Company
LOGO
Building a Lean Enterprise:
Navigating the Common Obstacles
to Success
May 13, 2010
Your Instructor
2
Provides Lean transformation
support to non-manufacturing
settings.
Co-author, The Kaizen Event
Planner: Achieving Rapid
Improvement in Office, Service, and
Technical Settings
Co-Developer, Metrics-Based
Process Mapping: An Excel Solution
Lean Enterprise Program Instructor
University of California, San Diego
Karen Martin, Principle,
Karen Martin & Associates
© 2010 Karen Martin & Associates
You will learn…
How to establish a five-year improvement plan.
Essential organization-wide learning needs.
How to accelerate results via organization-wide 5S/ Visual
Management, Standard Work, & Error-Proofing activities.
The benefits of establishing a Lean Steering Committee.
How to develop a kaizen culture that generates “single
hits,” while also achieving home runs and grand slams.
How to establish an infrastructure that builds
organizational competencies, while generating measurable
results.
The importance of building a foundation for success even
if you’ve been on the Lean journey for years.
3
© 2010 Karen Martin & Associates
Do not underestimate the degree of
learning, patience and resources
needed to experience success!
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© 2010 Karen Martin & Associates
Problem: Weak or No Leadership Buy-in;
Attempting a Grass-Roots Effort
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Obstacles to Success
© 2010 Karen Martin & Associates
The Executive Champion(s)
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© 2010 Karen Martin & Associates
Problem: No Sense of Urgency
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Obstacles to Success
© 2010 Karen Martin & Associates
The Journey Begins
Create and communicate
a sense of urgency /
burning platform
“Why should we care?”
The delicate balance
between motivating and
inducing fear
Data sells!
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© 2010 Karen Martin & Associates 9
Establish a Sense of Urgency
Shrinking margins
Customer dissatisfaction
Shrinking market share
Rising costs
Increased domestic and/or
global competition
Desire to absorb growth
without adding commensurate
staffing
Impending acquisition
Safety and quality slips
Reduced innovation
Staff burnout
Rising turnover
Regulatory pressure /
compliance issues
Rising litigation
Social, economic,
environmental, or political
pressures
Downward performance
trends (in speed and/or
quality)
The unknown
© 2010 Karen Martin & Associates
Problem: Non-Existent or
Unrealistic Strategy
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Obstacles to Success
© 2010 Karen Martin & Associates
Develop a Strategic
Improvement Plan
In many organizations, there is fairly
significant disconnect between what they
aim to achieve with Lean and the way
they go about achieving it.
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© 2010 Karen Martin & Associates
Five-Year Plan
1. Where are we now (in terms of performance)?
2. Where do we want to be?
3. What’s it going to take to get there?
Expertise / guidance
Learning / workforce development
Time
Resources
Strong communication
Leadership
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© 2010 Karen Martin & Associates
Establishing a Strategic
Improvement Plan
Tied to business goals / strategic plan
How much? How fast? Priorities?
Evolution vs. revolution
Establish clear goals and objectives.
What do you hope to achieve with Lean?
Within what time period?
What does that future state look like?
How does it feel?
What is it like to operate in that future state?
How will we measure our success?
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© 2010 Karen Martin & Associates
Achieving Optimal Performance
Quality
Cost
Delivery Safety
Morale
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Optimal
Performance
© 2010 Karen Martin & Associates
Lean as a process design technique
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P/U
AFrame
Power Pole
Hoist Rig Up Spaghetti DiagramBefore Kaizen Blitz Improvements
Estimated distance walked during Rig Up = 3095 ft
Diagram follows the Floor Hand and does not include moving the A-Frame
Rig Up Time = 90 minutes
Water
Before:
3,095 feet walked
Florida Hospital DeLand
Discharge Process - 2A Pilot
VAlue Stream Champion: Nancy Clark
Future State Value Stream Map
1/26/2010
Customer Demand (2A Only):
8 discharges/day; 55/week; 2,860/year
(Takt Time = 26.2 minutes)
Patient
Hold
Discharge
Huddle
Case Mgr &
Charge
Nurse
PT: 15 mins.
%C&A = 90%
Clean
Room;
Change
Bed Status
to Available
EVS
PT: 30 mins.
LT: 60 mins.
