UCSD Class: Lean Office
-
Upload
karen-martin -
Category
Business
-
view
2.881 -
download
1
description
Transcript of UCSD Class: Lean Office
Lean Office
Lean Enterprise Program
UCSD Extension
Instructor: Karen Martin
Learning Objectives
• You will learn how to:
– Identify and eliminate the eight wastes as they
exist in office and service processes.
– Use key metrics to improve office and service
processes.
– Create metrics-based process maps to identify
waste, design improved processes and
standardize office and service work.
© 2011 Karen Martin & Associates 3
The Impact of Pre-Production
Processes on Total Lead Time
Pre-Production Processes Prod.
Order Entry
Design/configuration
Documentation
Work order management
Material preparation
Fabrication
Assembly
Test
Package
Total Lead Time
© 2011 Karen Martin & Associates 4 4
5%
65%
25%
Materials
Direct Labor
Overhead
Common Product Cost Components
© 2011 Karen Martin & Associates 5
“White Collar” Challenges
• Defining value through the external customer’s eyes.
• Identifying the “product.”
• Not used to cross-functional problem solving.
• Not used to being measured.
• Resistance to standardization.
• Dependence on inspection.
• Not used to quick decisions and execution.
• Challenging overkill re: regulatory compliance.
• Challenging policy and VERY long-standing paradigms.
• Change is more emotional than mfg.
Cultural Differences – Mfg vs. Office
Shop Floor Traits Office Traits
Sense of urgency Less urgent
Time scarce resource Time expands to complete the
task
Production quotas Excessive work waits
Standard times and methods Few processing standards
Real time performance
measurements
Few to no real time
measurements
Daily production meetings Weekly staff meetings
Desire for change Desire to maintain
© 2011 Karen Martin & Associates 7
Lean in the Office
• Lean principles are the same
– Define value
• This is the most shocking element initially
– Create flow by eliminating waste
• Eight wastes are the same
• Metrics differ slightly
• VSMs differ slightly
• Lean tools used to make improvements are
basically are the same
• The environment/culture is significantly different.
© 2011 Karen Martin & Associates 8
Customer-Defined Value
• Value-Add (VA) - any operation or activity the
customer values and is (or would be) willing to
pay for if he/she knew the incremental cost of
that activity.
• Non-Value-Add (NVA) - any operation or activity
that consumes time and/or resources but does
not add value to the service provided or product
sold to the customer.
– Necessary – regulatory requirements, etc.
– Unnecessary – everything else
© 2011 Karen Martin & Associates 9
Eight Wastes (Muda)
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation
(material/data)
• Underutilized
people
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation (material/data)
• Underutilized
people
10
© 2011 Karen Martin & Associates
Overproduction
• Producing too much, too fast, too soon – More than required by next process
– Earlier than required by next process
– Faster than required by next process
• Creating or providing anything before it can be consumed or acted upon by the downstream customer
• Results in wastes of inventory and waiting
• What are the reasons for overproduction?
11
Work-in-process (WIP) is a symptom
of overproduction
© 2011 Karen Martin & Associates
Three Types of WIP
• Waiting to be processed
• Currently being worked on
• Completed, but not yet passed on
13
Step 1 Step 2 Step 3
WIP
WIP WIP
Step 2’s WIP
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation (material/data)
• Underutilized
people
14
© 2011 Karen Martin & Associates
Inventory Woes
• Stockout problems
– Extended lead times to complete the job
– Additional labor and expenses to deal with it
• Non-material inventory expenses
– Space
– Labor to manage it
– Risk of obsolescence or damage
– Risk of customer changing his/her mind
– Reduced cash flow
• Per unit price becomes less relevant in a Lean
enterprise
15
No Control over Inventory
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation (material/data)
• Underutilized
people
18
© 2011 Karen Martin & Associates
Over-Processing
• Effort that adds no value from the customer’s point of view – Unnecessary handoffs
– Re-entering data
– Multiple approvals / signatures
– Audits / inspections (verifying the work of others)
– Creating excessive documentation
– Excessive reporting
– Redundancies
– Unnecessary meetings
– Excess features / making it “too good”
– Over-specified plans and materials
– Excess approval sign-offs
19
Current State
20
SNAP
Main
Tech
DEPT
HEAD
C.O.
