Lean Office

LEAN
OFFICE
CREATING VALUE FOR CUSTOMERS

© Operational Excellence Consulting. All rights reserved.

Objectives
By the end of the course, you would be able
to:
• Understand the principles and key concepts of Lean
• Identify value and waste

• Gain an overview of key Lean principles and tools, and
their applications
• Apply 5S principles to improve workplace organization
and efficiency

• Apply a simple problem solving process
Copyrights of all the pictures used in this presentation are held by their respective owners

3

1
INTRODUCTION
TO LEAN OFFICE

What Lean IS NOT
• Laying off employees by the bus load

• Offshoring or outsourcing
• Delivering less or working harder
• Being mean to people
• Automation or implementing an IT system
• Narrow focus on unit cost management
• Another “extracurricular activities”

7

Lean Office Framework
(a.k.a. Toyota Production System)
1 Stability

Goals:
highest quality,
lowest cost, shortest lead times

2 Standardization
3 Just-In-Time

3 Just-In-Time

• Continuous flow

4 Jidoka

Jidoka

Involvement
5

• Separate man &

• Takt time

machine work

• Pull system

5 Involvement

4

• Abnormality
Identification

• Flexible workforce

• Poka yoke
2

Heijunka

Standardized Work

Kaizen

1 Stability


9

What does Lean in a office/service
environment look like? (1/2)
Application

Common Issues

Typical Solutions

Banks
• Mergers and
acquisitions
• Loans application

• Differences in

• Process integration and

business practices
• Loans approval
process

streamlining
• Fast track processing
for low-risk loans

IT
• Outsourced
managed services

• Complicated tasks
• Unbalanced capacity
• Manpower utilization

• Segmenting complexity
• Pooling resources for

Telco
• Procurement
• Call centre
operations

• Cost-based and capex • Inventory management
management
• Network sharing
• Customer service
• Channels efficiency

economies of scale
• Flexible manpower
systems

Source: Operational Excellence Consulting Research

11

Benefits of Lean Office
• Improved customer satisfaction (internal and
external)
• Improved quality of products/services
• Improved productivity

• Reduced paperwork
• Reduced staff stress (e.g. searching for
information)

• Engaged employees


13

Methods to Increase Productivity
More Staff

Quantitative
Approach

More Machines

Work Longer

How to Increase
Productivity?

Work Harder
Qualitative
Approach
Eliminate Waste
& Simplify

Focus of
Lean

Let’s work smarter!

15

Waste take up a significant amount of
time and costs which can be eliminated
Manufacturing Sector

Services Sector

Value
Adding
15%

Non-Value Adding
85%

Value
Adding
25%

Non-Value Adding
75%

Waste are the hidden costs and time
which the customer is not paying for

17

20 minutes of waste a day…
• Find a way to remove
20 minutes of waste
from your daily work
routine

• This will add up to 2
weeks over a one year
period


19

Types of Waste
Over-Production

• Creating reports that no one needs or
making extra copies
• Exceeding customer needs (“goldplating”)

• Exceeding scope of agreement
• Purchasing items before they are
needed (e.g. items on sale)

• Providing more information than the
customer needs

21

Types of Waste
Waiting

• Waiting to be served
• Waiting for
instructions, approvals, information or
decisions
• Seeking clarifications (due to unclear
communications)
• Equipment/System downtime
• Waiting between assignments or
projects

• Out-of-stock

23

Types of Waste
Unnecessary
Motion

• Reaching, bending or unnecessary
motion due to poor ergonomics and
office layout
• Unnecessary walking to utility room
• Searching for information in internet,
intranet or shared folders
• Searching for tools, files and supplies
• Lack of or sub-optimal SOP
• Handling paperwork

25

Types of Waste
Defects

• Data entry errors, mistakes or rework
• Missing information, missed
specifications, or lost records
• Poor process controls
• Managing subcontractors to correct
mistakes
• Incorrect schedules and information
• Inadequate trials before full
implementation
• Lost or damaged goods


27

Examples of Value-Added Activities
• Entering orders

• Translating materials
• Creating codes
• Preparing drawings or artwork
• Assembling goods
• Shipping to customers


