F2 and LEAN Introduction to LEAN January 24 th , 2011

1. F2 and LEANIntroduction to LEAN January 24th, 2011

2. Goals • Understand why Finance & Facilities (F2) is involved with LEAN • Become familiar with basic LEAN principles and concepts • Learn some basic LEAN tools Note: LEAN is not an acronym!

3. Who Is Finance & Facilities (F2)?

4. LEAN Supports Our F2 Strategy Map Vision: We are a global leader able to deliver outstanding service anywhere, anytime Values: Integrity • Collaboration • Innovation • Diversity • Excellence • Respect • Teamwork Value to Our Customers Enhance Resources Mission: We help people who change the world Provide value for your money Help solve complex University-wide problems Provide clear, timely, accurate, consistent communications from knowledgeable staff Attract and Retain a Talented and Diverse Staff Improve Operational Excellence Enhance leadership effectiveness Create and maintain collaborative relationships Develop customer value proposition Lead strategic UW-wide projects Recognize performance excellence Develop individuals to their full potential Improve, streamline and innovate Champion environmental stewardship Provide key input for informed decisions on financial & physical assets Grow and steward UW’s assets Manage resources to support strategic priorities

5. LEAN Thinking -- James P. Womack and Daniel T. Jones (2003), in Lean Thinking Lean Thinking is basically about getting the right things, to the right place, at the right time, in the right quantity while minimizing waste and being flexible and open to change.

6. What Is LEAN? LEAN is “a systematic approach to identifying and eliminating waste...” which includes— • Identifying the current state • Finding pain points and problems • Envisioning a future state • Implementing rapid process improvements • Involving customers • Improving continuously LEAN engages staff to identify issues and pain points and resolve them LEAN leaders trust and respect staff and help resolve issues -- James P. Womack and Daniel T. Jones (2003), in Lean Thinking

7. Why LEAN? 1. LEAN helps F2 become more: • Customer sensitive • Nimble • Efficient 2. LEAN helps F2 build a common culture where those closest to the work are: • Constantly improving work flow through observation, experimentation and action • Becoming better problem identifiers and solvers • Developing transferable job skills

8. LEAN Terms • 5S - A place for everything and everything in its place • A3 Report: A one-page report that documents a process. "A3" is an international-size paper about 11 x 17 inches

9. LEAN Terms • GembaA Japanese term that means "actual place.“ • Gemba WalkGoing to the actual place to see and understand the situation where the work is done. The first step is understanding the actual situation and "going to the gemba.”

10. LEAN Terms • KaizenA Japanese term that means "change for the betterthrough continuous, incremental improvement”. • Kaizen Event/WorkshopAn event or workshop that teaches how to identify waste in a given process and to make rapid improvements to a process. • Standard WorkA precise description of each work activity specifying cycle time, the work sequence of specific tasks, and the minimum inventory of parts on hand needed to conduct the activity.

11. Where can LEAN help you? (5 minutes) Form into groups: Record key points of your discussion on the sheet provided. Some may become future LEAN projects! Quickly identify some UW processes that contain waste or need improving, and briefly explain why Identify the pain points/problem areas ( Hint: Don’t solve the problems…just identify them!) Sheets collected at the end of class

12. 5 Key LEAN Principles • Customer defines value • Produce at the rate of customer demand “pull” • Eliminate Waste • Focus on work flow and value streams • Pursue continuous improvement

13. LEAN Concepts • Welcome problems (“Having no problem is the problem”) • Trust facts over data (go see what’s happening, “gemba”) • Focus on the process, not people • Develop people and teams • Learn by doing

14. What Is Unique About LEAN? • “Wing-to-wing” improvements involving customers, F2 staff at all levels, process partners and suppliers • Faster rate of change – pace and rhythm • Aggressive improvement goals (often 50%)

15. Where Is F2 Practicing LEAN Now? Control Spend Control spend Consolidate IT Consolidate IT Optimize Space Optimize space Construction Contracts A/E Contracts Reduce labor time CPO Close Out Furniture Procurement Shared Systems Protect the Core Campus Alterations Purchasing Supplier Registration Grant Unbilled Mailing Services SFS Direct Loans Real Estate Office Inquires Grant Closings 5S Copy Centers UW Auditing Process Worker’s Compensation Print Management

16. Three Conditions of Work • Before you do work, make clear what you expect to happen (process and results) • A3/Scope, VSM, 5S, Standard Work • Each time you do work, see that what you expect to happen actually occurred • Visual Management, Leader Standard Work (Gemba Walk) • When there is a gap between what actually happened and what you expected, solve problems while the information is still fresh • PDCA (Problem Solving), Daily Innovation

17. What is a Process? Value Added Tasks INPUT OUTPUT A resource that you will add value to: TRANSFORMING input to a desired output An input after you have added value • End product • Service • Performance • Physical • Non-Physical • Materials • Goods • Supplies • Resources • Physical • Non-physical • Data • Event • Manufacturing • Service • Physical • Non-Physical

18. Identifying The 8 Key Wastes (“Muda”) Overproduction Waiting Transport Processing Movement Complexity Underutilized people Excess inventory

19. Reducing Processes To Core Value EXCESSIVE MOTION (WALKING TO NEXT TASK, ETC.) DEFECTS (IDENTIFYING, HANDLING, FIXING) WASTED TIME AND ACTIVITY CORE PROCESS VALUE O P E R A T I O N A L L E A D T I M E UNNEEDED PROCESSING TIME WAITING (OFTEN RESULT OF UNBALANCED TASKS) TRANSPORTATION Focus on eliminating the wasted time and activity.

