Willowtree Advisors has designed a Lean Enterprise Initiative that includes a Lean transformation framework and a philosophy for Lean Six Sigma and Change Management approaches that could translate to any industry.

1. Lean Enterprise Initiative
Overview and Approach

2. Agenda
 Overview
 Approach
 Timeline
 Pricing
 Summary
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3. Overview

4. s
Lean Enterprise Initiative
“Words”
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5. Company Overview
 Denver Based Business Consulting Firm Recent Customers
• Business and technology strategy Local Customers
• Transformation State of Colorado OIT
• Optimization of internal assets (people and Arapahoe County Public Works
technologies) Arapahoe County IT
 Our goal: provide access to expert knowledge Western Disposal
and consulting at a reasonable price Denver Water
 Certified WOSB CO Dept of Natural Resources
National Customers
 Over 30 professional consultants
Tate and Lyle
• Certified in Lean, Six Sigma, PMI, TQM
EMC
• Experienced w/industry standards such as
Regis Corp
ITIL, CMMI, ISO 9000/9001 and Baldrige
Acadia
GSA (MOBIS)
Fast Flexible Focused
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6. Lean Project Experience
Private
Escapes BNSF
s
Veterans
Affairs BHP Billiton
Medical
Center
Center
Partners
Teleflex General
Medical Dynamics
Covidien Denver
Health
Rainbird
INTREX
Brambles
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7. Desired Outcomes
Increased Customer Satisfaction and Increased Employee Engagement
Engagement s
Satisfied and
Reduced Waste Supportive Increased Productivity
Customers
Strategically
Quantifiable Results Effective Tied to the Strategy
Relationships
and
Reputation
Financially An Efficient,
Strong and Effective and
Stable Strategically
Orgnization Driven
Organization
* Source : Client 2011 Strategic Plan
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8. Current Situation
 Rising Operating Costs  Sluggish Economy
 Wage Pressures  Risk of Reduced Service Levels
 Flat /Decreasing Revenues
s
Increasingly
Population Stringent
Growth Regulations
Conservation
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9. The Challenge
“70% of change initiatives fail.”
Michael Beer, and Nintin Nohria, Harvard Business Review
s
Leadership Employee
Commitment Engagement
Success
Stakeholder Solid
Communication Execution
Choose Your Team Wisely
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10. The “Words”
 Lean – An approach for business  Black Belt or Lean Facilitator – An
process improvement with a focus on expert in Lean methods who works
reducing waste in time, inventory and with teams to help them apply Lean
manpower methods and tools to business
process improvement activities
 Sensei or Lean Expert – A person who
has significant training and experience  Value Stream – A key business
with Lean tools, implementations and process that delivers a value (service
strategy or product) to the customer.
 A3 or Storyboard - A format for telling  Kaizen Event/RIE or Focus Event –
a story, or reporting results and/or One of several kinds of business
status on a single page improvement projects – focused on a
weeklong improvement workshop
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11. WTA Lean Transformation Framework - FLEX TM
JumpStart Traction Expand Sustain
• Assess and Align • Conduct Value • Conduct VSAs for • Conduct VSAs
Strategy
• Identify and Stream 50% for 100%
Prioritize Value Analyses for • Calibrate Strategic • Review and
Streams 25% Alignment Renew
• Define KPIs s
• Design • Form VS Teams • Expand VS
Governance
• Expand VS
Infrastructure • Implement Teams Teams
• KPI/Metrics Governance • Track and • Track and
• Governance Structure Report Results Report Results
Structure • Track /Report • Update Pgm • Accountability
• Templates
• Complete
`
• Design Approach • Implement • Expand Training
Adoption
• Training Adoption and Training Rollout
• Communication Approach Communication • Employee
• Change Mgmt • Rollout Comm, • Professional Engagement/
• Conduct Training Training Development Recognition
Deployment
• Conduct Pilot • Rollout Lean • Rollout Lean • Rollout Lean
• Evaluate Process to Process to Process to
Results 25% of Scope 50% of Scope 100% of Scope
• Followup
Program Management
18-24 months+
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12. Phase One - Alignment
Alignment Phase Duration Activities/ Deliverables Target
Completion Date
Jump Start 8 Weeks  Program/Phase Logistics
s
Month 2
 Review of Key Materials
 Executive Alignment Session
• Identify Key Business Processes
• Identify, Select & Prioritize Value
Streams
 Infrastructure Design
• Governance
• Communications
• Training and Change Mgmt
 Implementation Approach
 Conduct Pilot
 Phase One Summary Report
What starts right, stays right.
