Week 06_Handout day 1
- 1. 1 Lean Thinking Subtitle Lean Thinking Subtitle Lean Thinking Subtitle Lean Thinking Subtitle Lean Thinking Subtitle Lean Thinking Subtitle Lean Thinking Subtitle Lean Thinking Subtitle Lean Thinking Subtitle “Hidden Waste in Your Processes” (Part 1) + “Successfully Implementing Operational Enhancements” (Part 2) Chris Piccin 2 Day One 3 Introductions ▪ Tell us your name and company ▪ What’s your biggest operations issue? ▪ What are you hoping to get out of this class? Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 3
- 2. 4 Day One Topics The Four Big Ideas of Lean Customer Focus Value Stream Value Add Analysis By the end of this session you will: • know the four principle concepts for Lean thinking • understand how to build a Customer Journey map that describes Moments of Truth and Customer Critical to Quality Dimensions • be able to identify different types of waste and non- value add activities in a value stream 5 Why Lean? “We missed another deadline.” “Too many complaints.” “The work keeps piling in, we’re all working overtime, we can’t keep up.” “This was our best year ever and we can’t afford to hire more people.” “I’m always waiting for something before I can do my job.” Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 5 6
- 3. 7 What is Lean Thinking? Four Big Ideas: Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 7 1 Customer Focus Understand value from your customer’s perspective. 2 Value Stream Concentrate on the path through your processes. Find and reduce activities that do not add value (waste). 3 Continuous Flow Move products or transactions through the process as fast as value can be added, no waiting. 4 Perfection Keep improving until processes produce exactly what the customer wants, when they need it - no delays, errors or wasted effort. 8 1. Customer Focus Deliver value from the customer’s perspective • Design Features and Customer Benefits • Moments of Truth and ServQual • Customer Journey Maps Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 8 9 Customer Focus: Design Features Deliver Customer Benefits What Apple Built (Another) MP3 Player What Apple Sold Put 1000 Songs in Your Pocket KEY FEATURES • 5 GB hard drive • 10 hour rechargeable battery • Scroll wheel • iTunes software and catalogue CUSTOMER BENEFITS • Availability – All my songs, right now • Simplicity – No instructions required • Cool Portable Music Circa 2000 Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 9
- 4. 10 Customer Focus: Moments of Truth and ServQual 1Carlzon, Jan: Moments of Truth, 1987 2Zeithaml, Parasuraman & Berry, "Delivering Quality Service; Balancing Customer Perceptions and Expectations," Free Press, 1990. Process Gaps 1. Does the provider understand what the customer expects? 2. Has the provider specified features required to meet customer expectations? 3. Does the finished product or service meet specifications? 4. Are all customer communications consistent with the specifications? Moment of Truth1 An interaction where customers form a positive or negative opinion based on experience. ServQual2 Defining the gaps between Customer Expectation and Customer Experience. Customer (Critical to Quality) Dimensions Reliability Availability, dependability and accuracy Assurance Trust, confidence, safety and ease of use Tangibles Physical appearance Empathy Caring, individualized experience Responsiveness Prompt help or service Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 10 11 Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 11 Segment: Work-from-home Wilsons The Wilsons are a two income family of four. Their Internet Service Provider (ISP) supplies the digital oxygen for their daily lives. Mrs. Wilson owns a small business and has a dedicated workstaBon with a mulBline VOIP phone in the home. Mr. Wilson frequently accesses corporate email and applicaBons via his laptop. Thinking This can’t happen. I have work to do tonight. Updates must be in team’s inboxes first thing in the am Resolved: That wasn’t bad! Transferred: Waste of Bme. Are they going to show up? Will they fix it tonight? Best case: Wow! Worst case: I want a new ISP Feeling Concern Angst Relief or FrustraBon Doubt Pleasant Surprise or Betrayal Moments of Truth Very SaBsfied SaBsfied Neither DissaBsfied Very DissaBsfied Phases of Journey Discovery No?fica?on Diagnos?c Schedule Service Call Descrip?on Mrs. Wilson cannot log on aSer dinner. She reboots, no luck. She waits 10 minutes and tries again. Mrs. Wilson calls ISP 800 number. She navigates IVR screens seeking service support. Mrs. Wilson encounters IVR prompts instrucBng her to check her equipment before speaking to a service rep. Mrs. Wilson gets transferred to a representaBve who schedules a service call and tries to miBgate issues. Service Crew arrives at the Wilsons home. They inspect lines and equipment, repair or replace as necessary. Cri?cal to Quality Dimension Reliability – 24/7/365 Internet access Assurance – ease and speed to find appropriate support Accuracy - percent of issues resolved by automaBon Empathy – alt soluBons Responsive – acceptable Bme Tangibles – competence of service team Problem logging on Assume internet problem Contact ISP Internet Service Interrup?on 7:00 pm Tuesday Night IVR trouble shooBng Problem resolved Transfer to Service Rep Service scheduled On-Bme arrival Late arrival Problem resolved quickly Delayed resoluBon Customer Focus: Customer Journey Example 12 Simulation Round 1: Setting the Scene • Your products are made from domestically sourced, 100% sustainable hardwood veneers of the highest quality. • Your customers work in small spaces and cannot store large quantities of materials. They often purchase less than full sheets and depend on fast deliveries. • Your costs are out of control and, worse, delivery performance is faltering. Your customers are complaining. LOUDLY. • Your bank is concerned and raised the possibility of reducing your credit line. Your jobs: convince the bank that the operation can be run effectively and efficiently. Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 12 You work for a specialty plywood supplier that caters to artists and makers in the New York metro area.
