LEAN Methodology Iowa Experiences Mark Lowe Director Motor

LEAN Methodology Iowa Experiences Mark Lowe Director Motor Vehicle Division

What is LEAN? Lean is a collection of principles, methods and tools that streamline processes by eliminating waste. Originated with Toyota (Toyota Production System) – but the tools have been successfully applied in organizations across all sectors. Lean is not just for manufacturing! ◦ Lean works any time you have a process. ◦ Private and public-sector organizations have adapted and applied these methods to office environments, service-delivery processes, and administrative processes. ◦ In non-manufacturing settings, waste is most prevalent in the information flows associated with processes. ◦ For most processes only 5% of activities add value for the customer; 95% are either necessary non-value adding activities or waste. Is LEAN the same as Six Sigma? ◦ Lean focuses on the elimination of waste; Six Sigma uses statistical tools designed to reduce defects and other forms of process variation. The two are often used together and are sometimes referred to as “LEAN Six Sigma. ”

What can LEAN do for an Agency? Eliminate or dramatically reduce backlogs. Reduce lead times. Decrease the complexity of processes. Improve the quality of applications and consistency of reviews/decisions. Free up more staff time for "mission critical" work. Improve staff morale/and work environment. Improve process transparency.

How is LEAN facilitated in Iowa? Office of LEAN established in Iowa’s Department of Management Central point for information and resources for other agencies seeking to develop a Lean culture. “Johnny Appleseed” approach: ◦ Dedicated and trained facilitator conducts events for agencies. ◦ Develops facilitators within agencies by involving them in other agencies’ events. ◦ Goal is for each agency to become self-sufficient.

How did LEAN come to the MVD? Searching for ways to do more with less. Frustrated by difficulty of trying to manage through meetings. ◦ Not enough time. ◦ Not enough first hand knowledge about the day-to-day details of the work. Attended a “LEAN boot camp” put on by the state facilitator and Iowa industry in September, 2010. Developed a pilot project and completed our first event in December, 2010. Now completed three events: ◦ Temporary restricted license process ◦ Motor Carrier Services accounting process ◦ Administrative hearings and appeals process Scheduled to complete a division-wide event in December, 2011. Goal is to complete at least three events a year, develop in-house talent.

What are the LEAN tools? Kaizen Design for Lean Six Sigma Value Stream Mapping

What is Kaizen? “Kaizen” means “change for the good of all. ” Facilitated event conducted by a team. Event can last anywhere from two to five days. In our experience, typically conducted over four and a half days. Event makes the process visual so waste can be identified, and then brainstorms and maps a new process that eliminates the waste. Focus is on immediate results that can be implemented that week.

Project Selection Again, can apply to any process, especially where employees: ◦ Chase information to complete a task. ◦ Must jump through multiple decision loops. ◦ Are constantly interrupted when trying to complete a task. ◦ Are engaged in expediting (of reports, purchases, materials, etc. ). ◦ Do work in batches. ◦ Lose work in the "white space" between organizational silos. ◦ Don’t know what they don't know. From Lean Six Sigma for Service by Michael L. George

Pre-event planning Pre-planning the event is important. At least two meetings: ◦ One with the facilitator and the event “sponsor” to discuss the process, the initial scope of the event, event location, event scheduling, and construction of the team. ◦ One with the team to refine the scope and goals and to make sure the team is prepared. Key points of the team pre-event meeting: ◦ Understand define the scope of your project – what are your bookends? ◦ Understand what your current performance measures are so you have benchmarks to measure your results against. ◦ Define your goals in light of the performance measures. ◦ Make sure you know what resources you will need for the event and have them at your fingertips.

Building the team Ensure cross-functional members are on the team. Remember the 1/3, 1/3 Rule: ◦ 1/3 work directly with or are close to the process. ◦ 1/3 have some knowledge of or are somewhat involved in the process. ◦ 1/3 have no knowledge of the process, i. e. , external stakeholders/customers. The ideal team has about 12 members.

