Lean Service …..And….Lean Manufacturing

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Presentation transcript:

Lean Service …..And….Lean Manufacturing Venue: MPC Kepala Batas,Penang. Time:  0830hrs -0930hrs Date: 23 Feb 2012 The “Lean Method” Approach to Performance Excellence Super-factory or Super-Government with Lean

Consultant Profile Dr. Mirza is a Doctorate in Business Administration holder and has more than 23 years of Manufacturing, Quality, Project and Consultancy experience, which he has while serving a multi-national organization under the capacity as a Senior Manager in the area of Production, Lean Manufacturing and Six Sigma. His wide exposure in the Manufacturing sector has equipped him not only with knowledge in Lean Management, TQM, and Project Management but also hands on experience in implementing. His experience has made him as one of the company’s Six-Sigma Black Belt and Lean Manufacturing team member of whom he has carried out numerous projects related to productivity and Quality Improvement. Organization finds him to be caliber trainer and the learning process to be fun. His areas of expertise are in Lean Manufacturing, Six Sigma, Production Management, Productivity Improvement, Personal Development, Change Management, Leadership, Supervisory Skill, TQM, Managerial and Supervisory Development Program. Dr. Mirza has been lecturing for the past 14 years for Degree and Masters Programs in local colleges. He also has a Degree in management (Accounts and Finance), Master in Business Administration, Diploma in Manufacturing from UK and Certificate in Factory Management from Japan. Currently he is pursuing DBA from Local University. Dr. Mirza Abdullah (DBA (USM), MBA (USM), BBM (USM), Dip in Operations and Production Mgt (Inst Mfg UK), Cert in Factory Mgt (Sanno Inst of Mgt, Japan), Six-Sigma BB, Lean Master, Train The Trainer (PSMB))

What is Lean-Sigma?.... Lean-Sigma Lean Manufacturing Six Sigma Pembuatan / Perkhidmatan Menangani Pembaziran (Waste) Manangani Kesilapan (Error) Ketepatan (Accuracy) Kelajuan (Speed) Lebih Pratikal Guna Statistik (Minitab) P-D-C-A D-M-A-I-C Speed + Accuracy = Performance

Individual Commitment Lean Sigma Improve Processes Delight Clients Teamwork Individual Commitment High-Value Flow Speed Client Satisfaction Quality The success of Lean Sigma to improve processes has it’s very foundation of meeting & exceeding client needs by emphasizing the use of facts and data. It isn’t that our current processes our bad. In fact, we have some very good processes. But, clients’ needs change and evolve constantly. Lean Sigma tools can enable us to improve processes and delight clients by: Providing Top Quality – the first time, every time. No defects! Being the high-value provider Having increased speed & responsiveness to changing needs We can do this by using our individual commitment within teams to create processes that virtually eliminate defects and create flow in both our service and products. DATA FACTS CLIENT NEEDS

Common Misconceptions on Lean Lean is only for manufacturing sector Fear that the increasing productivity will creates higher stress Believes that by eliminating waste results in job loss Lean is a “Flavor of the Month” Internal efficiency focus = less external customer attention Lean practices is expensive Adapted from Lean Behaviors, LLC.

Why Government MUST embark on Lean? Government faces economic difficulties and rising cost in recent years. This is further impacted with: Country revenue have not rebounded Federal funds and reserves will won’t last forever Rising administration cost year after year Inefficiencies in handling projects or Inefficient process flow Borrowing and Loans is in the increasing trend Other cost cutting measure is taken and ongoing

Efficient and effective Lean Services or Manufacturing can be achieved…Why? Government or manufacturing sector is under increasing pressure to: Reduce waste or NVA Reduce costs and expenses Expand services with less resources (effective and efficient service) Improve processing time (improve cycle time) Increase productivity (remove non-value added activity) Improve quality of services (less mistake) Meet customer satisfaction and expectations

What make Lean so promising in service and manufacturing sector? A customer-driven waste reduction technique that: It focus and examines on current process or operations It improves efficiency by decreasing process time or Cycle time. Produces a product or service to the “beat” of customer demand Measures impact on time, capacity and customer satisfaction Initiates organizational change by involving employees participations The relentless pursuit of waste.

