Applying LEAN/Continuous Improvement Principles to Cash Management. Synthia Seefried, CTP Senior Cash Manager Kimberly-Clark Corporation

Transcription

1 Applying LEAN/Continuous Improvement Principles to Cash Management Synthia Seefried, CTP Senior Cash Manager Kimberly-Clark Corporation September 17, 2014

2 Agenda History and Overview of LEAN Examples of how time was reduced for Cash Management

3 History of LEAN Principles began as early as the 1500s when Venetian Arsenal had floating assembly lines for their boat production 1700s-1930: Concept of interchangeable parts, automatic production of parts, Ford s moving assembly line, mass production 1937: Toyota Motor Company: Just in Time delivery of parts 1960 s: Toyota creates a management system with a new approach to problem solving, leadership, supplier collaboration, product and process development and customer support 1987: LEAN proposed by MIT researcher as the label for the combination of production, product development, supplier collaboration, customer support, quality, and management methods pioneered by Toyota 1980s-2000s: Many books written. Examples: The Machine that Changed the World, Lean Thinking, Learning to See and Lean Solutions Excerpts from timeline on Lean Enterprise Institute website

4 What is Lean? Lean focuses on eliminating waste in processes Not only in Manufacturing settings! Definitions of Waste: Anything that the customer is not prepared to pay for Anything that does not add value for the customer Lean is about expanding capacity by reducing waste and shortening cycle times Removal of non-value added activity Lean is about understanding what is important to the customer Lean is about respecting people

5 Value add vs. non-value added activity

6 Eliminate Waste (Muda) Improve Flow! 8 Types of Waste Business Process Waste Motion Waiting Conveyance Correction Processing Overproduction Walking, routing information, searching for files Delays, authorizations, decisions, Computer system issues Information and task hand-offs, manual workflows Defects, re-work, incomplete data Unnecessary steps, reports with too much data, complicated approvals Unnecessary reports and information, back-ups in multiple departments Inventory A task waiting to be started (WIP), Piles of paper, e- mails Knowledge Same routine mistakes, not soliciting ideas from those that do the work, non-value added activities

7 8 types of Waste (Muda) Value-adding: 5% Knowledge Motion Inventory Waiting Over-production Conveyance Over processing Correction Waste: 95% 7

8 Waste Identification and Elimination

9 Key Learning Points of Waste Anything that the customer is not willing to pay for Typically less than 5% of processes to get a product to the customer are value-added Of the 8 types of process waste, over production is considered to be the worst as it causes other types of waste Focus on eliminating non-value added activities and limiting those which are necessary through standardization

10 To Eliminate Waste - First Expose the Problems

11 Problem Complexity/Scope Common Problem Solving Tools Months, use A3 or Lean/Six Sigma (DMAIC) Days-Weeks, use Kaizen Event Hours, use SPS and/or Process Map Minutes, use Quick & Easy Board Time to Resolve

12 Cash Management Example Two issues to solve: Needed to find more time to work on projects Needed to issue commercial paper 1 hour earlier Process Mapped the cash management day When to use the Process Mapping tool: This tool can be used at anytime to gain clarity and understanding of your current condition Generally best used when you want to move from your current state to an improved future state

13 Prior Process M-F: 8:15-11:00 then 1:00-2:00 (3 hours, 45 minutes) Using 5 days per week (18 hrs, 45 minutes per week) and 52 weeks = 975 hours per year

14 Changes Start process upon arrival at 8 am Automate more of the prior day recon (reduce time by 15 min) Only obtain CP rates when needed Worked with bank to combine SCF report with log-in for Disbursements (reduce log-in time) Eliminate cash report on Mon-Thurs (save 30 min per day, 4 days per week) Eliminate walk-around time looking for releaser (save 5 min = and stress reduction ) Scheduled releasers reduces wait time Eliminate 9:30 bank file (cost savings) as not needed Prior to this process mapping time, also eliminated secondary review of cash position

15 New Process M-Th: 8:00-10:00 then 12:30-1:00 (Reduced from 3.75 to 2.5 hours) F: 8:00-10:00 then 12:30-1:30 (Reduced from 3.75 to 3 hours) Total: 13 hours per week (found 5.75 hours per week for other activities) Total: 676 hours per year (300 hours per year saved!)

16 Typical non-value activities identified with Process Mapping From

17 Plan, Do, Check, Adjust Process for Continuous Improvement PDCA Plan Develop goal, means and measures Our hypothesis is Do Deploy and implement the plan Start with a pilot if possible Check/ monitor the plan Confirm results Are measures being met? Adjust/Act If you succeeded, standardize If not, start again or add to it PDCA Process

18 Importance of making time to review processes!

19 Questions?