29

“We must always
keep in mind that
the greatest waste
is the waste we
don‟t see.”
- Shigeo Shingo,
a Japanese industrial engineer and
expert on the Toyota Production
System


Lean Principles
1. Specify value from the customer‟s perspective

2. Identify the value stream for each service
family
3. Make the service flow
4. Deliver when the customer pulls from your
operations (just in time delivery)
5. Manage towards perfection
Source: Lean Thinking by James P. Womack and Daniel T. Jones

33

Lean Methods & Tools
• Many Lean techniques and tools are available
• Adopters are free to choose which techniques
and/or tools can be used to help them improve
efficiency and create additional value
• We will look at some Lean techniques and tools
in the following slides that are applicable to
office and lab environments


35

Go to “Gemba”, observe, recognize
Waste and take steps to eliminate it
• “Gemba” means the place where the real actions take
place
• It usually refers to the place where employees have
direct contact with customers

• “Gemba” is where the value-adding activities to satisfy
the customer are taken place
• One place that is not “Gemba” is a manager‟s desk

When was the last time you made your
“Gemba” walk?

37

What is 5S?
5S Is…
• Daily organization,
maintenance and
cleaning of an area
• Cornerstone for visual
management
• The building blocks for
developing a Lean
culture

• Setting up an area in the
most efficient manner
possible

5S Is Not…
• A thorough spring
cleaning
• A way of getting ready
for an upcoming tour

• A way to keep
employees busy during
slow periods
• Organizing and cleaning
everything that currently
resides in a work area


39

Meaning of 5S
Principles

General Description

1S

Sort

Remove what is not needed and keep
what is needed

2S

Set in Order

Arrange essential items in order for
easy access

3S

Shine

Keep things clean and tidy; no trash or
dirt in the workplace

4S

Standardize

Establish standards and guidelines to
maintain an organized workplace

5S

Sustain

Make 5S a habit and teach others to
adhere to established standards

41

1S : Sort
• Principle
 Stratification management

• Meaning
 Separate the necessary
from the unnecessary
 Get rid of what you do not
need

“When in doubt,
move it out!”

43

Attach Red Tags
• Fill in everything
except disposition

G42

• Perform tagging swiftly
Hydraulic Motor
3
Not in Use

06/13/2007

• Place tags on all items
in question
• Move “tagged items”
to a holding area


45

2S : Set In Order
• Principle
 Functional storage
 Search elimination

• Meaning
 Find a permanent place for all
needed items
 Arrange needed items in order for
easy access

“A place for everything, with
everything in its place.”

47

2S : Set In Order – Practice Tips
• Painting / color coding floors
• Zoning and placement marks
• Removal of old and obsolete information on
notice boards, intranet and shared drive
• Archiving of electronic files
• Creating cabinets for storing cleaning supplies
and materials used occasionally


49

2S : Set In Order - Examples

Marker pens sorted by color

5S on desk top drawer

Cabinet filing with labels

Files are color-coded and
neatly arranged on desk

A diagonal stripe was taped
on to the spines of a set of
binders. At a glance, anyone
can tell if any file is missing.

51

Which is cleaner – Your keyboard or
the toilet seat?
A 2004 study by Dr. Charles
Gerba of the Univeristy of
Arizona found keyboards have
on average 3,295 germs per
square inch versus a toilet
seat which has 49 germs per
square
inch. Gerba say, “Desks are
really bacteria cafeterias.”

Clean your keyboard. Researchers recommend that you should
give your keyboard a good “spring cleaning” by dusting off
crumbs and cleaning with an appropriate disinfectant.

53

4S: Practice Tips
• Make best practice common practice
• Create templates for all forms
• Systematically review and update SOPs and job
instruction sheets
• Set in place the rules and policies that support
the first three steps, e.g. designated areas,
proper marking of areas, a log of what goes
where, etc.

55

5S : Sustain
• Principle
 Habit formation
 Disciplined workplace

• Meaning
 Make 5S a habit
 Conduct regular „gemba‟ walks
 Schedule for 5S audits

 Communicate
“Maintain the gain, forget the
blame.”

