Kaizen: Easiest, Fastest Way to Improve Office Processes

As at other companies, many of the early benefits of Lean and Six Sigma at Medtronic, a global leader in medical technology, were in manufacturing. In the last year, however, Medtronic also has had notable results from the application of the methodologies in the office - in transactional and administrative processes. Last May, at Medtronic's world headquarters in Minneapolis, Minnesota, USA, the accounts payable department, a part of the company's Global Business Solutions organization, completed Medtronic's first U.S. Kaizen event on a transactional process. The event produced outstanding results and provided many lessons at the company.

How Accounts Payable Was Selected

When its bi-annual employee survey results were published in October 2004, the Medtronic Global Business Solutions (GBS) unit's score in operating effectiveness was below expectations. In order to find and address the root cause of the disappointing score, a Six Sigma project was commissioned by the organization's senior vice president. A cross-functional team of employees, led by a Medtronic Black Belt, completed the Define, Measure and Analyze phases. The analysis of the survey data showed that some of the GBS groups scored significantly lower on one question in the operating effectiveness category: "In my work group, we are effective at eliminating unnecessary tasks and steps." The most significant negative response for this question was in the accounts payable department.

Lesson Learned: The concept of waste (or "muda" in Japanese) is hard for many in service organizations to grasp. When so much workflow is electronic, waste can be especially hard to spot - and to employees, eliminating this waste can initially seem like a disservice to clients and customers.

While Six Sigma tools were used in the Define, Measure and Analyze phases of the project, multiple sub-projects were launched for the Improve and Control phases, some using Lean methods and some SixSigma, depending on the critical Xs. In the case of the accounts payable group, Lean was clearly appropriate to help "eliminate unnecessary tasks and steps." Lean projects can take months to complete, but in this case, results were needed quickly in order to improve performance, and to validate that employees' perceptions of operating effectiveness would be improved.

The choice to use a Kaizen event in accounts payable was not an immediately obvious one. While the short-time investment required to make improvements was attractive, there was little precedent for applying what seemed to be a manufacturing process improvement approach in a shared services environment.

Planning for the Kaizen Event

Planning for the accounts payable Kaizen event involved creating a project charter, creating a value stream map of the process to be improved (in this case, non-purchase order invoice processing), and gaining a basic understanding of the types (or families) of transactions.

Figure 1: Medtronic's Kaizen Event Guide

Day 1 of the Kaizen Event

The participants were all smiles on Day 1, but lurking behind those nervous smiles were doubts. Here are some comments heard that first day:

• "What do you mean we may actually move offices during this week? Moves are scheduled out weeks into the future - there's a waiting list!"
• "We can't change computer systems on the fly…what about IS production change controls? They'll never allow us to do that."
• "The imagers and accounts payable processors don't even report to the same manager...who is going to pay for the cost of any changes? We didn't budget for this."
• "I don't know why we're spending a week on this. If those guys would just do their job, everything would already be running smoothly.

Lesson Learned: While change management in any Lean Six Sigma project is challenging, condensing the change from four to six months into one week takes careful planning.

Reviewing the value stream map of the process surfaced many special cases and exceptions, and the map - posted so everyone could study it - was updated with sticky notes.

Opportunities to attack waste included:

• Eliminate shuttle delivery of payments.
• Reduce Fed Ex delivery of payments.
• Reduce daily distance walked.
• Eliminate sorting of invoices and attachments.
• Index directly from electronic image versus paper.
• Eliminate batching of invoices and attachments.
• Eliminate redundant inspections.
• Eliminate "call-for-pick-up" of payments.

Lesson Learned: Meeting daily with employees who work in the process, but who are not directly involved in the event, to bring them up-to-speed on the event's progress can ease concerns and increase receptivity to process change after the event.

Even though the entire accounts payable staff had been briefed about the Kaizen event, as the team made its first-hand observations about waste in the work area, the staff began to wonder what the Kaizen team was up to.

Day 2 Is for Gathering Information

The team documented the sequence of events for each major process step. The members gathered information about tasks and steps, cycle times, inventory, defects and distance walked. Then the team calculated the process Takt time. (Takt is a German word for the rate at which work is produced to meet customer demand.) Next it looked at the balance of the work in the current process compared to Takt time as shown in Figure 2.

Figure 2: Takt -- One Invoice Every 38 Seconds

To end Day 2, the team mapped the improved/simplified process as shown in Figure 3.

