2Chris Vogel- founder Compass Affiliates, providing management consulting for Lean leadership and design.Former Senior Vice President of Wells Fargo, Chris conducts Lean readiness assessments & action planning, provides Lean implementation consulting, works with leaders to develop Lean cultural systems, standardized Gemba walks, and leader development planning.
3Discussion Overview Lean Lean Leadership Policy Deployment Planning Wells Fargo Case StudyMotivations and opportunities for changeChanging the Document Management cultureWhere Wells startedAn example of the first major transformationWhat was learned and what was done nextResultsMyths, Achievements and ChallengesWhere to startQuestions
4LeanWhat is it not?It is not tools, projects, cost cutting or people reductionsIt is not a way to make people work harderIt is not a passive activity practiced by one group and not anotherIt is not a transition to the next “method”What is it?It is a total company system connecting Purpose, People, Process and all departments to increase Customer value, profitability and growth
5Wells Fargo Case Study Who is Document Management? Document Management is an operations team providing paper imaging, electronic document routing, data lifting and document storage services to the Home and Consumer Finance division of Wells Fargo. Services provided were integrated with back-end and front-end transactional processing. The Home and Consumer Finance division included the following groups; Home Mortgage, Financial, Insurance, Home Equity Lending, Credit Cards, Student Loans, Trust Services.To serve our internal Business Partners we had operations in NC, MN and Iowa. We had 1,200 team members providing services over two shifts, six days a week.Processes were continuously improved in partnership with business partners to provide the most quality centric, secure and cost effective value, meeting the needs of Customers.
6Conditions Motivating Change Organic growth of imaging and data lifting across unconnected groupsTechnical infrastructure was becoming highly variable in design increasing costOperations disciplines were defined by each separate process and departmentVolume nearly tripled to a record high following the Federal Reserve’s response to the 911 attacks
7Opportunities for Lean Departments were merged into a single division allowing a central vision to developThe value of work effort was not clearly identifiableMany, many handoffsProcesses were designed around batching workWork inventory was stored in rooms out of the way and out of site until it was processedDefect rates and service performance were hard to measureWithout adequate processes, management was required to respond to the “loudest” priority
8Where Did We Start? Began value stream mapping our process Made our processes obvious; and started changing themBuilt our Operational Excellence (Lean) Model
9Began Value Stream Mapping Our Process We engaged external vsm expertise to help us get started and to teach us the disciplineBegan conducting Kaizen events, created change proposals began day implementations (short cycles of improvement)Made Our Processes ObviousStarted to create flow and began shrinking batch sizesBegan physically connecting processes and making operations visibleBegan to exchange post process auditing for a balance of in-process qualityBegan to explore work standardization through 5SCreated initial baseline reporting for similar functions
10Built Our Operational Excellence (Lean) Model Created our Operational Excellence (Lean) visual model for reference, training, and communicationWe started experimenting with different training exercises to discourage batching and show the benefits of standardizationWe began creating production teams and breaking down the independent contributor system
11Continuous Improvement Process We followed the typical high-level Continuous Improvement ProcessIdentified GoalsMapped Current StateIdentified WasteMapped Future StateImplemented
12Present State Value Stream Map LegendCT = Cycle TimeC0 = change over timeUT = uptimeFPY = first pass yield
13Future State Value Stream Map LegendCT = Cycle TimeC0 = change over timeUT = uptimeFPY = first pass yield
14Operational Flow – Before 99PSS1200 ft. File Travel8 Back Flows9 Intersections1099Validation761288113881123344555555
15Operational Flow – After DoorReceivingPSSMilk RunsConv Imaging ModuleGovt Imaging ModuleGovt MatchLoan Packages OutElevatorFreightAssuranceQualityFile RoomDocs BuildoutFuture FinalDesign Objectives:Critical path is consolidated into main production space.Elimination of backflows and intersections.Circular flow from monument (freight elevator).75% reduction in travel.
