Lean Office by Operational Excellence Consulting

2. © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives 1. Understand the principles and key concepts of Lean 2. Identify value and waste 3. Gain an overview of common Lean principles and tools, and their applications 4. Apply 5S principles to improve workplace organization and efficiency 5. Apply a simple problem solving process Copyrights of all the pictures used in this presentation are held by their respective owners

3. © Operational Excellence Consulting. All rights reserved. 3 Outline 1. Introduction to Lean Office 2. Key Concepts of Lean Office 3. Overview of Lean Methods & Tools 4. Ways to develop “Kaizen Eyes” 5. Lean Office Roles 6. Sustaining a Lean Office NOTE: As this is a PREVIEW, only selected slides are shown. To download the complete presentation, please visit: http://www.oeconsulting.com.sg

4. © Operational Excellence Consulting. All rights reserved. 4 What is Lean? • Value streams or processes • Focused on improving process performance • Clear view of end state • Wide range of Lean techniques & tools are available • Learn-by-doing approach • Culture of continuous improvement • Lean is a management philosophy based on the Toyota Production System (TPS) • Eliminate everything that does not add value (waste) in the customer’s eyes Objective Focus and scope Approach and tools

5. © Operational Excellence Consulting. All rights reserved. 5 What Lean IS NOT • Laying off employees by the bus load • Only applies to manufacturing companies • A cost reduction program • Delivering less or working harder • Just a set of “tools” like 5S, kaizen events, etc. • Automation or implementing an IT system • Another “extracurricular activities”

6. © Operational Excellence Consulting. All rights reserved. 6 What does Lean in a service environment look like? (1/2) Banks •Mergers and acquisitions •Loans application IT •Outsourced managed services Application Common Issues Typical Solutions •Differences in business practices •Loans approval process •Complicated tasks •Unbalanced capacity •Manpower utilization •Process integration and streamlining •Fast track processing for low-risk loans •Segmenting complexity •Pooling resources for economies of scale •Flexible manpower systems Telco • Procurement • Call centre operations •Cost-based and capex management •Customer service •Inventory management •Network sharing •Channels efficiency Source: Operational Excellence Consulting Research

7. © Operational Excellence Consulting. All rights reserved. 7 What is Waste? • Consuming more resources than are necessary to produce the goods, or service, that the customer wants • Pure Waste: Actions that could be stopped without affecting the customer • Incidental Waste: Actions that need to be done based on how the current system operates but do not add value  Government Regulations/Policies, Audit requirements, Facility Layout, Technology

10. © Operational Excellence Consulting. All rights reserved. 10 20 minutes of waste a day… • Find a way to remove 20 minutes of waste from your daily work routine • This will add up to 2 weeks over a one year period

11. © Operational Excellence Consulting. All rights reserved. 11 Eight Types of Office Waste Over-production Producing more than what the customer needs Inventory Building and storing extra services/products the customer has not ordered Transportation Moving from one place to another Defects Reprocessing, or correcting work Over-processing Adding excess value when the customer does not require it Motion Extra physical/mental motion that doesn’t add value Intellect Not using employees full intellectual contribution Waiting Employees waiting for another process or equipment Waste

12. © Operational Excellence Consulting. All rights reserved. 12 Examples of Value-Added Activities • Entering orders • Translating materials • Creating codes • Preparing drawings or artwork • Assembling goods • Shipping to customers

13. © Operational Excellence Consulting. All rights reserved. 13 Non-Value Added activities in office 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

14. © Operational Excellence Consulting. All rights reserved. “We must always keep in mind that the greatest waste is the waste we don’t see.” Shigeo Shingo, a Japanese industrial engineer and expert on the Toyota Production System

15. © Operational Excellence Consulting. All rights reserved. 15 Lean Thinking Philosophy Identify and eliminate all activities that are waste. Focus on optimal flow throughout the process. Focus on creating value for customers. Current State Future State Identify Waste “True North” Value Added Time = Lead Time Full of Waste, Variation, and Rigidity Eliminate Waste

16. © Operational Excellence Consulting. All rights reserved. 16 Lean Principles 1. Define value from the customer’s perspective and provide what they want. 2. Identify the value stream or process for each product or service and reduce or eliminate steps that do not add value. 3. Align the value-added steps so they flow continuously. 4. Allow the level of customer demand to pull the process, i.e., produce only what is ordered. 5. Pursue perfection through continuous improvement Source: Adapted from Lean Thinking by James P. Womack and Daniel T. Jones

17. © Operational Excellence Consulting. All rights reserved. 17 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

