An Introduction to Lean Systems Thinking … a better way to make the work work

1. An Introduction toLean Systems Thinking … a better way to make the work work

2. "We cannot solve the problems we have created with the thinking that created them."Einstein

3. Two main design and management thinking approaches …

4. Mass Production / Command & Control

5. MANAGEMENT FACTORY

6. Perspective Design Decision making Measurement Management ethos Top down, hierarchy Functional Separated from work Output, targets, standards related to budget & plan Manage people, hit budget and plan Arise Command & Control! NOT DESIGNED AGAINST DEMAND BUILDS IN WASTE AND INHIBITS FLOW

7. MANAGEMENT FACTORY Variety in the context of continuous flow An alternative solution…

8. Summary of TPS Features • Pull • Flow • Waste • Measures • Decision making • Management role

9. The Toyota Production System “The number of man hours it takes to build a Lexus is less than the man hours used in re-working a top-of-the-line German luxury car at the end of the production line, after it has been made." The Machine that Changed the World Womack, Roos & Jones 1990

10. Vanguard - translation for Service • Service differs from manufacturing! • The customer is involved in ‘production’, • Their Demand triggers our work… • Variety of customers and demand is huge! i

11. Perspective Design Decision making Measurement Management ethic Outside - in Demand, value, flow Integrated into the work Related to purpose, and show capability Act on the system Systems Thinking Principles

12. Thinking Tools here System Performance improve Change this Service Efficiency Revenue Morale

13. The rise of Tools • Six sigma • Centred on a powerful problem solving and process optimisation methodology, 6 Sigma is credited with saving billions of dollars for companies over the past ten years. • Define • Measures • Analyse • Improve • Control

14. … and plenty more! • 5 s • 4 actuals • 7 wastes • Tact time • Value Stream Mapping • Brainstorming • Cause and Effect • Control Charts • Decision analysis • Failure Modes Effects Analysis (FMEA) • Force field Analysis • Pokeyoke (Failure Proofing) • SIPOC (Suppliers, Inputs, Process, Outputs and Customers) • Spaghetti Chart • Treatability Matrix

15. Thinking System Performance improve Do they change this? Service Efficiency Revenue Morale

16. DEMANDS PROCESSES OUTCOMES “WHAT MATTERS?” These Vary! Unhelpful? Costly? Focus outside in, design to absorb variety CUSTOMERS i

17. £ Nominal Value

18. Costs of departure from the nominal value Mum & Kids Businessman Fisherman Quick & Hot Coffee I/V Laptop DnD Kids 1st then me Customer sets nominal value and thus the response of the service. i

19. The place to start is Check

20. Check Do Plan i

21. What is the purpose (in customer terms)? 1 2 3 Capability of response Demand : T&F, V&F What matters? Understanding your organisation as a System The Vanguard model for ‘check’

22. Understanding capability data • Much of what we currently report on are percentages or averages in relation to targets (static data points) • Few of these targets relate to the real experience of the customer • Because of the way it is reported it is hard to see the effects of changes and decisions that we may be taking

23. Understanding capability data • Statistical process control charts (SPC) or Capability Charts are a powerful way of looking at our data and understanding the performance of our system • They capture statistically the capability or predictability of our system in delivering service for customer over time • Normally used to understand frequency of an occurrence or elapsed time (end-to-end)

24. x x x x x x x x x x mean x x x x x x How they work No. of Days Statistically we can measure the variation or predictability – what it feels like for our customers What’s important is knowing the extent of this variation and why – the causes 100 Every system has inherent variation UCL 50 LCL We tend to only pay attention to the average Cases

25. Thinking What is the purpose (in customer terms)? System Conditions Flow : Value work + Waste 1 4 2 6 5 3 Capability of response Demand : T&F, V&F What matters? Understanding your organisation as a System The Vanguard model for ‘check’

26. Thinking change action analysis System …act on the Performance improve Change based on knowledge…

27. Case Study 1: Housing benefits

28. What you learn from Check What do customers want? “Can I make a claim?” “My circumstances have changed”

29. What matters to customers? • “I get an answer quickly so that I know whether or not I’m going to get help” • “Deliver payments quickly so that I don’t get hassle from my landlord or the CTax department” • “Make sure my benefits keeps track with changes in my situation…” • “You help me through the process” • “I can understand the letters & forms” • “I don’t mind waiting a bit if I know it is going to be sorted”

30. Pay the right money to the right people as quickly as possible Purpose

31. Capability(how well are we meeting the purpose in customer terms?) • We don’t know! • Because we don’t measure it! • But … we do measure: • BVPIs & position relative to ‘similar’ authorities • Waiting time in reception • AvHT, wrap, etc. in the Call Centre • Number of cases per day in the back office

32. So what do customers experience? Ucl = 152 mean = 52

33. Learning to see HB as a System Multiple Sorts & Checks Cases fragmented Scanning/Indexing errors “I want to claim” 64% passed back Manage queues 34%V66%F Sort Scan Index Handoff Hand out forms Take in documents 22%V78%F HO 44%V56%F Workers’ activity ‘managed’ Allocate 1-10 cycles to clean (ave.4) 95% cases over-specified 20% docs. duplicated HO 99% claims ‘dirty’ No case ownership CTax fragmentation Letters unclear 87% Decide HO HO HO Pay Notify Inspect 0-152 days to pay 3% visit once 60% errors Rework

