Mike Boucher, VP of Client Services,  discussed the benefits of the management capacity program and how to free up management time by understanding executive priorities, analyzing management activities, and creating Standard Leadership Roles.

We hope you enjoy our recorded webinar and have the opportunity to benefit from the valuable content that was shared.

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Lean is a journey of continuous improvement and throughout their journey, Lean Advisors has introduced Lean thinking and applications at the day to day operational level through Enterprise Value Stream Mapping as well as at the strategic, business planning level through Hoshin Planning. That enterprise level of commitment is delivering results in terms of improved efficiency, productivity, staff engagement and most importantly with increased client satisfaction.

Here is their story:

In 2008, The Saskatchewan Assessment Management Agency (SAMA) adopted the Lean business process improvement strategy.  SAMA is responsible for the governance of the overall assessment system in Saskatchewan, and the provision of assessment services to our 756 client municipalities.  The Agency provides a financial foundation for municipalities and the education sector that they can use to establish and sustain local programs and services.

Lean is aimed at engaging the talents of the Agency’s people to eliminate waste, and create value for our customers.  With an ever-increasing workload and limited resources, Lean helps to ensure that SAMA’s clients’ and stakeholders’ needs are successfully met.

Thanks to the commitment of staff and Senior Management, SAMA is involving people throughout the Agency to tackle some of the challenges affecting the property assessment system in Saskatchewan.

“One of Lean’s strengths is its focus: the people most familiar with the actual work determine the necessary process improvements and plan the necessary changes,” said SAMA CEO Irwin Blank.  “The Agency has achieved significant progress to date, and Lean process improvement initiatives will continue to be a focus for SAMA in 2013 and beyond.”

Because the Agency looks for input from staff and management in all eight of our regional offices across the province, as well as our central office in Regina, the Agency has opted to train all staff and managers in Lean processes.  Staff all receive Introduction to Lean training, and many staff have received further training in Lean processes and change management.  The Agency currently has 14 certified Green Belts, and 5 certified Black Belts.  There are an additional four certified Green Belts who are currently Black Belt candidates, as well as another 14 Green Belt candidates.  Six of SAMA’s Executives have also completed Green Belt training.

To help guide and steer the Agency’s Lean journey, SAMA uses value stream mapping to improve the Lean process.  One of these improvements was to develop a Lean Manual.  The manual outlines details on creating and managing value streams, organizing and executing Rapid Improvement Events and the roles and responsibilities of staff, value stream leaders, facilitators and others.  All staff can access the manual on SAMA’s intranet system.

SAMA currently has several value stream maps in progress representing the different areas of focus within the Agency. For the operations area (Assessment Services) SAMA has value streams for Data Verification, Revaluation, Support of Value and Industrial Assessments.  For the Agency’s support divisions SAMA has value streams for Revaluation Governance, Finance, Quality Assurance, Human Resources and Agency Planning.

SAMA’s original Lean goals were:

• A 25% increase in efficiency and productivity between 2009 and 2013;

• Highly engaged staff, that take ownership of the business processes; and

• An Agency in a much better position to meet the increasing demands from clients.

Under the Lean initiative the Agency has:

• Advanced the Agency’s annual property maintenance program by 3-4 months and in 2012 completed the work for 62% of our client municipalities by December 31^st.  In comparison, only 14% of client municipalities received their annual property maintenance by December 31^st in 2009.  Property maintenance occurs when municipalities request SAMA to do on-site inspections of specific individual properties, usually where significant developments or changes have been made that have altered the physical data on  a property.

• Increased property reinspection productivity 57% over four years from 761 properties per appraiser Full Time Equivalent (FTE) in 2008 to 1,198 properties per appraiser FTE in 2012.  Periodically, municipalities must have all their properties reinspected on-site to verify that physical data and valuations are accurate.

