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Amway’s Lean Office Journey

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1 Amway’s Lean Office Journey
West Michigan HDI October 10th, 2012

2 Agenda Welcome Jill Bierens – Manager, Global IT Service Desk
Lean Office Overview Stephen Sweers – Manager, OPX Lean Office Amway IT Results David Drake – Lean Leader, IT Jill Bierens Daniel Uecker-Herman – Lead Service Desk Technician Q&A Optional Tour: IT Operations, ITAM, Lean Cell

3 About Amway Founded in 1959 Second largest direct-selling company in the world Annual sales of more than $10 billion in 2011 More than 450 products 80 countries and territories 20,000 employees Six million entrepreneurs selling Amway products around the world More than 900 patents granted and more than 800 pending From making soap in a garage to a global health and beauty leader

4 The Heart of Amway In addition to the founding families’ generous support of this community and a variety of causes, Amway has always been a very strong supporter of volunteerism. A few years ago they focused their efforts to more effectively enable distributors and employees to support children here and around the world. This is a key part of who we are as a company.

5 Amway’s Global Service Desk
Metrics Nearly 6,000 customers in North America and SE Asia Average 13,000 incoming contacts per month (all channels) Average 5,000 calls per month Live answer = 85% First Contact Resolution = 75% Eight Service Desk Technicians Four User Management Technicians ASA = 28 seconds AHT = 4:47 Abandon Rate = 8% 4 contractors on first phones 4 employees on overflow, and web tickets 4 workers on user management

6 Amway’s Global Service Desk
Current State Strategy Four regions Follow the Sun Standardized processes Caller Ada HQ 6:30am–7:30pm Malaysia 7:00am-7:00pm IT Operations Weekends & Holidays

7 WHY LEAN OFFICE? Identify and eliminate wasteful process steps in a systematic way More than 60% of the cost of a product or service is attributable to administrative processes. Quality and service improve Turnaround time shortens Costs go down and profits go up The customer is ultimately delighted Resources (people and money) become available to be redeployed to further grow the business

8 KAIZEN DEFINED Kai “ change ” (revolutionary) zen good (sacrifice)
Self Whipped Back Sheep Altar

9 LEAN OFFICE ISSUES Quality: How to improve it? Cost: How to reduce it?
Delivery: How to ensure it? Talent: How to develop it?

10 ELIMINATE WASTE The 8 Wastes Defects Over-production Waiting
Not engaging people Transportation Inventories Motion Excess processing

11 ELIMINATE WASTE Unevenness Overburdening
Can often be eliminated by managers through level scheduling and careful attention to the pace of work. Overburdening Workers by requiring them to operate at a higher pace, with more effort and for a longer period of time than appropriate workforce management allows (target 85%).

12 TRUE NORTH METRICS Right 1st time Quality Improvement
Delivery/Lead Time/Flow Improvement Cost/Productivity Improvement Talent Development “These are a select few measures, and if you improve them each year, ‘good things’ will happen.” – George Koenigsaecker


To what extent are your Function’s goals linked to Enterprise Goals? Can you identify all of your Function’s internal and external customers? Do you know all of the products and/or services your Function provides its customers? Do you know your customer’s requirements for your Function’s products and/or services? Do you measure Functional performance on the basis of how well your products and/or services meet your customer’s requirements? Can you identify your Function’s internal and external suppliers? Do you establish clear goals for the products and services provided to your Function by your suppliers? Do you have documentation of your Function’s role in the cross-functional value streams to which it contributes? Do you measure your Function on the degree to which it contributes to cross-functional value streams? Do you measure the “upstream” performance of the processes that flow through your Function? Do you have tracking and feedback systems that effectively and efficiently gather performance information and provide it to the people who need it? Do you have the skills to troubleshoot (remove the root causes of) performance gaps in your systems? Do you spend a large percentage of your time working to improve the interfaces between your Function and other Functions and between sub-units within your Function? Do employees in your Function work in an environment where their job design, job goals, feedback, rewards, resources and training enable them to make their maximum contributions to process efficiency and effectiveness?

15 SUCCESS FACTORS Factors for success: Clear Business Case
Leadership Endorsement Clear Roles & Responsibilities Dedicated Internal Resources Structured, Systematic Method Simple, True North Metrics Frequent Reviews

What: Improve Internal Process Workflows and Reliability Standardize Work Processes Improve Process Throughput Time Reduce Clerical Errors (implement mistake-proofing techniques) Establish “Lean Plans” Where: Transactional Business Processes (ex: Idea-to-Market, Procure-to-Pay, etc.) Key Functional Areas (ex: Planning, Procurement, QA, R&D, IT, Sales, Finance) Impact on: Throughput Time Variation (Operational Lead Time Improvement) Right 1st Time Quality Improvement

OFFICE EMPLOYEES SPECIALIZATION Breadth of Knowledge Employees typically retain 80% of the process knowledge. Specialized work No level loading Work duplication No realization of waste

LEAN OFFICE SPECIALIZATION: STABILITY OFFICE EMPLOYEES GENERALIST Shared Knowledge Multi-Skilled Multi-Process Handling Level 85% of Capacity Skills/Training Matrix

Assess efficiency of Functional & Cross-Functional business processes. Develop Functional “Lean Plans” aligned with Enterprise Strategy. Enable improvement by providing kaizen breakthrough method & support. Create expectation for annual improvement in: Right 1st Time Quality Productivity (Cost) Delivery (Lead Time) Talent Encourage active sharing & adoption of best practices.

