Transactional Change in Action - Using Lean Principles

1. Transactional Change in Action - Using Lean Principles

2. Presenter • Karen Kusler • Process Improvement for UCO • Formerly with Institutional Assessment • Lean Facilitator University of Central Oklahoma 100 N. University Drive Edmond, OK 73034 (405) 974-2540 khenderson@ucok.edu

3. Lean Enterprise is…. A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement.

4. History • Began in the Manufacturing Industry • Executive VP Kreidler introduced Lean to UCO in 2002 • Methodology to improve efficiency, reduce waste, and streamline processes • Result in employee satisfaction, clarity of role in process, and standardize work where appropriate

5. Words To Live By • “Do not believe that it is very much of an advance to do the unnecessary three times as fast” – Peter Drucker • “Bureaucracy defends the status quo long past the time when the quo has lost its status” – Laurence Peter

6. Lean Thinking • Fundamental Objective: • To create the most value while consuming the fewest resources • Define value from the customer’s perspective • Identify which process steps create value and which are only waste • Work to eliminate the root causes of the waste and allow for continuous flow of work and tasks

7. Lean is Not… • A headcount reduction program • A toolbox • A method for reducing resources that are needed to support the “customer”

8. Goal is Quality of Service • Quality is not a program – it is an approach. • Quality’s goal is excellence – anything less is an improvement opportunity. • Quality implemented properly – increases customer satisfaction, reduces time and cost.

9. Waste (Muda)– anything that is more than the minimum amount of • process, • workers’ time, • materials, space, or • equipment and adds no value to the product or service for the customer.

10. Lean and Eliminating Waste Typically 95% of lead time is non value-added

11. 8 Wastes in Processes • Overproduction – producing more sooner, or faster than is required by the next process. • Office examples – printing paperwork out before needed, purchasing items before needed (results in inventory storage, processing paperwork before the next person is ready for it

12. 8 Wastes in Processes • Inventory (Inbox) – any form of batch processing • Office examples – filled in boxes (electronic and paper), office supplies, sales literature, batch processing transactions and reports.

13. 8 Wastes in Processes • Waiting • Office examples – System downtime, system response time, approvals from others, information from customers

14. 8 Wastes in Processes • Extra Processing • Office examples – Re-entering data, extra copies, unnecessary or excessive reports, transactions, cost accounting, expediting, labor reporting, budget processes, travel expense reporting, month-end closing activities

15. 8 Wastes in Processes • Correction – any form of defects • Office examples – Order entry errors, design errors and engineering change orders, invoice errors, employee turnover

16. 8 Wastes in Processes • Excess Motion – movement of people • Office examples – Walking to/from copier, central filing, fax machine, other offices

17. 8 Wastes in Processes • Transportation – movement of paperwork • Office examples – excessive email attachments, multiple hand-offs, multiple approvals.

18. 8 Wastes in Processes • Underutilized People – people’s abilities, not their time • Office examples – Limited employee authority and responsibility for basic tasks, management command and control, inadequate business tools available

19. Lean Project Phases – Lean Team! Agreeing on the process to study, how to map it, who will participate, and logistics. Preparation Agreeing on a well understood map of the current situation. Current State Agreeing on a shared vision of a Lean future state. Future State Agreeing on how to implement the future state vision. Planning

20. Project Preparation • Select potential project with sponsor/Champion • Scope effort with functions represented in the selected value stream • Confirm business objective • Identify measures of success • Develop SIPOC • Identify participants & decision panel • Confirm scope with Decision Panel • Walk the flow

21. Case Study – Fixed Assets • Reason Selected • The current process results in undocumented and over-documented assets in the computer system. • Customer • Accounting staff that needs the information to prepare end of year reports and respond to external auditors is the customer.

22. Case Study Goals • Capitalize all qualified fixed assets. • Create processes to capture qualified fixed assets. • Identify miscoded fixed assets when ordered. • Validate Procard purchases of qualified fixed assets. • Define the process to write-off disposed assets.

23. Current State Whenever there is a product or service for a customer, there is a value stream. The challenge lies in seeing it. • Draw a Current State Value Stream Map (VSM) • Visualize work • Point to problems • Focus direction • Ask the 7 review questions

25. Review Questions • What does the customer really need? • How often will we check our performance to customer needs? • Which steps create value and which are waste? • How can we flow work with fewer interruptions?

26. Review Questions • How do we control work between interruptions? How will work be prioritized? • How will we balance the work load and/or different activities? • What process improvements will be necessary?

27. Future State • Draw a Future State Value Stream Map based on responses to the review questions

31. One Change through Teamwork • Commodity Codes were not being used effectively • Train staff on consistent coding • Expand and clarify description codes used to determine commodity codes

33. Finding • Sources of University Assets Vary • Foundation • Purchases • Grants • Items under $2500 not captured for capitalization

34. Response • Consistent information gathered • Foundation – link form to document donations • Purchases – expand inventory management input to include as capitalized items (even under $2500) • Grants – train staff to document assets

35. Result • End of year report and asset capitalization is more accurate

36. Making the Change in a Process • Establish the main objectives • Kaizen bursts • Create master plan (Lean Team) • Create detail plan (breakout groups) • Emphasis who, what, when, and why • Establish project review dates • Present the plan to the Decision Panel

37. No Pain – No $Gain • When the pain of staying put is greater than the pain of changing, then you have a chance to make cultural change. Can you find employee and customer pain and help them out of it in a less painful way? • The pain I know is almost always less than the pain I don’t know. But I can imagine that it is pretty bad.

38. Learn More About Lean • UCO offers educational programs on “Using Lean Principles for Transactional Change” • Next seminar is April 12 (registration fee $49) • For details go to http://administration.ucok.edu/ucocsi or call (405) 974-2540

39. Some Books That Helped Us Along the Way “Execution” “The Agenda” “Good to Great” By – Larry Bossidy, Ram Charan By – Michael Hammer By – Jim Collins

40. Some Books That Helped Us Along the Way “Using Lean For Faster Six Sigma Results” “Leadership On The Line” “Lean Thinking” By – Ronald Heifetz, Marty Linsky By – James Womack, Daniel Jones By – Mark Nash, Sheila Poling & Frony Ward

41. QUESTIONS