastes, non value added activities and manual rework)
more productivity and capacity (reduced cycle times and less cost to serve per unit)
Potential Gains per project:
Cycle time : 30%-70% reduction
Defects : 70% reduction
Costs : 20%-50% reduction
Capacity or Productivity : 15% - 20% increase
Others:
Project Duration : 4 to 6 months
Project benefits : 300 to 400 K€ per annum
Project ROI : 3 to 4 months

8. CONFIDENTIAL
www.equable.fr
Strategy Success
LEAN ORIGINS
History of the Toyota Production System, The Toyota House of Quality and The
Lean Five Principles
14/03/2017

9. CONFIDENTIAL
Lean Origins
LEAN / LEAN SIX SIGMA COMES FROM AUTOMOTIVE INDUSTRY.
Lean comes from a specific industry which is the automotive industry but it can be applied everywhere. Before
deploying Lean, one needs to understand what is specific to a given area (for instance services) or a given company
(for instance a bank or a telecom company).
Womack & Jones Michael George
1900-1940 : “Mass
production of cheap cars
using using assembly line”
1911 : Taylorism
1945-1990 : “Toyota
Production System”
1996 : “The 5 principles of
Lean Thinking”
2002-Today: “Integration
of Lean and Six Sigma in
non maufacturing
industries. i.e. Services”

10. CONFIDENTIAL
Building a Culture of Quality
TOYOTA HOUSE OF QUALITY
The Toyota House Of Quality was developed by Taiichi Ohno and Eiji Toyoda to facilitate the understanding of the
continuous improvement system of Toyota called TPS (Toyota Production System), by coworkers and providers.
JIDOKA: Issues visibility (ANDON system)
Quality must be integrated
to each step of the manufacturing process!
JIT: Just In Time
Productivity increase
Make only “what is needed,
when needed,
and in the needed quantity!”
Response time, Continuous flow. Pull system. Quick changeover.
Integrated logistics.
Operational stability: Heijunka (ManufacturingProduction Planning), Standardized work, Visual Management
Total Productive Maintenance (TPM): Kaizen
Best quality
Reduce costs and delays Improve safety & morale
+
« Good Thinking, Good Products »

11. CONFIDENTIAL
Respecting our People
LEAN DEFINITION ACCORDING TO MICHAEL BALLÉ
Lean is a management methodology that aims at improving companies performance through all employees
development.
That method enables ideal functioning conditions by making working people, machines and sites all together in order
to maximize value with less waste as possible.
Lean aims at 2 things: full clients satisfaction (that increases turnover) and full employees satisfaction (that is motivation
and engagement).
Michael BALLÉ :
Researcher at Télécom ParisTech, co-founder of Lean Enterprise Project and Lean France institute, co-author of
“The Gold Mine”, Shingo award 2007 and of “Lean Manager”, Shingo award 2010 of research excellence.
From Lean Summit 2016 (Lyon, France)

12. CONFIDENTIAL
Identifying the ennemies: MUDA, MURA, MURI
3 SOURCES OF INEFFICIENCIES in Operations:
• Muda: Wastes (Non Value Added Activities)
• Mura: Variation in Inputs creating variation in Outputs
• Muri: Impossible Workloads to achieve
All we do is look at the time that goes
by between when a customer places
an order and when we cash in.
Then, we work on reducing that time
by removing all waste and all “not
value added” activities.
Taiichi Ohno
MUDA MURA
MURI
World class operations have less than 20% of Value added time in their end to end lead time

13. CONFIDENTIAL
The MUDA (waste) are the processes, activities, or tasks that bring no added value to the product or service. To
bring added value to the product or service, the process, activity, or task must meet the 3 following criteria:
The customer must be willing to pay for it.
It must transform the product or service.
It must be right at the first time.
Chasing the MUDA
THE 7+1 MUDAs
MUDA WASTE
OVERPRODUCTI
ON
WAITING TIME
TRANSPORTATIO
N
INVENTORY
OVERPROCESSI
NG
MOTION
DEFECTS
UNDER USE OF
SKILLS &
COMPETENCIES

14. CONFIDENTIAL
2 – MAP
VALUE
STREAM
3 – CREATE
FLOW
4 – ESTABLISH
PULL
5 – SEEK
PERFECTION
1 –
IDENTIFY
VALUE
THE 5
PRINCIPLES
OF LEAN
THINKING
Introducing The 5 PRINCIPLES OF “LEAN THINKING”
BY WOMACK AND JONES
The 5 principles of “Lean Thinking” comes from the “Toyota Production System” study led by James P.
Womack and Daniel T. Jones from MIT.
Lean Thinking,
1996, by
Womack et
Jones.

