Lean in The Digital Age: It's Still All About People
|Author: Laurence Clements, AKA Continuous Improvement Specialist|
Date: Tuesday, November 13th, 2018
In today’s world, we are tightly focused on change. We are compelled by competition and by our own need to contribute, to make step change or continuous improvements in everything we do. Faster, cheaper, better. That’s the mantra of efficiency that drives improvement. We even have gone to digitize many of the continuous improvement tools that have been the backbone of the lean movement. While this is a good thing, it can lead to looking for short term solutions to long term issues.
If we focus on the mechanical and analytical tools alone, we miss a huge source of innovation. The people who live within a process know more about what is working and what is not working than any engineer with a spread sheet or value stream map developed on a computer. That’s why the Toyota Management System included, “Respect for People” as one of their pillars. Many Lean thought leaders recognized this and included the lack of respect for people as the eighth waste in the Muda elements.
When we try to compress the cycle of change in a continuous improvement or lean implementation beyond the capacity of the people to absorb that change, we set the stage for resistance. People are hard wired to resist change. It goes back to basic survival instinct. The rate of acceptance to change is also hard wired but programable. When we include the people being affected by the change in the change process, soliciting and acting on their ideas even if it results in some sub optimization of the efficiency of the new process, we win because we have reduced the resistance response.
Case in point. This case illustrates the use of Lean Manufacturing Kaizen in an office environment; group problem solving, value stream mapping and standardized work, integrated into a people intense continuous improvement process.
Several years ago, I was asked to develop some work cells for a mortgage processing and underwriting company. These are the people that ask for your life’s history before deciding how much of a mortgage they will approve. It was a very document heavy and time-consuming process as you might expect. My consulting team established a Kaizen workshop where we went through a value stream analysis, using simple brown paper flow charting on the conference room wall, drawing heavily on members of the company rank and file for input and evaluation of ideas. We went out on the office floor and took some simple time and task studies to develop a taktime chart. Two critical findings came out. First, new applications rarely had all the documents attached when first submitted. This required the underwriter to make additional requests for documents, causing delays in the processing. Second, even though there were about five people involved in the initial underwriting process, the underwriter job was severely over tasked because they insisted on personally rereading and verifying all documents in an application each time additional documents were submitted. Most underwriters were spending more time on rework applications than on new ones. Their task bar was almost double the taktime.
We asked a simple question, is there a possibility of creating a checklist of required documents that can be given to the mortgage originator and used as a go no go signal to filter out incomplete applications before they entered the system? From way in the back came the answer. We have them. Our clients just don’t use them, and we don’t enforce it because the underwriter reviews every document anyway. The sound of the circular logic was deafening. Once someone actually stated the issue out loud, it became obvious to everyone that by enforcing the existing checklist process, the underwriter workload would be greatly reduced.
The team developed a communications workshop for external mortgage originators to re educate them on the checklist process, while training the underwriter team receptionist to screen all new applications for incomplete packages, and, for resubmitted packages, check to confirm that the underwriters’ specific requests had been addressed, using the underwriters log, before passing them on. These simple changes more than doubled the daily throughput of applications.
Because experienced underwriters were intimately involved in the change process, they were willing, some not so easily, to stop doing 100% inspection of documents on resubmitted applications and increased the detail and accuracy of their log entries to better communicate their needs.
In order to cement the new process behaviors, the team established a standardized work structure along with a visual management control board to measure results. With several of these work cells in operation, the control boards allowed management to see progress in each cell, simply by walking through the department.
The team used basic lean tools, a manual value stream analysis, simple time studies and a cursory demand analysis to develop a taktime. This provided the process users with enough visibility of the process to identify the bottlenecks and come up with solutions. By their participation, they built ownership of the process which reduced resistance to implementation. This is not to say that lean process issues can be solved so easily, but before you invest significant time and resources to mechanically go through the textbook steps, try asking the people what they think is the problem.
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