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The Principles of the Lean Business System: #4 Pull Lean in the 21st Century ™ Series Professor Peter Hines

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• Welcome

• Webinar will last about 1 hour

• We will invite you to complete

a few Polls

• Q&A session

Our Webinar

Lean in the 21st Century™

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• Frederick Taylor invented the business system used by organizations throughout the 20th Century

– Cost is the focus – Scientific Management System – Functionally organized by expertise – Built for internal efficiency – Not fit for the global , competitive environment of the 21st century – Relies on traditional management to be effective – Objective is to minimize the time it takes to do value added

processes

• Peter Hines has invented a business system of the 21st

Century – People are the focus – Value Management System – Organized by value delivered – Built for productivity in an extended enterprise – Fit for the global, competitive environment of the 21st century – Relies on leadership disposition and language to be effective – Objective is to reduce or eliminate non-value added activities

Welcome!

• Co-founder Lean Enterprise Research Centre, Cardiff University

• Chairman, S A Partners • Adjunct Professor, University of

South Australia

Professor Peter Hines

90% of problems in business are caused by management, 10% by the workman. F. W. Taylor, 1912

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• Research conducted by Professor Peter Hines identified 5 key elements of success:- • Link business system to a one to two year strategy through Policy

Deployment • Dismantle traditional, siloed, functionally-focused business processes • Deploy human resources aligned to value to be delivered • Develop leadership to be effective in a 21st century business system

space • Synchronize business systems with suppliers and customers

We encapsulate this in an evolutionary business model rooted in time tested customer, quality and lean thinking

The Lean Business Model

How we see creating a 21st century business system…

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The Lean Business Model ®

Original source: Professor Peter Hines Benchmarking Toyota’s Supply Chain: Japan vs U.K. Long Range Planning, February, Volume 31, Number 6, pp. 911-918, 1998, ISSN 0024-6301

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The Principles

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• Who leads your continuous improvement effort (please pick one):

• Managing Director/CEO • Director/Vice President of Operations • Director/Vice President of Lean • Manager Level • Other

Poll #1

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1. Pull based delivery? 2. Pull based improvement 3. Pull based training 4. Pull based people process

Pull

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Pull Based Delivery?

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• What is real demand • Purple Micra • Failure Demand

Real Demand

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Demand Variability

Pull Based Delivery?

Demand Variability

Volume

Adapted from: Fisher, 1997

Runner

Repeater

Stranger

Low Variability/ Complexity

Kanban

Medium Variety/Complexity Make To Order

Adapted from: Fisher, 1997

High Variety/Complexity

Avoid? Stock?

Volume

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Types of Demand

Repeater :- Ongoing Demand More Difficult to Predict Medium Inventory Risk Items

Stranger :- No Ability to Predict Ongoing Demand High Inventory Risk Items

Runner :- Regular, Predictable Ongoing Demand Low Inventory Risk Items

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• What type of demand do you have?

• Mostly Runners • Mostly Repeaters • Mostly Strangers • Quite a variety of demand types

Poll #2

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Pull Based Improvement

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Management Process for Business Improvement

Many influences

in the environment

Crisis in the environment

Design & Plan Project

Implement Project

Adjust plan or targets

Check impact on performance

Discontinuous Improvement

Strategic Choices Targets

Top-Down, Business led Improvement Project Management Process

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Continuous Improvement - stability

Real time problem solving

Make changes

Check impact on performance

Problem detected at source

Test for stability and reset

Continuous Improvement

Many small problems

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Continuous Improvement - stability

Real time problem solving

Make changes

Check impact on performance

Problem detected at source

Test for stability and reset

Continuous Improvement

Many small problems

Deployed Targets

Bottom-up, Team led Day-to-day Improvement Process

Many influences

in the environment

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The CI learning system

Strategic Choices Targets

Deployed Targets

Seamlessly integrate

Continuous Improvement

Discontinuous Improvement

Continuous Improvement

Redesign processes

Feedback to strategy

Greater rate of improvement

Faster, better change

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Cascading the strategy & problem solving network

Business Level Cockpit

Sales Cockpit Product Development Cockpit HRM Cockpit Operations Cockpit

Marketing Sales (Key Accounts) Customer Service

DISCONTINUOUS IMPROVEMENT OR DI

CONTINUOUS IMPROVEMENT OR CI

PROCESS IMPROVEMENT OR PI

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Push or Pull?