15. CONFIDENTIAL
Understanding the Lean Principles in 90 seconds
Accès ici à la vidéo en anglais, sous-titrée en
anglais.

16. CONFIDENTIAL
On-boarding new Clients in a Bank in Asia
February 2017 one week Workshop
Problem:
• Corporate and Small & Mid Size Companies are complaining about our long delays and the difficulty to work with us
Objectives:
• Business objective is to reducethe Due Diligence Delay by 50%
Process:
File
Customer
Request
Do KYC
(Know Your
Customer)
Send
Documentati
on to
Customer for
Sign off
Create
unique
customer
identifier in
Bank
Setup
Customer
Account
BEFORE Workshop:
• 720000 Client Requests per year
• 200 FTE
• On-Boarding Cost: $250
• First Time Right: 25%
• Delay: 1 week to 4.5 months
Daily Huddle
Visual Management
Gemba
Kaizen
Eliminate unnecessary tasks
Re-arrange sequence of tasks
AFTER Workshop:
• 720000 Client Requests per year
• 160 FTE
• On-Boarding Cost: $180
• First Time Right: 85%
• Delay: 1 to 6 weeks

17. CONFIDENTIAL
www.equable.fr
Strategy Success
Questions?
14/03/2017

18. CONFIDENTIAL
www.equable.fr
Strategy Success
Appendices
14/03/2017

19. CONFIDENTIAL
Listening Continuously to our Customers
Compa
ny
strateg
y
Key Value
Chain/
Process
selectionLean initiatives
selection
Management &
Workers Capacity
Building
Lean Program
execution
CLIENTS
EXPECTATION
S Continuous
improvement
loop
… and more than 95% of
“Fortune 100” apply now
Lean Management.
Voice of Customers

20. CONFIDENTIAL
Measuring Process Performance
…through the eyes of your customers
The Process performance in Quality, Cycle Time and Cost to Serve is measured thanks to what is called Capability,
taking into account both average and variation. It is the capacity or the probability of a process to produce good
services and good outputs to the customers.
CYCLE TIME: % deliveries on time, cycle time
Customer
QUALITY: % yield (good at first time), % defects,
% corrections, % lost, % returned, % complaints
COST to SERVE: working time
End-to-end process

21. CONFIDENTIAL
LEAN EXPLAINED
FROM TOYOTA PRODUCTION SYSTEM TO MANY MANY LEANS
Methodologies around the worlds have learned from each other since Toyota Production System and Taylorism.
Lean, as a concept or brand, has captured the imagination of many in different spheres of activity.
Lean
manufacturing or Lean Production,
often simply "lean", is a systematic
method for the elimination of waste
("Muda") within
a manufacturing system.
Lean IT is the extension of lean manufacturing
and lean services principles to the development
and management of information technology (IT)
products and services. Its central concern, applied
in the context of IT, is the elimination of waste,
where waste is work that adds no value to a
product or service.
Lean services is the application of
the lean manufacturing concept to
service operations. It is distinct in
that Lean services are not concerned
with the making of ‘hard’ products.
Lean Construction is a combination of operational
research and practical development in design and
construction with an adaption of lean
manufacturing principles and practices to the end-
to-end design and construction process.
The purpose of Lean Accounting is to support
the lean enterprise as a business strategy. It seeks to
move from traditional accounting methods to a
system that measures and motivates excellent
business practices in the lean enterprise.
Lean Higher Education refers to the adaptation
of lean thinking to higher education, typically with
the goal of improving the efficiency and
effectiveness of operations.
A Lean Laboratory is one which is
focused on testing products and
materials to deliver results in the
most efficient way in terms of cost
or speed or both.
Lean Office
Lean Healthcare is a structured
way of continuously exposing
and solving problems to
Eliminate Waste in Systems that
deliver Value to Customers
(Patients).

22. CONFIDENTIAL
LEAN EXPLAINED
FROM TOYOTA PRODUCTION SYSTEM TO MANY MANY LEANS
LEAN (OR LEAN MANAGEMENT): THE COMMON BASIS
LEAN BY SECTOR/AREA: SPECIFICS DEVELOPMENT (METHODS AND TOOLS)
Lean manufacturing / Lean Production
(THE COMMON ANCESTOR)
Lean Laboratory Lean Accounting
Lean Higher Education Lean services / Lean Office Lean Construction
Lean Higher Education Lean services Lean Construction
Lean IT Lean Healthcare
5 principles of Lean Thinking
Toyota House of Quality
14 principles of Liker