%C&A = 95%
1 mins. 15 mins. 10 mins. 30 mins. 20 mins.
40 mins.
15 mins.
30 mins.
5 mins.
2.0 hrs.
1 mins.
60 mins.
30 mins.
60 mins. Lead Time (LT) = 6.1 hrs.
Process Time (PT) = 127 mins.
% Activity = 34.7%
Rolled First Pass Yield = 21.7%
Prepare
Patient
Primary
Nurse
PT: 15 mins.
LT: 30 mins.
%C&A = 80%
Transport
Patient
Messengers
0900-0430
Nursing
0430-0800
PT: 5 mins.
%C&A = 99%
Write
Order;
Complete
Paper Med
Rec
Phy sician
PT: 30 mins.
%C&A = 80%
CernerCanopy
Implement
Discharge
Huddles
Perform /
Improve Med Rec
at admission
Implement
Visual
Tracking
Relieve nursing from
transporting
nurse-collected
specimens to lab
Create
Standard W ork
for Entire
Process
Clear
Patient;
Create
Transfer
Packet (if
needed)
Primary
Nurse
%C&A = 99%
Enter DC
Info
(Depart I)
Primary
Nurse
PT: 10 mins.
%C&A = 90%
Perform
Med Rec;
Print DC
Packet
Primary
Nurse
PT: 20 mins.
LT: 40 mins.
%C&A = 50%
Remove
Equip &
Items w/
Meds/Body
Fluids;
Call EVS;
Discharge
Patient
Primary
Nurse
PT: 5 mins.
LT: 2 hrs.
%C&A = 90%
Clear
Patient
Case
Management
%C&A = 99%
Additional
Cerner
Training
Process Blocks
Green border = Value-Adding
Yellow border = Necessary Non-Value-Adding
Red border = Unecessary Non-Value Adding
Kaizen Improvement Bursts
Purple = RIE-1
Blue = RIE-2
Orange = Project (Owen)
Green = Leadership (Opal & Daryl)
Error-Proof
Disposition
Codes
Add Pt. to
Discharge
Board;
Update as
Needed
Primary
Nurse
PT: 1 mins.
%C&A = 99%
Note: Ongoing
Error-Proof
Med Rec
Enter Order
HUC
PT: 1 mins.
%C&A = 99%
Streamline
Attending/Consult
Communication
Relieve Nursing
of Patient
Transportation
Discharge
Patient
HUC
PT: 1 mins.
LT: 1 hrs.
%C&A = 99%
© 2010 Karen Martin & Associates
Lean as a business management
approach
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Building a C.I. Culture
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Heavy support from
seasoned improvement
professionals
Light support from
seasoned improvement
professionals
Support needed only for
audits, bandwidth gaps,
continued learning
Years 1 & 2 Small percentage of staff
engaged – project-based
Years 3 & 4 More staff engagement –
reduced need for formal
Kaizen Events
Years 5 & Beyond Company-wide engagement –
everywhere, all the time
“Settling In” Stage
• Demonstrating learned
competencies
• Process owners manage
performance
• Becoming more proactive
“Life is Good” Stage
• Daily kaizen is the norm
• “Action now” dominates
• Most processes are
stabilized with minimal waste
and output variation
“Disruption” Stage
• Sensei-dominated
• Much mentoring & learning
• Heavy use of Kaizen Events
• Many issues to be resolved
© 2010 Karen Martin & Associates
Problem: Lack of Alignment
Around the Improvement Strategy
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Obstacles to Success
© 2010 Karen Martin & Associates
Role Gather improvement ideas from across the enterprise.
Evaluate & prioritize improvement opportunities (closely tied to annual business goals).
Enable alignment across leadership team.
Communicate upcoming improvements and outcomes.
Aid in necessary culture shift.
Assure ongoing process measurement and continuous improvement is occurring.
Determine ongoing workforce development needs.
Stay informed about competing priorities and shift improvement focus accordingly.
Allocate resources.
Assess progress and adjust as needed.
© 2010 Karen Martin &
Associates
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Create a Lean Steering Committee?
