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Balancing Customer Satisfaction and Productivity

Your staff members complain about having too much work. The proportion of people on short-term sick-leave is consistently above average. And, the turnover rate is disturbingly high. Do these symptoms indicate that you need to increase your staffing? However, the average number of daily transactions processed shows that your staff should be able to easily handle the volume. Comparing takt time and processing time does not lead to any obvious issue. So, what is the problem?

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Banking – A Productivity Gold Mine

When I joined General Electric Capital fifteen years ago, I asked them why they would hire an engineer with no prior banking knowledge. The answer was quite a pleasant surprise: “We have enough people who understand banking. Unfortunately, we do not have those with a process mind-set.”

To assume that banks have changed since then, might be baseless. For me, banking is the real productivity gold mine. Here is a snapshot of some of the questionable activities that banks have been engaging in recently.

Increasing Productivity by Living our Values

On a recent trip to Japan, I took a Shinkansen high- speed train from Kyoto to Tokyo. The train was scheduled to arrive at Tokyo Station at 9.03pm. Since I had made an appointment to meet a good friend after arrival, I asked the train conductor whether we would be on time.

Increasing Productivity by Being on Time.

Punctuality reveals one’s attitude towards the most basic values of integrity, professionalism and respect.

The conductor looked at me, not understanding my question, and said: “We will arrive at 9.03pm.” I thought to myself, yes, I know the schedule. But will we be on time?

He must then have somehow guessed my real meaning. He said: “There is no reason for a delay. We have not had an earthquake or tsunami today. So, we will be on time.”

I had not heard this kind of answer for a while.

 

My professor at a German university where I studied – let’s call him Hofmann – was very strict in many aspects. His style displayed a deeply ingrained set of values. One of them was punctuality. Unless there was a very, very good reason for being late, we had to be on time – always.

Once, I was quite late for a meeting. However, I thought I had a good reason: “My train was late by 40 minutes.”

His reply was, “Okay, you take this train every day, right?”

“Yes, of course,” I replied.

“Was it ever late before?”

“Yes, this happens from time to time,” I answered, thinking that I was off the hook.

His answer: “Then you should have taken this into account and been prepared. Don’t use this excuse again!”

With this management style, we were able to deliver outstanding results. No project was ever late.

Despite this tough regime, Professor Hofmann was known as one of the professors everyone wanted to work with. He was not only able to develop one’s IQ (intelligence quotient) but also took strong care of our EQ (emotional intelligence quotient) as well.

As a result, punctuality is one form of behaviour that I hold very dear to my heart, because it reveals one’s attitude towards the most basic values of integrity, professionalism and respect.

 

Every human relationship starts with basic courtesy.

“Punctuality is the politeness of kings” is a saying coined by King Louis XVIII of France. He was making the point that educated people, and people who aspire to have and try to show a certain status, will fail if they don’t master the most basic of all manners: punctuality. Without punctuality they are just “small men”.

In Singapore, I have had to get familiar with the phrase, “Sorry, I’m late”, uttered by members of all levels of society without hesitation or shame. Often, it comes without any excuse. Only sometimes is it paired with statements such as “heavy traffic on PIE”.

No one is really surprised about the fact that some people are late, or the fact that there is heavy traffic on the Pan-Island Expressway, although both facts really have nothing to do with each other.

It is very likely that there is some heavy traffic on the PIE at certain times. This happens daily.

But heavy traffic is as good an explanation for being late as something like “There are many birds in Changi Village”.

 

So what is the real reason for being late? I think that this is, because we are good in talking about values. But we have forgotten that these values should also form part of daily courtesy and kindness, and not only be put on display on National Day. A good example of the huge gap between theory and practice is when meetings regarding value development or competency deployment cannot start on time because of the late arrival of key players.

Their entrance with a “Sorry, I’m late” can be directly translated into “Sorry, I don’t respect you”. Would you want to say this to your colleagues or friends? Wouldn’t it be more appropriate to show the correct behaviour ourselves before we try to plant this seed in others? This would be good for our credibility as well.

In Singapore, we should live every day the way we deliver great projects: excellent quality, on time.

How much time gets wasted and how much productivity gets squandered every day due to our inability to walk the talk? How about increasing productivity by living our own values?

