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Achieving Operational Excellence through Lean Transformation
Introduction to Lean October 29, 2014
PricewaterhouseCoopers LLP
Introduction to Lean
PPX Learning Events October 29, 2014
Haneef Chagani Partner, National Lean Practice Leader
PricewaterhouseCoopers LLP 250 Howe Street, Suite 700
Vancouver BC V6C 3S7
haneef.chagani@ca.pwc.com 604-806-7071
http://www.pwc.com/ca
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PricewaterhouseCoopers LLP
Overview of Presentation
• What is Lean?
• Why are organizations implementing Lean?
• Getting Started with Lean
• Value Stream Mapping and Training
• Lean Management System – Building a Lean Culture
• Project Examples
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Introduction to Lean
PwC
What is Lean?
• A business philosophy based on the fundamental goal of continuously minimizing waste and maximizing flow.
• The term “lean” refers to a basic absence of waste.
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Introduction to Lean
PricewaterhouseCoopers LLP
History of Lean
Early 1900s…>>…..WWII…>>….1970’s………1980’s…………..1990’s….………2000……………..2010
1937 Toyota Motor Co
1950’s…Deming in Japan
Late 40’s – early 60’s – TPS develops…driven by need after WWII. Earliest use of tools such as JIT, Kanban, Andon, visual controls.
1980s – 1990s, “Lean Thinking” by James P. Womack, Daniel T. Jones
1980’s…
”new domestics”
…bring Lean culture
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Introduction to Lean
PwC
Lean Processes Deliver to Customers
• Exactly what they need
• When they need it
• In the quantity they need
• In the right sequence
• Without defects
• At the lowest possible cost
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Introduction to Lean
PricewaterhouseCoopers LLP
A Shift in Mindset
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Current Thinking Lean Thinking
Overproduction
Transportation
Over-processing
Inventories
Motion
Under-utilized resources
Rework
Waiting
Overproduction
Transportation
Over-processing
Inventories
Motion
Under-utilized resources
Rework
Waiting
Overproduction
Transportation
Over-processing
Inventories
Motion
Under-utilized resources
Rework
Waiting
7+1
Wastes
Introduction to Lean
PwC
Philosophy
• Waste exists everywhere in the organization
• Lean systems focus on identification and elimination of waste
• All employees must be trained to identify and eliminate waste from their work – this will ensure successful implementation of Lean
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To have value, we must reduce waste!
The goal is to eliminate waste
permanently
Introduction to Lean
PricewaterhouseCoopers LLP
Five Guiding Principles of Lean
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• Specify value from the standpoint of the end customer (1) Focus on Customer Value
• Identify all the steps in the value stream, eliminating those that do not create value
(2) Define Value Streams
• Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer
(3) Create a Continuous Flow
• As flow is introduced, let customers pull value from the next upstream activity
(4) Customers Pull the work
• Begin the process again to create more value while further reducing waste
(5) Strive for Perfection
Introduction to Lean
PricewaterhouseCoopers LLP
The Value to Waste Ratio
Only 25% of traditional work activity is truly adding value
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Waste
Incidental Work
Value Added Work
Introduction to Lean
PwC
Key issues in the public and private sector organizations
• Cost reduction
• Increasing regulations and risk
• Greater transparency on expenditure and outcomes
• Increasing demand for services
• Employees at all levels need to be engaged in service delivery improvement
• Strategic culture change – need for culture of continuous excellence
• Limited funding/budgetary constraints
• Demographic changes – can’t easily replace people leaving
• Need for operational excellence/efficiency
• Focus on core and devolve non-core services
• Need to work across organizational boundaries to improve services and find efficiencies
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Introduction to Lean
PricewaterhouseCoopers LLP
How Lean addresses these issues
• Removes wasteful work from processes
• Allows an organization to impact culture – create a culture of continuous improvement and customer value
• Better utilize resources
• Enhances transparency and measures results
• Allows new capacity to be created
• Encourages senior managers to focus more on how work is getting done
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Lean creates and engaged workforce, drives simplification and focuses on
providing value to customers
Introduction to Lean
PricewaterhouseCoopers LLP
Lean Drives Results Lean has a 50 year track record supporting organizational performance in manufacturing and service industries
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• Reduce defects by 60%
• Improve throughput by 200%
• Improve productivity by 50%
• Reduce total cycle time by 50%
• Reduce cost by 50%
• Reduce floor space by 50%
• Reduce inventory by 90%
• Reduce lead time by 75%
Lean Performance Standards:
• Liability cost savings of over $1M annually, which have been redirected to provide services to the public
• 50%-95% reduction to process cycle times
• Millions of dollars saved in procurement and through improved inventory management
• Reduced number of process hand-offs by more than 50% from current 10-12 touch points to 5
• Dramatically improved customer contact centre response time
• Over 40% of senior leaders time is spent on value activities including coaching, driving performance and problem solving
Examples in the context of Public Sector:
PricewaterhouseCoopers LLP
Lean Thinking Behaviours
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Traditional Management Lean Management
Functional Focus Outcome Focus
Managers Directs Managers Teach/Enable
Blame People Blame the Process
Volume Lowers Cost Waste Increases Cost
Reactive Quality Proactive Quality
Internal Competition Internal Cooperation
Employee as a Cost Employee as an Asset
Drive for Results Process Improvement
Undetectable Process Flow Visual Workplace
Independent MBO’s Linked Goals
Functional Silos Value Streams
Introduction to Lean
PwC
Getting Started with Lean
Introduction to Lean
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PricewaterhouseCoopers LLP
Deployment Philosophy and Roadmap A “See, Learn, Do” approach – rapidly develops internal capability and capacity to sustain Lean
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Benefits Management
Program Management
Change Management
VSM & Kaizen Events
Lean Management System
Training • Train senior
management, operational managers and frontline staff.
