Oregon Department of Human Services

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Oregon Department of Human Services

• LEAN
• Context and Rationale
• PMA Workshop
• May 7, 2008

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What Is Lean?

The relentless pursuit of waste reduction

• A leadership approach
• A management philosophy
• A set of tools
• ALL as a complete system to reduce waste
• 
  Non-value adding activities and assets

Waste
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Since Ohnos original 7 Surface Wastes were
developed in 1946, Lean thinkers have identified
a critical 8th waste Not using peoples
Intellect
Categories of Waste
Taiichi Ohno Architect of the Toyota Production
System
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Lean and Six Sigma Complementary Methods
Six Sigma
Lean
Structured improvement methodology with standard
approaches and statistical tools
Operating philosophy with proven principles
tools, and techniques
Core driving principle

• Eliminate waste
• Speed up flow

• Reduce variation

Focus of improvement
Discrete projects selected based on critical to
quality and business results
Value streams, selected for impact on performance
and capability building

• DMAIC (Define, Measure, Analyze, Improve,
  Control)
• DFSS (Design for Six Sigma)

Root- cause analysis Process mapping Basic
analytic tools

• Value Stream Mapping
• PDCA (Plan, Do, Check, Act)

Problemsolving
Performancemanagement
Operational KPIs (Key Performance Indicators)
cascaded to front line
Project-specific metrics

• Green Belts, Black Belts, Master Black Belts
• Project teams

• Lean experts
• Change agents
• Management champions

Infrastructure and involvement
Expert-led projects with discrete beginnings and
ends
Front-line capability building and accountability
Change approach
Manufacturing, Supply Chain
Traditional starting points for application
Quality, IT, Product Development
Great organizations use best of both
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LEAN more than Process Improvement

• A long-term approach
• Perfect processes to eliminate waste
• Develop people
• Get to the root of problems
• Never be satisfied with the status quo

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The Standard Lean Process
As Is
Process today as it is
Should Be
Process according to procedures
Feedback
Ideal state
Could Be
Model for implementation
To Be
Implement
Validate
Assess
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Why Lean?

• As a learning approach
• Empowers workers to do their own work
• Uses work as learning
• As a research-based approach
• Uses work as discovery of new knowledge
• Can be used to align the organization
• Used with permission from John Shook, first
  American employee at Toyota's world headquarters

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Why Lean?

• Lean Thinking is one of the best ways to
• Reduce errors
• Address quality issues
• Increase efficiency
• Eliminate stress
• Do our work every day in a standard way that we
  created
• Used with permission from John Shook

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Full Engagement of the TALENT
Success in Organizational Change
80 70 60 50 40 30 20 10 0
World Class Organizations
Performance
?
Executive
Management
Talent
Traditional
Lean
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Lean engages the TALENT --staff who do the work
Why Lean is Effective?
Primary Leverage
Points of Leverage
vision and strategy
1 to 2
leadership and direction
5 to 20
Management
do the work improve the work
78 to 94
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Why Lean in DHS?

• Successful pilot in DHS Finance
• Return on investment within a year
• Additional potential benefits 5.2 million
• Significantly improved cash management, reducing
  Treasury interest costs for negative account
  balance
• Prepared and submitted DHS budgets 5 months
  earlier than last biennium
• Significant improvement in staff morale,
• and a positive shift in culture
• Met year-end close reporting deadline
• Received State Controllers Gold Star Award

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Implementation Tools

• Other Lean Tools
• Primary visual display
• Metrics
• Lean daily huddle
• Action sheets
• Weekly process improvement meeting
• Coaching

• Rapid process improvement events
• 5S
• Value stream process maps
• RACI chart
• Handoff chart

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Lean Daily Huddle
Each natural work team maintains
A natural work team is no more than nine people
working in close proximity for most of the time,
and has a process or functional connection
pulling them together.