There are always excuses for not doing things. Can we instead try to find reasons for doing things such as being on time? Our co-workers would thank us for it.

Remember, behaviour is contagious. Is yours worth catching?

 

 

Published on 15 Jul 2013, on AsiaOne, 18 Jul 2013, on Training Buzz, Jul 2015

Eight Workable Strategies for Creating Lean Government

Lean Government. Even to the seasoned Lean practitioner, the idea of a Lean government sounds far-fetched. Governments are traditionally seen as the epitome of bureaucracy, and the guardians of red tape, incomprehensible forms and endless queues. But there are workable Lean strategies for governments seeking to reduce waste and become more efficient. Eight are outlined here.

Perhaps considering the eight ideas can spur government change agents to study Lean literature for potential improvement applications and in the longer run, start a Lean revolution in governments.

lean

The idealised goal of Lean is “one-piece flow,” also known as continuous flow. One-piece flow is achieved when all waste is eliminated from the value stream and all that remains is value-added work from the perspective of customers. In manufacturing, one-piece flow is an ideal and will always be an ideal because of fluctuations in customer demands plus the customer requirements for ever shorter delivery time forces the manufacturer to create partially completed or completed inventories. This type of manufacturing strategy actually creates waste because there is a need for storage and management of storage.

The interesting thing about Lean Government is this that one-piece flow operation is almost achievable here because there is really no requirement for in-process inventories. There is really no such thing as a partially finished job that is not the result of a customer order within government processes.

What would one-piece flow feel like in a typical government value stream? Consider a typical government value stream. It has only four value-added processing steps from the customer’s perspective.

Adding up all the value added processing time, it should take no more than three hours to obtain a reply. Lean government is a possibility.

Most governments and their value streams are not lean. Recall personal experiences trying to obtain a government grant, applying for an international passport, getting a drivers license or applying for a business permit. The typical experience is that is not that it took just three hours. More likely, it took more than a week. Nonetheless, it is possible to make government value streams lean. Here are eight ways:

No. 1 – Synchronisation to Customer Demands

Most government value streams are not designed and synchronised to customer demands. In Lean manufacturing, the concept of Takt time, or beat time, is well understood but within most governments, this concept is unheard of. Takt time is a concept that is used to design work and it measures the pace of customer demand. It is the “available time for production” divided by the “customer demand.” The resulting number tells how fast each process step must operate to obtain one-piece flow.

stopwatch

Here is a government example: Suppose 30 citizens apply for a particular government permit in one working day and each working day consists of seven working hours. The Takt time of this permit application process is 420 (7 x 60) minutes divided by 30 applications, which is equal to 14 minutes. This means that for these 30 applications to be processed, every 14 minutes, one permit must be processed to satisfy the customer demand.

The first permit will take the sum of all processing times to complete. Suppose there are 10 processing steps,  synchronised to Takt at 14 minutes each; then the first permit will take 140 minutes to be completed. If one-piece flow is achieved, the next permit in the queue will leave the line exactly 14 minutes after the first permit and so on. To complete all 30 permits, it will actually take 140 minutes plus 406 (29 x 14) minutes, assuming one-piece flow operations.

To achieve this, the cycle time for each processing step must be 14 minutes or less to meet the demand. If any processing step takes more than 14 minutes, it becomes a bottleneck and work will get stuck at that point. However, if one process step takes two hours (120 minutes), it takes about 9 (120 / 14) staff to cope with the workload assuming these staff members work 100% on only this process – which is very idealistic. In reality, it takes rather 12 to 15 staff to complete this task assuming these staff members are only partially available for this process.

Government value streams are rarely designed around Takt time because the concept does not exist within most governments. One of the prerequisites for Lean Government itself does not exist. Most public sector administrators reject the idea that such a concept translates into their environment. As a result, workforce allocations in government value streams are rarely rationalised around Takt time, resulting in over capacity in some parts of the stream and under capacity in other parts.

The main waste that this produces is work-in-process inventory (WIP) and the most visible manifestation of this is the ever-full in-tray. WIP kills one-piece flow because it disables a processing step from producing to Takt. But WIP build up is inevitable in any government value stream that is not synchronised to Takt. This is the main reason why a three-hour job needs more than a week for processing.

