Living Lean

How to SAVE MONEY and make time for the FUN STUFF
Rebecca Goldberg and Elliott Weiss
Illustrations by Michael Twery

Goldberg Productions

Our Problem
Lean is the relentless pursuit of creating value by strategically eliminating waste. So what? Do our students really care?

Our Solution
Living Lean: How to Save Money and Make Time for the Fun Stuff
A collection of vignettes that presents everyday scenarios with lean insights

Why?
Ease of accessibility Simple accounts Entertaining and lively characters Personal AHAs! Not manufacturing!

Case Use
Stand Alone
Discussion to introduce concepts

Supplementary
To augment understanding of business cases

The 8C Model of Operations.

Identify the customer needs,

Design the capabilities to meet those needs,

CUSTOMER

CAPABILITIES

The Operations Management Process

COORDINATION

CONTROL

Coordinate with our suppliers and customers along the supply chain.

CONTEXT/ CULTURE/ COMPETITION

Develop a control system to assure those needs are met and improved upon,

Which leads to
CASH

All of this is done within the general context of the environment and our competitors, while creating a culture of change and improvement.

CUSTOMER

Defining the Customer Value Proposition Theron Hunters Coffee Shop (UVA-OM-1455)

Managing Variability Lunch with Guinevere (UVA-OM-1463)

Understanding Littles Law Dylan and Amelia Have a Cuppa (UVA-OM-1450)

Achieving Single-Piece Flow Belinda, Bags and Batches (UVA-OM-1466)

CAPABILITY
Managing Constrained Resources Donna Johnson and the Bottlenecks (UVA-OM-1449) Identifying Non-Value Added Activities Todds Balancing Act (UVA-OM-1425)

Mapping the Value Stream Rebeccas Morning Routine (UVA-OM-1427)

Establishing Standard Work Erika, in Through the Out Door (UVA-OM-1426) Implementing the 5S System David and the Case of the Haunted House (UVA-OM-1448)

CONTROL
Using Process Behavior Charts Tracy Scott Manages His Blood Sugar (UVA-OM-1443) Designing Experiments Bobs A-maize-ing Popcorn (UVA-OM-1467)

Maintaining Reliable Equipment Missys Car Maintenance (UVA-OM-1434)

COORDINATION
Designing a Supply Chain Brians Lunch Dilemma (UVA-OM-1435) Determining Lot Size Peter Goes Shopping (UVA-OM-1462) Setting Order Quantities and Safety Stocks Brad and Gina and Baby Makes Three (UVA-OM-1486)

CONTEXT AND CULTURE

Enabling Rational Decision Making Zekes Tree (UVA-OM-1433) Analyzing Root Causes Jackson and Wyatt Learn to Share (UVA-OM-1464) Putting It All Together Chloe Manages the Family Business (UVA-OM-1465)

How to Use the Cases

Customer (Section 1, Cases 1-4)
Case and Synopsis Learning Objectives Lean Takeaways Theron Hunters Coffee Shop (UVA-OM-1455) In order to identify those activities that do not add value, Customer defined value Planning to shelve his corporate career and open a one must first understand the customer defined value proposition high-end coffee house, Theron Hunter meets with proposition. Only when one realizes how cost, quality, Order-winning criteria his friend and potential business partner, John, to delivery and customization are important to the Make-to-order vs. make-to stock discuss his options. He identifies his target market customer can one take steps to improve the product, Voice of the customer and ideal location, then considers factors relevant service or experience. Thus, for Theron to lean out his Competing on capabilities to creating value for professional daytime foot coffee shop, he must first define this value for the Operating system strategic design traffic? customer. Assignment Questions 1. As you read Therons story, think about what Theron needs to do to make his coffee shop appealing enough to potential customers. What choices must he make in order to become profitable? How should he decide among the alternatives? 2. How does each of Therons operating systems decisions affect his value propo sition? Which are most critical to his business success? 3. How might an ice cream parlor use the concepts of make-to-stock or make-to-order? A clothing manufacturer? 4. What is your personal value proposition? What are the skills that you bring or might bring to your current or future organization? How is this similar to Therons situation? How is it different?

