LeanSigma ® Fundamentals Module 4 – Specify Value.

LeanSigma® Fundamentals

Module 4 – Specify Value

Our first step to Lean is understanding what customers value.• Specify Value – from customer perspective and

express value in terms of a specific service• Identify the Value Stream• Establish Flow• Pull from the Customer • Continuously Improve the Process to Perfection

© 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

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Customer needs aren’t always clear.


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Marketing Defined It Sales Ordered ItManagement Ordered It Engineering Designed It

Manufacturing Produced It Customer Service Installed It Technical Support Repaired It What the Customer Wanted

Kano models help us differentiate client wants.


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Want to understand which service elementsdrive customer satisfaction

ServiceElement

Customer Satisfaction

HighHigh

LowLow

AbsentAbsent

Fully ImplementedFully ImplementedExcitement

Threshold

Perfo

rman

ce

Perfo

rman

ce

Must Haves

SatisfiersDelighters

Mapping helps us see value.

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Value-added activities (VA): 1. The customer would pay for them

2. Transforms (output looks different than input)

3. Are done right the first time

Non-value added activities (2 types):• Non-value added activities (NVA):

1. Customer wouldn’t pay for them

2. Don’t transform

• Necessary non-value added activities (Necessary NVA):1. Customer wouldn’t pay for them

2. Necessary to run the business (time tracking, financial reporting, regulatory requirements, etc.)

Maximize

Eliminate

Minimize time required

All 3 criteria must be met to be value-added All 3 criteria must be met to be value-added

Value-added activities are often <10% of the entire process in most companies.

IMS value-added examples:• Deliver report• Interpret data trends• Gather order requirements• Answer client questions

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NVA

VA Necessary NVA

Some activities that don’t meet core value criteria are still important to the business.

• Audits, time-tracking, status meetings, etc. are necessary to run the business, but customers don’t value them.

• Activities that aren’t important to customers or the business are waste.


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Minimize time spent

Eliminate

Waste comes in many different forms. (Tim Wood)

Identify and eliminate waste• Excess Transportation• Excess Inventory - materials and

information• Unnecessary Motion• Waiting• Over-producing• Over-processing• Defects and loop-backs


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Moving materials (Transportation)


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Characteristic:• Poorly designed floor space• Lack of communication• Inconsistent schedules• Large batch sizes• BottlenecksExample:• E-mailing files back and forth• Use of large carts to move work

Definition:The movement of material or information from one function to the next that does not directly add value to the service

Waste of Excess Material/Information


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Definition:Any supply in excess of customer requirements necessary to produce services

Characteristic:• Too many forms or paper• Too many copies• Extra space for storageExample:• Excess paper reports• Needless cc: on e-mail• Two forms used with the same

information• Duplicate copies of the same file

When you remove the excess work-in- process, other wastes become visible.


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“Now You See It!”

Waste of Excess Motion


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Definition:Any movement of people or equipment that does not add value to the service

Characteristic:• Looking to find information,

supplies, or equipment• Multiple work stations to perform

one task• Too much search or walk timeExample:• Pulling information from various

sources to add into one• Walking back and forth to an

inconveniently placed fax machine

Waste of Waiting


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Definition:Idle time that is produced when two processes are not synchronized

Characteristic:• Unbalanced workloads – some

steps take much longer than others

• Process flow stops due to unplanned interruptions

• Queues or idle time• Capacity doesn’t match volumeExample:• Queues• Idle Time

Waste of Overproducing


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Definition:Producing more than needed or producing faster than needed

Characteristic:• Extra information, supplies, or

equipment• Unbalanced workflow• Large batch sizes• You produce “just in case” you

need it.Example:• Running analyses before they are

needed• Preparing mortgage docs before

they are needed• Preparing a special report just in

case the client asks for it again.

Waste of Overprocessing


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Definition:Ineffective use of resources to produce a result

Characteristic:• Bottlenecks• Lack of understanding customer

needs• Endless refinement• Redundant approvals or checks

Example:• Reports produced, but not used• Recording the same information on

four different forms in a chart/system• Reworking a powerpoint deck over

and over because the end-user’s needs are unclear

• Assigning work to an over-qualified resource

Waste of Errors and Rework


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Definition:Rework or repair a service to meet customer’s requirements

Characteristic:• Extra manpower required to rework,

revalidate, repair• Missed deadlines• Poor customer relations• Reactive vs. proactive• Unpredictable process outcomesExample:• Encoding errors• Late deliveries • Rerunning jobs that fail

5S is a technique that can remove waste

• A process and method for creating and maintaining an organized, clean, high-performance workplace

• A conditioning discipline for improvement

• The 5 Steps – Step 1: Seiri - Segregate & Discard– Step 2: Seiton - Arrange & Identify– Step 3: Seiso - Clean & Inspect Daily– Step 4: Seiketsu - Revisit Frequently– Step 5: Shitsuke - Motivate To Sustain


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Example


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Before After

How Is 5S Done?

• 5S is accomplished by following all of the steps. • Don’t skip a step!• 5S is a team oriented

process between themembers of the workarea.


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LeanSigma ® Fundamentals Module 4 – Specify Value.

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