Lean IT by Operational Excellence Consulting

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Presentation Description

Lean IT is a management philosophy based on the Toyota Production System (TPS). With Lean IT, you will be able to enhance value for your customers by improving service delivery and eliminating waste. Simply put, by becoming a Lean organization, you will be able to increase productivity and create greater customer value with less resources. This training presentation is especially tailored for the IT services industry. By teaching this presentation to IT service providers and employees, they will have a better understanding of the Lean principles and approach to eliminating waste, and will be more forthcoming to lead and participate in the Lean implementation process. LEARNING OBJECTIVES 1. Understand the principles and key concepts of Lean IT 2. Acquire knowledge on the key Lean methods and tools and their applications to eliminate waste and create increased value for customers 3. Identify ways to develop "Kaizen eyes" to look for improvement opportunities 4. Describe the various Lean roles To download this complete presentation, visit: http://www.oeconsulting.com.sg

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Lean IT:

Lean IT Transforming Delivery Excellence

Learning Objectives:

Learning Objectives Understand the principles and key concepts of Lean IT. Acquire knowledge on the key Lean methods and tools and their applications to improve productivity, optimize resources, eliminate waste and improve customer value. Identify ways to develop “Kaizen eyes” to look for improvement opportunities. Describe the various Lean roles. Copyrights of all the pictures used in this presentation are held by their respective owners

Outline   :

Outline   Introduction to Lean IT Key Concepts & Principles of Lean Common Lean Methods & Tools Ways to develop “Kaizen Eyes” Lean Roles Sustaining a Lean Culture NOTE: This is a PARTIAL PREVIEW . To download the complete presentation, please visit: http:// www.oeconsulting.com.sg

IT Imperatives:

IT Im p eratives Rising customer expectations Increasing total cost of ownership Difficulty in managing complex IT infrastructures Optimizing resource management Reducing staff frustration Improving customer satisfaction Improving employee satisfaction

Lean has been adopted in many different environments since its creation:

Lean has been adopted in many different environments since its creation Toyota Automotive Industrial products High fashion Medical devices Consumer products Aerospace Shipbuilding Pharma Food production Pulp and paper Chemicals Airlines Railways Naval operations & maintenance Hospital Insurance Banking Retail Store Upstream E&P High Tech Consulting Law Firms Hospitality ITO/BPO Services Process industries Manufacturing Time Complexity Source: McKinsey Research

What is Lean?:

What is Lean? Value streams or processes Focused on improving process performance Clear view of end state Lean techniques and tools are available Employee involvement Learn-by-doing approach Culture of continuous improvement Lean is a management philosophy based on the Toyota Production System (TPS) Eliminate everything that does not add value (waste) in the customer’s eyes Objective Focus and scope Approach and tools

Lean Principles:

Lean Principles Specify value from the customer’s perspective Map the value stream to identify waste Create flow by reducing waste from processes Create pull by delivering only what the customer has ordered Seek perfection by continuous elimination of waste Source: Adapted from Lean Thinking by James P. Womack and Daniel T. Jones

What Lean IS NOT:

What Lean IS NOT Lean is not about cutting jobs Outsourcing or offshoring Applies only to manufacturing companies Delivering less or working harder Automation or implementing an IT system Narrow focus on cost cutting Another “extracurricular activities”

Lean Facilitates a Culture Change:

Lean Facilitates a Culture C hange Work Systems & Processes Behavior Attitude Culture The way we act The way we think Waste elimination

Lean Management Framework (a.k.a. Toyota Production System):

Lean Management Framework (a.k.a. Toyota Production System) Source: Adapted from Toyota Production System Stability Heijunka Standardized Work Kaizen Just-In-Time Continuous flow Takt time Pull system Flexible workforce Jidoka Separate man & machine work Abnormality Identification Poka yoke Goals: highest quality, lowest cost, shortest lead times Involvement Stability Standardization Just-In-Time Jidoka Involvement 1 2 3 4 5 1 2 3 4 5 Focuses on Quantity and “Flow” Focuses on Quality and Prevention

Why Lean IT?:

Why Lean IT? Put the customer first Define value in terms of the customer Learn to see the 8 wastes of IT Make “ less is more ” the way to do things Improve overall customer experience Employee frustration and retention Inexpensive approach to improve service delivery

Value:

Value Value Added It is an activity It is requested by or important to the customer (i.e. something the customer is willing to pay for) It changes the thing being processed It is done right the first time (i.e. without any rework or waste)

Waste Typically Makes Up a Significant Portion of Total Time:

