Workforce Training Facilitation – Just-in-time, Kaizen Events in Office & Service Environments (Part 2 of 2)

Kaizen Events in Office & Service Environments: A Two-Part Webinar Part II - December 10, 2009 Company LOGO

Learning Objectives (both webinars) Participants will learn:       The difference between Kaizen and Kaizen Events. When to use Kaizen Events. Step-by-step approach to planning and executing office and service-based Kaizen Events. The “Kaizen Commandments” that reduce common pitfalls. How to create a Sustainability Plan with teeth. How to navigate the common obstacles to success. © 2009 Karen Martin & Associates 2

5-Day Kaizen: Sample Structure Day 1 & 2 (Plan) Day 3 & 4 (Do, Check) Day 5 (Check, Act) © 2009 Karen Martin & Associates Kick-off (executive presence) Analyze current state Perform root cause analysis Design future state Interim briefing Design & test improvements Obtain buy-in Interim briefing Finalize improvements Train process workers & stakeholders Present results CELEBRATE! 4

Kick-Off Recommended Order     Executive Sponsor Value Stream Champion (if relevant) Improvement Leader (if dedicated staff) Facilitator Ice Breaker (if helpful) Lean Overview (if necessary)  If tied to a VSM, review the current & future states Charter Review (always), Expectations & “Notional” Schedule. © 2009 Karen Martin & Associates 6

Kaizen Commandments  The team starts and ends the day together.  Being on time is critical.  The team stays 100% committed and 100% focused.  No interruptions.  All wireless devices on silent mode or off. No vibration.  Rank has no privilege.  Finger-pointing has no place.  No veto power from outside the team.  No silent objectors. Don’t leave in silent disagreement.  Seek the wisdom of ten, rather than the knowledge of one.  The current process isn’t “broken”; it needs improvement.  It’s okay and encouraged to disagree; it’s not okay to be disagreeable. © 2009 Karen Martin & Associates 7

Agenda Tuesday, December 1  PLAN Wednesday, December 2   PLAN – DO (Design) Interim Briefing Thursday, December 3   DO – CHECK (Test & Finalize) Interim Briefing Friday, December 4   ACT (Train) Final Presentation © 2009 Karen Martin & Associates 8

The Improvement Cycle A P Identify & Prioritize Macro Opportunities 1 Monitor, Refine & Sustain Implement Improvements 6 Plan for improvement 7 2 A P 3 Analyze Current State (Micro) DC 5 C Design, Test & Refine Improvements 4 Brainstorm & Prioritize Opportunities D

Current State Documentation Options Go to the gemba! – OBSERVE Review Performance data Draw Spaghetti diagrams Documentation / job aid review Videotape / photos Worker interviews Work samples Metrics-Based Process Mapping (MBPM) © 2009 Karen Martin & Associates 11

Metrics-Based Process Mapping

MBPM Post-it Conventions Step # Activity (Verb / Noun) Function that performs the task # Staff (if relevant) Barriers to flow (if relevant) PT (process time) % Complete & Accurate LT (Lead time)

Step 9: Label the value-adding (VA) and necessary non-value adding (N) activities 14

Metrics-Based Process Mapping Summary Metrics Metric Total Process Time (timeline) Total Lead Time % Activity Rolled First Pass Yield Total PT (all steps) Labor requirements Freed capacity Current State Projected Future State Projected % Improvement

Spaghetti Diagram (Shows people and product travel) Mail Room Start Desk Table Table Table 6, 7, 8, 9 Table 1 2 Table Desk © 2009 Karen Martin & Associates Table 6, 7, 8, 9 4b 6, 7, 8, 9 4a Table 6, 7, 8, 9 3 11 10 Desk Desk 4c 6, 7, 8, 9 Table 6, 7, 8, 9 Desk Desk Desk Desk cart Desk Desk Table Staging Area 12 Desk © 2008 Karen Martin &

ECN Process – Document Travel Finance Management Conference Room Sales Engineering Quality Assurance Safety Marketing Training Room Human Resources Operations Supervisor © 2009 Karen Martin & Associates

