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Vol 31 - No 07 - November/December 2005 Branch news : Thames Valley - Lean and Sigma in the Back Office The meeting at GSK headquarters in London was opened by John Hardwick who stated " All waste starts in an office, somewhere!" So our attention was sharpened by his ‘provocative’ introduction which set the scene for an evening of presentations from himself, Jeremy Kent of GSK and Ray Leung from Unipart Technology Logistics. John explored the scope and size of GSK's business operations - some 100,000 people, 82 manufacturing sites, spread across 37 countries, but added that some 30-35% of the company's employee costs are from non-manufacturing activities in the business. Whereas Lean and 6-Sigma appear to be readily applicable in an operations environment, translating them in to office-based areas is not so straight forward. Back Office operations can be characterised by: Diversity of business processes. Fragmentation of business processes. Knowledge based rather than the physical flow of materials. Difficulties in defining customer value - or even who the customer actually is. The absence of data (about the processes / performance measures). Tangential activities which are not part of the actual process. John highlighted two particular items from this list - firstly that is crucial to determine ‘customer value’ before any improvements can be attempted, secondly that the ‘absence of data’ appears to be a contradiction in terms (for a function that is based on information) but is true in their experience. However, the problems do need to be addressed and translated into terms that can be adapted and applied in the office. Figure 1 shows how this interpretation is achieved in GSK. Next Jeremy Kent picked up the reins and discussed the GSK approach to managing improvement projects. The first step is the development of a ‘blueprint’ as part of a 4-step DMAIC approach used by the team: Select Processes. Identify Critical customer requirements. Analyse and improve processes. Deploy and sustain. Jeremy highlighted some key guiding principles, including - identification of customer / customer value, and the resources applied. In the ‘Improve’ stage - avoid hand-offs wherever possible. The outcome so far in GSK's journey along the Lean / Sigma path has been the achievement of benefits relating to the process improvements. There is now a repository of good practice, which has been proven. This is available to share within different areas of the company, and especially to be able to share this across the operations in the 37 countries around the world where they operate. The key learning notes from their experience are: All waste starts in an office somewhere! Using the Lean & Sigma tools on business processes needs some imagination Defining value is not always straight forward Prioritisation is key Just talking about the process improves it! There is lots more opportunity, we need ‘seed’ ideas. Next Ray Leung, Financial Controller from Unipart Technology Logistics gave an introduction to Unipart Logistics. From its darker history buried within the BL organisation; it can now claim to provide it’s services to many leading companies such as Vodafone Hutchinson, BSkyB, Boots, Homebase, Jessops, as well as those traditionally associated with the automotive industry such as Jaguar. Unipart has now publicised and marketed its vision for the company, as the Unipart Way – the philosophy of working underpinned by a set of tools and techniques that: Form part of its knowledge management system Continuously improves based upon experience Enables them to improve faster than the best alternative available to our existing and potential customers. Ray characterised its application as ‘Efficiency with a human face’. He went on to explore the methods and applications within Unipart, which makes them now such a successful organisation. This is clear conceptually, but Ray then explored specific Lean/Sigma applications in Finance: Visual Management Control Boards Standard Work Audit Metric ‘U’ – application to problem solving. The first particular implementation which supports their success is the use of visual communication of operations /effectiveness, and problems. This enables progress to be controlled, and any problem issues alerted to those who need to know. Figure 2 shows an example of one of their communications boards. Secondly, Ray discussed the need to stay alert to problems, ensure that they are discussed with all the relevant parties, both inside and outside the company. Ray showed the structure of their approach to problem-solving – eg. Metric-U. Having been through the process with his team of people, he left us with a ‘take-away message’ – 1. You’ve got to have a vision / philosophy. 2. Begin with a few projects… 3. ... but very quickly follow it up with cultural change. 4. Change is easy…sustainment is hard. 5. Give the doers the power and the tools. 6. Your people will surprise you. An enlightening meeting for all who were present, and many looked forward to another meeting at GSK – the food was truly excellent! James Rowell, MIOM University of Buckingham Page number: 10 Word count: 800 Related Topics: Customer relations management Lean operations