Lean Office Project Masters of Professional Communication Project Parker Hannifin CSD has been successful at Lean Manufacturing on the production floor, now are challenged to move Lean methodology beyond production into the office. Emily Gundersen 3/5/2013 3/5/2013 1 INTRODUCTION When selecting a project, I wanted to work on something that would benefit me personally and also provide value to my employer since they are paying for my education. It was difficult to choose a project at work, as my original idea of helping the Contracts Department with developing their process turned out to be a political problem and would not be suitable for this situation. I had been planning on that project for a long time so it frustrated me to scramble for another worthwhile project. I spoke with various individuals at work to obtain some guidance for a sensible project. I was able to gain support from management on producing a Lean Office project. Lean Manufacturing concepts are not new to me. I was introduced to Lean Manufacturing while working for Autoliv, ASP Ogden, Utah in 1997. I had been working for Autoliv for many years when new management entered the scene and introduced Lean to our 3/5/2013 2 company. We began to make changes towards Lean principles and developed processes that are still used today. Autoliv was one of the first companies in Utah to become proficient at using the Lean Manufacturing processes. Parker Hannifin, my current employer, has taken many Autoliv tours to gain knowledge of Lean concepts and implementation of Lean into our manufacturing environment. Through the years, working for Autoliv and Parker, I have gained the understanding of eliminating waste and streamlining processes to improve throughput. Although, I have not had the Lean ‘hands-on’ experience prior to this project, completing this project has expanded my knowledge of Lean concepts and benefits of implementing a Lean Office. During this project I been able to apply the teamwork and leadership knowledge gained from the MPC program to implement a successful improved Lean process. 3/5/2013 3 LITERATURE REVIEW Lean Manufacturing philosophy was introduced many years ago to U.S. manufacturing by the Japanese manufacturing industry. Lean principles derived mostly from the Toyota Production System have been adopted by many U.S. manufacturing companies, Ford Motor Company, Autoliv Inc., Boeing Company, Motorola, Pepsico, Amazon, and 3M to name a few . The philosophy of Lean Manufacturing is to improve production bottom line cost and improve customer satisfaction. The core concept of Lean is founded on continuous improvement, process improvement, and elimination of non-value work. Lean focuses on reducing errors and increasing efficiencies, therefore, creating 3/5/2013 4 an environment that is structured and well organized. Lean provides the customer with the right goods, the services, the right quantity, at the right time, at the lowest cost and allows for continuous improvement environment. According to Tishler, “Lean’s purpose is to create more value while reducing waste and cost for everyone” (Tischler, 2006). Office Lean is a relatively new idea; principles used in Lean manufacturing can be utilized in the office to improve processes. Statistics show Lean Office principles have been known to reduce lead times by 90% and decrease process time up to 40% (Locher, In the Office:Where Lean and Six Sigma Converge, 2007). Not only do the efficiencies improve, Lean Office does not cost anything to implement. Essentially the principles of Lean are at no cost to the company. To find the waste in a process will improve cycle time and will free up resources. Expanding Lean into the office environment is beneficial to eliminate idle time, paperwork errors, and waste within 3/5/2013 5 any office procedure. Office Lean has three expected outcomes; the first is better processes that offer more value to the customer, less cost and waste. The second is better working conditions with shared goals and values. The third outcome is to meet organizations goals for profit, growth and sustainability. Office Lean is used in the same fashion as Lean Manufacturing: Processes are documented and evaluated to eliminate waste and standard work is developed for that process. “Standard work,” a principle of Lean, is described as using the best combination of people and assets while using minimum materials, equipment, and resources. Standard work is essential to improving quality and productivity for current and future business endeavors. Standard work defines the resources, steps and time required. Parker Hannifin has implemented Lean tools within the production floor and has been extremely successful yet has hesitated to implementing Office Lean. This project will address Parker Hannifin’s 3/5/2013 6 issues and resistance to creating a Lean Office environment. As change is often resisted, implementing Office Lean has been fought because of the initial time needed to evaluate each process and the complexity of each job description. However, potential benefits once Standard Work has been established include improvements in training and learning curves for new employees, reduced errors and inefficiencies, and clear and concise communication. Benefits have been proven by companies implementing the Office Lean methodologies through efficiency improvements and error reduction compared to processes before implementing standard work (Locher, The Complete Lean Enterprise - Value Stream Mapping for Administrative and Office Processes, 2005). There are many examples of Lean Manufacturing projects yet real application examples of Lean Office have been sparse at Parker Hannifin. This project applies Office Lean tools to the procurement Return PO process and demonstrates that other Lean opportunities 3/5/2013 7 within the organization exist. A clear, defined way to proceed in creating standard work was presented to the procurement team. The project proved to eliminate waste and we identified the inefficiencies in the rework PO process. The objectives of this project were communicated with the procurement team and management through face-to-face discussions, group discussions, and email communication. Results of the Lean initiative addressed in the project were discussed and implementation of the standard work has been agreed upon by procurement team members and management as described in the document, “Parker Standard Work Implementation Process” (SWIP) and “Procurement Desktop Work Instructions” (PDWI) attached. The rework PO process standard work has been implemented and the productivity will be measured by using the Standard Work Combination Sheet (SWIP, Figure 7, page 17). The procurement team has agreed to follow the Standard Work Combination Sheet to process any rework PO’s until June 2, 2013, 3/5/2013 8 when the productivity can be measured. Lean Manufacturing principles and tools were used to facilitate the efforts towards creating a Lean Office environment. They included the following: observing and creating a time observation sheet, developing current process map, analyze waste in process, create