Impact of Shared Equipment Distance traveled to printer   Dept A = 92 ft. per trip Dept B = 696 ft. per trip 120 occurrences / day = 4656 miles/year Walk pace = 1 mile per hour    = 582 days/year of unproductive, non-value-adding time = 4,656 hours = 2.4 FTEs © 2009 Karen Martin & Associates 18

Root Cause Analysis (RCA) RCA is necessary to: Avoid jumping to conclusions  Avoid creating “band-aid” fixes (addressing only the symptoms)  Select proper countermeasures  Design and implement lasting solutions that truly eliminate the problem  © 2009 Karen Martin & Associates 20

Root Cause Analysis Tools Simple problems   Five Why’s Problem Analysis Tree More complex problems    Brainstorm causes (fishbone) Tally frequency of most likely causes (check sheet) Identify relevant few (Pareto analysis) for countermeasure development © 2009 Karen Martin & Associates If necessary 21

Future State Design  Goals      Reduce total Lead Time (LT) & Process Time (PT) Improve overall process quality (increase Rolled First Pass Yield – RFPY = %C&A x %C&A…) Increase % Activity (PT/LT x 100) Reduce LT, PT, and increase %C&A at individual steps Reduce workforce stress, frustration, etc.  How?        Eliminate non-value-adding activities Reduce handoffs Improve quality of output Eliminate rework Eliminate inspections, audits, reviews, approvals Reduce batching, WIP (work-in-process) & queuing Reduce transportation and motion © 2009 Karen Martin & Associates 22

Building a Lean Enterprise Process Stabilization Tools

Building a Lean Enterprise Flow-Enabling Tools

Brainstorm Solutions 1. 2. 3. 4. 5. Classic brainstorming – no holds barred Merge similar ideas. Eliminate “unwise” ideas. Number & Prioritize solutions. Select those that can be accomplished in the Kaizen Event.   Keep scope and objectives in mind Don’t try to boil the ocean in one event © 2009 Karen Martin & Associates 26

PACE Prioritization Matrix Easy 5 4 13 23 8 22 17 3 10 21 1 16 15 20 19 14 6 7 11 2 18 12 Difficult Ease of Implementation 9 High Anticipated Benefit Low

Kaizen Event 30-Day List Spell-check Sheet Executive Sponsor Value Stream Champion Facilitator Team Lead Action Item Event Name Event Dates Owner Owner's Manager Due Date Progress Comments 4 1 3 2 4 1 4 1 3 2 3 2 4 1 3 2 4 1 3 2 4 4 1 3 3 2 4 1 3 2 4 1 4 3 2 3 4 1 3 2 4 1 3 2 4 1 3 2 4 1 3 2 4 1 3 2 4 1 3 2 4 1 3 2 4 1 3 2 1 2 3 4 5 Progress Key 0% Complete 2 25% Complete 6 7 8 9 50% Complete 4 10 75% Complete 11 12 13 100% Complete 14 15 29

Parking Lot Issues Executive Sponsor Value Stream Champion Facilitator Team Lead Issue / Discovery Event Name Event Dates Team Recommendation Owner 1 2 3 4 5 6 7 8 9 10 11 12 30

Documentation of New Process Minimal use of traditional SOPs (standard operating procedures) Heavy use of job aids MUST TEST WITH PARTIES OUTSIDE THE TEAM Test with real-time process, if possible © 2009 Karen Martin & Associates 32

Standard Work Job Aid Criteria • Simple • Visual • Physical • Posted at point of use • Created by people who do the work and tested by others

Creating Job Aids to Promote Standard Work • Use colorcoding when possible • Keep it simple 34

Common Obstacles to Success Kaizen Events not tied to a strategic plan. Scope too broad. Teams too narrow (functions). Key leadership not at interim briefings. Lack of communication and upfront consensus building. Inadequate training on new process. Inadequate structure for sustaining the improvement. © 2009 Karen Martin & Associates 38

Implementation = Training Why training     Communicate new process Distribute new procedures, aids, tools, etc. Create confidence & competence among workers Build sustainability Potential training audience    Workers and their supervisors / managers Downstream customers (if impacted by change) Upstream providers (if input they provide will be changed) © 2009 Karen Martin & Associates 39

