LEAN Office & Business Processes Participant Handout Value Stream Mapping
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1 LEAN Office & Business Processes Participant Handout Value Stream Mapping Manary Harcus Consulting Corp, 200
2 Value Stream Mapping Symbols xcel IN Process Box Inventory/Inbox Delay Time Customer or Supplier Information Flow Day P/T=2min L/T=0 days Electronic Inbox (queue) Schedule % C/A=99% Other Data Box Electronic Information Flow Worker W o r Iterations or Rework Workflow Material (Paper) Movement Slide Case Study # Example Employee Hiring Case Study Existing Position Department Manager initiates request to fill position Current State Objective: 3 weeks total Future State Goal: 50% faster In this case study, the focus is the hiring process in a large company. HM=Hiring Manager HRIS=HR Information System HRS=HR Specialist HRA=HR Assistant PAN=Personnel Action Notice Employee Starts work In position Slide 2 2 Manary Harcus Consulting Corp, 200
3 Example SIPOC New Employment Process Suppliers Inputs Process Outputs Requirements Customers Exec Committee Hiring Budgets Dept Managers Job Descriptions RECRUITMENT AND SELECTION PAYROLL AND TAX SET UP BENEFITS ENROLLMENT ORIENTATION TRAINING NEW EMPLOYEE Qualified MANAGER Fits XYZ CO- Recruiters, etc Candidates Culture WORKERS Oriented to Business CUSTOMERS Set-up for Payroll, Benefits Slide 3 New Employment Process Current State Process Data Process Time Lead Time % C&A Tool(s) Position Involved Create Requisition.25 hr day 00% HRIS HM Review & post job 3-4 hr 3-5 days 90% , HRIS/intranet, Internet HRS & HM Review Responses 2-3 hr 5 days Computer 50% Resumes 0% HRIS HRS & HM Screening Interviews 5 hr 5-7 days 80% Phone HRS Interview Candidates 4 hr 0 days 00% HRS, HM Select Candidate hr day 95% HRIS, phone HRS, HM Create Offer hr day 00% HR Desktop HRS, HRA Accept Offer n/a 2 days 95% n/a Candidate. Create PAN.25 hr day 00% HR Desktop HRS Slide 4 3 Manary Harcus Consulting Corp, 200
4 New Employment Process Current State VSM Manager Max 2/day Candidates Job Offer Create Requisition Day Review & Post 3-5 days IN Review Responses 5 days Pre- Screening days days Interviews Select day Create Offer day Accept Offer 2 days Create PAN day PT=5min LT= Avail= PT=3-4hr LT=-2hr Avail=0% PT=2-3hr LT=0 PT=5hr PT=4hr PT=hr PT=hr n/a PT=5min LT=.5-d LT=hr LT= LT+ LT= LT= %CA+ Avail=0% Avail=0% Avail=25% Avail= Avail= Avail= Avail= PT LT hr/747.25hr=.023% Value Add Slide 5 New Employment Process - Next Steps Establish goal(s) Gather Kaizen bursts Brainstorming ideas to achieve goal Create future state VSM map Prioritize ideas If a technology solution is required, consider the business case Create implementation plan Implement st idea Measure & VSM results Implement 2 nd idea Measure & VSM results Etc Slide 6 4 Manary Harcus Consulting Corp, 200
5 Create Requisition PT=5min LT= Avail= New Employment Process Kaizen Bursts Day Review & Post Pre-screen as responses come in (pull) days days IN Review Responses Manager Pre- Screening Schedule interview dates sooner Candidates Max 2/day Job Offer days days day Interviews Select Create Offer day Accept Offer 2 days Create PAN Skype PT=3-4hr PT=2-3hr PT=5hr PT=4hr PT=hr PT=hr n/a PT=5min Interviews LT=-2hr Eliminate paper LT=0 LT=.5-d LT=hr LT= LT+ LT= LT= based resume submissions %CA+ Avail=0% Avail=0% Avail=0% Avail=25% Implement Avail= TMS Avail= Avail= Avail= with parsing day PT LT hr/747.25hr=.023% Value Add Slide 7 New Employment Process - Next Steps Establish goal(s) Gather Kaizen bursts Brainstorming ideas to achieve goal Create future state VSM map Prioritize ideas If a technology solution is required, prepare the business case & project manage Create implementation plan Implement st idea Measure & VSM results Implement 2 nd idea Measure & VSM results Etc Slide 8 5 Manary Harcus Consulting Corp, 200
6 Case Study #2 Frontiers North Inc. has been in the adventuring business for over 30 years. The firm started as a one-person company from the basement of the family home in Winnipeg, with a telephone, a thermal paper fax machine and a typewriter. Initially they offered only three tours to Churchill to experience polar bears and beluga whales. Over the years, the home-grown company has moved out of the basement and now conducts extensive international business by selling tours direct to guests as well as through a global network of agents and wholesalers. Striving to operate a sustainable, professionally managed organization, Frontiers North Adventures now offers close to 65 departures and employs over 60 full-time and seasonal staff. The majority of Frontiers adventures and revenue stream occurs an 8 week window of time in October and November each year. This is a hectic time of year, with all employee efforts focused on ensuring guest have a memorable experience. Historically, if additional working hours were needed to do this, the staff just did what needed to be done, worked the overtime, and submitted their hours later for