What are the top 2 or 3 most costly outputs (products or services) your “lean office” makes and delivers to your customers? Or, what causes you the most pain? Brainstorm! Select one output (product or service for your customer), assemble a team and together explore using the SIPOC Tool (Supplier/Input/Process/Output/Customer). Plan your 3-5 Day Kaizen Event using your completed SIPOC as a guide (hint: you may want to include the voices of suppliers, processors, customers and “outside eyes” as well). Execute the Kaizen Breakthrough Method…. again, again and again (5X)!

21 Process (Transformational, Value-Creating Steps)
SIPOC Supplier Inputs (Requirements) Process (Transformational, Value-Creating Steps) Outputs Customer Meijer Kitchen 36 Minutes Total Time 2 ea Eggs ¼ Cup Water ½ Cup Vegetable Oil 8” X 8” Pan Shortening or Cooking Spray Large Mixing Bowl Wire Whip or Large Spoon Electric or Gas Oven capable of reaching 350F Cooling Rack Knife Spatula Serving Plate PREHEAT: oven to 350F for glass or metal pans, 325F for dark or non-stick pans. GREASE: bottom of pan with shortening or cooking spray. MIX: empty brownie mix, eggs, oil and water in large bowl. STIR: until well-blended (about 50 strokes). SPREAD: in greased pan and bake immediately. BAKE: following times listed per pan size (ex: 8” X 8”: Minutes. Add 3-5 minutes for dark or non-stick pans. DONE: when inserted toothpick 1” from edge of pan comes out clean. COOL: completely in pan before cutting and serving. 2” X 2” Fudgy Brownie Warm & Gooey Served on 6” Serving Plate Annie Sweers

22 Post-Event Monitoring
KAIZEN BREAKTHROUGH METHOD Pre-Event Planning Event Execution Kaizen Sponsor Secured? Kaizen Team Leader assigned? Kaizen Target Area Selected/Scoped? Kaizen Dates & Times Scheduled? Kaizen Team Room Scheduled? Kaizen Team Members Assembled (Rule of 1/3’s, SIPOC) Kaizen Supplies Collected? Kaizen Pre-Work/Data Collected? Catering Scheduled? Kaizen Training Material Prepared? Management Report-Out Scheduled? Kaizen Team Trained, Ground Rules Established. Current State Condition Identified. Opportunities for Improvement Defined. Future State Improvements Implemented & New Process Standardized. Management Report-Out Created & Delivered. Adhere to the Improved Process, Continue to Improve & Retrain After Each Improvement. Post-Event Monitoring Visual Controls are in place, Maintained & Continuously Improved. Standard Work Audits are Conducted, Economic Benefits calculated & Results Communicated. Weekly Kaizen Newspaper Accountability Meetings Conducted.

23 Current State Process (7 Days)
KAIZEN BREAKTHROUGH METHOD: RESULTS (2 Days) Current State Process (7 Days) Kaizen V/C Minutes WASTE 7 Days V/C Mins WAITING 2 Days Value-Creating Work Waste 75% savings!

24 Lean IT: Impact on Amway
Service Desk Data Center IT Asset Management Operations Voice Telecom Release management Application Development

25 Service Desk Corporate data stores Average of 100 requests per month
Original process plagued with excessive active and wait times Active time reduced from 45 minutes to 15 minutes SME provides clear direction on users’ needs Process to be leveraged globally

26 Service Desk Granting Remote Access
Focused on providing correct access without hand-offs Ensuring we meet PCI compliance requirements Decision tree developed and training provided for SD staff Standard work reduces training time Returned capacity = 1,400* hours (Jan-Aug 2012) * Includes time savings in IT Security and Network Services

27 What Have We Learned? New concept to IT
Lean is traditionally associated with manufacturing Many of the things we do have a production flow to them Balance between focusing on results vs. learning Staff hesitation to act without management direction Empowerment is critical Innovation, learn by doing Quantified improvements vs. observed improvements Other comments (Jill): Lean thinking begins to permeate everything you do; entire team begins to find and cut waste as part of their daily work; time saved is used to handle more work, participate in more kaizen events, work on projects (objectives) Kaizen events: Many “quick fixes” pop out right away and can be implemented immediately People are appalled by the number of steps in a process; they are compelled to make the changes because it seems ridiculous and irresponsible not to do so It may take a long time (6-12 months) to implement the newly designed process, especially if programming and training are involved; people are already committed to other projects; some people are resistant to change unless they participated in the event

28 What Have YOU Learned?


30 Tours Service Desk IT Operations PC Lifecycle Lean Cell
…Please gather in the lobby… David will be your guide

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