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Posts Tagged ‘Lean Methods’

10 Steps to Implement Kaizen in a Service Organization

February 5th, 2013 Comments off

A key aspect of service organizations is the flow of information. In fact, a core process in any financial service organization is that information flow. There are many steps about which we have written on how to implement process improvement in service organizations. One of the most popular articles was “What About Lean in a Services Environment?”.

Lean, with its focus on identifying the Elements of Waste, is a powerful concept in a services organization.  This article is meant to drive down one step further into using Kaizen events to eliminate said waste.    But when it comes time to actually make improvement changes, Kaizen is one of the fastest and cumulatively most impactful activities a service organization can implement.

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Kaizen (k-eye-Zin), defined by the Japanese as “continuous incremental improvement”, is a fast and furious implementation of continuous improvement activities designed to create radical and sudden changes in business processes. During a week of highly focused activity, a cross-functional, section specific team receives training on specific tools and techniques needed to analyze and improve a process immediately. There are 10 key steps to this process and they are:

1. Training – The key issue is to select a small group of individuals to be trained as mentors who will also be the key person to select the team members.
2. Project Selection – We have written extensively about the need for projects to be aligned. A few of the articles are “Let Your Business Define Your Performance Improvement Program” and “Business Process Management (BPM) = Robust Project Pipelines After the Low Hanging Fruit is Harvested“. But along with alignment, project selections should be cognizant of the impact the project will have on the specific area in which the project is to be conducted a well as any up or downstream effects.
3. Team Selection – The team must start with subject matter experts from the targeted process’ area. But it should also be cross-functional and include process owners, finance & admin personnel, IT personnel and anyone who has pertinent knowledge of the project process. These people should be open minded, willing to challenge the status quo and influential in the organization.
4. Value Stream Mapping – This is a hands-on technique utilizing flow charting and icons to analyze information flow in graphical form. The team will identify and compile all the specific elements necessary to bring a service from inception to delivery. The purpose is to understand the relationship between process steps and identify those areas most in need of improvement.
5. Process Mapping – The process map is more focused on one part of the oeverall process than the value stream map discussed above and provides more detail. When a team builds a process map it allows everyone to agree on the actual steps performed to produce the product or service. It’s a great tool for identifying non-value added process steps and reducing complexity.  This begins the team’s root cause analysis.
6. Developing Baseline Data – You must develop Primary Metrics to improve a process. In fact, it is the development of that Primary Metric that often leads to and is an indication of improvement.
7. Creating Spaghetti Charts – This is a visual diagram depicting the information, personnel, and document movement in a process, department or entire service organization. It is a great first step to eliminating waste in motion and conveyance.
8. Conducting Time Study Analysis – This tool is used to collect and verify cycle time data relative to an operation or process. This provides for careful study of each aspect of the process and continues to contribute to root cause analyis.
9. Developing Continuous Improvement – This is where the team records the changes to be implemented resulting from the analysis of collected data and brainstorming. The purpose is to identify improvements and their implementation.
10. Implementing Appropriate Changes – It seems all that is left is to implement the improvement. But along with implementation, the team should develop Control Plans so 30 to 60 days after implementation one can assess the impact of the process changes.

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Lean in ServicesService organizations are unique in their reliance on people and information. Those two organizational elements are the service companies’ most valuable assets. One might say customer relationships are the most valuable asset but to a great extent, those relationships are entrusted to those people and organizationally captured through information. If you are part of a service organization team and looking to drive improvement FAST, then look at the aforementioned 11 steps to implement Kaizen in a service company.

If you would like to discuss case studies of organizations that have done this, then contact me.

Lean Management System – The Key to Sustainability

January 24th, 2013 2 comments

Lean Management System is the Key

Lean has wonderful elements.  Two important ones about which we have written on many occasions are that lean projects can be implemented quickly and the tools can be disseminated broadly within your employee population. The result is that you can get traction and a payback the organization can see and measure.  Every level of management and line personnel love those properties.

But like any sort of change initiative, it is still difficult to get true cultural change.  In other words, just because it can be more easily understood and applied more easily than say Six Sigma and the payback is shorter, doesn’t mean its guaranteed to be successful.  Implementation and sustainability are quite different. So how can it be done?

Well let’s first define how sustainability appears.  A lean culture of continuous improvement is characterized by:

  • Daily Application – Ability to apply the tools to improve operational performance on a daily basis
  • Proper Application – Knowledge of where to apply the tools, or a process for continuously refocusing on problems and opportunities.
  • Demonstrated Successes – Extensive knowledge of, and success with, the tools.

To achieve this, organizations need a change model.  It should be a structured process for achieving the discipline and focus needed for any successful change. This process is a Lean Management System, which doesn’t guarantee lean success, but build the foundation skills.

A lean management system is focused on work groups of five to ten people. It provides an integrated set of planning, measurement and problem solving tools to help the work group:

  • Focus on daily performance measurement and improvement
  • Improve effectiveness of supervisory communication
  • Solicit and evaluate employee improvement ideas
  • Assess lean status and define improvement objectives

A Lean Management System is meant to build the new “habits” necessary to develop a culture of continuous improvement with four key elements:

  1. Primary Visual Display (PVD) serves as a central communication point for a work group. The work group members themselves maintain performance metrics, schedules and improvement actions.
  2. Huddles of ten minutes in length which serve as a meeting place to review performance to date, communicate critical next steps, plan progress and solicit solutions to problems.
  3. Performance Metrics which are essential to instill the discipline necessary for standard work and other lean practices to be sustained.
  4. Kaizen Events structured to systematically collect and evaluate employee improvement.  Kaizen events provide a process to capture the ideas, evaluate them and ultimately implement them for operational improvement.