© 2010 Karen Martin & Associates 20
Lean Steering Committee
Composition - 10 people max Cross-functional
Mixed perspectives (sr. leadership, middle management, improvement resources)
Meeting Frequency – scaled back over time Monthly for first year or two
Possibly quarterly for years 2-5
Disband in year 5, if organizational DNA is “set”
© 2010 Karen Martin & Associates
Problem: Lack of understanding;
Missing skills
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Obstacles to Success
© 2010 Karen Martin & Associates
Largest Obstacle to Success:
Lack of Understanding & Skills
Lack of training
Ineffective training
Poor timing - Large gap between classroom content
and real-world application
Inappropriate content – too much, too little, etc.
Establish clear learning objectives – what should participants
be able to do after the training?
Does Sr. Leadership really need to go through green belt training?
Improvement professionals need to be proficient in ALL Lean tools and
leading change
No application – learn-do is vital!
All principles and tools and no “sales” (here’s what Lean can do
for us)
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© 2010 Karen Martin & Associates
“Hooking” People into Improvement
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“You had me at hello.”
© 2010 Karen Martin & Associates
Spectrum of Learning
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Awareness
Deeper
Understanding
Skill
Development
Proficiency
Continued
Learning
Intellectual
Behavioral
© 2010 Karen Martin & Associates
Largest Obstacle to Success: Lack of
Understanding & Skill Development
Leadership
Initial ½-day to full-day overview
Reflection and continued learning every six months
Required reading – The Toyota Way and others
Middle management
Eventually at least a 2-day overview about key principles and
process management
Frontlines
Eventually at least a 2-hour overview about key principles
Heavy emphasis re: “what’s in it for me?”
Improvement resources
Significant development
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© 2010 Karen Martin & Associates
Improvement Professionals’
Learning Needs – The Basics
Business
Finance, sales & marketing, operations, etc.
Your industry
Your customers
Your competitors
Regulatory and political environment
Market trends
Your company / organization
SWOT (strengths, weaknesses, opportunities, threats)
Revenue streams
Cost structure
Business goals
Leadership concerns (and other key stakeholders)
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© 2010 Karen Martin & Associates
Improvement Professionals’
Learning Needs (continued)
General
Process management
Project management
Communication
Countering resistance
Lean Philosophy
Value, Value Stream,
Flow, Pull, Seeking
Perfection
PDCA
Workforce engagement
Analytical and
Execution Tools
Key Lean Metrics
A3 Management
Root Cause Analysis
Value Stream Mapping
Metrics-Based
Process Mapping
Spaghetti diagrams
Kaizen Events
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Improvement Professionals’ Learning Needs –
Tactical Tools
Process
Stabilization
Tools
Flow-
Enabling
Tools
Improvement Professionals’ Learning Needs –
Tactical Tools
© 2010 Karen Martin & Associates
Professional Development for
Improvement Resources
University-based
University of Michigan; Ohio
State;University of Kentucky; University of
Tennessee; San Diego State University;
University of California, San Diego
In-house certificate programs or single-
subject workshops
Workshops & conferences – LEI, AME,
Shingo, ASQ, IIE, etc.
Read, read, read…
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© 2010 Karen Martin & Associates
Organization-wide Learning
Lean foundation tools
Tools: Work standardization, error-proofing, 5S & visual
management (using the PDCA method)
Audience: middle managers to senior leaders
Initial training: half to full-day session
Assignment: Improve one area or one process; one
month to complete
Reporting & reflection
A3 problem-solving development
20 max; 4-8 problem teams (owners)
Skilled coach
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© 2010 Karen Martin & Associates
Problem: Inadequate improvement
resources
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Obstacles to Success
© 2010 Karen Martin & Associates
Improvement Resources
Internal
Dedicated vs. shared responsibility
Quantity
External
Training & development
Leading improvement activities
Observational learning + results generation
Coaching
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© 2010 Karen Martin & Associates
How many dedicated resources?
Ultimately 3-5%, per GK.
Examples
2,400 employee org has 4
dedicated resources and
15 part-time trained
facilitators.
1,200 employee
organization has 6
dedicated resources.
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© 2010 Karen Martin & Associates
Problem: Slow results
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Obstacles to Success
© 2010 Karen Martin & Associates
Year One
Experience quick successes
Requires skilled professionals – if not internal, then
bring in external support
Don’t attempt to solve your toughest problems first –
build “improvement muscles”
Gain leadership support
Via education, experience, and results
Familiarize the workforce to Lean principles and
benefits
Begin identifying and/or developing dedicated
improvement staff.
