Creating Stability & Consistency Created by funding from WIRED NW.

Creating Stability & Consistency

Created by funding from WIRED NW

By the end of today:You should be able to determine a

Transactional Value Stream and map itBe able to indentify improvement

opportunities and develop kaizen plans to address

Understand specific lean tools for TPI


Lean OverviewHow are transactional processes different than

factory floor processes?Difference between “product” and “information”Difference between “create” and “translate”80/20 split between people vs. machines

People are more variable than machines Where are the metrics on information flow?

Pass/Fail results, not quantitative Subjective qualitative data (good info is in the eye of

the beholder, and he keeps changing his mind!)Does the information have direct value to the

customer?Created by funding from WIRED NW

Why Focus on Transactional?•In order to deliver a quality product, all the processes in the value stream for that product must be robust.

•All processes can be improved!•The non-manufacturing processes have not typically had the focus needed to find and eliminate waste.

•Transactional processes often drive waste into other areas of the business

• Poor forecasting/ scheduling• Inaccurate sales order input• Engineering change orders taking too long


Quote generation process Contact/Lead generation process Accounts Payable process Accounts Receivable process Service and Warranty support process Sales process Order Entry process Purchasing process Credit process Human Resource process Shipping/Receiving process Product Development process Engineering Change process Improvement Processes

What are Transactional areas?


Transactional ProcessesEverything we do is part of a process……all processes can be improved

inputs

process

output


Rework

Scrap

Ship

Traditional Method

A B CInspectionA B C

A B C Ship

Quality Built in…

Build in Qualityat Each Process Do Not Pass Along Defects!


Marketing R&DProduct Design

Production Preparation Purch. Manuf. Distribution Service

Mkt. R&DProduct Design

Production Preparation Purch. Manuf. ServiceDist.

6 months 12 months

Marketing R&DProduct Design

Production Preparation Purchasing Manufacturing DistributionService

Lead-Time Reduction through Elimination of WasteConcept Cash

Total Value Stream

Total Value Stream

Total Value Stream after Kaizen

Mfg Kaizens

Transactional Kaizens


Traditional “Over the Wall” Batch Processing

Incoming Loan Sorting Loan Calculations Final Approval/Customer Contact


Lean Processing

Significantly Reduces Waste: Transportation, Waiting, Quality Defects, Inventory, Motion!

Customer SeesImproved QDC!

One Piece FlowCellular DesignStandard Work

Incoming Loan Sorting

Loan Calculations

Final Approval/Customer Contact


TIME

IMPR

OV

EM

EN

T

KK

K

K

K

K

K

K

K

S

S

S

S

Without standardization, improvements can not be sustained!

K = Kaizen ActivityS = Standardization Activity


Everything we do is part of a Process.

Processes inherently contain 2 types of activities:

1. Value Added2. Non-Value AddedTake the next few minutes to write a definition for each:Value added activities are:

Non-Value added activities are:

Value Added Activities vs. Non-Valued Added Activities

Any process or operation that shapes or transforms a product or service

into a final form that the customer will pay for.

Those process steps that take time, resources, or space, but do not

transform or shape the product or service towards that which is sold to the customer

Who is your customer?


Non-Value Adding __%

Value Adding____%

95What Are The Percentages?

Value Added Activities vs.

Non-Valued Added Activities

5The Value Add Is Usually Much Less Then 5%!


Auto Repair Bill:

Filling out customer information: .5 hrsMoving the auto into the garage: .10 hrsPreparing auto for inspection: . 5 hrsCoffee Break: .25 hrsLooking for parts: 1.0 hrsWorking on automobile: 2.0 hrsLunch: 1.0 hrsWorking on automobile: 1.5 hrsCoffee Break: .25 hrsMoving the auto out of the garage: .10 hrsExplanation of bill w/customer: .5 hrs

Total Hours Spent 7.7 hrs

Take the next few minutes and total the value added time you see in this bill.




Non Value Added vs. NecessaryWhere are we going to focus?

Value Added&Necessary

Non-VA&Necessary

Non-VA&Non-Necessary

Reduce

Eliminate

Identify

Value Added&Non-Necessary

Challenge& Eliminate




What are The Eight Wastes?

