1. Lean Office & Business Processes Not Just for Manufacturing
Michelle Manary & Deb Harcus
Manary Harcus Consulting Corp

2. Agenda Organizational Effectiveness & Lean
What is Lean & how does it work?
Lean Office Tools & Terminology
Success Strategies
Role(s) of HR in Lean Initiatives
8 Service Industry Wastes
Value Stream Mapping
Case Study
Debrief, Q&A

3. Organizational Effectiveness & Lean
Source: Queens University

4. What is Lean?
Lean is a system that continually searches for and eliminates waste throughout the total enterprise and value chain
Lean applies to office and administrative environments
In Service industries, there are 8 types of waste
Eliminating waste results in:
Shorter lead times
Reduced costs
Less inventory
Higher throughput
Higher return on assets
Six Sigma is a system focused on the elimination of defects.
Lean applies to office and administrative environments
Not just manufacturing
In Service industries, there are 8 types of waste
Eliminating waste results in:
Shorter lead times (faster turnaround)
Reduced costs (less effort, paper, steps, etc.)
Less inventory (eliminating backlogs)
Higher throughput (fewer resources, or get more done with existing resources)
Higher return on assets (better use of tools and people)
Henry Ford was the first lean thinker
The word “Lean” was first used in 1990 to describe the Toyota Production System
Six Sigma is a system focused on the elimination of defects.
TQM or Quality is more commonly known as Six Sigma today

5. Some Lean Office Tools The Language of Lean Value Stream Mapping
Pull vs Push
5S & Visual Controls
Kaizen Event
The Language of Lean 5S
Kaizen
Gemba
Pitch
VSM
Value Add
SIPOC
Mapping Symbols
Takt
Pull vs Push
Hansei
Heijunka

6. Strategies for Success with Lean
Base decisions on long-term, system-wide goals
Create continuous flow to bring problems to the surface
Level the workload (Heijunka)
Build a culture of stopping to fix problems
Standardized work
Use visual controls
Use reliable, thoroughly tested technology that serves your people and processes
Grow leaders who thoroughly understand the work, and can teach it to others
Respect your extended network by helping them improve
Go and see for yourself (get in the gemba)
Make decisions slowly, by consensus and implement rapidly
Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen)
Base decisions on long-term, system-wide goals
Create continuous flow to bring problems to the surface
Level the workload (Heijunka)
Build a culture of stopping to fix problems, to get quality right the first time
Standardized work and tasks are the foundation for continuous improvement & employee empowerment
Use visual controls so problems can’t be hidden
Use reliable, thoroughly tested technology that serves your people and processes
Grow leaders who thoroughly understand the work, and can teach it to others
Respect your extended network by helping them improve (eg: suppliers)
Go and see for yourself (get in the gemba)
Make decisions slowly, by consensus and implement rapidly
Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen)
Source: The Toyota Way, Liker 2004
Source: The Toyota Way, Liker 2004

7. Various Role(s) of HR in Lean Initiatives
Ensuring top down support & alignment
Review/revise HR strategy to support Business strategy
Change Management
Organizational Effectiveness
Develop Managers who are Lean Facilitators
Redefine Jobs to support Value Stream Manager role
Lean Participant
Ensuring top down support & alignment
Review/revise HR strategy to support Business strategy
Change Management – employee communication, understanding, skills development
Organizational Effectiveness –internal “systems” need to support the desired business results
Develop Managers who are Lean Facilitators
Redefine Jobs to support Value Stream Managers role
Lean Participant

8. 8 Service Industry Wastes
Corrections
Transportation
Extra processing
Inventory
Approval process
Excess motion
Backlog in work queues
Underutilized employees
Corrections (e.g.: errors, typos, misspelling, wrong data, accuracy, validating information)
Transportation (e.g.: excessive attachments, multiple hand-offs, multiple approvals, interoffice envelopes, )
Extra processing (e.g.: re-entering data, unnecessary s, expediting caused by poor planning)
Inventory (e.g.: any form of batch processing, stocks of sales literature, stocks of office supplies, s waiting for action)
Process of getting approvals (e.g.: too many, too few, people not available, methods used)
Excess motion (e.g.: generating information no-one looks at, walking to/from copier, filing area or fax machine, other peoples offices, poor office layout)
Backlog in work queues (e.g.: dealing with variability in demand)
Underutilized employees (e.g.: no cross-training, inadequate tools, limited employee authority & responsibility, individual versus team thinking)

