SAI Global's Lean Capability

Lean Capability Event March 2013

What is Lean?

Lean is a management approach.

Lean focuses on improving the value of a product or a

service from the customers perspective by reducing, or

eliminating, waste. As waste is eliminated, quality

improves while production time and cost are reduced.

In summary, Lean is about identifying and eliminating

Waste.

Categories of Waste Over production

Inventory

Waiting

Motion

Transportation

Over processing

Defects

Not utilising workers talent

and knowledge

“Typically less than 5% of

activities are value adding.”

Benefits of Implementing Lean

The benefits can be broken down into four main categories;

• Operational Improvement

• Administrative Improvements

• Strategic Improvements

• Improved culture in the organisation

Case study: Mining company Shift change

The company considered that efficiencies could be gained

during the shift changeover process

• Team formed – 2 supervisors; 1 manager; 1 CI rep; miner;

external facilitator;

• Time analysis conducted for finishing shift and starting shift;

• Repetition and “lost” time identified;

• Value stream maps and swimlane chart confirmed the wastes;

• Changeover process redesigned with union support;

• Annual saving of $3 million.

The Lean Tool Box

Value Stream Maps

5S

Visualisation

Kaizen and Kaikaku

Quick Changeover

Point of Use Storage (POUS)

Monuments and Remedies

Lean Performance Measurement

Batch Size Reduction

Takt Paced Production & Delivery

Fool Proofing

Spaghetti charts

Level Loading

Kanban

Work Cells

Value Stream Map Type Testing: Current State Value Stream Map

Represents information flow.

2 weeks 4 weeks 1 week

0.25 days 0.25 days 2 days 0.25 days

Total time: 7 weeks 2.75 days

Value add time: 2.75 days

% value add time: 7.30%

Receive and process

application

Develop project

plan for client

Provision of Type Test

Assessment Service

Issue Report to

client and invoice

Lead time:7 weeks


Scheduling and Resource Planning

Client

Report

Business Development

Contractor

Value Stream Map Type Testing: Future State Value Stream Map

Represents information flow.

1 day 2 weeks 1 day

0.25 days 0.25 days 2 days 0.25 days

Total time: 2 weeks 2 days


% value add time: 22.90%

Receive and process

application

Develop project

plan for client

Provision of Type Test

Assessment Service

Issue Report to

client and invoice

Lead time:2 weeks 2 days


Scheduling and Resource Planning

Client

Report

Business Development

Contractor

Develop Bill

of Materials

Supplier

Customer

Set Product

Requirements

Code

Application

Components

Exist?

Start

Set Product

Strategy

Build

Product

Ship

Product

Support

Product

Obtain

Customer

Feedback

Customer

Customer

Requisition

ComponentsInvoice

Customer

Customer

Invoice

Process

Payment

Report

ProblemsSearch for

Components

Order Invoice Payment

Problem

Resolution

Customer

Problem

Problem

Report

Product

InformationShipped

Product

Packaged

Product

Customer

Requirements

Technical

Architecture

Fully Functioning Product

Application

Vision and

Direction

List of

Required

ComponentsComponents

Components

Maintained and

Upgraded Product

Maintain

Application

Receive

Components

End

Yes

TEC

HN

ICA

L SU

PPO

RT

AC

CO

UN

TIN

GO

PER

ATI

ON

SD

EVEL

OPM

ENT

Swimlane Chart

Value-add Analysis

Value Adding activities are those exert an effect on the

service or product and this adds value from the customer’s

perspective.

Value Enabling activities are those that do not add value

as such, but are necessary or required for the conduct of the

process. Examples: steps needed to comply with regulatory

requirements; or to provide information to the organisation.

Non-Value Adding activities are those that do not add

any value from the customer or organisational perspective.

Develop Bill

of Materials

Supplier

Customer

Set Product

Requirements

Code

Application

Components

Exist?

Start

Set Product

Strategy

Build

Product

Ship

Product

Support

Product

Obtain

Customer

Feedback

Customer

Customer

Requisition

ComponentsInvoice

Customer

Customer

Invoice

Process

Payment

Report

ProblemsSearch for

Components

Order Invoice Payment

Problem

Resolution

Customer

Problem

Problem

Report

Product

InformationShipped

Product

Packaged

Product

Customer

Requirements

Technical

Architecture

Fully Functioning Product

Application

Vision and

Direction

List of

Required

ComponentsComponents

Components

Maintained and

Upgraded Product

Maintain

Application

Receive

Components

End

Yes

TEC

HNIC

AL S

UPPO

RTAC

COUN

TING

OPE

RAT

IONS

DEVE

LOPM

ENT

Swimlane Chart Showing: Handover analysis and Value-add analysis

CASE STUDY: Gov’t dep’t support application process

The application process took 12 weeks

• Team formed – manager; team leader, operators;

service support dep’t rep;

• Value stream map; Swimlane chart and value-add analysis;

• Identified multiple checks that did not add value and work flowing

backwards and forwards between departments;

• Gained management and operations agreement to remove checks

and waste activities along with redesigning some process steps;

• Pilot showed the time reduced to 3 weeks.