Waiting

zzzzz

Over-Processing

Sign-offs

Transportation

12 1 10 9 86 4 13 2 3 11 5 7 Unused

Creativity

Noway!

Motion InventoryQuality Defects

Wrong infoInfo missingKeypunch error

Over-Production


• Motion• Inventory• Waiting

• Quality Defects• Over Processing

• Transportation• Over Production• Unused Creativity

• Walking, routing information• A task waiting to be started (WIP)

• Delays and queues

• Incomplete or bad information• Unnecessary or extra process steps / Variation of process methods.• Handoffs of information

• Creating info that others don’t use • No process for improvement

Examples of Transactional WasteEight Wastes

The Eight Wastes – Transactional Examples


• Functional organization• IS technology gaps• Excessive controls• Outdated process design• No back-up/cross training• Unbalanced workload• System batching• Outdated policies

• Changing priorities• Responsibilities not defined• Poor visual control• Disorganized workplace• Lack of training• Obsolete forms• No SOP’s• Authorization levels

The Eight Wastes – Causes of Transactional Waste


Distance Exercise

30’ 20’

File Hard CopyPickup Next Order @ Fax

Enter Order And Print Hard Copy

Daily Requirement:40 Orders

Associate performs 3 tasks to complete 1 order

Feet per (8 hour) day ____________Feet per (5 day) week ____________Feet per (240 days) year ____________Miles (5280 ft.) per year ____________Hours (Miles/2)

4,00020,000

960,000

18190.5


Capturing The Current-State Transactional Value Stream

Transactional Value Stream Mapping (VSM) training

Walk the Value Stream starting from the customer’s perspective, walk from end to start

Map the Current-State Transactional Value Stream

Understand what a lean value stream is

Develop Kaizen Bursts from Current-State Map


VALUE STREAM = All steps, both VA and NVA, required to bring the product from raw material to customer

Value Stream

Receive Order

Build Product

Get Paid

PROCESS PROCESS PROCESS

Concept Cash

Customer


Mapping a Transactional Value Stream

Follow a transactional process pathfrom end to beginning, and draw a visual representation using icons (current-state map)of the material or service and information flows.

Then identify areas to improve and focus our TPI efforts


Transactional VSM helps point out waste in a value stream, and then identifies the activities that can eliminate the waste.


Definition Of Processes And Times

This is a manual process. Entering an order, checking a drawing… Put this time into the Process Capacity Chart under OCT to calculate the capacity of this operation.

OCT

Time

MCT

This is an automatic process. Order being processed by the ERP system, customer credit information being looked up by the ERP system… Put this time into the process capacity chart under MCT to calculate the capacity of this machine

Time

OCT MCT

This is a manual process triggering an automatic process. Manual time + Automatic time, typing in customer information, then the ERP system looks up the most recent order, triggering a manual back flush… If the operator can be separated from the machine, record the OCT and MCT on separate lines. If the operator is tied to the machine, put the total time (OCT+MCT) in the process capacity chart.

Time


Process Flow Diagrams - Considerations• What is the “right” amount of detail?• As the process moves you may use a different color paper for each department /

group in the process to make the map more visual.• Consider moving from left to right to roughly signify a passage in time• Consider highlighting value added, inspection, or queue points on the map

Marketing

CommManager

Traffic

Concept

Platform is Created

Correct?

Draft Copy Created

Create imageryAssemble 1st Proof

Update log

Notify ExternalVendors/ Quote

1

VAInsp

Yes

No

Graphics

Production

New JobOpened

Place Sticker/Log into tracking sys

VA

Update logand sign

Lit code needed?

2

Insp

Insp

3Log new Job


Customer Service Call Volume By Day

0

5

10

15

20

25

30

35

40

45

50

Time 1/ 2 Hour PeriodsMon T ue Wed T hur s Fr i

With this kind of variation within a day, can you calculate TAKT time the way we learned in a previous slide? Manufacturing has a due DATE, this example has requirements by the MINUTE!