SK
DAAS
BO1
ITEM
MGR
ISEA
SUPV
CRANE
SUPPLY
PEO
IWS2
CRANE
DEPOT
STOCK
POINT
Handoffs= 47
Lead Time = 486 hrs (60.7 days)
Process Time = 108 hrs (13.5 days)
Main
Tech
C.O.
ISEA
SUPV PEO
IWS2
STOCK
POINT
SNAP DEPT
HEAD
SK
DAAS
BO1
CRANE
SUPPLY
DOCKSIDE
Future State
Handoffs= 10 (78% improvement)
Lead Time = 90 hrs (11.3 days)
Process Time = 58 hrs (7.3 days)
Eliminating Over-Processing
© 2011 Karen Martin & Associates
Excessive Approvals & Authorizations
• Is the approval redundant? (same skill set and
perspective as another approver)
• Is the approval a “rubber stamp”?
• Does the approver have the technical skills and
experience to understand what they are signing?
• Does the approver have the authorization to
approve or deny?
• Is the approver accessible?
• Is the approver on the routing list merely to stay
informed?
21
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation (material/data)
• Underutilized
people
22
© 2011 Karen Martin & Associates
Waiting
• Types of waiting – People waiting for information, material or equipment
– Information, material or equipment waiting for people
– People waiting for people
• Idle time created when waiting for… – Information, input, decisions, approvals or authorization
to proceed
– Supplies and material
– Handoff
– Next batch
– Meetings to begin
– System to function properly
– Looking for stuff
23
© 2011 Karen Martin & Associates
Looking for Stuff: Time is Money
• Organization with 1,500 employees – Earn average of $22 per hour
– Work 250 days per year
• Each employee spends an average of 10 minutes per day looking or waiting for stuff – Individual impact
• = 41.7 hours wasted time per year
• = 0ver a week of frustrating, unfulfilling, nonproductive time
– Organizational impact • = 62,550 hours of nonproductive time
• 30 FTEs worth of wasted resources
• = $1.4 unnecessary direct expense per year
24
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors/Defects
• Motion (people)
• Transportation (material/data)
• Underutilized
people
25
© 2011 Karen Martin & Associates
Errors
• Errors become defects that require rework
• Key metric - % Complete & Accurate
(%C&A)
26
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation (material/data)
• Underutilized
people
27
© 2011 Karen Martin & Associates
Motion (people)
• Traveling to remote locations
• Walking to shared equipment
• Walking material/information to downstream customer
• Walking to offices for approvals, signatures, exchange of information, etc.
• Walking to and from supplies
• Looking for supplies, equipment, documents
• Ergonomic issues
• Risks: Time, Morale, Safety
28
Spaghetti
Diagram ECN Process
• Visualize
travel of:
– People
– Product
(“the thing”)
12.5 miles
per ECN
Desk
Table
Desk
Desk
Desk
Desk
Table
Desk
Table
Desk Desk
Table Table Staging Area
6, 7
, 8, 9
6
, 7, 8
, 9
Desk
6, 7
, 8, 9
6
, 7, 8
, 9
6, 7
, 8, 9
6
, 7, 8
, 9
Desk Desk
Table
Table
Start
Table Table
1
12
4c
4a
3
2
11 10
cart
4b
Spaghetti Diagram – Mail Room (Shows people or product travel)
Motion Waste
Shared
equipment
© 2011 Karen Martin & Associates
Impact of Shared Equipment
• Distance traveled to printer
– Dept A = 92 ft. per trip
– Dept B = 696 ft. per trip
• 120 occurrences / day = 4656 miles/year
• Walk pace = 1 mile per hour = 582 days/year of
unproductive, non-value-adding time = 2.2 FTEs
32
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation (material/data)
• Underutilized
people
33
© 2011 Karen Martin & Associates
Transportation (product)
• Transporting material, paperwork or
information between individuals,
departments, buildings, regional/corporate
offices, customer locations, etc.
