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Peter J. Sherman

Six Sigma

Learning Lean at Lunch

Start with the napkin

Published: Thursday, July 3, 2014 - 10:52

Who says business luncheons are a waste of time? Recently, I enjoyed one of the most productive business luncheons of my career. In February, I was dining with two senior-level professionals at an IT staffing firm. After the usual chitchat about the recent snowstorms and traffic snarls, we started to talk about business. I asked some opening questions.

“How is business? What's going well for you right now?”

The branch manager responded, “The market for entry-level IT professionals who have strong problem-solving skills is very strong. We're running pretty hard now.”

Next I asked, "What is the biggest pain point preventing you from taking the business to the next level?"

The branch manager immediately replied, “We need more qualified people to generate more business.”

“Really," I said. “Could you share in more detail why you need more qualified people?”

The sales manager stated, “We need more people to help us process more candidates through the hiring pipeline.”

My next question was, “How long does it take to process a candidate from opening to placement?”

“10 business days,” replied the sales manager. This is known as lead time, which is the time it takes to deliver the product or service after it is ordered. The sales manager went on to say, “We need 10 days to do the proper quality checks. You can't rush quality.”

I agreed with them 100%, but I said, “It is possible to accelerate the velocity of a process and actually deliver better quality.”

Both managers looked at me in disbelief. “Won't you create more mistakes by working faster?”

Eliminate the waste 

“It's not about people working faster; it's about speeding up the entire end-to-end process by concentrating on the value and eliminating the waste. Eliminating the idle time, the mistakes that cause re-work, and the excess processing that comes with multiple hand-offs.”

Their response was stoic. “We're from Missouri. Show us what you mean.”

So I showed them by drawing the value stream of their IT staff placement process on a napkin. We identified each major step in the process. The value stream represents all the activities (steps, labor, information, materials, equipment) to generate a product or service from start to finish. The value stream map provides a graphical representation of the flow of all these activities, as seen in figure 1.


Figure 1. Click here for larger image.

 

For each step, I asked, How long does it typically take to do the actual work?”  This is known as process time. What followed was quite interesting. Although there were 12 steps in the process, most took only a few minutes to complete. A few steps took one to two hours, and only one step took more than two hours. The total process time amounted to 17 hours and 39 minutes, as seen in figure 2.


Figure 2. Click here for larger image.

 

After we laid out the steps and process times, I asked, “If the work only takes two days, why does it take 10 days to process a candidate?”

The sales manager replied, "Because we have a lot of bottlenecks. We're constantly waiting. We wait two or three days to get a response from the hiring manager to confirm final candidate selections. We wait three to four days for the hiring manager to accept the candidate interview schedule. And then we spend one to two days waiting for the hiring manager's final decision."

There was more waiting. Waiting because the candidates sent by the recruiter were not properly screened. There were errors and omissions on the resumes, and salary requirements that were too high for the particular job.  All of this rework added two to three days to the lead time. Waiting and defects are two of the most common forms of waste.

I told the sales manager, “What you are describing are not bottlenecks, but time-traps. A bottleneck is a constraint on the system, like the capacity of an oven. In this case, there appears to be ample capacity. The issue is the chronic time-traps caused by inefficiencies in the process.”

We continued looking at the value stream map and questioned the value of each step through the eyes of the customer. We defined “value” as something the customer would be willing to pay for. At that point, the sales manager looked at the review/qualify and route steps and asked me, “Why am I doing that work? I’m a middle-man between the recruiter and the hiring manager. We should let the recruiter communicate directly with the hiring manager.”

I nodded my head in agreement.

Start with clarity 

Then the sales manager told me something that really surprised me. “You know, I should really be doing a better job defining and clarifying the open position role, qualifications, and salary expectations with the hiring manager. Everything starts from there. If we don't get it right from the start, we waste a lot of time.”  I nodded in agreement again—she was really getting it. See figure 3.


Figure 3. Click here for lager image.

 

Finally, we put it all together. The process time was 17 hours and 39 minutes, or slightly more than two days. The lead time was 10 business days. We divided the process time by the lead time to get our cycle time efficiency of 22 percent.

The sales manager and branch manager looked at me, puzzled. “What does this mean?”

I replied, “It means 78 percent of the time is spent waiting, performing rework, and excess steps that don't add much value.”

We continued to study the napkin and focused on the time-traps. I asked them, “Which of these time-traps are in your control and which are not?”

The branch manager responded, “The time to schedule the interview between the candidate and our hiring manger is really outside of our direct control. Lots of things can come up; people have conflicts.”

“That's probably very true,” I replied, “so let's focus on those areas we can control.”

The sales manager had identified two or three days lost due to rework from mistakes and omissions on the candidate resumes. This was in their control. Then she identified another three days waiting for the hiring manager's candidate confirmations and feedback after the interviews. This was definitely within their control.

Reap the benefits 

Conservatively, they could save five days on the hiring process lead time by making some simple process modifications, policy changes, and adding some internal service-level agreements (SLAs) to drive accountability with the stakeholders. This would effectively double the productivity and revenue without hiring more staff, and implementing these changes wouldn't cost very much. The return on investment would be significant. At that moment, both managers looked at me and said, “If we execute this process correctly, there might not even be a need for the background check at the end.” A broad smile crept over my face as I saw them understanding the power of lean thinking, as seen in the table below.


 

 

It was 2 p.m. The restaurant was empty. The branch manager and sales manager looked at me with the eyes of people who suddenly discover something important—the light bulb effect. They couldn't believe how simple it was to measure and analyze their business. We weren’t bogged down in statistical analysis or using complicated tools, just a simple value stream map on a napkin, some key lean terms, and lots of questions.

 

Discuss

About The Author

Peter J. Sherman’s picture

Peter J. Sherman

Peter J. Sherman is a managing partner of Riverwood Associates, a lean Six Sigma certification training and consulting firm based in Atlanta. Sherman brings more than 20 years experience in designing and implementing process improvement programs. Sherman is a certified lean Six Sigma Master Black Belt, an ASQ-certified quality engineer, and an APICS-certified supply chain professional. He holds a master’s degree in engineering from MIT and an MBA from Georgia State University.