Amways Lean Office Journey

West Michigan HDI October 10th, 2012

Agenda
Welcome Jill Bierens Manager, Global IT Service Desk Lean Office Overview Stephen Sweers Manager, OPX Lean Office Amway IT Results David Drake Lean Leader, IT Jill Bierens Daniel Uecker-Herman Lead Service Desk Technician

Q&A
Optional Tour: IT Operations, ITAM, Lean Cell

About Amway
Founded in 1959 Second largest direct-selling company in the world

Annual sales of more than $10 billion in 2011 More than 450 products 80 countries and territories 20,000 employees Six million entrepreneurs selling Amway products around the world More than 900 patents granted and more than 800 pending

The Heart of Amway

Amways Global Service Desk

Metrics
Nearly 6,000 customers in North America and SE Asia Average 13,000 incoming contacts per month (all channels) Average 5,000 calls per month Live answer = 85% First Contact Resolution = 75% Eight Service Desk Technicians Four User Management Technicians

Amways Global Service Desk

Current State
Caller
Ada HQ 6:30am7:30pm Malaysia 7:00am-7:00pm

Strategy
Four regions Follow the Sun Standardized processes

WHY LEAN OFFICE?

Identify and eliminate wasteful process steps in a systematic way

More than 60% of the cost of a product or service is attributable to administrative processes.
Quality and service improve
Turnaround time shortens Costs go down and profits go up

The customer is ultimately delighted

Resources (people and money) become available to be redeployed to

further grow the business

KAIZEN DEFINED
Whipped Back Sheep

Self Altar

Kai change (revolutionary)

zen good (sacrifice)

LEAN OFFICE ISSUES

Quality: How to improve it? Cost: How to reduce it? Delivery: How to ensure it? Talent: How to develop it?

ELIMINATE WASTE
The 8 Wastes
Defects Over-production Waiting Not engaging people Transportation Inventories Motion Excess processing

ELIMINATE WASTE
Unevenness
Can often be eliminated by managers through level scheduling and

careful attention to the pace of work.

Overburdening
Workers by requiring them to operate at a higher pace, with more

effort and for a longer period of time than appropriate workforce management allows (target utilization @ 85%).

TRUE NORTH METRICS

Right 1st time Quality Improvement Delivery/Lead Time/Flow Improvement Cost/Productivity Improvement Talent Development
These are a select few measures, and if you improve them each year, good things will happen. George Koenigsaecker

LEADERSHIP BEHAVIOR
Critical Questions
What is a problem? What is the cause? Who is responsible? What should the individual who makes a mistake do? What are the assumptions about people? Problem Solving Skills

Traditional Management
The result of someone messing up The Individual (5 Whos) The person who makes the mistake (5% of the time) Solve the problem on your own if at all possible People will not accept blame unless forced to Some have it, some do not

Lean Management
A deviation from Standard The System (5 Whys) Management (95% of the time) Call attention to the problem for assistance, to learn & to avoid the problem in the future People will feel empowered if they receive positive support for solving problems It can and must be taught

THOUGHT-PROVOKING QUESTIONS
To what extent are your Functions goals linked to Enterprise Goals? Can you identify all of your Functions internal and external customers?

Do you know all of the products and/or services your Function provides its customers?
Do you measure Functional performance on the basis of how well your products and/or services meet your customers requirements? Do you establish clear goals for the products and services provided to your Function by your suppliers? Do you measure your Function on the degree to which it contributes to cross-functional value streams? Do you have tracking and feedback systems that effectively and efficiently gather performance information and provide it to the people who need it? Do you spend a large percentage of your time working to improve the interfaces between your Function and other Functions and between subunits within your Function?

Do you know your customers requirements for your Functions products and/or services?
Can you identify your Functions internal and external suppliers?

Do you have documentation of your Functions role in the cross-functional value streams to which it contributes? Do you measure the upstream performance of the processes that flow through your Function? Do you have the skills to troubleshoot (remove the root causes of) performance gaps in your systems? Do employees in your Function work in an environment where their job design, job goals, feedback, rewards, resources and training enable them to make their maximum contributions to process efficiency and effectiveness?

SUCCESS FACTORS
Factors for success:
Clear Business Case Leadership Endorsement Clear Roles & Responsibilities Dedicated Internal Resources Structured, Systematic Method Simple, True North Metrics Frequent Reviews

DEPLOYMENT MODEL: PHASE 1 STABILITY What:

Improve Internal Process Workflows and Reliability Standardize Work Processes Improve Process Throughput Time Reduce Clerical Errors (implement mistake-proofing techniques) Establish Lean Plans

Where:
Transactional Business Processes (ex: Idea-to-Market, Procure-to-Pay, etc.) Key Functional Areas (ex: Planning, Procurement, QA, R&D, IT, Sales, Finance)

Impact on:
Throughput Time Variation (Operational Lead Time Improvement) Right 1st Time Quality Improvement

LEAN OFFICE SPECIALIZATION: INSTABILITY

OFFICE EMPLOYEES SPECIALIZATION Breadth of Knowledge Employees typically retain 80% of the process knowledge.