– Is hard copy really needed?
– Does it have to be shipped overnight?
34
© 2011 Karen Martin & Associates
Eight Wastes
• Overproduction
• Inventory
• Waiting
• Over-Processing
• Errors
• Motion (people)
• Transportation (material/data)
• Underutilized
workforce
35
© 2011 Karen Martin & Associates
Under-utilized Workforce
• Not utilizing the full skill set and potential of each worker (KSAC = Knowledge, Skills, Aptitude/Ability, Creativity)
– Not training workers to their maximum capacity
– Occupying staff with work that doesn’t need to be done, limiting time for creativity
– Narrow scopes of responsibility; over-specialization
– Not utilized for improvement design and implementation
36
© 2011 Karen Martin & Associates 37
Key Metrics
© 2011 Karen Martin & Associates 38
Task-Level Metrics: Time
• Process time (PT)
– The time it takes to actually perform the work, if one is
able to work on it uninterrupted
– Includes task-specific doing, talking, and thinking
– aka “touch time,” work time, cycle time
• Lead time (LT)
– The elapsed time from the time work is made available
until it’s completed and passed on to the next person or
department in the chain
– aka throughput time, turnaround time, elapsed time
© 2011 Karen Martin & Associates 39
• Critical Path PT
• Critical Path LT
• Activity Ratio (AR)
– The percentage of time work is being done to the
patient/item/data passing through the process
– AR = (∑ CP PT ÷ ∑ CP LT) × 100
– 100 – AR = Idle time
Summary Metrics: Time
© 2011 Karen Martin & Associates 40
Key Lean Metric: Quality
• %Complete and Accurate (%C&A)
– % time downstream customer can perform task
without having to “CAC” the incoming work:
• Correct information or material that was supplied
• Add information that should have been supplied
• Clarify information that should or could have been
clear
– This output metric is measured by the
immediate downstream customer and all
subsequent downstream customers.
© 2011 Karen Martin & Associates 41
• Rolled First Pass Yield (RFPY) =
– %C&A × %C&A × %C&A × …
– The percentage of occurrences where the
information/data/people being processed pass
through the entire process with no rework
required
– Example: (0.95 x 0.60 x 0.85 x 0.75) x 100 =
36.3% RFPY
Summary Metrics: Quality
© 2011 Karen Martin & Associates 42
• Total PT
– Sum of all activities, not just critical path
• Labor Requirements
Summary Metrics: Labor Requirements
Total PT (in hrs) X # occurrences/year
# FTEs Available work hrs/year
=
* FTE = Full-time Equivalent (2 half time employees = 1 FTE)
Freed
Capacity = CS FTEs - FS FTEs
© 2011 Karen Martin & Associates
What do you do with freed capacity?
• Absorb additional work without increasing staff
• Reduce payroll through natural attrition
• Innovate – create new revenue streams
• Conduct ongoing continuous improvement activities
• Do a better job with fewer errors and higher safety
• Talk and work with your customers and suppliers
• Mentor staff to create career growth opportunities
• Provide additional workforce development; cross-train
• Better work/life balance
• Slow down & think
• Get/stay caught up
• Do the things you haven’t been able to get to
• Collaborate with other areas
43
© 2011 Karen Martin & Associates 44
Dinner DVD
Time: The Next Dimension of
Quality
© 2011 Karen Martin & Associates 45
Value Stream Mapping
in the Office
Narrowing the Scope: Example
Order
Fulfillment
Process
International
Domestic
Service Parts
Consumables
Units
Non-
Warranty
Warranty
Service Parts
Consumables
Units
Non-
Warranty
Warranty
Current State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000 Supplies Purchasing - Current State VSM
Finance
Review
Budget
PT = 5 mins.
C&A = 60%
6
Corp Purchasing
Manager
Approve in
ERP
PT = 5 mins.
C&A = 90%
1
0.25 days
5 mins.
0.5 days
5 mins.
5 days
5 mins.
1 days
5 mins.
1 days
10 mins.
0.5 days
15 mins.
3 days
5 mins.
7 days
15 mins.
