1.
Lean Office Overview
Improving Workflow and Efficiency in Administrative Processes
Quantum Associates, Inc 2015

2.
What is Lean?
• Lean focuses on eliminating waste in
processes
• Lean is not about eliminating people
• Lean is about expanding capacity by reducing
costs and shortening cycle times
• Lean is about understanding what is
important to the internal or external customer
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3.
Thinking Lean
• Specify value
– can only be defined by the ultimate customer
• Identify the value stream
– exposes the enormous amounts of waste
• Create flow
– reduce batch size and WIP
• Let the customer pull product through the value stream
– make only what the customer has ordered
• Seek perfection
– continuously improve quality and eliminate waste
From Lean Thinking by Womack and Jones
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4.
“In America today we have good people
working in poor processes.What we want
is good people working in great processes”
Michael Hammer
Thinking Lean
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5.
Benefits
• Lean provides tangible benefits
• Reduces costs not just selling price
– Reduces delivery time, cycle time, set-up time
– Eliminates waste
– Seeks continuous improvement
• Improves quality
• Improves customer ratings and perceptions
• Increases overall customer satisfaction
• Improves employee involvement, morale, and company
culture
• Helps “transform” organizations
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6.
Definitions
• Value - A capability provided to a customer at
the right time at an appropriate price, as
defined in each case by the customer.
Features of the product or service,
availability, cost and performance are
dimensions of value.
• Waste - Any activity that consumes
resources but creates no value
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7.
Three Types of Office Activities
• Value-added activities
• Business non-value-added
activities
• Non-value added activities
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8.
Value-added Activities
• Those steps the customer is willing to pay for
• To qualify as value-added an activity must meet
the following criteria:
– It changes the form, feature, or function that
the customer desires
– It must be “done right the first time”
– The customer is willing to pay for it
“It is the customer who determines what a business is.What the
customer thinks he is buying, what he considers ‘value,’ is decisive—it
determines what a business is, what it produces and whether it will
prosper.” –Peter Drucker
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9.
Business Non-Value-Added Activities
• Activities the customer isn’t willing to pay
for but must be done to comply with
regulations, organizational policies, and so
on
• You must periodically examine these
activities to make sure they are necessary, if
not eliminate them
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10.
Non-value-added Activities
• Those activities the customer is not willing
to pay for and can be avoided
• Your goal should be to eliminate these
activities because they are WASTE
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11.
Types of Waste
• Overproduction
• Excess inventory
• Defects
• Non-value added processing
• Waiting
• Excess motion
• Transportation
• Underutilization of people
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12.
Eight Service Industry Wastes
1. Errors in documents
2. Transport of documents
3. Doing unnecessary work not requested
4. Waiting for the next process step
5. Process of getting approvals
6. Unnecessary motions
7. Backlog in work queues
8. People not working to their full potential
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13.
Examples of Office Process Waste
•Too many signature levels
•Unclear job descriptions
• Obsolete databases/files/folders
• Purchase Orders not matching quotation
• Errors – typo’s, misspelling, wrong data
• Waiting – for information, at meetings, etc.
• Poor office layout
• Unnecessary E-mails
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14.
The Eight Deadly Wastes
• Waiting Waste
– Waiting for anything—people paper, machines or information
– Waiting means idle time, and that cause the flow of work to
stop
– Documents waiting in your in-box or emails waiting to be
answered, documents waiting for approval
To Eliminate this Type of Waste
• Review and standardize required signatures to eliminate unnecessary
ones
• Cross train employees to allow work to continue when someone is out
• Balance the workload throughout the day to make optimum use of
people
• Make sure equipment and supplies are available
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15.
The Eight Deadly Wastes
• Transportation Waste
– Transporting something farther than necessary
– Temporarily filing, stocking, stacking, or moving materials,
people, information or paper
– Transportation waste can occur where work stations are not
properly laid out
To Eliminate this Type of Waste
• Make the distance over which paper, information, etc is moved as short
as possible
• Eliminate any temporary storage or stocking locations
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16.
The Eight Deadly Wastes
• Over-Processing Waste
– Unnecessary effort which adds no value to a product or
service
– Redundant activities such as checking someone else’s work
– Obtaining multiple signatures or excessive reviews
To Eliminate this Type of Waste
• Review the value-added steps in each process, and streamline or
eliminate steps whenever possible
• Review all signature requirements and eliminate signatures whenever
possible
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17.
