BFBM(5-2016) Lean in (lean transformation)
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Transcript of BFBM(5-2016) Lean in (lean transformation)
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TRANSFORMATIONPresented By
U TIN ZAN KYAW
Principal
Device Business Management Academy
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LeanLeastLow
EffectiveEfficientEquity
AchieveAwardsAttain
NormsNoNice
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- William Hazlitt (English writer, 1778-1830)
“Prosperity is a great teacher; adversity a
greater.”
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What is Core ValueValue is always defined from the customer’s perspective
Value-Adding ActivitiesTransform products or information into products and services the customer wants
Non-Value-Adding Activities/WasteConsume resources, but don’t directly contribute value to the customer
Speed is achieved by identifying and eliminating waste… in processes, innovation and decision making
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4 P’Shilosophy
olicy
rocedure
PPP
racticeP
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Creating LEAN Processes
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Get People Engaged
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Leading LEAN Improvements 1. To creates unwavering Passion
2. To create excitement for a Vision
3. To drives cultural transformation across the enterprise
4. resulting in Sustained Competitive Advantage
5. To increase Stakeholder Value.
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Building Blocks to Engagement 1. Create a sense of urgency
2. Change the focus
3. Develop leaders
4. Communicate openly and often
5. Focus on your customers
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Building Blocks to Engagement 6. Encourage and sustain innovation
7. Align through shared accountability
8. Allocate resources to ensure success
9. Promote continuous improvement
10. Maintain discipline and focus
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Performance Improvement Arena
Development Planning Arena
“Should”
“Actual”
“Actual”
Time
Perf
orm
ance
IMPROVEMENT VS. DEVELOPMENT
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Your Role
Set the Tempo Set the business vision and strategies
Create passion for leading the change
Set stretch goals
Define the critical few objectives
Establish metrics and incentives
Leverage Kaizen Breakthrough Events for engaging
associates in collaborative problem solving
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Lean ProductionLean Thinking
Lean PracticeLean Learning
The LEAN Global Network
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A Simple Definition of Lean Thinking & Practice
Systemically develop people and continuously improve
processes to create value and prosperity while consuming
minimum resources.
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Every Organization Must AddressPurpose – Provide value to customers (cost-effectively to prosper, etc.).
Process – Through value streams that are designed, operated, improved.
People – By engaging and respecting employees and other stakeholders.
Aligning purpose, process, and people.
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People & Process Balanced by Leaders
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Lean as a Social & Technical System
Social
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Lean as a Social & Technical System
Technical
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People & Process – aligned by leaders to achieve purpose
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Lean TransformationAligning:PurposeProcessPeopleto create value
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WHAT is our
PURPOSE?What situational problemdo we need to address?
How to improve the work?
How to develop
the people?
What is our BASIC THINKING??
What leadership
behavior and management
system do we need?
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Lean Transformation
PROCESSIMPROVEMENT
Continuous, practical
changes to improve the way the work is done
CAPABILITY DEVELOPMENT
Sustainable improvement
capabilityin all people at all levels
VALUE-DRIVEN PURPOSE - Situational Approach -
“WHAT PROBLEM ARE WE TRYING TO SOLVE?”
Basic Thinking, Mindset, AssumptionsThat drive this transformation
Behaviors
MANAGEMENTSYSTEM
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EmployeeFulfillment
Quality Principles
OrganizationalPractices
EffectiveBusiness
CustomerSatisfaction
Attitudes(e.g. commitment)
How to Do
What to Do
Achieving Lean Transformation
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Organizational practicesLeadershipMission statementEffective operating ProceduresStaff supportTrainingYield: What is important and what is to be accomplished.Quality principles
Customer focusContinuous improvement
Employee empowerment Benchmarking Just-in-time Tools of TQM Yield : How to do what is important and to be accomplished.Employee fulfillment
Empowerment Organizational commitmentYield: Employee attitudes that can accomplish what is important Customer satisfaction
Winning ordersRepeat customersYield: An effective organization with a competitive advantage.
The Flow of Activities in Lean Transformatio
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Purpose/Problem At Each LevelEach person with responsibility for his or her situational problem to solve!
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Process Improvement at ALL LevelsMacro Enterprise System Level
Value Stream level
Factory, Hospital, Office, Department Level
Micro Level of Each Individual Job
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LEVELS OF GOALS / PLANS AND THEIR IMPORTANCECorporate Decision
Strategic Decision
Tactic Decision
Operational Decision
Vision/Top Management
Senior Management
Middle Management
Lower Management
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Lean Capability Development“Make people as you make product…”
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How to Transform?
It’s easier to act your
way to a new way of
thinking than to think
your way to a new way
of acting.