10 days LT = 28.4 days
PT = 65 mins.
AR = 0.477%
Supervisor
Review Req.
PT = 5 mins.
C&A = 95%
2
Sys Engineer
Review
Requisition
PT = 5 mins.
C&A = 90%
1
IS Manager
Review
Requisition
PT = 5 mins.
C&A = 100%
1Financial Mgr
Review
Requisition
PT = 10 mins.
C&A = 95%
1
Admin Asst
Enter
Requisition
PT = 15 mins.
C&A = 98%
1
4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.
Originator
Inititate Req.
PT = 10 mins.
C&A = 10%
31
2 hrs.
Form File
File Maker
ERP
Quicken
Vendor
Website
Excel
4 hrs.
Customer Demand:
615 requisitions per y ear
20 ReqsExternal
Supplier
PT = 20 mins.
Hard CopySupplies
Data Entry
Corp Purchasing
Submit PO
to Supplier
PT = 15 mins.
C&A = 98%
6
10 Reqs 63 Reqs
1
2 3 4 5 6 7 8 9 10
RFPY = 4.2%
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activ ity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Y ield
80 hrs.
Supplies Purchasing - Future State VSM
Customer Demand:
615 requistions per year
Dept.
Manager
Approve
in ERP
PT=5 mins.
C&A = 90%
1
0.5 days
5 mins.
0.75 days
5 mins.
1 days
20 mins.
10 days LT = 12.3 days
PT = 30 mins.
AR = 0.508%
Supervisor
Review
Req.
PT=5 mins.
C&A = 95%
28 hrs.
Originator
Enter Req.
in ERP
PT=30 mins.
C&A = 85%
31
File Maker
ERP
Vendor
Websites
6 hrs.
Standard
Work for
review
Additional
IT access
Requisition
Checklist
Cross
Training
Additional
IT access
External
Supplier
PT=20 mins.
Supplies
4 hrs.
Auto Notify
Integrate Form
File with File
Maker
Use budget in place
of Quicken
Dedicated
Buyers
Corp Purchasing
Place
Order
PT=20 mins.
C&A = 98%
6
Approval
1
2 3 4 5
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Yield
RFPY = 71%
80 hrs.
Future State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000
© 2011 Karen Martin & Associates
Projected Improvements
Purchasing Process
49
Metric
Current State
Projected
Future State
%
Improvement
LT 28.4 days 12.3 days 56.7%
PT 65 mins. 30 mins. 53.8%
AR (PT/LT x 100) 0.48% 0.51% 6.3%
RFPY 4.2% 71.0% 1,590%
# Steps 10 5 50%
# IT Systems 6 3 50%
Projected freed capacity = 358.8 hrs = 9 business weeks
Typical Differences - Manufacturing vs. Office VSMs
Manufacturing Office
Customer icon Upper right Center
Supplier icon Upper left None
“The thing” we’re
following
Raw material, sub-
assemblies, finished goods
Paper and electronic
Information
Information Flow More structured /
formalized I.T. systems
Multiple I.T. systems and
work-arounds
Schedule notification Multiple points across VSM Work not scheduled
WIP icon Inventory triangle In-bin (if preferred)
Quality Metric
First Pass Yield (FPY)
Percent Complete &
Accurate (%C&A)
Takt Time
Typically can be applied
Only applicable with
dedicated resources
LT determination for
each block
Based on WIP between
process blocks
Based on a single item
passing through
Scope / Product
family definition
Straight forward Much more refined (due to
excessive variation)
© 2011 Karen Martin & Associates
Metrics-Based Process
Mapping (MBPM)
51
© 2010 Karen Martin & Associates
The Improvement Process
52
Plan
Do
Check
Act
Traditional Method Used:
Process Flow Chart
Look up Customer
in Eclipse
SALES
New
Customer?
Enter Order
SALES
Print Ship Ticket
SALES
Load Trucks
SHIPPING
Enter Customer
Information
ADMIN
Perform Credit
Check
FINANCE
Okay?
Notify Sales COD
Only; Notify Admin
to update
Customer Profile
FINANCE
Yes
No
No
YesProduct in
Stock?