18. © Operational Excellence Consulting. All rights reserved. 18 What is 5S? Principles General Description 1S Sort Remove what is not needed and keep what is needed 2S Set in Order Arrange essential items in order for easy access 3S Shine Keep things clean and tidy; no trash or dirt in the workplace 4S Standardize Establish standards and guidelines to maintain a clean workplace 5S Sustain Make 5S a habit and teach others to adhere to established standards

19. © Operational Excellence Consulting. All rights reserved. 19 Office Desk – Before & After 5S An office desk before and after conducting 5S Sort and Set In Order. Clutter and unused items have been removed leaving only what is needed. Before After

21. © Operational Excellence Consulting. All rights reserved. 21 5S your computer hard/shared drive 5S Principle Description Sort • Check all your files and software, and get rid of any that are unnecessary Set In Order • Organize your files and optimize the use of file folders • Keep in mind how often you need them and how much time you need to store them • Create specific shortcut icons for the most used files or programs Shine • Eliminate any files under deleted items, sent items and the recycle bin Standardize • Establish procedures for maintaining your computer 5S system Sustain • Include hard drives in 5S audits • Focus on how people maintain files and program organization, and the time they spend ding so

22. © Operational Excellence Consulting. All rights reserved. 22 Three Types of Visual Management • Label to make it perfectly clear where things belong and what the procedures are Visual Displays • Quantify the path to targets for success • Graphs and Pareto charts Visual Metrics • Create an mistake-proofed environment to promote easy adherence to standards Visual Controls

23. © Operational Excellence Consulting. All rights reserved. 23 • Creates an end-to-end view of the system • Demonstrates interaction between material/work and information flow • Provides a common visual language for understanding a complex system Supplier/ Customer Management Control Customer Work & Information Flow Information flow Value stream mapping provides an overview of the end-to-end administrative process

24. © Operational Excellence Consulting. All rights reserved. 24 Standard Work Make it the only way: • No alternatives left Warning: • Warns for abnormalities Showing: • One-point-lesson • Visual information Reading: • Manuals • Procedures • instructions Fail-safe Visual control tools Visual aids Procedures, Instructions and Manuals The Compliance Pyramid

26. © Operational Excellence Consulting. All rights reserved. 26 The source of good quality lies in Prevention. . . . through:  PRODUCT DESIGN  PROCESSES  MATERIALS  PEOPLE . . . Not in Inspection or Correction Make It Right First Time, Every Time Quality At Source

27. © Operational Excellence Consulting. All rights reserved. 27 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.

28. © Operational Excellence Consulting. All rights reserved. 28 Poka Yoke (Mistake-proofing) • Mistake-proofing refers to techniques that make it impossible to make mistakes • Also known as Poka Yoke in Japanese • Mistake-proofing helps people and processes work right the first time

29. © Operational Excellence Consulting. All rights reserved. 29 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

30. © Operational Excellence Consulting. All rights reserved. 30 Example: Lean Kaizen Summary Project type: 5S Area: Sales & Marketing Office Team Leader: John Smith Before After Reasons project chosen: • Difficult to move around a cluttered office • Difficult to find information and supplies Tools used on project: • Cleaning equipment and tools • 5S principles Results: • Unwanted materials were discarded • Less waste – e.g. transportation, motion, waiting, etc. • Improved staff morale Next steps: • Conduct monthly 5S audits • 5S for other common areas

31. © Operational Excellence Consulting. All rights reserved. 31 A Simple Lean Implementation Roadmap Create Awareness Build Capability Operations Management & Improvement Lean Training Lean Leadership Training Build Lean Activity Board Kaizen #1: 5S Kaizen #2: Waste Elimination Value Stream Mapping for Key Processes Train-the- Trainer Training Information Sessions for Whole Organization Senior Management Awareness Kaizen #3: Standardization Month 1 Lean Methods & Tools Training Month 3Month 2 Daily Management Meeting Lean Update in Monthly Newsletter & Intranet

32. 32© Operational Excellence Consulting. All rights reserved. 32 Understanding Responses to Change Critical Mass Direction of Enrollment Middle Enrollers Late Enrollers Early Enrollers Initiators Slugs Die Hards 5% 15% 30% 30% 15% 5% Source: The Atlanta Consulting Group, Inc. Enrollment Curve It is key to understand and leverage is the rate and pace at which people adapt to change It is key to understand and leverage is the rate and pace at which people adapt to change Enrollment Curve Start by focusing time and effort on the middle/late enrollers

33. © Operational Excellence Consulting. All rights reserved. 33 Sustaining a Lean Culture • Management commitment • Alignment to vision and mission • Availability of resources • Address “what is in it for me” • Success measures and KPIs • Management review • Rewards and recognition