57

5S your computer hard/shared drive
5S Principle

Description

Sort

• Check all your files and software, and get rid of any that
are unnecessary

Set In Order

• Organize your files and optimize the use of file folders
• Keep in mind how often you need them and how much
time you need to store them
• Create specific shortcut icons for the most used files or
programs

Shine

• Eliminate any files under deleted items, sent items and
the recycle bin

Standardize

• Establish procedures for maintaining your computer 5S
system

Sustain

• Include hard drives in 5S audits
• Focus on how people maintain files and program
organization, and the time they spend ding so

59

Everyday Visual Management


61

3 Types of Visual Office
Visual
Display

• Label to make it perfectly clear
where things belong and what the
procedures are

Visual
Metrics

• Quantify the path to targets for
success
• Graphs and Pareto charts

Visual
Controls

• Create an error-proofed
environment to promote easy
adherence to standards

63

Visual Control Objective
• The objective is to implement an effective Visual Control
system that provides the necessary level of control to
achieve and sustain service improvements while
maintaining high productivity and quality.
Cycle Time Reduction

Product Profitability

Process Costs

On Time

100%

Rework

WIP Backlog

Internal Quality

Revenue


Late Delivery

65

Daily Standup Meetings

Agenda
• Yesterday‟s issues
• Lessons learned
• Manpower status
• Update from top management
• 5S & Kaizen activities
• Today‟s target & actions


67

Why Office Layout?
• Ensures most efficient layout for employees and work
flow
• Reduce or eliminate excess travel and motion wastes
• Allows for workforce flexibility via sharing of work when
necessary
• Provides foundation for small lot work flow
• Can be U-shaped or L-shaped, depending on area
• Facilitates communication and reinforces team work
• Increases organizational process knowledge, versus
individual process knowledge

69

Value Stream Defined
• Value Stream - All of the activities, required to
fulfill a customer request from order to delivery.
Value Stream
Process 1

Customer
Request

Process 3

Process 3

Customer
Receipt


71

Value stream mapping provides an overview
of the end-to-end administrative process
Information flow
Supplier/
Customer

Management
Control

Customer

Work & Information Flow

• Creates an end-to-end view of the system
• Demonstrates interaction between material/work and information flow
• Provides a common visual language for understanding a complex system

73

Current State Value Stream Map
Purchasing – Non-repetitive purchases less than $5,000


75

Future State Value Stream Map
Purchasing – Non-repetitive purchases less than $5,000


77

Standard Work supports a culture of
continuous improvement
Control Points
Materials &
Information

Machines
(equipment)

Methods

People

Measurements

Feed in materials
& information

Ship to customers

Customer
request

That’s not what
they ordered!

Sloppy work =
defective, off-standard
products

Different
product
Standard

Elements for Building Quality into products

79

Standardization

Takt Time = 10 seconds


81

Heijunka
• Leveling the type and
frequency of service delivery
over a fixed period of time
• This enables the service
provider to efficiently meet
customer demands while
avoiding batching and
results in minimum
inventories, capital costs,
manpower, and delivery lead
time through the whole value
stream

Mura and Muri can be
improved by balancing
the work load

83

Heijunka – Lean Levers Can Be Applied to
Reduce Waste
1
2
3
4
5

6
7

Segmenting complexity

Form separate channels for complicated tasks so that simple
ones are not held up

Redistribute activities

Align activities with appropriate skill set and group

Pool resources

Utilize existing skills and resources to reach economies of
scale

Flexible manpower systems

Balance processing capacity with the ongoing demand by
moving people to where the work activity is

Reduce incoming work

Eliminate tasks from a person by reducing the actual work
activity arising

Reduce NVA work

Eliminate work that does not directly add value to the end
customer

Standardize operations

Establish best practices to execute a task


85

Philip Crosby: Law of 10

1

Minimal defects due to preventionbased activities

10

Defects found within the company
and corrected internally

100

Customer finds defects and makes
complaints


87

Quality at Source
• Quality means meeting requirements
 Needs
 Expectations

• Every staff is an inspector, not the next person
in the process or the customer
• We can use tools such as poka yoke (mistakeproofing) and visual control to prevent errors


