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In the previous post, I outlined how lean projects can be manged through Plan-Do-Check-Act (PDCA) cycles. Here, I’ll be walking through an example.

Plan

This step includes drawing current value stream (VS) map in terms of processes (or activities), calculating processing times on the value stream, and analyzing for waste. After conducting some brainstorming, the PDCA team can list opportunities for removing such waste by reducing, re-organizing, realigning, training. Finally, we prioritize such opportunities start implementation with those with highest impact first.

In this example, a pizza shop takes orders for delivery over the phone and processes manually.  Customers complain about delivery time being long. Here is how the process works:

• The order taker writes down all order information (type of pizza, size, ingredients, ..etc.) as well as the address.
• Order gets verified by the manager before forwarded to the kitchen. In case of any missing information, the order taker calls the customer back for corrections
• Prepare pizza
• Pizza sits in queue before baking
• Bake, cut, package and label pizza
• Pizza waits in warmer for delivery
• Deliver pizza

The goal here is to eliminate all complaints due to “long delivery time”and increase customer satisfaction.

Times form the above value stream can be summarized as follows:

Lead Time: The time from the customer calling in until the pizza is delivered. In this example, the Lead time is 44 minutes.Value-Adding: All activities that add value to what the customer experiences / pays for. Those steps amount to 15 minutes which is about 34% of the lead time.

Delays / Waiting amounts to 8 minutes.

The PDCA team has conducted root-cause analysis to eliminate waste (and shorten delivery time). The team decided that the manual system for orders created delays and inefficiencies. So it was decided to implement a computerized system for entering orders and communicating them to the kitchen using computer monitors. Also, it was decided to hire an additional delivery driver. The future value-stream table is expected to look as follows:

Do

• Prepare and implement action plan for  computerized system
• After implementation, let the system run and stabilize
• Collect delivery times data again for measuring progress

Check

• Data analysis after implementation of plan show a reduction of  lead time by an average of 11 minutes. This is a reduction of approximately 25% of lead time.
• Complaints due to long delivery time were reduced by 60%.

Act

The updated  value stream after implementation will become the “current” for the next PDCA. As can be seen from the updated value stream table, delays due”waiting for oven space” and “waiting for driver” are still there and could be minimized or eliminated by coming up with efficient methods and creating additional capacity.

Mustafa Shraim

Without an effective platform - lean (quality) management system- Lean initiatives might not be carried through to the finish line. A good Lean management system can effectively sustain gains and extends to other areas where they are needed.

A Leanmanagement system includes quality management system, financial management system, HR management system, environmental management system, ..and other, as applicable. Leadership, discipline, standards, and accountability are essential ingredients. Standards carry the documentation systems (manuals, standard works, procedures, visuals, dashboards). In the absence of good management system, particularly the standards, Lean initiatives are not sustainable. Here are some signs that the management system is weak and far from Lean:

• Employees develop tricks outside the system to get the job done
• Employees enter redundant information that no one cares about or analyze
• Problems are not readily visible and need “special investigation” to uncover
• Company spends a lot of time and effort before audits to clean up the system 
• Employees in production are not aware of customer complaints or involved in resolving them
• Line standards are not updated with improvements (e.g. visual workplace, poka-yoke)
• Dashboards are not updated regularly with useful information on performance
• Corrective actions are past due (months!!)

What’s important here is that these signs (and many others as well) create waste and result, directly and indirectly, in employee and customer dissatisfaction.

(For discussion on lean quality management systems, please join our group Lean QMS on LinkedIn.

I recently made a presentation on lean thinking at a meeting hosted by The Project Management Institute (PMI)-Central Ohio Chapter . I started by asking the group for their input on two questions:

1. From your experience, what are some examples of waste (non-value adding activities)?
2. What is most important to your customer when it comes to the product or service they receive?

I didn’t have a chance to go over the results during the presentation (ran out of time!) but I wanted to share the feedback. The group represented different industries including IT, Law / Legal Services, Automotive, Research & Development, Construction, Retail, Hair Styling,  Public Administration, and Public Health. However, almost half of the attendees were IT professionals.

