1.
Seeking Perfection: Lean Operations in Non-Manufacturing Environments

2.
What You Will Learn <ul><li>The definition and history of Lean Thinking </li></ul><ul><li>The three phases of Lean implementation </li></ul><ul><li>Lessons from a case study: Lean in the Health Care industry </li></ul><ul><li>How to identify and reduce Waste </li></ul><ul><li>How to Value Stream Map any process </li></ul><ul><li>To understand change and how to manage people through it </li></ul>

3.
This Is Not the Lean We Are Talking About

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What Does the Boss think Lean Is? Is it cutting corners? Is it fewer people? Is it working harder? Is it making less?

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Definition of Lean Thinking or Lean Management <ul><li>Doing more with less </li></ul><ul><li>Providing customers with exactly what they want: </li></ul><ul><ul><li>Every time </li></ul></ul><ul><ul><li>With no waste </li></ul></ul>

6.
Key Lean Concepts <ul><li>Value streams </li></ul><ul><li>Waste elimination </li></ul><ul><li>Flow </li></ul><ul><li>Pull </li></ul><ul><li>Continuous improvement </li></ul>

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Why Apply Lean? Impact of Lean Operations on Industry 11/02/09 Fertuck Enterprise Directions - 248.881.3244 - doug@fertuck.com - www.fertuck.com *Source: Virginia Mason Medical Center Validated Historical Industry Averages* % Changes Direct Labor Productivity Improved 45-75 Cost Reduced 25-55 Throughput Increased 60-90 Defects and Scrap Reduced 50-90 Inventory Reduced 60-90 Space Reduced 35-50 Lead-Time Reduced 50-90

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History of Lean

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Before Lean

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After Lean In Modern Auto Assembly Plants

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Lean Thinking Applies to Any Company in Any Business <ul><li>Womack and Jones of The Machine That Changed the World have spread the gospel to other sectors </li></ul><ul><li>Health Care industry especially is adopting lean thinking </li></ul><ul><li>Many of us are now applying lean methods to the office and other non-manufacturing environments </li></ul><ul><li>Why is it spreading? It works! </li></ul>11/02/09 Fertuck Enterprise Directions - 248.881.3244 - doug@fertuck.com - www.fertuck.com

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Scope of Lean Operations Can Vary

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Learning how to stabilize , standardize , and simplify business processes using the power of the Toyota Production System The Lean System

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Stabilize <ul><ul><li>Stabilize tools are : </li></ul></ul><ul><ul><ul><li>Understanding Waste </li></ul></ul></ul><ul><ul><ul><li>Leading Change </li></ul></ul></ul><ul><ul><ul><li>Teaming </li></ul></ul></ul><ul><ul><ul><li>5S and Visual Controls </li></ul></ul></ul><ul><ul><ul><li>Cycle Time </li></ul></ul></ul><ul><ul><ul><li>Takt Time </li></ul></ul></ul><ul><ul><ul><li>Data Collection </li></ul></ul></ul><ul><ul><ul><li>Value Stream Mapping </li></ul></ul></ul><ul><ul><ul><li>Brainstorming and Problem-solving </li></ul></ul></ul><ul><ul><ul><li>Metrics </li></ul></ul></ul>

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Standardize <ul><ul><li>Standardize tools are : </li></ul></ul><ul><ul><li>Just-In-Time </li></ul></ul><ul><ul><li>Continuous Flow </li></ul></ul><ul><ul><li>Pull Systems and Kanbans </li></ul></ul><ul><ul><li>Standard Work </li></ul></ul><ul><ul><li>Pitch </li></ul></ul><ul><ul><li>Space Layout </li></ul></ul><ul><ul><li>Work Load Balancing </li></ul></ul><ul><ul><li>File System </li></ul></ul>

16.
Simplify <ul><li>Kaizen – the process of improving </li></ul><ul><li>“ Continuous improvement” </li></ul><ul><li>Can be a single task or team project </li></ul><ul><li>People are the foundation </li></ul>

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Virginia Mason Medical Center: Seeking Perfection in Healthcare <ul><li>Founded in 1920 in Seattle </li></ul><ul><li>Now consists of 336 bed hospital, group practice of 480 physicians, network of regional clinics </li></ul><ul><li>In 2002, Virginia Mason embarked on an ambitious, system-wide program to improve the way it delivers safe health care. </li></ul><ul><li>It adopted the Toyota Production System (TPS), calling it the Virginia Mason Production system (VMPS). </li></ul>

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Virginia Mason’s “Strategic Issues” <ul><li>Quality </li></ul><ul><li>Safety </li></ul><ul><li>Morale </li></ul><ul><li>Cost </li></ul><ul><li>Profit </li></ul>

