1. LeanSigma® Fundamentals
Module 6 – Establish Flow and Pull

2. Step 3 of the Lean execution roadmap establishes flow.
Specify Value
Identify the Value Stream
Establish Flow – continuous movement of the service and information from beginning to end thru the process
Pull from the Customer
Continuously Improve the Process to Perfection
It’s all about the pace and flow of the process.
Eliminating the waste is basic; flow and pull is a bit more difficult
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

3. Beyond simple waste reduction, Lean optimizes system flow.
Time Principles
Establish Continuous Flow
Operate to Takt Time
Leverage a Pull System
Smooth the Process
Demand vs. capacity
Routing standardization
Workforce management
Jidoka
Root Cause Identification and Elimination
(Abnormality Management)
Mistake-Proofing
Standard Operations
Principles
of LeanSigma®
Just in
Time
Jidoka
Process Smoothing
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 3

4. Batch processes create poor flow and work in process.
Open Mail
Batch Invoices
Calculate Batch Total
Enter Batch
A large chunk of working proceeding through each step before proceeding to the next step.
More or less efficient?
Customer perspective: Will they have to wait longer?
Examples:
Must take into account available skills
File Batch
Voucher
Stack and hold
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

5. One piece flow is the fastest way to complete a process.
Open Mail
Enter
File Batch
Emphasize that all components are important (not just JIT)
All three components must be developed for the house to stand. If you focus only on JIT, the roof caves in!
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 5

6. Continuous flow is uninterrupted movement of a service through a process.
It contributes to the elimination of waste through the following:
Highlights any delays, breakdowns or bottlenecks
Leads to the reduction of end-to-end lead time
Facilitates standardized processes
The IDEAL state is single item continuous flow.
Flow is paced to Takt Time – the pace needed to meet demand.
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 6

7. Takt Time paces work to customer demand.
The tempo sets the pace of any operation to match customer demand. The tempo of any operation is “Takt Time.”
Can be compared to the conductor of an orchestra.
EZ $ target: customer demand = 6
Over-produce: Excess inventory at the end of the day, or unoccupied resources. E.g., food/restaurant business
German word meaning “pace”
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 7

8. Takt Time is calculated based on available time and demand.
Customer Requirements / Period*
Net Operating Time / Period*
* Time periods must be consistent (shift, day, week )
Calculate for EZ Money
Takt time: (5 min/day) / (6 applications/day) = 50 seconds
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 8

9. Takt Time Example Net Operating Time Per Shift: Customer Requirements:
Shift: minutes
480
Time Per Shift:
Breaks: 10 minutes
Cleanup: 5 minutes
Net operating time per shift
Customer
Monthly requirements (items)
9600
Requirements:
# Working days/month
÷ 20
Items / day
Op Time: 455 minutes/day
Cust Req/Day: 480 items/day
Net Op time = 455
Demand = 480 items/day
T/T = 455/480 = 0.95 minutes or 57 seconds
Ensure period unit is the same for both Net Op time and demand.
Customer Requirements / Period
Net Operating Time / Period
Takt Time =
For 1 shift / day: Takt Time =
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 9

10. Lead Time vs. Cycle Time Lead Time Associate Cycle Time
Lead Time is…
the time it takes from the initial customer request until the product / service is delivered
Associate Cycle Time is…
the time it takes the associate to complete the assigned sub-process or set of tasks
Note: Use this slide only if needed to clarify the difference between lead time & cycle time.
The time from the beginning of the transaction with the customer until the completion of the service
The time it takes an associate to complete their portion of the process
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 10

11. Step 4 of the LeanSigma execution roadmap establishes pull.
Specify Value
Identify the Value Stream
Establish Flow
Pull from the Customer – process flow activated by customer demand signaling the need
Continuously Improve the Process to Perfection
Push: Ignores demand. Keep making more, regardless of demand
Pull: EZ $: 6 appl per day
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

12. Pull Systems satisfy customer demand with minimum effort.
The objective of a Pull System is to deliver what the customer wants on demand at minimum costs.
Overproducing is doing it faster than the customer needs it.
Underproducing means the customer won’t get what they need when they need it.
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

13. Pull systems supply output just as the customer needs it.
Dependent on a few simple rules – not on brute force, elaborate systems or expensive technology.
Should be self-regulating and naturally adapts to schedule changes.
There are clear “customer-supplier” linkages throughout the process.
It is visual – not hidden in notebooks, files, computers, etc.
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