Conduct of the event – Day One Morning – Training the Team ◦ Getting to know each other – what do they do, what are their goals for the event, what do they have a passion for? ◦ A process exercise. ◦ Kaizen basics. Afternoon – Begin Mapping ◦ Painstaking process. ◦ Focuses on the people that do the process – have to enunciate each step in the process across multiple “swim” lanes. ◦ Highlights the importance of a well-trained facilitator. Key attributes: Lean is “experiential” – need hands on experience in many events. Organized and efficient. Ability to maintain time tables and keep people on task. Ability to guide without taking over – patient enough to let the process/team work. Bright and verbal – can help participants think through processes and enunciate processes. Good at dispute resolution.

Day Two – Complete Mapping

Day Three – Brainstorming Break into groups to brainstorm solutions. Challenge each group to come up with at least seven solutions. Free for all – no hierarchy among members or opinions. Groups reconvene, share, and rank solutions. Often called the “trough” because people feel overwhelmed by the enormity of what they have mapped.

De-selection process • Identifies • Impact to customer • Difficulty implementing I M P • Helps to rate/rank solutions to resolve issues while identifying ease of implementation A C T I III “Sweet Spot” -- high impact, low difficulty II IV DIFFICULTY

Day Four – Map the New Process and Begin Implementation Mapping visualizes the solution and makes sure it does what you think it does. If completed on schedule team is actually working on implementation of new solutions by the afternoon.

Compare – Old Hearing Process

New Hearings Process

Results – Hearing Process Old Process New Process Percent of Change Proc#1 # TOTAL STEPS 170 77 -55% # VALUE ADDED 11 8 % VALUE ADDED (#VA/#Steps) 6% 10% 61% # DELAYS 36 13 -64% TOTAL DELAYS average process (DAYS) 34 20 -40% 146 100 -32% 4 0 HANDOFFS 21 14 -33% DECISIONS 36 17 -53% 6 2 -66% TOTAL DELAYS worst case (DAYS) LOOP BACKS TOTAL LEAD TIME (HOURS)

Other results TRL process ◦ Reduced steps by 46% and delays by 95%. MCS Accounting process ◦ Reduced delay time by 48%, decisions by 40% and handoffs by 56%.

Day Four and a half – Report Out Celebrate Share ◦ Make sure the team is congratulated and appreciated – the work has been hard and tiring. ◦ Get staff involved in the report out. Helps with buy in when they understand what went in to the new process. Helps build excitement for new events and helps instill a Lean culture. Support ◦ Make sure the hard work is supported by prioritizing the changes and any homework.

After the Event – Homework and More Support 30 day, 60 day , 90 day , 180 day , and one -year follow-ups by the facilitator. Specific tasks with accountability. Again, make it a priority.

Why Do I Like Kaizen? Focused. Immediate results. Ground up – ownership and investment. Empowers employees. Accomplishes much more than can accomplish in top-down meetings, and much more quickly. Tells us things we never knew about our processes.

Other Tools Design for Lean Six Sigma ◦ Methodology to create a new service, product or process ◦ Applicable to any high-value project that needs a significant amount of new design ◦ Strong emphasis on capturing and understanding the customer and organization needs Value Stream Mapping ◦ Mapping of many processes that are part of an overall theme or value stream from a 30, 000 foot level to show where gaps or overlaps are in programs and services. ◦ Used as a strategic planning tool, typically gives agencies a three to five year plan, but can be used for shorter time frames such as one to three years.

Resources http: //lean. iowa. gov/resources/index. html Includes: ◦ Lean Government Primer ◦ Lean Starter Kit ◦ List of Suggested Reading

Questions? Mark Lowe Director, Motor Vehicle Division Iowa Department of Transportation 6310 SE Convenience Blvd. Ankeny, IA 50021 515. 237. 3210 mark. lowe@dot. iowa. gov