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Archive for the ‘Value Stream Mapping’ Category

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My credit union doesn’t want me to come in and bother them if I have a check to be deposited in my account. If I have a scanner at home and access to the Internet, I can just deposit my checks from home!

It saves me a trip to the bank, time, gas and the opportunity to do something else useful. For the bank, I am doing all the work. They don’t need me showing up at the branch needing time on their part to do the work I can do from home.

Chase Begins Converting Its ATM Fleet to No-Envelope Machines reports Bank and Technology. You can now deposit up to 30 checks in one go along with cash also in a Chase ATM.

They are trying to do away with Deposit Slips and that’s a great Value-added improvement for consumers as well as a lean improvement for banks.  For the consumer, they get a scanned image of the check in the receipt as well as money that is available sooner because the intermediate step of somebody at the bank manually opening these envelopes and processing them is totally eliminated.

Businesses seem to be benefit even more because they don’t need to write a big deposit slip with thirty or forty checks each time. The ATM can just easily scan it all and print out a receipt with all the images.

In addition, it appears that the bank has eliminated fraudulent transactions where someone deposits their own checks into their own accounts and if that bank allowed withdrawals immediately, got the money out!

Great example of a Lean Improvement in check processing that is a win-win for everyone, except perhaps for the people not needed anymore to process these transactions at the bank!

Any general statement is like a check drawn on a bank. Its value depends on what is there to meet it.  –  Ezra Pound

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Zappos, the online retailer threw out all metrics for its Customer Service Organization. Customer service representatives stayed with a  customer on the phone, till they are happy, even if it takes hours and hours. Throws out all kinds of Six Sigma variation reduction goals out of the window. But that’s exactly what helped them build a new company in the midst of hundreds of other competitors and helped sell their company for billions to Amazon!

Check this article out about their now, legendary service! – Expediting delivery of WOW customer service Zappos Style.

Advanced Decisioning for Process Excellence is an excellent article by James Taylor that argues that for process excellence incorporating flexibility and advanced decisioning in people, helps reduce process complexity and make them simpler.

He says that processes become convoluted, complex and difficult to manage just because they don’t incorporate complex decision making capabilities with the people doing the process.

Brings us back to empowerment also. In addition to having the knowledge about how decisions could be made by people, they also need the power to make those decisions and make them stick. If the customer is on the phone and wants a full refund, throwing that person into another part of the process where another person may be involved in that decision just aggravates the customer. If that person is empowered to make those kinds of decisions themselves without any kind of authorization from anybody else, that makes the process a lot simpler and wins a customer for life, possibly, and also word of mouth recommendations from that person.

However, many automated parts of processes with rule engines and such may not have this flexiblity and so while they may be efficient in execution, they may not have the same effectiveness of a person satisfying a customer and increasing word of mouth sales.

Do the right thing. It will gratify some people and astonish the rest – Mark Twain

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Finace and Accounting processes in a company belong to a whole class of non-value adding activities, if you really think about it. They are needed by the regulatory authorities, shareholders and other stakeholders that have business with the company but for the life of me could not think of one way in which it adds value to me, the end customer.

How Ford Motor Company does its Finance and Accounting function has very little to do with the value it is adding to the Ford car I am thinking of buying!

It is interesting that even large companies like Dell and Cisco spent time thinking about how to make the Finance and Accounting function leaner.  

What they found was interesting. They unearthed lots of unnecessary processes and wasted human effort in all of their financial forecasting and regular accounting functions.

The surprising result of all of this is the elimination of a lot of unncessary reports.

As anyone who has watched the movie OfficeSpace and/or worked in a middle management or lower position in any company, we all know the reports we need to fill out periodically that we were convinced wasn’t going to be useful to anybody within the company.  

Time wasted in useless reports so satirized in OfficeSpace that people have designed coversheets for Initech T.P.S Report as a joke! IniTech is the fictitious company that features in the movie.

But seems like wasted human efforts and unnecessary reports are a reality in the world of Finance and Accounting and companies have found a lean approach to eliminating them!

But if you have not seen OfficeSpace yet, do not miss it! It’s widely available on DVD!

There’s no business like show business, but there are several businesses like accounting. – David Letterman

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Lean methods are those that cut waste in human effort, time, unnecessary movement of information or physical paper or objects.

It can also mean anything that does not add value to the end customer!  This is the basis of Value Stream Mapping, where you identify your internal activities that add value to the end customer, and eliminate those that do not. For example, someone bolting a door to a car in an assembly line is a value-adding activity. Them updating a sheet on a clipboard regarding their production statistics may be necessary from the company’s point of view, but not Value-Adding from the end customer’s point of view. After all, what do they get directly from something that benefits the company?

From this point of view, most Business Intelligence activities benefit only the company, providing them insights into what product is selling where, which sales person is selling what in what numbers in what regions, etc.

However, there is a new breed of Customer Intelligence solutions that provide direct value to the end customer.

On many store receipts, at the end of the purchase totals is a little section that is trying to persuade you to call a toll-free number or go to a web site and fill out a survey about your purchase when it is fresh in your mind.

I was chatting with Borge Hald, CEO of Medallia, and what they do. They provide a Software As a Service (SaaS) offering that enables these kinds of surveys to happen, collect Business Intelligence and provide insights about customer experiences to management.