14. Kanban signals are visual cues that more output is needed in the pull system.
Production
Kanban
Supplier Process
Withdrawal Kanban
Customer Process
Store
Kanban is a pull system:
The customer process goes to the supplier process and withdraws (pulls) what is needed and when it is needed.
The supplier process is then free to replace what has been taken.
Kanban = “Signal”
Most frequently used in a manufacturing process
Reorder checks
Helps to smooth out the process flow and keeps everyone working
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
KBE Module 3 - LeanSigma® Overview
4 - 14

15. Process smoothing is the foundation of the Lean house.
Time Principles
Establish Continuous Flow
Operate to Takt Time
Leverage a Pull System
Smooth the Process
Demand vs. capacity
Routing standardization
Workforce management
Jidoka
Root Cause Identification and Elimination
(Abnormality Management)
Mistake-Proofing
Standard Operations
Principles
of LeanSigma®
Just in
Time
Jidoka
Process Smoothing
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 15

16. Smoothing adapts processes to variable levels of demand complexity and volume.
Variable volume 60
Time 40 30 20 10
We often staff to the peaks in the process
Vertical lines: Time required for each step in the process.
Step 6 resource is probably waiting for work 1 2 3 4 5 6 7 8 9 10 11 12
Customer or Request
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 16

17. Takt Time vs. Cycle Time Bar Chart is a basic tool for matching capacity to demand.
Visually contrast staff cycle time and takt time for a service
Determine the proper number of staff for a service
Visually display work load balance
Next step in the EZ Money simulation
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
KBE Module 3 - LeanSigma® Overview
4 - 17

18. The bar chart shows visually when cycle time exceeds takt time.
Cycle Times
# Staff =
Takt Time 30
Takt Time = 25 min 25
Time 20 15 S
Cycle Times = 75 min 10 5
What steps can we take to resolve this inbalance.
Streamline work at step 2
Reassign some work at step 2 to other resources 1 2 3 4 5 6 7 8 9 10 11 12
Staff #
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
KBE Module 3 - LeanSigma® Overview
4 - 18

19. Variation in volume is sometimes internally driven.
Fluctuations in Schedules
Rush Jobs/Projects
End-of-Day Tasking
Lack of Steady Work Pace
Excessive Resources to Achieve Peak Demand
Heavy Reliance on Overtime
Causes:
Unrealistic Forecasts
Excessive Service Cycle Time
Lack of Planning
Lack of Standardization
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
KBE Module 3 - LeanSigma® Overview
4 - 19

20. Routing standardization reduces volume variation by grouping work differently.
Similar or complementary work is grouped together.
Example: Triage work so similar types of requests are handled by one team. A different type would go to another team.
Group work with peaks in Sept with other work that has valleys in Sept.
The simple and small get stuck behind the big and complex. Where feasible, group the simple and small.
E.g., Offering Development. One business architect. A Rapid Response team created to work on the simple and small.
Must factor in skills.
Demand fluctuations: Operations: Flexible staffing… This is more difficult with knowledge workers.
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 20

21. Variation in demand also can be managed by changing capacity.
Capacity is controllable, however volume is often not easily influenced.
Volume is what we have to process
Capacity represents your ability and/or capability to process volume
Capacity is a function dependent on a certain set of variables all working together
Capacity = Resources * Time * Productivity
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
KBE Module 3 - LeanSigma® Overview
4 - 21

22. Capacity is always in one of three stages.
Capacity > Volume
No Waiting
High Error Rates
High Costs
Capacity < Volume
Customers Waiting
High Error Rates
Low Costs
Missed Expectations
Capacity = Volume
Good customer Flow
Fewer Errors
Costs are justifiable
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

23. Workforce management matches capacity to demand.
LeanSigma Workforce Management
A methodology developed for the Service Industry that determines the efficient allocation and scheduling of resources
Targeted for highly complex and variable environments to maximize customer service, while containing costs.
Workforce management / capacity study
Focus on one team/functional area and assess every activity they’re doing and how it takes
Use to assess capacity, and to regroup work
Segment out “interrupters” and assign to one person, so that others can focus
Match Capacity to Volume
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