20. Key LEAN Tools • Value Stream Mapping • 5S (Workplace Organization) • Just in Time/Continuous Flow • Standard Work • Visual Management

21. What Is A Kaizen Event? Kaizen = change for the betterthrough continuous, incremental improvement Two or Three Day Workshop on how to identify waste in a given process and to make rapid improvements to a process • Team includes project leader, facilitator, staff members, customers/process partners • Identify Current State, Identify Issues, Envision Future State, Identify Kaizen Projects 30, 60 and 90-Day Report Outs to Leadership

22. What Is Just Do It? Just Do It… Improvements that: • are quick to implement • you have direct control over • the impact is clearly understood and agreed upon • will be measured. Examples: • Make revisions to one of your reports • Create contract definition sheet – Alterations Event • Reduce Time in Meetings – Strategy Management • 5S within your work area

23. Kaizen Event Scope Document What is the problem? Why is it important? When? Problem Statement /Background:Event/Workshop Dates: Process Metrics: Event Mission/Vision: Sponsor: Goals / Objectives: Project Leader: Process Description:Lean Consultant: Team Members: What metrics will be used to track process improvements? What do you want to accomplish during the workshop? Name and title What are the overall goals / objectives you want to achieve? Name and title Name and title High level overview of the overall process to focus on from beginning to ending steps of the process Names /titles including customers

24. What are participants saying about LEAN? • “As we got to working on the process map, I realized how much work was done that I did not know about. I had a real “aha!” moment. I always thought my pieces was the most important and I was not aware of all the work that happened before the balancing of the Direct Loans ended at my desk. I was amazed at how many steps happened before I got involved!” • “The weekly pace checks, with the project managers and contracts people, are particularly valuable in pointing out how our procedures are working and how we want them to change. “

25. What Is A Value Stream Map (VSM)? A process map: • Define first to last step • Clarify relationships of different tasks • Discover non-value added steps • Has values added to each step That: • Describes the entire current process • Helps identify problems • Helps team to choose improvements to work on

26. Value Stream Map – Alterations Process

27. Value Stream Mapping Process List how much time is needed for each step May also add other values to the map like - % Complete/Accurate/Correct (CAC%)

28. Value Stream Mapping Time Measures Step 1 Step 2 Touch Time (T/T) Interruptions, Need more information, Breaks Touch Time (T/T) Wait Time (W/T) Process Time (P/T) Process Time (P/T) Total Lead Time (TLT)

29. Value Stream Mapping Exercise • Choose a topic to map: • Requesting annual leave • Mailing a package • Planning a meeting • Preparing a PowerPoint presentation • Preparing a budget request • Identify the main steps you complete to accomplish this process • Place the notes in order from start to finish

30. Value Stream Mapping Process - continued • Calculate times: • Total time (TLT) it takes to complete the process • Total touch time (T/T) • Total wait time (W/T) • Look at the map and identify any issues that leap out at you • What do you see? • What does the process do well? • Where are the wastes? • Can you identify some “LEAN” opportunities? • Choose a Kaizen(s) to work on • Create an action plan

31. What Is 5S? 5S creates an efficient workflow by reducing waste in the placement and movement of materials, information, equipment, and people.

32. LEAN Activity : February 2010 Facilities Services – 5S (All staff in Administration Building) Customer Impact/Benefit to Customer: Workspace Focus Facilities Services’ 5S projects are designed to improve customer service by identifying and eliminating wasted time and space to allow for increased accuracy and productivity. Before 5S After 5S 5S LEAN concept: • Sort • Straighten • Shine • Standardize • Sustain

33. 5S WARNING! -- The Toyota Way LEAN is not just about using 5S to clean and organize a work area. The real value of 5S is to create and maintain an efficient work flow and make problems visible.

