LeanSigma ® Fundamentals Module 2 – Time-Based Strategy & LeanSigma Execution.

LeanSigma® Fundamentals

Module 2 – Time-Based Strategy & LeanSigma Execution

Lean’s foundation: Time-Based Strategy leads to success.Build an organization with fast response time in serving customers and preempting competitors, and you will grow profitably.

© 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

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The Old Business Analogy … a Chess Game

The New Analogy … a Dogfight

observe

orient

decide

actFast Animal, Moving Sidewalk, Folding a shirt videos

IMS departments have different objectives, but speed is the common element.

“Today, it’s all about speed.”

–Tom Peters

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Lean = Speed

Lean tools and techniquesare the most effective way to speed up every part of your operations


• Have lead times 25% - 50% shorter than their competitors in business processes

• Leverage time advantage to achieve growth 3X – 5X industry average

• Attract the most profitable customers and enjoy price premiums of 20% or more than their industry average

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Time-based companies grow faster and can often charge a premium.


Process time in IMS kaizens is generally improved more than 20%.


Non-VA Tasks

Decision Points

Loopbacks

Hand-Offs

Delays

Delay Time

Cycle Time

Lead Time

0 5 10 15 20 25 30 35 40 45 50

Percent Improvement

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Removing waste reduces time.

• Cycle time: the time spent to complete an activity EXCLUDING delays (Man hours or Effort time)

• Lead time: the time required to complete an activity INCLUDING delays (Elapsed time)

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IMS has reduced process time in many kaizens.

• In Poland, automation of Bridging programs and elimination of redundant checks will reduce cycle time by 30%, enabling delivery1 day in advance and saving 300 hrs/month ($14.4k/month)

• In the US, the team reduced the time it takes to validate drug rebates from 9 – 15 days down to 1 – 5 days by reorganizing tasks and reducing bottlenecks.


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Time-Based strategy removes waste.

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The key is to reduce waste like waiting and delays in order to focus on “core value”


Time-based strategy is more effective than traditional improvement.


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MinorImprovement

TraditionalImprovement

0.5%

99.5%

10%

LeanSigmaImprovement

MajorImprovement

90%

TypicalCompany

OriginalLead Time

1%

99%

Value-Adding Activities Non-Value-Adding Activities

When speed improves, cost and quality also improve.

By reducing end-to-end lead time we can simultaneously improve our service, cost, and quality…


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“Time is the scarcest resource and unless it is managed, nothing else can be managed.”Peter Drucker

“Time is the scarcest resource and unless it is managed, nothing else can be managed.”Peter Drucker

Lean and Six sigma are complementary approaches.

Lean Manufacturing is about flow, speed and efficiency

Six Sigma is about precision and accuracy

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Lean Manufacturing and Six Sigma are both process improvement methodologies that began to emerge in the US in the late 1970’s

Taichi OhnoFather of Lean Manufacturing

Edward Deming“Father” of Six Sigma


Elements of LeanSigma® have developed over the last five decades.


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Create flow & eliminate waste

Improve capability & reduce variation

®

Lean is a simple concept.

Lean is simply creating more value for customers by eliminating wasted activities.

–It has been used in manufacturing to manage competitive pressures and heightened customer expectations.–In the last decade, it has been used increasingly in service industries.

• Banks• Hospitals• Government


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There are some common misunderstandings about Lean.

• It is not a substitute for leadership.• It is not a silver bullet.• It is not a “manufacturing thing”• It does not require specialized knowledge –

everyone can play.• It is not a replacement or competing approach to

Six Sigma – it is complementary.


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LeanSigma® has a broad, team-based approach.


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• Lean tends to tackle end-to-end Processes… the Value Stream Map

• Lean uses a multi-functional team approach.• It focuses on Speed, Quality, Efficiency & Standard Work.

= Six Sigma= Lean

Patient Value StreamAdmit ER OR Step

DownUnit DischargeBranch

AppsCredit Risk Legal Doc

Prep Fund

Lending Value Stream

Lean improves a process. Six Sigma perfects it.Typically you streamline processes with Lean before improving capability with Six Sigma.

•Flow changes, standardization, and simplification through Lean may significantly improve existing process quality.•Lean may completely eliminate a process that was causing an error.•Removing waste through Lean makes issues and potential root-cause more apparent.


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Much of Lean will seem like “Applied Common Sense”.

• Time Principles– Establish Continuous Flow– Operate to Takt Time– Leverage a Pull System

• Smooth the Process – Demand vs. capacity– Routing standardization– Workforce management

• Jidoka– Root Cause Identification and Elimination

(Abnormality Management)– Mistake-Proofing– Standard Operations


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Principlesof LeanSigma®

Justin

Time

JustJustinin

TimeTimeJidokaJidokaJidoka

Process SmoothingProcess Smoothing

Justin

Time

Time Principles

JidokaJidoka

Process SmoothingProcess Smoothing

Lean Sigma has six steps to optimize processes.

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LeanSigma ® Fundamentals Module 2 – Time-Based Strategy & LeanSigma Execution.

Documents

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licensee of leansigma

effort time lead time

process time

cycle time

fast response time

leansigma fundamentals

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