payroll. John, the General Manager, is frustrated with the lack of information available to him when it comes to employee overtime. Currently he learns about it at the end of the year when the financial results are prepared, and wants to find a way to make overtime more visible to his management team so it can be managed. hat we needed to do, about Lean and wondered if it might be a tool that could help them. John invited the key stakeholders (the Controller who manages payroll, and the Logistics Manager who schedules the tours and workers during bear season) to a meeting to discuss the problem. They discussed and created a SIPOC map, so they knew what the scope of their efforts would be. While discussing the SIPOC the stakeholders determined the following: The problem would be called Time Reporting, and would include any time that an employee needed to be report, outside of a normal working day. This included vacation time, over-time, and sick time but excluded regular hourly or salaried employee working hours. Managers were responsible for reviewing and approving the overtime of direct reports, as well as scheduling vacation time for their direct reports. present, there was a general assumption made that all managers had some method of tracking this. The problem had more than customer and each of these customers had different needs. The customers included the employees themselves (the recipients of overtime and vacation pay), the people managers (who had to manage their budgets), finance (who had to process payroll) and the general manager (who wanted visibility to overtime reporting). 6 Manary Harcus Consulting Corp, 200
7 It was determined that the scope of the problem would include time reporting for all Winnipeg staff as well as the seasonal employees who were hired for bear season in Churchill, and exclude time reporting for garage staff in Churchill, as the garage manager had implemented processes that were different from the ones used by employees in Winnipeg and seasonal staff. If the task had a range of time for completion (eg: 2 5 minutes), the average of the two times would be used in calculating the metrics (eg: the average of 2-5 min is 8.5 min). Seasonal employees were scheduled to work either a 0 or 2 hour day during bear season, as the company needed guides and drivers to stay with their tour groups for the whole tour day. These people were compensated with a daily rate that included the required overtime pay. This simplified time reporting for seasonal employees as it consisted of knowing which days they worked, and then the daily rate was applied. If any overtime hours beyond their standard day were worked, they would now need to be approved and reported. For the past couple of years, during bear season, Frontiers has sent the payroll person to Churchill for a day to explain the pay cycles and how/when overtime shows up on employee pay to the seasonal staff, and deal with any other questions they may have. This has been perceived to be positive, and the seasonal staff have historically found it helpful in understanding why their pay stubs show an hourly rate when their hire letter states they are being paid a daily rate. The SIPOC map looked like this: Frontiers North SIPOC Map Suppliers Inputs Processes Outputs Customers Employees Managers Seasonal Driver Schedules s O/T hours worked or Vacation Requests (printed) Spreadsheets (printed) Convert days to hours Key Into vendor payroll Manual vacation Accrual calculations Verify Results & Process Time Tracking for Payroll Remit Taxes Manager Time Tracking Employee Time Tracking Paystubs Financial Results Vacation Carryover General Manager Employees Managers Seasonal Guide Schedules ROE Some Guides over or under paid 7 Manary Harcus Consulting Corp, 200
8 The following time reporting steps occur on a regular basis: As needed, employees send an request for vacation or overtime to their manager for approval. If the employee is a function manager, the request is sent to the General Manager for approval. On average, managers respond to these requests within 2 days of receiving them, and depending on the type of request, it takes between and 5 minutes to process each one. If approved, the request is forwarded by to Finance for payroll processing and record keeping. If not approved, the manager talks to the employee and makes alternative arrangements. In addition to the s, Finance receives a spreadsheet from the Logistics manager that identifies which drivers and guides are scheduled to work on specific dates. The scheduling spreadsheet is t account for last minute changes that need to be made for a variety of reasons. Each pay period, Finance gathers and prints all approved requests for overtime that have arrived. Each one is reviewed to see if it impacts the current pay period. If it does, the time reported is converted if necessary (e.g.: days to hours) and entered into the payroll system. Entering all of this information can take between 30 minutes to 3 hours, depending