Three Questions about Standardized Work in the Office

A client asked an earnest question. I have my opinions but not observed facts. In fact I have heard conflicting information on this issue, with respect to Toyota.

In essence this question gets to the heart of how and how much can transactional or non-physical labor work be documented and standardized. Moreover, to what degrees can times be assigned to repetitive tasks that are performed in office environments?

My initial thought was that Toyota may not be the benchmark for office lean. Since this is not their gemba, the place where they add value and make money. With their focus on genchi genbutsu, they spend a lot of time in the field or on the floor, rather than in the office. Also, the A3 process of documenting business plans, proposals and problems solving is not prescriptive and requires a lot of collaboration and critical as well as creative thinking. I have heard of cases where kaizen projects were run on the translation of documents from Japanese to English, including time studies and the development of standard work. But these may be the exceptions.
So my questions to the readership are three:

Office people, lean people, Toyota people, can you help out my friend find the answer?

Brandon Ruggles
April 28, 2010 - 9:24 am
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In my last job I asked for the opportunity to value stream map and improve the process of planning seminars. To do this I created a basic process flow, and from there I created standards (with the other employees) for each step of the seminar planning process. This was all kept on a wiki with auto-tracking sheets that told how well you were doing compared to how you should be doing with respect to the expected completion dates for each task. It worked quite well, and reduced the amount of effort to plan a seminar significantly. We used a wiki for revision control, and because the computer/desk was our gemba. They are still using the system and improving the standards as the years and seminars go by.
Tomas Bachorik
April 29, 2010 - 1:25 am
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I work for 6 years in quality dept. for a contract manufacturer of computers and electronic devices. We have various stages of work standardization in the office. Some positions are standardized pretty well, some not at all. Of course there are basic standards such as various forms and reports everywhere. Every position in the support office can be “standardized” to some extend. But we need to be careful not to impact the creativity of some positions. Two examples from my own experience.
(1) HR person responsible for hiring: There can be very nice standard for his/her work describing step by step what has to be done from the hiring request receipt through candidates search, pre-interview, interview, evaluation and hiring till the start of the new employee at his workplace. This can include things like – CV to be in local and English language (for companies outside US), criteria for quick candidates pre-selection prior the interview based on knowledge, experience, etc. etc. Even steps that need to take place after candidate was hired are very important. Simple checklist is very valuable – do we have desk for the new guy? is there PC, phone, internet access, SAP and email account available and set properly? If this exist then it should not happen that new employee comes to the factory and there is no free table for him, no PC, email account not working… which means a lot of frustration for the new employee (I have been through this myself). So let’s create VSM for hiring process, map out critical steps put corrective actions in place, create work instructions / procedures and checklists where appropriate.
(2) Supplier Quality Engineer: Anytime there is a line down situation in the production caused by poor supplier quality SQE is alarmed. He starts to run around collecting data, looking for evidence, preparing problem analysis and (very important) contacting the supplier with problem description. 10 engineers can send an email describing the same problem and you would see 10 very different messages, often very confusing for the supplier. Especially for those not speaking English very well. If such supplier is in different time zone (+/- 8 hours for example) then the reply your engineer finds in the email the next morning usually says “can you be more specific? can you provide this and that?…”. 1 day of precious time lost. Solution I have implemented is work instruction for the engineers named “how to escalate quality issue to the supplier properly” describing what is the format and structure of the escalation email, what are the “must have” items (e.g. list of defective serial numbers, batch / lot date code, clear pictures of the defect, video showing the defective symptom etc.). Once this format and checklist is used the number of “we have no clue what you are talking about” replies dropped very close to zero and the suppliers can work on the problem solution right after being contacted. On the other hand I do not want to bind engineers’ creativity they need to use during the problem investigation. Apart of basic rules such as 5W, Pareto, Ishikawa… they always need to use their own creativity and experience that cannot be described in the work instructions and procedures.
There is plenty of possibilities where work standardization can be applied to the office / admin work. From HR through Planning, Procurement, Engineering, Business Finance Control to whatever position within the company. It just requires guts to pursue (office staff often thinks they are somehow different then production so are not willing to accept standards) and not impacting creativity where it is essential part of the job.
I hope I did not overcomplicated this 🙂
Tomas
Robert Drescher
April 29, 2010 - 9:41 am
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1. What’s the answer to the question above, if you know it?