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13. Phase Two - Implementation
Implementation Duration Activities/ Deliverables Target Completion
Phase Date
Traction 12 - 18 Program Framework, Governance and
s Month 3 - 20
months Infrastructure Implementation
• Communications, Training and Change
Management Plans
• Tracking /Measurement/ Reporting/
Problem Solving Tools, Templates and
Processes
Value Stream Analysis and Mapping
Workshops
Lean Team/Facilitators Training
Focus Event Facilitation and Report Outs
Workforce Orientation
Quarterly Reviews / w Lean Expert (s)
Early traction drives success.
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14. Phase Two - Implementation
Implementation Phase Duration Activities/ Deliverables
Expand 18 - 24 Continuation of Traction Deliverables, as requested
s
months Periodic/on-request support, coaching, training and
quality reviews as requested
Quarterly Reviews / w Lean Expert (s)
Sustain 18 - 24 Periodic/on-request support, coaching and quality
months+ Quarterly Reviews / w Lean Expert (s)
“Do or do not. There is no “try”.” -- Yoda
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15. Benefits of Our Approach
 We understand the challenge
 We have an approach that works
 We can get the job done
 We’ve price our services reasonably
 We have a vested interest in helping you be successful
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16. Approach

17. “A true Lean transformation must begin with people.”
s
Carey and McConnell
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18. What Does the Client Require?
Manage Change Plan for dealing with the impact that implementation of Lean practices has on the culture
Focus Improvements A method to identify and prioritize value streams and business processes for improvement
s
Assistance with the identification of specific and measurable key performance indicators
Measure Results
Development of a leadership team representative of all company employees and functions,
Develop Leaders empowered and capable of implementing the Lean Enterprise Initiative
Training in and use of a method for quickly evaluating and implementing changes to business
Proceed with Speed processes/RIE/Kaizen Events
A training plan and program for key staff members that allows for a gradual transition to
Train Effectively employee-led process improvement efforts.
A method to track and report hard dollar savings that result from Lean exercises and
Validate Contribution improvements to business processes
Assist client’s Communication team to provide clear messaging about the Lean Initiative and its
Communicate Clearly results through key internal and external stakeholders
Although efficiencies can be achieved through attrition or reassignment of personnel, the Lean
Eliminate Waste not People Initiative will not be a tool or justification for layoffs or reductions in force.
The Lean Program should not be a “canned” version of initiatives completed for other
Tailor Initiatives organizations and should be flexible and adaptable for the company’s mission
Although the consultant will have a direct and significant role in developing and leading the
Transfer Knowledge program initially, the long term goal is to train and transition skills to company employees
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19. Tailor Initiatives
WTA Lean Approach
Our Philosophy
 The basics are the same, but the  Choose the tool that works best for
details vary. - Recognize that each the situation. - Start with basic Lean
client and each culture is different. templates and approaches.
 Be on the leading edge, not bleeding  What worked somewhere else is a
edge. Focus on leveraging lessons good starting point, not necessarily
learned from other industries and the end point. Modify standard
incorporate best practices from approaches to fit the specific client
previous projects. environment and objectives
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20. Tailor Initiatives
WTA Lean Approach
What we have learned…
 “Brand” the initiative to create internal and
external interest and ownership.
 Pay attention to other initiatives, and learn
from their experiences.
 Don’t worry about getting it “perfect”, just
do what is right for your business and your
customer.
 Coordinate with current projects so as to
optimize resources and ensure alignment.
 Don’t take on too much at once.
 Have fun!
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21. Change Management Approach Manage Change
 Our approach embodies aspects of
change management throughout the
methodology:
• Quick Wins
• Coaching, mentoring • Transparency
• Communications • Accountability
• Governance • Sustainability
• Employee Empowerment
Results = Quality Solutions x
 Our approach
Acceptance
• Tailor the change approach in Phase One
• Deploy in Phase Two
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22. Develop Leaders
Developing a Lean Leadership Team
 Identify and involve leaders from all levels
of the organization
 Transfer Knowledge through
Observation, Participation, Repetition
and Ownership
 Develop a Recognition Program for
Leaders and Teams
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23. Communicate Clearly
Communications Approach
 Communicate early and often
 Communicate to both internal and external stakeholders
s
 Plan communication using stakeholder management tools
Stakeholder Map and Alignment Plan
Stakeholder Groups Key Stakeholders in this Hot Buttons, Concerns, Interests How will we engage What do they expect from Communication Communication
Group them? us? Opportunities Timeline
Stakeholder Group 1 Executives Overall Information on governance Face to face Same as Hot Buttons Governance Workshop One off event
responsibilities, process changes, discussions
roll-out, dry run & on-going metrics
Stakeholder Group 2 Mid Level Management Process changes directly affecting Calls and/or emails Contact List Governance Workshop One off event
employees & stakeholders; New Processes
interaction with new team; roll-out,
dry run & on-going metrics, escalated
issues
Communication is the foundation of organizational buy-in.