89

Poka-Yoke (Mistake Proofing)
• Poka-yoke is a Japanese
term that means "mistakeproofing"
• Poka-yoke refers to
techniques that make it
impossible to make mistakes
• Poka-yoke helps people and
processes work right the first
time


91

Poka Yoke – Dual Focus
People and systems do make mistakes.
A portion of mistakes turn into defects.
Prevention
Poka-Yoke that focuses here
works on mistake prevention or
making mistakes impossible.

Process

Mistakes

Defects
Detection

Poka-Yoke that focuses here
works on mistake
detection, or making sure
mistakes do not turn into
defects.

93

What is Kaizen?
• The Japanese word “Kaizen” (改善) means
change (KAI) to become good (ZEN).
Kai

Zen

改善
Change

Good


95

10 Rules of Kaizen 1
1. Discard conventional rigid thinking about
service delivery.
2. Think of how to do it, not why it cannot be
done.

3. Do not make excuses. Start by questioning
current practices.
4. Do not seek perfection. Do it right away if for
only 50% of target.
5. Correct mistakes at once.

97

Kaizen Event
• Rapid, focused application of Lean to reduce waste to
improve cost, quality, delivery, speed, flexibility and
responsiveness to customer needs
• 3-5 day dedicated event
• Clear objective and scope
• Continuous small
improvements
• Changes are
implemented quickly
Source: "The Idea Generator” by Norman Bodek

• Everyone gets involved


99

Lean Kaizen Storyboard

To: ___________________
By: ___________________
Date: __________________

THEME: Concise statement of what this Kaizen is about.
BACKGROUND:
• Note any contextual or background information necessary to
fully understand the issue.
• Indicate how this problem affects the company‟s goals or is
related to its values.

TARGET CONDITION:
• Insert a diagram that illustrates how the proposed process will
work, with labels.
• Note or list the countermeasure(s) that will address the root
cause(s) identified.
• Predict the expected improvement in the measure of interest
(specifically and quantitatively)

CURRENT CONDITION:
• Insert a diagram that illustrates how the current process
works.
• Label the diagram so that anyone knowledgeable about the
process can understand.
• Note the major problems
• Include quantified measures of the extent of the problem –
graphical representations are best!

IMPLEMENTATION PLAN:
• List the actions which must be done in order to realize the
Target Condition, along with the individual responsible for the
action and a due date.
• Add other items, such as cost, that are relevant to the
implementation.

ROOT CAUSE ANALYSIS:
• List the main problem(s)
• Ask appropriate “why?” questions until you reach the root
cause. A rule-of-thumb: you haven‟t reached the root cause
until you‟ve asked “why?” at least 5 times!
• List the answers to each why question

Action

Responsibility

Action 1
D. Smith
Action 2
N. Jones
Action 3
M. Jordan
Etc.
COST: no expenditures required

Deadline
Oct. 1
Nov. 5
Nov. 28

FOLLOW-UP:
Plan



Note the plan to measure the
effectiveness of the proposed
change.
Indicate when it will be
measured, and by whom.


Actual




Leave blank initially
After follow-up, record
the results of
implementation
Record the date of actual
follow-up

101

PDCA Problem Solving
• A systematic approach
to process
improvement

Act
• Provides the
framework for a team
to carry out
improvement

Plan

Check

Do


103

Pareto Chart
• Purpose
 To show relative importance of a set of measurements
 Also called the “80/20” rule

• When to use
 To differentiate the „vital few‟ from the „trivial many‟
 After improving a process, to show relative change in
a measured item

 Sorting a set of measurements to emphasize their
relative sizes


105

Example: Pareto Chart
Pareto Chart
Pizza Defects

35

120%

30

Occurences

25
80%
20
60%
15
40%
10
20%

5

-

Wrong Toppings ColdPizza Late
Pizza
Wrong Crust
Tastes Forgot Breadsticks No Change in Box
Bad
Driver Had Smashed Wrong Price
Driver Rude All other

