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Appendix 1: Associated Tools, Techniques and Approaches

A1.1 Lean Tools and Techniques

It has been indicated above that Lean is a philosophy and within that there are some fundamental principles and concepts. However, to make Lean happen it consists of a number of tools, techniques and approaches often referred to as the 'Lean toolbox'. A full outline of all the tools can be found in 'The Lean Toolbox' by John Bicheno (3). The Kaizen Blitz has been outlined but another one which is of relevance to public sector is Value Stream Mapping and so is described below.

A1.1.1 Value Stream Mapping

There are tools like Value Stream Mapping from which it is possible to understand the components of a value stream and, to identify waste to either remove or reduce it (18). The seven accepted wastes (18) are:

1. Faster than necessary pace, which inhibits quality and productivity.
2. Waiting resulting from inefficient use of time.
3. Transporting large amounts of goods can cause damage and deterioration.
4. Inappropriate processing with overly complex solutions for simple procedures.
5. Unnecessary inventory creating storage costs and hiding defects.
6. Unnecessary motion of workers bending stretching or picking up items.
7. Correcting mistakes are direct costs.

Reducing waste improves production, which results in Leaner operations and the ability to expose further waste and quality problems. The seven value stream mapping tools are:

1. Process activity mapping involving five steps. First an analysis of the process is undertaken, followed by the identification of waste. Then consideration of whether the process can be rearranged in more efficient sequence, whether there is a better flow pattern and whether superfluous tasks can be removed.
2. Supply chain response matrix seeks to portray the critical lead times for a particular process from distribution, supply to retailer. Once the total lead-time is understood, individual lead times and inventory amounts can be targeted for improvement.
3. The production variety funnel allows an understanding of how firms or supply chains operate, how complexities can be managed and the identification of similarities and differences between industries. This tool can be useful for targeting inventory reduction.
4. The quality filter map identifies the three types of quality problems that can exist in a supply chain. These are defects with the finished product as noted by customers, service defects not concerned with the production of the product and defects picked up by internal inspection systems. Each defect can be mapped along the supply chain to target improvement activity.
5. Demand amplification mapping assess how demand changes along the supply chain in varying time periods. The information can be used to redesign the value stream configuration, manage fluctuations or establish solutions to manage regular and exceptional demand.
6. Decision point analysis at the point in the supply chain where demand-pull gives way to a forecast driven push. Understanding where this point lies is useful for assessing processes upstream and downstream from this point and for designing what if scenarios to see the impact of moving the point. The may allow for a better design of the value stream.
7. Physical structure mapping is useful for understanding what a particular supply chain looks like at an industry level. This knowledge helps to understand how the industry operates and for directing attention to areas that may not be receiving sufficient development attention (18).

The Value Stream Analysis tool involves completing the sections on the wastes identified, the mapping tools available and the correlation between these tools and wastes. A high correlation is equivalent to 9 points, medium to 3 points and low to 1 point. Then identifying for each of the wastes the benchmark company in the sector (Section A), in order to get people to think about who is best at reducing waste. The next stage is to ascertain the individual importance of the seven wastes by assigning weights to them (Section B). The last stage is to create total weights for each tool in order to identify how useful each tool is in identifying the various wastes designated as most important by the organisation. This type of calculation is applied to each row so that scores are recorded for each individual correlation. The total scores for each column are then summed and recorded in Section C. The columns with the highest scores are those that contain the most appropriate tools. It is useful to choose more than one tool. Also make sure that the most important two or three wastes, are being addressed by tools with which they are highly correlated.

Figure A1. An example of a Value Stream Analysis Tool (18)

A1.2 Related Tools and Techniques

For the purpose of this research it was decided to define Lean in a wider context i.e. good practice of process/ operations improvement that has allowed reduction of waste, improvement of flow and better concept of customer and process view. Therefore, other approaches were also considered in the literature review including business process re-engineering, six sigma and just in time in order to identify any relevant writings which may help in considering the implementation of Lean in the public sector.

)BPRA1.2.1 Business Process Re-engineering (

Business Process Re-engineering ( BPR) aims to organise people, materials, energy, equipment and procedures into specific work activities. Case studies of a public sector service organisation implementing BPR focus on the practicalities of implementation and problems due to political and people issues (5). There has been a study of BPR within UK hospitals, which examines a corporate change programme from a knowledge perspective (35). In health care doctors still control major process from admittance to discharge, while management plays a facilitative role. BPR was extended to four core processes of emergency entry, patient stay, patient visit and clinical support services. This generated new knowledge about the need to adapt and customise redesign methods to suit clinical contexts and communities within the hospital. The implementation of BPR was tailored to clinical situations, which meant that it could not be implemented in a mechanised fashion. This further led to the lead being given to managers for the implementation of the BPR programme. The approach proved to be inadequate and the infrastructure for external change agents was disbanded. It was found that managers could not necessarily direct a change in a clinical domain (35).

Another study reported on a BPR attempt where the need for change arose out of low customer satisfaction due to inefficient processes clogging up the supply chain. However, the technical, financial and political restraints led to only a hybrid version of the old and new system being implemented. Although internal people were used to drive the redesign these people still had a vested interest in preserving as much of the status quo as possible and suggested modifications were conservative. The main problems associated with BPR for this project were then concluded to be (5):

• Effecting culture change when staff felt threatened by redundancy.
• Drawback of the team approach - can a specialist really do the work of a generalist.
• Power in relations between management and employees.
• Role of management consultants - different techniques branded and accusations of oversimplification as a sales pitch.