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Design the Production System to Optimize the Seven Flows of Medicine

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VMPS Action Tools <ul><li>Patient Safety Alert System </li></ul><ul><li>Value Stream Development </li></ul><ul><li>RPIW (Rapid Process Improvement Workshop) </li></ul><ul><li>5-S (Sort, simplify, standardize, sweep, self-discipline) </li></ul><ul><li>Daily work life –Everyday Lean Idea System (ELI) </li></ul>

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Example: Nursing Cells “ Less nursing time provided to patients is associated with higher rates of infection, GI bleeding, pneumonia, cardiac arrest and death.” Keeping Patients Safe: Transforming the Work Environment of Nurses - Institute of Medicine 2004

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Nurses’ Workshop Ideas

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Nursing Cells <ul><li>Organize work of RN and patient care technician (PCT) in a geographic grouping of rooms (cell) </li></ul><ul><li>Supplies at point of use </li></ul><ul><li>One piece flow of documentation </li></ul><ul><li>In room handoff with patients </li></ul><ul><li>Standardize work for staff from 7AM –11 AM (First cycle of day) </li></ul><ul><li>Increase nursing surveillance of our patients—make care safer </li></ul>

24.
Nursing Cells: 90 day Results Metric Before After RN # of steps 5,818 846 PCT # of steps 2,664 1,256 Completion time for AM work cycle 240’ 126’ Patient dissatisfaction 21% 0% RN time spent in indirect care 68% 10% PCT time spent in indirect care 30% 16% Call light on between 7a-11a 5.5% 1%

25.
Selected Results of VMPS <ul><li>Saved $11 million in planned capital investment and freed an estimated 25,000 square feet of floor space </li></ul><ul><li>Reduced the time it takes to report lab test results to the patient by more than 85 percent. </li></ul><ul><li>Reduced inventory costs by more than $1 million </li></ul><ul><li>Reduced staff walking distance by 60 miles per day </li></ul><ul><li>Reduced labor expense in overtime and temporary labor by $500,000 in just one year </li></ul><ul><li>VM was named a 2007 Leapfrog Top Hospital , one of 41 hospitals in the nation and the only hospital in Washington state to receive this designation. </li></ul>

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Stabilize <ul><ul><li>Stabilize tools are : </li></ul></ul><ul><ul><ul><li>Understanding Waste </li></ul></ul></ul><ul><ul><ul><li>Leading Change </li></ul></ul></ul><ul><ul><ul><li>Teaming </li></ul></ul></ul><ul><ul><ul><li>5S and Visual Controls </li></ul></ul></ul><ul><ul><ul><li>Cycle Time </li></ul></ul></ul><ul><ul><ul><li>Takt Time </li></ul></ul></ul><ul><ul><ul><li>Data Collection </li></ul></ul></ul><ul><ul><ul><li>Value Stream Mapping </li></ul></ul></ul><ul><ul><ul><li>Brainstorming and Problem-solving </li></ul></ul></ul><ul><ul><ul><li>Metrics </li></ul></ul></ul>

27.
Stabilize – Understanding Waste <ul><li>Waste: Anything that Adds Cost or Time </li></ul><ul><li>without Adding Value </li></ul>

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What is Value? <ul><li>Value is what, in its entirety , the product and service does to fulfill the expectations of the customer </li></ul><ul><li>Elements of value: </li></ul><ul><ul><ul><li>Performance </li></ul></ul></ul><ul><ul><ul><li>Price </li></ul></ul></ul><ul><ul><ul><li>Appearance </li></ul></ul></ul><ul><ul><ul><li>Reliability </li></ul></ul></ul><ul><ul><ul><li>Delivery </li></ul></ul></ul><ul><ul><ul><li>Features </li></ul></ul></ul><ul><ul><ul><li>Etc., etc. </li></ul></ul></ul>

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Understanding Waste: Overproduction <ul><li>Overproduction – producing work prior to it being required is waste and is the greatest of all the wastes </li></ul><ul><li>Producing reports no one reads or needs </li></ul><ul><li>Making extra copies </li></ul><ul><li>E-mailing, faxing same document </li></ul><ul><li>Entering repetitive information on multiple documents </li></ul>

30.
Understanding Waste: Waiting <ul><li>Waiting – for people, signatures, supplies, repairs, and information is waste. This is “low hanging fruit” which is easy to reach and ripe for the taking. </li></ul><ul><li>Unnecessary signatures or approvals </li></ul><ul><li>Waiting for others to complete tasks (bottlenecks) </li></ul><ul><li>Slow computer operations </li></ul><ul><li>Cross-departmental resource mismatches </li></ul>