9. 5S & Visual Controls
Sort – What is not needed. Sort through, then sort out.
Set in Order – What must be kept, make it visible and self explanatory.
Shine – everything that remains.
Standardize – Set standards for the first 3S’s
Sustain – Requires discipline, stick to the rules and make them a habit
Perform any necessary realignment of office layout, work stations, walkways, aisles, entrances.
Mark-off the inventory locations, inventory levels, equipment/machine locations, storage locations (cabinets, shelves, tables)
Help errors and mistakes easy to see and deal with
Sort – What is not needed. Sort through, then sort out. When in doubt, throw it out
Set in Order – What must be kept, make it visible and self explanatory so everyone knows what goes where
Shine – everything that remains. Clean equipment and work space
Standardize – Set standards for the first 3S’s
Sustain – Requires discipline, stick to the rules and make them a habit
5S is not free, but it does have accuracy and efficiency benefits

10. A Successful Office Kaizen Blitz
(pronounced Ki-zen)
Kaizen Means: “Continuous Improvement”
A “Kaizen Event” is normally 3 days long
Starts with a SIPOC map
Using Value Stream Mapping techniques:
- Map the current state
- Analyze & kaizen blitz possible improvements
- Map future state
Begin to implement changes & measure results

11. Suppliers Inputs Processes Outputs Customers
SIPOC Map
Suppliers Inputs Processes Outputs Customers
Defines the practical limits of your mapping activity (scope)
Ensures you gather all the information you’ll need
Identifies the processes (which may have sub-processes)
Captures the voice of the customer.

12. SIPOC Map Example New Employment Process – SIPOC Map Suppliers Inputs
Outputs
Requirements
Customers
Exec
Committee
Hiring
Budgets
Recruitment
& Selection
Payroll &
Tax Setup
Benefits
Enrolment
Orientation
Training
New
Employee
Qualified
Manager
Dept
Managers
Job
Descriptions
Candidates
Fits XYZ
Culture
Recruiters
Co-workers
Oriented to
Business
Customers
Setup for
Payroll,
Benefits

13. Value Stream Mapping
VSM=The assessment and planning tool of lean practitioners
3 states exist: Current, Perceived, Future
The only way to ensure you capture the true current state is to: walk the process
Current state map
Future state map
Implementation plan
Drawing
Risk of not mapping the current state is that you have no baseline or justification for making changes.
VSM=The assessment and planning tool of lean practitioners
3 states exist: Current, Perceived, Future
The only way to ensure you capture the true current state is to:
walk the process (use a stopwatch) or
get the people who do work in the process involved, and map the current state themselves
Drawing
Plan &
Implement

14. Value Stream Mapping Symbols
xcel IN
Customer or
Supplier
Process Box
Inventory/Inbox
Delay Time
Information Flow
1 Day
P/T=2min
L/T=0 days
Schedule
% C/A=99%
Electronic Information Flow
Other
Electronic Inbox
(queue)
Data Box
Workflow
Material (Paper) Movement
Worker
Iterations or
Rework
Wor

15. Value Add, Process & Lead Time
Rework,
Checking,
Revisions
Non-Value
Add Time
Value Add
Time
Queue/Wait
Time
Process Time
Lead Time

16. Map Current State Document customer information & need
Identify main processes to deliver service
Start with customer and work backwards
Collect data on main processes (attributes/metrics)
Perform value stream walkthrough and fill in the data boxes, including “work-in-process”
Identify process boxes where flow stops and batch or queue occurs
In the office, inventory is information in a queue (paper or electronic)
Establish how each process knows what to process next (information flow)
Can be formal or informal; how is work prioritized?
Calculate lead time vs process time
Calculate % accurate & complete
Calculate value add

17. Example - Current State VSM Map
Insurance Claim Processing
Timeline
Value Stream Metrics - Process Time (P/T): 75 min
Lead Time (L/T): days
% Complete & Accurate (%C/A): 29%

18. Typical Data Attributes/Metrics
Process & available time
Set up time (eg: between computer systems)
Lead time/turnaround time (LT)
Typical batch size or frequency
% Complete and Accurate (%C&A)
Rework/revisions
Number of people involved
Downtime (eg: information systems)
Inventory – queues of information (eg: electronic, paper)
Demand
Team needs to decide which attributes/metrics will work best for tracking progress toward the targets.