Waste Typically Makes Up a Significant Portion of Total Time EXAMPLE System Administrator T asks The goal is to reduce non-value added time Software implementation System configuration Writing scripts Problem resolution Patch/Upgrades SME consultancy Core (value-added) – 60% Chase ups on Problem / Change records Meetings outside of scope / non-related work Access restrictions ( e.g ., can’t get to server to apply patch , don’t have user access) Lack of documentation or quality of info Ad-hoc education for others ( e.g . project managers, new hirers) Non- related emails , IM, calls, etc. Unrelated (mandatory) training / meetings Non-Value (Frustration) – 25% Validating and discussing issues with app support Documentation updates Performance & Capacity reviews Bridge / War room calls for issues Team meetings Change / RFS meetings Infrastructure training (e.g. Notes) Incidental (non-value added) – 15%

Eight Types of Waste in IT Services:

Eight Types of Waste in IT Services Over-production Producing more than what the customer needs Inventory Building and storing extra services/products the customer has not ordered Transportation Moving product from one place to another Rework Reprocessing, or correcting work Over-processing Adding excess value when the customer does not require it Motion Extra physical/mental motion that doesn’t add value Intellect Not using employees full intellectual contribution Waiting Employees waiting for another process or equipment Waste

Types of Waste:

Types of Waste Routinely exceed customer needs (“gold-plating”) Exceeding scope of contract Providing extra features Creating reports that no one needs or making extra copies Excess emails messages Performing unrequested work Purchasing items before they are needed Over-Production

Types of Waste:

Types of Waste Idle time during automated program runs Waiting for information, instructions, approvals or decisions Waiting between assignments or projects Long setup time for tasks Seeking clarifications (due to unclear communications) Equipment/System downtime Waiting

Types of Waste:

Types of Waste Defects Inadequate testing before production Architecture group designs system specifications without checking for implementability Data entry errors, mistakes or rework Missing information, missed specifications, or lost records Managing subcontractors to correct mistakes Incorrect schedules and information

Value-Added Activities in IT Services (System Administrator):

Value-Added Activities in IT Services (System Administrator) Software implementation System configuration Writing scripts Problem resolution Patch/Upgrades SME consultancy

Lean Levers Can Be Applied to Eliminate IT Waste:

Lean Levers Can Be Applied to Eliminate IT Waste Segmenting complexity Redistribute activities Flexible manpower systems Reduce incoming work Reduce NVA work Standardize operations Form separate channels for complicated tasks so that simple ones are not held up Align activities with appropriate skill set and group Balance processing capacity with the ongoing demand by moving people to where the work activity is Eliminate tasks from a person by reducing the actual work activity arising Eliminate work that does not directly add value to the end customer Establish best practices to execute a task 1 2 4 5 6 7 Pool resources Utilize existing skills and resources to reach economies of scale 3

What is 5S?:

What is 5S? Principles General Description 1S Sort Remove what is not needed and keep what is needed 2S Set in Order Arrange essential items in order for easy access 3S Shine Keep things clean and tidy; no trash or dirt in the workplace 4S Standardize Establish standards and guidelines to maintain a clean workplace 5S Sustain Make 5S a habit and teach others to adhere to established standards

Example – Sorting by Complexity of Ticket:

Example – Sorting by Complexity of Ticket Ticket sorted or segmented by complexity Each SA processes only one type of ticket Complexity segmentation allows SA to build rhythm and increases productivity Each SA works on all types of cases Frequent mix in complexity of tickets does not allow SA to build a rhythm s s s s s SA c s s c c s s s c c c SA Situation before 5S sort s s s s s SA SA SA SA c s s c c s s s Queue of tickets Situation after 5S sort s c Complex case Simple case SA

Office Desk – Before & After 5S:

Office Desk – Before & After 5S An office desk before and after conducting 5S Sort, Set In Order and Shine. Clutter and unused items have been removed leaving only what is needed. Before After

3 Types of Visual Management:

3 T ypes of Visual Management

Visual Management - Scrum Task Board:

Stories To Do In Progress Testing Done Human Resource Management System (HRMS) Business Excellence Framework Human Resource Planning Performance Management System Compensation & Benefits Learning Management System Innovation Framework Project Repository Project Toolkit This is a sample text. Competency Management Benchmarking Projects Training Records Operator Timesheet Employee Records Training Enrolment Leave Management Audits & Assessment Records Audit & Assessment Schedule Project Portfolio Employee Suggestion System ISO 9001 Quality Management System Human Resource Balance Scorecard Visual Management - Scrum Task Board

Daily Management Meetings:

Daily Management Meetings Agenda Yesterday’s issues Lessons learned Manpower status Update from top management 5S & Kaizen activities Today’s target & actions

Value stream mapping provides an overview of the end-to-end business process:

Creates an end-to-end view of the system Demonstrates interaction between material/work and information flow Provides a common visual language for understanding a complex system Supplier/ Customer Management Control Customer Work & Information Flow Information flow Value stream mapping provides an overview of the end-to-end business process

Example: Lack of standardized procedures at helpdesk leads to longer calls :

