Kaizen Events in Office & Service Environments (Part 1 of 2)

Kaizen Events in Office & Service Environments: A Two-Part Webinar Part I - December 4, 2009 Company LOGO

Learning Objectives (both webinars) Participants will learn:       The difference between Kaizen & Kaizen Events. When to use Kaizen Events. Step-by-step approach to planning and executing office and service-based Kaizen Events. The “Kaizen Commandments” that reduce common pitfalls. How to create a Sustainability Plan with teeth. How to navigate common obstacles to success. © 2009 Karen Martin & Associates 2

Kaizen Event – Definition A two- to five-day focused improvement activity during which a sequestered, cross-functional team designs and fully implements improvements to a defined process or work area, generating rapid results and learned behavior. Karen Martin & Mike Osterling The Kaizen Event Planner, 2007 © 2009 Karen Martin & Associates 4

Office Kaizen Events: Less “brawn”; more policies & procedures

When do you need a Kaizen Event? Rapid change is desired Cross-functional problem solving is necessary Innovation is desired Hands-on learning is desired You want to “bake” the improvement process into the organizational DNA You want to shift culture by engaging the workforce in problem solving © 2009 Karen Martin & Associates

5-Day Kaizen: Sample Structure Day 1 & 2 (Plan) Day 3 & 4 (Do, Check) Day 5 (Check, Act) © 2009 Karen Martin & Associates Kick-off (executive presence) Analyze current state Perform root cause analysis Design future state Interim briefing Design & test improvements Obtain buy-in Interim briefing Finalize improvements Train process workers & stakeholders Present results CELEBRATE! 7

Common Obstacles to Success Kaizen Events not tied to a strategic plan. Scope too broad. Teams too narrow (functions). Key leadership not at interim briefings. Lack of communication and upfront consensus building. Inadequate training on new process. Inadequate structure for sustaining the improvement. © 2009 Karen Martin & Associates 8

Tie Kaizen Events to a strategic improvement plan, such as a Value Stream Map, Hoshin Kanri, or A3 Avoids “Kamikaze Kaizens,” “Drive-by Kaizens,” or “Random Acts of Kaizen.” © 2009 Karen Martin & Associates

The Improvement Cycle A P Identify & Prioritize Macro Opportunities 1 Monitor, Refine & Sustain Implement Improvements 6 Plan for improvement 7 2 A P 3 Analyze Current State (Micro) DC 5 C Design, Test & Refine Improvements 4 Brainstorm & Prioritize Opportunities D

Current State Value Stream Map Outpatient Imaging Services Pre-register Patient Customer Demand: 15 patients perDay (Takt Time 1920seconds) 8 hours per day Schedule Appointment Referring Physician Hospital 4 3 5 Lead Time = 24 days 2 6 Lead Time = 990 mins. Cycle Time = 30 mins. Lead Time = 990 mins. % C&A = 100 % Demand = 15 per day 1 Lead Time = 12 mins. Cycle Time = 11 mins. Lead Time = 12 mins. % C&A = 98 % % C&A = 65 % CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate Symposium E Pay Excel ADS Internet Meditech Fax Order Solutions Waiting Room Management System PACS Auto Fax 50% Us Mail 25% MD Mailbox 25% Rework Loop via Fax 25% of the time Check-in Patient (Admitting) Prep Patient (Tech) Check-in Patient (Imaging) Complete Exam (Tech) Transmit Images (Tech) Read/Dictate Exam (Radiologist) Transcribe Report (MDI) Review Draft/Sign (Radiologist) Print Reports (Imaging) Send Reports (Imaging) 5 mins. 5 5 5 mins. Cycle Time = 2 mins. % C&A = 90 % 0.0833 hrs. 3 Cycle Time = 1 mins. % C&A = 98 % 0.0833 hrs. 2 mins. 6 45 mins. 2 0.75 hrs. 1 mins. 7 30 mins. Cycle Time = 10 mins. % C&A = 100 % 2 0.5 hrs. 10 mins. 8 5 mins. Cycle Time = 15 mins. % C&A = 90 % 2 0.0833 hrs. 15 mins. 9 248 mins. Cycle Time = 3 mins. % C&A = 100 % 2 10 4.13 hrs. 3 mins. 365 mins. Cycle Time = 15 mins. % C&A = 95 % 6 11 6.08 hrs. 15 mins. 960 mins. Cycle Time = 5 mins. % C&A = 75 % 2 12 16 hrs. 5 mins. 110 mins. Cycle Time = 1 mins. % C&A = 95 % 2 1.83 hrs. 1 mins. 13 120 mins. Cycle Time = 1 mins. % C&A = 99 % 6 2 hrs. 1 mins. 14 Cycle Time = 3 mins. % C&A = 90 % LT = 32.5 hrs. 3 mins. CT = 56 mins. CT/LT Ratio = 2.87% Rolled First Pass yield = 29% VSM Champion: Paul Scanner Created: July 17, 2007