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24. “Waste is a tax on the whole people.”
Albert Atwood
s
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25. Proceed with Speed
Projects Overview
Overview
 Annually, Value Stream Analyses are
performed to identify and prioritize projects
for the upcoming year.
• Just Do Its
• Focus Events
• Short Term Projects
• Long Term Projects
 Focus Events (i.e. RIE, Kaizen) are focused
process improvement events intended to be
completed in one week.
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26. Focus Improvements
Lean Improvement Approach
Value Stream Analysis s Projects
Prepare for Conduct
VSA VSA Follow-up
Workshop Workshop
Prepare for Conduct Follow-up
Leadership/ Event Event
Value Stream
Alignment
Prepare for Conduct
VSA VSA Follow-up
Workshop Workshop
Prepare for Conduct Follow-up
Event Event
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27. Focus Improvements
Lean Initiative Structure Example
Leadership Team
Lean Program Manager/PMO
Value Stream Lean Team Value Stream
Exec Exec
Sponsor Sponsor
Lean Facilitator Lean Facilitator
WTA Lean Experts
Project Team
Project Team
Project Team Project Team
Project Team
Project Team
Project Team Project Team
Project Team Project Team
Project Teams include:
• Process Owner
•Team Lead
Value Stream A •Team Members Value Stream B
• SMEs
• Customers
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28. Focus Improvements
Leadership/Value Stream Alignment Process
s
Prepare Conduct Alignment Followup
Workshop
2 Weeks Prior to Workshop 3 Days During Next 1-2 Years
 Review strategic plan and budget  Introduction, approach  Conduct Value Stream
 Interview senior leaders  Process mgmt fundamentals Analyses for Key Business
 Define Key Business Processes Processes
 Finalize meeting logistics
 Metrics system  Perform followup activities, (e.g.
input to strategic plan)
 Strategic plan correlation
 Select Key Business Process and
potential Value Streams
 Select high level metrics (KPIs)
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29. Focus Improvements
Mapping Levels
Organization-wide Key Business
Processes (KBPs) and Metrics
sZZ
Value Streams
Processes/Metrics
Project
Processes/Metrics
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30. Focus Precisely
Focus Improvements
Value Stream Analysis Process
s
Prepare Conduct Workshop Followup
6-8 Weeks Prior to Workshop 2.5 Days 2-4 Weeks After Workshop
 Identify, validate and invite team  Introduction, approach, tools  Notify and debrief Event Team
members training Lead and Team members
 Finalize meeting logistics  Review key business processes/VS  Schedule Focus Events
 Establish workshop guidelines map  Perform followup action items
 Review key Value Stream  Define scope of VSA focus
documents:  Identify and prioritize Events
• Mission, Strategy  Identify Event Participants
• Org structure  Develop High Level Event Maps
• Procedures manuals  Draft Event Charters
 Gather and review data/metrics
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31. Focus Improvements
Focus Event Process
s
Prepare Conduct Event Followup
2-3 Weeks Prior to Event One Week1 1-3 Months After Event
 Finetune Preliminary Charter  Day 1 – Educate and Analyze  Complete documentation of
developed during VSA  Day 2 – Brainstorm, Design event and appropriate
 Conduct working session(s) with Improvements “sharing”
stakeholders to identify high-level  Day 3 – Implement Changes  Observe Implementation
requirements and perspectives. and Test/Simulate  Finish any open action items
 Gather & perform cursory analysis of  Day 4 – Finalize Documentation,  Ensure Data Collection
data to provide guidance to focus  Day 5 – Present Results  Conduct periodic (30/60/90
event
day) reviews of metrics
 Finalize logistics of Event 1 One Week if Focus Event
,additional weeks if a project
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32. “Several things must be done to move from Lean Six Sigma capacity to Lean Six Sigma
s
culture. Knowledge transfer may be the most important.”
Carey and McConnell - Knowledge Transfer is the Key to Lean Six Sigma Culture
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33. Transfer Knowledge
Knowledge Transfer Philosophy
 We focus on skills acquisition
 Classroom Training is just one of many ways
to transfer knowledge
 Hands On, Experiential Learning and
Coaching is preferable to Classroom Training
 Classroom Training is best as a supplement
to hands on learning (not the other way
around!)
