How to apply lean principles and automation for process adoption and perfection

Ian Hawkins (PEX Network)00:00

Hello, I'm Ian Hawkins, editor of PEX Network, where you'll find everything you need to navigate the world of process excellence, from the evergreen principles of Lean Six Sigma to the cutting edge in process automation, with analysis, white papers and free webinars like this one.

Ian Hawkins (PEX Network)00:41

At the bottom of your screen you'll find a resource box with case studies and white papers from today's speakers, and a Q&A box. Type your questions in and we'll cover as many as we can at the end; any we don't reach, I'll send to the speakers with your contact details.

Ian Hawkins (PEX Network)01:42

Today FlowForma and Octagon Value Chain share use cases and recommendations to help you apply lean principles and automation for process adoption and perfection. Shay O'Connor, senior vice president at FlowForma, has more than 25 years in technology, helping customers across the US and Ireland streamline and automate their business processes with no-code process automation.

Ian Hawkins (PEX Network)02:16

Clifford Lee, vice president at Octagon Value Chain, is an operations and supply chain expert with 30 years of improving infrastructure, policies and processes in complex global organizations, with deep strategy deployment, Lean Six Sigma and process excellence experience. Cliff and Shay will discuss lean principles and how to digitize processes, Shay will give a short demo, and we'll finish with Q&A.

Clifford Lee03:27

Thank you, Ian. It's an honor to be here with so many accomplished lean professionals. I'll start with a quote from Winston Churchill, because the mindset he articulates is spot on for an important aspect of lean: continuously perfecting whatever it is you're doing that brings value.

Clifford Lee04:05

This slide summarizes the supply chain transformation projects I've led or taken part in during my career. Every one used lean concepts and tools as a core element, many were Lean Six Sigma projects, and every single one integrated change management, with varying degrees of effectiveness. I'll come back to that.

Clifford Lee05:13

Like a good lean professional, I want to be clear on operational definitions. These four steps of the lean journey are sequential, but since the search for efficiency never ends, it's really a feedback loop aimed at one thing: the most cost-efficient delivery of value to the customer. Only pay for what you need is a great statement of lean value delivery.

Clifford Lee06:05

Lean and Six Sigma go together like ham and eggs; you can fit any lean tool into DMAIC. Compare your own experience with what we share today, and think about where an easy tool to digitize the process, as part of developing standard work, becomes relevant early on.

Clifford Lee06:45

This is our version of the operational excellence journey, compiled from several others. Companies evolve from heavily siloed and slow to respond to change, to increasingly agile, with better governance and much more cross-functional collaboration. Most companies are still in the first big step beyond stage one, and the barrier to move from stage two to stage three is enormous. Today we'll discuss one key step change: digitization.

Clifford Lee07:55

The process evolution curve mirrors those four steps, with detail specific to process excellence. You'd think most companies have moved their manual processes into the digital world, but from working with many clients over the past few years, I can tell you that's far from reality. If you're reflecting on all the manual processes in your business, you're definitely not alone.

Ian Hawkins (PEX Network)08:45

So how lean are your business processes? Are you at stage one, manual, undocumented and non-lean; stage two, mapped, digitized and automated; stage three, optimized, process-mined and lean; or stage four, machine learning and RPA? Choose the one closest to your current situation.

Ian Hawkins (PEX Network)09:45

Lots of people think they're at stage one, manual, undocumented and non-lean, followed by 38.5% at stage two, mapped, digitized and automated, and 2.3% at stages three and four. Cliff, what do you make of those numbers?

Clifford Lee10:06

That matches the population curve on the OpEx journey pretty well. I think we have a very honest audience, so we're going to have a very good discussion.

Clifford Lee10:30

Digitization is definitely part of the lean journey, and continuously working to digitize and lean out your processes is a crucial enabler of operational excellence. Look at Amazon: they digitize everything, but only automate where the human interface isn't needed. There's a big difference between digitization and automation.

Clifford Lee11:29

Manual work is much slower and more costly than digital. Process governance with manual work is commonly poor, because if everybody does manual work, they're each doing their own process, so there's no consistency from person to person or group to group. And data silos are a natural outcome, because people are far less inclined to share everything they're doing.

Clifford Lee12:45

I spent many years working with divisions of DuPont. Moving the needle took an all-in mindset at the C-level, a best-in-class organization of trained and certified continuous improvement professionals in Lean and Six Sigma, and specialists in many centers of excellence. It took several years to stand that up.