Future State Value Stream Map Outpatient Imaging Services Standard Work Work Balance Demand = 15 per day Customer Demand: 15 patients perDay (Takt Time1920 seconds) 8 hours per day Co-locate Schedule appt Pre-register Referring Physician Hospital 3 Lead Time = 15 days 2 6 1 Lead Time = 45 mins. Cycle Time = 11 mins. Lead Time = 45 mins. % C&A = 98 % % C&A = 85 % Risk Reduction (Joint Commision) Symposium E Pay Excel Internet Waiting Room Management System Work Balancing Standard Work 3 35 mins. 4 Cycle Time = 1 mins. % C&A = 98 % 0.0833 hrs. 2 Complete Exam (Tech) 5 20 mins. Cycle Time = 10 mins. % C&A = 100 % 0.583 hrs. 1 mins. 2 Transmit Images (Tech) 6 5 mins. Cycle Time = 10 mins. % C&A = 90 % 0.333 hrs. 10 mins. Visual Workplace Set-up Reduction Prep Patient (Tech) Check-in Patient (Imaging) Fax Order Solutions PACS Auto Fax 80% Us Mail 15% MD Mailbox 5% 5S Value Stream Alignment Pull System (Supplies Kanban) Remove Check in and Reduce System Access 5 mins. Meditech CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate 2 7 120 mins. 2 Review Draft/Sign (Radiologist) 420 mins. Cycle Time = 15 mins. % C&A = 95 % 2 hrs. 2 mins. 8 Batch Reductions Voice Recognition Read/Dictate Exam (Radiologist) Cycle Time = 2 mins. % C&A = 100 % 0.0833 hrs. 10 mins. Continuous Flow 2 Print Reports (Imaging) 9 2 mins. Cycle Time = 1 mins. % C&A = 95 % 7 hrs. 15 mins. Rework Loop via Fax 10% of the time 2 30 mins. Cycle Time = 1 mins. % C&A = 99 % 0.0333 hrs. 1 mins. 10 Send Reports (Imaging) 6 Cycle Time = 3 mins. % C&A = 90 % 0.5 hrs. 1 mins. 11 LT = 11.3 hrs. 3 mins. CT = 43 mins. CT/LT Ratio = 6.32% Rolled First Pass yield = 40% VSM Champion: Paul Scanner Created: July 18, 2007

Outpatient Imaging Projected Results Metric Current State Projected % Future State Improvement Lead Time 32.5 hrs 11.3 hrs 65% Process Time Activity Ratio (or % Activity) Rolled First Pass Yield # Steps/Handoffs Tech turnover (annual) 56 mins 43 mins 23% 2.9% 6.3% 117% 29% 40% 38% 14 11 21% 100% 25% 75% © 2009 Karen Martin & Associates 14

Future State Implementation Plan Value Stream Outpatient Imaging Implementation Plan Review Dates Executive Sponsor Allen Ward 11/1/2007 Value Stream Champion Sally McKinsey 11/21/2007 Value Stream Mapping Facilitator Dave Parks 12/13/2007 Date Created 10/18/2007 Block # 2 Goal / Objective Improve quality of referral Improvement Activity Type KE Implement standard work for referral process Owner Sean O'Ryan PROJ 1/10/2008 Implementation Schedule (weeks) 2 3 4 5 6 7 8 9 10 11 12 Dianne Prichard 3, 4 Reduce lead time beween schedulingand Cross-train and colocate work teams preregistration steps 5, 6 Eliminate the need for two patient checkins Collect copays in Imaging KE Michael O'Shea 6 Eliminate bottleneck in waiting area Balance work / level demand KE Dianne Prichard 9 Eliminate lead time associated with transcription step Implement voice recognition technology PROJ Sam Parks 10 Eliminate batched reading Reduce setup required KE Sam Parks 7 Reduce inventory costs, regulatory risk and storage needs 5S CT supplies area; implement kanban KE Michael O'Shea 12 Reduce delay in report delivery Implement additional fax ports PROJ Martha Allen 12 Reduce delay in report delivery Increase percentage of physicians receiving electronic delivery (rather than hard copy) KE 1 Martha Allen Approvals Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Signature: Signature: Signature: Date: Date: Date: Date Complete

Strategic Improvement Roles Who? Senior Leadership Accountability Tool What has to happen Value Stream Mapping How it will happen Kaizen Events Tactical Middle Management Frontline Workers © 2009 Karen Martin & Associates 16