• Reserve classroom training for Project
Participants and Champions
• Train “just in time” – don’t overwhelm
participants with unnecessary training
• Create excitement around projects through
access to formal training
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34. Transfer Knowledge
Knowledge Transfer Process
Observe
• Attend the orientation and observe
the methodologies.
s
Participate
• Participate in the Value Stream
Mapping and Focus Events led by
WTA Lean Experts
Repeat
Own • Repeat the learning by leading
portions of Focus Events in
conjunction with WTA Lean Expert
Repeat
Participate
• Attend formal training
Observe
Own
• Own the process, lead all Focus
Events with participation and/or
review of WTA Lean Expert
• Attend formal training
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35. WTA Lean Transformation Framework - FLEX TM
Lean Transformation Framework Transfer Knowledge
JumpStart Traction Expand Sustain
• Assess and Align • Conduct
• Conduct VSAs for • Conduct VSAs
Strategy
• Identify and Value Stream
50% for 100%
Prioritize Value Analyses for
• Review/Calibrate • Review and
Streams 25%
Strategic Renew
• Define KPIs Alignment Responsibilities:
s
• Design • Form VS Teams  WillowTree Leads, with support
Governance
• Expand VS • Expand VS and participation from Denver
Infrastructure • Implement Teams Teams Water
• KPI/Metrics Governance • Track and • Track and
• Governance Structure Report Results Report Results
Structure • Track /Report • Update Pgm  Denver Water leads, with support
• Accountability
• Templates and participation from WillowTree
Focus
• Design Approach • Implement • Expand Training • Complete
Adoption
• Training Adoption and  Denver Water leads
Training Rollout
• Communication Approach Communication • Employee
• Change Mgmt • Rollout Comm • Professional Engagement/
• Conduct Training • Training Development Recognition
• Conduct Pilot • Rollout Lean
Deployment
• Evaluate Results Process to • Rollout Lean • Rollout Lean
• Followup 25% of Scope Process to Process to
• Lead Focus 50% of Scope 100% of Scope
Events
Program Management
Alignment Implementation
18-24 months+
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36. Train Effectively
Recommended Training
Training Level Overview Duration Suggested Attendees Target Phase
Lean  Overview of Lean Principles, Tools and 4 Hours • Pilot Event participants, Phase One and Two
Orientation Methods sponsoring manager(s) of (Included in Pilot,
the Pilot Event and Pilot
 Introduction to Tools s and all Focus
Event Project leaders Events)
 Examples
Executive  Overview of Lean Concepts, Principles, 8 Hours  Executive Team Early Phase Two
Orientation Methods  Lean Executive Sponsor,
 Developing, Managing and Nurturing a  Lean Program Manager
Lean Culture
 Lean Project Manager
 Bringing Benefits to Bottom Line
 Value Stream Sponsors
 Hands-On Examples
 Your Role as a Champion of Lean
 Establish expectations as sponsors of
Lean projects
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37. Train Effectively
Recommended Training
Training Level Overview Duration Suggested Attendees Target Phase
Employee  Overview of Lean at Company 30 Minutes  All employees and stakeholders Phase Two
Orientation  What it means to my job
 How I can contribute s
Foundational  Overview of Lean Principles and Methods 8 hours  Project Teams/Participants Phase Two
 Understanding Lean Communication Strategy  Project Leaders
Training
and Change Management  Sponsoring Managers
 Detailed Tools and Methods Training with
Examples and Case Studies
 Identifying Opportunities, Prioritizing Projects,
and Achieving Results
 Basic Project Management
Mainstream  Intermediate Tools Understanding 16 Hours  Company Project Leaders who Phase Two
have successfully completed
Training  Introduction to Advanced/Six Sigma Tools that
Foundational Training and at
complement Lean
least one Lean Event and want
 Advanced Project and Change Management to become a Lean Facilitator
 Facilitation  Organizational Leaders charged
with driving the Lean Enterprise
Initiative to the next level
Formal Training Focuses on the Participants of Lean Projects
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38. “Routinely collecting, compiling, and communicating data on the performance of key
s
aspects of a process—including data not typically collected by environmental
agencies — is an important aspect of Lean and Six Sigma implementation. “
Environmental Protection Agency
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39. Measure Results
Metrics Approach
Metrics Description Target Number of KPIs Examples
Begin in Phase One with KPIs at the 3- 5 High Level KPIs, Tangible and Metric: Customer Satisfaction
Tier 1 Enterprise program/enterprise level. These KPIs support and Intangible
Metrics/ KPIs Level: Enterprise
align with Strategic Plan and overall objectives of
s
the Lean Initiative. Target: Improve Customer
Satisfaction by 5% each year
These KPIs are addressed in Phase Two, after 3-5 Metrics (VSIs) per Value Metric: Customer Satisfaction
Tier 2 Value
Value Streams are identified and chartered. These Stream, linked to the Enterprise
Stream Level: Accounting Value Stream
KPIs link Enterprise KPIs to those associated with KPIs
Metrics/VSIs each Value Stream. Each KPI supports or relates Target: Reduce Customer Billing
to an Enterprise KPI. Complaints by 15 % in 6 months
These KPIs are addressed as part of each project 1-3 Project Level Metrics per Metric: Customer Satisfaction
Tier 3 Project
and support and link to both the Value Stream VSIs Project/Event, linked to one or
Level Metrics Level: Customer Billing Errors
and the Enterprise KPIs. more VSIs.