Figure 3: Before and After of Process Mapping

Day 3 the Team Works for Improvements

The team began with a spaghetti diagram of the physical flow and worked to find a way to reduce travel by 73 percent. The before and after diagrams are shown in Figure 4.

Figure 4: Before and After Diagrams of Physical Flow

That activity was followed by a rebalancing of the work. Techniques used to balance the work included single piece flow, standard work methods, moving/combining steps, reducing non-value-added time and changing the sequence of work. In addition, there were a number of 5S improvements to better organize the work areas and make the process more visual. 5S is the Japanese concept for housekeeping. The results are shown in Figure 5.

Figure 5: Mail and Scan Combined into One Step

Results of the Kaizen Event

The event was extremely successful. Table 1 below offers an overview of positive results.

Table 1: Results of Kaizen Event
Metrics	Original	Goal	Estimated at Report Out	Actual: 1 Week Later	Improvement
Lead Time	8.5 days	5.0 days	4.0 days	2.7 days	68%
Total Cycle Time	5.7 min.	5.7 min.	5.0 min.	2.9 min.	49%
Inventory (Invoices)	Old: 3375 New: 2056	1985	< 1588	Old: 1454 New: 938	Old: 41% New: 57%
Walking Distance	Total/Day: 8381'	No Goal	Total/Day: 2232'	Total/Day: 2232'	73%
Productivity (output/- person/effective hours)	12.8	15.5	No Estimate	15.5	21%

Lesson Learned: Kaizen events can work as well on transactional processes as they do in manufacturing. And a longer Lean Six Sigma project duration does not necessarily equal better results. In many cases, all of the benefits of a four- to six-month project can be realized in a one week Kaizen.

In addition to the results in the table, the accounts payable department was able to avoid hiring two employees planned to support a forecast of additional volume. The dramatic improvements are reflected in the invoice processing durations in Figure 6. This sub-process improved from negative sigma performance to about 4.1 sigma in one week.

Figure 6: Invoice Processing Duration

Lesson Learned: Making electronic processes visible/visual is challenging but possible, and it is a critical part of the Control phase post-Kaizen.

At the Post-Kaizen Follow-Up

At the 30-day post-Kaizen review, a number of issues came to light. The Kaizen event results were impressive, but there were some areas of concern. Because so much of the accounts payable workflow is electronic, inventory/queue levels, resource constraints and quality problems are not visible to everyone in the process. Making them visible would require either more system changes or creating some other vehicle to share this information. Addressing these concerns led to some additional learning about the overall Kaizen process.

The success of the accounts payable Kaizen event created a high demand for Kaizen events from other office/transactional process owners. Encouraged by it own success, the accounts payable department also is undertaking additional Kaizen events and has started several Six Sigma projects.

Conclusion: Higher Scores and More Kaizen Events

Lesson Learned: Kaizen builds organizational momentum and overcomes skepticism about Lean Six Sigma in a short period of time.

What about the accounts payable employees' viewpoint? Did the Kaizen event change how they saw operating effectiveness? Based on the re-survey of accounts payable employees 45 days after the Kaizen event, the answer is a resounding yes. The score for operating effectiveness improved 15 points. Even a five-point improvement would have been statistically significant. Medtronic plans to monitor this over time to ensure the company can hold the gains.

For future GBS Lean projects, the simple criteria will become: Why not a Kaizen event? Unless there is a good reason not to, GBS Lean projects will be approached with Kaizen events. Medtronic has not yet attempted to conduct a Six Sigma project in a five-day Kaizen event, but that is certainly an experiment whose time has come.

About the Author: Susan Frank is a Lean Six Sigma Black Belt in Medtronic's Global Business Solutions. Her previous responsibilities include leadership positions in quality and information technology at Medtronic, United Defense LP, Amdahl Computer and A.O. Smith. She can be reached at susan.frank@medtronic.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Kaizen with Six Sigma Ensures Continuous Improvement

Kaizen aims to eliminate waste in all systems of an organization through improving standardized activities and processes. By understanding the basics of Kaizen, practitioners can integrate this method into their overall Six Sigma efforts.