No. 2 – Understand Variations in Customer Demand

Synchronisation to Takt generally requires two things – reducing the processing time of the step and establishing the correct staffing level. Suppose it takes 120 minutes to complete the application process at the government counter. To achieve one-piece flow at a Takt time of 14 minutes (as in the previous example) would require the manning of at least nine counters (120 divided by 14 minutes). This assumes that one customer arrives into the stream every 14 minutes. Reducing the processing time to 90 minutes would allow the manning level to be reduced to seven counters (90 divided by 14 minutes, data analytics).

BalancingOf course, customers do not normally arrive at specific intervals. Most value streams experience significant variation in customer demand throughout the course of any typical workday. When the counter process is not synchronised to fluctuating customer demand, the familiar queue builds up. The typical government response to this problem is to build waiting areas and queue ticketing systems. This wastes not only expensive floor space (which taxpayers pay for) but more importantly it wastes the time of the citizens (customers). In some of the government value streams, this queuing can take up to hours.

This happens because fluctuations in customer demands typically are not monitored and also because government processes generally ask for more information than necessary at this first step, hence lengthening the processing time unnecessarily. If fluctuations in customer demands were monitored, the manning levels can be adjusted to match the requirements. This requires a workforce that is not only multi-skilled but also flexible – which brings up the next problem.

No. 3 – Create Work Cells

Most government value streams are organised around separate departments and functions. For example, to obtain a government approval for a permit, an application form probably has to flow through no less than three separate departments and/or functions prior to approval. The main reason is that people performing a particular type of function are normally grouped together in the same place.

Because of this, in most government setups, there is a type of internal post office system (registry process) that handles this movement of work from one part of the organisation to another. From a Lean perspective, this creates waste of transportation and waiting. In some government processes studied, this registry process makes at most three to four collections and deliveries a workday. Collected WIP is sorted according to destination and delivered at the next allocated time slot. This causes two problems – a waste of time managing the movement of WIP between processes and, more severely, the creation of a natural batch of work that kills the one-piece flow capability of the receiving processing step.

5_5 (2)The solution to this kind of problem is deceptively simple. Why not create a work cell where all the necessary value-adding processing steps and personnel are located together? This cuts out the need for the registry process, which should take out 50 percent of the total processing time and allow for smoother work flow because batching is no longer required. Implementing this kind of solution has proven to be remarkably difficult, largely because of the mindset that says jobs of the same function should be clustered together.

A key feature of Lean work cells is the training of multi-skilled and flexible workers. In a Lean work cell, the goal is to have all workers trained to a level where everyone can perform the job at every workstation. Since everyone can do every job, processes are never left half finished because the right person to do a particular job is not around.

No. 4 – Eliminate Batching Work and Multi-Tasking

Because work within most governments is organised around functions and not around processes, most government officials are required to multi-task. Most government officials, at all levels, participate in more than one value stream. They also have a whole host of other types of work that takes them away from the main value-creating work streams (normally meetings and more meetings). To compensate for this, most government personnel batch their work – often waiting for a minimum number of work items to build-up before working on them.

good workerThis strategy increases their personal efficiency. Obviously it is more efficient to process a batch of similar type of work within a compressed time slot than to process them as they arrive. This is because batching eliminates the need for several set-ups. (It is a common perception that administrative work requires no set-up time. Anyone who has done administrative work knows that this is not true. Every time a particular type of work is to be performed, the processing officer needs at least the time to adjust their mind to that new type of work.)

However, the whole batching problem and the time it takes can easily be eliminated if work is organised around work cells. But, as noted, work cells are not easy to create in governments. A Lean Government would most likely have those.

No. 5 – Enforce First in, First out

In manufacturing, “first in, first out” (FIFO) is the normal rule applied to the processing order of work. If a company does not adhere to FIFO, much variation is added into the total distribution of processing time. For instance, in a last-in-first-out system, the jobs that come in last are processed quickly while the jobs that come in first take much longer to process.

passing waterNormally, in manufacturing value streams, there are FIFO lanes that prevent the FIFO rule from being violated. In government processes, jobs are often delivered into an in-tray. The in-tray creates a natural last-in-first-out effect leading to large overall processing time fluctuations. Large overall processing time fluctuations make the overall process less capable of meeting customer requirements as a whole.