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Taking a business to higher levels of performance is best described as jumpshifting.
Ingredients: Clear Vision
Stretching Goals
Powerful Strategies
Operating Imperatives
+Lean Managers
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Traditionally, results are thought of a Trend Line Growth.
But, Company is looking to do a lot better than Trend Line Growth and has introduced the LEAN
MANAGERS Program to take the business to a whole new level.
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THINKING DIFFERENTLY
A Passion for Growth
A Passion for Change
A Passion for Sustained Momentum
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THINKING DIFFERENTLYSmall changes to small thingsa waste of time
Is This Essential?
Small changes to big things necessary, but frustrating good, but need many
Big changes to big things the key to growth
No âNecessary Â
VITAL Â Â
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How do we do it?LEAN MANAGEMENT means ...
Individual Practice and Mindset
Transforming the organization and aligning the
people in order to dramatically improve the
business and sustain long-term momentum
É Ê
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LEAN MANAGER BEHAVIORS
1. Provides a clear vision2. Thinks outside the box3. Creates an aligned team4. Builds a strong, empowered organization5. Set and maintains high standards6. Demonstrates integrity
LEAN MANAGER Results (The Acid Test)1. Dramatic change2. Developed and empowered employees3. Sustained momentum4. improved competitive/financial position
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Design of Process,
Design of Work Experience
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Basic Thinking – Lean Thinking
Principle of “Just Enough”
Practice of Questioning and Experimenting
• Structured Questions and Experiments
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Lean Thinking Principle of Respect for PeoplePractice of Continuous Improvement ( Kaizen)
Never ending learning…to make things better…
in everything…everywhere
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Lean Thinking Philosophy
Current State
Future State
Eliminate Waste
Identify Waste “True North”
Value Added Time = Lead Time
Full of Waste, Variation, and
Rigidity
Identify and eliminate all activities that are waste.Focus on optimal flow throughout the process.
Focus on creating value for customers.
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Growing Your Business Through
Lean Process Improvement
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COMPETITIVE ADVANTAGE
Quality
Service
Innovation
Excellence
Profit
Superior
Cost Selli
ng P
riceResources
Competence
Capabilities
Talent
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The Cost Reduction Principle
Cost
Profit
Price
Price
Traditional ThinkingCost + Profit = Price
Cost
Profit
Price Price
Lean ThinkingPrice – cost = profit
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What is Lean Process Improvement?
What is Lean?
Is it skinny?Is it less people?
Is it working harder?Is it making less?
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Impact of SFM on Effectiveness of Company’s OperationCompany A
ProcessA
ProcessB
ProcessC
ProcessD
ProcessE
99% 99% 99% 99% 99%Total Effectiveness = (99%) x (99%) x (99%) x (99%) x (99%) = 95%
Company BProcess
AProcess
BProcess
CProcess
DProcess
E
95% 95% 95% 95% 95%Total Effectiveness = (95%) x (95%) x (95%) x (95%) x (95%) = 77%
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Goals of Lean Process ImprovementImprove Quality
Eliminate Waste
Reduce Lead Time
Reduce Total Costs
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IMPORTANCE OF QUALITYMarket GainsReputationVolumePrice
Lower CostsProductivityRework/ScrapWarranty
IncreasedProfits
ImprovedQuality
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Wheel playing changes beliefs.Wagon must stop.People must play.
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How things really work in some organizations!
Or, maybe more like this:
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What Do You See in the Picture?
Wagon LeaderFollowers
Square Wheels
Round WheelsRope
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The Seven Deadly Wastes
The ultimate lean target is the total elimination of waste. Waste, or muda, is anything that adds cost or time without adding value. Seven deadly waste have been identified over the years. Recently an eighth waste has been identified—underutilization of people.
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OPERATING PROFIT
OPERATING EXPENSES
PRODUCT VARIABLECOST (PVC)/COGS
REVENUE
Gross SalesLess Discount & Allowances
= Net Revenue
Less Product Variable Cost /COGS= Net Revenue
Less Total Operating Expenses= Operating Profit
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Major contributors to business health and growth are Leverage Points relating to volume and revenues.
Examples of Volume Drivers:• Quality• Pricing• Advertising• New Products• New Brands• Distribution Systems• Customer Service
• Merchandising• Channel Development• Organization• Functional Support• Operating Knowledge• Packaging Consumer Activity
• Media• Promotions• Merchandising• Public Relations• Special Events
Consumer Activity• Ordering• Delivery• Merchandising• Joint Promotions• Customer Services
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Product Variable Cost (PVC) – Leverage Points like Quality, Purchasing and
Manufacturing Efficiency, play a major role.