future process map, document standard work, publish standard work, and observe results for increased productivity (SWIP). The Time frame for project completion was established to complete project by end of spring semester. A rolling action item list (RAIL) was established to identify and status each task for completion. Opportunities and actions for future Lean events were also captured on the RAIL (SWIP Figure 1, page 4). “All work shall be highly specified as to content, sequence, timing and outcome.” (Parker Hannifin & Duggan & Associates Inc., 2011) 3/5/2013 9 ISSUES ANALYSIS Parker Hannifin currently utilizes Lean manufacturing principles and techniques in our assembly and test area. Plan for every part (PFEP) is the process that Parker uses to develop standard work for each part on the manufacturing floor. The error proof methodology and waste reduction analysis has proven consistent in reducing lead times by implementing a Lean environment on the production floor. Lean Office development is a Parker Hannifin corporate goal across all organizations. This goal has been in place for two years but hesitation by management and employees to get started on the implementation is causing delays in progressing towards a Lean office environment. The resistance to focusing on Lean beyond the production floor is understandable, because Lean office is not easy. “Lean Manufacturing principles can produce more immediate results than other quality techniques can” (Tischler, 2006). 3/5/2013 10 Resistance; complexity, time, resources and leadership commitment are a few of the reasons for the reluctance. Lean Office implementation is complex because of the variability for each desk. Roles and responsibilities for a buyer may be significantly different from desk to desk in the procurement department. Therefore, creating standard work to be utilized in the procurement department is predicted to be difficult. Many front office positions, program managers, contracts administrators, financial analysts, quality engineers, design engineers and even management positions have different types of processes that vary. From the Institute of Administrative Management come this quote; “Struggle from the front office employee may be because they feel the process of establishing standard work will lead to redundancy; however, they may actually find it will lead to a more satisfying work” (Tiplady, 2010). Involving the staff during the Lean transformation process, will resulted in shaping their own work environment by removing 3/5/2013 11 duplication and minimizing disruption, that involvement gave them more satisfaction than a process being set for them by management by freeing up time and eliminating duplication of work. Employees feel empowered to make changes and therefore more vested in the effort and feel more self-empowerment. Bill Mann states in his book, Creating a Lean Culture, “Until office workers experience the benefits of Lean, they can be especially sensitive to the accountability that comes with standards for performance and productivity” (Mann, 2010). Although this Lean process took four months to review and establish and is still in the implementation phase currently, the end-result is a standard process that has improved efficiencies and provided satisfaction to employees and management. Employees have already benefitted by the reduction of the PO batch tine to every 15 minutes. Introducing the Lean Office project cut waste significantly, removed bottlenecks, decreased costs, eliminated errors and offered more efficiency throughout processes (Keen & Evans, 2011) as shown in SWIP document (SWIP page 7 through page 13). 3/5/2013 12 The Current State map (SWIP Figure 4 page 7) and Future State Map (SWIP, Figure 5 page 13) show evidence of the time improvements by eliminating the waste and implementing the Standard Work Process (PDWI). The PDWI step-by-step process will improve buyer learning curves on the rework PO process as it defines each step necessary. A new buyer will not need instruction each time they perform the rework PO process which reduces a buyer training time as well. Finally, gaining leadership commitment was critical to implementing a Lean Office culture. The article, Live Lean or Die, proposed, “Leadership teams can jump-start the culture change process by issuing organizational behavioral expectations; behavioral expectations will only produce culture change if they are modeled by the leadership team” (Templin, 2006). Completing this project gained ground on getting leadership commitment and team member accountability to progress with continuous improvements in Lean office. 3/5/2013 13 LEAN KEY TERMS  CURRENT PROCESS MAP: FLOW OF CURRENT PROCESS OF EACH STEP TO PRODUCE A SPECIFIC OUTPUT  CYCLE TIME: ACTUAL TIME TO COMPLETE WORK  FUTURE PROCESS MAP: MAP DEVELOPED THAT ELIMATES WASTE IN PROCESS, REFINED CRITICAL TO QUALITY OF THE PROCESS  JUMP OFF POINT:RESULTS OF WHERE WE ARE TODAY  LEAN (KAIZEN) EVENT: CONTINUOUS IMPROVEMENT TEAM EVENT TO IMPROVE CYCLE TIME AND ELIMINATE WASTE.  RAIL (KAIZEN) NEWSPAPER: RECURRING ACTION ITEM LIST  STANDARD WORK: PROCESS THAT DESCRIBES THE BEST CURRENTLY KNOWN COMBINATION OF PEOPLE AND ASSETS WHILE USING THE MINIMUM AMOUNT OF MATERIALS, EQUIPMENT AND SPACE.  TIME OBSERVATION SHEET: STEP BY STEP DESCRIPTION AND TIME OF A PROCESS, INCLUDING WALKING, WAITING, OVERPROCESSING, MISTAKES, ETC.  WASTE/ NON-VALUE ADDED WORK: TASKS THAT DO NO TRANSFORM PARTS OR MATERIALS INTO FINISHED PRODUCTS. 3/5/2013 14 COMPONENTS OF LEAN This project utilized the metrics used in any Lean manufacturing process. A “Lean event” would be initiated. Lean event is described as a complete process to eliminate waste and standardize work which includes the following tools. The tools that were used were Rolling Action Item List, Jump Off Point Tracker, Time Observation Sheet, Current Process Map, Waste/Non-Value Added Work Analysis, Future Process Map, Documented Standard Work (PDWI), and Results Tracker. The following is an explanation of each these Lean tools. The process evaluated was observed and each step was written down and timed ten times, this is referred to as Time Observation Sheet (SWIP Figure 3, page 6). The Time Observation Sheet was completed ten times and a Current Process Map was produced (SWIP Figure 4, page 7). The Current Process Map is a value time map that includes all tasks necessary in the completion of a process. From the Current State Map, waste was discussed with team and identified (SWIP, page 3/5/2013 15 9- 10). Waste was evaluated by seven specific types: 1) Overproduction 2) Inventory 3) Waiting 4) Motion 5) Transportation 6) Rework 7) Over Processing (SWIP, Figure 8, page 8). Once the Waste in the process was recognized as a possibility that it could be eliminated, a Future Process Map was created. From the Future Process Map, Standard Work was documented and implemented. Standard Work is defined as doing the right thing, at the right time, for the right reason. 