For the first question, here is a list of answers. The number next to the activity represents the number of times that answer was repeated:

• Meetings (10)
• Defects / Correction & Reworks (5)
• Paperwork Bureaucracy / Checklists (4)
• Indecisiveness / Waiting too long for answers (3)
• Gold Plating (2)
• Others receiving one vote include: Handoffs, overdevelopment of application, time loss, added functionality, retraining, resistance to change, scope creep, processing policy changes, filing trips (transport), producing the wrong product, double-checking, re-design, overlapping trades, large inventory during slow economy

The answers for the second question about what the customer is looking for came as follows:

• Quality / Functionality (7)
• Value / Efficiency (4)
• Cost Control / Within Budget (4)
• On-time (3)
• Customer Service / Expertise (2)
• Others receiving one vote include: stability, reliability, security, access to service, and accuracy.

In lean thinking, waste refers to any activity that absorbs resources but produces no value. Also by definition, value-adding refers to activities the customer is paying for - meaning, they add value to the product or service being produced. Somewhere in between, there are activities (sometimes called enablers) that the customer is not paying for but considered important (e.g. administrative paperwork, rework, and some meetings).

For those of us in project management, it would be worthwhile to look back at a completed project (through schedule, log, interviews, etc.) and:

1. List all activities / tasks in the project
2. Identify the type of task / activity (e.g. waste, value-adding, or enabler)
3. Include time and/or cost for each activity
4. Determine total time for each type of activity

 If we do this exercise for a few projects and see similarities, then we we’ll be able to plan our projects so that:

• Waste is eliminated or minimized
• Enablers are streamlined, replaced or improved
• Value-adding activities are optimized

 Is this possible?

Everyone knows that becoming Lean is a gradual ongoing process. Some gains, particularly those involving value stream maps, may have a significant impact on reducing lead time and associated costs. However, other gains, such as applying the 5-S system, contribute to the overall success but in smaller increments.

Gradual ongoing gains may also be realized from applying Lean concepts in quality management systems (QMS). From experience, many organizations have implementation problems and are heavy on documentation for reasons such as:

• The belief that all tasks require work instructions or procedures
• One person owns the QMS. As a result he or she is free to introduce additional items (procedures, forms, frequency of events) without real evaluation of the impact on leanness
• The QMS has redundant and/or more-frequent-than-needed tasks. This includes the circulation for signature on an updated document or over-documenting a simple step
• Copies of documents where they are NOT needed
• Change of the QMS guard which  means adding more documents. Usually, it is easier to add than eliminate documents thinking that all existing documents are needed (or they would not be there in the first place!!)
• Just in case mentality: thinking that having more would likely impress the external auditor

How do these examples affect leanness?

 I am sure that there are many examples and questions about this issue.  A Lean QMS group on LinkedIn was started to share ideas and experiences. Please join as it is open for all!

In order to provide the best value to the customer, quality (of product and service) as experienced by the customer must be managed. By “managed”, I mean planned for, controlled, and improved. Many companies engaged in applying lean concepts focus on internal operations with little attention to quality. Or quality might be addressed one issue at a time, as needed. For example, if you’ve been applying lean concepts (e.g. value stream maps) but still get many customer complaints / high external failure costs, this might be an indication.

The fact of the matter is that applying lean concepts should not be in conflict with providing high quality that the customer wants. The objectives of a lean system are to improve quality, eliminate waste, reduce lead time, and reduce total costs. In his book “Lean Thinking”, leading expert Jim Womack outlines steps for applying lean starting with identifying value. Value is specified by the customer and created by you (the producer).

If the customer specifies value, why not study what they want? What types of complaints have we encountered in the past? Can we summarize such complaints on a Pareto chart? What complaints are repeated? Do we have survey results? Any informal data from sales or field service? Answering such questions upfront will help us determine value as perceived by the customer. Once that value is determined, it can then be identified and controlled on the value stream.