Process Mapping: Creating Business Success

Posted on28. Apr, 2009 by carolesf.

Process Mapping

as a tool for creating business success has been around in one form or another for quite a long time.  The earliest forms of flowcharts were developed in the 1920′s and 1930′s as part of industrial engineering.  Since then, highly sophisticated Process Mapping tools and techniques have been developed.  Helping to drive the development of these tools was the certification standards of ISO 9001 and ISO 14001 in the early to mid 1990′s and the Sarbanes-Oxley Act in the early 2000′s. 

But perhaps even more important a driver is that old standby of capitalism:  Competition. 

If your competition has a shorter, less costly, and more effective process, they’ll eat your lunch.  Why would any customer pay more to wait longer for a less reliable product?  Of course, they won’t.  But under pricing pressures you can’t just price on a “cost-plus” basis.   Result?  Your prices are the same as the competition’s prices, but your costs are higher, so what suffers?  Your profitability.  Under such competitive pressures, businesses have come to scrutinize their processes in ever more detail, seeking waste that can be cut out.

Tools of Lean Manufacturing such as Value Stream Mapping have come to be used in every type of business process.  Lean Manufacturing was pioneered by Toyota and has since spread to every corner of the globe.  But Process Mapping is also a key part of Total Quality Management (TQM) and Six Sigma as well, plus combined methods such as Lean Six Sigma.

What is Process Mapping?  Simply put, it is a chart which shows every activity that must be completed in order to deliver a product or service to the end customer.  Modern versions typically include not just materials flow, but paper flow and information flow as well.  Put that way, it does sound simple.  But it’s harder than you might think, and requires an experienced business analyst and leader to do it effectively.

Here are some key areas to consider when beginning a project of Process Mapping:

(1) For one thing, you’ll need to set the boundaries of your process map.  Are you mapping a process at the macro or micro level?  Are you looking at an entire factory, or only one workcell within the factory?  How much of the upstream and downstream sub-processes do you need to show, to help inform your understanding of the area under study? 

(2) You’ll also need to identify the product, and maybe even the customer.  It’s not always as easy as you might think!  This is especially true in the case of service industries, or internal departments where the “customer” is another department of the same company.     

(3)  How much detail should your map show?  Too much detail and you risk losing the forest for the trees.  Too little detail and you may miss some important factors.

(4)  Who should be on your team?  It should be a multifunctional team from many levels, yet if it is too large the team becomes unwieldy.  Often only the workers know what really goes on, but you must be sure that these team members will not be intimidated by the views of higher-level members who have a different vision of what “should” be happening.  And when all of these people have their own “real” jobs to do (as of course they will in a multifunctional team), getting them to focus on the Process Mapping project is an art in itself.

Despite all these challenges, Process Mapping is a crucial part of business process improvement.  Just remember, your competition is monitoring their processes.  Literally, you can’t afford not to.

Welcome back to Lean Six Sigma Source! Thanks for your continued support.

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Lean Office: The Next Frontier

Posted on26. Apr, 2009 by carolesf.

Okay, you get the whole Lean Manufacturing thing.  But what the heck is Lean Office? 

The Lean Office Concept

Lean Manufacturing is starting to make sense to you.  Though a part of you really wants to hang onto that safety margin of inventory “just in case,” your data-driven brain accepts that Inventory Equals Waste.  Fine.  You understand the value of Lean Thinking as it relates directly to what you sell, even if that’s a service and not a widget.

But can you really apply Lean Thinking to your company’s administrative functions?  HR?  Accounts Payable?  IT? 

None of these departments are directly related to producing what your customers want to buy, yet it’s difficult to imagine how a modern company could operate without them.  It’s even more challenging to imagine how to observe, map, and quantify the value streams associated with them.  And changing these departments will be more difficult still, since these areas are even more strongly influenced by local company culture and “the human factor” than is the manufacturing environment.

So how does Lean Office work?  First of all, let’s be clear that Lean Office is not about cutting people or departments.  It’s about getting the most value out of the people and departments you have. 

The main idea is the same as in all Lean efforts:  Cutting out wasted effort or time. 