How to Use the Cases

Class Discussion, Module 1 (Customer), Case 1: THERON HUNTERS COFFEE SHOP
Vignette Value proposition John asks Theron to clarify the value proposition of the coffee shop and match his distinctive features to what the customer wants. Theron considers two product lines: fast but limited selection and slow but highly customized. Personal Do students have a value proposition? How is it reflected in resumes, cover letters, career choice, educational choices, personal presentation, and career strategy? How do students market themselves to potential employers, and to potential customers? How do they focus on the order-winning criteria of the person with whom they interact? How do students manage their homework, professional work, email, and housework? Do they utilize a make-to-order or a make-to-stock approach? What are the circumstances that would warrant one or the other? Ask for examples of ways in which they have listened to their employers, customers, spouses, significant others, families and/or friends to improve the ways they relate to themand improved their own experience of the relationship as a result. How have students chosen to highlight or focus on developing their own personal core strengthsand how they have adapted to or compensated for their own personal weaknesses? In what ways have students structured their homes, families, and/or schoolwork processes intentionally and in relation to their core competenciesor gaps in those competencies? Professional Compare the value proposition of a fast food restaurant with that of a five-star restaurant.

Order-winning criteria

Made-to-order versus made-tostock

Therons two product lines are made at different points: in batches and individually.

Voice of the customer

Theron can do market research pre-entry, then weave multiple forms of customer engagement into his business plan. Theron knows how to select and brew coffee. He also has a background in finance, which will help him run the numbers. The key is finding a way to relate these capabilities to what the customer wants and will pay for. Theron thinks critically about his design choices and should continue to do so.

Competing on capabilities

Ask students for business/ organizational examples of each content area and discuss. In what ways do the student examples illustrate the intentional use of these concepts? In what ways do the examples illustrate suboptimal use of the concepts with room for improvement?

Operating system strategic design

A Practical Example: Lunch with Guinevere1

Salad Bar

Chefs Special

Custom Meal

Practical Example: Managing Inventory

When to order the next beer?

Here?

Pragmatic Inventory and EOQ/ROP: Which are You?

Brad Tina

Gina

Lena

Copyright 2012 Elliott N. Weiss

On Hand ROP

Pragmatic Lean - Metrics

Define the defect: Dinner without all the family members present physically, or Dinner with the entire family, but without all the members being relaxed and engaged. If someone is too tired or distracted to engage, then the primary goal of emotional interaction is missed.

Other Personal Applications

XmR Project

A3 Report

Process Behavior Chart Project

Toward the end of the term we will learn about a technique for process improvement called XmR charts. At the beginning of the term you will be asked to start collecting data on a process measure of your choice. Once we learn about XmR charts, I will ask you to submit an analysis of your own data set. Examples
Body weight Pulse Blood pressure Commute time Number of steps taken per day Number of diaper changes Time taken for bathroom breaks

Initially, the data looks strange, and poorly controlled

Individual Observations
1600
1400 1200 1000 X Value 800 600 400

This Is Really 2 Processes! Fits with knowledge of human restroom habits Solution is to split data into Process #1 and Process #2

200
0 -200 -400 Upper Limit 623.082 541.003 Center 183.000 165.444 Lower Limit (257.082) n/a 0 10 20 30 Observation Number 40 50 60

X chart mR chart 1400 1200 Moving Range

Moving Range

1000
800 600

400
200 0 0 10 20 30 Observation Number 40 50 60

Process #1 is well controlled with a tight tolerance

Process #1
200 180

160
140 X Value

120
100

I suspect these are detours of some kind, or chance encounters with people I needed to speak with

80
60 40 20 0 0 5 Center 89.200 7.000 Lower Limit 70.580 n/a 10 15 20 25 30 35 40 45