Preparation & Logistics Kaizen Event Planning Checklist Executive Sponsor Value Stream Champion Event Name Event Start Date Facilitator Coordinator  Activity 4 Weeks Prior 3 Weeks Prior 11 Finalize Kaizen Event charter and gain approval. 12 Distribute approved Kaizen Event charter. 13 14 15 16 17 18 Review Event scope and determine which current state data and metrics needs to be collected and assign accountability (e.g. volumes, metrics, service levels, survey results, etc.). Identify potential functions / individuals that may need to receive training on the improvement process be trained during Kaizen Event and send notification email to them. Prepare training materials for the event (including lean overview and relevant tools). Identify potential on-call resources (people and/or supplies) and time commitment required of those resources. Send communication to area staff, as well as "involved" internal customers & suppliers, advising of upcoming Kaizen Event. Post Kaizen Event charter. Solicit improvement ideas from stakeholders (include upstream and downstream workers, too). 19 Follow-up with people who haven't RSVP'd re: their participation. 20 Schedule senior leadership representation for event kick-off. Due Date Owner Comments

Kaizen Event Planning  Create Charter.      Select a facilitator. Scope event. Establish measurable objectives. Form team. Schedule interim briefings; invite key parties.  Distribute charter to team, leadership & affected stakeholders; send meeting notices for briefings & team presentation.  Gather supplies, material & data.  Arrange for technology needs.  Obtain input from non-team workers who perform the work being improved.  Conduct pre-Event Lean overview. © 2009 Karen Martin & Associates 19

Kaizen Event Charter Serves as a planning/shaping tool    What are our measurable objectives? Defines the event scope and boundaries Who needs to be involved? Serves as a communication tool     Why is improvement needed? To the team – this is what you’re chartered to accomplish To leadership – this is what you are supporting To the organization – this is what’s going on and why Assigns accountability © 2009 Karen Martin & Associates 21

Kaizen Event Charter Event Scope Value Stream Leadership Schedule Executive Sponsor Dates Specific Conditions Value Stream Champion Start & End Times Process Trigger Facilitator Location Team Lead Interim Briefings Event Name First Step Last Step Event Boundaries & Limitations Workforce Training Event Coordinator Event Drivers / Current State Issues Final Presentation Team Members Function 1 2 2 4 Contact Information 1 3 Name 3 5 4 Event Goals and Objectives 5 1 6 2 7 3 8 4 5 9 10 Potential Deliverables On-Call Support Function 1 2 2 4 Contact Information 1 3 Name 3 5 4 Possible Obstacles 1 Approvals Executive Sponsor Value Stream Champion Facilitator 2 3 4 Signature: Date: Signature: Date: Signature: Date:

Lean Facilitators Necessary Traits & Competencies Skills / Knowledge      Lean principle & tools Root cause analysis Project & time management Team building / facilitation People effectiveness Authority / Respect    Personality / Energy   Challenging, yet supportive Positive, upbeat, energetic Pushy without irritating  Objectivity / Fairness Recognized as a change agent / influence leader Trustworthy Comfortable removing obstacles & reaching out to senior leadership © 2009 Karen Martin & Associates   Not attached to the work itself

Define Scope: Narrow & Deep Define fenceposts, conditions, and limitations. Gives the team “freedom with boundaries.” Communicates what the team does not have permission to do. © 2009 Karen Martin & Associates 28

Refining the Focus Purpose  To break improvement into manageable chunks  Counter the temptation to want to solve world hunger in a single improvement cycle.  To select the most effective team. Process     Identify conditions that go through different process steps. Select one based on “pain,” volume, cost, customer impact, compliance issues, etc. Analyze the current state for that single condition. Attempt to apply future state improvements to a broader set of conditions. © 2009 Karen Martin & Associates 29

Narrowing the Scope: Example Units Domestic Consumables Warranty Service Parts Order Fulfillment Process NonWarranty Units International Consumables Warranty Service Parts NonWarranty

Set Measurable Objectives Goals Objectives Content Words Numbers Example Reduce lead time. Reduce lead time from 14 to 7 days. Includes baseline & desired state? No Yes Measurable? No Yes © 2009 Karen Martin & Associates Notes Helpful to also include percent improvement (e.g. 50%). 32

Form the Kaizen Team No more than 10 Highly cross-functional            Process workers Upstream suppliers (internal) Downstream customers (internal) Subject matter experts Outside eyes External suppliers / contractors External customers Administrative support (if needed) Union representatives (if relevant) Maintenance / facilities representatives Management (limited representation) © 2009 Karen Martin & Associates 35

Kaizen Event Team Formation Worksheet Executive Sponsor Event Name Value Stream Champion Event Dates Facilitator First Step Last Step Role in Target Process Department 1 2 3 4 5 6 7 8 9 10 11 12 Work Group Upstream Suppliers Process Workers Downstream Customers Subject Matter Experts No Involvement or Impact