By Afsar Ahmed Choudhury

Kaizen is a Japanese philosophy that focuses on continual improvement throughout all aspects of life. When applied to the workplace, Kaizen activities can improve every function of a business, from manufacturing to marketing and from the CEO to the assembly-line workers. Kaizen aims to eliminate waste in all systems of an organization through improving standardized activities and processes. By understanding the basics of Kaizen, practitioners can integrate this method into their overall Six Sigma efforts.

What Is Kaizen?

The purpose of Kaizen goes beyond simple productivity improvement. When done correctly, the process humanizes the workplace, eliminates overly hard work, and teaches people how to spot and eliminate waste in business processes.

The continuous cycle of Kaizen activity has seven phases:

1. Identify an opportunity
2. Analyze the process
3. Develop an optimal solution
4. Implement the solution
5. Study the results
6. Standardize the solution
7. Plan for the future

Kaizen generates small improvements as a result of coordinated continuous efforts by all employees. Kaizen events bring together a group of process owners and managers to map out an existing process and identify improvements that are within the scope of the participants.

The following are some basic tips for doing Kaizen:

• Replace conventional fixed ideas with fresh ones.
• Start by questioning current practices and standards.
• Seek the advice of many associates before starting a Kaizen activity.
• Think of how to do something, not why it cannot be done.
• Don’t make excuses. Make execution happen.
• Do not seek perfection. Implement a solution right away, even if it covers only 50 percent of the target.
• Correct something right away if a mistake is made.

Kaizen activities cover improvements in a number of areas, including:

• Quality – Bettering products, service, work environment, practice and processes.
• Cost – Reducing expenses and manpower, and use of material, energy and resources.
• Delivery – Cutting delivery time, movement and non-value-added activities
• Management – Improving procedures, training, morale, administration, planning, flow, information systems, documentation and reporting.
• Safety – Decreasing hazardous situations, unsafe working conditions, chances of resource depletion and damage to the environment.

Implementing Kaizen

To generate a Kaizen, everyone involved must begin thinking about their work in a new way – in terms of:

• Now: Present condition
• Next: Desired state
• New: How to reach that state

Typically, implementation of Kaizen occurs in three stages in any organization:

1. Encourage participation: Awareness training sessions for all employees are a must. To further encourage employee involvement, promote specific Kaizen activities, and consider distributing monetary or tangible benefits after solutions from Kaizen activities are implemented.
2. Training and education: Focused training of associates is required for understanding what is – and is not – the essence of Kaizen. Team leaders should be trained to understand Kaizen in an organizational vision context, which needs to be followed thoroughly in order to achieve desired business objectives. They also must be taught about the necessity of impartial evaluation and strategy for improving participation.
3. Quality level improvement: After the training stage is completed, practitioners should continue to focus on long-term implication, widespread application, alignment with organizational objectives and planning objectives. Management should form a core department to carry out Kaizen evaluation and implementation.

Using Kaizen with Six Sigma

Through Six Sigma, companies can make breakthrough improvements in existing processes. Cost savings from breakthrough Six Sigma projects are not always reflected in the bottom line, however. The reason for this is the absence of small improvements, as well as maintenance – establishing standard operating procedures and ensuring everyone follows them. Processes can degrade without systemic monitoring and improvement (Figure 1).

Figure 1: Results of Six Sigma Use without Maintenance

But if a company has a combined system of Six Sigma, a strict adherence to established processes, and local resources who are constantly looking for ways to make their processes better (Kaizen), the situation becomes the best. This puts the organization in a better financial position in the long-run because improvements happen on an ongoing basis in addition to the occasional breakthrough (Figure 2).

Figure 2: Use of Continuous Improvement by Market Leader

Case Study: Reducing Sampling Time

The following case study illustrates the importance of combining Six Sigma with Kaizen activities. At a four-wheeler manufacturer, a Black Belt completed a Six Sigma project on the cycle time of the sampling inspection of completely built units (CBU) of automobiles. The cycle time for sampling inspection at the start of the project was about 24 hours, or three workdays.

At the end of the project, during the Control phase, the time was reduced drastically to about 7.7 hours or one workday, thus reducing two-thirds of the cycle time. The Belt handed over the ownership of the process to a few assigned employees. The associates responsible for the workstation held several Kaizen activities, which benefited the work process as well as improved the motivation level of the employees.