In the office environment, that could be the time files or other work items spend sitting around waiting for someone to work on them.  That’s the entire process of getting useless rubber-stamp signatures for some routine purchase.  It’s having a staff meeting on Wednesday mornings just because there’s always been a staff meeting on Wednesday mornings — even though half the time no agenda is prepared, the boss is late, and there aren’t even any doughnuts. 

Lean Office follows the same principles as Lean Manufacturing, but you may have to get a little creative to figure out what some of these terms mean in the office environment.

For instance, in an Accounts Payable office, the “customer” could actually be seen as the supplier who is waiting to be paid, the “product” is invoices, and the goal of “going Lean” would be to reduce the number of days an invoice goes unpaid. 

In an HR department, the “customers” are other departments internal to the company; the “product” is willing and qualified workers; and the metric for success of your Lean efforts might be to reduce the number of days an open position goes unfilled.

To succeed at Lean Office, you need to map the current process in terms of flow.  How does paper flow (or the equivalent in electronic forms)?   How does information flow, and is it the same as the paper flow or not?  (If not, think hard about the value of some of those forms.)  Map the value-add and non-value-add costs. 

Once again, the Lean principles are:

(1) Specify value — as the customer sees it, however the customer is defined for your function.

(2) Map the value stream, identifying value-add and non-value-add costs — and minimize the latter.

(3) Make the remaining process steps flow.  This usually means empowering the workforce, pushing down responsibility for a decision to the right level in the organization.

(4) Let the customer pull the desired product through the production process.  Don’t do work until someone has asked for it.

(5) And finally, don’t stop there.  Pursue perfection through continual improvement.  In other words, the job is never done.

Now look around your workspace.  Can you put your hands on any piece of information you need in under one minute?  Could somebody else walking into your office find the needed info in under one minute if you weren’t there?  

If not, then we apply the 5S process to HQ: Sort, Straighten, Sweep, Standardize, and Sustain.  The goal is, “A place for everything and everything in its place.”  

The fact is, if you’ve already achieved Lean production (whether of a service or a widget), there’s no need to let flabby practices in the office keep you from world domination.  You owe it to yourself to give Lean Office your best shot.

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Lean Manufacturing: No Muss, No Fuss

Posted on26. Apr, 2009 by carolesf.

What is Lean Manufacturing all about?   (We’ll get to the closet later.) 

Lean Manufacturing

is one of several related terms that describe similar systems.  Just-In-Time, World Class Manufacturing, Stockless Production, and Demand Flow Technology are a few of these other terms.  Broadly, all of these concepts focus on doing the bare minimum necessary to produce the product required by customers. 

In other words, don’t order extra inventory and then have to pay for facilities to store it and people to manage it.  Don’t over-design a product and spend countless engineering and design hours figuring out how to shoehorn 10 pounds of sand into a 5-pound bag.  (All the customer wants is 5 pounds, and they won’t pay more for 10.)  These things are wasteful.  The customer won’t pay for them; why should your company? 

Lean Manufacturing had its roots in Henry Ford’s system of mass production.  Ford was one of the first and most famous industrialists who paid careful attention to work flow and process standardization.  Before Ford, automobiles were an extreme luxury, since it cost so much for craftsmen to produce each one by hand.  Ford’s express goal was to create a market for the automobile.  He achieved this by reducing per-unit production costs and paying his factory workers enough so that they could afford to buy the cars they were building.  It worked.  America’s love affair with the automobile was born.

After World War II, Japanese auto producer Toyota admired the American system of production.  But Toyota’s leadership realized they did not have the capital or other resources needed to implement a process as centralized as Ford’s.  So Toyota set about trying to streamline everything related to producing cars.  The result was a system that became famous in the early 1990′s, in part as a result of a book entitled “The Machine That Changed the World” by James Womack, Daniel Jones, and Daniel Roos. 

So what are these revolutionary principles?    

(1) Specify value — as the customer sees it.

(2) Map the value stream, identifying value-add and non-value-add costs — and get rid of the latter.

(3) Make the remaining process steps flow.  This usually means empowering the workforce, pushing down responsibility for a decision to the right level in the organization.

(4) Let the customer pull the desired product through the production process.  Never build in advance of an order.

(5) And finally, don’t stop there.  Pursue perfection through continual improvement.  In other words, the job is never done.