3/5/2013 16 OBJECTIVES ACHIEVED The Lean Office project objectives accomplished within this project were: Communication with Peers, Communication with Management, Publish, document and train the rework PO process standard work (PDWI), publish, document and train the Lean Office process implementation (SWIP) and develop a PO scanning process. COMMUNICATION WITH PEERS The first objective was to communicate with my peers and solicit their help in this Lean event. A meeting was held on November 29, 2012, with Lex Prince, Karen Martin, Paul Pederson, Leah Bonneau, Tammy Scholermann and Kelly Higgins to communicate the objective of this project. All team members were willing to help with this project in any way. Karen, Kelly and I were willing to establish a jump off point for the return purchase order process. For two weeks, the team members tracked current deliveries and rejections of the Rework PO process. We were able to establish the jump off point (SWIP, Figure 2, 3/5/2013 17 page 5) for rejections in the current process. Actual improvement results will be compared and evaluated once the Lean event is completed, standard work is implemented and the productivity can be recorded. The next step in developing Standard Work was the need for examples of the Rework PO process to be observed. Ten timed observations were completed by five different team members. Each time the return PO process was performed, the steps were observed and every task was documented and timed (motion, waiting, over-processing, error clean up, etc.) on the Time Observation Sheet (SWIP Figure 3, page 6). Once the ten observations were complete, a meeting was held on Feb 5, 2013 to develop the Current Process Map. The time observation sheets were used to establish the Current Process Map (SWIP, Figure 4, page 7). An 3/5/2013 18 evaluation of the process results were reviewed and waste in the process was identified (SWIP, page 9). The team discussed the waste and options to eliminate of the waste found in the current process (SWIP page 9 – 11). The goal of creating the Future Process Map was to improve cycle times so any idea generated from the team was discussed during the brainstorming session. Although, not all waste can be eliminated, any improvement ideas were discussed by the team. The Future Process Map generated was achievable with a few items that needed further evaluation and discussion with management or other departments or sources (SWIP, page 11). Discussions proceeded on what was possible to eliminate and needed to be implemented to create the best possible Future Process Map (SWIP Figure 5, page 13). COMMUNICATION WITH MANAGEMENT The second communication objective was to provide most achievable Future Process Map (SWIP, Figure 5, page 13) to procurement 3/5/2013 19 management. The meeting with management was held on Feb 27, 2013. The team presented the Current Process Map and the waste identified within the current process. We presented the Future State Process Map (SWIP, Figure 5, page 14) and discussed the improvements the team could make by implementing the Standard Work. Management approved the Future State Map and the new Standard Work Combination Sheet (SWIP, Figure 6, page 18). PUBLISH/ TRAIN REWORK PO PROCESS STANDARD WORK The third communication objective was to publish to the procurement team the Standard Work for this process and provide training of the process. A meeting was held April 3, 2013 to train the procurement group. A detailed standard work instruction was published and distributed to the procurement team (PDWI). The Procurement Desktop Work Instruction has been designed to be the beginning of a desktop workbook for all buyers to reference guide. The Rework Purchase Order step-by-step process will be the first of many to be in 3/5/2013 20 the reference guide. The procurement team will evaluate the new Standard Work process and provide feedback as to efficiencies or inefficiencies. The procurement team members will utilize the Standard Work Combination Sheet to track their productivity until June 3, 2013 and evaluate the improvement of the Standard Work executed (SWIP, Figure 6, page 17). The combination sheet will be used to compare with the jump off point results to show the improvement of cycle time, rework, reduction of non-value added work, etc. The time improvement will be evaluated by performing ten time observations again to calculate the actual time improved using the new rework PO standard work process. PUBLISH / TRAIN LEAN OFFICE PROCESS IMPLEMENTATION The fourth objective was to publish documentation that exhibits the example of the PO process implemented and define the process of the Lean Office project. The SWIP document training was held on April 3, 2013 to demonstrate the process of implementing the 3/5/2013 21 standard work for the rework PO process (SWIP). The documentation exhibits a model of how we created the standard work for the rework PO process (PDWI) and the results of the Lean Office project including the time improvements, labor improvements, cost savings, 5s improvement, goals met and other opportunities discovered for Lean Office events (SWIP, Page 14 – 19) During the training session, the procurement team members were pleased that an improved process was being implemented. Some team members were surprised at the different activities on this process that people were still doing (waste). After the training session, many co-workers came by to let me know how notable the project turned out. Also, that I took time to establish the event and create the documentation for the project. The buyers and shipping clerks were pleased that was not only able to help the procurement group but make a difference in another department. Many were impressed by the presentation and effort that had put forth. I am 3/5/2013 22 pleased they like what I had completed. As requested by the team, my presentation and all other information is located in a team folder for all to access when needed. During the training, the team members and leadership were encouraged to brainstorm ideas for other process improvement opportunities. Several other processes were identified to become Lean Office Projects: Machining Process, Customer Furnished Material Process, Drop Ship Process, Schedule Change Process, Repair and Overhaul Unit Process. During the meeting, leadership was encouraged by the efficiency improvements of the new standard process and other project opportunities that were brought to the table. Leadership was committed to provide time allowance for other opportunities to be explored. Gaining leadership commitment at this point to move forward with other opportunities across the procurement department is critical to keep momentum for Lean continuous improvement in the procurement area. Leadership has 3/5/2013 23 already assigned other team members to create a Lean event for other projects. This gives our procurement department and our division the advantage in the corporate initiative to implement Lean office across all process. DEVELOP/DOCUMENT/TRAIN PO SCANNING PROCESS This project also initiated development of a scanning process for purchase orders that has been needed for years. We have storage units full of documents that continue to fill up and