One Kaizen event involved a subprocess in the sampling process – measuring for the turning radius of the car. Before, this part of the sampling process took 20 minutes and required two employees. One employee sprayed water on the tire of the car while another person was driving the car and turning the tire. The employees measured the water mark on the ground to calculate the turning radius. After the Kaizen, the driver would connect a pipe with the water tank under the hood and used that to spray water on the tires while also turning the tires. This idea did not come from a skilled Black Belt, but from a trainee helper. It reduced the time needed for that task from 20 minutes to 5 minutes, and also reduced the manpower needed from two to one.

What was gained was not merely a few minutes in a day-long process, but idea generation in the form of innovative participation. The confidence gained by the employee opened doors to many more Kaizen activities, adding up to sustained improvement after the end of the Six Sigma project.

About the Author: Afsar Ahmed Choudhury is working as a quality manager at Ericsson India, where he heads the Six Sigma improvement program for the India operation and local suppliers. He is an Indian Statistical Institute-certified Master Black Belt and also has worked as Kaizen coordinator in a Honda car manufacturing plant in India. He can be reached at choudhury_afsar@yahoo.co.in This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Keep it Simple: Choose the Best Tools for Kaizen Events

A non-statistical tool, the value stream map, is the focus during Kaizen events, and when selecting other tools to accompany the map, Belts must be mindful not to introduce anything overly complicated, or they may waste valuable time with staff.

By Robert Tripp

Kaizen events are deceptively simple. The tools used are often considered to be less rigorous than the more analytical tools that are the hallmark of Six Sigma. But in practice, Kaizen events can be challenging to facilitate effectively because participants are pulled from their regular roles, requiring the events to be short and focused, and facilitators to be efficient in their selection and execution of problem solving tools.

Facilitators trained in the Six Sigma methodology may be tempted to use more rigorous analytical tools. A non-statistical tool, the value stream map, is the focus during Kaizens, however, and when selecting other tools to accompany the map, Belts must be mindful not to introduce anything overly complicated.

Focus on the Value Stream Map

Standard tools and approaches in Kaizen can vary, but the backbone of most Kaizen events is the value stream map. Beyond that, the specific tools applied in any given event will depend on a variety of factors. Selecting the right tools for a given situation is challenging and using the tools effectively can be even harder. Furthermore, the tools that are most useful for complementing the value stream map in Kaizen events are other non-statistical tools, such as selection matrices, fishbone diagrams and brainstorming.

Recently I observed a Kaizen team immediately jump into a failure mode and effects analysis (FMEA) following the creation of a well-documented current state value stream map. Any positive momentum that had accumulated during the value stream work was immediately squelched as the team slogged through an excessively detailed and painful FMEA. While the FMEA can be an effective tool for documentation or detailed process analysis, forcing a team to meticulously examine how they do work, it can also be mercilessly laborious, and in the context of a Kaizen event it must be applied selectively. In this case, the team attempted to document a detailed FMEA for the entire value stream and to make matters worse, the FMEA was improperly facilitated, yielding misleading risk priority number (RPN) scores.

The Role of the Facilitator

Examples such as the use of the FMEA are common in Kaizen events because facilitators often fail to prudently select the best tools and techniques for their situation. The irony is that the tools are simple to understand; the way they are manipulated and applied requires a special skill in the context of Kaizen. The good news is that while there is some mystery in the successful application of Kaizen tools, there are several ways to improve the chances of success.

The first step is to plan and prepare for the event, taking into consideration the participants and desired outcome for the effort. While not every Kaizen event will require takt time analysis and redefinition of standard work combinations, every event should produce a list of immediate and future improvement actions with dates and responsibilities assigned. In the course of planning, ensure that the proper scope and objectives are consistent with the complexity of the process being studied and the time allotted for the event. Traditional Kaizen events, which aim for inventory, waste and cycle time reductions in five days or less, are best applied to operational processes where no more than three different functions play important roles in the value stream.

As in any project management endeavor, the advice of the day for Kaizen event planning is “don’t bite off more than you can chew.” Events that focus on larger, multi-disciplinary or cross-functional organizations should be limited in their objectives to thorough value stream documentation, management system implementation and waste elimination at a high level. One major outcome of such events – in addition to fundamental improvements – is often a detailed plan for more focused Kaizen events in the future. This is consistent with the philosophy that processes should be “Kaizened” periodically, not addressed once and then ignored.