Quantity

29

25

22

13

10

7

4

3

2

1

25%

46%

64%

75%

84%

90%

93%

96%

97%

98%

100%

% of Total

25%

21%

19%

11%

8%

6%

3%

3%

2%

1%

0%

2

Cum %

Cumulative Percent

100%

2%

Time Period:

January-02


107

Cause & Effect Diagram
(a.k.a. Ishikawa Diagram, Fish-bone Diagram)
• Purpose
 To identify and structure the causes of a given effect

• When to use
 When investigating a problem, to identify and select
key problem causes to address
 When effect of a problem is known, but possible
causes are unclear

 To find other causal relationships, such as potential
risks or causes of desired effects

109

Example: Cause and effect diagram used in solving
the problem of “Late Payment of Invoices”
Internal Mail
System

Computer
System

Cost-Reduction Program
Older System
One Pick-Up Daily

Excess
Demand

Downtime
Manual Sort
Process
New
Excess
Maintenance
Demand Contractor

Access Limitations

Workspace

Equipment
Lost/Misplaced Mail
Turnover

Low Priority

Inexperienced Staff
Hiring
Freeze Turnover
Access Limitations

Paycuts
Productivity
Deadlines

Morale

Overtime
Reduced

Staff

Low Priority

Audit Recommendation
for Tighter Control
Centralized
Payment
Authorization

Maximize
Cash

Branch Offices
Forward Payments Weekly

Payment
Delays
Increased
Workload

Reorganization
of Purchase Org.

Missing Documentation
Resigned
No Limit Manager

Missing
Purchase Orders

Finance
Policy

Manual Crowded
Files
Space

Late
Payment
of
Invoices

Documentation


Legend
Validated
root causes

111

What Are “Kaizen Eyes”?
• Kaizen is continual improvement for the better.
• "Kaizen Eyes" see opportunities to improve.
These eyes are a skill that can be developed
through technique and practice.
• The following slides are ways (techniques) to be
practiced. They will help to widen the ability to
recognize opportunity that may not be in full
view.


113

Ways to Develop “Kaizen Eyes” 2
21. Record annoyances

31. Build something

22. Look from different frame (i.e.
quality, safety, materials)

32. Specify value through the eye of
the customer

23. Follow the flow

33. Start to Kaizen something

24. Do an experiment

34. Join an improvement team

25. Swim up the process

35. Create a poka-yoke

26. Test a theory

36. Brainstorm possibilities

27. Ask a child

37. Study other Kaizens

28. Look for patterns

38. Collect examples of improvements
from all parts of life

29. Understand the financials
30. Imagine what the activity would
look like with different staffing

39. Practice at home
40. Teach to a child


115

5
LEAN ROLES

Role of Lean Deployment Leader
• Responsible for the deployment of Lean within his/her region,
division or business unit
• Works with leaders of region/division/business unit to determine
their goals and objectives and ensure that they are aligned with the
executives
• Facilitates the identification and prioritization of projects
• Develops a communication plan for the region/division/business unit
• Reports the deployment status to the steering committee
• Selects the project champions

• Remove barriers for the team
• Share best practices


119

Role of Process Owner
• Takes ownership of the project when it is complete

• Is responsible for maintaining the project gains
• Removes barrier for Lean project teams
• Support the project team, e.g. make resources available

• Maintain the countermeasures and ensure that they are
active and compliant
• Participate in Lean project reviews


121

Role of Lean Team Leader
• Is responsible for leading, executing, and completing
Lean projects
• Teaches team members the Lean methodology and tools
• Assists in identifying project opportunities and refining
project details and scope
• Reports progress to the project champions and process
owners
• Transfers knowledge to other Lean Team Leaders and
the organization
• Mentors Lean Team Members

123

Critical Success Factors
• Management commitment

• Alignment to vision and mission
• Availability of resources
• Address “what is in it for me”
• Success measures and KPIs
• Management review
• Rewards and recognition


125

“Whether you
think you
can, or you
think you
can’t, you’re
right.”
- Henry Ford

Lean Office

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