Kaizen Event Charter Event Scope Value Stream Leadership Schedule Executive Sponsor Dates Specific Conditions Value Stream Champion Start & End Times Process Trigger Facilitator Location Team Lead Interim Briefings Event Name First Step Last Step Event Boundaries & Limitations Workforce Training Event Coordinator Event Drivers / Current State Issues Final Presentation Team Members Function 1 2 2 4 Contact Information 1 3 Name 3 5 4 Event Goals and Objectives 5 1 6 2 7 3 8 4 5 9 10 Potential Deliverables On-Call Support Function 1 2 2 4 Contact Information 1 3 Name 3 5 4 Possible Obstacles 1 Approvals Executive Sponsor Value Stream Champion Facilitator 2 3 4 Signature: Date: Signature: Date: Signature: Date:

Workforce Training Facilitation – Just-in-time, just-the-facts Must be mandatory & interactive  Face-to-face if possible  May require multiple sessions  If geographically dispersed, person-to-person with support of:       Conference calls Webinars Voice mail Email (instructions, procedures, etc.) Designated mentors for on-going support Channel for post-training feedback, Q&A, etc © 2009 Karen Martin & Associates 41

Workforce Training Content – everything that is required in order to perform the new process tomorrow  Purpose of event  Quality, Cost, Delivery, Safety, Morale  Business needs   Instruction on new process Handouts for everyone  New procedure, process map, checklists, visual aids, etc.   Demonstrate new process (if possible) Discuss on-going support/monitoring, sustainability plan, audit plan  Who should they contact for help and/or additional improvement suggestions? © 2009 Karen Martin & Associates 42

Kaizen Event Final Phase While training is occurring  Calculate projected results (actual, if possible)  In financial terms, when possible      Complete Event Report Create Sustainability Plan Finalize 30-Day List Finalize Parking Lot Plan for Team Presentation © 2009 Karen Martin & Associates 43

Kaizen Event Report Executive Sponsor Value Stream Champion Facilitator Team Lead Event Objectives Allen Ward Sally McKinsey Dave Parks Sean Michaels Event Name Order Fulfillment Process Event Dates 11/26 - 11/28/2008 Key Improvements Implemented 1 Reduced lead time from time requistion is received until it is input from approx 11 days to 2 days. Engineers and maintence given access to ERP and trained how to create requisitions 2 Reduce number of approvals form 5 to no more than 2 Before Photos, Graphs and/or Data ERP coding changed only department manager authorization is required if total spend is less than $5000 Department managers trained on approval process including need to engage IT group if purchasing application programs 3 4 5 Measurable Results Metric 1 Lead Time 2 Process Time 3 Rolled First Pass Yield 4 Handoffs 5 Unit of Before Measure Measurement Collateral Benefits Projected After Measurement Projected Change Days 8.3 2.3 -72.3% Min 55.0 25.0 -54.5% % 4.0 72.0 1700.0% Each 6.0 2.0 - Reduced equipment downtime due to waiting for parts; trickle-down effect re: stress on maintenance department and inter-departmental conflicts - Less frustration with the purchasing process - Reduced lost-time,and improved productivity, due to walking requisitions through the approval process - Should see less premium freight costs due to expediting of purchased parts and customer orders. -66.7% Team Members 6 Dianne O'Shea Ryan Austin 7 Sean Michaels Mary Townsend 8 Sam Parks 9 Paul Dampier 10 Michael Prichard After Photos, Graphs and/or Data

Common Obstacles to Success Kaizen Events not tied to a strategic plan. Scope too broad. Teams too narrow (functions). Key leadership not at interim briefings. Lack of communication and upfront consensus building. Inadequate training on new process. Inadequate structure for sustaining the improvement. © 2009 Karen Martin & Associates 45