Example: Lack of standardized procedures at helpdesk leads to longer calls ~ 85 <5 min ~ 15 ≥5 min Percent of observed calls Collect user info ~ 80 <1 min ~ 20 ≥1 min Clarify, analyze, answer Examples of longer calls Long conversation with caller about local weather When agent was baffled, waited a long time for response to IM to colleague High proportion of agents (~15-20%) take an excessive amount of time to complete on and off-call tasks due to absence of standardized procedures After call work ~80 <1.75 min ~20 ≥ 1.75 min Agent writes detailed paragraph on solution using complete sentences, covering details

Standard Work:

Standard Work Make it the only way: No alternatives left Warning: Warns for abnormalities Showing: One-point-lesson Visual information Reading: Manuals Procedures instructions Fail-safe Visual control tools Visual aids Procedures, Instructions and Manuals The Compliance Pyramid

Example: Mismatch of Capacity to Demand Creates Waste in Staffing:

Example: Mismatch of Capacity to Demand Creates Waste in Staffing Percent of average Company A Hour of day Improving baseline scheduling could better match supply to demand Real -time labor management can enable aggressive matching of schedule to forecast Eliminating overstaffing and understaffing could result in 15-25% cost reduction Overstaffing Understaffing Supply Demand Opportunity to improve staffing

Example: Flexing Manpower During a Shift to Reduce Waste:

Example: Flexing Manpower During a Shift to Reduce Waste Source : McKinsey ILLUSTRATIVE If maximum control level is passed, add 1 person for additional hour until queues fall below maximum control level 6:30 7:30 8:30 9:30 10:30 11:30 12:30 13:30 14:30 15:30 16:30 17:30 18:30 If queue level falls below minimum control, take 1 person away from additional hour until queues go above minimum control level Queue size Number of tickets Maximum control level = 36 Minimum control level = 6 Monitoring queue levels on visual board enables real time decision-making and the ability to flex manpower as required Target queue level for 2-person operation* * 2 people are operators and 1 person is the central coordinator (triage )

Examples of Poka Yoke (1):

Examples of Poka Yoke (1) Kitting An example of kitting is do-it-yourself furniture, for which buyers are given the appropriate number of screws, parts and even tools to assemble the furniture. A packaged kit of everything needed for your child’s lunch is another example. 5S workplace organization By applying the principles of 5S to an area, clutter and waste can be removed, leading to fewer mistakes. For example, in grocery stores, perishable products are constantly purged of old inventory, arranged by first in-first out, and kept fresh with sprinklers and chillers. Labels and bins prevent products from becoming disorganized. Space separation A common problem in waiting lines is having customers accidentally or deliberately cutting into the queue. To prevent this problem and have better control of physical space, barriers are erected to guide customers to enter from the end of the line to approach the serving area.

Example: Kaizen Summary Project type: 5S Area: Sales & Marketing Office Team Leader: John Smith:

Example: Kaizen Summary Project type: 5S Area: Sales & Marketing Office Team Leader: John Smith Before After Reasons project chosen: Difficult to move around a cluttered office Difficult to find information and supplies Tools used on project: Cleaning equipment and tools 5S principles Results: Unwanted materials were discarded Less waste – e.g. transportation, motion, waiting, etc. Improved staff morale Next steps: Conduct monthly 5S audits 5S for other common areas

Example of 5 Whys:

Example of 5 Whys Why? Because… 1 Why is Tom injured? …he had a fall 2 Why did he fall? …the floor was wet 3 Why was the floor wet? …there was a leaking valve 4 Why was the valve leaking? …there was a seal failure 5 Why did the seal fail? …it was not maintained 1 3 4 5 2 A continuum of causes

A Simple Lean Implementation Roadmap:

A Simple Lean Implementation Roadmap Create Awareness Build Capability Operations Management & Improvement Lean Thinking Training Lean Leadership Training Build Lean Activity Board Kaizen #1: 5S Kaizen #2: Waste Elimination Value Stream Mapping for K ey Processes Train-the-Trainer Training Information Sessions for Whole O rganization Senior Management Awareness Kaizen #3: Standardization Month 1 Lean Methods & Tools Training Month 3 Month 2 Daily Management Meeting Lean Update in Monthly Newsletter & Intranet

Understanding Responses to Change:

Understanding Responses to Change It is key to understand and leverage is the rate and pace at which people adapt to change Enrollment Curve Start by focusing time and effort on the middle/late enrollers

About Operational Excellence Consulting:

About Operational Excellence Consulting

About Operational Excellence Consulting:

About Operational Excellence Consulting Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. The firm’s mission is to create business value for organizations through innovative operational excellence management training and consulting solutions. OEC takes a unique “beyond the tools” approach to enable clients develop internal capabilities and cultural transformation to achieve sustainable world-class excellence and competitive advantage. For more information, please visit www.oeconsulting.com.sg

END OF PREVIEW To download this presentation, please visit: www.oeconsulting.com.sg:

END OF PREVIEW To download this presentation, please visit: www.oeconsulting.com.sg

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