Number of operators required at 9:00 AM:

Our TAKT Time = 1800 Seconds / 47 Calls = 38 Seconds At 9:00 AM we would round

up to 10 people taking calls

Number of operators required at 5:00 PM:

Our TAKT Time = 1800 Seconds / 5 Calls = 360At 5:00 PM we only need 1 person taking calls

360 Seconds Per Call ------------------------------- = 360 TAKT Time

1 Operator

360 Seconds Per Call ------------------------------- = 38 TAKT Time

9.47 Operators

Looking at the example on the prior slide, we had 47 calls in a ½ hour period at 9:00 AM and 5 calls in a ½ hour period at 5:00 PM. For this exercise we will assume that each call averages 6 minutes or 360 seconds. There are 1800 seconds available in ½ hour.

A Playbook should do the following:• Show the number of operators required versus time (this example is ½ hour increments)• Should show what work each operator is to perform. Sometimes an operation will be split between operators.

In this case, you will need to spell out what steps each operator starts and stops at.• Be visual – high visibility charts work best.

Sum Of Process Cycle Times ------------------------------- =TAKT Time

# Of Operators


It’s Time to make the ImprovementsBegin by asking from the customers’ perspective“What would the ideal process look like?” and create a high level Ideal Process Flow.

-Where is the non-value added?

-What is driving the non-value added?-Lack of Visual Systems?-Lack of Standard Work?-Batch processing and bottlenecks (lack of flow)? -Excessive handoffs?-Process Complexity?

-What steps can be eliminated? -Do we need to re-design? -Try-storming!!

STOP

JUST DO IT!!


Determining Where To Focus TPI Activities

•Complete Current-State map of the Transactional Value Stream.

•Identify where TPI activities should be focused. •Use the symbol (Kaizen Burst) on the Current-State map to highlight where we will focus within the Value Stream.

•Prioritize Kaizen activities and scope what can get done this week.

•The team may tackle a portion of the Value Stream or choose to make improvements within the entire value stream.


Sustain the ImprovementsComplete The Should Be Process Flow MapComplete The Should Be Process Standard

Work SheetPut Metrics In PlaceLearn About Countermeasures And How To

Apply ThemLearn About Future State Mapping“Should Be” Process TrainingDocumenting The “Should Be” ProcessKaizen Report Out Format


A “Should Be Process” Flow

GenerateECR

GroupAnalyzes

ECR

ValidECR?

AssignDraftingResource

GenerateChanges

Approved?

Bring ECOto Meeting

ImplementECO

ProblemCorrected

Problem IsNoticed

No

Yes

Yes

Customer

Cross Functional

ECO/ECR Meeting

Manufacturing

Engineering

Drafting

ECO Coordinator

No

Note:This map is formatted horizontally. While this is very visual, it is not a mandatory format


“Should Be” Process Training For Associates• Who are you going to train?• When are you going to train them?• What are you going to train them on?

These questions must be answered before you can begin to train.Remember, the “Should Be” process is the process that will be running at the end of the event so the training needs to happen before the end of the event.


Documenting The “Should Be” Process• Be sure to modify any existing SOP’s, Standard Work Documentation, or Operating

procedures to reflect the changes that this workshop generated• Make sure you perform an audit of the new process to make sure ISO documentation

accurately reflect the changes• Post Metrics of the new process – Remember, what gets measured, gets improved and

tracking metrics is a great indicator of compliance to Standard Work• Post Standard Work documents that were generated during the event

•Takt Time•Playbooks•Standard Work Sheet•SOP’s

• Post the Kaizen Newspaper in the area that was kaizened so that the status of open items is available to all the associates in the area

• OVERCOMMUNICATE! – Meet with all of the associates whose processes were changed and communicate these changes to them immediately!


Kaizen Newspaper Team:_______________

Item Problem Kaizen ActionPerson

ResponsibleDate Result

DBS-0006 01/96

Post the Kaizen Newspaper

Hint:Use the kaizen newspaper format to keep track of action items you intend to address DURING the kaizen.Use the same form to document action items that will be completed AFTER the kaizen.


Putting Metrics In PlaceKey questions after establishing our New Process

• Are we following the standard work we put in place?• How are we doing relative to our goals?• How do we know?

The Answer Is To Put Appropriate Metrics In Place

Good Metrics…• Focus on the customer• Reflect the purpose and scope of the process• Are simple and repeatable• Track progress to goals• Are accepted as fair and helpful• Lead to action!