23. CONFIDENTIAL
LEAN EXPLAINED
LEAN TOOLS ARE NOT ENOUGH: THERE ARE 5 KEY ELEMENTS IN TOYOTA CULTURE
Long term
philosophy
Work
standards
Leadership
Performance
management
Skills
management
Toyota founders and current leaders of the company strongly believe that decisions should be
made considering the the company as a whole and they make sure they are.
Work is managed thanks to detailed procedures that are standardized. Consensus improvement
decisions are made from an A3 document that gathers all consequences for all stakeholders.
Leaders are trained to make sure the organization is based on continuous learning. A team
leader in Toyota is a mentor, teacher, a role model and a challenger.
Objectives are always aggressive. Adherence of the teams is bottom-up stimulated through the
enhancement of first line propositions.
Employees and Trainers’ training is at the center of the whole Lean system.

24. CONFIDENTIAL
VALUE NOTION
VALUE ADDED (VA), NOT VALUE ADDED (NVA), AND BUSINESS VALUE ADDED (BVA)
VA for Value Added is defined as anything that the
customer is willing to pay for when he buys a product or
a service. If the task is suppressed, the customer’s
satisfaction and the service performance is impacted.
NVA for Non Value Added are all activities of a given
process that add no value to the product or service
that the customer is willing to pay for. If the task is
suppressed, neither the customer’s satisfaction nor the
service performance is impacted. All not value added
tasks are considered as wastes in the process.
BVA for Business Value Added: The customer is not
willing to pay for those tasks because they don’t add
any value according to him. Although they are required
by the law or a regulation. Those tasks are considered
as tasks without any added value in Lean.

25. CONFIDENTIAL
OPERATIONAL EXCELLENCE DEFINITION
PROCESSES MEETING CUSTOMERS’ EXPECTATIONS (TIME, COST, QUALITY, RISK)
The objective here is to reach Business Operational Excellence, that being:
Analyze the current business processes (“as is”) and turn them into optimized and performing processes, first
class in the world…
… in order to produce and deliver what the customers need:
When they need it (time)
With the required quality and fidelity (quality)
With a competitive cost (the cheaper the better) with the maximum efficiency (cost)
With the lesser risk possible (risk).
réduit
Temps d’exécution du processus
réduits
Coûts de non qualité
Réduit
Temps de travail par unité produite
Réduits
Risques opérationnels
Augmentés
Satisfaction clients et revenus

26. CONFIDENTIAL
• 12 Black Belts
• 12 Pilot projects (proof of
concept) +
12 projects in first year
2010-20112009 2012
Pilot Phase
Roll Out
• 60 additional Black Belts
• 120 projects per year with 60 Black Belts
(acceleration pace)
• Executive training
• Sponsor & stakeholders trainings
• Green Belt trainings
Knowledge Transfer
• 60 additional Black Belts
• 240 projects per year with 120 Black Belts (cruise pace)
• Training of Client’s Master Black Belt
• Lean Six Sigma License transfer
In a decentralized environment a regional
entity can volunteer for the Pilot Phase and
provide a positive background of internal
competition
26
BOE® - Typical timeframe & approach
To be adapted according to the
resource availability and the
change management cult

27. CONFIDENTIAL
27
þ Monitoring of the output
þ Control and audit the sustainability of the output
þ Standardize and transfer the output to the process owner
þ Close the project
Month 1
Define
(3 weeks)
þ Identify the issues and the scope of the project, the objectives and the business plan
þ Set up the macro-planning and the project team
þ Map the macro-process (SIPOC)
þ Voice of the Customer
þ Formalize and validate the Project Chart
Measure
(5 weeks)
þ Define the data collection program
þ Collect the data for each indicator for all the end to end processes
þ Analyze and validate the proposed measurement system
þ Measure the “as is” process performance
Analyse
(6 weeks)
þ Analyze the statistic data
þ Analyze the detailed process mapping
þ Analyze the process added value
þ Identify the inefficiency root causes
Identify improvement solutions addressing the root causes
Plan, develop and implement pilot solutions
Roll out the solutions
Improve
(6 weeks)
Œ 
Œ

Ž
Ž
Month 2 Month 3 Month 4 Month 5
BOE® Execute
Each individual Lean Six Sigma project respects a common framework & timeframe
Control
(4 weeks +)

28. CONFIDENTIAL
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Contributes to Lean 6 Sigma projects
Who is doing what in Lean Six Sigma?
Top Management
Engage and promote Lean 6 sigma
Select processes, projects & people. Make plan.
Change Agent
Lean Six Sigma expert. Train and coach Black
Belts and Green Belts
Deliver Lean 6 Sigma projects.
Full time project leader
Quality Manager/
Champion
Master Black Belt/
Expert
Black Belt / Project
Leader
Green Belt/
Team member