What other leverages would you consider important for your market?
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Retail as we know it
retailer home
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home
internet comparisonand online purchase distributor
Emerging retail
retailer home
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Customer Journey
Awareness Consideration Purchase Activation Usage Support
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Relationships+
Engagement( Airlines Business Class)
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PreviouslyRetailers owned the relationship with the customer
Retailer Customer
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Previously
Retailer Customerservice provider
Master Distributor
manufacturer
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Nowthe retailer becomes a mediator between customers & brands
Customerservice provider
aggregator
manufacturer
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“Stores”become places to manage customer relationships
Customerservice provider
aggregator
manufacturer Showrooms
Webfronts
Solution boutiques
Shoperiences
Experatail
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Adapting to changeTo create a customer experience that is…
FasterEasierCheaperMore Personal
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What Customers WantThanks to digital, customers now expect a shopping experience that is:
FASTER EASIER CHEAPERMORE
PERSONAL
How Retailers Can RespondThanks to digital, customers now expect a shopping experience that is:
TIMELY RELEVANT CONTEXTUAL TARGETED
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The Future of Retail
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One Thing Has Stayed The Same
The CUSTOMER Pathway to PurchaseNeed Enquire Browse Search Shortlist Compare Order Pay Reward
Market Order
Attract Entertain Engage Transact Reward
The RETAILER Pathway to PurchaseMarket Order
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In the Home
At the Store
On the Go
THE RETAIL
“STORE” OF THE FUTURE
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WHAT CUSTOMERS REALLY NEED, WANT AND EXPECT
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1. HELP
2. RESPECT AND RECOGNITION
3. COMFORT, COMPASSION AND SUPPORT
4. EMPATHIC LISTENING
5. SATISFACTION
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6. TRUST
7. FRIENDLY AND SMILING FACE
8. UNDERSTANDING
9. FEELING OF IMPORTANCE
10. QUALITY PRODUCT OR SERVICE AT A FAIR PRICE
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BenefitsReach more customersReduce costsImprove cash flowIncrease sales more rapidlyFocus on area of expertise
Retail Functions in Distribution contd..
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The Basic Supply Chain
Finance Flow
SupplierRaw material packaging warehouse Manufacturer
Manufacturer warehouse
Retailer warehouseRetailer
Physical Flow
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TQM Go and SeeChall
enge
Kaizen
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7 Process Wastes (TIMWOOD)1. Transportation: Unnecessary movement things (parts or machines)
between processes
2. Inventory: Raw material, work in progress or finished goods which
is not having value added to it
3. Movement: Unnecessary movement of people within a process
4. Waiting: People or parts that wait for a work cycle to be complete
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7 Process Wastes (TIMWOOD)5. Overproduction: To produce sooner, faster or in greater quantities
than the customer demands
6. Over processing: Processing beyond the standard required by the
customer
7. Defects: Not right first time, repetition or correction of a process
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Decisions—Decisions—Decisions Is my company too small for Lean Process Improvement?
Isn’t Lean a manufacturing process? I am a service business.
Can I afford to implement Lean Process Improvement?
All of these industries have successfully applied Lean to their processes
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Value Stream MappingA Popular Lean Process Tool
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Infographics Process
1 Selection the Topic
2 Surveying & Researching
3 Gathering the Data
4 Analyzing the Data
5 Finding the Narrative
6 Sketching the Idea
7 Editing
8 Designing9 Testing
10 Completing the Infographic
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Workplace 5SSort
Systematize
Sweep
Standardize
Self-Discipline
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5S is a workplace organization technique composed for five primary phases:Sort, Set In Order, Shine, Standardize, and Systematize.
Lean Six Sigma: 5S
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Specify Value
Identify Value
Streams
Create Flow
Leverage Pull
Seek Perfection
Lean Supply Chain
Current Position 5 Principles of Lean
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Key Elements of a
Lean Management
System(LMS)
Apply strong Leadership
and Governance
Engage Staff Fully in Daily Improvement
Coach The Staff and
Transfer Lean Skills
Measure The Right Things
and Make Results Visible
Embed Standard
Work Into The Culture
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Conclusion If you are the low cost producer of a good or service you have
a competitive advantage and will be able to grow your
business. Lean is the tool to reduce your costs.
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WITHIN FIVE YEARS, IF YOU’RE IN THE
SAME BUSINESS YOU ARE IN NOW, YOU’RE GOING TO BE OUT OF
BUSINESS.
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DO NOT BE AFRAID, MY
FRIEND
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Leading Through Turmoil
…use time as your focus and LEAN as your
foundation.
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Thank you and good luck!