KPI Board

Safety Quality Delivery Cost


GenerateECR

GroupAnalyzes

ECR

ValidECR?

AssignDraftingResource

GenerateChanges

Approved?

Bring ECOto Meeting

ImplementECO

ProblemCorrected

Problem IsNoticed

No

Yes

Yes

Customer

Cross Functional

ECO/ECR Meeting

Manufacturing

Engineering

Drafting

ECO Coordinator

No

Where Should The Process Be Measured?We typically only measure at the End

We should measure processes at Decision Blocks and at the End of the process


Countermeasures

0

5

10

15

20

25

30

35

40

45

50

1 2 3 4 5 6

Control Chart / Historical Data ParetoRoot Cause:

We have experienced a 5% failure rate of ECO’s at the signature step for the month of July.

Individuals chart with Shewhart Control Limits

86

88

90

92

94

96

98

100

1 2 3 4 5 6 7 8 9 10

Run

Indi

vidu

als

Val

ue

Series1

Center = 96.4429

UCL = 98.1719

LCL = 94.7139

Zone A Above

Zone B Above

Zone A Below

Zone B Below

GOAL

Who WhenCountermeasures

1. Reduce Failure Rate to < 1% (VRK Event) Bob 8/10

Impact

45K PPM

Use a countermeasure form with historical data and pareto data to clearly show root cause, corrective actions that will be taken, who will take these actions, when they will be taken, and the impact


Complete The Needed “Should Be Process” Forms

GenerateECR

GroupAnalyzes

ECR

ValidECR?

AssignDrafting

Resource

GenerateChanges

Approved?

Bring ECOto Meeting

Im plem entECO

ProblemCorrected

Problem IsNoticed

No

Yes

Yes

C ustom er

C ross FunctionalEC O/EC R M eeting

M anufacturingEngineering

D rafting

EC O C oordinator

No

Process Flow

LH-Chrys-001

L-Hand Bracket

5,400 23,600 Secs.

Date Completed:

11

Standard WIP # Pieces WIP TAKT Time Cycle Time

From:

To:

Part No.

Part Name:

Operation

Sequence

Quality Check Safety Precaution

17-Jul-02

Drawings Implemented

Problem Noticed Standard Work Sheet

Qty.

Mfg. Engneering

Product Engineering

Materials/ECO Imp. Engineering Services

Factory Floor

ECO Conference RoomMeetings 2X Per Week

ECO Process Standard Work1 - Mfg. Engineer generates ECR2 -Mfg. Engineer walks ECR to meeting3 - ECR is approved at meeting and converted to an ECO4 - Draftsman is assigned to ECO task at meeting5 - Draftsman drafts changes6 - Draftsman walks ECO to meeting7 - ECO is signed at meeting8 - ECO coordinator walks ECO to work area to implement

Standard Work Sheet / Spaghetti Diagram

Safety Quality Delivery Cost

Process Metrics

As Is Should Be PercentCategory Process Process Change

Total Processing Time 29,125 23,600 19.0%Number Of Steps 32 6 81.3%Distance Traveled 4,770 700 85.3%Number Of Handoffs 13 2 84.6%Number Of Inspection Steps 7 1 85.7%Number Of Queues 10 1 90.0%Amount Of WIP 140 11 92.1%

Process Data Summary Form

Process Being Observed: Highland ECOFrom: Problem NoticedTo: Drawings Implemented

Observed By: Bruce GrahamObservation Date: 12-Jul-2002

Process Data Summary

Standard Work Documentation

SOP’sVisual ControlsProgram ChangesPictures


Future State MappingFuture State Mapping should be employed in TPI whenever there is a gap between what was accomplished during the TPI event and the ideal Future State. This Future State should be something that can be accomplished in about six months to one year.

Sometimes, although you may recognize the ideal Future State, there may be other organizational issues that need to be worked out first.

Another improvement that some companies realize is that they could eliminate a substantial amount of Non-Value Added activities by developing an electronic ECO system to improve and automate the following:

•ECR generation and submittal•FIFO management•Drawing Checkout process•ECO release process•ECO logging and tracking

You might chose not to automate these functions during the TPI event week to make sure the “Should Be” process works well before attempting to automate it.