• 1. A daily work team start-up meeting (Lean
  Daily Huddle)
• 2. A work team primary visual display
• 3. A Kaizen Action Sheet improvement system
• 4. Excellence charting and improvement planning
• 5. Short interval coaching
• 6. A weekly problem solving/process improvement
  meeting of one hour

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Why Lean Daily Huddle?

• Facilitates communications and collaboration
  within work groups
• Increases the productivity, quality, and
  efficiency of established operating processes
• Promotes continuous improvement
• Focuses on metrics
• Coordinates change efforts
• Speeds implementation of new processes,
  procedures
• Facilitates system thinking
• Communicates changing priorities

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Primary Visual Display Example
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Primary Visual Display Example
APP. PROCESSED AGAINST PLAN
ATTENDANCE
NUMBERS BY DAY
Customers 1. CAF CW 18 2. CAF SS 12 3. SPD
LTC. 9 4. OSH 8 5. PHD 8 6. AMH/AD. 7 7.
OVRS 6
CUM. MONTH TO DATE
SKILL VERSATILITY
QUALITY ISSUES YESTERDAY
Metrics (mo. To date) 1. Work/(Work
Muda) 68 2. system up time. 76 3.
Absenteeism. 4 4. of plan output 98 5.
Completed on time 99 6. WIP ( of
output) 0.5 7. Cycle time (min) 4.5 8.
caseworker PM done 100
1 Loose connectors (board A-2) 5 2 System lock up
FACIS 4 3. GW Remote Access down 2 4. BB server
reboot every 3 hrs 1 5. RFP for ICM contains
errors 1
Metrics (mo. To date) 1. Apps. Process to
date 3,345 2. Compared to plan () 102 3. Cost of
Labor Hour 34.12 4. processes on time
98.8 5. Cycle time (min) 453.4 6. system up
time () 69.2 7. Client satisfaction 85.2
SAFETY AUDITS
20 KEYS
KAIZEN ACTION SHEETS
RESOLVED
SUBMITTED
WORKING
BLANK
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Performance Measures

• What is the right thing to measure?
• Measures that can be influenced by the team
• Set targets that can be achieved
• Set target goals to strive for
• What is the Industry Best ? Benchmarking
• ....and the date(s), by which it should be
  achieved
• Continually adjust targets as they are achieved
• Make measures visible

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We Dont Know What Workers Want

Workers
Mgt. Feelings of accomplishment . . . . . . . .
. 1 . . . . . . 8 Personal recognition . . . .
. . . . . . . . . . 2 . . . . . . 13 Good
leadership by supervisors . . . . . . 3 . . . .
. 12 Proper direction and training . . . . . .
. . 4 . . . . . 11 Knowledge of what is
expected . . . . . . 5 . . . . . 14 Fair and
tactful discipline . . . . . . . . . . 6 . . . .
. . 7 Feeling involved . . . . . . . . . . . .
. . . . . 7 . . . . . 10 Participatory
management . . . . . . . . . . 8 . . . . .
. 5 Good pay . . . . . . . . . . . . . . . . .
. . . . . 9 . . . . . . 1 Promotional
opportunities . . . . . . . . . . 10 . . . . .
. 3 Good working conditions . . . . . . . . . .
. 11 . . . . . . 4 Job security . . . . . . . .
. . . . . . . . . . . . 12 . . . . .
. 2 Company loyalty to workers . . . . . . . .
. 13 . . . . . . 6 Fringe benefits . . . . . .
. . . . . . . . . . . . 14 . . . . . . 15 Help
with personal problems . . . . . . . . 15 . . . .
. . 9
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Why Transformations Fail

• - Not Establishing a Sufficient Sense of Urgency
• - Not Creating a Powerful Leadership Coalition
• - Not Creating a Vision
• - Under-communicating by a Factor of 10
• - Not Removing Obstacles To the Vision
• - Not Planning and Creating Short-term Wins
• - Declaring Victory Too Soon
• - Not Anchoring Changes in the Culture

Why Transformation Efforts Fail John P. Kotter,
Harvard Business Review
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Questions, Comments

• YOUR TURN