Sustainability Plan Sustainability Plan Executive Sponsor Value Stream Champion Facilitator Team Lead 30-Day Audit Date Event Name Event Dates "Go Live" Date "Go Live" Location 60-Day Audit Date Identify process owner. Communication / Training Requirement Plan Who has ultimate responsibility for how process is performing? Plan Provide training for those who missed initial training. Who will deliver it and when? Integrate new process into ongoing department training. Who leads identification of training that need to be updated (ongoing and for new employees), when will training be in place? Update Value Stream Map. Monitoring / Measurement Requirement Which value stream map(s) need to updated, who will do it and when? Update training records to reflect who has been trained. Who maintains training records? Communicate to affected parties who were not advised Who communicates? How? To whom? during event. Observe process one day after event is over. Talk with Which Kaizen team member(s) will observe the process? How will they workers, assure they understand how process should communicate results? Who is responsible for adjusting the process, if needed? be performed; see if there are problems. Put in place key metrics to measure process performance; post performance. Who is responsible for finalizing process performance metrics and by when? Observe process one week after event is over. Talk with workers, assure they understand how process should be performed; see if there are problems. Which team member(s) will observe the process? When? How will they communicate results? Who is responsible for adjusting the process, if needed? Define corrective actions required if new process not being followed (rewards and consequences). Will there be rewards / recognition for sustaining improvements? What will corrective actions be if workers are not following new process? Who will enforce these rewards/consequences? Post the Event Report, 30-Day List, Sustainability Plan. Who is accountable? Where posted? Monitor process performance frequently; post results put continuous improvement plans in place. Who monitors process performance on an ongoing basis? Who communicates the results? When, to whom, in what format? Update SOPs and other ISO or regulatory documents impacted by changes. Who identifies relevant documentation? Who updates it? By when? Conduct 30-day audit. Who will lead audit & when? How will results be communicated? To whom? How will the process be adjusted, if needed? What's the plan for continuous improvement? Communicate and post 30-day and 60-day audit results. Who communicates? How? To whom? Where posted? Conduct 60-day audit. Who will lead audit & when? How will results be communicated? To whom? How will the process be adjusted, if needed? What's the plan for continuous improvement? Communicate audit results to stakeholders and leadership team. Who communicates? Via what medium? Communicate process performance measurement plan. How is process performance going to be communicated to workers? Are additional visuals needed? Who owns this activity? Value Stream Champion Process Owner Name Name Signature Signature Date Date

Sustainability Issues Who owns the process?    Doesn’t have to align with org chart Should have authority across multiple functions Doesn’t have to be management What are the 2-5 Key Performance Indicators? Who will be responsible for monitoring process performance?   Formal process audits – 30-day audit is a must! Ongoing improvement Heavy use of visual management increases success. © 2009 Karen Martin & Associates 47

Team Presentation Agenda Value Stream Champion Sally McKinsey Facilitator Dave Parks Agenda Item Event Name Order Fulfillment Process Event Dates 11/26 - 11/28/2008 Presenter(s) Opening Comments 1 • Team introductions • Agenda • "Rules" for attendees Sean Michaels Scope and Objectives 2 • Process being addressed • First & last steps • Specific conditions • Event drivers / current state issues • Objectives • Boundaries & limitations Sean Michaels "Before" Condition 3 • VSM and/or MBPM review • Relevant metrics • Photos (if relevant) Sam Parks & Tom Albin Key Improvements Implemented 4 • Key improvements and accomplishments implemented during the event • Tools used Paul Dampier & Michael Prichard "After" Condition 5 6 • New process description • Projected results (direct and collateral) Key Open Action Items • 30-Day List Dianne O'Shea & Mary Townsend Brian Utke Sustainability Plan 7 8 • Potential obstacles that could prevent attaining projected performance levels Parking Lot Issues • Define what a "parking lot" item is Ryan Austin Sean Michaels Lessons Learned 9 • Greatest success; greatest challenge • Team feedback (each individual) 10 Facilitator Feedback 11 Question and Answer • Leadership feedback to team 12 Team Recognition 13 Wrap-up as required Karen Louise Team Leadership Sean Michaels

