Lean Is About Time—Particularly in Customer-Facing Services Presenter: Richard J. Schonberger 177...

Lean Is About TimeParticularly in Customer-Facing Services Presenter: Richard J. Schonberger 177 107th Ave., N.E., #2101 Bellevue, WA 98004 USA [email protected] IIE Annual Conference Applied Solutions Sessions Nashville June 2, 2015 Richard J. Schonberger

This presentation draws from Richard Schonberger presentation at: POMS 26 th Annual Conference Washington, DC May 8-11, 2015 Sub-Title: Fixing Leans Bungled Transition from Manufacturing Richard J. Schonberger

This presentation includes research and topical materials from Richard Schonberger book : Best Practices in Lean Six Sigma Process Improvement: A Deeper Look... with Telling Evidence from the Leanness Studies (New York: John Wiley & Sons, 2008) Richard J. Schonberger

Era of Process Improvement Just-in-time (JIT) production: Circa 1960 in Japan; 1981 in U.S., linked with quality, as JIT/TQC JIT renamed lean 1990: in book, Machine That Changed World, but not joined with TQM Six Sigma: Motorola, 1986 (successor to TQM?) Lean + Six Sigma merger, 2000s All the above = Continuous process improvement In what sense? Richard J. Schonberger TQC Total quality control TQM Total quality management

Ever quicker, more flexible, higher-quality, lower-cost responseall along the chain of customers Service examples including visual- management features Richard J. Schonberger

Ever quicker at Seafirst (later B of A) Bank Lean objective: Queue/queue-time reduction Photo goes here

Queue-time Reduction Leans Dominant Quest and Result 5 minutes, $5 at Seafirst bank (1995)*: Highly flexible, on-call staff Electronic record of every $5 payment High payments treated as measure of poor quality to customers *ANZ (Australia and New Zealand) Bank was using the same system in mid 1990s Richard J. Schonberger

More flexible Photo goes here

Ever quicker and more flexible At Atlantic Envelope Co., Atlanta Two cross- trained, clerks co-located behind parti- tion cut order process time to 1 day; also plot/manage own results Prior: 1 week thru 4 depts.

Issue: Radnor, et al.*, say... Healthcare is... capacity led... lean, therefore, is unlikely to free up resources or influence demands for care. *Lean in Healthcare: The Unfilled Promise (Four case studies in UK National Health Service); Social Science and Medicine, 74:3 (February 2012): 364-371 Richard J. Schonberger Oh, yeah?

Richard J. Schonberger 8 AM Surgery Dr. Frederick Dr. Singh Dr. Vickery Nurse Olsen... Instruments... Who was late chart Nurse Debby Costly Resources Freed Up, with Enhanced Patient Care... in Debbys Dugout Northwest Hospital, Seattle 1992

Cells: Co-location with Cross-Training Leans Most Effective Methodology One-Stop Vehicle Licensing, Lincoln, NE (1984)Overcoming Legalities: Citizens processed at one long counter, subdivided into 3 legal entities, each with cross-trained employees Richard J. Schonberger

Vehicle licensing counter shared by employees of the county assessor, clerk, and treasurer Photo goes here

Vehicle Licensing Lancaster County, Lincoln, NE Formerly: 3 separate offices, different floors; citizens would queue up, find they were in wrong line Single counter shared by 3 county agencies Counter Clerk Treasurer Assessor

More Services Examples HUD/FHA Seattle: 158-day loan processing cycle down to 29 days (via cross-training, express lane for no-issue loans, etc.); led to application of same methods country-wide Virginia Mason (lean-famous internationally): Via co-location & 5S, nurses cut search times (in steps walked per day) from 10,000 to 1,200 Richard J. Schonberger

Lean Examples All Showed Quick response + Service quality Richard J. Schonberger In services (more than manufacturing) quick, queue-less response is viewed, by customers, as quality of service Complementarily, any lack of right-first- time quality greatly and irregularly slows service and creates queues

Measuring Quick Response: Toward Queue-less Service Operations Count of units (customers, paperwork, etc.) waiting; or waiting time Units/time waiting tells a lot: Visible, countable, comparable marker of process improvement Hiding places for multitude of illsin facility design, training, operations, etc. Lengthens discovery, contaminates causal trail, magnifies a disaster Richard J. Schonberger

IE Methodologies: Old and New Old: suboptimizing Functional layout Economy of large lots/queues (EOQ) Deliberate insertion of buffer stock/queues Automation of material handling New: The lean core Cellular/flow layout Quick setup to minimize queues Ideal: 1-piece flow (no buffer stock/queues) Minimal, simplified material handling Quick customer response Slow response: Long lead times Richard J. Schonberger

Convergence: Lean Core and IE Models Queuing models and process simulation... Reveal broad benefits of: Cellular/flow layout Quick setup/readiness One-piece flow Re-focus attention... Away from suboptimal efficiencies Toward queue-free customer service Richard J. Schonberger