Observation Number
X chart mR chart Upper Limit 107.820 22.890

Moving Range

120
100 Moving Range

80
60 40 20 0 0 5 10 15 20 25 30 35 40 45

Observation Number

Process #2 is also well controlled, but with much more variance

1400 1200 1000 X Value 800 600

Definite trend here, but I am not sure why

Individual Observations

400 200
0 0 2 4 6 8 10 Observation Number X chart mR chart Upper Limit Center Lower Limit 1,033.544 686.857 340.170 426.190 130.333 n/a 600 500 Moving Range 400 300 12 14 16 18 20

Moving Range

200
100 0 0 2 4 6 8 10 Observation Number 12 14 16 18 20

Topic:

Lean Implementation

Deliverables: As part of the Operations Management course, each student in the MBA for Executives program is required to submit an A3 project report describing a process improvement activity. The activity will utilize one of the following techniques: Identification and elimination of muda 5S Standard work

These techniques have been covered and discussed during the Operations course in Terms 3 and 4. The process improvement activity may be from either your personal or professional life. Results should be presented as an A3 report Gallery Walk Prior to dinner on the night of August 22, 2013 we will have an open reception with wine and cheese where all projects will be presented.

Sample Personal Topics

Sustained Weight Loss The Beauty of Sleep The Closet Consolidation Improve Golf Chip Shot Improving Flip Cup Outcomes Precision Parking (5S in a Garage) Kite Boarding Setup Time Throughput Time reduction for Kids Bath Standard Work for Potty Usage Reducing Muda in the Middle of the Night Baby Feeding

A3: Standard Work and Throughput Time Reduction for T-Shirt Folding Process
PROBLEM DEFINITION
R E D U C E V AR IABILIT Y R E D U C E T HR O U GHP U T T IM E

Author: ANTHONY HOANG

Date: AUGUST 2013

RECOMMENDATION / PLAN

Reduce variability in the resulting Reduce the time required to length and width of folded T-Shirts. fold T-Shirts.
A key leader of the Hoang House (aka mom) has a stated requirement that T-Shirts be folded consistently to support orderly stacking and storage in the closet and dresser drawers
With an estimated 2900 T-Shirts folds performed in the Hoang House each year, there is a desire to reduce the amount of time consumed performing these folds.

ANALYSIS
Analysis of original folding process results (30 individual T-Shirt folds = 3 people x 10 T-Shirts)
ANALYSIS OF VARIAB ILITY
DRIVERS OF VARIABILITY 1. Varying t-shirt sizes 2. Fabric quality differences 3. Varying folding techniques are used by each person

Apply technology to the TShirt folding process to address variability through standardization of work Achieve time efficiencies in the folding process via technology Procure FlipFold, The Ultimate Folding Tool as seen on TV Train all folders on the RESULTS FlipFold Analysis of the FlipFold-based process results (30 individual T-Shirt folds = 3 people x 10 TShirts) Variability was reduced in fold length (-.25in on mR) and width (-.05in on mR)
V AR IABILIT Y IN F O LD LE N GT H V AR IABILIT Y IN F O LD WID T H Avg T-Shirt Width

Length

9.76 in

Avg T-Shirt Length

Width

4. Lack of standards 5. Human error 6. Folding does not occur in one continuous session

V AR IABILIT Y IN F O LD LE N GT H

V AR IABILIT Y IN F O LD WID T H

14 13 12 11 10 9

6.8 in

11.5 in

Avg T-Shirt Length

14 13 12 11 10 9 4 2 0

Length of

Width of

Moving

8 7 6
Avg T-Shirt Width

mR

mR Average

6.9 in

mR Average

0.21 in

0.47 in

0
Throughput Time was reduced by 21%

Moving

Moving

Time per Fold (Run)

mR Average

0.72 in

mR Average

0:57

Time per T-Shirt folded (sec)

