11 Lean Tools for BPM, Part 2

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By Forrest W. Breyfogle III

Lean tools are invaluable for effective business process management (BPM) of the value stream – the process of defining customer value, making value flow, letting customers determine the product or service they want, and relentlessly pursuing perfection in a timely manner at an appropriate price.

Value stream steps can be value-added, non-value-added, or non-value-added-but-necessary. Lean emphasizes the elimination or reduction of steps that don't have value. We start with the customer's request, strive for no interruptions or waste, avoid batch processing and seek smooth just-in-time one-piece flow.

This two-part article presents an overview of 11 tools that have been shown to be productive for Lean initiatives but that also have value in BPM.

--> Tool #6. Kaizen

Kaizen is a focused methodology that uses teams for making improvements. A continuous improvement process that empowers people to use their creativity, Kaizen can be used to fix specific problems, workflow issues, or a particular aspect of a business.

Based on quantitative analysis, a starting point is to look at the way people work – identifying waste through a time and motion study of tasks with input from both workers and managers. Generic steps for conducting a Kaizen event are:

1. Prepare and Train the Team

During event preparation, identify problem cells and select the cell that will be given focus. This work should have been done in the early stages if it is within an overall corporate/operational project execution roadmap. Assemble the team and, if necessary, conduct training on waste control, standardized work, and continuous flow.

2. Analyze Present Methods

The team uses a digital or video camera or other tool to capture and analyze the cell in action to determine material flow, cycle time, cell layout, process waste and other vital measurements. During this time they can generate a standardized work and work combination table. The team needs to record the current number of operations over time and defect rates. Photographs or screenshots should be used to document the overall Kaizen event.

3. Brainstorm, Test, and Evaluate Ideas

Divide the team into smaller groups to discuss ways to improve the cell using the compiled work cell analysis statistics. Groups then test potential improvement tactics on the work cell, assessing their impact. Results from the tested ideas are shared with other team members. This keeps other groups from making similar mistakes and inspires new ideas. This cycle may be performed many times before desired results are achieved.

4. Implement and Evaluate Improvements

After the team has developed its plan for achieving results, a request is generated to describe modifications so that management can authorize changes to the work cell and its processes. All of the working personnel are then trained in the new process by Kaizen team members. Improvements are monitored and progress is captured again and standardized. Results are measured and items that require additional time are put on a future 30-day action list to be implemented by the team.

5. Results and Follow-up

Team members document all improvement items and compile results to determine monetary savings, improved space utilization, and time reductions. Team members make a presentation to top management with a commitment to complete outstanding items. Management recognizes the team's performance and makes suggestions for the future.

--> Tool #7. Kanban

A business system that creates work or a product before it is ordered or needed by the customer is called a push system. If there is no mechanism to keep the work in progress (WIP) below some level that is consistent with the customer demand, work output can become excessive, which can lead to problems such as excessive work and rework in a transaction.

In pull systems, products and transactions are created at a pace that matches customer demand. Kanbans are used to buffer variations in customer or next-step demands. A familiar form of kanban is American-style supermarkets, where each product has a short-term buffer and replenishment from a regional distribution facility and is triggered when the item is scanned at checkout. When the distribution center receives the replenishment signal, an order to the supplier is triggered for a replenishment of the distribution center. The kanban is the signal that occurs when the product is scanned. The Japanese word kanban refers to the pulling of a product through a production process. The intent of kanban is to signal that the next process needs parts, information or material. In the supermarket example, an order is only placed with the originating supplier after an item is sold to the store's customer.

A bottleneck is a system constraint. In a pull system, the bottleneck should be used to set the pace for the entire production line. Buffers in high-volume manufacturing serve to balance the line. It's important that such operations receive the necessary supplies in a timely basis and that poorly sequenced work doesn't interfere with the process completion. Pull systems address what the external and internal customer needs when they want it.

While it's difficult to describe a pure kanban managed system in a transactional process, you see a simple case of it when the process manager won't let new work start until a given transaction is completed and provided to the customer or user.