Establishing Basic Disciplines

In addition to scope, complexity and time allowed, Kaizen event objectives should also take into account the maturity of the organization or process to be improved. Navigating the path to Lean requires basic disciplines to be established in the following order:

1. Workplace organization (5S)
2. Visual workplace (signals to work and visible performance data)
3. Standardized work (process control)

Establishing these fundamentals can require considerable time, but they are important contributors to the efficacy and the permanence of continuous improvement efforts like Kaizen. In many cases it is appropriate for a single five-day Kaizen event to focus purely on establishing 5S standards and methods.

Ensuring Useful Results

For certain team-based tools, Black Belts and Green Belts should not let their facilitation be encumbered by the exact approach that they learned in their DMAIC coursework. For any Kaizen event it is important that the right tools be applied in creative ways to ensure that the team’s time is used most effectively and that the tools produce useful results. This is the part that can make Kaizen event facilitation particularly challenging, but the challenges can be transformed into opportunities with a little preparation and practice.

About the Author: Robert Tripp is a frequent contributor to iSixSigma.com and an associate with Six Sigma Advantage. He was part of the "original DNA" of AlliedSignal's groundbreaking Six Sigma program. He has trained, coached and certified hundreds of business professionals, managers, engineers and senior leaders in Six Sigma. He can be reached at r.b.tripp@att.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Kaizen and Six Sigma Together in the Quest for Lean

Kaizen alone is ineffective and should not be used as a continuous improvement culture without Six Sigma and DMAIC. Combining these tools with Kaizen in the Lean spirit of continuous improvement will optimize success and improve the organization.

Kaizen is seductive and efficient. It can deliver results quickly and on a significant scale, utilize the collective insight and experience of those who know most about the process and inspire employees with a relentless curiosity about and discomfort with waste, defects and constraints to throughput. But it is also overrated.

Kaizen Alone

In the context of a truly “Lean” environment, Kaizen is a pervasive philosophy that affects the way all employees look at their work environment. Kaizen, loosely translated from Japanese, means “continual improvement.” And what better way to promote learning, build capabilities and improve processes than to create a culture that drives everyone to constantly seek, study and exploit opportunities for improvement. Kaizen is particularly effective in business environments seeking to improve their value streams with an inexhaustible focus on more effectively delivering value to customers and society – environments that remain dedicated to this philosophy even at the expense of short-term financial goals, as noted in The Toyota Way by Dr. Jeffrey Liker. It is this philosophy that cultivates continual learning and characterizes the Lean environment, not the use of specific tools like kan ban (using visual or other signals to trigger activity) or hiejunka (leveling the workload). Some tools or approaches are practically universal in Lean, such as 5S (sort, straighten, shine, standardize, sustain) or value stream maps, but the consistent thread tying all Lean systems together is the drive for everyone in the processes to continually learn. The learning environment in Lean embraces two basic notions: 1) Genchi Genbutsu, study and thoroughly learn the process or problem yourself and 2) make decisions by consensus supported by a deep understanding of all the potential options and then act on those decisions quickly.

Kaizen in North America

Unfortunately, most North American organizations do not apply Kaizen in this context. Kaizen tends to be limited to blitzes: short, focused bursts of continuous improvement activity utilizing a team of people removed from the distractions of normal operations. These teams typically consist of the right players: process technicians, technical experts, customers and suppliers using effective tools like 5S, value stream maps, takt-time analysis and standard work combinations to balance product flow. And they deliver solid results. The problem is that results happen in sporadic bursts due to the intermittent nature of the Kaizen events. Because decisions are made quickly to accommodate the timeframe of the Kaizen event, root causes are often not thoroughly analyzed in order to optimize the results. Kaizen events without the philosophical structure of Lean focus on fixing the obvious issues at the expense of learning about the latent opportunities. For many organizations that may be enough, but Kaizen in this regard is no different than Quality Circles of the 1980s or Work-out from the early 1990s.

Kaizen Events

Kaizen events can lead an organization to believe that an effective continuous improvement culture can be achieved through Kaizen events alone. Recently an organization employed well-planned and executed Kaizen events in various functions of the organization. Sales processes were improved to reduce price reductions. Customer service centers were streamlined to resolve issues faster. And waste was removed from servicing processes to reduce reviews, hand-offs and cycle time. The only problem was that “quick fix” solutions – improvements that failed to address root causes – were employed in each case. Prices were lowered and margins reduced to help sales achieve fewer price reductions. Issues in customer service were resolved quicker but the number and severity of issues remained constant since no effort was employed to eliminate issues at the source. Servicing processes were faster, but because escaped defects increased, customer satisfaction and market share declined. In each of these cases Kaizen was employed – and even sold to the organization – as an alternative to disciplined measurement and analysis of the processes. Remember, nothing in Kaizen promises optimization – only change – and in situations like this where systems thinking is neglected it is no more than group brainstorming with a housekeeping component.