In order for your production facility to support this approach, it is often the case that the physical plant must be transformed.  Lean Manufacturing prescribes the Five S process to achieve this: Sort, Straighten, Sweep, Standardize, and Sustain.  These actions can be taken in relation to the inventory but also to tools and equipment.  The goal is that age-old saying, “A place for everything and everything in its place.”  If you don’t need it — don’t hang onto it.  If you do need it, make sure you know where it is, and whether or not it’s in working order. 

So, what about that closet?  Well, the first three S’s are accomplished fairly easily, often in one major effort — like spring-cleaning a closet.  But without the last two S’s, it doesn’t take much time before things start to look like the same cluttered mess they were before.  Do you already have a stock of Widget A?  They didn’t get put where they were supposed to be, and something else got put there instead, so you don’t know.  Well, you need Widget A to produce your output, so you order more.  Bingo!  Wasted inventory, wasted time, wasted money. 

Lean Manufacturing requires constant discipline to avoid slipping back into pre-lean, wasteful habits.  The price of Lean is constant vigilance.  But if you’re successful in maintaining that vigilance — you can be a world-beater.

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Lean Thinking Generates Value — And Profits

Posted on24. Apr, 2009 by carolesf.

The Value of Lean Thinking

What does the “Lean” in “Lean Six Sigma” stand for? And what is “Lean Thinking”?

Both Lean and Six Sigma have their roots in manufacturing process improvement. Over the past decade or so, they have been integrated into a combined approach that has been applied to the full range of business processes, not just manufacturing.

The term “Lean” originated in “Lean manufacturing.” This is a manufacturing method which was famously pioneered by Toyota, as documented in the 1990 book “The Machine That Changed the World” by James Womack, Daniel Jones, and Daniel Roos. Womack and Jones later released another influential book titled “Lean Thinking” (1996) which sets forth the basic principles of the lean model of business.

The core concepts of Lean could be summed up as: (1) Add nothing but value. (2) Value is in the eyes of the customer. (3) Therefore, the enterprise should be oriented along lines that enable the customer’s needs to “pull” raw materials, services, and information along the most-efficient, least-wasteful path or “flow.” At the end of this flow, the customer has received the product or service he or she wanted.

Clear enough, but what does a Lean Thinking company look like in practice? And can it work in a non-manufacturing firm?

In the simplest terms, a Lean organization has a short order-to-delivery cycle. The shorter the cycle, the leaner the company.

It doesn’t really matter what the customer is ordering. It could be rapid transportation to a distant city (airline tickets). It could be showerheads (Home Depot). It could be the opportunity to buy or sell something at the best possible price (eBay). A sense of connectedness to friends and family (Twitter). In all cases, the customer wants to obtain something that he or she values, and some organization is trying to deliver whatever that something is.

What adds value to the order-to-delivery cycle? The activities of receiving the order, preparing the product or service to fulfill the order, and delivering the order.

What does not add value? In other words, what would customers not be willing to pay for, if they knew it was going on behind the scenes? How about stockpiling raw materials to enable the company to produce someone else’s order (inventory)? How about not having enough capacity to fulfill the customer’s order right away (backlog)? (A non-manufacturing example of this: Overbooking an airline flight.) How about an order entered incorrectly? Or a lost shipment? What if a particular webmail service kept crashing your web browser whenever you tried to check your email?

Lean Thinking is a mindset that doesn’t so much seek to avoid wasteful mistakes in a step as to eliminate a wasteful step entirely.

For example, if an order is entered incorrectly, the Lean approach would ask, “Do we need to do order-entry at all?” Maybe if the customer orders on-line, then we automate the order-entry process and eliminate that wasteful step in the process. On the other hand, maybe your particular customers want to “be taken care of” and would resent an expectation that they “do it themselves.” If that is the case, then, yes, we must continue to do order-entry and moreover, it should provide a personal touch to these customers. This is why understanding the customer’s wants and needs is so central to designing Lean processes. One customer’s trash is another one’s treasure — and you need to know which customer you’re dealing with.

In embracing Lean Thinking, a company is dedicated to discovering what their customers want, and providing it to them in a way that adds nothing but value — that the customers will pay for. By doing so, the company will create value (profits) for itself as well.

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