34. Is there opportunity to improve? How would you realise it? i

35. Thinking System Performance What is the That has caused the … to result in i

36. Learning to see HB as a System Multiple Sorts & Checks Cases fragmented Scanning/Indexing errors “I want to claim” 64% passed back Manage queues 34%V66%F Sort Scan Index Handoff Hand out forms Take in documents 22%V78%F HO 44%V56%F Workers’ activity ‘managed’ Allocate 1-10 cycles to clean (ave.4) 95% cases over-specified 20% docs. duplicated HO 99% claims ‘dirty’ No case ownership CTax fragmentation Letters unclear Decide HO HO HO Pay Notify Inspect 0-152 days to pay 3% visit once 60% errors Rework

37. Case Study 2: The IT Helpdesk

38. What’s itsPURPOSE? If there is an issue, sort it:One-stopor manage my expectations

39. The IT Helpdesk … What a user experiences? What’s going on?

40. Calls not being fully fixed first time Ongoing problem Not set up properly Calls closed Bounced between people / teams • Work done • R & R • Diagnosis • Fixing • Ordering … • Reasons for wait: • Reallocation • suppliers • engineers • user Predictably up to 5 people 3 teams MORE WORK @ LOG QSM TO TEAM A or S DW CUST DW CUST WAIT 1:1 1:1 FIX FIX FIX CLOSE CLOSE CLOSE www.lean-service.com Vanguard A Story of IT Support 33% 16% 51% 1.5 min 1 Hr 58 Hrs 83 Hrs

41. Operations Remote Techs. HelpDesk MORE WORK @ LOG QSM TO TEAM A or S DW CUST DW CUST WAIT 1:1 1:1 FIX FIX FIX Core Techs. CLOSE CLOSE CLOSE Development 83 Hrs www.lean-service.com Vanguard Handoff Batch Check Rework = DELAY What underpins this design & performance? Functional Design

42. Logging data MORE WORK @ LOG QSM TO TEAM A or S DW CUST DW CUST WAIT 1:1 1:1 FIX FIX FIX CLOSE CLOSE CLOSE 83 Hrs www.lean-service.com Vanguard What underpins this design & performance? Focus on Close NOT Fix = MORE WORK Prioritise jobs = DELAY Functional Design KPI’s Reopen Raise Job Stop Clock Close Job

43. MORE WORK @ LOG QSM TO TEAM A or S DW CUST DW CUST WAIT 1:1 1:1 FIX FIX FIX CLOSE CLOSE CLOSE www.lean-service.com Vanguard What underpins this design & performance? Control over IT people and costs = DELAY = STAFF FRUSTRATION We say “No!” = USER FRUSTRATION Functional Design KPI’s Procedures & Authorisation

44. BUDGET CONTRACT MORE WORK @ LOG QSM TO TEAM A or S DW CUST DW CUST WAIT 1:1 1:1 FIX FIX FIX CLOSE CLOSE CLOSE www.lean-service.com Vanguard What underpins this design & performance? Functional Design KPI’s Procedures & Authorisation Stick to the letter Ensure we hit the numbers (and don’t get fined) Juggle resources between support and development Focus on the numbers “Lower Cost” staff for “Simple” jobs Juggle resources between support and development Say “It’s chargeable!” Authorisation to “control” spend

45. Thinking System • Focus on revenue • Meet the budget • Stick to the contract • Manage the people • Improve through Projects • Demands equal units of work • Functionalised design • Managers make decisions • Focus on productivity, output and prizes • Workers follow procedures • Hand-off, batch & Q, checking, reworking • Hard to get through • Poor first time resolution • Long E2E time • High failure demand • Rising complaints • Poor retention • Rising costs • High staff turnover Performance

46. Clarity of purpose What are the value steps? What are the management roles? Add value Clarity of the permanent measures 3 4 5 1 6 2 What are the ‘core’ roles? Design against demand Principles for ‘Plan’ (Re-design) Where do we need to act? Remove System Conditions C U S T O M E R S   

47. Learning to see HB as a System Multiple Sorts & Checks Cases fragmented Scanning/Indexing errors “I want to claim” 64% passed back Manage queues 34%V66%F Sort Scan Index Handoff Hand out forms Take in documents 22%V78%F HO 44%V56%F Workers’ activity ‘managed’ Allocate 1-10 cycles to clean (ave.4) 95% cases over-specified 20% docs. duplicated HO 99% claims ‘dirty’ No case ownership CTax fragmentation Letters unclear Decide HO HO HO Pay Notify Inspect 0-152 days to pay 3% visit once 60% errors Rework

48. Purpose Measures Method Change thinking, improve performance Pay the right people the right money fast mean = 142 Experiment: find & act on causes of variation

49. Purpose Measures Method Change thinking, improve performance Pay the right people the right money fast mean = 142 mean = 12

50. The Systems Solution: design against demand “I want to claim” Demand • Obtain clean information • Make a decision • Notify the claimant • Pay if entitled Value Work • Put the claims expertise at the front end • Enable assessors to pull support on demand • Build Ctax expertise into the flow • And measure against purpose Expertise