31.
Understanding Waste: Motion <ul><li>Motion - any movement of people, paper, electronic exchanges that does not add value is waste </li></ul><ul><li>Searching for computer files </li></ul><ul><li>Searching for documents in file cabinets </li></ul><ul><li>Repeatedly reviewing manuals for information </li></ul><ul><li>Hand carrying paper to another process </li></ul><ul><li>Walking to and searching for supplies or equipment </li></ul>

32.
Understanding Waste: Transport <ul><li>Transport - the time to deliver any work within an operation </li></ul><ul><li>Locating commonly used equipment at a distance </li></ul><ul><li>Distributing unnecessary copies </li></ul><ul><li>Sending unnecessary attachments </li></ul><ul><li>Hand-carrying paper to another process </li></ul>

33.
Understanding Waste: Over-Processing <ul><li>Over-processing - putting more effort than necessary into the work required by internal or external customers is waste </li></ul><ul><li>Duplicate reports or information </li></ul><ul><li>Repetitive data entry </li></ul><ul><li>Constantly revising documents </li></ul><ul><li>Revisiting agenda items </li></ul><ul><li>Specifying incomplete or unclear requirements </li></ul>

34.
Understanding Waste: Inventory <ul><li>Inventory - work piles, excessive supplies, and excessive signature requirements are waste </li></ul><ul><li>Files awaiting signatures or approvals </li></ul><ul><li>Work awaiting task completion by others </li></ul><ul><li>Inadequate training of back-ups </li></ul><ul><li>Excessive office supplies </li></ul><ul><li>Storing obsolete documents or files </li></ul>

35.
Understanding Waste: Defects <ul><li>Defects (or mistakes) - all processing required creating a defect or mistake and the additional work required to correct them </li></ul><ul><li>Data entry errors </li></ul><ul><li>Pricing errors </li></ul><ul><li>Shipping errors </li></ul><ul><li>Forwarding incomplete documentation </li></ul><ul><li>Lost files </li></ul><ul><li>Incomplete or incorrect customer service </li></ul>

36.
The Eighth Waste: Underutilization of people <ul><li>Underutilization of People – the result of not placing people where they can (and will) use their knowledge, skills, and abilities to the fullest </li></ul><ul><li>Unbalanced work loads </li></ul><ul><li>High absenteeism and turnover </li></ul><ul><li>Diminished work capacity </li></ul><ul><li>Stunted skills development </li></ul>

37.
Stabilize – 5S

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Example of Applying 5S: The Computer Desktop Action Example Issues Sort Cluttered desktop; files everywhere Set in Order Inconsistent folder structure Shine or Scrub Old and obsolete files retained Standardize Each worker has his or her own folder scheme Sustain No audit system

39.
Stabilize – Value Stream Mapping <ul><li>Value Stream Mapping – the visual representation of the processes (work units and information) required to meet customer demand </li></ul><ul><ul><li>The core starting point for applying lean thinking </li></ul></ul><ul><ul><li>Includes both value-added and non value-added activities </li></ul></ul><ul><ul><li>Allows for “seeing” areas of waste in current state </li></ul></ul><ul><ul><li>Current state becomes the basis for improved future state </li></ul></ul>

40.
Value Stream Mapping: Example of Current State

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Elements of Value Stream Mapping <ul><li>Walk the product’s production path from beginning to end </li></ul><ul><li>Identify every sub-process in the material and information flows </li></ul><ul><li>Measure time of each operation within a sub-process </li></ul><ul><li>Record all waiting times </li></ul><ul><li>Draw a visual representation of how the material and information flows connect </li></ul>

42.
Value Stream Mapping: Example of Current State

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Creating the Future State of the Value Stream Map <ul><li>Conduct a waste audit </li></ul><ul><li>Brainstorm ideas </li></ul><ul><li>Look for easy flow issues </li></ul><ul><li>Review “common sense” remedies </li></ul><ul><li>Use the basic Lean tools and update the map as you learn more </li></ul><ul><li>Keep going </li></ul>

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Value Stream Mapping: Example of Future State

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Implementing Lean is a Big Change <ul><li>Leadership must set the course and commit </li></ul><ul><li>Involve all key people </li></ul><ul><li>Provide the necessary training and resources </li></ul><ul><li>Anticipate resistance and manage it </li></ul><ul><li>Communicate, communicate, and deliver </li></ul>

46.
If the “Horse Doesn’t Drink”, You Have Nothing

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Three Elements of Success Water Lead the Horse Drink Situation Technique Behavior Opportunity Process Commitment Nikes Athletic Skills Just Do it! Tools Method Action

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Thank You!