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© 2010 Karen Martin & Associates
Year One – Quick Successes
Select 1-3 value streams, based on business need
Select executive sponsors and/or value stream
champions
Conduct proper value stream mapping activities,
including the development of an actionable
implementation plan
Execute the implementation plan
Heavy use of Kaizen Events to begin shifting culture, develop the
workforce, and gain quick results
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© 2010 Karen Martin & Associates
Problem: Results not
communicated
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Obstacles to Success
© 2010 Karen Martin & Associates
Communication Options
Intranet
Closed circuit LCDs
Posted / Visual
Improvement boards
Break rooms
Hallways
Paycheck stuffers
Company newsletter
Meetings
Standing agenda item?
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© 2010 Karen Martin & Associates
Problem: Processes not monitored
and continuously improved
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Obstacles to Success
© 2010 Karen Martin & Associates
Process Management
Process Owner
Monitors KPIs (key performance indicators)
2-5 max
Types
Operational (Time & quality)
Financial
Customer / external stakeholders
Employees / internal stakeholders
Reports performance
Leads continuous improvement as necessary
Manager or lower is best
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© 2010 Karen Martin & Associates
Problem: Everything waits for a
Kaizen Event
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Obstacles to Success
Blue = Improvements that do not require help from others. Yellow = Improvements that require help from others.
Shingo-Prize Winning Company’s Suggestion Program
For ideas that require help from other departments:
1. The employee completes a yellow suggestion card and places it on
the Improvement Opportunity Board under the “new opportunity” column for their department. Company-wide improvements are placed in the Company-Wide row.
2. The department’s designated “improvement lead” reviews the suggestions and talks with stakeholder departments as needed. Company-wide suggestions are reviewed by the Lean team.
• If OK’d, the improvement lead moves the card to the “in process” column, allocates resources, and the PDCA cycle begins. When the improvement is complete, the card is moved to the “completed” column.
• If not OK’d, the improvement lead contacts the employee directly and communicates why the suggestion won’t be implemented.
Recognition board includes photos of the improvement and the suggestor’s name. Names from successful improvements go entered in a monthly drawing for prizes.
Shingo-Prize Winning Company’s Suggestion Program
For ideas that do not require help from other departments:
1. The employee completes a blue suggestion card, gets a manager’s
signature, and begins implementing the idea (via mini-PDCA).
2. When the improvement is complete, the blue card is moved to the “completed column.”
Recognition – All the employees names for completed improvements (both yellow an
blue) are entered into a monthly drawing for a gift card (movies, Starbucks, etc.) or T-shirt.
– Pictures of visual improvements with the employee’s name are placed on the “Wall of Fame.”
© 2010 Karen Martin & Associates
Problem: Workforce remains
disengaged; improvement resources
are expected to “do for others”
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Obstacles to Success
© 2010 Karen Martin & Associates
Breaking Old Habits
Define facilitator for all
Coach and teacher vs. “do-er”
Communicate improvement resources’
roles and responsibilities
Demonstrate through action
Avoid having improvement professionals
serve as the process owner
Audit function only to assess organizational
learning, progress, and reporting
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© 2010 Karen Martin & Associates
You will learn…
How to establish a five-year improvement plan.
Essential organization-wide learning needs.
How to accelerate results via organization-wide 5S/ Visual
Management, Standard Work, & Error-Proofing activities.
The benefits of establishing a Lean Steering Committee.
How to develop a kaizen culture that generates “single
hits,” while also achieving home runs and grand slams.
How to establish an infrastructure that builds organizational
competencies, while generating measurable results.
The importance of building a foundation for success even if
you’ve been on the Lean journey for years.
49
© 2010 Karen Martin & Associates 50
The Transformation Process:
Key Success Factors
Strong sense of urgency / burning platform
Leadership alignment around strategy
Improvement priorities are closely tied to organizational
strategy and annual business goals.
Careful planning to avoid “implosion” and change fatigue
Value-stream driven improvements.
Heavy use of Kaizen Events in first 1-3 yrs.
Dedicated improvement resources.
Entire workforce receives exposure to Lean.
© 2010 Karen Martin & Associates 51
Karen Martin, Principal
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
For Further Questions
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