0.26 in

0:28
0:00

Ori gin al Pro c

% Time Reduction Person 1: 26% Person 2: 21% Person 3: 16%

Average Time per T-Shirt

ANALYSIS OF THROUGHPUT TIME

0
Average Time per T-Shirt

10 20 Folds (30 Runs per Process)

30

13 sec

Person 1 Person 2 Person 3

Time to Fold 10 T-Shirts (min) 2:28 3:43 2:07 TOTAL = 8:18

Avg Time per T-Shirt (sec) 0:14 0:22 0:12 AVG = 0:16

FUTURE STEPS
Sustain the new and improved FlipFold-based process for T-Shirt folding Continue to master the FlipFold with current persons Train new persons on the use of the FlipFold

16 sec

Sample Professional Topics

Material Loss Reduction in Plastics Manufacture Optimal Cross Docking Marketing Lead Generation Muda in an Emergency Department, Improving Throughput Time Reducing Loan Turnaround Times Credit Bureau Complaint Reduction Improving the Database Build Process

A3 Report: Criss-Cross will make you dock, dock!

I. Background:
Based on the previous 12 months worth of data, approximately 40% of inbound warehouse orders could be immediately shipped out to fulfill orders. However, existing warehouse procedures and limitations within the ERP systems existing programming have previously limited the warehouses ability to cross-dock. II. Problem Analysis: Several issues create prevent or inhibit implementing the ability to cross-dock. Inability for the Receiving Team to identify orders that qualify for X-docking. Inability to release orders upon receipt via the ERP system. The actual printing of the pick tickets. and timing of the pick release batches. Separating out cross-dock orders from inventory requiring put-away. The distance between the Receiving Team and the Pick/Pack & QA Team.

Author: Arjun Moldanado

IV. Total Effect:

Date: 8/22/2013

Apples to apples sample batches are nearly impossible in our business however accounted for as best as possible using number of lines per order and like items. Before X-Docking: In addition to the initial put away time, this process entailed travel/transport time to include the need for a forklift, search/picking time, packing time, and quality assurance. 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 1 2 3 4 5 6 7 8 9 10 Total Time (minutes) Avg Time Per Order UNPL

III. Implementation:
To address the aforementioned problems, implementation of cross-docking required the following procedural and technical enhancements: A note in the receiving field identifying lines capable of being immediately shipped as well as adding printers at the receiving workstation where those orders will release regularly. Locators adjacent to the Receiving station to be received into and pallets next to the receivers to identify cross-dock orders from put-aways. Physically moving of a Pick/Pack station closer to the Receiving station and combining it with the QA process.

After Implementation: Picking occurred at the new floor locators adjacent to the receiving stations and the QA phase was combined with the packing stage. 15.00

10.00
5.00 0.00 1 2 3 4 5 6 7 8 9 10

Total Time (minutes)

Avg Time Per Order

Ancillary notes: Pick releases specifically for cross-docking orders would now release 6 times per day including 5 minutes prior to the standard twice-per-day pick releases for normal orders allowing for continuous flow of orders.
The immediate pulling of orders to be shipped eliminated the need for put away and the subsequent picking from locators throughout the warehouse. It also allowed for the QA process to be combined with the packing process.

Results: Average pick-to-pack time per order decreased from 12.2 to 6.4 minutes per order. The differences between the UNPL and LNPLs reduced from 14.6 to 12.8 indicating a 12% reduction in routine variation. Since previously limiting factors did not allow all orders to be shipped the same day, the overall increase in the number of orders shipped per day has saved approximately 1.5 days on the supply chain (this figure is subject to improve given seasonality). V. Action Items: Changes in Purchasing procedure will allow for more orders to be cross-docked via segregation of shipments. To be weighed against a potential marginal increase in inbound freight costs. Changes in sales strategy would reduce the number of orders needed to be put away allowing for more orders to either be drop-shipped or cross-docked. Instantaneous pick release upon receipt could increase flow during busier times.