The Principles of the Lean Business System: #4 Pull. Lean in the 21 st Century Series Professor Peter Hines

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1 The Principles of the Lean Business System: #4 Pull Lean in the 21 st Century Series Professor Peter Hines

2 Our Webinar Welcome Webinar will last about 1 hour We will invite you to complete a few Polls Q&A session Lean in the 21 st Century

3 Welcome! Frederick Taylor invented the business system used by organizations throughout the 20th Century Cost is the focus Scientific Management System Functionally organized by expertise Built for internal efficiency Not fit for the global, competitive environment of the 21 st century Relies on traditional management to be effective Objective is to minimize the time it takes to do value added processes 90% of problems in business are caused by management, 10% by the workman. F. W. Taylor, 1912 Peter Hines has invented a business system of the 21 st Century People are the focus Value Management System Organized by value delivered Built for productivity in an extended enterprise Fit for the global, competitive environment of the 21 st century Relies on leadership disposition and language to be effective Objective is to reduce or eliminate non-value added activities Professor Peter Hines Co-founder Lean Enterprise Research Centre, Cardiff University Chairman, S A Partners Adjunct Professor, University of South Australia

4 How we see creating a 21 st century business system Research conducted by Professor Peter Hines identified 5 key elements of success:- Link business system to a one to two year strategy through Policy Deployment Dismantle traditional, siloed, functionally-focused business processes Deploy human resources aligned to value to be delivered Develop leadership to be effective in a 21 st century business system space Synchronize business systems with suppliers and customers We encapsulate this in an evolutionary business model rooted in time tested customer, quality and lean thinking The Lean Business Model

5 The Lean Business Model Original source: Professor Peter Hines Benchmarking Toyota s Supply Chain: Japan vs U.K. Long Range Planning, February, Volume 31, Number 6, pp , 1998, ISSN

6 The Principles

7 Poll #1 Who leads your continuous improvement effort (please pick one): Managing Director/CEO Director/Vice President of Operations Director/Vice President of Lean Manager Level Other

8 Pull 1. Pull based delivery? 2. Pull based improvement 3. Pull based training 4. Pull based people process

9 Pull Based Delivery?

10 Real Demand What is real demand Purple Micra Failure Demand

11 Pull Based Delivery? Demand Variability Variability Stranger High Variety/Complexity Avoid? Stock? Repeater Medium Variety/Complexity Make To Order Volume Volume Adapted from: Fisher, Adapted 1997 from: Fisher, 1997 Runner Low Variability/ Complexity Kanban

12 Types of Demand Repeater :- Ongoing Demand More Difficult to Predict Medium Inventory Risk Items Runner :- Regular, Predictable Ongoing Demand Low Inventory Risk Items Stranger :- No Ability to Predict Ongoing Demand High Inventory Risk Items

13 Poll #2 What type of demand do you have? Mostly Runners Mostly Repeaters Mostly Strangers Quite a variety of demand types

14 Pull Based Improvement

Management Process for Business Improvement Many

Targets Design & Plan Project Crisis in the

Improvement Implement Project Top-Down, Business

15 Management Process for Business Improvement Many influences in the environment Strategic Choices Targets Design & Plan Project Crisis in the environment Adjust plan or targets Discontinuous Improvement Implement Project Top-Down, Business led Improvement Project Management Process Check impact on performance

16 Continuous Improvement - stability Many small problems Problem detected at source Test for stability and reset Real time problem solving Continuous Improvement Make changes Check impact on performance

17 Continuous Improvement - stability Many influences in the environment Deployed Targets Bottom-up, Team led Day-to-day Improvement Process Problem detected at source Test for stability and reset Many small problems Real time problem solving Continuous Improvement Make changes Check impact on performance

18 The CI learning system Strategic Choices Targets Discontinuous Improvement Faster, better change Deployed Targets Seamlessly integrate Feedback to strategy Continuous Improvement Redesign processes Continuous Improvement Greater rate of improvement