Clifford Lee13:45

It also takes years to develop a world-class process: highly disciplined and digitized where possible, combining agile transformation, hoshin kanri strategy deployment and demand-driven value delivery. It was enabled by lean tools, from Kaizen to multivariate and ABC-XYZ analysis, all underpinned by change management, which we got better at after some initial stumbles.

Clifford Lee14:50

The time investment in each swim lane was five to ten years or more. You can't take a quarter-by-quarter approach to this, but you do need consistent quarter-by-quarter performance measurement to make sure you're on track for the one-, three- and five-year goals. DuPont did become recognized as world-class in quality, but it took on the order of a decade.

Clifford Lee16:14

There were headwinds, and they're only accelerating everywhere. When you have organizational turnover with manual processes, you have chaos and firefighting, which is why the emphasis was on digitizing as much as possible. Once core processes were digitized, we could move the needle much faster. And through the Dow merger and the wholesale leadership changes that came with it, divisions with committed leadership kept their focus.

Clifford Lee18:00

To summarize the success factors: dedicated leadership comes first, with a succession of leaders who keep the same values on continuous improvement. Understand that the journey never ends. Create short-term successes that embolden the people doing the work and convince leadership they're on the right track, with well-defined projects aligned to business priorities and measurements connected directly to financial results.

Clifford Lee19:27

Digitization is the key enabler today for basically every continuous improvement measure you want to put in place and govern going forward. And finally, manage your change management methodology. Most technical implementations and transformations that fail do so because they aren't adopted well and the change management wasn't done properly.

Shay O'Connor20:16

Thank you, Cliff. When lean methodology was introduced, there weren't systems around to help sustain it. Nowadays there are. FlowForma was started about six years ago, and the directive to its creators was that people should only ever see what they need to see.

Shay O'Connor21:20

That applies to the people building processes too. You shouldn't have to build a workflow, then forms, then data and documents, and stitch them together. Everything starts in one place. That enables fast turnarounds and quick adoption, because users are involved from the very start, with no handing instructions to coders, since it's a no-code environment.

Shay O'Connor22:11

There are a lot of direct correlations between lean and FlowForma. First, you can standardize your processes, which matters for organizations with locations around the globe and people working remotely. Every time a task is done, it goes through the same steps to the right people, and every movement is tracked in the background without anyone having to notify anybody.

Shay O'Connor23:23

At the end you can see how long each step took. And you can add rules: if this isn't done within a day, notify somebody; if it isn't done within 48 hours, reassign it. You build those rules into the process so nobody has to think about them.

Shay O'Connor24:05

Next is the reduction of waste. Everyone's used to 10- or 15-page manual forms, like an insurance renewal. A dynamic form shows and hides information based on your selections, and the creator never writes any code to make that happen; they just say hide this, show that.

Shay O'Connor24:52

As your process evolves, you'll want to involve customers and other external people. You can say this step is for an external user; they get a link and complete their piece of the process.

Shay O'Connor25:30

Then personal responsibility: each step has an owner, an individual or a group, so nothing sits in limbo in an in-tray, and you always know where the process is. And finally, analysis. Environments and requirements change, and the easiest way to keep an eye on your process is to have it digitized, rather than analyzing a manual process all over again.

Ian Hawkins (PEX Network)27:15

Which benefits would you like to gain from digitizing lean business processes? Users only see what they need to see, seeing bottlenecks quickly, having one source of truth, or increased efficiency and productivity. You can choose more than one.

Ian Hawkins (PEX Network)28:12

Strongly showing for increased efficiency and productivity, not surprisingly. One source of truth and seeing bottlenecks quickly are in the middle, and users only seeing what they need is in fourth place.

Shay O'Connor28:35

Those benefits are far-reaching, and they happen as a direct result of digitizing. You get better data: you connect your data, so you only ever enter it once and reuse it. Workflows often don't concentrate on the data shared between steps, but when you digitize, you think about data integrity, using drop-downs and categories instead of free text.

Shay O'Connor29:59

The knock-on effect is better governance and visibility: you know where your processes are. And everything is mobile-accessible, because when you create a process it's automatically rendered for the mobile app.

Shay O'Connor30:40

This example is targeted risk monitoring on a road construction project in the UK, which used completely manual processes. The biggest hurdle was initial adoption, so they concentrated on one process: they measured how long it took manually, digitized it, and measured how long it took digitally. That one process was quantified at $96,000 in savings.

Shay O'Connor31:48

Not every process can be measured, but when you can illustrate the savings of a simple process like this over the duration of a project, it far outweighs the cost of bringing in a tool like FlowForma. And they did 76 processes.