The Eight Deadly Wastes
• Inventory Waste
– Any supply of materials in excess of what is required to deliver
services in a Just-In-Time Manner
– Unneeded files, extra supplies, and unnecessary copies
– This waste is also related to time. Time is a valuable
commodity in the office environment, and a work unit sitting on
someone’s desk is waste
To Eliminate this Type of Waste
• Produce only enough to satisfy the requirements of your downstream
customer
• Standardize work locations and the number of units per location
• Make sure that work arrives at the downstream process when it is
needed and doesn’t sit there
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18.
The Eight Deadly Wastes
• Motion Waste
– All unnecessary work or people movement
– Ineffective job processes and layout contribute to more
walking, reaching or bending than necessary
To Eliminate this Type of Waste
• Standardize folders, drawers, and cabinets throughout the area—use
color codes
• Arrange your files (paper and electronic) in such a way to easily
reference them
• Arrange work areas of office equipment in central locations—consider
purchasing additional equipment to eliminate multiple trips
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19.
The Eight Deadly Wastes
• Defect Waste
– Waste as a result of defective work
– Rework—doing something over
– Incorrect information on a form or missed deadlines
To Eliminate this Type of Waste
• Establish standardized work procedures and office forms
• Create and post visual job aids
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20.
The Eight Deadly Wastes
• Skills Underutilization
– Is a result of not placing people where they can
(and will) use their knowledge, skills, and abilities
to the fullest
To Eliminate this Type of Waste
• Involve people in the lean transformation
• Empower your staff to make improvements
• Listen to new ideas for improvement and implement them when
possible
20Quantum Associates, Inc 2015

21.
Lean vs. Traditional
• Major reduction in sales-order cycle time by
59 percent (from 23 hours to 9 hours)
• Engineering change-order cycle time decreased by
91 percent (from two hours to ten minutes)
• Response time to customer’s quote requests reduced
by 83 percent (from 66 hours to 11 hours)
• Errors by company employees were reduced by 69
percent
(Tonya, 2004)
21Quantum Associates, Inc 2015

22.
Lean Enterprise vs. Traditional
• Half the hours of engineering effort
• Half the product development time
• Half the investment in machinery, tools and
equipment
• Half the hours of human effort
• Half the defects in the finished product or service
• Half the space for the same output
• A tenth or less of in-process inventories
Source: The Machine that Changed the World, Womack, Jones, and Roos, 1990.
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23.
Barriers to Lean
• Implementing Lean Can Be Difficult Because it is
Counterintuitive from a Traditional Paradigm:
– Providing documents or information at the rate demanded by the
customer instead of batching documents
– Cross training instead of putting activities on hold until the one person
who knows how to perform the activity can get to it
– Using standards to continuously improve.
• There is no step-by-step cook book
– There are some basic steps but the how-to varies from organization
to organization
– Requires an assessment of the company in order to map out the
strategy
• Company culture plays a big part in the how-to
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24.
Implementing Lean
• Gain top Management “Buy In” and Support
• Perform overall company assessment tied to company strategic,
operational, and marketing plans
• Develop strategic lean deployment plan
• Integrate customized training with lean to improve specific skill sets,
leverage training resources
• Team Building, Communications, Problem Solving, Change
Management, Lean Manufacturing Tools
• Conduct “Kaizen blitz” high impact events
• 5S, Work Cell, Set-Up Reductions, Inventory Reductions, Work
Standardization
• Use an enterprise wide approach to help “Transform” your culture and
the way you do business.
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25.
Progress Toward Lean
• Smaller batch sizes
• Increased capacity / throughput
• More available floor space
• Improved workplace organization
• Improved quality : reduced defects / re-work
• Reduced lead times
• Improved participation & morale
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26.
Some Lean Concepts
• Kaizen
• Pull
• Lean Office Suggestions
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27.
What is Kaizen?
• Kaizen (Ky’zen)
• “Kai” means “change”
• “zen” means “good (for the better)”
• Gradual, orderly, and continuous
improvement
• Ongoing improvement involving everyone
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28.
How to Kaizen
• Identify the customer
• PDCA Cycle
– Plan – identify what to change and how to do it
• Current state
• Future state
• Implementation plan
– Do – execute the improvement
– Check – ensure the improvement works
– Adjust – future and ongoing improvements
– Repeat
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29.
Kaizen—Identify the Customer
• Value added is always determined from the
customer’s perspective.
• Who is the customer?
• Every process should be focused on adding value
to the customer.
• Anything that does not add value is waste.
• Some non-valued added activity is necessary waste
(“NVA-R”)
– Regulatory
– Legal
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30.