- 5. 13 Simulation Round 1: The Rules • Follow your job descriptions to the letter – do not adapt the process you have been instructed to perform • Follow your reporting lines. You may only talk to your Supervisor or your Subordinates • By all means ask questions for clarification, but you may not always get an answer. Sound familiar? • No computers may be used during the simulation. • You may find yourself confused or frustrated with the process. This is normal. Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 13 14 Value Stream 2. Value Stream Find and reduce activities that do not add value • Eight Wastes • Five S • Value Added Analysis Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 14 Customer Journey 15 Value Stream Schematic: Commercial Loans Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 15 Origination “up to the proposal” Collections Deal Structure “proposal to booking” Loan Servicing “booking to termination” Cash Application Customer ServiceLegalUnderwriting Business Development Value Stream – End to End “Close the deal fast!” “Minimize risk” “Fix problems” “Get the cash on the books”
- 6. 16 Value Stream: The Eight Wastes Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 16 D O W N T I M E Customer Focus Value Stream Continuous Flow Perfection 17 55 Example: Extreme Transportation Reduction This structure is a storage facility for new cars. It's an inside view of one of the 20- story car towers at Autostadt, Volkswagen's facility in Wolfsburg, Germany Transportation Reduction for Auto Manufacturing This structure is a 20-story storage facility for new Volkswagen cars in Wolfsburg, Germany Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 17 18 Transportation Reduction Example: Enrollment Packages 69 Example: Use of work cells and Kanban Production of Benefit Kits BindBind AssembleAssemble ShipShip Store & PickStore & Pick PrintPrint Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 18 70 NewProcess:ContinuousFlowthroughworkcells PickBindAssembleShipPrint PickAssembleBindShip 70 NewProcess:ContinuousFlowthroughworkcells PickBindAssembleShipPrint PickAssembleBindShip 70 NewProcess:ContinuousFlowthroughworkcells PickBindAssembleShipPrint PickAssembleBindShip Print
- 7. 19 Sort Set in Order Shine Standardize Sustain Keep only the necessary items Arrange items for efficient workflow Clean the work area Document and conduct checks. Maintain and review standards Motion Reduction up Close and Personal Work Area: Five S Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 19 20 Five S in Action Sort? Set in Order? Shine? Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 20 21 No Value Added Value Added Analysis: Three Questions Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 21 Task Customer Requirement? Right First Time? Business Requirement? Real Value Added Business Value Added No No NoYes Yes Yes Defects Motion Talent Inspection Review & Approval Waiting / Inventory Tasks to reduce or eliminate. They exist because the process is inadequately designed or functioning poorly.
- 8. 22 Real Value Add Analysis: Computer Rack Manufacturing Example 22 Steel Coil Inventory Stamp Steel Construct Cabinet Buffer Stock Paint Cabinet Inspect and Rework Buffer Inventory Final Assembly Test and Rework Inspect and Rework Buffer Inventory 96.0 0.3 8.0 0.2 0.1 3.0 0.5 0.2 5.0 3.0 0.2 Cycle-time: 116.5 hours Steel Coil Inventory Stamp Steel Construct Cabinet Buffer Stock Paint Cabinet Inspect and Rework Buffer Inventory Final Assembly Test and Rework Inspect and Rework Buffer Inventory 0.3 0.2 0.5 3.0 Real Value Add: 4.0 hours Steel Coil Inventory Stamp Steel Construct Cabinet Buffer Stock Paint Cabinet Buffer Inventory Final Assembly Test and Rework 4.0 0.3 0.2 0.5 0.5 1.0 2.5 0.1 Real Value Add: 3.5 Cycle-time: 9.1 23 Real Value Analysis Exercise Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 23 • Using the criteria you learned, analyze each process step and identify add value and which do not • Be prepared to justify your choices • Remember to think about the process from the Customer’s perspective 24 Simulation Round 2: Improving the Value Stream • Owner is responsible for final decisions • Changes must be reversible • No changes that involve customers • No elimination of staff • Facilitator has final approval • Implement changes and train if necessary Copyright © Vox Datum LLC (2016-2017). All Rights Reserved. 24 Objective: identify and implement two changes to improve the process.