Rules to consider when operating an effective kanban:

• No new transaction is begun until the next process step pulls a transaction into its area.
• Working ahead isn't allowed.
• If the customer demand rate increases, then all process steps increase their throughput equally.
• If an error or mistake is found, it's corrected or restarted before other work is started at that operation. This transaction isn't considered complete unless it's corrected.
• A lack of available work to pull or an inability of the next step to pull work triggers a shift in resources to balance the workflow.

If production requirements drop off, the process must be stopped. An increase in production requirements is addressed through overtime and process improvement activities.

Kanban can dramatically improve a process that produces few defects or errors within work areas. However, if there are areas that have high defect rates, the system can become "starved" for work. This problem can be avoided by integrating kanban with a measurement and improvement system.

Kanban can be the relay signal between supplier or provider and customer. Kanban signals can be generated by lights, colored balls down a tube, or a computer alert.

--> Tool #8. Demand Management

Demand management works best when there's a uniform flow of work within the system. While a company's policies should encourage stability, unfortunately, that isn't always the case. For example, a reward system for product sales might encourage a spike in customer demands at the end of each month.

That can lead to supply chain problems in the form of an inaccurate work forecast if these signals are read incorrectly. Accounting procedures can encourage management also to produce excess inventory or use excess overtime in order to make the number on which they're evaluated look better.

When lead times are reduced, you get improved forecasting accuracy. That equates to supply chain improvements, which lead to more uniform schedules.

Another improvement opportunity is to change internal policies, which affect demand volume. For example, take an end-of-the-month/quarter sales-target bonus policy, which results in the sales department giving temporary price concessions so that they meet their monthly/quarter sales targets. This policy could be a candidate for change, since the salesforce reward policy could be leading to an activity demand peak that requires overtime and generates quality problems.

--> Tool #9. Heijunka

Heijunka is a traditional Lean scheduling methodology for environments that have a repetitive mix of products or services. A Heijunka box provides process level scheduling/pacing, schedule visibility and early problem highlighting. You accomplish this by keeping a balanced mix of easy and difficult transactions or a daily mix of transaction types that equate to customer demand for each type of transaction. This is the opposite of batch processing similar transactions and then switching to another type.

Leveled production is customer order averaging so that small sequenced cycles produce the required volume and product mix. In a Heijunka box monthly or weekly volume demands can be leveled into daily demands.

Pull systems and Heijunka work hand in hand. However, system improvement is required for success. When the visual system indicates a problem, prompt identification and correction are absolutely essential.

--> Tool #10. Continuous Flow and Cell Design

The disadvantages of traditional batch production are large amounts of work in progress, a large conveyance time for parts, large lead times, and a large liability for defects. Batching occurs when groups of transactions are collected and then moved to the next activity before further processing.

Small lot production removes the walls from batch production and reduces work in progress, lead times and conveyance, if the activities of the process are allowed to move between steps in the same small groups.

Within U-shaped layouts, employees are cross-functionally trained and move with changing cell layouts. This means that one person can control the work in progress. Close proximity of workers also enhances communications and makes quick roadblock detection possible, and work load adjustments can be made for volume changes.

--> Tool #11. Changeover Reduction

One of Lean's major objectives is reduction of lead time. To achieve this, the size of batches often needs to be reduced, which creates a focus for reducing changeover times, the time required between the last piece of one batch to the first piece of the next batch. The classic changeover is, of course, the Indianapolis 500 pit stop! It's important not only to reduce the mean changeover time, but also its variability.

In a typical business environment, every interruption of a worker, every meeting, every change in tasking creates a work change over. Does anyone believe that there's a loss in productive time when one task is stopped before it's done and another is started? Of course, we need to put one away, pick up the new task and review it to see where we should start. This concept of a changeover time penalty in the transactional environment often goes unrecognized.

Useful Links

11 Lean Tools for BPM, Part 1
http://www.bpmenterprise.com/content/c070618a.asp

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