The solution is once again the creation of Lean work cells, where work is pulled from one processing step to the next rather than pushed. If work is always pulled (that is, work is only ordered from the previous processing step when the operator is free), the FIFO rule will always be adhered to. Once again, the move from a push culture towards a pull culture is difficult for most governments. The normal government manager’s mindset is to load people with more work than they can do so as to ensure that they are always occupied.

No. 6 – Implement Standardised Work and Load Levelling

Related to first-in-first-out issue is the lack of understanding and application of standardised work within government value streams. Even in highly repeatable work, it is fairly common to find different government workers performing similar tasks using slightly different methods and hence taking slightly different time. Because work is not standardised, there is no basis for evaluation and improvement. Often, the “best” workers are loaded with more work because they work faster and more efficiently than other workers.
4_7Overall and over time, this encourages government workers to slow their pace. They learn that additional work will be pushed to them once they complete a certain amount of their current workload. Hence, production is paced according what is deemed reasonable by the supervisor and not paced according to customer demands.

No. 7 – Do Today’s Work Today

Most government officials do not believe that work that arrives today can be finished today. They are correct to believe so because the way the work streams are currently set up do not allow work that arrives today to be complete on the same day. Over time, this cultivates a mindset that says, “We can always do it tomorrow.”

Sit UpWhat many governments may not realise is that customer demands remain largely constant from day to day. That is, the number of people applying for a particular permit each day tends to average out. If about 300 apply on Monday, a similar number are like to apply on Tuesday. If the government agency only managed to process 100 out of the 300 applications on Monday, there will be about 500 applications waiting to be processed on Tuesday (200 from previous day). This gives good opportunities for Lean Government.

The accumulation of WIP has the effect of lengthening the expected flow time of the job. When the WIP is only 300, one can reasonably expect the permit to be processed within three days. However, by the end of the month, with WIP levels at 5,900, one can only expect their permit to be processed after 59 days. And the problem continues to grow.

The only way to stop this is to design value streams that can complete what comes in by the same day.

No. 8 – Make the Value Stream Visible

Last but certainly not least, the easiest way toward Lean Governments is to teach government officials value stream mapping. Unlike manufacturing, there is no visible line in government. In fact, most people working in government do not even know they are part of a larger value stream. They think largely in terms of their job and their function.

Discrete DataMaking the value stream visible through value stream mapping exposes non-valued steps, time wasted by transportation and WIP, excessive process variation caused by non-standard work processes and production rules, waste caused by rework, waste caused by excessive checking and more.

When a value stream map is created for their operations, many government officials are surprised by how much time and money is wasted. They are also surprised by how easy it is, once the value stream is visualised, to produce Lean Government value streams.

Seven Habits … – Habit 4: Focus on the Process

When was the last time you reprimanded someone for a job not done perfectly. I guess you can remember easily. And, when did you tell someone that she did an excellent job? If you have issues answering the second question whereas the first one comes to you easily, I suggest you go on reading.

Poka Yokae - Mistake Proof Processes

No one makes mistakes on purpose

So, you have no problem in finding people who are not as good as you are? This is a very common phenomenon amongst us, the managers, that is contributed to many factors.

Factor one: Sometimes, we think the way we do things is the best way and we refuse to accept considering other ways. The bad news is: we may have given up learning. We are not open for suggestions any more. No matter whether we are 30 or 60 years old, the world changes. The day we have given up looking for new developments and accepting some of them, we have started falling behind – at least in our leadership qualities.

Factor two: Often, we find that our team members are not as brilliant as we are. Isn’t it fair then to consider that we may have failed in our staff development responsibilities? And, if we stubbornly conclude they cannot be developed? Wouldn’t this mean, we may have recruited the wrong staff in the first place? And our succession planning must be in a bad shape, too.

Factor three: From time to time, we reprimand people who obviously make mistakes. Fair enough. Still, is there a small, teeny, tiny chance that we have not communicated our expectations clearly? Have we moulded them into policies and procedures so that we don’t need to repeat them every day again and again? Most importantly: if errors happen, our processes allow them to happen, right? Then, our processes are not Poka Yoke.

