1. LEAN 101
Mike Nugent
Prevention Services Division
CDPHE

2. “At Toyota we get brilliant results
from average people managing a
brilliant process. Others get average
results from brilliant people
managing broken processes.”
Source: Toyota Motor Co.

3. Toyota Production System
• Approach to Production
– Build only what is needed
– Stop if something goes wrong
– Eliminate anything which does not add value
• Philosophy of Work
– Respect for Workers
– Full utilization of workers’ capabilities
– Entrust workers with responsibility & authority
Taiichi Ohno 3

4. Core Concepts of Lean
• Create continuous process flow to bring
problems to the surface
• Use “pull” to avoid overproduction
• Level out the workload (hejunka)
• Get quality right the first time
• Standardize tasks
• Use visual controls so no problems are hidden
• Use only reliable, thoroughly tested technology
that serves your people and processes
• In pursuit of perfection

5. Customer Define Value
• Value-Added (VA):
– Any activity performed during the production of a
product or service that increases the value to the
customer or citizen
• Non-Value-Added (NVA):
– Any activity that does not add value to the customer
or citizen, or that is not necessary in support of the
main purpose. (These activities should be eliminated,
simplified, reduced, or integrated.)

6. Sample Lean Event Tools
• Waste Walk
• Rapid Improvement Events (RIE)
• 5S
• Kanban
• Process Mapping
6

7. Waste
• Waste is disrespectful of humanity
– Because it squanders scarce resources
• Waste is disrespectful of individuals
– Because it asks them to do work with no value -
President Toyota
• Waste is disrespectful to Colorado citizens
– By asking them to endure processes with no value

8. Waste

9. 7 Wastes Characteristics
Overproduction • Processing that the customer does not need or want
Inventory • Staff Members waiting
• Multiple applications awaiting approval
Extra Processing • Duplication
• Processing a small deal the same as a large deal
• Navigating multiple screens to input data
Motion • Printing material
• Looking/researching for data/info
• Incorrect data on application
Defects/Rework • Missed customer due dates
• Rework
• Application waiting approval
Waiting • Waiting on information from customer
• Waiting on information from 3rd party
• Receiving hardcopies from customer
Transportation • Shipping hard copies for customer signature
• Manually walking the application for approval

10. Waste Walk

11. Kaizen- Rapid Improvement Event (RIE)
• Goal: Generate ideas for improvements and test
changes at the work site
• Typically 4 days and report out event
• Appropriate scope
• Prework and data gathering key
• Cross-functional team (8-10)
– Black Belt team leader
– Process owner
– 1/3 fresh eyes
– 1/3 Lean experience
– 1/3 team doing the work

12. Kaizen- Rapid Improvement Event (RIE)
Day 1  Examine a process/function or area
 Identify areas of waste, non-customer value and metrics
Day 2  Develop new process, standard work and communication to
eliminate identified waste and increase value
Day 3  Implement the new processes, standard work
 Monitor production board and communicate standards
 Observe new process and any change in metrics
Day 4  Adjust and fine tune new standards

13. RIE Day 4

14. 5S
• Sort (does it belong here)
• Set in Order (organize)
• Shine (clean)
• Standardize (repetition process)
• Sustain (metrics posted, accountability)

24. How 5S will be used at PSD
• Reduce searching • Gain flow
• Trigger an activity • Enable communication
• Define standards for and information sharing
consistent results • Mistake-proof tasks

25. Push and Pull method of Work
Flow
Push Method: A method in which production of the item
begins in advance of customer needs.
Example: A buffet where food is prepared in advance.
Pull Method: A method in which customer demand activates
production of the service or item.
Example: A restaurant where food is only prepared when
orders are placed.
Lean systems use the pull method of
work flow.

26. KANBAN
Kanban means “card” or “visible
record” in Japanese & refers to
cards used to control the flow of
production through a factory.
KANBAN is a PULL System .

27. Kanban System

28. Office Supplies Kanban Project

29. Process Mapping
• Diagram that visually displays a series of events,
activities or steps that occur within a given process
– Helps to define and analyze a process
– Identifies deviations from the norm
– Shows relationships between steps or
departments involved
– Highlights value-added and non value-added step
in a process