• Made changes to sales verification, market analysis and support of value processes and reduced total appraiser time to complete the 2009-2012 revaluation cycle by 28.1 FTEs or 22% – an average of 7.0 FTEs for each year of the program.  Sales verification and market analysis are two key components of the Agency’s revaluation work that happens on a four year cycle. SAMA is also required to participate in property appeals and provide full disclosure of how property values are determined. This responsibility for openness and full disclosure is part of what SAMA calls “support of value.”

SAMA’s 2014 to 2017 Lean goals are:

• Increase the number of properties that an appraiser can review by 80% from 1,029 to 1,850 properties annually using Lean business process and technology improvements.
• Double the number of properties that an appraiser can reinspect from 1,050 to 2,100 properties annually using Lean business process and technology improvements.
• Utilize Lean value-stream mapping events and other tools to increase the efficiency and effectiveness of work processes.
• Improve the efficiency and productivity of annual maintenance processes resulting in the reallocation of 14 FTEs to the property reinspection program by 2018.
• Based on continued significant growth expected in Saskatchewan’s energy and minerals sectors, the agency will progressively double the capacity of our industrial program by 2017.  Lean process improvements, software upgrades, cost model simplification and remote data collection tablets will improve the efficiency of the industrial property assessment program by 25%.

• Efficiencies will be attained in delivery of the revaluation and annual maintenance programs that will allow the reassignment of critical appraiser resources to the reinspection program – increasing the agency’s average capacity for reinspections from 8 FTEs in 2013 to 27 FTEs annually by 2018.

The agency will continue to build on the Lean improvements attained over the past five years. The plan takes a long term and careful approach to innovative new business processes, and it invests in technology to ensure the sustainability of the property assessment base and municipal and education property tax revenues.

The focus for 2014-17 will be on sustaining current levels of service for our governance responsibilities, continuing to improve the delivery of assessment valuation services to our clients, and building the capacity to enable the Agency to reinspect all properties at least once every 12 years.

SAMA’s Lean journey has been one of trial and error and learning from our missteps.  The Agency’s Lean transformation has required this learning process, which will ultimately help us move towards becoming a truly Lean organization. With a strong commitment and growing knowledge of Lean, SAMA is constantly looking for ways that Lean can influence and improve our everyday business, and in turn, help us provide our customers with the best service possible.

A very commonly-implemented intervention when attempting to “mistake-proof” a process involving humans is the double-check.

Double-checks are, by their nature, waste.  Often, double-checks are put in place as temporary stop-gap measures while more effective, value-adding countermeasures are devised and implemented.  While a perfectly-implemented double-check does indeed improve error rate, it does not come close to serving as effectively as a prevention-based mistake proof device (poka yoke) and should therefore be considered a weak intervention.

The prevailing theory behind a double-check is that, while a person will occasionally err when undertaking a task, with probability A, the process will be made more robust by inserting a double-check of the work of the original person.  The presumption is that the person doing the double-check will also occasionally err, with probability B, but that the combined probability of error emanating from the double-checked task will be geometrically lower (improved).  For example if the error rates of the original person performing the task is 10% (A=0.10) and the error rate of the double-checker is 15% (B = 0.15), the combined error rate of the double-checked process is now (0.10)(0.15)=0.015, nearly an order of magnitude improvement.

Actual results of such interventions in practice rarely match the theoretical improvement.  By understanding the factors leading to gaps in performance of double-checks, we can set out to implement double-checks in such a manner that efficacy is enhanced.

Factors leading to sub-optimal performance of a double-check

Often, a double-check step is inserted into a process “on the fly” without thoughtful planning to eliminate possible failure modes of the check itself.  Following are some common situations to avoid when considering a double-check for your process.