Kaizen—Identify the Current State
• Crucial first step in process improvement
• Deep understanding of the existing processes and
dependencies
• Identify all the activities currently involved in
developing a new product
• Observe the process first hand
• Identify Value Added (VA), Non-Value Added
Required (NVA-R), and Non-Value Added (NVA)
• Generally creates more questions than answers
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31.
Kaizen—Brainstorm and Analyze
• Kaizen team brainstorming to develop new process
• Post improvement ideas on map or by category
– Workflow
– Technology
– People / Organization
– Procedures
• Develop detailed future state map
– New workflow
– Value Add and Non-Value Add
– Cycle times
– Identify Kaizen “bursts” (immediate radical change)
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32.
Kaizen—Implementation Plan
• Think global / systems optimization
• Maximum impact to process
• Speed of implementation – create small
victories
• Cost-benefit analysis
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33.
Kaizen—Execute
• Develop a concise, achievable milestone plan
• Communicate the plan to everyone
– Suppliers
– Team members
– Customers
• Track activities in public
• Celebrate small victories and publicly analyze
failures
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34.
Kaizen—Check and Sustain
• Meet regularly (weekly?) to review status of
open implementation items
• Re-evaluate Future State regularly
(quarterly?) for additional improvement
• Track results on a public Kaizen Board
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35.
Kaizen Blitz
• Total focus on a defined process to create
radical improvement in a short period of time
• Dramatic improvements in productivity,
quality, delivery, lead-time, set-up time, space
utilization, work in process, workplace
organization
• Typically five days (one week) long
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36.
Kaizen Blitz - Agenda
• Day 1: Setting the scene
– Meet the team, training
• Day 2: Observe the current process
– Flowchart, identify waste, identify root causes
• Day 3: Develop the future state process
– Brainstorm and flowchart (typically the longest day!)
• Day 4: Implement the new process
– Plan, communicate, implement, modify
• Day 5: Report and analyze
– Performance vs. expectations
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37.
10/15% 10/20% 5% 60/75%
90%5% 5%
Adm/clerical
-filing
-typing
-mailing
-gathering data
General phone
Inquiries from
members
Fill in for
Other staff
Loan Processing
Phone inquiries
Loans only
Fill in for
Other staff
Loan Processing
Example – Financial Institution
Time spent by Loan Processor – Old Process
New Lean Process after Kaizen Event
NVA
VA
BNVA
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38.
Roadblocks To Kaizen
• Too busy to study it
• A good idea but the timing is premature
• Not in the budget
• Theory is different from practice
• Isn’t there something else for you to do?
• Doesn’t match corporate policy
• Not our business – let someone else analyze it
• It’s not improvement – it’s common sense
• I know the result even if we don’t do it
• Fear of accountability
• Isn’t there an even better way?
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39.
Why Pull?
Lean is really about minimizing waste
• Which is about only creating work (or
work units) required by the
downstream process (or customer)
• Which is about seamless continuous
flow
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40.
Continuous Flow
• Continuous flow means producing work
according to three key principles
– Only what is needed
– Just when it is needed
– In the exact amount needed
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41.
• Actual customer demand drives the process.
• It creates a system of cascading requirements and
delivery instructions from downstream customers to
upstream processes in which nothing is produced by the
upstream supplier until the downstream customer signals
a need.
• The rate of production for each product/service is equal to
the rate of customer demand.
Pull Production
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42.
Lean Office Suggestions
• 5S Discipline
– Segregate your information into three categories
(applies to hard and electronic information)
• Working
• Reference
• Archive
– Then cull the obsolete garbage.
– Benefit
• Reduces the waste of motion and time spent searching for
your work
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43.
Lean Office Suggestions
• Keep the Value Stream Flowing
– Focus on keeping your value stream flowing. Deal with
the work that enters your system—an email, a phone call,
a memo, a project, etc—by taking one of four courses of
action (4Ds):
• Doing it
• Delegating it
• Designating time to address it
• Dumping it
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44.
Lean Office Suggestions
– Benefits
• When you rigorously apply the 4Ds nothing will return
to the inbox
– Value will continue to move forward
– Significant reduction in the amount of time spent working a
backlog
– Significant reduction in the amount of time spent processing
emails
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45.
Lean Office Suggestions
• Smoothing the Flow
– Cut down needless interruptions with schedules—times that
each employee is available for meeting for conversation
– Establish sustainable service level agreements for email
responses rather than supporting the expectation of instant
response
– Reduce the amount of multi-tasking in favor of single tasks,
creating the understanding that doing one task at a time is
actually faster and more efficient
– Benefits
• Significant reduction in time lost due to interruptions
• Improved productivity
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46.
DO NOT BE
AFRAID, MY
FRIEND
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