But what is Lean about this is that it allows local Store managers or Hotel Managers to address the issues that the customer had with their experiences at their establishment.  Often, headquarters gets summarized abstracts of this kind of intelligence, but those never are Lean in the sense it benefits the end customer much. But allowing feedback about customer experiences to be channelled to the right local establishment and allowing the local management to address them directly in a timely, relevant way, Customer Intelligence becomes Value adding and as Lean as it gets!

Now companies like Medallia are making it possible to do this even from your iPhone closing the gap in time between a customer experience and the feedback to be channelled to the right people for them to take action! After all, if you need  come home, relax and start doing something else, you may never get to providing that feedback, good or bad, that you felt strongly at the location. Smartphones allow you to do that right then and there when the experience is fresh in your mind and your motivation is high!

Very interesting way to approach Business Intelligence, especially in the context of making it matter to the end customer. That’s Lean Business Intelligence!

You must learn from your past mistakes, but not lean on your past successes. – Denis Waitley

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Lean and Research and Development (R&D) don’t seem to fit together.

Lean is about cutting waste in effort, unnecessary movement and making sure anything you do adds value to the end customer.

Research and Development is about conquering new frontiers in Scientific Exploration, and in Industrial settings (Not academic), turning that research into Innovations, Advanced Development and Products.

In theory,  they could be poles apart. In practice, not quite!

We have all heard of legendary stories of very good research and advanced development not really making money for the company that invested in that research. Xerox PARC (Palo ALto Research Center) is famous for inventing the computer mouse but Apple was the company that made it into a commercial product. Corporate histories are laden with beauracracies totally killing innovative ideas.

The latest one is that General Motors spending millions of dollars developing an electric vehicle EV1, making many succesful production versions of it, leasing them, but buying every one of them and crushing them! There is a whole website devoted to this colossal waste of effort. money, research and innovation! . Now they are talking about producing an Electric Car! They had one and they threw it away before!

You might be surprised at the amount of money spent on R&D by companies that does not make a dime for the company. There is research for research’s sake but there are many companies that turn research ideas into products, ready for production, only to be killed by politics, economics or some other consideration!

Making sure that all your efforts at R&D are turned into something useful for the company is itself, Lean!

In addition, there are lots of others things companies can do for Lean R&D. Laboratories can be shared, resources can be shared by many research groups, cutting waste in the process.

There are some recent examples of how Pharmaceutical Companies have rationalized and Leaned their drug discovery efforts even! These are very large, very risky, very expensive projects and it only makes sense that you at least do not waste resources, efforts and the final outcomes are what you want as a corporation! 

Whoever thought that Lean and R&D could actually make sense together!

Misery acquaints a man with strange bedfellows. – William Shakespeare.

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If anything, Six Sigma and Lean Thinking are complementary to each other. There is a lot of antagonism towards Six Sigma in the Lean Thinking camp and vice-versa.

If I were using these I would consider them two different tools for two different purposes. Both of them are vaulable in their own right and ignoring their differences, and particular strengths does not do the enterprise any good.

Sic Sigma is focused on reduction of variation. If you are doing things that are of little value to the end customer or client, with very little variation, it is still wasted effort! If my job on the manufacturing floor is to fill out a form for something, it does not add value to the end customer since it may be  done only for internal efficiencies! Reducing variation in this may still be a waste of effort, and resources.

If on the other hand, lean thinking helped you eliminate non-value adding activities but there are still a lot of value adding activities that need to be done. If Six Sigma is not there to reduce variation in this, the end quality may suffer. If in a call center, one call takes one hour and the other one with a similar problem and solution takes 15 minutes, the customer’s expectation of reliable, consistent service may suffer. This is where Six Sigma comes in handy!

Arguing about whether Six Sigma or Lean Thinking is better is just dumb!  They are two different tools with distinct purposes in your arsenal. The wise person would understand the nature of these tools and use them appropriately!

You can’t expect to meet the challenges of today with yesterday’s tools and expect to be in business tomorrow. – Anonymous

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Our company was collaborating along with a large IT company in India to respond to an Request for Proposal (RFP) for processing Passport Applications for Indian Citizens. This is a huge, huge problem as you can imagine given the demand for passports in a country like India with this population as compared to any other country. They also set some impossible goals for achieving a 3-day (Yes! 3-Day!) turn-around time. 

The consultants they had hired had come up with an ingenious way of achieving this 3-day goal. Usually, the things that hold up a passport application are background checks like Criminal Record Check, Police Check, etc in diffferent countries.  They observed that a very small % (less than a fraction of 1%) of the applications turn up something bad in their background checks. So why hold up the other 99.999% of applicants’ passports waiting for that occasional one to turn down.

They suggested that ALL applications be approved right away and get the background checks started right away. If something shows up negatively in the background checks, then you can withdraw the Pasport. In a day where even in country like India where all passport information are computerized, you can always stop a person at the port or the airport or the border when they show up with a passport that has been withdrawn.

This method of Approve Now, Decline Later if necessary may not work in all cases. But it is perfect in cases where a process is being done only to avoid a small percentage of cases that fit a profile that should not be approved. This is not even the 80-20 rule but is more like 99.99-0.01 rule. It saves everybody a lot of hassle and is quite a lean improvement if feasible!

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