Applying Lean to the complete end to end Value Chain (or, why do so many Lean projects fail to deliver?) Rob Walley

Introduction Deploying Lean in the form of a Lean Improvement Project is a common way in which businesses try to improve both process and business performance. The outcomes of these projects can often fail to meet expectations. We may get an improvement in the performance of the specific process we have focussed the Lean Project on. However, this frequently does not translate into more relevant business performance improvement. This presentation aims to explore a reason why and to offer an approach that can realise both process and business benefit.

What do we mean by a ‘the complete end to end Value Chain’? A value chain is a set of activities that a business operating in a specific industry performs in order to deliver a product or service for the market. The complete end to end value chain refers to the extended participation of the business’s supply chain and customer chain. Transport /Logistics Quarrying Processing Surfacing Road Use Example: Pavements Value Chain

What do we mean by a ‘Lean Project’? Top Down Bottom Up Business Wide Division Wide Department/Function Wide Individual Teams & Team Members Large scale Improvement interventions focussed on significant Cross- Business Processes (Lean or Six Sigma approaches) Smaller scale interventions/Rapid Improvement Events focussed on specific Divisional/Departmental Specific Processes Establishment of Continuous Improvement ethos within an appropriate frameworks (Lean Daily Management System®)

Lean Projects have multiple manifestations but around a common theme… DMAICT PDCA Rapid Improvement Events Kaizen Blitzes 8D 5S 3C etc W. Edwards Deming (1900 – 1993)

So, what goes wrong? It often starts in the way we identify and select our projects in the first place…

We often start with a problem… Its too costly Quality is poor Its late Its taking too long We’ve had complaints We are inefficient Its unsafe But usually constrain ourselves to specific processes or sub-processes

We deploy Lean to help solve the problem… LEAN!

Business Processes are complicated This only gets worse when we start to consider Customers; Customers Customers; Suppliers and Suppliers Suppliers etc. Complete Value Chain

Our Lean Project is usually focussed on one part of our business… The inevitable conclusion is that we will only get significant (and relevant) improvement if we are lucky

So, what should we do? 1.Identify your key Value Chain in amongst the other processes/activities

So, what should we do? 2.Understand the way work flows through the specific value chain – make it visible!

So, what should we do? 3.Collect and analyse data – where are the constraints/bottlenecks that inhibit the performance of the value chain?

So, what should we do? LEAN! 4.Deploy Lean – focus a Lean improvement project on the specific bottleneck(s)/constraint(s)

How do we go about doing it? 1.Select the Value Chain you want to or needs to be improved 2.Identify Champion and Practitioners (Champion should be the closest to whoever ‘owns’ the value Chain) 3.Confirm the extent of the Value Chain to be considered (where are you going to start, where do you end?) 4.Produce an initial scope for the programme 5.Identify the key stakeholders from along the value chain and form a representative team 6.Finalise the scope with the team

How do we go about doing it? 7.Undertake high level mapping exercise(s) to make value chain visible 8.Collect & analyse data – Identify the constraints/bottlenecks 9.Assess need/opportunity for macro or micro change 10.Assess benefit potential/opportunity 11.Launch specific lean project(s)

Top Tips… Collaborate – internally between functions, externally with customers & supply chain Don’t try to define the complete end to end value chain to the nth degree. You need enough detail to identify the constraints only Focus on the ‘big picture’ – don’t get drawn into the detail Concentrate on the specific value chain – avoid scope creep Use Lean tools to help increase understanding – (e.g. Value Chain Mapping; SIPOC; Quad of Aims etc.) Data is King (as long as it accurate & appropriate – check the source!) Don’t try to ‘boil the ocean’ – Macro change is tempting but can be unrealistic

Conclusions In order to ensure your Lean Projects not only improve process performance but also positively impact Business performance, you need to make sure you choose them correctly. Make sure you understand the overall end to end value chain sufficiently to allow you to focus improvement efforts and energy on the specific areas that are holding back the business.

Questions?