Lean for Internal Audit Overview

Transcription

1 Lean for Internal Audit Overview November 26, 215 Paul Choquette Lean Six Sigma Black Belt, CIA, CCSA Craig Szelestowski MBA, Lean Black Belt Copyright of this material is owned by Lean Agility Inc. Not for duplication or distribution without prior written consent.

2 LEAN less inventory NOT less people 2

3 The Challenge With fewer resources : you must still deliver as much, and maybe more to your clients faster and better while increasing staff engagement 3

4 4 94 days 5 days

5 Retirements Review Improvement plan over three weeks 45 Retirements backlog reduction plan New process start date /1/213 16/1/213 17/1/213 18/1/213 21/1/213 22/1/213 23/1/213 24/1/213 25/1/213 28/1/213 29/1/213 3/1/213 31/1/213 1/2/213 4/2/213 5/2/213 6/2/213 7/2/213 8/2/213 11/2/213 12/2/213 13/2/213 14/2/213 15/2/213 18/2/213 19/2/213 2/2/213 21/2/213 22/2/213 18/4/213 Cases in queue Planned reduction In queue actual Stabilization (remaining cases too far in the future to process) Date

6 Reduce time to staff a position by 5% Reduce claims and payments time: days Waiting time for a hearing: two years four months. Top 35 companies to work for in Canada list Report on Business Magazine 6

7 7 Difficult to believe until you see how.

8 What is Lean? A way of thinking + habits leading to speed, flow, effectiveness and efficiency Find ways to stop doing things that are not necessary in the eyes of your Client/end user/key stakeholders. Apply this found capacity to higher value added activities, creating speed and quality without working harder or adding resources. 8

9 Business System People System LEAN Processes that flow; constantly makes problems visible Willing, able, and enabled people who constantly solve these problems 9 Faster, better, more capacity with inspired people

10 Elapsed Time: 9+ % non-value added It takes us three weeks to process a file but the time we spend actually touching it or working on it is only four hours. 1

11 Flow If you took a file, put an imaginary video camera on it and sent it through your process, what would it see? bottlenecks backlogs unnecessary approvals chronic errors missing info unbalanced work last-in, first-out clarifications unnecessary steps too many handoffs waiting waiting waiting 11

12 How backlogs often develop MURA: Unevenness MURI: Overburden MUDA: Waste creates made worse by Defects Overproduction Waiting Not using skills Transport Inventory Motion Excessive Processing 12