34. What Is Visual Management? Visual representation of process in a highly visible location that: • Makes problems visible • Focuses on improving Value-Added Work Flow • Communicates at-a-glance how work should be done and whether it deviates from the standard • Helps the team to stay focused and accountable to improve the process • Provides a place for a team to share knowledge and experiences

35. Visual Controls

36. Visual Controls – Kaizen Examples GCA Unbilled Team discusses project with Sue Camber, AVP and other sponsors, guests GCA Budget Closings Team reports progress to V’Ella Warren, SVP and other sponsors, guests

37. LEAN Kaizen Event #3: January 2010 Financial Management – GCA Budget Closings Customer Impact / Benefit to Customer: • Eliminate backlog of GCA closing budgets • Customer feedback from April 2010 customer survey • April Backlog of 5,478 reduced by 4495 (82.1% ) as of 1/14/11 2. Improve closing process and avoid future backlog • Currently, 673-day average to close a research budget • Improved process targets 120-day closing average • 72 days average to close with pilot of Future State GCA identifies opportunities for customer improvement with the help of Susan Carpenter-Brandt (Psychology) and Verna Blackhurst (Aquatic and Fishery Sciences).

38. LEAN Kaizen Event #6: June 2010 Financial Management – GCA Unbilled Customer Impact / Benefit to Customer: Reduce the amount of the unbilled backlog • December 2009 unbilled backlog of cost reimbursable grant expenditures was $15.8 million (reduced $10.7 million or 67.7% in 6 months) • Target amount is $2.0 million or less • Unbilled backlog has been reduced to $5.1 million as of December 2010 GCA reviews their current process to identify opportunities to reduce the amount of unbilled

39. LEAN Kaizen Event #4: April 2010 Financial Management – Copy Centers Customer Impact / Benefit to Customer: 1. Reduce customer cost by 10% 2. Improve billing and reporting process • Change current once a month to real-time billing (daily) • Reports that help customers better manage their usage Customers explain and share their business needs to FM Copy Centers Aaron Munoz (Business School customer) • Sal Ramirez • (UWMC customer) Beth Berquist (Harborview customer)

40. LEAN Kaizen Event #7: July 2010 Financial Management – Mailing Services Customer Impact / Benefit to Customer: • Increase mail preparation revenue by 40% • Eliminate overtime hours (38% avoided in 3 months through cross training) • Reduce junk mail and misaddressed mail Recycled 8986 (avg = 499/wk) pounds of waste or junk mail since Aug 9 (18 wks) Sal explains how Mailing Services can help UWMC reduce their need to resort mail and handle junk mail, and teach them how to package outgoing mail to reduce mailing costs. • Sal Ramirez • (UWMC customer)

41. LEAN Kaizen Event #10: July 2010 Financial Management and College of Arts and Sciences – Shared Services Initiative Customer Impact / Benefit to Customer: Reduce Humanities department administrative labor time by 20% with focus on the Payroll, Purchasing and Web processes. Customers and process partners share their business needs with Financial Management staff David Miles (Spanish & Port, French & Italian process partner) Michael Furr (Linguistics process partner) • Amy Pelloff • (not pictured) • CHID process partner ZhenyaLavy ( Simpson Center process partner)

42. Architects/Engineers Contracts LEAN Project Goal was to reduce contract process time. To date we have achieved a 40% reduction in time on master agreements.

43. Days to Complete a Contract

44. How Does LEAN Impact F2? LEAN dependsmoreon people, not less. More than tools and techniques, it’s a culture and mindset that respects and depends on staff to: • identify and fix issues to get quality right the first time • work with a sense of urgency, purpose and teamwork • think, learn, be creative and grow • share lessons learned with others • own the entire process – beyond your own work

45. “LEAN is a Journey, not a Destination…” LEAN starts you on a journey to discovering new ways of seeing things that need continuous improvement.

46. How Can You Get Involved with LEAN? • Suggest an improvement area • Join an improvement team • Just Do it!

47. LEAN References . • Learning to See, Value Stream Mapping to Create Value and Eliminate Muda, Author(s):  Mike Rother and John Shook • The Toyota Way, 14 Management Principles from the World's Greatest Manufacturer, Author:  Jeffrey K. Liker • Toyota KATA, Managing People for Improvement, Adaptiveness, and Superior Results, Author: Mike Rother • Kaizen, The Key to Japan's Competitive Success, Author: Masaaki Imai • LEAN Six Sigma for Service, How to Use LEAN Speed & Six Sigma Quality to Improve Services and Transactions, Author: Michael L. George • LEAN Thinking, Banish Waste and Create Wealth in Your Corporation, Author(s): James P. Womack and Daniel T. Jones • LEAN For Service Organizations And Offices, A Holistic Approach for Achieving Operational Excellence and Improvements, Author: DebashisSarkar • LEAN Solutions, How Companies and Customers Can Create Value and Wealth Together, Author(s): James P. Womack and Daniel T. Jones  • Chasing the Rabbit, How Market Leaders Outdistance the Competition and How Great Companies Can Catch Up and Win, Author: Steven J. Spear • http://f2.washington.edu/lean/resources/references

48. LEAN Website View the LEAN web site for updates, resources, etc. http://f2.washington.edu/LEAN • Organizational Effectiveness Initiative (OEI) at: • https://depts.washington.edu/oei/