• Lack of clear definition (standard work) of how the double-check is to be performed
• Ineffective training of staff who are to perform the double-check
• Failure to design an independent double-check; one that only involves the person originating the work has a high likelihood of error due to confirmation bias, which can blind the person performing a check on his/her own work .
• When a second person is assigned to perform the double-check, confirmation bias can blind this person.  This can be caused by specific information being passed from the first to the second person prior to validation, the second person subconsciously deferring to the authority of the first person, or simply trusting that the first person could not have erred.  Any of this leads to the second person missing errors.
• Creeping complacency, due to a person knowing that someone else is in place to catch any mistakes he or she will make
• Interruptions during the double-check
• Rushing the double-check

Related, and equally common, is the issue of nobody being tasked with examining errors caught during the double-check and using that insight to drive focused root cause analysis and interventions upstream to eliminate as many of these failure modes as possible.

What can you do?

1. Assess and analyze any double-checks you already have in place.  Look for evidence of any of the above issues.  Ask to see the data showing what errors are being found.  Investigate what actions have been initiated as a result.
2. Before assuming that a double-check is the strongest mistake-proof device (poka yoke) that can be designed and implemented for a particular task within a given value stream, challenge yourself and your team to seek out stronger interventions.  Estimate the relative strength between multiple intervention ideas.
3. Where a double-check is the only course of action, either for the short term or for a longer time period, infuse these design principles:

• independence of the check, separated by time and space if possible to mitigate risk of “contaminating” the checker with information about the person originating the work, inputs, outputs, calculations, and judgement applied
• to simplify and make visual the double-check, create a checklist showing the specific steps to be undertaken
• create a physical environment for the double-check that will be free from distraction and which will make the task simplest
• carefully document the standard work, train those involved, and assess skill/capability of those who will be performing the check
• avoid having the same two people serving as checkee-checker on a sustained basis
• periodically assess efficacy of the check, in a blinded fashion and provide feedback
• instrument your check and specify roles to include those who will prepare, analyze, and act upon the errors caught by the check

4.   Seek to continually improve, through successive cycles of mistake proofing, until you can evolve beyond the use of double-checking

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Mobilizing Our Ingenuity Through Good Management.

In this video, Mike Rother shares valuable insights into the importance of ‘structured’ change methodology, called Kata.

At Lean Advisors, we believe Kata is the next major critical concept organizations need to grasp in order to create a sustainable transformation. Mike has uncovered, through his research with U of Michigan another important piece of the puzzle necessary for success and taking your team to the next level of competitiveness

Message from Larry Cote, President, Lean Advisors Inc.

I recently came across this video of Mike Rother who spoke at the Lean Summit in 2012. I had the privilege to work with Mike back when Lean was just gaining interest in the mid 90s.

At that time, much of Mike’s research and efforts were focused on Toyota and the primary transformational tool known as Value Stream Mapping (VSM).

We wanted to share this with our online community.

Lean Summit 2012 – Mike Rother – Toyota Kata

In this webinar, Larry Cote, President, Lean Advisors Inc. shares an objective assessment of Lean 15 years after the concept was coined ‘Lean”.  He highlights his own experiences as well as examines and identifies how different organizations from all industries have succeeded with Lean implementations.

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In his first year as President of the UTPA, Dr. Robert Nelsen recognized this challenge right away. He had a transformative vision for his University which required improved responsiveness in administrative functions, without any increase in cost. The university had focused on improving the quality of its curriculum and educational resources without giving much thought to the transactional business functions. Until now, they simply had not been a priority. For him to accomplish his vision, Dr. Nelsen simply could not ask for more money from the UT program, he had to find a way to get more out of the resources he already had. Dr. Nelsen was familiar with the concept of LEAN at an enterprise level, and suspected he could achieve his goals through the identification and elimination of waste and improvement in the flow of tasks. He discussed this idea with an industry colleague, George Reynolds, a pioneer in developing lean transactional processes and formerly employed by Northrop Grumman Corporation as their Director of University Programs and Process Improvement. George agreed to provide some training and assistance to UTPA. After some discussion, both parties agreed to look at the procurement process at UTPA, and establish it as a test case to see if the lean methodology would “work” in an academic environment, and also to see whether it was possible to train UTPA staff to use lean methodology, so that they could continue to make improvements after the Northrop Grumman team left.