Measuring Quick Response: Toward Queue-less Operations Count of units (customers, paperwork, etc.) waiting; or waiting time Units/time waiting tells a lot: Visible, countable, comparable marker of process improvement Hiding places for multitude of illsin facility design, training, operations, etc. Lengthens discovery time, contaminates causal trail, magnifies a disaster What about measuring service employees? Richard J. Schonberger

Two Skits Skit 1: Requires 1 male, 1 female actor Skit 2: Requires another pair, 1 female, 1 male Richard J. Schonberger

Common Management Metrics/KPIs* Outside Employees Zone of Influence Operational KPIs: Productivity, output, on-schedule, utilization, unit cost Unfair (Dr. Deming): 85% of causes are management system (data, authorization, specs, training, etc.) Ineffective: Front-line servers have small influence on complex, aggregated measures KPIs: Too often minor-key or off-key *KPI: Key performance indicator

IEs Lean Legacy: Value/Non-Value Analysis & Flowcharting Richard J. Schonberger Value/Non-Value-Add (NVA) 5 flowcharting symbols (Gilbreth, 1921, ASME 1946): O value-add operation 4 NVAs: Arrow (transport) D (delay) Triangle (storage) Square (inspection/check) Two-stage flowcharts: Gilbreth (1921): Before and after charts Nadler (1967): Before & technologically workable ideal system target (TWIST) Ackoff (1978): Similar idealized design Rother/Shook (1998) VSM: Similar present state Future state encourages management by goals and metrics (KPIs)* *Schonberger, Best Practices (2008), 105-106

Ever quicker and more flexible At Atlantic Envelope Co., Atlanta Two cross- trained, clerks co-located behind parti- tion cut order process time to 1 day; also plot/manage own results Prior: 1 week thru 4 depts. Progress charts No numeric goals! No KPIs!

Employees/Servers Main Concerns Capability/conditions... That allow doing work well and safely Process data: Reveal true causes, lead to solutions that relieve job frustrations Process improvement needs flowing rivers of process data; gets trickling streams Richard J. Schonberger

Continuous Employee Engagement Everyones Job Every day (because they occur every day): Record (e.g., on check sheets, flip charts) process glitches, hiccups, frustrations As they occur: Record nonconformities, customer concerns/frowns, safety hazards/conditions In teams: Analyze these data, generate/ process corrective actions, invite experts help as necessary, make presentations Richard J. Schonberger

Continuous Employee Engagement Everyones Job Every day (because they occur every day): Record (e.g., on check sheets, flip charts) process glitches, hiccups, frustrations As they occur: Record nonconformities, customer concerns/frowns, safety hazards/conditions In teams: Analyze these data, generate/ process corrective actions, invite experts help as necessary, make presentations This is low-cost, natural route to continuous process improvement Relying too much on experts is costly, capacity-limited, sporadic Virginia Mason Med. Center tracks PSAs (patient safety alerts) including staff frustrations over obstacles to patient safety) Richard J. Schonberger

Putting Demingand Process Datainto Quality of Service: Two Examples Airline flight attendants: Record every customer complaint New car sales staff: Every customer, ask/record at least two things you dont like about that car All data consolidated, sent to (e.g.,) a manufacturing V.P. Richard J. Schonberger

Lean Methodologies... in Services vs. Manufacturing Richard J. Schonberger

Lean: Should Work Better in Services than in Manufacturing Services Motivational advantage: Customers often seen (human services are customer-facing) Losing the advantage: Services taking their lean lessons from and following wrong tendencies of manufacturing Manufacturing Disadvantage: Customers out of sight, out of mind As a result: Leans focus: Shifts from effectiveness (customer value) to efficiency (waste reduction) Process improvement: Shifts from continuous engagement to intermittent projects dominated by staff experts Richard J. Schonberger Where lean services beats lean manufacturing: Striving to serve multiple customers simultaneously

What Do All of These Have as Common, Beneficial Results? Quick setup/ changeover Kanban/pull system Cells Multi-skilled work force Total productive maintenance 5S Quality at the source Continuous replenishment Richard J. Schonberger

What Do All of These Have in Common? Richard J. Schonberger Lean-related: 5 whys Attack wastes Spaghetti diagramming Value-stream mapping Value-add/non-value- add analysis General: Quality function deployment Process benchmarking Design of experiments

Applications in the Process Co-location/teams (work cells) Cross-training/skills certification/job rotation Multiple serversfor concurrent processing Quick setup, startup, readiness, changeover Queue limitation (kanban) Visual management (5S housekeeping, etc.) One-piece flow (small batches, small containers) SOPs* (standard work) Fail-safing (pokayoke) Supplier reduction Lean machines Focused factories Rate-based (takt-time) scheduling Total productive maintenance (TPM) Widely applicable Important in factories Adaptable in some services *SOP: Standard operating procedure Richard J. Schonberger

Co-Location (Natural Teams): Leans Most Effective Concept Break up departments, functions, silos Co-locate service people by flow of work or flow of customers (or by product/ service families) Disperse professional/technical staff to action zones to help, teach, share Everyoneline or staffcross-trained Richard J. Schonberger