We don’t have team members who spend their time thinking how they can mess up our organisation and make us unhappy, do we? From time to time, it may look like that but it is usually not the case. Most of them do their best. They most likely try to anticipate the one thing they can do we may finally like – and we prompt with a smile.

The truth is, that our organisation, especially our processes, be it for recruitment, for performance management and for all other business activities are not good enough for delivering what we want. This is basically our responsibility.

Changing the way processes run is easier than trying to engineer our colleagues. Moreover, transforming a “people issue” into a “process problem” puts people at ease.

With Poka Yoke, we would find

Conclusion

No one delivers defective parts, wrong information or even typos in emails intentionally. It is usually our processes that allow and sometimes even enforce mistakes to happen. If we were able to help our staff in improving and simplifying our processes, they would do their job in good quality. Investing some trust usually pays back. Trust me!

The best processes are simple, robust and Poka Yoke.

Productivity Problem: Rework

At least once a month, we “go” shopping grocery – in the convenience of our living room. Logging onto the website of our favourite supermarket is easy, selecting the goods with a click on the mouse supported by predefined shopping lists is very comfortable, payment is done online as well and the merchandise is delivered within the next two or three days. Everything works like a breeze. Nearly everything.

Increase Productivity – The Leadership Challenge

“We need to increase productivity!” What sounds very reasonable on a country scale could be damaging on a company level.

Now, after nearly two years of recession the economy is back on track, i.e. companies of all sectors sell more. This is good news, isn’t it? It brings our productivity to new heights, meeting and even surpassing the levels we had seen before the recession. Stop! This is not really good news. This is expected news. Every company – well managed or not – will be able to show these figures. The question is: have companies used the time of low productivity to expand the productivity potential in preparation for the future?

Increase Productivity? How To…

Productivity measures the ratio of output quantity over input quantity. Increase of productivity means growing the output quantity faster than the input quantity. Output quantity can stand for anything from number of products made over number of customers served to number of donors treated or number of work passes produced. Input is usually summarising all resources needed to do this from raw material over equipment to man hours.
How is productivity increase possible?

Why Six Sigma Black Belts Make Better Leaders

Besides business and functional know-how, a successful leader must have competencies in leading change and improving, designing and managing processes. A Six Sigma program helps prepare leaders by providing on-the-job training through project work.
A recent survey by iSixSigma Magazine of more than 1,300 business professionals whose companies are using Six Sigma revealed that leadership development programs which involve Six Sigma training are six times more likely to be called “highly successful” than those without. Many of these leadership development programs involve a Black Belt track for future leaders. Thus, the obvious question is, What skills and know-how do Six Sigma professionals acquire that gives them an edge as leaders?

Every Beginning is Difficult

New undertakings or experiences are always challenging at first. This is no different when Schenker Singapore (Pte) Ltd, a transportation & logistics company, decides to embark on something new like Lean Six Sigma. It might seem to be even more demanding at the outset since the number of 3rd party logistics providers rising to this challenge is very limited. Best practices in this industry are not widely spread and hard to come by.

Red Tape? – Not Here

Everyone, undoubtedly, has had the unenviable honour of experiencing ‘bureaucratic government processes.’ Be it applying for your first ID or passport, to initially obtaining a driving license and the inevitable dealings with the tax man. Judging by the time it takes and the “milestones” or number of departments one has to go through when dealing with German government bodies, the processes behind ID, passport or driving license must be highly complex and are usually being done by constantly overworked people. The Red Tape is often unbelievable.

Read Tape - Not HereSome time ago, I had to go to the Singapore Immigration and Customs Authority to receive my PR stamp in my German passport. The process was quite fast and the service very nice. I was about to leave the building when I saw a signboard which ‘advertised’ – “Get your Access Card now”. Since it seems to be a fashion to have a card for almost everything I stopped at the signboard and read the fine print. My conclusion was: “If you travel a lot you can make your life easier with an Access Card”. I turned around to ask a friendly officer for the Access Card counter.

