A Healthy Corporate Lifestyle Arno van Berkum Luncheon - - PowerPoint PPT Presentation

Lean Principles and Practices:

A Healthy Corporate Lifestyle

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Arno van Berkum Luncheon Presentation; September 25, 2014 The Institute of Internal Audit, Calgary

A Little Bit About Myself…

• Certified Lean Six Sigma (Master) Black Belt; 11+ years of hands-on and coaching

experience

• Worked in variety of industries - Oil & Gas, Utilities, Healthcare, Manufacturing,

Consumer Electronics

• …and different parts of the world - North America, Europe and Asia
• Married to an auditor, 2 sons

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Our Conversation Today

• Lean is an inherently simple, yet powerful methodology
• Good habits make for healthy organizations
• You already know some of this stuff!

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Lean Methodology Was Born Out Of Necessity

• Ford’s first attempt
• Toyota’s rise from

the ashes: do more with less

• Adoption by

automotive and

• thers; now called

Lean

Shorter Cycle Time Improves Capital Turns

Cycle Time

Capital In Capital Out

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Shorten Cycle Time By Reducing Waste

Value added activities are typically a small percentage (5% to 20%) of process cycle time. Traditional approaches tend to focus on accelerating value add; Lean on reducing waste.

Wait in line Print Boarding Pass Wait in line Correct Spelling error Check luggage Security clearance Walk to gate

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Wait in line Board plane

Travel Example:

To Eliminate Waste We Have To First Identify Value

VALUE

Who are your customers and what do they value?

VALUE STREAM

Map your end-to-end process, identifying which activities add value to the customer, and which do not

FLOW

Move towards continuous, single piece flow

PULL

Provide solutions/ information/ services only when it is required by the customer

PERFECTION

Create visual performance measures and drive continuous improvement

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Waste – Activities that Customers Don’t Want To Pay For

Waste identification requires different perspective on what good looks like, what’s feasible.

Oil that does not meet refinery specification Oil that exceeds refinery specification (e.g. water content) Too many parts ordered, equipment idle Moving parts between warehouses Producing in excess of customer demand Parts not available Moving back and forth between work place and tool shed

7+1 Wastes

Where Does Waste Come From?

• Processes are complex
• Complexity leads to errors
• Errors lead to increased controls (more complexity)
• Fighting with internal processes at expense of focus on customer

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The Benefits Of Lean

Customer

Improved responsiveness Improved quality Optimized cost

Culture

Empowerment Continuous improvement Customer focus

People

More creativity Less frustration More autonomy

Business

Increased competitiveness Higher staff engagement &

productivity

Improved agility

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Project Example – Reduce Wellhead Facility Cycle Time

Key Performance Indicator Baseline Target # Engineering designs Many 1 Engineering effort (hours) 1,200 None provided Engineering cycle time (days) 275 None provided Construction cycle time (days) 7 4

The trigger – “there has to be a better way”

Step 1 – Standardize Engineering Design

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Kaizen I Standardize design based on design variables; define MOC process

Marked up P&ID

Asset 1 Asset 2 Asset 3

Step 2 – Streamline Process

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Kaizen II Pre-fabricating modules prior to construction, concurrent execution

Current State value stream map Future state: time-phased construction schedule

Step 3 – Implement, Monitor and Enhance New Process

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New piling depth guideline Integrate with Completions

Results tracked and communicated via Scorecard

Improve scheduling process

Root-causes, solutions identified using tools such as Pareto analysis

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The bottom line - $1.9 MM Cost Savings

Key Performance Indicator Baseline Target After # Engineering designs Many 1 1 Engineering effort (hours) 1,200 None provided 500 Engineering cycle time (days) 275 None provided 35 Construction cycle time (days) 7 4 4

Additional benefits are increased flexibility, higher process awareness and less frustration.

Lean Tools & Techniques Alone Are Not Enough

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It is easier to change processes than mindsets and habits.

Diet Analogy - Rapid Weight Loss, Then Rebounding

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Focus on short term results Underlying beliefs don’t change Incentives don’t change Old habits reappear Inefficiencies creep back in

Lifestyle Change – New Thinking, Healthy Habits

RESPECT EVERY INDIVIDUAL - Cultural Enablers

Involve everyone Ensure a safe environment Develop people Build teamwork

SCIENTIFIC METHOD TO SEEK PERFECTION - Continuous Improvement

Stabilize, standardize process Eliminate waste Fact-based decision making Integrate improvement with work

CLEAR PURPOSE - Enterprise Alignment

Align Strategy Align Systems (Mgt, Financial, HE, IT) Align Performance

CUSTOMER VALUE Results

True North Metrics Leadership Behaviors Focus On The Problems

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Traditional Leadership – Hierarchy Rules

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Autocratic All knowing Management By Objectives Impatient Blaming Controlling

Lean Leadership – Questions Are The Answer

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Humility & Curiosity Facilitator Focus on what and how Student Coach Communicator Perseverance

Closing Thoughts

Lean methodology and -tool set is powerful and relatively easy to grasp Lasting results require a different perspective on business; and new habits Deployed correctly, Lean will drive long term financial health, and a more positive work environment

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Thank you! Questions?

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Our Conversation Does Not Have To Stop Here Personal coordinates:

• arno_vb@yahoo.com
• ca.linkedin.com/in/arnovanberkum

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