cost more money each year to rent. We now have a procedure in place to scan all purchase orders which has a multitude of benefits, including eliminating storage unit need, filing, retrieving files, eliminating filing cabinets and the need to archive and shred files. The scanning process will provide the opportunity to clear up space and time for buyers. Scanning purchase orders also provides a significant improvement to the Receiving Dock. Noteworthy, labor and time savings (SWIP, page 15) will be realized for shipping personnel to 3/5/2013 24 receive parts without having to retrieve a file. They will no longer need to fumble through a file drawer to find a piece of paper. Scanning will allow them to search on line and find the document immediately, therefore eliminating the time spent in a filing cabinet. PROJECT SUMMARY KNOWLEDGE GAINED I learned more about Lean than I ever wanted to know! I actually learned about Lean, leadership and some new office skills. From this project experience, I learned in order to be a leader you cannot be attached to the process. Leading a team requires patience and listening skills and the ability to let go of the process or procedure that you imagined it should be. Letting go of preconceived processes is the only way to getting an agreement as everyone on the team has their own perspective of a better process. I had to allow the team to agree on the process in order to move forward. We had some contention on the process sequence, but I allowed the team to 3/5/2013 25 provide input and discover the best sequence to follow. If I didn’t allow the team to come up with their process, the team would not implement the process at their desk and defeat the purpose of the Lean event. When working on the project documentation, I was able to improve my creative and administrative skills using Word and the SnagIt tool. Word has many features I was unaware of and the Snagit tool proved to be very useful when illustrating step-by-step process. I am able to manipulate the SnagIt tool proficiently. Using the Word feature and the SnagIt tools, I was able to create professional work instructions with very detailed information to document the new Rework process. I believe the documents are easy to read and provide a more exciting structure than just a plain word document or power point slides. STRENGTHS This was a great project for work and has proven to be effective even at the early stages of implementing the scanning and new 3/5/2013 26 Rework process. Once the Future State Process has been utilized for a period of time and buyers have implemented the standard work, the project will be recognized for significant efficiency improvements on the shipping dock and in procurement. We discovered many wastes and were able to eliminate them (SWIP, Page 8). The new scanning process will free up time and labor in both departments (SWIP, page 15). The productivity measurement will be the real test of the improvements in June 2013. One major improvement implemented immediately was getting the PO print every 15 minutes. Procurement PO’s would only print every hour which interrupts any PO process if you are waiting for the PO to print. This is more efficient for buyers on any new PO creation or change order as well as the Rework process. This improvement has been recognized by all buyers as significant. I was encouraged by the procurement team and the helpfulness in working with me on this project. In the beginning I was hesitant that 3/5/2013 27 team members would not want to participate, however I discovered they were happy to be involved. Asking my team members to help improve a process was easy, as everyone is looking to save time and aggravation. Most team members were thrilled that someone took the initiative to work on improving a process. It goes without saying, there are many improvement opportunities needed, if we had the time to work on them. I believe if management would encourage more individuals to take on projects like this one, procurement could make significant process improvements. Team members are willing to work on projects outside of their daily duties, but no time is available as procurement demands increase and resources are limited. The procurement group can utilize the Standard Work Implementation Process that I have demonstrated to construct similar Lean Office events to improve other processes that need step-by-step instructions (SWIP) for a Lean office event. The desktop work instructions created by this process is a valuable 3/5/2013 28 tool for new buyers at Parker (PDWI). We have a few fairly new buyers and they are scrambling for good training material to improve their learning curve as seasoned buyers are busy and do not have available time to train. WEAKNESSES Knowledge, support and time constraints are few weaknesses in this project. Even with the knowledge from my past experience at Autoliv, ASP, I need more experience with Lean tools and concepts. It is unfortunate that I was not afforded the opportunity to participate in the Lean Boot Camps extended to some employees at Parker previously. I would have been more in tune with the tools needed to accomplish the standard work. I would also been more armed with information of how to handle team member resistance to implementing standard work. Having more background in Lean, I would have been a better leader. However, after this experience my abilities and knowledge have improved and performing another Lean Office event will not be as difficult. I also feel that if Lean is so 3/5/2013 29 important to management at Parker, there would have been more supportive to me and my team. I felt the Lean experts had very little time to support the team’s efforts. I was fortunate to have my advisor very interested in my project and was extremely supportive to the outcome. Otherwise, I would have been more frustrated if Lecia Anderson had not contributed to the process. Another constraint for the Lean initiative is that time and resources are limited at Parker. Thus, finding available time to perform tasks, such as, time observations, discussions and meetings was difficult. I had to keep meetings short and sweet and most action items fell on my shoulders. Discussions with responsible individuals regarding potential waste reductions took significant time during the day, taking away from my buyer tasks. Asking questions and understanding another process was also time consuming, this is what took most of my time when trying to complete an action item. Because work at Parker can be stressful, as time and resources are 3/5/2013 30 limited, I am impressed the new process has been implemented thus far. However, we only have the productivity results to compile and the action list presented on the time line will be complete. The time frame of this project did not allow for implementation and productivity to be measured in the time frame for this project. Since the rework PO process is not done daily by every buyer, an ample amount of time is needed to allow each buyer to utilize and evaluate the new process a few times in order to provide feedback and productivity