A Simple Flow Chart Example For A Non Profit Laws of Speed and Lean Six Sigma

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Laws of Speed and Lean Six Sigma

The title of a recent book argues: “It’s not the big that eats the small, it’s the fast that eats the slow.” Speed ​​is the key to your competitive advantage.

Laws of Motion Force in the book, Compete against time (Free Press 1990), the authors present compelling evidence for power laws of motion.

5% Rule: The actual time required to create or deliver a service is only 5% of the total elapsed time.

25-20 Rule: Every 25% reduction in elapsed time will double productivity and reduce costs by 20%.

3X2 Rule: Companies that regularly reduce cycle times enjoy triple the growth with profit margins three times the industry average.

Problem: Ad hoc process

Most processes, whether they are ordering, billing, manufacturing, or order fulfillment, evolve from ad hoc processes assembled over time. Work is handled in increasingly large chunks by specialized individuals to “reduce costs”. Every employee is busy working hard, but their inbox is full and their outbox becomes someone else’s inbox.

A customer’s “lazy” order

When I work with a team of people about reducing cycle time, they all cry because they don’t see how they can possibly work faster… and they’re right. Speed ​​is not about people working harder or faster; It’s about focusing on the customer’s “lazy” orders.

Here’s what I learned: Your people are always busy, but customer orders are IDL 90% of the time. The order does not mean that there is a bum, but the procedure forces him to act as such. Sure, you can always squeeze a little more speed out of the “factory” line workers, but the big profits always come from squeezing orders, not people.

Example of computer operations

I worked with a computer operations group that was having trouble completing their nightly “batch” process so they could bring the customer service system online in the morning. He used to spend an average of 8-10 hours a night. When we examined the process, we found that the actual time required to run the batch programs was one hour, but there were 32 points in the process where technicians were waiting for validation before they could proceed. A computer job scheduler could do most of what technology did, so they automated 30 checkpoints and jobs now complete in 1-2 hours… an 80% reduction in cycle time or a fivefold increase in speed .

Example of a medical claim

Last year, I worked with a medical claims group. Each claim took an average of 140 days or more to process. Upon investigation, we found that only 7 hours (one day) of this time is used to process the claim; The rest of the time Dawa sat waiting for something to happen. In just a two-day session we discovered ways to shave almost 100 days off their cycle time. That’s a 70% reduction in cycle time or a 3x increase in speed.

Breaking the speed barrier

Want to make progressive improvements to your speed? Here’s how:

1. Flowchart your process showing all the activities (boxes), decisions (diamonds), and arrows that connect each box.

2. From the top of your flowchart, from the moment a customer (internal or external) contacts you to place an order for your product or service, list every box, diamond, and arrow…especially the arrows. Note: 80% of cycle time is in arrows, delays between activities, not in the activities themselves.

3. For each box, diamond, and arrow, estimate the actual time required to complete that part of the process. And don’t buy the first answer you get. I asked the claims group how long it takes to queue up and get a new claim. They said 25 days. Not true! It took about 10 minutes to log the form, 24 days before it reached the reviewer, and 45 minutes to validate the form. 55 minutes, not 25 days. 24 days and 7 hours, the claim was inactive awaiting processing.

4. Now ask yourself, does this box, diamond or arrow add value to the order? Value-added things change, enhance, or improve the sequence. What is not value added? Delay, idle time, inspection, rework, scrap etc.

5. Eliminate procrastination. In the claims example, there was really no reason to wait 24 days to investigate the claim. I recommended that they set a goal of logging in and checking the claim in less than 24 hours. We continued to do this with each major delay in the process to remove a total of 100 days.

6. Eliminate non-value-added work. If the box, diamond, or arrow doesn’t add value, is there a way to reduce its effect or remove it from the flow? Why, I wondered, do they have to check every incoming claim form? Using problem solving the team can identify the most common errors in form filling and redesign it to reduce or eliminate common errors. Then it may not need to be checked or it can be easily handled by a less experienced staff person.

7. Create an action plan to transition from the old, slow process to the new, faster process. Start a new process using the incoming order and let the existing order exit the old process.

8. Find a way to “burn the bridge” to the old process. At one company, they removed old personal workstations, forcing everyone to participate in learning to use the new, high-speed workstations.

9. Establish cycle time measures to maintain improvements, perhaps XmR charts for individual orders.

Templates for flowcharts and value-added analysis are available in QI Macro SPC software for Excel. For more help, consider the Lean Simplified book.

If you need help getting a team off the ground or refocusing, consider our consulting services.

Avoid common pitfalls

Pitfall #1: Don’t buy the first answer you get. People often include idle time in their answers.

Solution: Keep trying to determine how much time value-added work actually takes. The remaining time is the delay which can be reduced.

Problem #2: Old habits are hard to break.

Solution: Burn bridges in the old process. Implement new processes in such a way that people cannot revert to their old ones. Want to make your customers happier? More loyal? Less likely to switch suppliers? In today’s high-speed society, they want you to be fast, always fast. Using simple tools of flowcharts and value added analysis, I have never failed to find cycle time reductions of 50-70 and even 90%. And you can too! It’s a bit of a pain, pulling your process apart and disrupting its flow, but you only have to do it once to discover the power in this process.

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