Arriving at the second floor, I approached the counter. “Good afternoon, Sir. How can I help you?” After I had explained my interest in the card the lady behind the counter asked me with a smile: “Do you have your passport?” “Yes” “A passport photograph?” “Sure” “Some money?” “No problem” “Your thumb?” “Yes” “Then we can proceed.”

Being accustomed to typical government processes I imagined receiving my application form and being asked to fill it in, then submitting it and coming back a few weeks later to pick up my Access Card. I was under no illusion that this process would take less than a month.

The first surprise: this nice lady at the counter did not ask me to fill in an application form. She did it for me! I cannot recall any encounter with a German government clerk who would have done this. After signing my application form she asked me to take a seat.

About 15 minutes later, she called me back to the counter – presenting my plastic Access Card with chip and my photograph on top: “Sir, this is your Access Card. Please try at the simulator over there whether it works.” I tried. It worked – of course.

I could not believe what I had just experienced. Between not knowing that an Access Card exists until holding my personal card in my hands – with programmed chip embedded and photograph printed in plastic – pass less than 30 minutes in Singapore. No Red Tape. Impossible! Unbelievable!

This is what I call Process Excellence for Customer Satisfaction, or better: Customer Delight. I would not even expect this kind of performance from a private company, let alone a government agency. Thank you, ICA!

Conclusion

Only outstanding products or services are able to get customers noticing your company, talking about it and recommending it to their business partners and friends. Delivering what customers request is not enough. Customers would not ask for an Access Card delivered within 30 minutes because – for most of them – this is beyond their wildest dreams as it was for me. This kind of solution needs a creative mindset and an innovative organisation.
Keep in mind: Impossible is nothing.

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BPR Case Study: Preparation for ERP Purchase & Implementation

An Australian construction equipment rental & leasing firm had decided to implement an Enterprise Resource Planning system in 12 months. During this 12 month period there was an expectation that all front-end services including Sales, Customer Service, Receivables, Payables, would be re-designed to achieve streamlining and simplification prior to ERP implementation.

Operations spanned 18 cities across Australia with many more small ‘re-sellers’ located in the Australian interior or ‘outback’ as it is locally known. Compounding a normal organisational and operational setup was the fact that this firm grew a substantial portion of its business through the acquisition route thus effectively incorporating myriad systems and practices. There were 5 Receivables systems, 4 Payables systems and a decentralized customer service database (more than 200 input platforms) which needed to be tied together to make the ERP implementation work.
Continue reading →

SMED Case Study: Steel Tools Manufacturer

After a Lean programme for inventory was instituted the production facility struggled with getting a good product mix out to the finished goods inventory due to relatively long change-over times for cutting dies. Steel tool (final product) cutting dies need to be replaced after every 4 Kanban batch runs of 225 pieces each.

This frequent changeover, occurring once every hour of work is necessary to maintain and re-sharpen the cutting die’s cutting edges. Current changeover time for the cutting die was approximately 60 minutes and included the use of a single 10 ton forklift though the die weight was 5 tons. Nearly 50% of a working day was ‘wasted’ on changeovers not including the impact of the ‘inability’ to achieve a high vol-ume of product mix for agility to meet with product demand requirements of a Lean pro-gramme.
Continue reading →

Six Sigma – Show Me The Money

Globalisation and instant access to information, products and services continue to change the way our customers conduct business.
Today’s competitive environment leaves no room for error. We must delight our customers and relentlessly look for new ways to exceed their expectations. This is why Six Sigma Quality has become a part of our culture. Jack Welch, GE

What is Six Sigma?

First, what it is not. It is not a secret society, a slogan or a cliche. Six Sigma is a highly disciplined process that helps all kinds of companies focus on developing and delivering near-perfect products and services.

Six Sigma in Financial Services

Background

OurBank is an American international bank with 50 branches in Germany and approximately 300 employees working either in the headquarter office or in one of the branches.
In 2003, the senior management of OurBank decided to adopt and implement Six Sigma as their business management tool across all business units in the Europe region.
According to the OurBank business strategy, the car loan business was identified as one of the business priorities in the next 12 months. The strategy was to significantly grow the car loan business market share within the region in two years time, by 100% in the first year, and by another 70% in the second year.

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