5S Workplace Organisation

Tool Meaning

Sort Housekeeping. The only things that should be in the

workplace are files, materials and tools being used.

Set in order Workplace organisation. A place for everything and

everything in its place.

Shine Clean up. Make the place shine.

Standardise Best Practice. Make the above 3S’s become a way of

life.

Sustain Discipline. 5S becomes part of the way we do things

around here.

Is this sorted?

Fool Proofing

Fool proofing or error proofing.

It is a technique for avoiding and eliminating mistakes.

Cardboard template is

“bill of material”. Wrong

parts cannot be picked.

Example: 5S and Error Proofing

Messy, time lost finding parts

and wrong parts often picked.

ISO 9001 Lean

ISO 9001 Lean is a program that combines the

benefits of a structured management system

with the powerful but simple tools of Lean to

implement effective performance improvement

using an ISO 9001 based management system.

ISO 9001 Lean 5.4 Planning (to meet objectives) –The objectives are established and processes are designed

to support the achievement of objectives at section, division and the strategic level.

ISO 9001 Lean 5.4 Planning (to meet objectives) –The objectives are

established at section, division and the strategic level.

8.4 Analysis of data

Collect and analyse data relating to:

Process performance

Customer satisfaction

Product / service performance

Cost

Time / efficiency

Internal audits

Performance against objectives


established at section, division and the strategic level).



Process performance



Results of internal audits

Cost

Time / efficiency


Gaps in performance are now known.


established at section, division and the strategic level).



Process performance




Cost

Time / efficiency


Gaps in performance are now known.

Use the improvement clauses

of the standard to address

gaps in performance using

simple Lean tools.





Process performance




Cost

Time / efficiency


8.5.1 Continual improvement

8.5.2 Corrective action

8.5.3 Preventive action

Use the tools out of the Lean Toolbox





Process performance




Cost

Time / efficiency


8.5.1 Continual improvement

8.5.2 Corrective action

8.5.3 Preventive action

Use the tools out of the Lean Toolbox

Causes of gaps identified, solutions

identified, future state developed and

implemented.

Improved and sustainable performance

Lean provides an extremely effective tool for:

Focusing key members on the elimination of

waste,

Identifying specific alternatives that will improve

processing times or quality,

Provides a new lens for reviewing customer

requirements,

Creating solutions that ‘bridge the gap’ between

process and management.

Lean Improving Business Performance

An organisational journey

Fix the

basics

Align the

System

Focus on

value

Sustainable

Performance

SAI Global Client Solutions

Client

Solutions Services

What

• Establishing sustainable performance • Organisational wide engagement in Excellence and Continuous Improvement • Tailored Systems for Business Performance Improvement

How

• Facilitating sustainable capability development

• Structured program for organisational learning

• Delivered by credible advisors with extensive experience in Business Excellence

Our point

of difference

• Sole Australian Provider of the internationally recognised Australian Business Excellence Framework

• Demonstrated success in Organisational Change Management

Our Approach for LEAN

• Lean Implementation 5 day event – consecutive days or split over several weeks

Training of CI Facilitators

Action Learning approach

Address an improvement opportunity and deliver outcomes through the training Event

• Lean Blitz 2 day Blitz

Basic Lean skills applied to an operational problem

• Applying Lean Concepts • 2 day Introduction to Lean Concepts

• Working towards a Lean Organisation

• ISO 9001 Lean • Application of lean to improve your management system

• Lean Coaching

The ABEF Categories

Understand the

Australian Business

Excellence Framework

and Principles

Clarify Strengths

and Opportunities

for Improvement

Implement and

Manage the

Solution

Understand

the

System

Apply

Improvement

Techniques

Review

Improvements

Common Understanding

of the System and

Priorities Agreed

i.e. System Outcomes

Allocation of

Resources for Working

ON the System

Approval to Implement

and Accountability

Assignment

OFI’s from

Other

Sources

Systems

Thinking

Achieving Sustainable Excellence

Benefits to Commercial organisations

20% productivity increase in one year

247% sales increase over two years

150% increase in tenders won

500% increase in share price over six years

25% sick leave reduction in one year

66% lost time injury reduction

80% product defect reduction

Benefits to the way you personally work

Provided me with solutions I needed to overcome issues being imposed upon me by the

Standards Agency and Accreditation.

Has allowed me to devolve responsibility down the line better.

I look at requests for change through eyes of data and not just whims. Personally more

open to ideas and suggestions.

I have stepped back from ‘leading’ to allow others to try to make decisions.

Benefits to Staff

Staff morale has increased and they are in more control.

Improved staff satisfaction.

Staff are beginning to understand their role in the context of the wider organization

Personal improvement plans now work.

Staff members who previously were reluctant to be involved now line up to be part of it.

The staff have more confidence in using feedback systems.

Better use of RN time.

Communication and awareness has increased by more than 90%

Benefits to Organisations

Reduced Outside Maintenance cost by approximately $6000 per year.

This has brought the four facilities together in sharing data and common systems.

Greater focus on the system and not on the people when things go wrong.

Feel we now have control of the business again.

BE & Management Systems

ABEF & integrated

leadership and management systems

Lean Capability Event March 2013

Questions?

Thank You