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Transcript of Getting the Most Bang Out of Your Resources!! Dr. Frances Kennedy Professor and Director, School of...
Getting the Most Bang Out of Your Resources!!
Dr. Frances Kennedy
Professor and Director,School of Accountancy
and FinanceClemson University
LEAN CONCEPTS
Strategic Lean
More than a shop-floor tool
Process improvement should beapplied throughout organization
Support functions must participate and contribute to lean journey for it to succeed
Lean is a total business strategy
Lean Principles
Value Streams
Empo
werm
ent
Value
Flow
and
Pul
l
Perfection
Lean Principles
Value Streams
Sequences of processes and activities delivering customer value
Discharge Process:•Cross functional•Multiple care providers
• Pharmacy• Doctor • Nurses• Quality • Coding• Bed Control• Outpatient • Billing
Supplier Payment Process:•Ordering•Receiving•Storage•Inventory•Payment•Systems
Form a team with members from all constituent areas
What does it mean to “map the Value Stream”?
CURRENT State VS map
Customer: Petroleum, Aeronautical Companies
Expectations: Orders processed within 1 day
Initiate Order
Keys order in Computer
45s pl
Verify Order
Review Order 15s
Sales Mail Sort
Sort/30s
Central Mail Sort
Post/302
8 hrsCentral Mail
Room
Sort Orders/5s
Place in Out Box/5s
Sales Mail Sort
Sort by Customer/5s
Date Stamp/2s
Place in Cust Rep Folders/
10s
Check Part Numbers
Verify Part # /10s pl
Check Part Numbers/15s pl
Attach Revisions/10 s pl
Sort by Customer/10s pl
Establish Price 60s pl
Assign Delivery Date
Assign Delivery Date/30s pl
File Hard Copy15 m
4 hrs 4 hrs 2 hrs 1 hrs 4 hrs 4 hrs
Schedule
8:00; 11:00; 3:00
3x Daily
Faxed Orders
Phone Orders (Expedites)
1x Daily
Order Acknowledgements
8 hrs
Returned Work/4mExpedite
Order/10m
.16
480 240 240 120 60 240 240 480
553.75.28 11.25 .923.75
BASELINE DATA:Total Order lead Time = 2149.19 min or 4.5 daysTotal Order Cycle Time = 49.19 minValue Added Percent = 2.3% (2149.19/49.19)
Customer Order ProcessCurrent State Map
Queue Time
Kaizen Customer Mail Hand Delivery
Electronic Process
s = secondsPl = per line item
Exception ProcessingLead Time = 4.5 Days
Cycle Time = 49 min.
FUTURE State VS map
Standard Work
Process
Kanban Folders
U-Shaped
Cell
Queue Time
Kaizen Customer Mail Hand Delivery
Electronic Process
s = secondsPl = per line item
Exception Processing
Customer: Petroleum, Aeronautical Companies
Expectations: Orders processed within 1 day
Customer Service Supervisor
Keys order in Computer/1m
Central Mail Sort
Cycle Time 5m
Central Mail Room
Sort Orders/5 s
Schedule
8:00; 11:00; 3:00
3x Daily
Faxed Orders
Phone Orders
(Expedites)
1x Daily
Order Acknowledgements
Proposed:Total Order lead Time =297.56 min or 5 hoursTotal Order Cycle Time = 42.56 minValue Added Percent = 14.3% (42.56/297.56)
Customer Order ProcessFuture State Map
Runner 3x Daily
Kanban
E-mail Acknowledgements
Runner 4x Daily
.16 1 40.9 5
15 120120
Exception Processing
.25 Worker
145 min / day
Order Processing Cell
3 Workers: 40.9 m
Kanban
Kanban
Load every 2 hrs
Schedule
Lead Time = 5 HoursCycle Time = 43 mins.
Current Conditions Value Stream Map
Ideal State Value Stream Map
Future State Value Stream Map
Lean Principles
Value Streams
Value
GOAL
100% Quality Smooth Flow On timeFlow
and
Pul
l
What is Waste?
Waiting
Errors!
Motion
Transporting
Obstacles to Quality, Flow and
Time!!
Spaghetti DiagramWaste in time and movement!!
Key – 5S
Wasted time looking!
Sort
Straighten
Shine
Standardize
Sustain
Value Streams
Empo
werm
ent
Value
Flow
and
Pul
l
Perfection
100% quality; unbroken flow; at the pull of the customer
Information and authority to act when needed
Necessary for Lean Consists of visuals that
Supply information Trigger need Alert issues Provide instructions Demonstrate control and location
Visuals
Stove A
Stove B
Stove C
A B C
Push or pull? left side or right? How did you know?
Pull Systems
Kimberly Clinic
Defined the Perfect Patience Experience
Mapped the process
“Saw” the waste – bottleneck was the lab
Implemented a new process targeting the lab
Began initiatives in all areas
30 MINUTES!!
Call Center
Songs: “Don’t Worry; Be Happy” and “Jeopardy”
Center of Discussion Goal attainment Color coding
Employee Journey helped to ‘see’ where they were going
Continuous Improvement is critical!
Results!
Lean Accounting:
Use of same Lean tools in accounting department as in operations
Accounting for Lean:
Accurate, timely, and understandable information for motivating lean transformation
Lean Accounting vs.