Applications in the Process Co-location/teams (work cells) Cross-training/skills certification/job rotation Multiple serversfor concurrent processing Quick setup, startup, readiness, changeover Queue limitation (kanban) via RFID/barcoding Visual management (5S housekeeping, etc.) One-piece flow (small batches, small containers) SOPs* (standard work) Fail-safing (pokayoke) Supplier reduction Lean machines Focused factories Rate-based (takt-time) scheduling Total productive maintenance (TPM) Widely applicable Important in factories Adaptable in some services *SOP: Standard operating procedure Richard J. Schonberger

High-Payoff Lean in Hospitals: Supplies, Devices, Stockrooms, Cabinets Chronic issues: Frantic searches for right supplies while patient waits Massive $ in supplies/devices in bulging stockrooms, but wrong mix Healthcare: Among last to adopt barcoding R/x: RFID being adopted everywhere Results: Leans massive low-hanging fruit savings in $ and in better care Richard J. Schonberger

High-Payoff Lean in Hospitals: Supplies, Devices, Stockrooms, Cabinets Chronic issues: Frantic searches for right supplies while patient waits Massive $ in supplies/devices in bulging stockrooms, but wrong mix Healthcare: Among last to adopt barcoding R/x: RFID being adopted everywhere Results: Leans massive low-hanging fruit savings in $ and in better care Richard J. Schonberger Precedent: St. Alexius Hospital developed crude barcode-scan in 1970a flop; but in 1986 started applying its own barcode stickers to incoming items: big success! Rundle, Doctors Orders: Hospital Cost Cutters Push Use of Scanners to Track Inventories, WSJ, 6/10/1997 Schonberger, Lets Fix It! (Free Press, 2001), pp. 211-12

From Quality Digest, May 2008, pp. 46-48 Photo goes here

Strong Tendency: Inability to Keep Lean Going, Hold Gains Long-Term Big-Data Evidencefrom manufacturing/distribution/retail: 1600 global companies Measure of Merit: Inventory Why? Inventory is: Customers/patients/clients waiting impatientlyto be served Goods waiting to be ordered/made/shipped Also... Nearly every process improvement reduces reliance on inventory Richard J. Schonberger

19601975199520121985 Japan: Rise-Decline-Rise U.S.: Decline-Rise-Decline-Rise-Decline 1960s-70s: Small Japanese sample Rising, then falling long-term inventory turns, many companies: Boredom/fatigue? JIT/TPSJIT/TPS fatigueJIT/TPS JIT fatigueJITComplacency Lean fatigue Lean Richard J. Schonberger

19601975199520121985 Japan: Rise-Decline-Rise U.S.: Decline-Rise-Decline-Rise-Decline 1960s-70s: Small Japanese sample Rising, then falling long-term inventory turns, many companies: Boredom/fatigue? JIT/TPSJIT/TPS fatigueJIT/TPS JIT fatigueJITComplacency Lean fatigue Lean Has quality followed similar pattern? Symptoms of weak exec. interest because not seen as strategic? Will lean in services follow similar pattern? Richard J. Schonberger

Wastes Lean: Gaining/Keeping Executive Support Focus on Wastes Puts Cart Before Horse CusTomerCusTomer CusTomerCusTomer LeanPut Customer (Marketing) First Provide what all customers want: Quicker, more flexible response with better quality, higher value Waste elimination: An enabler, not a primary Customer-first upgrades lean from operational focus to competitive/strategic... to gain enduring executive support Richard J. Schonberger *George Stalk, TimeNext Source of Competitive Advantage, HBR, July-Aug., 1988

Why Did Manufacturing Re-Define Lean/JIT/TPS as Reduction of the Seven Wastesinstead of, e.g., Time-Based Competition? Richard J. Schonberger

How Did Lean Come to Be Promoted(Even Defined) as Reduction of Wastes? One answer: George Donaldsons, Chasing the Lean Transformation,* compared 7 prominent process- improvement models under the lens of Demings 14 principles & System of Profound Knowledge. Six largely conformed. Not the 7 th : Womack & Jones 5 principles focus purely on variation (waste). Richard J. Schonberger *MSc dissertation, Univ. of Buckingham, UK Supervisors: John Bicheno, Pauline Fround (among most active lean researchers in U.K.)

What Should Service Organizations Do? Professional and management staff (faculties, too): Define/present lean in effectiveness/competitive/ strategic termsspecifically, Deliver ever quicker, more flexible, higher quality, higher value CUSTOMER service. For front-line employees, same thing... But operationally, present lean as in-the-process methodologies: cells/flow lines, cross-training, quick setup, 5S, etc. UK National Health Service: Bypassing terms such as lean & waste, in favor of More Time to Care Richard J. Schonberger

Brief Summary: Lean in Services For strong, enduring lean, define & promote competitive/strategic essence: Improvement in the eyes of customers... Operationally simplified as reduction of units (people or pieces) waiting Six sigma: Large, multi-functional, dis- continuous projects Lean: Continual low-level improvements fed by continual streams of data on everything going wrong Richard J. Schonberger

Lean Is About Time—Particularly in Customer-Facing Services Presenter: Richard J. Schonberger 177...

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