COURSE OVERVIEW 8 Section One: Introduction to Lean 11. Section Two: Value and Waste 21. Section Three: Understanding and Using Lean: 41

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1 TABLE OF CONTENTS COURSE OVERVIEW 8 Section One: Introduction to Lean 11 Introduction 12 Overview of the Five Principles 13 Section Two: Value and Waste 21 The Customer Defines Value 22 Eliminate Waste 25 Section Three: Understanding and Using Lean: 41 Problem Solving Abililty 43 Section Four: Using Tools of Lean 47 The Lean Tool Box 48 Section Five: Lean Performance Measurables 85 Introduction 87 Measurement in a Service or Office Environment 87 Measuring Performance 89 Section Six: Change Management and Using Teams to Implement Lean 93 Change Management 94 Working with Teams 95 The Role of the Change Leader 100 Creating the Improvement Culture 101 Section Seven: References and Furthedr Reading Page 9

2 LEAN ACTIVE WORKSHOP Introduction Lean, reduced to the most fundamental of definitions is the purposeful elimination of waste activities. In his book, Lean Thinking, James Womack defines Lean as the process of determining what is of value and then making it flow. Lean principles began in manufacturing environments and are described in a number of ways: Lean Enterprise, Lean Manufacturing, Lean Production, Toyota Production System, etc. The development of Lean principles stem back to the time of Henry Ford and his production facilities, however, more refined principles are generally attributed to the Japanese production environment. Lean can be defined as a systematic approach to identifying and eliminating waste through continuous improvement, flowing the product at the pull of the customer in pursuit of perfection. Lean applies to an entire organisation. Although individual components or building blocks of Lean may be tactical and narrowly focused, using them together and applying them cross-functionally through the entire system is required to achieve maximum effectiveness. Lean is a process philosophy with three purposes: 1. To eliminate wasted time, effort and material; 2. To provide customers with made to order products/services; and 3. To reduce cost while improving quality. Page 12

3 Benefits of Implementing Lean The creation of a Lean Enterprise will deliver wealth and prosperity to an organisation. The price of a goods and services is determined by the cost to supply the product and service and the profit determined by the organisation. Hence the selling price minus the cost of supplying the goods and service determines the profit. Waste will add to the cost of supplying goods and services, hence reducing an organisation s profit margins. By creating a Lean Enterprise organisations can expect to cut production times, reduce inventories, reduce errors and scrap within any process. Typically job related injuries are also reduced. Goods and services will reach the market place far quicker and value added products will require less investment costs. This is not the end of the benefits though. When fully adopted within a business, improvements are continuous and an organisation can expect to increase productivity whilst decreasing errors and lead times. The investment required to implement Lean is insignificant to the rewards that will be gained. Consider if your competitor is doing Lean and you are not. How will you compete? Typically the benefits of implementing Lean can be broken down into three broad categories: Operational, Administrative and Strategic Improvements. Most organisations that implement Lean do so for operational improvements, primarily because of the perception that Lean only applies to the operations side of the business. However, Lean s administrative and strategic benefits are equally impressive. Some of Lean s benefits are summarised below. Operational Improvements Lead Time (Cycle Time) reduction. Productivity increase. Work In Progress Inventory reduction. Quality improved. Waste identified and removed Space utilisation improved. Customer satisfaction increased Page 13

4 LEAN ACTIVE WORKSHOP Administrative Improvements Reduction in order processing errors. Streamlining of customer service functions. Reduction of paperwork in office areas. Reduced staffing demands, allowing the same number of office staff to handle larger numbers of orders. Documentation and streamlining of processing steps enabling the outsourcing of non-critical functions, allowing the company to focus their efforts on customers needs. Reduction in turnover and the resulting attrition costs. Strategic Improvements Identification of Root Causes allowing for more effective strategic planning Creation of Customer Value Proposition, providing clarity to ongoing strategy development Inclusion of staff as part of the Continuous Improvement development, allowing for key engagement Allowing for the innovation from all staff to build the business. Identifying key metrics to continue to improve and build the business Creating motivated staff to take on the new directions of the business Lean requires A different way of thinking A different way of looking at the organisation s processes A different way of looking at everything we do Recognising that we have to make changes Page 14

5 Activity Barriers Objective: To determine barriers to effectively implementing Lean in an organization. Introduction: Form teams, then in your team discuss and record whether there are likely to be any barriers to the successful implementation of Lean in an organisation. As you undertake this activity consider organisational culture; executive; management; people; implementation as well as other perspectives. Task: Develop a list of barriers to implementing Lean and present it for discussion. Page 15