Documenting The Future-State Process

Here Are The Kaizen Bursts From The VSM Portion Of The Training

Establish FIFO

Develop Visual SystemFor High Priority ECO;s

Improve timeliness of Signature Process

Reduce # OfHandoffs

Reduce WIP

One organization has decided to attack their ECO process by implementing the following:

1. The ECR is generated by the Manufacturing Engineer (same as before)

2. The ECR will be evaluated at a cross functional meeting that will be

held 2X per week ( Reduces # Of Handoffs, Reduces WIP)

3. The cross functional meeting will evaluate ECR’s and check ECO’s for

approval. Signatures will happen right at the meeting which eliminates

the circulation process. High priority ECO’s will be color coded BLUE

so that they stand out. (Develop Visual System For High Priority ECO’s,

Improves Timeliness Of Signature Process)

4. The cross functional meeting will assign the ECR to a Draftsman who

will complete the changes. A first in first out system (FIFO) for high

priority ECO’s will be established and adhered to. (Establish FIFO)

5. After the drafting work is completed, the cross functional group will

check the ECO for quality and completeness

6. The ECO Coordinator will take the approved ECO and implement it.Created by funding from WIRED NW

OCT = 3,600Batch = 0Reject = 0%

27,000 Sec. Avail.

ECO Meeting

Drawings Implemented

TT = 6,750 Sec.

20 ECO’s Per Week1 ShiftImplement ECO

1

OCT = 5,400Batch =0Reject = 0%

27,000 Sec. Avail.

6 partial

OCT = 300PLT = 0Batch = 0.

27,000 Sec. Avail.

ECR

1

Mfg. Engineer

Notified O

f

Problem

Requiring ECO

ProblemNoticed

ECO Process Future State

Electronic Submission Of ECR

Completed

ECO’s

FIFO3 Max.

OCT = 10,800Batch = 0Reject = 0

27,000 Sec. Avail.

Make Chg’s

2

ECR’s FIFO

By Priority

VRKRej. % To 0

Software TPIElectronics Doc.System

FIFO

5 Max. In

3 Max O

ut

2X Per Week

Lead Time=2.75 DaysProcess Time=20,100

0 Days

300 Secs.

0 Days

3,600 Secs. 5,400 Secs.

Kaizen activities necessary for the company to get to their ideal state.

10,800 Secs.

2 Days .75 Days


Kaizen Report Out

• Each team should take no longer then 15 minutes to present their results

• All team members stand with the entire team during the presentation

• Each team member should participate in some portion of the presentation

• At a minimum, the items from the presentation checklist should be presented. Any other significant item may be presented as appropriate. An example would be before and after pictures if the layout of an area was changed

• People from the areas that were kaizened who were not on a team should be present for the report out


Check Off Each Item As You Complete The TasksGENERAL DATA

� Team Charter – Members, Leader, Facilitator, Goals, Objectives…AS IS PROCESS DATA

� Current State Value Stream Map� Process Flow� Standard Work Sheet / Spaghetti Diagram� Waste Recording Form� Problem Solving Tools Used� Takt Time

SHOULD BE PROCESS DATA� Standard Work Sheet / Spaghetti Diagram� Process Flow� Standard Work Documents

Pictures (layout changes, new visuals…) Visual Controls SOP’s Playbooks

� Process Metrics� Kaizen Newspaper� Process Data Summary Form� Future State Map (If Generated)

TPI Kaizen Presentation Checklist

Remember to provide a copy of all documents to the host site DBSM


SummaryTransactional Process Improvement (TPI) is a

tool used to improve non manufacturing Value Streams

TPI is very similar to Value Stream MappingAny process can be mappedLook for opportunities to improveDevelop Kaizens to addressImplement improvements


Independent Assignment1.Meet with your mentor and review the materials discussed in today’s session.2.Mutually agree on opportunities to apply what was learned today, using as many tools as possible.3.Value stream map a non-manufacturing process. 4.Identify Kaizen opportunities to improve the value stream.5.Identify an opportunity to apply transactional process improvement tools to a work area.


Creating Stability & Consistency Created by funding from WIRED NW.

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