Yes
Order Material
PURCHASING
No
Receive Material
RECEIVING
Where’s the quality? Where’s the time?
© 2011 Karen Martin & Associates 54
What is a Metrics-Based Process Map?
• Cross-functional process map
• A visual process analysis tool which integrates: – Functional orientation of traditional swim lane
process maps
– Key Lean metrics: • Lead Time
• Process Time
• Quality (Percent Complete and Accurate)
• Tool which highlights the disconnects / wastes / delays in a process – Keeps the improvement focus properly directed
• Becomes standard work for workforce training and process monitoring
© 2011 Karen Martin & Associates 55
When Do We MBPM?
• Value Stream Driven – VSM is the strategic tool that identifies when
we need to perform a more detailed analysis of a process
– MBPM is a tactical tool used to flesh out the details at each step to see the “waste behind the waste”
• Enables a team to “drill down” from a few targeted blocks on the VSM
• Effective analytical tool for “white collar” Kaizen Events (usually Day 1)
Functions Step
1 Step
2 Parallel Steps
Process Time Lead Time
Who
Activity (Verb/Noun)
Percent Complete and Accurate
(%C&A)
For each step, document:
Add’l Barriers to Flow
Summary Data
PT = 85 min LT = 28.7 hrs
Timeline
© 2011 Karen Martin & Associates 59
1. Label the map in upper right corner. Process name, date, facilitator and/or team members
2. List the functions involved in left column.
3. Document all activities/steps. Verb/noun; concise language; include function as well.
4. Number the activities. One number per column; concurrent activities are labeled A,
B, C, etc.
5. Add activity-specific metrics (PT, LT, %C&A), barriers to flow, and number of staff involved (if relevant). Include units of measure (mins, hrs, days, etc.)
Creating the Current State MBPM
Phase I
© 2011 Karen Martin & Associates 60
Creating the Current State MBPM
Phase II
6. Define the critical path. Longest LT unless “dead-end” step; use colored marker
7. Create the timeline.
8. Calculate the summary metrics CP PT Sum, CP LT Sum, AR, RFPY, Total PT, Labor
Required
9. Define the value-adding and necessary non-value-adding activities Use small colored post-it labeled with “VA” and “N.”
10. Circle the step-specific metrics that indicate the greatest opportunity for improvement. Use red marker.
Longest LTs, Low %C&As, High PTs, Low step-specific ARs
Metric Current State Projected
Future State
Projected %
Improvement
CP LT Sum
CP PT Sum
AR
RFPY
# Steps
Total PT
Labor
requirements
Freed capacity
Metrics-Based Process Mapping
Key Metrics
© 2011 Karen Martin & Associates 62
Metrics-Based Process
Mapping (MBPM)
Simulation
Building a Lean Enterprise
Process
Stabilization
Tools
Standardized Work Job Aids
• Simple
• Visual
• Physical
• Posted at
point of use
• Created by
people who
do the work
and tested
by others
© 2010 Karen Martin & Associates
The Rings of Knowledge (ROKs)
Job Aids
© 2010 Karen Martin & Associates
Standardized Work for Electronic
Data Entry
66
Checklists
assure all
critical tasks
are done
within defined
timeframes
Building a Lean Enterprise
Flow-Enabling
Tools
© 2011 Karen Martin & Associates 69
Metrics-Based Process Map (MBPM)
Critical Path
Auto-Calculated Results
© 2011 Karen Martin & Associates
Lean in the Office – Summary
• Lean principles are the same
– Define value
• This is the most shocking element initially
– Create flow by eliminating waste
• Eight wastes are the same
• Metrics differ slightly
• VSMs differ slightly
• Lean tools used to make improvements are
basically are the same
• The environment/culture is significantly different.
72
Learning Objectives
• You will learn how to:
– Identify and eliminate the eight wastes as they
exist in office and service processes.
– Use key metrics to improve office and service
processes.
– Create metrics-based process maps to identify
waste, design improved processes and
standardize office and service work.
74
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
For Further Questions
Free monthly newsletter:
www.ksmartin.com/subscribe
Learn / Connect :