Making IT Lean: Lean Principles, Created By Toyota in the ‘50s to Streamline Auto Manufacturing, Now Helps CIOs Eliminate IT Waste and Increase Efficiency
Source: Smart Enterprise – April 8, 2009
By: Minda Zetlin
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Dee Cantrell, CIO of Emory Healthcare in Atlanta, recently spent some time in a medical practice’s waiting room. Cantrell wasn’t sick. She and members of her IT staff wanted to observe how the practice’s staff scheduled patient appointments and procedures. “We did this eight hours a day for a week,” she says. “We watched the workflow, so that we understood every step, and we wrote each step on a yellow sticky note.” At the end of the week, Cantrell and her team lined up the notes, in order, on a conference room wall. By the time they were finished, the notes snaked around all four walls.
“There are an extremely large number of steps in the scheduling process,” she says, “and there were a lot of wasted steps.” For example, when Cantrell asked “What happens to the output you create in that step?” the staff replied, “We put it in a folder.” Next, she asked, “What happens to the folder?” Back came the reply: “Nothing.” Then, in a second session, she asked: “What should the workflow look like?” and mapped that out, too. “Combined, the two sessions helped us see where there were opportunities to use technology and make processes more efficient,” says Cantrell.
Cantrell is one of several employees of Atlanta-based Emory Healthcare who are certified in the Lean methodology, which was developed by Toyota in the 1950s to eliminate waste and increase efficiency at its plants. These days, IT departments facing budget cuts that force them to do more with less are finding that Lean can help them as well. Cantrell’s project, which will eventually take her team to offices in all 28 medical specialties within Emory, is one such example. The streamlining of scheduling workflow will improve throughput, provide a better patient experience and help both front desk staff and physicians do their jobs more easily, says Cantrell. “That’s where business benefits drive the requirements for technology.”
Where’s the Value?
Unfortunately, it’s often the other way around, says Ron Wince, President and CEO of Guidon Performance Solutions LLC, a consulting firm that helps companies implement Lean and Six Sigma methodologies. Even the technology-request process can benefit from Lean, he says. “In most organizations, if you look at the process used to put a new piece of technology in place—say to stand up a server—95 percent of the process does not add value for the business customer,” says Wince. “It’s just an activity, so we call that overprocessing.”
And there can be a lot of that, he adds. “We have a lot of approvals, handoffs, waiting on vendors to provide answers, and IT’s internal requirements for approvals before buying equipment. We may think those controls are important, but the customer doesn’t really care about them.”
Lean methodology encourages IT to take a customer-centric view. “The customer just wants us to flip the switch on the new server,” he says. “We challenge anything that doesn’t directly contribute to that.”
One way of applying Lean principles is to gather everyone involved in or affected by a process together in a room. This reduces “volleyballing,” according to Bob Zimmerman, Managing Partner at Geneca, a custom software development firm in Oakbrook Terrace, Ill. “A developer gets requirements, reads them, has questions and sends an e-mail to get those questions answered,” he explains. “It’s like throwing a volleyball over a net and waiting for someone else to throw it back.” “Volleyballing” is so counterproductive that, when working with client companies, he insists on flying people in from other offices if necessary, to get all the main stakeholders together.
It’s very important to include not only those in management, but also developers, hands-on project managers and end users. “People in the environment know where their highest pain points are,” he says. “They can easily tell you things like: ‘If we could do X, we would be 20 percent more productive,’ or ‘Doing Y is really killing us.’ Those conversations are where you find the biggest opportunities to eliminate waste,” he says.
At its most intense, this process of getting everyone in a room takes the form of something called a “Kaizen Blitz,” a Japanese word that means “to take apart and put back together in a better way,” according to Six Sigma’s online dictionary.
“That’s a component of Lean that we use quite a bit,” Cantrell says. “It’s a very focused effort on a broken process. We get the right people in a room for a few days to figure out how we can make incremental changes that will make things better.”
Kaizen events typically last for one week, during which time participants make a commitment to deliver some type of improvement by the weekend. They can do this because they are focused primarily on the Kaizen—and not their regular duties— during this time.
The process can be a powerful driver for change, Wince notes. “That’s when people see really inefficient processes, and go ‘Holy cow! Why do we do it this way?’” he says. During one recent Kaizen, says Wince, participants discovered their company was still paying licensing fees for software that hadn’t been used for years.