Kaizen with Six Sigma

Six Sigma, or DMAIC, can assist in filling the gap that Kaizen (as it tends to be applied in many organizations outside of Toyota) fails to address. Six Sigma is not a substitute for Lean and does not necessarily cultivate a learning culture. It is effective in supplying the analytical discipline and rigor necessary to thoroughly understand the nature of processes and problems. Six Sigma is a structured, data driven approach to solving problems. Six Sigma is not a set of statistical tools, and it is not a bureaucratic, stage-gate approach to managing projects, although these features often are hallmarks of successful Six Sigma deployments. Six Sigma is a way of thinking and the results of the approach can yield a spectrum of improvement choices based on the balance of value and risk. The improvements can range from frequent and immediate, low-risk actions addressing obvious opportunities; to Kaizen event-like team efforts addressing root causes based on data; to protracted projects that require review and administration through the DMAIC project cycle. Figure 1 shows the spectrum of the project/risk relationship.

Figure 1: Project/Risk Relationship

The Six Sigma way of thinking, through DMAIC, provides rigor and minimizes poor decisions by:

• Asking what a company wants to learn versus jumping to conclusions
• Discovering processes and requirements
• Gathering the right facts and data
• Characterizing root cause through y = f (x)
• Innovating solution alternatives and selecting the best
• Controlling results and verifying value
• Standardizing and leveraging best practices

The collective insight of the project team, combined with analytical tools and a variety of risk-management tools like MSA (measurement system analysis) and FMEA (failure mode and effects analysis), help reduce the risk of sub-optimal decisions in the DMAIC process. Without the judicious application of some subset of these tools, Kaizen events are simply a technique similar to the less successful Total Quality Management approaches that initially forced the evolution of Six Sigma.

Summary

Kaizen can be effective if applied in the Lean spirit of continuous improvement (not just through sporadic events) utilizing the rigor and discipline of DMAIC. It must start with an organizational commitment to continuous learning applied to drive value for customers and society. Kaizen and Six Sigma together become elements of the larger quest for Lean.

About the Author: Robert B. Tripp is a managing partner at Six Sigma Advantage. He was part of the "original DNA" of AlliedSignal's groundbreaking Six Sigma program and is an innovator and leader of Six Sigma retail and financial services. He has trained, coached and certified hundreds of business professionals, managers, engineers and senior leaders in Six Sigma. His experience includes Champion, Master Black Belt, Black Belt, Green Belt and process management training as well as mentoring hundreds of projects. Mr. Tripp can be reached at rtripp@sixsigma-advantage.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Fast and Intense: Kaizen Approach to Problem-Solving

Perhaps it was impatience with how long traditional projects take. Often it was an awareness of how hard it is for people to concentrate on improvement when they keep thinking about getting their work done. To some extent it was a matter of their innate respect for the people who do the work. For all these reasons, years ago the Japanese inventors of the Lean improvement systems came up with a different improvement model they called Kaizen.

Kaizens (or blitzes, as they are sometimes called) are improvement events where people work only on improvement for a few days, up to a full week. In a traditional Kaizen project, the people from a particular work area come together with a few experts for four or five days straight and complete most or all of a DMAIC cycle on a narrowly targeted high-priority issue. ("We need to process loan applications faster.") The model has been so successful that this basic approach has been adapted to other uses such as service design sessions.

Example of a Bank's Use of Kaizen

A major national bank started using the five-day Kaizen approach whenever it wanted to attack process speed and efficiency problems. The bank's Kaizen events all share four characteristics:

• The purpose is to take a cross-functional view of the process or work area.
• Participants are people who are directly involved in, and usually responsible for, various parts of the process. The team is cross-functional.
• Participants are pulled off their jobs for several days at a time.
• The project is well-defined going in because there is not time to redefine the purpose or scope.