13 DOWNTIME THE CLASSIC EIGHT LEAN WASTES 13

14 Defects When something is missing, or must be: corrected, clarified, or adjusted/adapted in order to be used. 14

15 Overproduction When The work is started too early Too much work passed to next step Too much work is taken on 15

16 Waiting When the work flow is stopped to wait for 16

17 Not fully utilizing people When people are not used to their full potential 17

18 Transport When material and information travels further than necessary 18

19 Inventory When work piles up and stops flowing. 19

20 Motion People move more than required to do their work 2

21 Send written questions in advance to referees Correction Demand % Time/ week C&A % 1 Batch wks Total CT 3 mins Inv C PT 15 P/week Inv P evaluation of checks; logistics, references/candidate 2 contact templates, Build CHRBP: check references, Delegated Manager Checks Reference initial screening At eg. appropriate if process the in earlier parallel in done be Can BIZ Touch Time: 2-3 hours/candidate weeks 2-4 Time: Lead References Check % Time/ week Demand Correction 1 Batch C&A % Total days CT C Inv hrs PT P Inv P/week Delegated Manager and Board Follow Up if references not ok mins week Time/ % Demand Correction 1 Batch C&A % Total days 2 CT C Inv hrs 1 PT P Inv P/week OK 9% Create forms and sign Delegated Manager and Board Board, candidates, exams, screening forms, (3X) % Time/ week Demand Correction 1 Batch C&A % Total days CT C Inv hrs 2 PT P Inv P/week Delegated Manager and Board results/report Assessment Compile pools to website interdepartmental and national regional, local, Add % Time/ week Demand Correction 1 Batch C&A % Total days CT C Inv hrs PT P Inv P/week Delegated Manager and Board pool create & pkg results/report Assessment Review posssible pools where on date expiration Eliminate % Time/ week Demand Correction 1 Batch 3 C&A % Total days 1 CT C Inv hrs 1 PT P Inv P/week HR Assistant Letters Results Create % Time/ week Demand Correction 1 Batch 66 C&A % Total wks 1 CT C Inv mins 15 PT P Inv P/week HR Advisor Letters Results Review Correction Demand % Time/ week Batch 1 % C&A 2 CT Total days 1 PT C Inv hrs Inv P/week P CHRBP Manager Delegated out Fill form Fit Right Added Value % Time/ week Demand Correction 1 Batch 5 C&A % Total days 2 CT C Inv mins 3 PT P Inv P/week HR Advisor Form Fit Right Review % Time/ week Demand Correction 1 Batch 5 C&A % Total days CT C Inv mins 5 PT P Inv P/week HR Assistant Employment of Conditions Verify % Time/ week Demand Correction 1 Batch C&A % Total hrs 3 CT C Inv mins 15 PT P Inv P/week Delegated Manager Verbally Candidate Notify % Time/ week Demand Correction 1 Batch C&A % Total hrs 3 CT C Inv mins 5 PT P Inv P/week CHRBP Delegated Manager / Admin Asst Form Clearance Security out Fill % Time/ week Demand Correction 1 Batch 5 C&A % Total days CT C Inv mins 5 PT P Inv P/week HR Assistant Process Languages Official Touch Time HR: 5 minutes Touch Time BIZ: 1-3 minutes clearance, Secret) Security Lead Time: 1 day (existing clearance) 6 months (no existing demand correction Total mins mins Correction Demand % Time/ week C&A % Batch 1 CT 26 wks Total PT mins Inv C P/week Inv P mins mins Security mins (Secret) Clearance Security Conduct week Time/ % Demand Correction 1 Batch C&A % Total days 3 CT C Inv mins PT P Inv P/week Security (Reliability) Clearance Security Conduct appropriate the process if earlier in parallel in done be Can appropriate the process if earlier in parallel in done be Can Correction Demand % Time/ week C&A Batch 1 % hrs Total CT C Inv mins PT P Inv P/week Added? Non-Value clearance; priority first from months 2-3 than more if Occurs Advisor HR Clearance Priority Re-Verify CT:.5 days minutes 2 PT: Officer/Manager WF request for HRSR Issue CT:.5-1 day minutes 5-1 PT: Coordinator Clerk/Admin HRSR Create CT:.5 day minutes 2 PT: Officer Manager / WF changes required) (if make and HRSR Review CT:.5 day PT: 2 minutes covers WMB challenge (meets every 2 weeks); Board Management Regional Review Board Management Regional CT:.5 day minutes 2 PT: Officer or Coordinator WF Signed docs to HR Send % Time/ week Demand Correction 1 Batch C&A % Total days 1 CT C Inv mins 2 PT P Inv P/week CHRBP HR Assistant Consideration of Notice Create NO COMPLAINTS Correction Demand % Time/ week C&A % Batch 1 CT wks Total PT mins Inv C P/week Inv P CHRBP Delegated Manager Discussion Informal demand correction Total mins mins mins mins mins week Time/ % Demand Correction 1 Batch 75 C&A % Total wks 1 CT C Inv mins 5 PT P Inv P/week CHRBP HR Assistant Appointment of Notice Create % Time/ week Demand Correction 1 Batch 75 C&A % Total days 1 CT C Inv mins 2 PT P Inv P/week HR Assistant Offer of Letter Prepare % Time/ week Demand Correction 1 Batch 75 C&A % Total days 1 CT C Inv mins 1 PT P Inv P/week HR Advisor Offer of Letter Review % Time/ week Demand Correction 1 Batch 2 C&A % Total wks 2 CT C Inv mins 3 PT P Inv P/week Delegated Manager Offer of Letter Verify % Time/ week Demand Correction 1 Batch C&A % Total wks 1 CT C Inv mins PT P Inv P/week HR Assistant / Coordinator employee to letter Send Maximum Lead Time: 67 weeks (7 months) Touch Time: 19 days FUTURE STATE Minimum Lead Time: 21 weeks (5 months) % Time/ week Demand Correction 1 Batch C&A % Total wks 1 CT C Inv mins PT P Inv P/week CHRBP Candidate offer Candidate signs of letter Added Value % Time/ week Demand Correction 1 Batch 8 C&A % Total wks 1 CT C Inv mins PT P Inv P/week CHRBP HR Assistant PeopleSoft into letter signed Enter Excessive Processing When the work is processed more than required Requestor 1- Create a file 2- Add Line A Department of Addition (DoA) Current State Value Stream Map (VSM) 3- Add Line B and Grand Total 4- Verify File Requestor 5- Review & Approve JOB TITLE File Creator JOB TITLE Addition A Officers JOB TITLE Addition B Officers JOB TITLE Supervisor JOB TITLE Manager Process Description Create blue file with Post-It notes Process Description Add up the first line, sign Process Description Add up the second line, subtotal, grand total, sign Process Description Verify accuracy of file, sign Process Description Verify accuracy of file, sign Batch: 3 Piece(s) Batch: 3 Piece(s) Batch: 3 Piece(s) Batch: 3 Piece(s) Batch: 3 Piece(s) P/T: 1 seconds P/T: 2 seconds P/T: 3 seconds P/T: 1 seconds P/T: 15 seconds CT: 2 minutes CT: 2 minutes CT: 72 seconds CT: 5 minutes CT: 29 seconds C&A: 1 % C&A: 1 % C&A: 99 % C&A: 6 % C&A: 5 % Inv/WIP 52 Piece(s) Inv/WIP 5 Piece(s) Inv/WIP 6 Piece(s) Inv/WIP 31 Piece(s) Inv/WIP 6 Piece(s) NOT OK 1% COMPLAINTS 21