This is why discussions must take place without recrimination or apology for the inefficiencies discovered, Cantrell adds. “It’s important to the Lean process that there is no shame or blame,” she says. “It has to be open and candid to identify the causes of inefficiency or waste.”
Done right, a Kaizen Blitz can have very dramatic results. “It’s very common to find 50 percent quality improvement in a week, once you get at the root cause of a problem,” Wince says.
For example, a recent Emory Kaizen Blitz focused on how medical staff entered medication history into an electronic medical records (EMR) system. “We were having difficulty with compliance in that area,” Cantrell says. “We looked at the workflow in terms of how we collect that information, how it gets entered, who enters it and what happens after it’s entered. The team identified an operational process, and we realized we could make a change in our technology to make it easier for the right person to enter the information. Compliance improved as a result.”
Specific, measurable goals such as increased compliance are essential to Lean success, experts agree. For example, at WNA Inc., a manufacturer of high-end disposable food service goods such as plastic cutlery, plates and cups, metrics help the IT department define success related to technology maintenance. “We have three main metrics,” says Paul Reed, Director of IT at the Covington, Ky.-based company. “These include: mean time to repair—how long it takes to solve a problem; first-fix rate— how often the problem is solved on the first attempt; and change success rate — how often the solution is a permanent fix, rather than a temporary one.”
Many organizations start an initiative without the business having clearly defined what success is, says Zimmerman. “The business will say, ‘Let’s put in a CRM system’, but IT doesn’t have a clear definition of what would make that CRM system a success. So IT puts in a system in three months and thinks it did a heroic job, but the business doesn’t think it’s successful because it doesn’t, for instance, help with lead generation or allow them to send group e-mails to regular customers.”
Not establishing such goals up front often leads to failed projects. It can also lead to open-ended projects without firm deadlines, says Zimmerman. “If we don’t ask the business for a definition of completion, we can end up with a Lean process that never ends.”
Getting those definitions in place at the outset requires excellent communication between business and IT, something that those with Lean experience say is vital to the concept’s success. “I have three or four people in our department, including myself, who interface with users in the company,” Reed says. “We have people in IT who know business as well as IT, so they can look at a business requirement and provide a technical specification that interprets it.” Reed says this helped a great deal when WNA implemented its ERP system a few years ago. “Users adapted to it right away and found it valuable,” he says.
There Yet?
It’s important to remember, experts stress, that companies rarely experience an ‘ah-ha moment’ of Lean achievement. You aren’t suddenly Lean where before you weren’t. Instead, becoming Lean is an ongoing process that focuses on continuous improvement.
Even Toyota, which has spent 50 years using the technique day in and day out, still finds room for improvement, says Wince. This is why — instead of expecting to actually achieve 100 percent improvements — CIOs should think in smaller, manageable improvement increments. “Let’s say you have two percent value added. Try to double that next year,” he suggests.
Cantrell agrees. Although she’s been applying Lean principles for years, she says Lean is part of a never-ending, continuous-improvement loop, an ongoing effort rather than a specific goal. “We implement a change based on a rapid improvement event, monitor it for a few months, and then get back together and figure out the next thing we need to do,” she says. “We find that in a complex environment like ours, incremental change is good. That way, we have continuous improvement and continuous learning.”
Other Ways to Get Lean
There’s a human side of going Lean that includes improving processes and looking for wasted effort, but these aren’t the only ways you can achieve Lean-ness, eliminating unnecessary waste and associated costs. Here are four more:
Virtualization: Virtualization saves space in data centers and allows you to do more with fewer servers. This, in turn, cuts hardware, heating and cooling costs. There’s a time savings as well: It can take mere minutes to deploy a virtual server as compared to hours installing a physical one.
Consolidation: Even without virtualization, consolidating several servers into one or replacing rack servers with blades saves space and power.
Automation: Becoming automated can help a business run its processes more leanly. For instance, in the past, WNAInc. put electronic data interchange (EDI) in place only when customers requested it. Now it seeks out opportunities to use EDI wherever it can. “It’s an investment in IT infrastructure, but it’s offset by the reduction in administration resources,” says WNA’s IT director, Paul Reed.
License Management: In a bid to cover their bases, some companies buy more software licenses than are actually needed. Others automatically renew licenses even when software is no longer in use. In both cases, a careful review is likely to yield some cost-cutting opportunities.
Minda Zetlin is co-author of The Geek Gap: Why Business and Technology Professionals Don’t Understand Each Other and Why They Need Each Other to Survive.
All contents © 2009 Smart Enterprise. All Rights Reserved.
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