A Typical Kaizen Schedule

Here is a sample agenda which the bank uses for the five days:

Day 1 is an afternoon spent training participants on topics that cover basic concepts related to the goals of the project. This could include teaching relevant Lean or Six Sigma concepts and reviewing relevant data.

Day 2 is spent looking at the process with new eyes. Participants do a "unit walk," a tour of operations affected by the problem or situation being studied where they simulate being a work item flowing through the process. The group visits each portion of the process, where, because there is cross-functional representation, they have the opportunity to hear insights from someone who works in that area. The group creates a value stream map (a picture of the "as-is" situation) that captures the basic process steps, such as cycle times, number of steps, rework loops, queuing delays, work in progress (WIP) and transportation time.

Day 3 is designed around clarifying problems and brainstorming solutions. The team re-organizes the value stream (on paper) or creates a "should" map that depicts how the process would need to function to solve the identified problems. The outcome includes developing action plans for implementing solutions or trial simulations for the next day.

Day 4 is used to test the solutions, conducting a simulation within the operations if possible. The group quantifies the improvement if the proposed changes are implemented, using estimates of reductions in travel time, queuing time, work in process, number of steps, number of forms, and so on.

Day 5 is when participants prepare and present their findings to the sponsor in a formal report-out session.

Making It Work and the Results

The bank makes this model work by having its internal consultants (equivalent to Master Black Belts) partner with the manager/sponsor to pick problems that are extremely high priority, not only for that work area but also for the business as whole. This makes it much easier to justify taking people off their regular jobs. Also, the goal of the event is a little more modest than a traditional Kaizen. Instead of having solutions up and running full-bore after five days, teams are expected only to get through the simulation and piloting of solution ideas. The internal consultant will then assist the team with full-scale implementation.

In the many Kaizens this bank has run, it has achieved results such as:

• Cycle-time improvements have ranged from 30 percent faster to nearly 95 percent faster, measured sometimes in minutes and other times in days. One administrative process went from 20 minutes to 12 minutes, and a complaint resolution process dropped from 30 days to 8 days.
• Fiscal indicators have all been positive. One high-level project has allowed the bank to start charging for a service that previously was offered free to customers. New revenues are expected to total between $6 million to $9 million per year. Other projects have led to cost reductions or loss avoidance in the hundreds of thousands of dollars.

An Alternative Kaizen Format

While consecutive days of intense work is the ideal, some companies have found it impossible to pull an entire work group, or even a subset of a work group, off the job for the better part of a week.

One company worked around this issue by using the following structure:

• The team was brought together for a brief meeting where the problem was explained and people brainstormed what they would need to know and understand in order to find solutions.
• The team leader, a Black Belt, and one team member then worked offline during a period of several weeks to gather data and refine the problem definition.
• The team was brought together for a day to rapidly analyze the problem and come up with complete action plans - not just ideas - for improvement.
• Since the changes likely would affect the everyday work of the team members, they and others were involved in making the changes real-time on the job, and establishing a control plan.

This alternative Kaizen structure works well in this company because:

• The company is still relying on the knowledge of the people who actually do the work.
• It is data-based decision making.
• The company starts with a narrowly defined problem or opportunity statement - often the participants may be examining how they can implement a Lean principle to their process, such as "How can we make information flow better?"
• The company takes steps to verify that the target is likely to bring important, measurable results. Random or "drive by" Kaizens, chosen with little forethought, may, at best, lead to local improvements, but will not contribute to significant value stream gains.

Conclusion: Concentrating on Creativity

Kaizen events are a powerful improvement tool because people are isolated from their day-to-day responsibilities and allowed to concentrate all their creativity and time on problem-solving and improvement. Companies which use Kaizens have found they generate energy among those who work in the area being improved, and produce immediate gains in productivity and quality.

About the Authors: Mark Price is a vice president with George Group and has led Lean Six Sigma deployments for Global 500 clients in service and product companies. He has been working with corporate teams to design and implement successful performance improvement programs for the last 16 years. He can be reached at mprice@georgegroup.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Tim Williams is a Master Black Belt at George Group. He is experienced in applying Lean Six Sigma to the financial services industry to drive bottom-line results. He has assisted organizations in scorecard development, business review practices, and process improvement strategies. Mr. Williams has been a speaker at conferences for the Banking Administrative Institute and the Institute of Business Forecasting. He also contributed to the book Lean Six Sigma for Service by Michael George. He can be reached at twilliams@georgegroup.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it .