Operations Cockpit Sales Cockpit Product Development Cockpit HRM

19 Cascading the strategy & problem solving network DISCONTINUOUS IMPROVEMENT OR DI Business Level Cockpit PROCESS IMPROVEMENT OR PI Operations Cockpit Sales Cockpit Product Development Cockpit HRM Cockpit CONTINUOUS IMPROVEMENT OR CI Marketing Sales (Key Accounts) Customer Service

20 Push or Pull? 20 big projects 3 Projects each Lean Coaches Lean Coaches

21 Poll #3 Is your system of improvement: Mostly push based? Mostly pull based?

22 Pull Based Training

23 Pull Based Training Team: Prince Team Leader: Venkateswaran S Sanctions Level 1/2 Skills Matrix Sanctions Officers Name Rosy John L comments L U U L U Iswarya Mukundagiri Vankeepuram U U U Damodharan Nagarajan I Sinu Bhaskarannair Nirmala Bhavan O O O Omprakash Maruthanayagam L L L L U U U Anoop Sabusenan I I Pramoth Kumar Venkatesh U U U Kumaran Murugesan Pradeep Gandhi Dhanabalan O O O O Manjula Veeraragavan O O O Dhanyan K Uthayanandhan Dinesh Kumar Krishnasamy Karthick Balamurugesan Alwin Tara Singh Anburatnam Nagarajan Srinivasan Suresh Varadarajalu D Arul Prakasam Boopathy Capability to undertake process: Number of Staff Requirement: Number of Staff Gap: Number of Staff Key: Training Need Identified I* Training Completed Can meet Quality & Productivity Standards Able to Coach Others Application of filters Updating Scan-IT Hit review station with L U O Investigating all hits Activities/Skills Proposing Skips Strong PC skills Comprehensive knowledge of systems and processes Investigation capability

24 Pull Based People Process

25 Push or Pull Based People Process Who is the Production Manager / Planner of the HR People Department Process? Who is the customer Line of Manager the people process? Whom Internal is or the Outsourced Supplier? Recruit Induct What Review is the Physical Train Flow? Retain Retire

26 Poll #4 What further activity would you like? Please select one or more answers

27 Further Questions If you would like to discuss anything coming out of the webinar please contact me at: or +44 (0) Please also link up with me at uk.linkedin.com/in/profpeterhines/ Or join me at my Lean Business System LinkedIn group: ?trk=myg_ugrp_ovr See also Kevin Eyre s recent webinar on Lean Culture:

28 European Events Come and join Professor Peter Hines at Aimia Foods, winner of the 2012 BFA Factory of the Year Award. Learn Share Grow Achieve Lean Excellence Event 3-4 th October, Aimia Foods, Haydock, Lancashire Understand how Lean Thinking provides the basis for a profitable, growing and customerfocused business and experience a tour of Aimia Foods to see in action an exemplar lean facility. Qualify for an exclusive 10% discount by entering promotion code LI1013 on the booking form. To find out more or to book your place, follow the link: For further information please contact jo.maniatt@sapartners.com Or visit for our full event schedule

29 Australian events Cardiff University accredited training in Melbourne, Sydney and Brisbane. See more details on: Lean Business System networking Conference Sydney 6 th Sept with Professor Peter Hines and a range of executive lean speakers from Commonwealth Bank, Treasury Wines, Boral and more. See this link for details content/uploads/2012/10/sydney-lean-networking- Conference-6th-September-flyer-and-booking-formcopy.pdf Or Contact our Australian Managing Director Chris Butterworth on chris.butterworth@sapartners.com

The Principles of the Lean Business System: #6 Partnering. Lean in the 21 st Century Series Professor Peter Hines

The Principles of the Lean Business System: #6 Partnering Lean in the 21 st Century Series Professor Peter Hines Our Webinar Welcome Webinar will last about 1 hour We will invite you to complete a few