Specialized work No level loading Work duplication No realization of waste

LEAN OFFICE SPECIALIZATION: STABILITY

OFFICE EMPLOYEES GENERALIST Shared Knowledge

Multi-Skilled Multi-Process Handling Level loaded @ 85% of Capacity

Skills/Training Matrix

LEAN LEADER STANDARD WORK

Assess efficiency of Functional & Cross-Functional business processes. Develop Functional Lean Plans aligned with Enterprise Strategy. Enable improvement by providing kaizen breakthrough method & support. Create expectation for annual improvement in:
Right 1st Time Quality Productivity (Cost) Delivery (Lead Time) Talent

Encourage active sharing & adoption of best practices.

GETTING STARTED: ACTIVITY

1. What are the top 2 or 3 most costly outputs (products or services) your lean office makes and delivers to your customers? Or, what causes you the most pain? Brainstorm! 2. Select one output (product or service for your customer), assemble a team and together explore using the SIPOC Tool (Supplier/Input/Process/Output/Customer). 3. Plan your 3-5 Day Kaizen Event using your completed SIPOC as a guide (hint: you may want to include the voices of suppliers, processors, customers and outside eyes as well). 4. Execute the Kaizen Breakthrough Method. again, again and again (5X)!

SIPOC
Supplier Inputs (Requirements) Process (Transformational, Value-Creating Steps) Outputs (Requirements) Customer Meijer Kitchen 36 Minutes Total Time 2 ea Eggs Cup Water Cup Vegetable Oil 8 X 8 Pan Shortening or Cooking Spray Large Mixing Bowl Wire Whip or Large Spoon Electric or Gas Oven capable of reaching 350F Cooling Rack Knife Spatula Serving Plate PREHEAT: oven to 350F for glass or metal pans, 325F for dark or non-stick pans. GREASE: bottom of pan with shortening or cooking spray. MIX: empty brownie mix, eggs, oil and water in large bowl. STIR: until well-blended (about 50 strokes). SPREAD: in greased pan and bake immediately. BAKE: following times listed per pan size (ex: 8 X 8: 42-45 Minutes. Add 35 minutes for dark or non-stick pans. DONE: when inserted toothpick 1 from edge of pan comes out clean. COOL: completely in pan before cutting and serving. 2 X 2 Fudgy Brownie Warm & Gooey Served on 6 Serving Plate Annie Sweers

KAIZEN BREAKTHROUGH METHOD

1. Pre-Event Planning
Kaizen Sponsor Secured? Kaizen Team Leader assigned? Kaizen Target Area Selected/Scoped? Kaizen Dates & Times Scheduled? Kaizen Team Room Scheduled? Kaizen Team Members Assembled (Rule of 1/3s, SIPOC) Kaizen Supplies Collected? Kaizen Pre-Work/Data Collected? Catering Scheduled? Kaizen Training Material Prepared? Management Report-Out Scheduled? Visual Controls are in place, Maintained & Continuously Improved. Standard Work Audits are Conducted, Economic Benefits calculated & Results Communicated. Weekly Kaizen Newspaper Accountability Meetings Conducted.

1. Event Execution
Kaizen Team Trained, Ground Rules Established. Current State Condition Identified. Opportunities for Improvement Defined. Future State Improvements Implemented & New Process Standardized.

1. Post-Event Monitoring

Management Report-Out Created & Delivered. Adhere to the Improved Process, Continue to Improve & Retrain After Each Improvement.

KAIZEN BREAKTHROUGH METHOD: RESULTS Current State Process (7 Days)

WASTE 7 Days V/C 56 Minutes

Kaizen Value-Creating Work Waste

WAITING 2 Days

V/C 10 Mins

(2 Days)

Lean IT: Impact on Amway

Service Desk Data Center IT Asset Management Operations Voice Telecom Release management Application Development

Service Desk
Corporate data stores
Average of 100 requests per month Original process plagued with excessive active and wait times Active time reduced from 45 minutes to 15 minutes SME provides clear direction on users needs Process to be leveraged globally

Service Desk
Granting Remote Access
Focused on providing correct access without hand-offs Ensuring we meet PCI compliance requirements Decision tree developed and training provided for SD staff Standard work reduces training time

Returned capacity = 1,400* hours (Jan-Aug 2012)

* Includes time savings in IT Security and Network Services

What Have We Learned?

New concept to IT
Lean is traditionally associated with manufacturing Many of the things we do have a production flow to them

Balance between focusing on results vs. learning Staff hesitation to act without management direction
Empowerment is critical Innovation, learn by doing

Quantified improvements vs. observed improvements

What Have YOU Learned?

QUESTIONS

Tours
Service Desk IT Operations PC Lifecycle Lean Cell
Please gather in the lobby David will be your guide