1. Getting the Most Bang Out of Your Resources!! Dr. Frances Kennedy Professor and Director, School of Accountancy and Finance Clemson University LEAN CONCEPTS

2. Strategic Lean More than a shop-floor tool Process improvement should be applied throughout organization Support functions must participate and contribute to lean journey for it to succeed Lean is a total business strategy

3. Lean Principles Value Streams Empowerment Value Flow and Pull Perfection

4. Lean Principles Value Streams Sequences of processes and activities delivering customer value Discharge Process: Cross functional Multiple care providers Pharmacy Doctor Nurses Quality Coding Bed Control Outpatient Billing Supplier Payment Process: Ordering Receiving Storage Inventory Payment Systems Form a team with members from all constituent areas

5. What does it mean to “map the Value Stream”?

6. CURRENT State VS map Lead Time = 4.5 Days Cycle Time = 49 min.

7. FUTURE State VS map Lead Time = 5 Hours Cycle Time = 43 mins.

8. Current Conditions Value Stream Map

9. Ideal State Value Stream Map

10. Future State Value Stream Map

11. Lean Principles Value Streams Value GOAL 100% Quality Smooth Flow On time Flow and Pull

12. What is Waste? Waiting Errors! Motion Transporting Obstacles to Quality, Flow and Time!!

13. Spaghetti Diagram Waste in time and movement!!

14. Key – 5S Wasted time looking! Sort Straighten Shine Standardize Sustain

15. Value Streams Empowerment Value Flow and Pull Perfection 100% quality; unbroken flow; at the pull of the customer Information and authority to act when needed

16.  Necessary for Lean  Consists of visuals that  Supply information  Trigger need  Alert issues  Provide instructions  Demonstrate control and location Visuals

18. Stove A Stove B Stove C

19. A B C Push or pull? left side or right? How did you know?

21. Pull Systems

23. Kimberly Clinic  Defined the Perfect Patience Experience  Mapped the process  “Saw” the waste – bottleneck was the lab  Implemented a new process targeting the lab  Began initiatives in all areas 30 MINUTES!!

24. Call Center Songs: “Don’t Worry; Be Happy” and “Jeopardy” Center of Discussion Goal attainment Color coding

25. Employee Journey helped to ‘see’ where they were going Continuous Improvement is critical!

26. Results!

27. Lean Accounting: Use of same Lean tools in accounting department as in operations Accounting for Lean: Accurate, timely, and understandable information for motivating lean transformation Lean Accounting vs. Accounting for Lean

28. The DRIVING Question Where do I start in Accounting?!?

29. Start with People! Create a safe environment Develop a joint vision Communicate – Solicit opinions and suggestions

30. 5S the office workspace Remove cabinets, bins Remove unused and redundant reports Review/revise retention policies and enforce Rearrange office layout

31. Result  Cleaner, more orderly workplace  Positive impact on morale  Save time hunting for files and reports  Use that time for more interesting and value-added analysis  Cross-training N = Novice B = Beginner I = Intermediate E = Expert

32. Form a Vision  One Controller’s Approach:  Developed levels of performance in 10 key responsibilities 1.Housekeeping 2.Management of Objectives 3.Employee and Process Development 4.Performance Measurement 5.Developing Your Suppliers 6.Safety/Health 7.Customer Service 8.Reporting Compliance 9.Communication 10.Documentation/Standardized Work Tasks Established a Champion to lead a team in each area

33. Performance Measurement Levels Level 1PM’s are not standard. Few functions have measures. There is no quantitative basis for rewarding exceptional performance. Employees don’t know where they stand. Level 2Some departmental measures are in place and employees are aware of the measure. Internal and external customer focus is a key topic, but feedback measures are not in place. Level 3PM’s are in place for 75% of the tasks. Critical tasks are measured, and successful completion is 95%. All tasks have primary customer focus. Customer feedback is requested periodically. Level 4Customer focus is clear. Commitments to due dates are supported by PM’s. Follow up meetings review performance for continuous improvement. Level 5PM’s are used to support continuous improvement on all critical tasks. Customer satisfaction surveys ensure proper focus. The team works as a unit toward 100% compliance.

34. Selecting the activity/process to improve  Does this activity require a simple change that can be implemented at no cost?  How much employee time will it take to plan, analyze and implement a change?  Is it likely that there will be additional costs involved?  What is the impact of the change on the information’s customer?  What is the impact on the quality of information?

35. Selecting the activity  Is it the quickest or costless?  Will it have the most impact?  Does it save resources?  Will it impact other departments? Biggest Headache? Customer Complaints?

36. Prepare an Action Plan Current State What do we do now? Date: Future State Ideally, what could it be? Date: Suppliers paid on periodic basis. Use three-way matching on all payments. All discrepancies investigated. 80% supply purchases on blanket purchase orders. Payment is authorized upon receipt quantity. No matching and discrepancy investigation necessary Obstacles & ChallengesHow to Overcome Number of vendors and part numbers will make it hard to visualize Visit and see what others are doing; Involve people who ‘design’ as their job, such as marketing and design engineers What are the first steps? 1. ______________________________________ 2.______________________________________ 3. ______________________________________ 4.______________________________________ Organize cross-functional team Enlist champion Schedule first meeting Prepare project plan What needs to be in place in... 3 mos? Project Plan in place, data collected, New process designed. 6 mos? Be ready to test. 9 mos? New process implemented 12 mos? Sustained Who needs to be involved in the process? ___________________ _____________________ Ann B., Purchasing Mark W. Receiving Terry D., Accounting Chris B., Accounting Karen M., Purchasing Tom H., Systems

37. Next?  Understand the process!  Map it  Collect data  Draw it  Talk to the people directly in it  Identify the waste!  Time?  Redundant controls and reporting?  Inadequate training?  Design new process!  Map the new process  Communicate it – post it!  Implement and adjust Waiting Errors! Transporting

38. Key Points  It all starts with your people!  Workplace 5S  better workplace, helps to understand waste, better experience  Be honest about the current process  Target easy waste first and “Just do it!”  Involve all the process constituents in the solution  Use visuals to communicate, measure and celebrate!  Plan to sustain improvements