• Understand current situation, strategy goals and timeline.
• Identify key service areas for initial deployment of Lean philosophy and techniques for continuousl improvement.
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Strategy & Assess
Mobilize
• Refine Lean deployment approach and training.
• Formalize knowledge transfer.
• Implement Lean Management System.
• Select priority customer-facing Value Streams,.
• Complete first set of Value Stream improvement events.
• Deliver and measure benefits.
• Evaluate the overall Lean deployment approach.
Initiate Integrate Sustain
• Continue implementation of Lean Management System and in the creation of Lean culture of continuously improving service and operating efficiency.
• Establish systems and infrastructure to embed the change.
PwC
Value Stream Mapping and Training
Introduction to Lean
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Daily View of Value Stream Mapping Event
Day 4 •Finalize Presentation. •Dry Run of Presentation.
•Team Presentation to Sponsors and Executives.
Day 3 •Validate Future State Map. •Implementation Plan.
•Benefits Capture & KPI’s. •Presentation Development.
Day 1 •Value Stream Training. •Waste Identification.
•Current State Mapping. •Issues Identification.
Day 2 •Root Cause Analysis. •Brain Storm Solutions. •Identify Improvements. •Future State Mapping.
Day 1 Deliverables
•Deliver Lean/VSM Training
•Current State Map
•Key Issues Documentation
Day 2 Deliverables
•Data Analysis and Review
•Identification of Improvement Opportunities and Solutions
Day 3 Deliverables
•Future State Process Map
•Implementation Plan
•KPIs / Metrics Plan
Day 4 Deliverables
•Communication Plan
•Close Out Presentation
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Introduction to Lean
PwC
Lean Training – everyone gets trained
Introductory Level
• Introduction to Lean for Executives (2 days)
• Introduction to Lean for Managers and Supervisors (1 day)
• Introduction to Lean for Staff (1 day)
Advanced Training and Certification
• Lean Leader Training (3 days)
• Lean Six Sigma Green Belt (5 days)
• Lean Six Sigma Black Belt (20 days)
• Lean Six Sigma Master Black Belt (10 days)
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Develop a culture of “Lean Thinking” through training,
coaching and “doing” Lean
Introduction to Lean
PwC
Lean Management System – Building a Lean Culture
Introduction to Lean
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PricewaterhouseCoopers LLP
Lean Culture
Philosophy and values of the Toyota Production System (TPS):
Continuous improvement
• Long-term vision; go to the source of the issue or problem
Respect for people
• Respect others and build mutual trust; maximize individual and team performance
Be close to the workplace
• Leaders should have an intimate knowledge of how work is getting done
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Introduction to Lean
PricewaterhouseCoopers LLP
Building a Lean Culture – Lean Management System
Approach to:
• Optimize what managers and teams do, how they do it, and the tools they use
• Assist organisations to act and behave differently from the past and be equipped with the internal management capabilities to channel resources effectively and efficiently towards accomplishing the vision
• Support, encourage and identify problems (and opportunities)
• Execute and sustain continuous improvement
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Introduction to Lean
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The management system elements are introduced incrementally through structured weekly learning cycles
Coaching Training
Design
Construct
Implement
Review
Learning Cycle Week
1 2 3 4 5 6 7 8
Information Centres
Performance Reviews
5S & Visual Management
Problem Solving
Standards
Process Confirmation
Coaching & Capability
Routines & Practices
Vision
Celebrating Success
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PwC
Thank you for your participation! Questions?
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