An Action Plan for Lean Services

by Jim Womack of Lean Enterprise Institute shown at the 1st Lean Service Summit on 23rd June 2004 run by the Lean Enterprise Academy

1. Lean Service Summit – Amsterdam, 23 June 2004 www.lean.org
An Action Plan for An Action Plan for
Lean Services Lean Services
A Presentat
i
on by
James P. Womack
President, Lean Enterprise Institute
For
Lean Service Summit Europe 2004
Amsterdam
June 24, 2004

2. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Core of Lean Thinking The Core of Lean Thinking
•
A
ll value is the result of a process.
•
A
manager’s focal plane should be the value creating
processes, rather than organizations and assets.

3. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Types of Processes The Types of Processes
•
S
ome processes are primary
, serving an external
customer. Example: A transactional proc
ess such as processing an
insurance claim or conveying a letter from mailer to receiver.
•
S
ome processes internal, to support
the primary
processes.
Example: A hiring process to obtain the needed
employees to process the in
surance claim or collect,
sort, and deliver letter mail.
•
P
rimary processes are easier to see, but support
processes are equally necessary.

4. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Nature of a Process The Nature of a Process
•
A
process is a set of actions
(steps), each of which must be
accomplis
h
ed properly in the proper
sequence to create value for
someone.
Example:
9
Receiv
e the life insurance claim.
9
Verify the data.
9
Verify the death certificate.
9
Calculate the amount of the pay out.
9
Write the check.
9
Send the check.

5. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Perfect Process The Perfect Process
We are all in search of the perfect process. But perhaps you have not realized this! The perfect process has some simple but challenging
attributes:
•
I
t creates precisely the right value for the customer.
Value is hard to determine for external processes and
even harder for support processes.
But note: In the absence of correctly specified value,
every step in any process is muda!

6. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Perfect Process The Perfect Process
•
E
ach step within the process must be:
9
Valuable
9
Capable (Six Sigma)
9
Available (Total Productive Maintenance)
9
Adequate (Theory of Constraints or TPS)
9
Flexible (Toyota Production System)

7. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Perfect Process The Perfect Process
•
T
he steps/actions in the process must be linked by:
9
Flow (in low volume with high variety, TPS)
9
Pull (Toyota Production System)
9
Leveled demand, from the pacemaker step/action (TPS)

8. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Perfect Process The Perfect Process
•
T
he actions in the process are satisfying for people to
perform and managers to manage:
9
No injuries.
9
No fatigue.
9
No boredom.
9
A sense of providing a valuable good or service.
9
A sense of personal fulfillment & accomplishment.
Note that putting good people in a bad process is the
best way to produce “bad” people!

9. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
The Perfect Process The Perfect Process
In Summary In Summary
•
T
he right purpose (value).
•
T
he best method (process).
•
T
he highest sense of accomplishment (people).

10. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
How Can We Create the How Can We Create the
Perfect Process for Every Service? Perfect Process for Every Service?
Start by identifying the key processes in your organization: •
W
hich are primary?
•
W
hich are support?
•
W
hich are most important to the customer?
•
W
hich are most important to the success of the
organization?
•
W
hich are most troubling to your people?

11. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Ask who is responsible for each process. When you discover that the answer is “no one”, appoint
someone!
Note that in the early going it helps if the someone is a
“someone”. (That is, a widely respected person with a bright future in the organization.)
Responsibility doesn’t necessarily mean a full time job and
it certainly doesn’t mean direct reporting by everyone involved in the process.

12. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Select the most important processes (but only a few). Form a team of the responsible person and those involved
in the process –
c
ustomers, participating employees
across functions, technical advisors.
Map the process as it currently operates, taking extra care
to specify value from the standpoint of the customer (external or internal).
Label this map the “current state”, making sure that
everyone agrees that the map is truly accurate.

13. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Current Current
--
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14. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Ask how the process should be changed to move toward
perfection.
¾
Note that if the value of the existing process is found to be incorrectly specified, the entire process may need to be changed or even eliminated.
¾
Note that in many cases, one tangled process with many exceptions may need splitting into a number of processes, each with its own flow path.
Label this map the “future state”, making sure that
everyone agrees about the key changes in the process.

15. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Future Future
--
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16. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Think a bit about your organization: •
F
rom the standpoint of its customers, an organization is
the sum of its processes, both primary and supporting.
•
P
rocesses flow horizontally toward customers, across
departments, functions, and organizations.
•
H
owever, organizations tend to be oriented vertically,
toward senior leadership.
•
A
nd organizations tend to measure functional
performance in terms of asset utilization (people, machines) and other metrics that may be inconsistent with a perfect process.

17. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Ask what changes in your organization will be needed to
create and sustain the future state of your test process(es):
•
C
reate a new position of “process manager”?
•
R
earrange existing departments and functions?
•
I
ntroduce new metrics to align department and function
performance with process needs?

18. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Implement the necessary changes to create the “future
state” process:
•
M
easure the performance compared with the current
state.
•
R
eflect on what has been accomplished and how it could
have been better. (“Check” in PDCA language.)
•
I
ntroduce necessary changes to adjust the process.
(“Act” in PDCA language.)
•
D
etermine whether the adj
usted process is stable and
sustainable.

19. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Once test processes have
proved your improvement
method:
•
D
evelop a “Plan for Every Process”.
•
D
etermine and clearly ex
plain what you will do with
excess people and assets.
Hint: Service processes can only perform at a high level
for the customer if employees feel the management is introducing lean methods in a fair and equitable way. So, deal with processes painful to employees early and use excess people to grow.
•
T
ackle every process, in order of importance.

20. Lean Service Summit – Amsterdam, 24 June 2004 www.lean.org
Creating the Perfect Process Creating the Perfect Process
Once you have tackled all of your processes: •
S
tart the cycle again! (The former “future state” is the
new “current state”.)
•
S
tart to look at extended processes shared downstream
and upstream with other organizations.
•
P
eriodically review the Plan for Every Process to guard
against backsliding.
•
S
hare your successes (and failures) with the Lean
Community as we all pursue the perfect process for every service!

21. Lean Service Summit – Amsterdam, 23 June 2004 www.lean.org
An Action Plan for An Action Plan for
Lean Services Lean Services
A Presentat
i
on by
James P. Womack
President, Lean Enterprise Institute
For
Lean Service Summit Europe 2004
Amsterdam
June 24, 2004