Project
Target: Reduce Billing Errors
due to mis-keyed information by
Specific Measureable Achievable Relevant Timeline 20% within 30 days.
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40. Measure Results
Metric Definition and Data Collection
Project Name: Billing Errors
Project Leader: Susan Smith
Value Stream Name: Customer Service
Associated Tier 1 KPI: Improve Customer Satisfaction
Associated Tier 2 VSI: Reduce Customer Complaints
s
Metric Name: Reduce Billing Errors
Measurement and Data Collection Plan
Measurement Plan Metric Information
What do you want to Measure? Billing errors due to mis-keyed information
Operational Definition: How will measure be expressed Type 23 Billing Errors/All Billing Errors in One Calendar Month
Stratification: By variables By customer type
Target Improvement Date 30 days from start of project
Target Improvement % Reduce Error Type 23 by 50%
Data Collection Plan
Data Source: database or sample Customer Billing System ( CBS1)
Target number of units/samples 50% sample of Type 23 errors from each month
Time period of collection June 2011 - Dec 2011
Person Responsible John Rath
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41. Eliminate Waste
Lean Process Improvement Approach
Philosophy Lean is the reason….
 Lean initiatives focus on an organization’s  An Iowa business can now get a clean water
work and operations, helping groups think permit in 4.5 months instead of 28
differently about the way they work, while
 In S. Carolina, lead time for processing storm
increasing capacity and adding value for
water applications dropped from 47 to 10 days
those they serve.
 In Michigan, the application process time for
 Lean focuses on eliminating administrative
major permits is reduced from 422 to 98 days
and transactional waste.
 In Iowa, a backlog of 600 clean air permits was
 Lean helps the organization design and
eliminated
implement its processes by directly
focusing on achieving desired outcomes  At BAE Systems, ERP system upgrade time
reduced from historical highs of 24 to 10
months
What is Lean Government? It is a mindset and a discipline to increase our
capacity to do more good.”
Ken Miller, Extreme Government Makeover
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42. Financial Validation
s
“CEOs want to know the return on investment of Lean projects, and CFOs want
to compare real financial results to “powerpoint dollars”. A rigorous
approach to calculating an improvement project’s impact is important to
every organization.”
R. Copercini – Calculating Financial Impact of Lean Six Sigma Projects
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43. Validate Contribution
Project Lifecycle
Accurate
Reporting
s
Idea Lean Track
Generation Event Benefit Event Event and P&L
Event/Project work Event
and Triage Charter Assessment Approval Prioritization Report Reconciliation
(controls & tollgates) Complete
Benefits
Model Establish Locate Tangible
ROI Auditing Savings on
Parameters P&L
Statement
= automated portfolio system elements for
financial validation process
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44. Validate Contribution
Project Benefits Savings Categories
Tangible
Operating Income Working Capital
Cost Reduction
Receivable Reduction
Inventory Reduction
Asset Productivity
Payable Increase
Revenue Growth
Cost of Services Sold Indirect COSS Selling, General, & Admin Cost
Service Cost Other Cost RD&E Cost SG&A Cost
Labor Material Labor Material Other Labor Material Other Labor Material Other
Intangible
Other
Risk Mitigation Reduce NVA Cost Avoidance Employee Satisfaction Customer Satisfaction
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45. Validate Contribution
Key Elements for Financial Validation
 Financial Guidelines
• Financial Definitions for Project Benefits
• General Rules For Benefit Calculation
 Project Benefit Governance Process
 Specific Benefit Categories and Calculations
 Tools & Templates
• Return on Investment Templates and Models
• Reference Guides
• Financial Statements Reconciliation Templates
• Auditing Documents
 Financial Network Representatives
• Roles and Responsibilities Definition
 Training
• Financial Process and Accountability
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