6 LEAN ACTIVE WORKSHOP Where to Begin Stephen R. Covey gave the best advice on where to begin Start with the end in mind. Only when the executive vision of Lean is clear will it be possible to commence a course of action. Successful implementation strategies have shown that having good leaders with a sound knowledge of Lean who can quickly and effectively commence building a culture of continuous improvement on a day-to-day basis is a positive start. The sequence of events that must be followed for a successful implementation are: 1. Understanding of Lean. 2. Ongoing commitment. 3. Initial Application areas identified as pilots 4. Resources made available. 5. JDI. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals Toyota 4P Model Page 18

7 Overview of the Five Principles 1. The Customer Defines Value Value is defined from the perspective of the final customer/end user. Value is expressed in terms of a specific service or product, which defines the customer s needs at a specific price and at a specific time. 2. Eliminate Waste Identify the value stream. Create a map of the current state and the future state of the value stream. Identify and categorise all forms of waste in the current state and eliminate it. 3. The Customer Establishes Pull The customer will pull products from the organisation as they need them, thus eliminating the need for a sales forecast. 4. Involve and Empower People Who Add Value Use empowered teams to create value and eliminate waste. 5. Total Cost is the Ultimate Performance Metric The promise of wealth and prosperity can only be achieved using total cost as the driving measure. Page 19

8 COURSE OVERVIEW ACKNOWLEDGEMENTS SAI Global would like to acknowledge the contribution of the following individuals: David Smith David Sikorski PURPOSE Welcome to the Lean Active Workshop which is a two day training event that introduces the concepts of Lean and the tools used in Lean process improvements. The concept of Lean is focused on eliminating all waste within an organisation s processes. Using specific tools and techniques will support the elimination of waste for a leaner organisation and one that provides greater value to customers. LEARNING OUTCOMES At the end of this event, participants should be able to: REVIEW Understand the concepts of Lean; Describe the characteristics of a Lean organisation; Have an understanding of how Lean tools are used; Understand how Lean can be used at all levels in an organisation; Undertake Lean improvements. ABOUT THIS COURSE Course Content and Assessment Criteria REVIEW This course covers: 1. Introduction to Lean 2. Value and Waste 3. Understanding and using Lean 4. Using Tools of Lean 5. Lean performance measures 6. Change management and using teams to implement Lean Event Duration This is a two day active learning workshop that includes presentations, discussions and activities to reinforce learning. Event Award Participants who attend this training will receive a Certificate of Attendance. Page 8

9 SAI Global Training Registration Form ABN To register Please send enrolment form by: Alternatively you can register by: PHONE MAIL SAI Global, Flinton Tolentino, Level 8, GPO Box 5420, Sydney NSW 2001 Attendee details (Please ensure your details are correct as this will be used for records and/or issuing of certificates). Title Mr Mrs Ms Miss Other Surname* First Name* Position* Address Suburb State Post Code Telephone* Mobile * DOB ABN Industry Promo Code (if applicable) Note: As a condition of RABQSA qualifications, contact details of all successful RABQSA course graduates will be solely supplied to RABQSA for the purpose of further RABQSA qualification. *Denotes mandatory fields. Cours e selection (Only one registration form per attendee. Please photocopy form for additional attendees). Course Name City Date (DD/MM/YY) Price (inc. GST) Price (LESS DISCOUNT) Lean Active Learning Workshop Brisbane 11/02/14 $1,320 Do you have any dietary requirements or special requests?... Discounts for group bookings may be applicable for this course. For more information please contact our Customer Service Team on SAI Global Assurance certification clients are eligible for a 10% discount when you quote your licence number. Price is inclusive of 10% GST unless specified. Invoicing details (If different) Title Mr Mrs Ms Miss Other Surname First Name Position Organisation* Organisation Address Suburb State Post Code Telephone Mobile Payment details Amount $. P/O No. Promo code VISA Mastercard Amex Cheque enclosed payable to SAI Global Please Invoice EFT (details below) Card No. Expiry CCV * * What is a CCV? Credit Card Verification number. For Visa & Mastercard, the verification number is a 3-digit number printed on the back of your card. It appears after and to the right of your card number. The American Express verification number is a 4-digit number printed on the front of your card. It appears after and to the right of your card number. The CCV number is a requirement for all payments processed via our payment system, WorldPay online. Name Signature EFT Details SAI Global: Westpac Banking Corporation, Cnr Market & Clarence St, SYDNEY NSW 2000 BSB Account No Name I have read and accept the SAI Global Public Training Terms and Conditions in relation to payments, cancellations, confirmations, transfers, admin fees and privacy as outlined on and I declare all information supplied is true and accurate (no enrolments will be accepted unless completed and signed below). Position Signature Date (DD/MM/YY) Other areas of interest: OHS Environment Food Safety Risk and Compliance Quality Auditing Business Improvement Other I do not wish to receive any further information from SAI Global. I understand that I will no longer receive information on related training courses or services from the Training Division. SAIREGOFORM OCT13