22 Tools: Value Stream Mapping 22

23 Sustaining: Visual Management 23

24 Sustaining: Stand-Up Meetings 24

25 Typical Typical Challenges Challenges to Implementing Lean Government 1% technical 9% human 1% technical 9% human 25

26 Autonomy Mastery Purpose 27

27 How does Lean apply to Internal Audit work? 28

28 Specific Lean Issues in IA Too much work taken on lowers productivity and quality Audit plan not executed consistently inconsistent data needs rework or recollection Documents: Audit Plan and Audit Reporting Too many edits, takes too long and too much effort to get to final version 29

29 Specific Lean Issues in IA TOO MUCH WORK TAKEN ON 3

30 Too much work is taken on When we multi-task*, we get less done. 31 *actually, switch-task

31 Time Yourself Scenario 1 (Focus-Tasking) Write: Multitasking eats time Note how long that took. 32

32 Time Yourself Scenario 2 (Context Switching) Write one letter, then one number, one letter, one number, etc: Multitasking eats time Write down how long that took. 33

33 34

34 Specific Lean Issues in IA AUDIT PLAN NOT EXECUTED CONSISTENTLY INCONSISTENT DATA NEEDS REWORK OR RE-COLLECTION 35

35 Poka Yoke Error Proofing Visual warning Predictive Preventive 36

36 Sustaining: Stand-Up Meetings 37

37 Repeatability and Reproducibility Gage R&R Individual accuracy Assessment Agreement Appraiser # Inspected # Matched Percent (%) 95.% CI Sally ( 3, 16.5) Joe ( 8.6, 34) Betty 5 1 (.1, 6) Bob 5 5 ( 3, 28) Sue ( 2, 19.2) David ( 11, 38.2) # Matched: Appraiser's assessment across trials agrees with standard. Repeatability Assessment Agreement Appraiser # Inspected # Matched Percent (%) 95.% CI Sally ( 35.5, 65) Joe ( 53, 8.5) Betty (, 58.7) Bob ( 43, 7.) Sue ( 35.5, 65) David ( 57.5, 88) # Matched: Appraiser agrees with him/herself across trials. 38

38 Gage R&R (cont d) Reproducibility Assessment Agreement # Inspected # Matched Percent (%) 95.% CI 5. (., 5.8) # Matched: All appraisers' assessments agree with each other. Overall accuracy Decisions routinely made using this data as a base % accuracy! Assessment Agreement # Inspected # Matched Percent (%) 95.% CI 5. (., 5.8) # Matched: All appraisers' assessments agree with standard. 39

39 Specific Lean Issues in IA AUDIT PLAN & REPORTING TAKES TOO LONG, TOO MUCH EFFORT 4

40 Fall Creation of Spring project update (intranet article) ADM ADM EA DM DM EA Two-page intranet article Article approved Handoffs 97 Lead Time Effort Time Organizational Learning 9 months >1 hours? Project DG Project DG EA DG Comms CIO CFO CHRO COO Project Director Project Liaison Project Manager Comms. Liaison Article posted on Intranet Subject Matter Expert Subject Matter Expert Subject Matter Expert Subject Matter Expert 41 Subject Matter Expert

41 Preventable work / 8 Lean wastes Unclear voice of client Waterfall Development Issues in document creation work Too much work in progress Workflow is invisible Many review loops 42

42 Lean for Internal Audit SUMMARY 43

43 Summary Not a project a business approach and tools, create habits Applies equally to your client s work as well as IA work Makes Internal Auditors more effective and delivers better results to clients 44

44 Lean Internal Audit Yellow Belt Training Ottawa, Feb , 216 To register: or leanagility.com Craig Szelestowski (613) Paul Choquette (819)