results. The training is complete but the team will need until June 3, 2013 to provide feedback. During the week of June 3, 2013, I will perform ten time observations to complete the productivity results (SWIP, Figure 6 page 17) and compare with the jump off point (SWIP, Figure 3, page 6). At that time, we can provide the actual time savings for the new rework PO process and provide the results to leadership. In hindsight, there are several things I would do differently if I were to perform another Lean event involving team members. Team 3/5/2013 31 meetings would be held more often so that we could complete the project in a more timely fashion. There were weeks in my schedule that I could not accomplish anything, as I was waiting on a team member to free up time or management to become available. In the future, I would ask team members to take on more actions and see them through to completion. I was the one driving the actions to completion and should have put more ownership on others. I was feeling the burden as the project was to complete my MPC degree. I would invite more team members from the beginning as well. In the end, I felt we needed to have more team members involved in the process. We needed more of the team to agree on the future process map. Team members were willing to be involved, but didn’t have the opportunity to participate from the beginning of the project. NEXT STEPS As my project wraps up at WSU, there will be a few action items that will be followed up on at a later date. I have trained and distributed two documents to the procurement team members: Procurement 3/5/2013 32 Desktop Work Instructions (PDWI) and Standard Work Implementation Process (SWIP). The Procurement team has been asked to utilize the standard work process (PDWI) and provide feedback by June 3, 2013. Once feedback has been received, I will incorporate any valuable changes into the documents. Utilizing the standard work combination sheet the productivity sheet the procurement department will track their results of the new standard work process (SWIP, Figure 6, page 17), documenting any rejections using the new process (SWIP, Figure 2, page 5). We will evaluate the results compared to the jumping off point and calculate the reject improvements. During the same week, ten time observations will be performed to evaluate the productivity on time improvement as well. We can then report out to management the efficiency improvement of this project at that time. The SWIP document describes the Lean office process of developing new standard work for the rework PO process. Ultimately, the idea 3/5/2013 33 would be for another team member to utilize the descriptions as a tool for a future Lean Office opportunity. I am hoping that since the training discussions sparked some other ideas for Lean office events, the document can be used. During the training meeting, the team was impressed by the presentation and step by step evaluation of the process. 3/5/2013 34 CONCLUSIONS The objectives completed within this project have initiated a jump start in the procurement department to move forward and implement Lean Office across all processes in Procurement. Implementing Lean Office is about knowledge and leadership (Parker Hannifin & Duggan & Associates Inc., 2011). To create a Lean environment, knowledge in the tools and concepts is necessary and leadership commitment is crucial to inspire and promote a cultural change in the office. I am pleased with the outcome of this project and have discovered many things about myself, my fellow team members and team leaders. During the training session conducted on April 2, 2013, I felt the procurement team was very supportive and was inspired to make improvements to other projects. I believe this would be the time for the team leaders to take the initiative to support the team to continue with improving processes. Many co-workers have the drive to do it, 3/5/2013 35 however, need the support, motivation and recognition of leadership. I am hoping leadership will take the initiative at this time. Positive reinforcement from management to continue developing Lean Office projects is crucial. Completing this project there are clear examples of the savings from this project including time improvements to the buyers desk providing more capacity for other tasks (SWIP, page 14), labor improvements on learning curves that save in buyer labor (SWIP, page 14), shipping clerk labor by eliminating waste, as well as cost savings such as paper and storage costs (SWIP, page 15). Ultimately, if Lean office continues in procurement more savings could be realized. There are many different processes in procurement that could be improved. Procurement team members need to be given the time and support from management to accomplish more process improvement activities. Parker management has embraced the Lean culture on the production floor and now need to be driving the direction of Lean in the office area. . 3/5/2013 36 TIME FRAME 3/5/2013 37 Works Cited Keen, M., & Evans, C. (2011, Spring). Office Skills. Management Services. Locher, D. (2005). The Complete Lean Enterprise - Value Stream Mapping for Administrative and Office Processes. Locher, D. (2007). In the Office:Where Lean and Six Sigma Converge. Quality Progress, pp. 54-5. Mann, D. (2010). Creating A Lean Culture. New York: Productivity Press. Parker Hannifin & Duggan & Associates Inc. (2011). Lean Enterprise Value Stream Transformation. Templin, P. (2006). Live Lean Or Die. Industrial Engineer. Tiplady, B. (2010, August). Running A Lean Office. Institute of Administrative Management, p. 23. Tischler, L. (2006, July). Bringing Lean to the Office. Quality Progress, pp. 32-38. Parker Standard Work Implementation Process (SWIP) Procurement Rework Purchase Order Process Emily Gundersen 4/19/2013 2 Standard Work Implementation Process PURPOSE To review an example of developing standard work in the procurement department. This project will define the steps used to develop standard work for the Rework (R-job) Purchase Order Process as our example. INTRODUCTION This process was used to define the steps to create a Rework (R-Job) Purchase Order (PO) or Vendor rejections and develop standard work for this process. We define the current process used by the Ogden Buyer’s and evaluate the waste in the process. From a team perspective develop a future state process that will reduce waste and improve efficiencies in the procurement department. The following are the goals that were established for this Lean Office project. Goals Reduce PO Rejections Reduce Process Time Reduce Training Time 5S Improvements 3 Standard Work Implementation Process PROCESS STEPS The following are the steps used to develop the Rework Purchase Order Standard Work. Meet with Management and Peers Rolling Action Item List Updated Continually Measurements Identified Develop Current Process Map Analzye Waste/ Eliminate Waste Create Future State Map Evaluate Improvements Document Standard Work Feedback Requests Other Opportunities Identified Productivity Results Documented 4 Standard Work Implementation Process Meeting with