In October, 2010, George brought along a Master Black Belt to help observe the procurement process and facilitate a three day Value Stream Mapping event, focused primarily on the procurement process. A VSM, or “Value Stream Map” is a visual representation of a process that is intended to deliver value to a customer. It provides a structured approach for “seeing” the sequence of events required to deliver customer value and defines how each step in the process impacts what the customer values. The VSM shows how the processes link together in a ‘value chain’ and the map provides a way of “seeing” opportunities to minimize waste and improve process performance. The real strength of the VSM approach is in gathering people from different disciplines to see and talk about the flow of processes in a common language, and at a common contextual level. Once the problems are seen in the context of the overall process flow, their impact on performance can be measured, and countermeasures/improvements can be made. This effort using the VSM culminates in designing a detailed Future State Plan and vision to move forward.

The UTPA team went right to work, embracing the idea that they had control of their own destiny. The team quickly outlined the process they intended to improve (2), connecting each process step and output to a customer. This outline framed the starting and stopping points for a more detailed look at the procurement process, which the team mapped in great detail (3). With this detailed view of the process, the team was able to identify the “friction points” in the process – the things that got in the way and slowed things down.

The more detailed map also allowed the team to measure the individual process steps from a time standpoint. As part of the VSM process used by George’s team, the relative variation in time associated with the “friction” in the process was also measured. The facilitator used this specific measure of time and variation to create a Monte Carlo simulation of the time spent in the procurement process, and the relative impact of the variation in time as it impacts the overall process lead time. The marriage of visual representation of the process friction (pain points), and modeled impact on overall lead time helped the UTPA team focus on the “most important” things to work on. They spent almost a day of their time together coming up with, and prioritizing improvement ideas to make the procurement process “better”. While there were dozens of ideas for improvement, the team was able to resolve that all the ideas centered on five basic themes:

1. Lack of Visibility for information
2. Lack of Flow – process stops without warning and waits
3. Choosing the Wrong Path / Routing Errors
4. Training / Insufficient Knowledge – the people involved with the process just were not sure what to do.
5. Infrastructure – The tools (hardware and software) were not adequate to support the procurement needs.

The final day of the three- day VSM process was used to synthesize the process improvement ideas into specific actions (“WHO is going to do WHAT by WHEN”). This involved a lot of discussion, trade-offs, negotiation and estimation of costs and impacts, and is always much more intensive than it sounds. With each improvement idea, the team estimated the relative impact the “fix” would have on the overall procurement lead time, and a “future state” Monte Carlo simulation was used to model the overall expected impact on performance. The ability to visually model the impact allowed the team to focus on solutions that involved the most “bang for the buck”. At the end of the third day, the UTPA team was exhausted, but satisfied. They had addressed the specific changes they needed to make to the process, each dealing with manageable actions that are summarized below.

• Visibility – Understanding where the information is, who has it, and the status of the process
• Priority – Understanding which tasks are more important than others
• Trigger – How to signal that work needs to be done, or that additional emphasis/priority is needed to keep the procurement moving forward
• Handoffs – Minimize the “in box / out box” waits from handing tasks back and forth to different functional organizations. Maximize the amount of work that can be accomplished at one time by each group.
• Delegate – Trust others to accomplish their jobs, and hold them accountable for success
• Metrics – Measure the current process to establish how well it services the stakeholder’s needs
• Better Tools – Improve the ability to flow work, provide priority and visibility and extract information out of the Oracle Database
• Organizational Efficiency – Reorganize the group to be more efficient. House complementary functions under the same organization

The impact of improvement impact was re-modeled using the Monte Carlo approach, and the “Future State” process time was compared to the Current State. Improvements to specific process paths were modeled to be ~ 30% (5), except for the Sole Provider Procurement process, which involved improvements that were out of scope for this initial effort.