30. Versions of a Process
1. What you think it is...
2. What it actually is... 3. What you would like it
to be...

31. Process Mapping
Yellow notes: steps in the process
Pink notes: identify opportunities for improvement

32. CURRENT STATE
PM Actions:
-Verifies info on claim form
-Checks supporting
document Mgr Actions: Control Analyst Actions:
-Verify math accuracy -Verifies expenses fall within -Verifies expenses fall
-Verify match & local claim period within contract period
PM receives benefit Yes -Verifies travel expenses Yes Sends to -Checks claim against
Data PM PM enters PM routes Manager
claim form -Verify expenses are Accurate? -Verifies eligibility of Accurate? Control prior expenses
stamp signs into SAP to Mgr signs
from grantee eligible expenses Analyst -Checks SAP against
-OTS contract mgmt -Reviews match/local claim
manual No benefits on claim form -Completes all PM and
-NHTSA federal finance -Verifies spending rate No Mgr steps
document
PM Add to Response Keep old When new
-CONUS/Travel info Need to Yes Start
contacts pending from until new received,
Fiscal rules (state & OTS) resubmit? over Send back
grantee file grantee received check pile
to PM
PM No
contacts
mgr Move
forward
PM
contacts
control
analyst
Yes CA initials Original claim
PM copies
Accurate? and returns goes to Teri
claim for file Paul logs
to PM for logging
MOST claims
No and walks
upstairs Janet pulls copy Some claims: Take purchase order
Al receives Al date Janet Janet logs all Write claim # Check vendor
of purchase order/ enter match/local and claim form to
claims from stamps and receives all claims and down and and remittant
contract and benefit info into assure correct fund/
Submit claim mailbox distributes claims assigns # sign address
Type claim Copy claim File claim attaches to claim spreadsheet performance period
return form Teri walks claims
return form return form return form upstairs to
to Mgr
business office
mail box
PM resolves
Mgr goes to PM closes
and forwards to
PM for claim loop with
Control Analyst
resolution Mgr
for initials
Hand packet View document Janet separates Batch claim Scan page 1
Yes Enter into SAP Compare Paid next Mike K. File original claim
to Michael K. # and compare Before Yes Return to claim form forms, copy & 2 of claim
Accurate? (“parking” contract “Post it” business signs claim (hard copy)
(2-3 times/ with claim and 2pm? Janet purchase order page 1 & 2, and form and file
invoice) period day form (Business office)
day) contract and returns to file return to PM in EDM (OTS)
No No
Hold claim
Paid
and contact
business
PM via email/
day plus 1
phone

33. FUTURE STATE
Send claim to
No Compile Yes
Claim Proj Mgr Controls Additional Add errors
Accurate? list of
submitted reviews claim Analyst for errors? to list
errors
review
Yes No
Send claim to
Controls
Analyst for
review
No Compile Return claim Proj Mgr
Errors
Accurate? list of form to Proj contacts
corrected
errors Mgr vendor
Yes
Put claim in Jenn takes Business office
Check Yes Return
outbox for claim(s) to receives claim(s) Park Claim to Form to
remittant Accurate? Mgr Review Post invoice original claim
business business invoice Mike Janet
address to PM
office office Distribute - Tech
No
Contact PM
W9

34. LEAN Goals
April 1, 2012-March 31, 2013
• Create a general awareness and enthusiasm regarding LEAN
process improvement amongst PSD employees
• Provide managers and supervisors opportunities to attend
training in LEAN process improvement
philosophy, methods, and tools
• Provide mentorship and coaching to PSD managers and
supervisors in the application of LEAN process improvement
principles
• Demonstrate measurable improvements in PSD program
delivery, business practice, and Division efficiency and efficacy
• Leverage PSD LEAN expertise in facilitating cross departmental
improvement initiatives

35. LEAN Activities
April 1, 2012-March 31, 2013
• Provide LEAN 101 presentation to PSD managers, supervisors, and
employees
• Provide training to managers and supervisors related to LEAN tools
including but not limited to 5S, standard work, process mapping, and
waste walks
• Develop and regularly update LEAN tracking sheet for PSD operations
documenting cost savings, cost avoidance, and improvements in efficiency
and customer service
• Provide representation and support to CDPHE’s LEAN Advisory Group
• Conduct Rapid Improvement Events (RIE) with an emphasis on strong
baseline metrics and process improvement sustainability
• Conduct Program Reviews in an effort to improve program efficacy and
customer service

36. Measures for Activities
• A minimum of 125 employees attend LEAN 101 presentation
during performance period
• A minimum of 50 employees attend at least one training related
to the use of LEAN tools such as 5S, standard work, process
mapping, and waste walks.
• Using the PSD LEAN tracking sheet, document at least
$500,000 in cost savings, cost avoidance, and/or waste reduction
during the performance period
• Provide PSD representation to at least 75% of CDPHE LEAN
Advisory Group meetings
• Conduct at least two PSD Rapid Improvement Events (RIE)
• Conduct at least two PSD Program Reviews

37. Progress Reports
RIEs n=2
100%
90%
80%
70%
60%
CDPHE Lean Advisory Meetings
50% Program Reviews n=2
n=9
40%
30%
20%
10%
Goal
0%
Actual
Cost Savings n=$500,000 LEAN 101 n=125
LEAN Tools n=50

38. Comments and Questions