Management and Peers In order to begin, it was discussed with management which process would be reviewed, evaluated and developed into standard work. We chose the R-job process as this is an important process for procurement and each buyer is responsible to perform this task. Some buyers have more rejections than others. In this case, the buyers that are most affected to improve this process were asked to participate. Actions, tasks and ideas were kept in a Rolling Action Item List (RAIL) to keep track of efforts being made or items that would need to be implemented at a later date. Figure 1 - Rolling Action Item List 5 Standard Work Implementation Process MEASUREMENTS Standard Work is the baseline for continuous improvement. The measurements that were used to understand the current process and understand improvement opportunities are the Jump Off Point and Time Observations. The first key step was to develop a “jumping off” point. Three team members were identified to keep track of the quantity of Rework purchase orders produced for a two-week period. During this time the buyer would record if at any time they were stopped from finishing the process and record it in the rejection column. Figure 2 - Jump Off Point Tracker The calculation for the jump off point resulted in a 26% rejection rate. Therefore, we discovered we have room to improve with this process. 6 Standard Work Implementation Process Time Observations Time Observations were observed of five different procurement team members. Observations included timing and recording each step of a buyer’s Rework PO process. The time observations were used to develop the current state process. Figure 3 - Time Observation Sheet The results of the time observations provided the average time to process a Rework PO and the gaps between each buyer’s process. Process times varied between 8 - 38 minutes. The average time to complete the entire Rework process is 25:03. 7 Standard Work Implementation Process CURRENT PROCESS The time observation sheets recorded allowed us the opportunity to put together a current state map and realize the process gaps between buyers and waste in the process. Lean opportunities are captured on the current state map by the starburst signs. Figure 4 - Current State Map 8 Standard Work Implementation Process Buyer Gaps Different Sequence in PO Process Creation Different TEXT Templates Used Debit Memo Processed at Different Times Extra Paperwork Created Email to Supplier 9 Standard Work Implementation Process Identify Waste – Seven Wastes We used the following seven waste identifiers to recognize where improvements could be made in the process. Actions were defined and captured on the RAIL. RAIL items were reviewed and discussed with management or responsible team members to eliminate or improve the process. 10 Standard Work Implementation Process Rework PO Process Waste Overprodution Copying paperwork not needed Copy of traveller to be filed Waiting Time PO Batch Operations Batch Transportation Providing Paperwork Not Needed Filing on Dock B Processing Data Entry Time Variability Inventory Waiting to Process PO File Folders Motion Walking to Find Part and Lost Parts Defects Rejected PO for incorrect data (Qty, Work Order #, Operations not entered) Copies 11 Standard Work Implementation Process Current Waste Steps Identified Look up price twice Screen Changes Part Number Information Not Correct Shop Floor Operations Not Entered Night Batch Required for Operations PO EmailBatch Hourly Copies of Rework Package Part Location Not Correct Create Procurement File Procurement Files Batching on Buyer's Desks Lost Traveller New Copy of Traveller Needed 12 Standard Work Implementation Process Opportunities for Improvements Waste Reduction Improvements IT Request to Increase Batch Process Understand Rework Package Needs for Supplier Develop Scanning PO Procedure Evaluate and Improve Supplier Discrepancy Process Flow Develop Standard Work for R-Job Process •PO Batch Increase to 15 Minutes •Shop Floor Operation Batch Process Every Hour IT Request Increase Batch Process •Eliminate Copies of Items accessible from Parker Portal Rework Package Need for Supplier •Understand Corporate Policy for Document Control •Develop Index for Scanning Purchase Orders •Develop Procurement Scannning Process Develop PO Scanning Procedure •Improve Process for Entering Operations •Part Location to be Standardized Evaluate and Improve Supplier Discrepancy Process Flow •Eliminate Waste and Variability of PO Processing •Eliminate Copying of Packages •Develop Process for Dock to Print Traveller Develop Standard Work for Rework Process 13 Standard Work Implementation Process Team Concerns In moving forward with developing standard work for the R-Job process, team concerns were identified. All concerns were addressed with consideration. Team members were encouraged to be open to new opportunities which ultimately will improve the efficiency of the team. All processes can be modified and error proof to an extent, nevertheless, can always have room for continuous improvement. In developing lean processes, there will always be some hesitation. • Believe their process is best • Believe Standard Work will cause Audit Concerns • Concerned Suppliers will have issue with New Process Team Members 14 Standard Work Implementation Process FUTURE STATE – STANDARD WORK We identified the waste in the process and developed the Future State Map and created a Rework PO Standard Work process. Figure 5 - Future State Map Through developing the future state we discovered lead-time improvements and hard savings would transpire in the Procurement and Shipping Departments. Costs savings and 5S improvements in procurement will also be realized in the future from implementing the Rework Standard Work PO Process. 15 Standard Work Implementation Process Time Improvements Labor Improvements Buyer • PO Process Throughput (error proof) • Copying paperwork • Finding Part • Creating Files • Reduce New Buyer Learning Curve Shipping • Sorting Paperwork for Shipment • Filing Traveller • Un-filing Traveller • Receiving Part Throughput Labor Hours • New Buyer Training - Standard Work will Reduce Training Time from 2.5 hours to 1 hour • Scanning travellers will save Shipping Department 2 hours per week by printing traveller from Scanning database (Eflow) • Procurement Labor Rate Average Savings $18.00 per hour Improve Capacity • Buyer PO production = 250 per week; Reduce Procurement time by 4 hours a week • Scanning 250 POs = 30 minutes • Buyer to find PO File from a Central Location 16 Standard Work Implementation Process Cost Savings Cost Savings Buyer Salary vs. Scanning Shipping Salary vs. Scanning Paper Cost File Folders Cost Storage Shed Cost New Employee Training 17 Standard Work Implementation Process 5S Improvement Parker has focused on Lean 5S for many years. Procurement will improve their 5S score by implementing the new PO Scanning procedure for all future purchase orders. Buyer to Send Files to Scanning vs. Pile on Desk Removal of Filing Cabinets in Procurement Area Storage Units could be Eliminated 18 Standard Work Implementation