24. Forecasting volume is half of the workforce management equation.
When does the work arrive to be processed?
What is the variation over the year, month, week, day?
How does the volume flow through the process?
Example: Client Service used QMS to estimate the types of work and how they take
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

25. What activities does the team perform?
Forecasting available manpower is the capacity portion of the equation.
What activities does the team perform?
What is the sum of the available work time on the team? (productive work hours)
How much time does it take to create a unit of work? (productivity)
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

26. Many additional factors can be considered in the analysis.
LeanSigma
Workforce
Management
Existing Schedules
Resource
Requirements
Scheduling
Customer Arrival Pattern
Volume
Non -
Controllable Factors
Customer Deadlines
Productivity
Limiting Resources
Process
Training Curve
Critical Success Factors
Input
Output
Workforce management is more than just a simple calculation. Other inputs in the equation must be considered. For example, some variation in demand cannot be mitigated. Productivity is variable. Etc.
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

27. Jidoka combines automation and human intervention to improve the process.
Time Principles
Establish Continuous Flow
Operate to Takt Time
Leverage a Pull System
Smooth the Process
Demand vs. capacity
Routing standardization
Workforce management
Jidoka
Root Cause Identification and Elimination
(Abnormality Management)
Mistake-Proofing
Standard Operations
Principles
of LeanSigma®
Just in
Time
Jidoka
Process Smoothing
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 27

28. Jidoka is a mindset that doesn’t allow errors to pass to customers.
Three components
Rapid Problem Solving – Root Cause Analysis
Mistake-proofing
Standard operations
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
KBE Module 3 - LeanSigma® Overview
4 - 28

29. Steps to mistake-proof the process
Cause & Effect
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

30. Use a Fishbone (Ishikawa) Diagram to identify the root cause
General Categories for Services
Measurement
(Data Collection, Calibration)
People
Defect
Sometimes Environment must be considered
Materials
Raw, In-Process
Machines
Methods
(How work is done)
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

31. Apply mistake-proofing strategies to prevent defects
Shut down: Process stop: Cannot proceed until issue is addressed
Control: Pull-down box: Only “X” choices available – must select from choices
Signal: Error message: Notification of incorrect data entry by pop-up text box
A good example of mistake-proofing--Shut down strategy: The “safest table saw ever built”
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

32. Jidoka improves productivity by eliminating the need for people to supervise.
Allows processes to automatically detect abnormalities and prevent reoccurrence until the abnormality is corrected.
Empowers employees at all levels to:
Help solve problems
To make decisions that affect them
Be accountable for their work
Improve productivity and quality
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
KBE Module 3 - LeanSigma® Overview
4 - 32

33. Standard operations brings all of the Lean concepts together.
Articulate the best way to complete a process with the most efficient use of resources.
Articulate it clearly so that employees can follow and sustain the process.
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

34. Standard Operations Example
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
4 - 34

35. Average Cycle Time (Seconds)
Back to EZ Money …
Create a Takt Time vs. Cycle Time Bar Chart for EZ Money and Report Out Findings.
The following table provides average cycle times for the current state process :
Step
Functional Area
Average Cycle Time (Seconds) 1
Sales 78 2
Admin
114 3
Data Entry 35 4
Finance 60 5
Accounting 34 6
Training 75 7
Ordering 46
Total cycle time = 442 seconds
Takt time = 50 seconds
# Resources = 442/50 =8.8 = 9
Current state no. resources: 11 people
Cycle time does not include delays…this accounts for the difference between the actual no. resources and the estimated no. resources based on takt time.
Staffing calcs are easier when there is low variation in cycle time.
Chart shows the need to rebalance….but first, remove the waste, and THEN rebalance!
Factor in variation: Requires multiple time trials. For EZ Money, a couple of trials may be adequate.
IMS productive time
37.5 hours/day
52 weeks/year
Subtract: Holidays, vacation, status meetings, etc. Usually we assume 15% non-productive time
= 1608 hours/year
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

36. Back to EZ Money …
Create a Future State for your process starting with the VA steps you identified. Employ the principles of flow, takt time, and pull.
Create a Future State layout and spaghetti map showing information and paper flow.
Determine a Staffing Plan.
Report Out the Plans.
Move furniture! (Make your future state a reality, and pilot the impact.)
© 2010 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.