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© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Mike Orzen, CMA, CFPIM, PMP www.maorzen.com
May 16, 2012
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Purpose
� Introduce you to the ideas Lean thinking and strategic alignment
� Explore the role of HR
� Provide an example
� Share some ideas and insights
2
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Mike Orzen, CMA, CFPIM, PMP
§ Accountant/Financial Analyst/MIS (PriceWaterhouse)
§ IT project manager, systems analyst, QA, developer
§ Business Reengineering (Lean, Six Sigma, TOC)
§ Production Panning, Supply Chain & Plant Manager
§ Lean Coach & Consultant - Lean Enterprise Institute, The Shingo Prize
§ IT, HR, Finance, Production Planning, Supply Chain, Admin, Mfg.
§ Strategic Planning and Deployment
3
Shingo Prize 2011
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved. 4
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
What Challenges Are You Facing? � Keeping up with complexity and growth
� Coordination and communication
� Addressing constraints – time, $, people, regulations
� Sustaining improvements
� Moving away from reactive firefighting to proactive
value creation
5
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
What It Feels Like
� Endless “firefighting” (unplanned work)
� Conflicting priorities and requirements
� Doing more and more with what seems
like less & less!
6
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
The #1 Question I Get Asked:
� 235,532 (Culture)
� 21,102 (Changing Culture)
� 23,580 (Changing Behavior)
7
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved. 8
Thinking Thinking
Acting
Culture:
“the customs, arts, social institutions, and
achievements of a particular nation, people,
or other social group.”
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Defining Lean � Lean is a way of thinking for creating a highly effective
organization
� Essential components of Lean ü Applying methodical problem solving to
eliminate waste & variation to drive quality ü Value Stream focus to flow value to the Customer ü Learning through seeing, doing, seeing, asking &
presence
9
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
History of Process Improvement
10
1900 2000
Henry FordConveyor Line/Process Flow
Taylor, GilbrethScientific Management
DemingVisits Japan
Taiichi Ohno -‐ Birth of Toyota Production System
Shewart atBell LabsStatistical Analysis/Process Control
TotalQualityManagement
Six SigmaMotorola, Allied Signal, GE
“The Machine ThatChanged the World”published
“Lean Thinking”published
Lean Six Sigma
Theory of Constraints
TrainingWithin Industry
JuranVisits Japan
Feigenbaum publishes “Quality Control Principles” Shingo Prize
created
Age of Scientific Management Age of Engagement Age of Integration
Lean Office, Supply Chain, Health Care, Service
Industries and beyond
“Reengineering the Corporation” published
1950Agile Manifesto
mid-‐1500s , continuous flow production
of warships – Venice1793, interchangeable parts to
cotton gin -‐ Eli Whitney
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Lean Principles
Source: Lean IT: Enabling and Sustaining Your Lean Enterprise, Bell/Orzen © 2010
Constancy of Purpose
Respectfor People
Pursuitof Perfection
Proactive Behavior
Voice ofthe Customer
Quality atthe Source
SystemsThinking
Flow / Pull / JIT
Culture
TIME
QUALITY
COST
MO
RA
LE
11
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
The PDCA Cycle
The scientific method is at the heart of Continuous Improvement
Go & See
Plan Plan
Do
Check
Act/ Adj
12
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
The Great Divide
Within most organizations there are many….
� Silos � Sub-cultures � Areas of expertise, execution and focus
13
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Barriers of Communication & Coordination
� Words � Measures, Reward & Recognition � Values � Paradigms (Attitudes, Behavior, Culture) � Multitasking & Information Overload � Conflicting Priorities
14
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Many Silos and Many Islands
15
Management
CustomerRelationsSupply
OperationsProduct &
ServiceDevelopment
Information &Information
Systems
OOppeerraattiioonnss
EEnntteerrpprriissee AArrcchhiitteeccttuurree
DDaattaabbaassee AAddmmiinniissttrraattiioonn
PPMMOO
AApppplliiccaattiioonn SSuuppppoorrtt
BBuussiinneessss IInntteelllliiggeennccee
IInnffrraassttrruuccttuurree
GGoovveerrnnaannccee
PPoorrttffoolliioo MMggtt..