16Transformational Timeline Analysis & DesignLayoutPrototypeFull VolumeAdd CapacityTransition and Stabilize EnvironmentTiming:Key Themes:8 week weeks weeks weeks weeksPhysical LayoutCost ProjectionsCurrent flow analysisPurchase equipmentSetup physical SpaceRecruit teamTrain operatorsTest receiving and imaging lineDocument resultsGo/NoGo DecisionBuild out space on lines to handle the co-location volume and timeline.Convert all MPLS volume to new flow design
23Andon shows normal vs. abnormal for administrative work
24What Did We Learn?People need to envision their efforts fitting into an overall vision or Lean operational modelStaff have kaizen knowledge and are very willing to contributeIn order to be successful, all team members must contribute as a learning organization therefore a learning strategy was requiredBatching work is a natural tendency for people and requires a conscious choice to overcomeLeadership at all levels needed to spend dedicated time on the floor to understand and respond to the needs of the systemIf you cannot differentiate abnormal from normal operating conditions, you don’t have standardized work and cannot kaizenCheck / Adjust is just as important as Plan / Do
25How Did We Adjust?We developed a training strategy for all team member levels, clearly showing expected skills and development timelinesWe did training at all levels showing the pitfalls of batching and benefits of flowWe required managers to spend dedicated time on the production floor every day and IT support in operationsWe realized our weakness in standardized work, trained leadership to recognize, trained staff on the value and took it to the next levelWe clarified the relationship of team members and their accountabilities concerning Kaizen, variation, overburden, change approval, etc…We evolved the Operational Excellence (Lean) model and stated the cultural norms
27Philosophical Underpinnings Focus on business partner / customer valuePeople are the most critical elementA commitment to continuous improvement
28Managerial Culture Generosity of spirit and sustained sense of trust Accountability at all levels of the organization to improve their workFact based decision makingCommitment to creation of sustained learningProblems are considered good things because they help direct us to our improvement opportunitiesAll support functions, technology development and projects focus on direct operational value stream improvement
29Tools Standard Operational & Lean Product Development Tools Tools A3 FormatValue Stream MappingSmall lot processingJust in timeQuality in process (jidoka)5SProduction BoardsAndonsStandardized Work ChartsProduct Development ToolsAgile ProcessesBurn Down ChartsAgile activity tracking softwareToolsFlowPullGemba walksAction BoardsKanbanPareto ChartsMistake Proof (poka yoke)PDCA disciplineMany others…..
30Results Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Overall Improvement Operations Cost per Image (decrease)13%24%25%34%28%76%Images per FTE (increase)(21%)27%30%40%21%17%168%Image Availability Lead time (decrease)45%20%31%92%Space Consumption(decrease)33%26%0%50%First Pass Yield64.0%78%99.5%99.8%99.9%35.9 pct ptsBusiness Partner Service Level Compliance75%99%99.7%49.7 pct ptsTransactional Volume12%(10%)100%111%371%
31What happened after that? Creating Level PullImproving the connection between leadership objectives and production staff (A3 and Catch ball)Improving synergies between operations and project management / software development initiativesFurther ingrain the cultural norm that leaders are teachers and give everyone the skills to grow knowledgeInfect others
32What we might have changed? Spend more time communicating the cultural vision and the mechanisms of our Lean modelLead with the A3 Hoshin Kanri processInvolve staff earlier in the process (training, work flow design, production boards)Train, educate, and emphasize standardized workWhat Strategies Worked Well?Start with focus on value definitionBegin value stream mappingFocus on making work visible and connectedContinue to favor action over analysis
33Hoshin Kanri – True North Performance, gaps, and targetsThis year's action planSLACPLCPICPKGoalsActivitiesJFMASONDLast Year Targets:DM98%na$ 0.121?A. Strengthen strategic planning1. Teach Management Hoshin KanriWFHM$$ 0.082and policy deployment process2. Require mgmt to build Mother A3s andWFF$ 0.076baby A3s within departmentsCCG3. Communicate goal / strategies to staffCSthrough catch ballLast Year Actual:99.70%B. Deliver cost reduction 25%1. Standardize work at all sites99.64%$19.03$ 0.085greater than budget2. Kaizen not Kaikaku99.8%$ 0.0633. Empower staff to manage mudaC. Institutionalize OE culture1. Execute training program focus onat all levelsOE & Muda for staff, A3 & Stan Wk for mgrReflection on last year's activities2. All non-staff spends 2 days in cellActivityRatingKey Results / IssuesMeet Financial ObjGGoals metD. Institutionalize effective BCP1. Operationalize new Des Moines siteStabilize ops & techYCannot easily move work between sitesand rate rally redundancies2. Common capture platform all sitesSupport COREDates made, resource split effectiveEngage staff in processIdea boards put in place, don’t own mudaE. Institutionalize effective1. Mature Lean/Agile project practicesproject execution2. Align team with function (create zones)Pass AuditFlying colors3. Measure and forecast velocity4. Create effective tracking & commAdvance Ops ExcellenceTraining prgm stalled, mgrs cant do workF. Instantiate financial allocations1. Deliver high level KPIsAnalysis / Justification to this year's activitiesand metrics2. Roll out allocation method for all BPs3. Standard reporting formats / goalsCost burden to business partners limits process improvement opportunities.Follow-up / Unresolved issuesOperations are unstable and improvements are not sustainable.1. Catch ball may not be well understood by staff by end of 2007We are unable to forecast project execution and deliver expected results on schedule.2. Training program will not be well integrated with Corporate L&D teamInconsistent communication of financial allocations, metrics, and SLAs confuse business3. Long term second site will still need to be identifiedpartners and erode confidence in the corporate business model.4. High level KPIs and operational reporting may not be synchronous5. Intense focus on our operational needs is often an obstacle for BPs.Signatures:Author:Chris VogelVersion and date:V24/2/2007
37Common Myths Challenges Operation discipline doesn’t allow for good customer serviceStandardized work is an insult to personal creativityLean tools are designed to get rid of peopleLeaders can deploy the OE system from their officeChallengesUnderestimating the criticality of standardized workOvercoming staff perception of Lean being a people cutting methodCreating discipline for management time spent on the floor