Other research has stated that the critical factors in process re-design projects are (15):

• The redesign must address 6 "depth levers" - roles and responsibilities, measurement and incentives, organisational structure, information technology, shared values and skills.
• Need to restructure all the organisational elements from layout of offices to skills required.
• Process improvement can only produce lasting results if senior executives invest their time and energy.
• Won't get level of return if the processes are too narrow and only 1 or 2 depth levellers are changed.
• Success will only happen if true cost savings have breadth and depth.

Therefore, a study of a number of companies concluded that successful redesign would only be achieved if an organisation (15):

• Set an aggressive performance target
• Commit 20-50% of CEO time to the project
• Conduct a comprehensive review of customer needs
• Assign an additional senior executive to be responsible for implementation
• Conduct a comprehensive pilot of the new design

The same study also highlighted the following ways to fail (15):

• Assign average performers
• Measure only the plan
• Settle for the status quo
• Overlook communication

)JITA1.2.2 Just In Time (

The Just In Time ( JIT) philosophy adopts a make when needed approach in order to reduce non-value added waste. The advantages of JIT are (69):

• Potential for increasing organisational efficiency and effectiveness and eliminating waste in production and material.
• Improving communication internally within the organisation and externally.
• Potential for reducing purchasing costs, a major cost to many organisations.
• Reducing lead-time, decreasing throughput time, improving production quality, increasing productivity and enhancing customer responsiveness.
• Fostering organisational discipline and managerial involvement.
• Integrating the different functional areas of the organisation.

Studies looking at the application of JIT in the administrative functions of an organisation, e.g. billing, order taking, financial tasks like accounting (4). One of the techniques used is "under capacity scheduling", whereby any employee performing an administrative task should have time to identify the problems in the task and provide a solution to improve productivity. Solutions include:

• Layout and merger of operations so that interrelated activities are close together.
• Standardisation of tasks and training of workers to increase flexibility and efficiency.
• Worker centred quality control to trace task performance to an individual.
• Finding factors that cause slowdown, by reducing workers involved in doing the tasks.
• Cellular organisation and grouping is also considered to increase ease of communication and better delivery of the task.

A1.2.3 Six Sigma

Six Sigma uses the five-step DMAlC (Define, Measure, Analysis, Improve and Control) process to identify, define, characterise and resolve tough business problems by applying a combination of statistical thinking and Lean thinking (58).

• Define Step: Management works with its Six Sigma specialists to identify the business issue and define a significant project for close scrutiny.
• Measure Step: Determines the baseline business performance for the process, identifies all potential failure modes, characterises the measurement capability within the process and also identifies both its current performance capability as well as the potential for improvement in both statistical and financial terms.
• Analysis Step: Identifies the variables that contribute the most variation to the undesirable outcome of the process.
• Improve Step: Optimises process performance by defining the set operating conditions for best performance and testing these factors to establish the degree of performance improvement that is available on a consistent basis.
• Control Step: Prepares the process for routine operation at thee new level of performance and integrates the improvements in the business control systems.

By process mapping the value stream of the process, Six Sigma specialists identify unnecessary process complexity, eliminate unnecessary work, and minimize the process activities that do not add value. Lean production tools such are integrated with the quality tools used to produce a combined "Lean sigma" perspective of process performance that identifies both the Lean improvement opportunities as well as the statistically based improvement opportunities (58).

Studies have shown that a significant number of organisations applying six sigma have not been in manufacturing, and have provided case studies in which six sigma was used to reduce student scheduling (timetabling) errors (2).

Six Sigma is being applied now to various sectors with government and healthcare applications joining manufacturing, financial, information technology and other sectors. In many instances the supporters of this approach (12):

• Believe that existing culture and systems (for example, Lean, ISO 9000 and continuous improvement) are sufficient to meet their needs.
• Do not understand Six Sigma or have the internal capability to assess its potential value to them.
• Regard the costs of hiring, training and retaining Six Sigma talent as prohibitive in view of what they believe the returns will be.
• Are in services and do not see the applicability of Six Sigma since they don't make things.
• Fear change for any of a variety of reasons, some of which may be valid.

Six Sigma supports report on high returns on investment, defect reduction or elimination, cycle time reduction, waste reduction, market share gain, significant product or process improvement or innovation, and increased customer satisfaction (12). However at the root of Six Sigma failures one commonly finds poorly scoped projects, poor project management or use of Six Sigma when another method might have proved a better match (12).

A1.3 Agile Manufacturing

Agile Manufacturing is presented not as a component of Lean but for completeness as often Lean and Agile are presented in documents and writing together i.e. 'Lean and Agile'. However, it is important to realise that Agile is not the same as Lean as it is often considered to be appropriate for high variety, low volume situations whereas Lean lends itself to high volume and low variety. Agile can be seen as the principles of Lean combined with Flexible Manufacturing Systems ( FMS) to provide low-cost manufacturing for all volumes through application of processes, techniques and people. There are comparisons with Lean through considering the elements of agile (54):

• The product; agile considers optimising current processes but has flexibility to respond to other developments whereas Lean only responds to the first.
• The process; agile focuses on the reduction or elimination of variables.
• The people; important in both.
• Global manufacturing; important for both.

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