At each step of the process, the facilitator instructed the team about the theories of lean and continuous improvement that were used. He further taught the practitioners how to created and model their own maps, so they could continue to develop their improvement skills without the need to bring in expensive consultants each time. As highly engaged and intelligent groups often do, they embraced the concepts of the process improvement paradigm, and diligently went off and worked the action items. Within a few months, the team had met the expectations of the modeled performance, but saw the opportunity to do even more. They met with smaller teams, and continued the process of problem identification and problem resolution. Without increasing costs or headcount, they were able to bring the lead time for the procurement process down by almost 50%!

What happened next was even better – the UTPA staff became encouraged by the success they experienced in the procurement process, and started to map other elements of the administrative and transactional processes. While not every process was capable of a 50% reduction in lead time, each process was capable of being made better without adding more cost or resources. In fact, there was no magic to the improvement effort itself, it was the result of key stakeholders paying attention to what was happening, assessing the current state information, identifying the problems and simply deciding to do things a little better. We call this type of change “continuous improvement”, and it enables us to get control of the seemingly chaotic things that make it difficult for us to succeed at work.

Dr. Nelsen states: “It was the little things that made a big difference. Once we really started looking, we started seeing. Once we saw, we asked questions and then really listened to the people working in the process. They had the answers; we just needed a way to get to them – after that, knowing how to act was much easier. The Continuous Improvement folks helped us figure out what to measure, where to look, and how to listen, it was a great help.”

He goes on to note: “We have a long way to go to get where we want to be. But this is a great start, and now we know that we can ‘get there from here’.”

Yes, good things ARE happening at the University of Texas Pan American. Small improvements add together incrementally, and lead to big changes. According to George Reynolds, the former Director of University Relations and Process Improvement at Northrop Grumman : “All we need are good people, the desire to look, the patience to listen and the guts to act.”

First, let’s alleviate the misconception, apprehension or anxiety that Lean doesn’t work.  It does work!

The caveat is that you must discover the ‘right’ or proper adaptation of the thinking and concept to  your unique situation!

Once you have acknowledged the above, you can then begin to search for the proper solution and resources to lead your Lean Transformation.

Chances are you will try to find the expert internally first and then if you feel you don’t have the internal expert, or need additional resources or guidance, you will go outside your organization to either hire someone or find a credible consultant.

The problem with trying to select the expert talent is that you may feel a little hesitant as you may not know what to look for (or not look for) in an individual in order to make this important decision.

This decision becomes even more stressful because you know that you get one chance to make the right decision and that if you select the wrong person(s), you alone are responsible for taking your organization down the wrong path and it is extremely difficult to start again.  We acknowledge that much of this confusion has been caused by consultants and trainers that have misguided their clients and/or students and given them the incorrect or incomplete knowledge which in turn the leadership unknowingly uses to select what and who they need to guide them.

So we thought it might be helpful in this post to at least highlight some of the red flags to be aware of when hiring a person(s) to lead the change in your organization and that you are willing to put your reputation on the line for.

Here is a list of some of those Red Flags to keep in mind when deciding on the expertise you are looking to engage:

1)      The transformation costs tons of dollars.

2)      The person doesn’t know the difference between Process and Value Stream Mapping and where both are critical.

3)      They speak about tools instead of cultural change.

4)      They have a solution prior to properly assessing the situation.

5)      They will do it for you – your staff won’t be that involved, the staff only have to utilize the changes once the consultant is done.

6)      They use the word ‘bottleneck’ or project to focus on one area.

7)      They call it Lean Sigma and it is really mostly Six Sigma (a tool).

8)      They use a matrix type chart to determine the priority of projects i.e. the one axis is normally large and little impact and then the other axis is little or most effort.

9)      They give you a long list of projects to assign to staff or themselves with no sequencing analysis.

10)   Their plan requires them to be on-site for, what seems like, an unreasonable length of time.