Focus to reduce the 8 Types of Waste (Sources of Non-Value-Added Activity) 2. Over production 5. Transportation 6. Inventory 8. Over processing 7. Motion 1. Defects, Rejects, Rework Lean looks for waste. There are 7 wastes which together result in underutilized employees. For instance, during the initial day of the Kaizen event, team members look for elements of waste in the process. What are wastes and how can we best define them? ( attn trainer - The following are simply examples. Feel free to use your own.) We could ask – Does the customer pay us for repeated QA inspections? (picking, packing, shipping) – overprocessing What if we could package product at the end of the production line for direct movement to the shipping dock for a specific order? Would the customer pay us for producing excess inventory that has the potential of becoming obsolete? Why do we have inventory anyway? Is it because the customer demands it? Why does the customer demand it? Are they concerned that we can’t meet their demand otherwise? Would the customer pay for the extra steps and/or time an operator takes to retrieve a missing tool? How about the time the next operator is waiting for the missing tool to be found? Does the customer pay us for moving the product from the end of the production line to inventory? Does the customer pay us for receiving the product into inventory? 3. Waiting 4. Talent & miss-use of resource

1. Defects Anything that has to be redone, incomplete or incorrect. Employees probably know what work often has to be redone Incorrect or incomplete work delivered to the next process (the customer) Results in rework Causes of defects: Weak process control Incorrectly processed order Inadequate education/training/work instructions Misunderstanding of customer needs

2. Overproduction When too much or more of something is produced (e.g., information) or when something is produced too early and faster, while the downstream customer (internal or external) waits for something else. Leads to excessive inventory Causes of overproduction Generating reports that are not needed Emails sent to people who do not need to receive them Misuse of automation Long process setup Unbalanced work load

3. Waiting Waiting for anything – people, task, paper, signatures, approvals, etc. This idle time is created when waiting for invoices, copier, parts, materials, machines, information, signatures, help, approvals, special task, etc. Lead to time waste which is money / cost Causes of waiting: Unbalanced workload Too few office machines No clear office protocol Upstream quality problems Waiting for a signature approval

4. Not using employees Failing to take advantage of employees’ skills. For example, does management seek out their ideas for improvement or put them in correct task? If so, do they act on them? The waste of not able to use people’s Abilities, Skill and Knowledge (ASK) in appropriate place and time. Causes of underutilized people: Old way of thinking, politics, the business culture Poor hiring practices Low or no investment in training Low-pay, high-turnover strategy

5. Transportation Transporting time of documents and materials around the office until the next step. There is an opportunity for the process to break as work gets lost, misunderstood, etc. Minimizing the number of touches in a process is can make a process lean. Movement of people that does not add value to the product or service Causes of transportation waste: Poor office layout Processing extra paperwork Office processes that are not located near each other Poor understanding of the process flow Large batch sizes Large storage areas

6. Inventory/backlog Not just an abundance of supply, but also a backlog of work that leads to even greater waste as workers must spend time and effort managing and working around the backlog Any supply in excess of one-piece flow - Often the result of “Overproduction” - Unbalanced workload - Improper scheduling - Unreliable suppliers Examples: Finished Good Inventory Work In Process Inventory Supplies Inventory Staged or “kitted” Inventory Solutions: Make to Customer Order Kanban Pull System Eliminate Inventory Storage Areas Identify bottle-neck or Use TOC

7. Motion Excess motion on the part of the worker. For example, a poor office layout might require a worker to spend too much time walking between one point to another point where work equipment is located. Movement of people that does not add value to the product or service. It is a waste in time and effort. Causes of motion waste Poor people/machine effectiveness Poor office layout Inconsistent or no standardized visual work instructions Poor workplace organization and housekeeping Extra “busy” movements while waiting

8. Excess processing Extra steps or processing that does not add value, from the customer’s perspective (e.g., obtaining too many signatures or double- or triple-checking of work, extra testing). Effort that adds no value to the product or service from the customers’ viewpoint. Customer is not paying for the waste…The organization cost will increase. Causes of extra processing: Product changes without process changes True customer requirements undefined Lack of communication Redundant approvals Emails sent to everyone

LEAN TOOLS SHOP-FLOOR MANAGEMENT Improve Cycle Time. Drive down waste! CHANGE MANAGEMENT LEAN TOOLS T1 – SET-UP REDUCTION Improve Productivity Improve Quality T2 – ERROR PROOFING T3 – VISUAL MANAGEMENT T4 - MATERIAL CONTROL T5 – BIG TO SMALL LOTS T6 – DELAYS IN SHOP FLOOR T7 – VALUE STREAM MAPPING (VSM) T8 – STANDARDIZED WORK T9 – CELLULAR LINE LAYOUT Improve Cycle Time. Drive down waste! T10 – SINGLE MIN DIE EXCHANGE (SMDE) T11 - JIDOKA T12 – THEORY OF CONSTRAINT (TOC) SHOP-FLOOR MANAGEMENT

T1- Set up Reduction Time The 4 Key Principles involved are External Activities Internal Activities Parallel Activities Streamline internal Activities The Mind Shift You Approx. 15 mins. F1 Formula 8 sec. !!!

The Mind Shift

Example of Mistake proofing Without mistake proofing, we can have a mistake with irreversible damages With mistake proofing, error is not possible

T7 - Process Mapping / VSM? What is a Process Mapping?: A visual representation of the flow of work in a series of steps showing the path of a process and the relationship between the steps. Versions of a Process Map Adapted from Product & Process Innovations, Inc.

