Module 2

MEASUREMENT OF LEAN METRICS

 Lean Management
• Lean management uses
methods for eliminating
factors that waste time,
effort or money.

• Done through analysis of a

business process and then
revising it or cutting out any
steps that do not create
value for customers.
The Five Principles of Lean by Doanh Do, August 2017

Module 1: Measurement of Lean Metrics – Lean

 Lean Principles (for the Public Sector)
1 1.Define
VALUE

Map the VALUE

2
STREAM

3 Create FLOW

Pursue
4 PERFECTION

Module 1: Measurement of Lean Metrics – Lean

 What is Value?
Value is what makes the clients happy and
satisfied.
…what taxes and fees are used for.
…the opposite of waste.

Module 1: Measurement of Lean Metrics – Lean

 Six (6) areas of improvement on Kaizen Cycle

P = Productivity Improvement
Q = Quality Improvement
C = Cost Reduction
D = Delivery on Time
S = Safety Improvement
M = Morale Enhancement

Module 1: Measurement of Lean Metrics – Lean

 WASTE is anything that adds cost
to the product without adding value
as perceived by the customer.

Module 1: Measurement of Lean Metrics – Lean

 Defects
• Data entry error
• Documents error
• Missing information
• Missing specification, lost records
• Substandard public works
• Late projects, response
• Machine malfunction

Module 1: Measurement of Lean Metrics –

 Let’s just say I
read these…

Overproduction
• More information than the
citizen needs
• More information than the next
process needs
• Creating reports no one reads
• Making extra copies

Module 1: Measurement of Lean Metrics –

 Waiting
• Waiting in a batch
• Waiting for emails, presentations
• Waiting for system back-ups
• Waiting for copy machines
• Waiting for a response
• Waiting for a handed-off file
to come back

Module 1: Measurement of Lean Metrics –

 Non-utilized Talent
• Employees not empowered participate in
quality and productivity programs, or to
make changes to the current systems
• No delegation

Module 1: Measurement of Lean Metrics –

 Transportation
• Retrieving, storing, or carrying
documents to and from shared
equipment
• Taking files to another person
• Going to get signatures
• Bringing things to another facility

Module 1: Measurement of Lean Metrics –

 Inventory & Work
in Progress
• Files/ applications waiting to be
worked on
• Open projects
• Office supplies
• Emails waiting to be read
• Unused records in databases

Module 1: Measurement of Lean Metrics –

 Unnecessary
Motion
• Searching files
• Extra clicks or keystrokes
• Clearing away files on the desk
• Gathering information
• Looking through
manuals and catalogs
• Handling paperwork

Module 1: Measurement of Lean Metrics –

 Extra Processing
• Excessive review and approval.
• Repeated manual entry of data.
• Unneeded formatting and
animation.
• Long reports

Module 1: Measurement of Lean Metrics –

 8 Types of Waste: D.O.W.N.T.I.M.E.
Defects
Efforts caused by
rework, scrap and
incorrect information
Transportation
Unnecessary movements
of products & materials
Module 1: Measurement of Lean Metrics –
Overproduction Waiting Non-utilized talent
Production that is Wasted time Underutilizing
more than needed or waiting for the next people’s talents,
before it is needed step in a process skills & knowledge
Inventory Motion Extra-Processing
Excess products and More work or higher
Unnecessary
materials not being quality than is required
movements by people
processed by customer
 Imagine
:Materials, Energy & Information flow like
water.

Check & Evaluate

Client Request Validate request against Approve License Receive Fees Issue License
credentials agency to Operate
standards

• Materials – documents, forms, paper money/checks

• Energy – Electricity, strength
• Information – verbal, written, electronic

Module 1: Measurement of Lean

What makes the process
discrete?
Lack of Waiting for Organization
Lack of or too
personnel, signatories, boundaries,
much
No Transpo., Typing errors, extra
information,
Extra no materials processing
extra motions
processing

Evaluate
Check & request against
Client Request Validate Approve License Collect Fees Issue License
agency to Operate
credentials standards

Complaints,
Clients Batched up Batched up Batched up Clients
Correcting
forming lines documents documents documents, forming lines
Errors

Module 1: Measurement of Lean

 DMAIC Approach to Process Streamlining

PLAN :
Define the process (mapping)
Measure performance &
baseline Analyze to identify
wastes

DO:
Improve and simplify

CHECK/ ACT:
Control, monitor, evaluate and standardize

Module 1: Measurement of Lean

 Defining Processes
• The processes are defined in your Citizens’ Charter
• Start and an End
• Process owner
• Customer ( Internal or external)
• Supplier ( internal or external)
• Performance measures applied

Module 1: Measurement of Lean

 Our Citizens’ Charter

Module 1: Measurement of Lean

 Our Citizens’ Charter
Charter Other steps (Our Journey)

Module 1: Measurement of Lean

 Streamlined Process
The customer journey Streamlined Charter Our Journey

No extra costs
No compliance ARRIVE
No extra
cost
No extra trips to
processing
other agencies and additional
No queues/ GO HOME motions
waiting

• 1 Step for critical process

• Minimal Transaction Cost
• No Compliance Cost
• 1 Signature
• Electronic Documents
• 5 min < Turn Around Time
(TAT)
Module 1: Measurement of Lean
 Some Things to Note:
• Some processes are created to compensate for human errors
• Processes evolve and create more waste

• Some processes or steps evolve through new technologies,

politics, war, crime rate, terrorists, socio-economic
conditions, diseases (which may no longer exist)

• Some processes can be eliminated by technology and

innovation but remain as legal requirements
• We can benchmark similar processes from different agencies
(not necessarily the same service)

Module 1: Measurement of Lean

 The 6 Measures
1. Turn-around-Time: Start to end time
2. No. of Steps: CC + your journey
3. Transaction costs: Costs you charge the citizen
4. Compliance Costs: Costs the citizen bears separately
5. No. of signatures: Signatures needed vs total
6. No. of Documents: Sheets Produced
7. Other measures

Module 1: Measurement of Lean

 The Goal: One Piece Flow
• Only one piece being processed per workstation
• No pile of work in the “in” box
• When the process approaches one-piece flow:
• Wastes are exposed and “plead for solutions”
• e.g. Rework due to errors become obvious,
also machine breakdown, extra motions etc...

Module 1: Measurement of Lean

 Consider Demand and Capacity
Agency

System Capacity Demand

What happens when demand is greater than capacity?

Module 1: Measurement of Lean

 TAKT Time
• The time interval between citizen arrival if demand
was One-Piece Flow.
• This measure is important inasmuch as we aim for
One-Piece Flow.
• This time interval is easy to perceive.

Module 1: Measurement of Lean

Formula
TAKT Time Total Annual Available Time

= Total Annual Demand

Example:
Annual Demand = 75,000 licenses and permits renewal per year

Annual Available time = 40 hrs/week X 50 weeks/year X 60 min/hr

= 120,000 min/year

TAKT Time = 120,000 = 1.6 min interval

75,000

This average arrival rate must be matched by our system capacity.

Module 1: Measurement of Lean