20 big projects

Lean Coaches

3 Projects

each

Lean Coaches

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• Is your system of improvement:

• Mostly push based? • Mostly pull based?

Poll #3

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Pull Based Training

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Pull Based Training

Team: Prince Sanctions Level 1/2 Skills MatrixTeam Leader: Venkateswaran S

Sanctions Officers NameRosy John L L U U L UIswarya Mukundagiri Vankeepuram U U UDamodharan Nagarajan ISinu Bhaskarannair Nirmala Bhavan O O OOmprakash Maruthanayagam L L L L U U UAnoop Sabusenan I IPramoth Kumar Venkatesh U U UKumaran MurugesanPradeep Gandhi Dhanabalan O O O OManjula Veeraragavan O O ODhanyan K UthayanandhanDinesh Kumar KrishnasamyKarthick BalamurugesanAlwin Tara Singh AnburatnamNagarajan SrinivasanSuresh Varadarajalu DArul Prakasam BoopathyCapability to undertake process: Number of Staff 5 5 6 4 4 4 3Requirement: Number of Staff 6 5 5 6 3 5 3Gap: Number of Staff -1 0 1 -2 1 -1 0

Key:Training Need Identified I*Training Completed LCan meet Quality & Productivity Standards UAble to Coach Others O

Comprehensive knowledge of systems and processes

Investigation capability

Activities/Skills

Application of filters

Updating Scan-IT Hit

review station with

comments

Investigating all hits

Proposing Skips

Strong PC skills

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Pull Based People Process

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Push or Pull Based People Process

Who is the customer of the people process?

Line Manager

Who is the Production Manager / Planner of the People Process? HR Department

Whom is the

Supplier?

Internal or Out-sourced

What is the Physical Flow? Recruit Induct Review Train Retain Retire

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• What further activity would you like?

• Please select one or more answers

Poll #4

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• If you would like to discuss anything coming out of the webinar please contact me at: peter.hines@sapartners.com or +44 (0)7974 416660

• Please also link up with me at uk.linkedin.com/in/profpeterhines/

• Or join me at my Lean Business System LinkedIn group: http://www.linkedin.com/groups/Lean-Business-System-1801885?trk=myg_ugrp_ovr

• See also Kevin Eyre’s recent webinar on Lean Culture: http://www.sapartners.com/thought-leadership-in-the-area-of-lean-culture/

Further Questions

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Come and join Professor Peter Hines at Aimia Foods, winner of the 2012 BFA “Factory of the Year” Award. Learn • Share • Grow – Achieve Lean Excellence Event 3-4th October, Aimia Foods, Haydock, Lancashire Understand how Lean Thinking provides the basis for a profitable, growing and customer-focused business and experience a tour of Aimia Foods to see in action an exemplar lean facility. Qualify for an exclusive 10% discount by entering promotion code LI1013 on the booking form. To find out more or to book your place, follow the link:

http://www.sapartners.com/achieve-lean-excellence-event/ For further information please contact jo.maniatt@sapartners.com Or visit http://www.sapartners.com/uk-events/ for our full event schedule

European Events

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• Cardiff University accredited training in Melbourne , Sydney and Brisbane . See more details on: http://www.sapartners.com.au/wp-content/uploads/2012/11/Lean-Awarness.pdf

• Lean Business System networking Conference Sydney 6th Sept with Professor Peter Hines and a range of executive lean speakers from Commonwealth Bank, Treasury Wines, Boral and more. See this link for details http://www.sapartners.com.au/wp-content/uploads/2012/10/Sydney-Lean-Networking-Conference-6th-September-flyer-and-booking-form-copy.pdf

• Or Contact our Australian Managing Director Chris Butterworth on chris.butterworth@sapartners.com

Australian events