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A Lean Management System seeks to build new work habits.  And, like any new habit-building program, it must be practiced diligently until the new processes gradually become “business as usual.”  Day-to-day, hands-on coaching of work groups and team leaders is essential to ensure acceptance. Initially this is accomplished through process compliance, but ultimately through knowledgeable use of the tools.  And finally, through a deep enough understanding that you achieve process innovation.

A lean management system is focused on improving work group performance.  It is part of a broad-based lean deployment, not a substitute for value stream mapping, kaizen events and other methods to identify and implement lean improvements. Think of a lean management system as the glue that will hold lean improvements in place and gradually broaden the application of lean tools within your organization.
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A lean management system must be linked to higher-level operational management activities within an organization to ensure seamless communication of expectations, feedback on results and review of improvement ideas. As teams and organizations gain experience with a lean management system, work groups become more empowered and the freedom to act increases dramatically. A lean management system will help bind lean changes to the process and build lean thinking into the culture at the intact work group level. A lean management system is the missing link to a achieving a lean culture.  A lean management system is the missing link to a achieving a lean culture.  If you wish to discuss this post, feel free to contact me.

What is Lean, Really? Taking a Step Back …

October 25th, 2012 1 comment

What is Lean? How’s it different from Six Sigma?  Which one should I use?  How do I get started?   I get questions like this all the time.  To process aficionados… well, these questions just seem trivial.  Come on … How can anyone not know that?

Not so fast.  To a business person under real pressure to solve a real business problem … one who doesn’t have time to wade through the vast swamp of information and opinions out there … these are completely relevant questions.  And save the theoretical, academic stuff … just cut to the real-world chase … no time for a lecture … can it help me nor not?

What is Lean?

I know there are a lot of more complete definitions, but I like simple and straight forward so I boil it down to a relentless focus on the identification and elimination of waste.  But, let’s expand a little more:

  • Lean is about doing more with less
  • Lean is based on the premise that anywhere work is being done, waste is being generated … and should be minimized or removed
  • It should be team based process understanding business processes in a way that identifies and eliminates waste to increase efficiency and effectiveness.
  • It can be used at any level of the organization and applied to any process or work area

What Lean Isn’t …

At least the way we approach it here, it’s not a long, complicated process based on sophisticated data analysis, where projects take months and months to deliver results.  Now, to be clear, there are certainly projects/problems that need tools like Six Sigma to do this kind of analysis, but Lean approaches a different kind of problem (flow, throughput, cycle time, etc) in a simpler way, and, done well,  typically focuses on incremental improvements instead of big bang breakthroughs.  And, Lean is for everyone, from the lowest level operator to high level executives.  You don’t need a PhD to get stuff done.

How do I get started?

In my opinion, Lean should not be rolled out as a big, top-heavy initiative.  Lean can be effectively deployed in a grass roots, pay-as-you-go model that requires minimal up-front investment, and still delivers quick ROI.  See this post where I laid out such a pay-as-you-go approach.

How can Lean help me?

  • Faster. Removing waste, complexity, and bottlenecks improves process flow and assures that things can be done faster, and be more predictable
  • Cheaper. If there are fewer unnecessary steps, less complexity, and things get done faster because of better overall flow,  then fewer resources need be consumed
  • Better. Complexity = more opportunities for defects = reduced service quality. Reduce  complexity, and quality improvements often are a natural by-product

Difference between Lean and Six Sigma?

Difference Between Lean and Six Sigma

There you have it.  Simplistic, I know, but I hope this helps to answer some of the fundamental questions.  Contact me if you want to discuss in more detail.

Why Lean? Why Now?

August 20th, 2010 No comments

A long time friend told me how his boss asked him to manage his processes on a systems basis.  He wanted process maps and metrics.  He wanted control.  I’d like to help this friend so I asked him about his processes.  What were they?  Who owned them?  What was wrong?  But as he started to describe the work environment, he quickly took a left turn.  He began to tell me how hard everyone was working.  He told me how in the end, they met their goals but that it was killing them to get there.  He told me how the number of clients was growing and they anticipated growing further.  He told me how his company planned to add these clients without adding people.  He feared continuing to add work to the existing personnel would simply create an unstable environment in which the best people, who are starting to see job options, might leave.  And these are his most productive colleagues. 

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Basic psychology tells you that when you find someone’s fear, then you have found the motivation for change.  He was talking to me more out of the fear of an increasingly unstable environment with his team than his boss’ desire for control.  What advice could I offer him?  There are lots of options which we offer as services.  This friend is in a highly entrepreneurial environment so he gets to just do one. Which will it be?  What will reduce his fear? 

I told him he needed to simplify what they are doing.  It’s not time for control.  It’s time to reduce complexity.  How could he do that?  Well his company must be doing something right if they are adding clients in this environment.  But how much of what they do along the way is valued by those clients and how much of it is done because it’s the way it used to be done?  He needs to get rid of everything his customers don’t value.  He needs to get rid of everything that makes his team’s life so stressed and isn’t prized by his clients.  The things that make them work late and extra days.  We didn’t talk about deployment maps or how to introduce management systems.  We simply spoke about his fear.  

How many of us find ourselves in the same work environment?  We are trying to do all the things we used to do. But there are less people around.  And we are starting to grow again.  Maybe growth is not in an accelerated fashion but it is enough to stress out who is here.  And while the fear in the board room may be another decline, the fear in the workplace is of accelerated orders.   So, if people are working at their limit, eliminate what your clients don’t value.  And, if you’re sensing a greater risk from adding a customer ahead of another resource, reduce the complexity.   Let’s take out those non-value added activities and reduce the stress.  Let’s give ourselves the ability to handle growth without taking more risk.  If you find yourself in the same situation as my friend, contact me.