Instructor Profile – Lean Enterprise and Lean Six Sigma – Mike Osterling

Mike OsterlingQ: Why do a company’s non-manufacturing departments need lean?

The interesting thing is that the root of lean is in manufacturing, but over the years we’ve learned that the majority of opportunities – between 50 to 90 percent – for process improvement, cost reduction, customer service improvement, actually reside in the support areas.

The manufacturing pieces are just one little step in the customer fulfillment process or value stream. In manufacturing organizations we figured out that we need to shift the focus, not ignore the operations piece or manufacturing piece, but we need to also include the administration processes. Through that transition, we’ve learned that if we are in a product design environment, HR department, or  finance or accounting function, that there are opportunities to improve service to external and internal customers.

Q: What are the key program takeaways?

The Lean Enterprise Certification program comprises 12 or 13 modules. Some of them are high-level management perspectives on how to change the way we think, we manage, and we organize. Other modules get into the dirty details of how we apply specific methodologies, whether it’s cellular manufacturing or pull-systems or application of lean concepts and office or administration processes.

Q: Can you give me an example of lean working in an office environment?

Recent class projects have revolved around things like human resources. For example, what are the logistics behind getting a new hire on board? We had a team that looked at the event of hiring a person and all the resources they need to complete the process from beginning to end. What are all the steps and how long does it take to get all of that accomplished? They started out big picture – the identification of needs until the resource is in place. During the course of the program they narrow the scope, and talk about execution. We examine what’s really going on inside a process. They honed in on from the time the new hire said, “I’m ready, I accept the offer” until all of the resources are in place like computer, account, desk, and office space. We ask the question: How long did that take? It was eye opening. It took 27 days from the point of wanting someone to the person starting the job.

Twenty-seven workdays, that’s five and a half weeks. The team examined the issues in the process. They were able to go from five and half weeks to five days. What does that mean to the company? That means that the company’s new employee was able to start the job a month earlier.

Another team examined the same process with new sales representative hires. They reviewed how long it took to take a new sales rep to have all the information they need in order to go out and make a sales call. The results were similar – they went from 30 days to 12 days.

Q: What are the first steps of lean, other than education?

That’s a real interesting question and as a consultant I say it depends. It depends on the organization. There is no cookie cutter approach, it’s situational. Five different things need to be in place in order to transform. Those five things are purpose or vision, skills, a plan, resources, and motivation.

Q: Take me on a journey from the first day to the last day of the program.

We try to apply the concept of lean through the act of doing – from beginning to end.

We encourage students to come to class with a problem. We kickoff the program with a lean overview, introduce the concepts, and show students simulations and exercises. We illustrate the overall impact and transformation that lean creates.

The next two classes are very hands-on. We work on value stream mapping. We do that on-site at a host facility. We have actual processes where we break the class into teams and they create currency value stream maps for the host site’s processes. Then the second half of the value stream mapping piece – or day two – we design a future state for the processes. Interwoven are expectations and homework, where students can start applying the same concepts in their work environment, and in their own project.

Follow-up classes are a mix of change management. We introduce modules on change management, and on applying concepts in administrative and manufacturing environments. We learn a variety of tools and applications and learn how to identify problems and apply these tools and applications to close gaps.

Q: What are the misconceptions of lean?

One of the biggest misconceptions or misapplications of lean is cost-cutting initiatives and cost reductions.  The real purpose of lean is customer focus – service and value philosophy. We only do things that need to be done in order to service the customer and responsibly manage the business. Lean isn’t about getting rid of employees. Lean is about creating lean processes and cutting out the process fat.

Q: Is lean static?

By definition, lean needs employee involvement – those who understand the work and can be a part of the improvement process. People talk about continuous improvement, but this is the only methodology that is really focused on ingraining continuous improvement into the DNA of the organization. Lean creates problem solvers, so no matter how big or how small a problem is, lean-trained employees will look at ways to address the problem, make the job easier, and find ways to better satisfy customer needs.

Q: Is there anything that I didn’t ask that you think is important to know?

Yes, we need to focus on the execution and application of lean in the workplace. One of the course requirements is that people apply lean concepts in their workplace. The final class is a presentation by teams. They showcase the impact of lean changes that they implemented.  We hear things like, “We cut service times of our customers by 50 percent, or We freed up space and capacity.” We focus on measuring bottom-line impact.

Q: Why do you think that companies fail in lean?

I would say one of the biggest challenges we have is from a constancy of purpose, from a leadership perspective. A company needs to truly get the leadership team engaged in lean and the transformations. Many times, the leadership wants everyone else to change, but from their perspective they are not ready to change. That’s one of the biggest challenges.