Accounting for Lean
The DRIVING Question
Where do I start in Accounting?!?
Start with People!
Create a safe environment
Develop a joint vision
Communicate – Solicit opinions and suggestions
5S the office workspace
Remove cabinets, bins
Remove unused and redundant reports
Review/revise retention policies and enforce
Rearrange office layout
Result Cleaner, more orderly workplace
Positive impact on morale
Save time hunting for files and reports Use that time for more interesting and value-added analysis Cross-training
N = NoviceB = Beginner I = IntermediateE = Expert
Form a Vision One Controller’s Approach: Developed levels of performance in 10 key responsibilities
1. Housekeeping
2. Management of Objectives
3. Employee and Process Development
4. Performance Measurement
5. Developing Your Suppliers
6. Safety/Health
7. Customer Service
8. Reporting Compliance
9. Communication
10.Documentation/Standardized Work Tasks
Established a Champion to lead a team in each area
Performance Measurement LevelsLevel 1 PM’s are not standard. Few functions have measures.
There is no quantitative basis for rewarding exceptional performance. Employees don’t know where they stand.
Level 2 Some departmental measures are in place and employees are aware of the measure. Internal and external customer focus is a key topic, but feedback measures are not in place.
Level 3 PM’s are in place for 75% of the tasks. Critical tasks are measured, and successful completion is 95%. All tasks have primary customer focus. Customer feedback is requested periodically.
Level 4 Customer focus is clear. Commitments to due dates are supported by PM’s. Follow up meetings review performance for continuous improvement.
Level 5 PM’s are used to support continuous improvement on all critical tasks. Customer satisfaction surveys ensure proper focus. The team works as a unit toward 100% compliance.
Selecting the activity/process to improve Does this activity require a simple change that can be
implemented at no cost?
How much employee time will it take to plan, analyze and implement a change?
Is it likely that there will be additional costs involved?
What is the impact of the change on the information’s customer?
What is the impact on the quality of information?
Selecting the activity Is it the quickest or costless?
Will it have the most impact?
Does it save resources?
Will it impact other departments?
Biggest Headache?Customer
Complaints?
Prepare an Action Plan
Current State What do we do now?
Date:
Future State Ideally, what could it be?
Date:
Suppliers paid on periodic basis. Use three-way matching on all payments. All discrepancies
investigated.
80% supply purchases on blanket
purchase orders. Payment is authorized upon receipt quantity.
No matching and discrepancy investigation necessary
Obstacles & Challenges How to Overcome
Number of vendors and part numbers will make it hard to
visualize
Visit and see what others are
doing; Involve people who ‘design’ as
their job, such as marketing and design engineers
What are the first steps?
1. ______________________________________
2.______________________________________
3.______________________________________
4.______________________________________
Organize cross-functional team
Enlist champion
Schedule first meeting
Prepare project plan
What needs to be in place in . . .
3 mos? Project Plan in place, data collected, New process designed.
6 mos? Be ready to test.
9 mos? New process implemented
12 mos? Sustained
Who needs to be involved in the process?
___________________ _____________________
___________________ _____________________
___________________ _____________________
___________________ _____________________
Ann B., Purchasing
Mark W. Receiving
Terry D., Accounting
Chris B., Accounting
Karen M., Purchasing Tom H., Systems
Next? Understand the process!
Map it Collect data Draw it Talk to the people directly in it
Identify the waste! Time? Redundant controls and reporting? Inadequate training?
Design new process! Map the new process Communicate it – post it! Implement and adjust
Customer: Petroleum, Aeronautical Companies
Expectations: Orders processed within 1 day
Initiate Order
Keys order in Computer
45s pl
Verify Order
Review Order 15s
Sales Mail Sort
Sort/30s
Central Mail Sort
Post/302
8 hrsCentral Mail
Room
Sort Orders/5s
Place in Out Box/5s
Sales Mail Sort
Sort by Customer/5s
Date Stamp/2s
Place in Cust Rep Folders/
10s
Check Part Numbers
Verify Part # /10s pl
Check Part Numbers/15s pl
Attach Revisions/10 s pl
Sort by Customer/10s pl
Establish Price 60s pl
Assign Delivery Date
Assign Delivery Date/30s pl
File Hard Copy15 m
4 hrs 4 hrs 2 hrs 1 hrs 4 hrs 4 hrs
Schedule
8:00; 11:00; 3:00
3x Daily
Faxed Orders
Phone Orders (Expedites)
1x Daily
Order Acknowledgements
8 hrs
Returned Work/4mExpedite
Order/10m
.16
480 240 240 120 60 240 240 480
553.75.28 11.25 .923.75
BASELINE DATA:Total Order lead Time = 2149.19 min or 4.5 daysTotal Order Cycle Time = 49.19 minValue Added Percent = 2.3% (2149.19/49.19)
Customer Order ProcessCurrent State Map
Queue Time
Kaizen Customer Mail Hand Delivery
Electronic Process
s = secondsPl = per line item
Exception Processing
Waiting Errors!
Transporting
Key Points It all starts with your people!
Workplace 5S better workplace, helps to understand waste, better experience
Be honest about the current process
Target easy waste first and “Just do it!”
Involve all the process constituents in the solution
Use visuals to communicate, measure and celebrate!
Plan to sustain improvements