Post-Event Activities Executive Sponsor Value Stream Champion Event Name Event Dates Facilitator Coordinator  Task 1 Week After 1 Key Follow-up Activities 2 3 Observe the new process the first day or shift following the event. Make realtime adjustments, if needed. Hold first of four weekly post-Event meetings with Kaizen Team to assess progress on 30-Day List, monitor process performance, identify/resolve new problems, and discuss lessons learned. Send thank you's to all team members, on-call support, and others who helped. 4 Broadcast results organization-wide (via email, newsletter, etc.) 5 Post Event Report and Sustainability Plan on improvement communication board(s) and shared drives. 6 Assess if new process is being followed. 7 Take corrective action if process is not being followed. 8 If controlled procedures / processes were changed, update relevant documentation as necessary. 9 Plan future improvement activities, if needed. 10 Share "later" ideas on Ideas List with relevant leadership and continuous improvement staff. 11 Modifiy process further if it needs additional improvement. 12 13 2 Weeks After 14 Meet with team to assess progress on 30-Day List. 15 Measure process to validate projected future state metrics. 16 Adjust process, if needed. 17 Interview process workers and those affected by the improvements to assess success and need for future improvements. 18 19 3 Weeks After 20 Meet with team to assess progress on 30-Day List. 21 Measure process to validate projected future state metrics. 22 Adjust process, if needed. 23 Determine data needs required for further current state analysis and future state design. Assign accountability for measurement and timeframes for delivery. 24 Prepare for 30-day audit. 25 26 4 Weeks After 27 Meet with team to assess progress on 30-Day List. 28 Conduct 30-day audit. 29 Adjust process and/or take corrective action, if needed. 30 Conduct 30-day audit briefing and post audit results. 31 Schedule 60-day audit. 32 33 60 Days After 34 Conduct 60-day audit. 35 Adjust process and/or take corrective action, if needed. 36 Communicate and post audit results. 37 38 Due Date Owner Comments

30-Day Audit Report Executive Sponsor Event Name Value Stream Champion Event Dates Lead Auditor Audit Date Criteria Yes Corrective Action Needed No Owner Are workers following the process as designed in the event (or 1 authorized modifications made since the event)? 2 Is there evidence that all workers, including those new to the area, have been trained on the new process? 3 Is process performance being measured and reported as set forth in the Sustainability Plan? 4 Is the area manager monitoring and supporting compliance to the new process? 5 Are consequences for not following the new process design in place? 6 Have any unintended consequences (positive or negative) arisen? Check with downstream customers. 7 Is anyone resisting the new process? 8 Are all aspects of the Sustainability Plan being followed? 9 Are workers pleased with the improvements? Do they feel their work has been simplified? 10 11 Number of action items due by audit date 30-Day List Status Number of action items completed % of action items completed Performance Metrics Metric / Activity Being Measured Unit of Measure Lead Time Process Time Rolled First Pass Yield % Before Measurement Projected After Measurement Projected Change Actual After Measurement Actual Change (from Before Measurement) Comments

Spread Organizational Learning Communicate results   Newsletters Online bulletins Applying learnings to other parts of the organization  Additional Kaizen Events  Review, modify, and roll out process to other business units, product lines, conditions, etc. Beware of too many Kaizen Events    No more than 4 events per 100 employees per year. BUT… much lower if involving similar functions. And… much lower if you don’t have adequate resources dedicated to continuous improvement. © 2009 Karen Martin & Associates 53

Learning Objectives (both webinars) Participants will learn:       The difference between Kaizen and Kaizen Events. When to use Kaizen Events. Step-by-step approach to planning and executing office and service-based Kaizen Events. The “Kaizen Commandments” that reduce common pitfalls. How to create a Sustainability Plan with teeth. How to navigate the common obstacles to success. © 2009 Karen Martin & Associates 54

Save the Date! 2010 Webinar Kick-off  Wednesday, January 20 – Lean Psychology  How to leverage human behavior to maximize improvement efforts.  Thursday, January 21 – Facilitator Skills  Tips to reduce resistance, stimulate innovation, and successfully challenge paradigms. Survey re: interests and learning needs will be included in next week’s newsletter – please respond © 2009 Karen Martin & Associates 55

Recommended Resources Click here to order from Amazon

Workforce Training Facilitation – Just-in-time, Kaizen Events in Office & Service Environments (Part 2 of 2)

TKMG, Inc.

Workforce Training Facilitation – Just-in-time,