Process Productivity Results Using the following standard work and process map, the procurement team will track the results each time they produce a Rework Purchase Order. Tracking the results of the new Standard Work will see “real time” improvement instead of an estimated time improvement. Figure 6 - Standard Work Combination Sheet 19 Standard Work Implementation Process Goals Met The Standard Work for the Rework PO process was developed and has already realized the goals set forth in the beginning of the project. Once we have productivity results from team members we will evaluate of all the improvements of this process. Actual Results Once productivity has been recorded by the team for a two-month period, observations will be performed ten times to provide the actual time improvement for the Standard Rework PO process. We will provide management with the improvement time and actual savings in procurement. Reduce PO Rejections Reduce Process Time Reduce Training Time 5S Improvements 20 Standard Work Implementation Process Other Opportunities The focus of this project was to improve the Rework Purchase Order Process however during the evaluation of waste we discovered other opportunities or procedures outside of this process that can be improved. Supplier Discrepancy Procedure Assembly and Test Rejection Process Return Traveller Procedure Procurement Desktop Work Instructions (PDWI) Rework Purchase Order Process Emily Gundersen 4/19/2013 2 REWORK PURCHASE ORDER PROCESS PURPOSE: Desktop Work Instruction for Rework Purchase Order Process This process is to define the steps to create a Rework (R-Job) Purchase Order (PO) or Vendor rejections. Part rejections are from the Assembly and Test area (A&T) and have been evaluated by Quality and determined defective and to be Returned to Vendor. R-jobs generally are debitted back to Vendor for cost and processing fees. 1. Once Quality determines the Vendor is responsible for the rejection an auto-generated notification email with Debit Memo link is sent to Buyer. Figure 1 - Debit Memo Email Notification 2. Buyer will begin PO process once a hard copy of Rework Package or R-job has been received from the Procurement Quality Engineer. See Figure 1. 3 REWORK PURCHASE ORDER PROCESS Rework Package or R-job includes: Traveller and Discrepancy Report copy Figure 2 - Rework Traveller – Page 1 (R-Job) (Traveller references: P/N, Drawing Revision, Traveller Revision) Information highlighted will be used to complete the rework PO process. Figure 3 - Rework Traveller - Page 2 4 REWORK PURCHASE ORDER PROCESS Figure 4 - Discrepancy Report (DIP) 5 REWORK PURCHASE ORDER PROCESS 3. Buyer to determine if Vendor requires a Return Material Authorization (RMA). 4. If yes, Buyer requests an RMA number from Vendor (email or vendor portal request). If no, you may begin PO process. Skip to Step 5. 5. Once RMA from Vendor has been received, begin PO process. 6. Open Debit Memo. 6 REWORK PURCHASE ORDER PROCESS Options to open Debit: a. Open Link in email notification for Debit Memo. See Figure 1. b. Open Debit Memo Database through Supply Management System (SMS). See Figure 5. c. Locate under Buyer Name or DIP#. See Figure 6. Figure 5 - Debit Memo Database (SMS) Figure 5 - Debit Memo Files By Buyer d. If Debit Memo has not been generated, Quality has determined Parker is responsible. Skip to Step 13. 7 REWORK PURCHASE ORDER PROCESS UR indicates Utah Rework PO 7. Once you have located and opened the correct debit (DIP # located on traveller). See Figure 1 &2. Click on Edit. 8. Enter New Purchase Order using UR plus Work Order #, located on Traveller (Figure 1 &2) 9. Enter Ship VIA, Account # and RMA # received from Vendor. 10. Review the quantity of parts on traveller to be returned and review the S/N’s are the same on Debit Memo and Traveller. 11. Enter Quantity in RTV/Scrap Box Figure 6 - Debit Memo 8 REWORK PURCHASE ORDER PROCESS Figure 7 - Debit Memo for Discrepancy found at Receiving Inspection 9 REWORK PURCHASE ORDER PROCESS 12. Next, the P/N price is needed. Open MRP system using AMAPS Options to look up Cost: 13. Enter into Func: COND and in Data: the Original PO # listed on Debit Memo, Page 1 (comma 1) and Review PO line and release for the correct cost to enter into Debit Memo Figure 8 - COND / DATA / PO Price 14. Func:IVPH screen, list P/N for cost history Review PO line and release for the correct cost to enter into Debit Memo. 10 REWORK PURCHASE ORDER PROCESS Figure 9 - PO Price / Line and Release 15. Toggle back to Debit Memo. Add part cost in RTV/Scrap box (Figure 7). 16. Vendor will be debited for freight charges, quality assessment fee, and processing fee which are automatically updated, unless determined by the contract charges do not apply to Vendor. See Total Debit Amounts. (Figure 11) Figure 10 - Total Debit Amounts 11 REWORK PURCHASE ORDER PROCESS 17. Once all fields are updated, click on Submit for Supplier Review. This will auto-generate an email to the Vendor Name on file in Contact Management. Debit Memo is complete. Figure 11 - Submit for Supplier Review 18. For Shipping: If RMA is needed on shipping box for Vendor, generate Debit Memo Shipper database. You will need to be in Open Debit Memo and By Buyer by Status. Checkmark the DIP needed and click Print Shipper. A shipper will generate with the RMA # and other pertinent information. Include this with your rework package for Vendor. Highlight RMA #in yellow and Dock A will write RMA on the box. 12 REWORK PURCHASE ORDER PROCESS AMAPS; Capital letters will auto update Keep Debit Memo open for easy reference to cost for Purchase Order input. Figure 12 - Debit Memo Print Shipper 19. Toggle back to AMAPS for PO generation process. 20. Begin with creating new text for Rework PO. Under Function code type TEXT and under DATA use the template RE-WK or RADS to create COPY for new text. MODE needs to be in UPDATE or it will not work 21. Change MODE: to UPD for UPDATE. 22. Prior to making any changes, go to bottom of page and enter template name into FROM ID and in TO ID the new text # you wish to use and enter. Figure 13 - TEXT Function 13 REWORK PURCHASE ORDER PROCESS *****COPY TEXT: FROM ID: RE-WK TO ID: R236541 Figure 14 - New TEXT Updates 14 REWORK PURCHASE ORDER PROCESS 23. Update Reference with DIP # from Rework Package and RMA number if needed. Update operations listed from the traveller and serial numbers or M dates needed on your TEXT. (Figure 1 &2) 24. Once TEXT is complete, next is to create new PO, a. Enter into FUNC:COND; DATA: NEW PO#,,Vendor Code Figure 15 - COND / NEW PO / VEND Code Another option for creating a new PO: FUNC: COND then under DATA: enter the original PO or use another PO from the same vendor to eliminate any errors with your part number matching up with another vendor name. Figure 16 - Original PO / New PO 15 REWORK PURCHASE ORDER PROCESS Ensure your MODE is in update (UPD), then enter the new PO using the UR to indicate a Utah/Rework PO. Figure 17 - New PO Input This will open up a new PO to the Header Page. 25. Enter the following: a. Administrator: V1 (Buyer Code) b. All other fields in first column are filled in automatically. c. You can change payment codes or freight codes manually. d. Contract Clauses will be added manually. First contract clause will be the determination of the total cost of the PO. Small Business / PO Under $3000 = UNDR3 Small Business / PO Under $10K = UNDR10-1 (See more options in T:/PURCHASE/ CONTRACT CLAUSE) e. The second Contract Clause should be the text you created for this rework PO. (ex. R236541) Figure 18 – COND Screen / New PO Header Page 16 REWORK PURCHASE ORDER PROCESS After all information has been entered Hit Enter. 