Forming the Kaizen Team: Key Considerations  Sequestered; Must be relieved of regular duties  Full time attendance is mandatory.  Be highly strategic!  Action-oriented individuals.  Or thorough prepping / coaching of more passive members   Must currently perform work being improved. Don’t avoid “whiners,” but only include one or two.  Manage team member selection     May need to lobby for team members Obtain approval of person’s direct supervisor first Avoid being told who needs to be on the team by people who don’t understand Kaizen Events Once the Kaizen Charter is finalized, no one is added to the team unless the team requests them. © 2009 Karen Martin & Associates 37

On-Call Support May or may not be needed. If needed, will be time limited. Must be able to drop everything and serve the team’s needs. Typically a subject matter expert.   e.g. Finance, Regulatory, HR, etc. Typically not directly involved in delivering value to the external customer © 2009 Karen Martin & Associates 39

Schedule Interim Briefings to Leadership Every day or two. Team presents their ideas; leadership assures team has considered all options and thought through all implications. Leadership’s role – no veto power.  Instead: “Have you considered this?” “How would we handle…?” “What if…?” Workforce grows stronger as they learn how to identify and eliminate waste. Venue for challenging policies. Some attendance is mandatory.  So schedule Kaizen Events around leadership availability. © 2009 Karen Martin & Associates 42

Functional Department 1 2 3 4 5 6 7 8 Audit Results (Post-Event) Event Report (Post-Event) Team Presentation - Invitation Team Presentation - Required Attendance Training on improved process Executive Sponsor Value Stream Champion Facilitator Team Lead Interim Briefing(s) - Invitation Level of Engagement Interim Briefing(s) - Required Attendance Lean / Kaizen Overview Training Event announcement (with charter) to affected stakeholders No involvement Receive notification Receive training Approve Provide input Kaizen Event Communication Worksheet Event Name Event Dates Coordinator Email / Meeting Notice Content

Kaizen Event Planning  Create Charter.      Select a facilitator. Scope event. Establish measurable objectives. Form team. Schedule interim briefings; invite key parties.  Distribute charter to team, leadership & affected stakeholders; send meeting notices for briefings & team presentation.  Gather supplies, material and data.  Arrange for technology needs.  Obtain input from non-team workers who perform the work being improved.  Conduct pre-Event Lean overview. © 2009 Karen Martin & Associates 47

Kaizen Event Supplies Checklist Facilitator Coordinator Event Name Event Dates  Description N/A* 1 Batteries for all battery operated devices (extra sets recommended) 2 Binder clips or paper clips 3 Calculator 4 Card stock in various colors (if needed) 5 Digital camera (with USB cable or memory card/reader) 6 DVD and / or VHS player with monitor and speakers 7 Flip chart pads and stands (at least 2) 8 Handouts for participants (kick-off info, charter, training material, etc.) 9 Kaizen team t-shirts (if being provided) 10 Label maker and label stock (if needed) 11 Laminator and laminate sheets (if needed) 12 Laptop or PC for training and presentations 13 Laptops or PCs for team use - 2 to 4 based on group size each with access to MS Office, internet, email, intranet, shared drives and internal applications 14 LCD projector 15 Markers, flipchart - various colors 16 Markers, Sharpie 17 Markers, white board 18 Masking tape 19 Name tents (if preferred) 20 Paper (white, 36" wide roll)

Material & Data Needs Work volume. Work samples.  Enough copies for entire team. Sample forms. Survey/audit results. Anything else relevant to the improvement. © 2009 Karen Martin & Associates 49

Technology Needs  2-4 laptops  Full access to:      Intranet All relevant applications Internet Email Everyone must be able to log in.  Printer – in the Kaizen room  LCD Projector  Speaker phone  Arrange for dedicated I.T. resource.  TEST ALL EQUIPMENT  The day before the Event begins and every day prior to the team arriving. © 2009 Karen Martin & Associates 50

Build Consensus from the Get-Go In work areas being affected…  Communicate  Post Charter  Obtain input  Flip charts in work area  Email (less effective) Train   Kaizen Event and work teams who will be affected by the improvement. Content  Lean principles & tools  Review Charter  Kaizen Event – their role; what to expect © 2009 Karen Martin & Associates 52

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Learning Objectives (both webinars) Participants will learn:       The difference between Kaizen & Kaizen Events. When to use Kaizen Events. Step-by-step approach to planning and executing office and service-based Kaizen Events. The “Kaizen Commandments” that reduce common pitfalls. How to create a Sustainability Plan with teeth. How to navigate common obstacles to success. © 2009 Karen Martin & Associates 54