on the completeness of the information received. Finance indicates that the data entered into the payroll system is 00% accurate, but the incoming information sometimes suffers from GIGO (garbage in, garbage out). Once everything has been entered for the pay period, Finance initiates payroll processing which takes minute at most, and is outsourced it to a web based payroll provider. The next morning, the payroll register report and pay stubs are delivered by courier. Sometime that day, usually after lunch, the payroll register is reviewed for accuracy by the accounting clerk and this usually takes 2 minutes. The accounting clerk then distributes the paper pay stubs to all employees and this takes between 2 and 5 minutes. Two to four days later, the payroll results are rekeyed into the Accounting system, which takes an average of 3060 minutes. After receiving their paystubs, employees can contact Finance if they find any errors, such as over or under payments, or have any questions. Finance has found that sometimes ay correct, and this results in additional work on the next pay cycle to correct it. Errors are caused when changes in the schedule occur, or when over time is incurred, but not reported to payroll. Overall the accuracy of employee pay stubs is estimated to be 98% Each monthend, financial reports are generated from the Accounting system and provided to the General Manager. The GM is finding the financial reports not very useful in helping him manage overtime or understand why the overtime is being worked in the first placed like to see the information more frequently than once a month. 8 Manary Harcus Consulting Corp, 200
9 In your group, prepare a current state map for this case, calculate the current metrics, establish your groups future state goals and brainstorm kaizen blitz improvements that should be considered. Be prepared to present:. How efficient and effective is the current process? 2. What did your group as a result of mapping it with VSM? 3. What goals did your team establish? (stated in metrics) 4. Where are some of the lean opportunities? Provide a prioritized list of improvements that your group is recommending and explain why these ones were chosen Case study used with permission from Frontiers North. 9 Manary Harcus Consulting Corp, 200
10 Lean Office Quick Reference Guide 5S & Visual Controls While not Sort what is not needed, sort through then sort out. When in doubt, throw it out Set in Order what must be kept, make it visible and self explanatory. Everyone knows what goes where Shine everything that remains. Clean equipment and work space Standardize Sustain Stick to the rules and make them a habit Kaizen accomplishes the following: SIPOC map is defined Map the current state, analyze & kaizen blitz possible improvements Map the future state Begin to implement changes Kanban A lean term used to describe a pull system. Lean vs Six Sigma Both Lean and Six Sigma are concerned with continuous improvement. Lean is about improving processes or products by eliminating waste, while the focus of Six Sigma is improving quality and continuous improvement. Mistake Proofing Mistake proofing prevents errors & accidents, because the work can only be done a specific way. Examples of mistake proofing are: Stove plugs/receptacles, USB keys, notched items that can only be inserted a certain way. Pitch Pitch is a lean term used to define how often performance is checked. Poka Yoke 0 Manary Harcus Consulting Corp, 200
11 Pull vs Push In an office environment, push frequently leads to batching, variability in workload, and the more closely with Takt. Pull can be monitore Quick Changeover Lean lends itself to quick changeovers, so it becomes easier to customize requirements for each customer. SIPOC All lean projects need a SIPOC map. SIPOC is a Lean acronym which stands for: Supplier Inputs Processes Outputs Customer A SIPOC map defines the practical limits of your activity (scope), ensures you gather all the -processes), and captures the voice of the customer. Takt Takt is a lean term that defines what the customer really needs and how often they need it. Value Stream Mapping Value stream maps are the assessment & planning tool of lean practioners. In value stream mapping, there are 3 states: Current, Perceived, & Future. The only way to ensure you capture the true current state is to: walk the process yourself, or get the people who do work in the process involved, and map the current state themselves Waste in Service Organizations Lean is about eliminating waste in processes. It comes in various forms: wasted time, effort, steps, people, supplies, etc. Eliminating waste results in: Shorter lead times (faster turnaround) Reduced costs (less effort, paper, steps, etc.) Less inventory (eliminating backlogs) Higher throughput (fewer resources, or get more done with existing resources) Higher return on assets (better use of tools and people) Manary Harcus Consulting Corp, 200
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