26. Proceed to the next function. For Page 2 of PO, enter into DATA:,1. Figure 19 - New PO Page 2 System will automatically take you to Page 2 for order entry. 17 REWORK PURCHASE ORDER PROCESS 27. Enter the following: a. Item Number/MCN: enter part number with asterisk b. Contract Price: No dollar signs used c. STATUS: Open (Auto) d. Desc source: P (Auto) e. Drawing Revision: MQI if needed on PO f. Line Item Text ID: Account #6K251020 g. Route Revision: If MQI is not required, NA must be entered Figure 20 - PO Page 2 Item Entries When creating an "R" order an asterisk (*) must be placed in this field. This allows the system to bring up a final screen (XREF) for Work order # and operations.. 18 REWORK PURCHASE ORDER PROCESS Figure 21 - PO Page 2 Item Entries (cont.) Once all information is entered …HIT ENTER. The system will automatically take you to the XREF Screen. 19 REWORK PURCHASE ORDER PROCESS 28. Proceed to the next function in XREF to enter WO# and Operations. a. From Traveller enter Work Order #. b. X-REF Code: Enter 3 (Rework) c. Op-FROM: 002000 (VendorFab operation); Located on Traveller (Figure 1 & 2). Other VendorFab OPS can be used (ex. 001500). d. Hit Enter Figure 22 - XREF Screen Entries If Operations have been entered and batched, you have successfully completed a rework Purchase Order. 20 REWORK PURCHASE ORDER PROCESS BEST SHIP DAYS FOR R-JOB SHIPMENTS TUESDAY WEDNESDAY THURSDAY Figure 23- New PO Complete If you complete PO successfully, skip Step 29 and 30. If operations are not entered, return to Scheduler for operations to be entered into Shop Floor. Overnight batch is necessary for operations to be successfully input into PO. 21 REWORK PURCHASE ORDER PROCESS 29. Once operations have batched over night. Return to UR PO Figure 24 - Return to UR PO Then to XREF screen, Add in 01001 to DATA line and update OPER function to ADD. Then continue with updates to Work Order #, Ref Code and Operations. Figure 25 - XREF ADD Operations 22 REWORK PURCHASE ORDER PROCESS If error QCOO Verification for Policy P occurs at this point, 30. Go to FUNC: PURD and enter the correct information. Figure 26 - PURD Function 31. Update QC Code: P, Figure 27 - PURD Update 23 REWORK PURCHASE ORDER PROCESS Return to Step 19 and begin creating PO again. 32. Wait for an email notification.(Batch every 15 minutes) 33. Open email and PO document 34. Sign and Save to T:/PURCHASE/ELECTRONICALLYSIGNEDPOS/”Supplier Name” 35. PRINT PO 36. Make PO Packages: Vendor: Signed PO, Rework Traveller, DIP, Shipper if RMA on the box is needed. 24 REWORK PURCHASE ORDER PROCESS Scanning will pick up PO’s on a regular basis. R-jobs will be expedited through scanning process. Scanning: Signed PO, Rework Traveller. Other paperwork can be included, only if necessary. 37. Place Scanning Package in pick up box. (Traveller will be scanned for Dock B to print when needed.) 38. Take Vendor package and pick up part from Procurement location. Walk part and Vendor package to Dock A for shipping. 39. If overnight shipment is needed, Green OVERNIGHT tag should be placed with part. 40. Email supplier the PO for notification part is being returned. If Parker is paying for freight, Team Leader signature is required to allow shipping to process overnight fees. 25 REWORK PURCHASE ORDER PROCESS Figure 28 - Process Map 26 REWORK PURCHASE ORDER PROCESS Figure 1 - Debit Memo Email Notification .................................................................... 2 Figure 2 - Rework Traveller (R-Job) ; Page 1 ................................................................. 3 Figure 3 - Rework Traveller (page 2) .............................................................................. 3 Figure 4 - Discrepancy Report (DIP) ............................................................................... 4 Figure 5 - Debit Memo Files By Buyer .............................................................................. 6 Figure 6 - Debit Memo .................................................................................................... 7 Figure 7 - Debit Memo for Discrepancy found at Receiving Inspection .................. 8 Figure 8 - COND / DATA / PO Price ............................................................................... 9 Figure 9 - PO Price / Line and Release ........................................................................ 10 Figure 10 - Total Debit Amounts .................................................................................. 10 Figure 11 - Submit for Supplier Review ....................................................................... 11 Figure 12 - Debit Memo Print Shipper ........................................................................ 12 Figure 13 - TEXT Function ............................................................................................. 12 Figure 14 - New TEXT Updates ..................................................................................... 13 Figure 15 - COND / NEW PO / VEND Code ................................................................ 14 Figure 16 - Original PO / New PO ................................................................................ 14 Figure 17 - New PO Input .............................................................................................. 15 Figure 18 – COND Screen / New PO Header Page .................................................... 15 Figure 19 - New PO Page 2 ........................................................................................... 16 Figure 20 - PO Page 2 Item Entries .............................................................................. 17 Figure 21 - PO Page 2 Item Entries (cont.) .................................................................. 18 Figure 22 - XREF Screen Entries .................................................................................... 19 Figure 23- New PO Complete ....................................................................................... 20 Figure 24 - Return to UR PO ......................................................................................... 21 Figure 25 - XREF ADD Operations ................................................................................ 21 Figure 26 - PURD Function ............................................................................................ 22 Figure 27 - PURD Update .............................................................................................. 22 Figure 28 - Process Map ................................................................................................ 25