Shay O'Connor32:53

The biggest trepidation is getting people to change from manual to digital, especially with low digital skills. The first process is a bit of a hurdle, but everything after it is the same, so the learning curve is much shorter. On this project the first process took about a month, and the other 75 came in that year.

Shay O'Connor33:34

The data gathered gives you graphics like this. When management and supervisors make decisions, they want something visible, accurate, up to date and visually compelling. With manual forms, by the time you create the report it's already out of date.

Shay O'Connor34:45

This demonstration area replicates a live environment at Abingdon and Witney College in the UK. The processes they digitized saved them over 5,000 hours a year. The CFO measured every process he digitized, and the time saved equated to two and a half people, so he was getting the workload of an extra two and a half people done.

Shay O'Connor36:05

The student update form shows how dynamic a form can be. All the forms, such as trips and visits, risk assessments and expenses, have a similar look and feel on purpose, so once people understand the first one, the next ones are much easier. When I choose personal details or course details, the whole screen changes based on my selections.

Shay O'Connor37:54

The steps across the top show where you are in the process, what's been done and what's next, so it educates your workforce on how the process is meant to operate.

Shay O'Connor38:35

In Flow Designer, your forms, workflow and document generation are brought together: the steps, some hidden and shown based on criteria, the data in each step, and the rules on the right. You also get a visual interpretation of the process, which is fantastic for getting users to agree on it, and any changes are reflected automatically, so it works as a prototype and as the live process.

Shay O'Connor40:03

I add a step, then a username question set to the current user, a compulsory yes/no question asking whether all documentation has been read, a choice question for why not, and a signature question, so people on touchscreens can sign off, and the signature can go into generated documents.

Shay O'Connor42:18

The last two questions are hidden, so I add hide/show rules. Every rule is designed the same way, with a description, conditions and actions: if all documentation read equals yes, show the signature; if it equals no, show why not.

Shay O'Connor44:04

Because forms are rendered automatically, the next time someone opens the student update, the new step is there with the same look and feel. If I try to submit without answering, validation stops me; if I say no, it asks why; if I say yes, it looks for a signature. That's a change to the process within moments.

Shay O'Connor45:23

FlowForma is in use in 20 countries with 200,000 users, and Forrester Research has highlighted it as one of the platforms to consider when you're looking to digitize. If you haven't digitized yet, you really should; there's no downside.

Ian Hawkins (PEX Network)46:18

We have time for some questions. Are there any other classic lean techniques you've found useful?

Clifford Lee46:48

Looking back at the Lean Six Sigma slide, value stream mapping proved to be the essential starting point for most of us. You really have to understand and map out your process and put lean rigor to it; if you don't understand it, you can't improve it.

Ian Hawkins (PEX Network)47:49

Most companies don't have the resources to build a massive organization for their lean journey. How can they succeed?

Clifford Lee48:02

You don't have to improve an entire company like DuPont did. If you want to improve your own area, you need your leadership on board. The all-in mindset begins there, and then you introduce the lean journey and its concepts.

Ian Hawkins (PEX Network)48:31

What technology do people need to run FlowForma, and can they access forms on mobile devices?

Shay O'Connor48:41

You just need Office 365. When you create a process, the forms are automatically rendered for the mobile app, which is downloadable, and it works in any browser as well.

Ian Hawkins (PEX Network)49:49

Dan asks whether you support right-to-left languages.

Shay O'Connor49:57

We've done a proof of concept for that, so it's not out of the box, but we've proven it can be done. It has come up before, though we haven't made it part of the product yet.

Ian Hawkins (PEX Network)51:19

A couple of people asked: don't we have to standardize the process through Lean Six Sigma before we go digital?

Shay O'Connor51:58

You don't have to reach full Six Sigma levels before you digitize, but we always tell people to optimize their process and have it documented and rationalized first. We have use cases showing it will save you half the time in digitizing. Then you can apply Six Sigma to the process in its digitized form too, with better measurements.

Clifford Lee53:10

Mapping and digitizing a process is itself a lean event. You see so many inefficiencies, and standardizing to get it mapped and digitized will lean it out. But since it's a never-ending journey, you'll always keep looking to lean out your process.

Ian Hawkins (PEX Network)53:42

Thanks very much for a really interesting session. It will be available on demand. For further queries, email info@flowforma.com, and you can sign up for a free trial, book a one-to-one demo with one of FlowForma's experts, or request a consultation. Thank you again to Cliff and Shay.