WWeebb SSeerrvviicceess
TTeelleeccoomm
VVeennddoorr MMggtt.. SSeerrvviiccee MMggtt..
MMiiddddlleewwaarree
FFiinnaannccee
SSeeccuurriittyy
RReegguullaattoorryy
CCoonnssuullttiinngg
SSeerrvviiccee DDeesskk
MMaaiinntteennaannccee
NNeettwwoorrkk
QQAA
UUAATT
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Hum
an Resources
Patient Visit Value Stream
Lab Value Stream
Healthcare Enterprise Value Streams
Patient Lifecycle Value Stream
Inbound Calls Value Stream
Accounting
Information &
Technology
Quality
Regulatory
Procurem
ent
Clinical O
perations
Pharm
acy
Dental O
perations
16
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Planning, E
nt. Architecture
Application Delivery Value Stream
Service Desk Value Stream
IT Services Value Streams
Telecom Value Stream
Knowledge Management Value Stream
Operations
Help
Desk &
Sup
port
Governance, B
udget
Infrastructure Engineering
Portfolio M
gt.
App D
ev/Maintenance
PM
O and
Resource M
gt.
Prioritization, D
elivery
17
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
What is Operational Excellence? � Better, faster, cheaper
� Dual focus leadership
� Moving away from siloes to an end-to-end approach that
links business processes (value streams)
� A learning organization
18
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
4 19
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
GUIDING PRINCIPLES SUPPORTING PRINCIPLES
One Model of
Operational Excellence
20
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
“Empowerment without alignment is chaos” Peter Senge, Fifth Discipline
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Alignment
22
ü Clarify Objectives
ü Identify Interdependencies
ü Two-way communication
ü Agreement of what is important
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Engage & Align: Top Enabled/Bottom Up
Executives
PDCA
Managers
Associates
Individuals
Strategic Goals and
Objectives Continuous Improvement
Initiatives
Strategy Deployment
23
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
The Role of HR � Change Management
� Communications
� Engagement
� Shifting culture
� Job Descriptions
� Recognition & Reward Systems
24
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
The Current State = The Challenge
Most companies spend 60 - 80% of their
operating budget* just to keep systems
running, not investing in improvement or
innovation of the business.
25
Source: Pricewaterhouse Coopers Technology Forecast, Summer 2009
* Includes $, mindshare, focus, energy
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
HR…A Day in the Life
26
�Job Analysis and design �Regulatory compliance
�Recruitment and selection �Staffing
�Job evaluation/performance appraisal �Health and safety
�Orientation �Community relations
�Training and development �Industrial relations
�Diversity Issues �Ethics and Values
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved. 27
Case Study – Take I
Acquire a software application to address HR request management
28
Case Study – Take II
Develop a framework/structure for a scalable internal-customer request process
29
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Outcomes � HR led by example: � Cross functional team � Value stream focus � A3 � Process before technology
� Their work served as a prototype for the entire campus
� Saved ~$300,000 in avoided acquisition costs
30
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Reflection - Hansei
� Methodical problem solving is the only thing that works
� To understand, decompose work into discrete steps
� Address root causes
� Assume you need additional effort to
sustain improvements
31
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Respect & Humility
Learning by Trial & Discovery
Getting Comfortable with Uncertainty
32
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Everyone has two jobs…
33
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved. 34
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
The Roadmap
StrategyEstablish
leadership visionand consensus
Articulate strategic intent and drivers
Define and communicate
the plan
Build a lean Leadership team
Create a basic toolkit
Assess key enterprise value streams
Launch pilot kaizen projects
Invest in enterprise-wide infrastructure
Consolidate gains & build momentum
Start here
Measure results, assess understanding
and buy-in
PlanningExecution
PlanDo, Check, Act35
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
Next Steps
� Acknowledge that the only lasting solutions are built on a fundamental shift in behavior and thinking
� The best time to begin in now!
36
© Copyright 2012 Mike Orzen & Associates, Inc. www.maorzen.com All rights reserved.
[email protected] www.maorzen.com LinkedIn: mikeorzen Twitter: @MikeOrzenLeanIT 503.313.0023
Thank You!