Steady Velocity - VSM When do we get our Parts? 2 WEEKS! Traditional: Batch Production (like a meandering stream with many stagnant pools, waterfalls, and eddies) When do we get our Parts? 2 WEEKS! FLOW: One Piece Production: Pipeline with fast-flowing water or product The right Job and it must keep moving Notice how One-Piece Production results in a straight, unimpeded process to meet customers’ needs? Also, notice, One-Piece Production has no room for rework, no stopping off place for inspections. There is no place for inventory accumulation. There is also a steady demand – you’ll be hearing more about steady demand, referred to later as “TAKT” time. 23

TS - Example in Service Sector Immigration Department – Online Vs Conventional method in International passport application. Cycle time reduce from week to hours Prevent queuing High customer satisfaction JPJ Department – Online Vs Conventional method in driving license renewal. Cycle time reduce Banking Sector – Online / Internet banking or ATM Vs Conventional methods. Security services – Manual guard service Vs security camera and alarm system (few areas can be monitored by one guard using CCT.

What is Waste Service sector? Examples of Waste: Document errors Document transport Completing work not needed Process steps, reviews and approvals Waiting for the next step Searching for information Backlogs Behaviors Developed by Products & Process Innovation, Inc. – following the Taiichi Ohno Model

How is it Done? Must obtain management commitment Make employees aware of what Lean is - Identify a process/procedure to be “Leaned”  Build employees desire to participate in Lean - Establish a Lean team (include people who do the work)  Give them knowledge about how to participate - Use Brainstorming/Process Mapping to identify “bottlenecks” and areas for improvement in day to day work Implement customer-driven waste reduction techniques  Evaluate the results and make further improvements  Reinforce the change - Continue to find additional Lean projects within the unit

Barriers to Lean's Success (Why do some LEAN events ‘Fail’) The industrial jargon is a turn-off – Have impression that it cannot be implemented in Government / Service sector Executives generally don’t focus about operations - Lack of alignment around improvement strategy Unrealistic Expectations - The emphasis of Lean is on the wrong thing. Lack of understanding or missing skills Difficult to buy-in or change the mindset towards Lean idea or Lean culture Poor support and understanding from top Management - Weak or no leadership buy-in Lack of Visible Management Commitment- Results not communicated Inadequate Follow-up - Processes are not monitored and continuously improved No sense of urgency Source: Adapted from Karen Martin & Associates, “Building a Lean Enterprise: Navigating the Common Obstacles to Success,” Webinar Presentation, 13 May 2010, www.slideshare.net/KarenMartin2/building-a-lean-enterprise.

Expectations of Lean LEAN Focus What to Expect? What is the benefit of implementing Lean? To Organization To Employees What to Expect? Customer value Smooth Flow Pull Process Map or VSM Root cause Analysis Continuous Flow Perfection Repeatable and predictable processes Increased productivity Fewer errors Exceed customer expectations Improved employee satisfaction Empowered staff Reduce cycle time LEAN Focus

Diffusing Lean Thinking Share results from early Lean experiences. To the successes of early Lean events. Get consistent support from organizational leadership. Elect a Lean coordinator. Build staff for Lean concept. Develop tools for Lean. Keep momentum - Continue to hold Lean events.

How to transformation Lean in a service or manufacturing Environment? How Do You Lead the LEAN Transformation? Link Lean to Organizational / Government Strategy Obtain support of department head / upper management Emulate Lean behavior or culture Empower all staff to take responsibilities and sponsor the lean principles through-out the value chain Encourage innovation through creative thinking Think like a profit making organization - view lean as a long term journey Instill a continuous improvement viewpoint

Actual savings – Success story My OWN experience Connecticut Department of Labor’s Reduce WIP CT – Estimated Saving US$ 120K. 13 Second Auto line Cycle time Reduction – Estimated Saving US$150K. Improve the Recycle Media Yield from 54% to 80% - Estimated Saving US$380K. Reduce the loss communication and routing fail in Cert Oven - Estimated Saving US$125K. Reduce the Plant Electricity usage on Air-Con System - Estimated Saving US$80K. U5 Rework Yield = U5 Prime Yield - Estimated Saving US$100K. Inventory Variance in shop floor - Estimated Saving US$500K Finisar – 25 projects – 3 years – Total savings USD 1.4 million Moduslink – 14 projects – 3 years – Total savings USD$1.22 million 590 process steps reengineered or automated 14,868 worker hours reengineered or automated $1,270,626 in worker hours saved

“If you don’t manage your business processes, they will manage you.” It is not the strongest of species that survives, nor the most intelligent, but the one most responsive to change.”…………..Charles Darwin Success! Through Lean Government THANK YOU Terima Kasih “If you don’t manage your business processes, they will manage you.” mirzapaa@yahoo.com 012-427 9600