19. Value Stream Managers Each Value Stream needs a Value Stream Manager
For product and/or service ownership beyond the function
Assign responsibility for future state mapping and implementing lean value streams to line managers with the capability to make change happen across functional and departmental boundaries
Value Stream Managers should make their progress reports to the senior manager on site.

20. Which Steps Add Value and Which are Waste?
Now that the process is visible, what problems do you see?
Challenge every step – ask the following:
What is really needed by the customer? (Takt)
How often do we need to check our performance? (Pitch)
Why are the current steps performed?
What can be done differently or not at all?
Is the order of the steps creating waste?
Can we eliminate certain steps or do others more intelligently?
What assumptions underlie the current process?
Are existing tools and guides appropriate?
Go back to the 8 wastes to see if the step is a waste.
Now that the process is visible, what problems do you see?
Challenge every step – ask the following:
What is really needed by the customer? (Takt)
How often do we need to check our performance? (Pitch)
Why are the current steps performed?
What can be done differently or not at all?
Is the order of the steps creating waste?
Can we eliminate certain steps or do others more intelligently?
What assumptions underlie the current process?
Are existing tools and guides appropriate?
Go back to the 8 wastes to see if the step is a waste

21. Future State Questions
What does the customer need and how are we doing in serving this need?
Takt time=Demand rate
Which steps create/add value and which are waste?
How can we flow work with fewer interruptions/handoffs?
How can we control work between interruptions/handoffs?
How will we balance the work load and/or different activities?
How do we set pitch?
Pitch is the tempo of the output
Ideal: Takt = Pitch
What process improvements will be necessary?
Can we establish a pace or rhythm that improves processing?
What does the customer need and how are we doing in serving this need?
Takt time=Demand rate
(Effective working time/customer requirements in that working time)
Which steps create/add value and which are waste?
How can we flow work with fewer interruptions/handoffs?
How can we control work between interruptions/handoffs?
How will work be prioritized?
How will we balance the work load and/or different activities?
How do we set pitch
Pitch is the tempo of the output
Ideal: Takt = Pitch
What process improvements will be necessary?
Can we establish a pace or rhythm that improves processing?

22. Project Tracking Center
What gets measured gets monitored. What gets monitored, gets done.
A document board in a highly visible area, and as close to the work area as possible
Post the Current and Future state maps
Show Implementation Timelines
Key measures of progress and success
Value stream performance indicators
Implementation progress & impact
Other documents as required (as few as possible)

23. Case Study #1 Identify map developer & spokesperson for your group
Read case & then map the current state process
You have 2 colors of sticky notes – use one color for a process step, the other color for time spent waiting for something to happen
Utilize the mapping symbols
Identify waste and problems
Gather and measure a variety of attributes, such as:
PT – process time
LT – lead time
%VA - percent of process that adds value
%C/A – percent of process that is correct & accurate
%D/T – delay time
# of people involved
# of process steps required
Brainstorm kaizen opportunities
Stop

24. Case Study Debrief
What do you see?
What problems are pointed out?
Where were some of the “lean” opportunities?
Discuss areas in your business that could benefit from lean thinking

25. Process Improvements
Identify all process improvements that could be done or will be necessary to implement the future state (Kaizen “bursts” or opportunities)
Prioritize the list for quick hits and big hitters based on data or consensus
Decide which attributes will be the best ones to use
Map the desired future state & estimate expected results
Consider Six Sigma for projects with unknown solutions and the root cause is unknown
Identify all process improvements that could be done or will be necessary to implement the future state (Kaizen “bursts” or opportunities)
Prioritize the list for quick hits and big hitters based on data or consensus
This prioritization is the basis for the implementation plan
Decide which attributes will be the best ones to use
Map the desired future state & estimate expected results
Implement quick hits first (low cost, simple to change)
Implement more complex changes next, one at a time
Big hitters are usually tracked as projects
Consider Six Sigma for projects with unknown solutions and the root cause is unknown

26. Measure The Impact Attribute Current State Performance
Future State Goal
Future State Expected Result
Actual Result

27. Questions?

28. Not The End Lean is a new beginning
Reinventing your business, increasing your competitive position, a differentiator
It’s a continuous improvement journey
Not an event or a project
Lean is a way of thinking that all employees ultimately learn and continue themselves. It becomes part of the company culture and an organizational commitment