These are only some of the Red Flags you should keep in mind.  If you ‘see’ any of these types of ‘flags’, take notice and do some additional analysis and research into the credentials and approach.  Doing this analysis properly could save you years of regret, not to mention thousands of dollars, and in the end- frustration and disappointment not just for you but for your entire staff.

Lean does work when implemented properly!  The challenge for you is to choose the distinctive and effective adaptation of the theory that is right for your environment/situation that will not only transform your processes but also transform your culture into a sustainable continuous improvement organization.

For more information, contact us at corp@leanadvisors.com.

Universities and Colleges represent an immense opportunity for the application of Lean Concepts. Lean Advisors Inc, Senior Advisor Sav Pota P.Eng, will share his insights on how Lean principles and practices apply to educational processes.  He will also provide highlights from his own experiences in higher education, including success examples, lessons learned, and advice on how to best engage university/college staff in order to create a culture of continuous process improvement to achieve the most effective and efficient results.

Date: February 28,2013

Time: 1300 – 1345 EST

Space is limited. REGISTER TODAY

About the Presenter:

Saverio (Sav) Pota P.Eng

With over 25 years of practical experience in various industries, both manufacturing and non-manufacturing, (healthcare, government, justice, logistics/distribution) Saverio (Sav) Pota has a unique ability to “make complicated systems simple” using Lean. His passion has always been to pass on this ability to adapt and apply Lean to challenging situations and to others.

Sav’s Lean experience includes many sectors – manufacturing, healthcare, college/educational institutes, government, design/architecture and service. From his early days in the electrical industry where traditional production management (e.g. EOQ and the big batch) was prevalent, he saw firsthand how North American companies latched onto individual concepts, such as Just In Time (JIT), which led to disappointment because benefits could not be sustained. Sav then worked in the Auto Industry where he was first indoctrinated in the Deming management philosophy. This led to an understanding on how company culture is a fundamental requirement for sustaining continuous improvement.

Subsequently, Sav worked for a major Crown Service Corporation where Lean was introduced as a new direction (a direction that lives on 15 years later).The basic principles of Lean, (Define Value, Map the Value Stream, Make in Flow, Pull and Perfection) became the driving force for both cost and service improvements. Mapping the Value Stream clearly identifies the end-to-end flows of a product or service and is paramount for any sustainable improvements. Sav also led a major initiative (Kaikaku) in a product processing overhaul, but more importantly he led a team of his peers in the development of a Value Stream Management organization. Sav believes that it is imperative to have internal value stream owners to ensure that Lean becomes imbedded into the culture of any organization.

Sav’s work continued into the private courier industry, where he planned and managed the start up of new facilities based on Lean principles. As a director at a major North American transportation company, he applied the concepts of Lean in the creation of their long-term vision. This vision was the guiding principle of their business transformation initiative.

Recently, he was part of the design team for the new Children’s Hospital in Saskatchewan. He led teams comprising of Ministry reps, Hospital leaders /staff and designers to analyze existing processes and establish new, more efficient , flexible flows throughout the facility that would be incorporated into the design of the future hospital.

Presently, he is working with several Health Regions in Ontario, College Administrations and Municipality Administrations to transform them using Lean.

As an owner/partner in a manufacturing company, Ontario, he has also managed to benefit from Lean principles. Significantly growing his own company over the years. This company has survived and thrived even throughout the latest recession.

A graduate of Industrial Engineering from the University of Toronto, Sav has furthered his professional development by keeping abreast of manufacturing management techniques by attending seminars and conferences. Sav even had the opportunity to attend a Deming seminar lectured by Dr. W. Edwards Deming. He led a presentation at the “Lean Summit” in Atlanta, Georgia, plus was asked to present at two other Lean Manufacturing Conferences hosted by the Institute for International Research. He was also a co-presenter, with his Lean Advisors colleague Mike Boucher, at the ASQ conference .