I am like you I cannot say anything for certain, however I have had an opportunity to discuss the issue with some people who have been around them. The info I have depends alot on what the job is, a function like financial accounting can be rather easily standardized as the function is highly repeative, however many of their office functions are not like western office functions, so they are rarely standardized. Since the bulk of purchasing is contracted for the long-term, daily ordering is not really purchasing’s job it gets handled by the Kanban system. Their purchasing dept instead spends their time working to improve weak suppliers or find new supplier with which to work, neither job function is easily standardized as current economic state is in constant flux, as are present and future suppliers.
So you can guess that seeing their office is less involved in daily business than, by that point alone it would require their office to be less standardized, as they deal with an uncertain future.
2. If you do office work documentation and standardization well, what do you do?
The best office work system I have ever seen is not generally considered a Lean tool. The brutally honest Activity Based Costing and Management systems do a far better job at controlling front office cost for that matter most service organization would be better served by this system. It is rather easy to argue successfully that many office functions can create a value to a consumer (sorry accounting and finance you do not ever), however ABC looks at them slightly differently. Real ABC analysis and design places all cost drivers in three groups Revenue generating, Expense generating and Neutral (there are a very few of them). You set out in your ABM program to limit the last two to as few as possible (cut expense and waste), and you drive the first group as high as possible(increase sales). The result is that you are pushed to shrinking every layer, but the actual layer that produces the product or delivers the service or product. Whether a company uses it or not you never know, but you will see the signs of it in how they operate, the percentage of employees in the lower ranks (production, sales, distribution, etc.), is always higher than their competition. If you look really closely at them they have far fewer middle layers. ABM makes manging larger numbers of people easier as they know what they are supposed to do, they help define it, and anyone given the choice wouild prefer to do those activities that secure their jobs.
Take Canadian banks, most are runn like the rest of the businesses very management rich, yet TD Canada Trust (the former Canada Trust Company used it heavily) has a much larger base than any of their main competition, their profit per employee is higher because a higher percentage of their employees are at the bottom of the organization. It is why their branches; run longer hours, are more heavily staffed, and why they do more for their customers. If you sell a service you actually have to do something.
3. What have you seen as benchmarks or best practice in this area, whether within a purchasing department, in a financial service companies or a call center?
I have never found much value in bench marks or best practices. First there are only two points that matter.
A. At how low a price you can produce a product of the required quality vs any competitor. Labour per unit is not the only cost by a longshot. In most western business the biggest cost is overhead, yet they outsource product to save a nickle in production labour, but end up with a smaller production base to spread the overhead across.
B. How much more you can reduce the cost by either reducing required inputs per unit, or by find ways to produce other products using currently wasted resources (material, labour time, machine time, etc.).
The call center industry follows best practices so well they are all uniformly pathetic, the only call centers that I have found that are better are all internal to the company that uses them. Out of the several dozen calls I am forced evry year to make to call centers only a handful are a pleasant experience. The Call centers could all learn from JC Penney, they are the least scripted people there are, their scripted lines are the hello and the thank you at the end everything in between is human.
Secondly in business if we want to survive we have to do better and grow, following the pack is a recipe to end up in the middle. Did SouthWest or Virgin follow the benchmarks or best practices of their competition? Find any long-term industry leader that ever has.
We need to be honest with ourselves before we can achieve anything in overhead reduction, value and wealth are not the same thing. Business needs to not only create value, but also either create wealth or help sustain it to be worth the cost. Having spent my life as part of the office, I know first hand no office creates wealth, so we had better be helping sustain the wealth production creates, or we should get out.
I firmly believe that no two businesses are the same, each has to find their own place in the market or they will perish. The only sustainable answer to a problem you face are inside your walls now you just need to tap into all the intelligence inside them.
sharma
May 11, 2010 - 1:55 am
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Dear Jon,
The best answer of standardized work in an office is ERP solutions(although lean thinkers are skeptical about it). Here the roles, information flow chart, processes, authorities, etc. are well defined. Also, there are checks and balances, if any individual fails to perform his responsibilities. Also, it can be easily modified for future requirements.
Thanks!
Joseph
May 17, 2010 - 11:01 am
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As a long serving Industrial Engineer who has launched Lean in a hostile environment I can tell you that all types of work can be measured. At the end of the day all systems are just sausage machines.
How do you think people in factories establish the correct labour that is needed in a repair area where many jobs are different.
One way would be to measure the time a person takes to do 20 jobs. To set a time divide the toltal time by 20 and set this as an average. If you want to check the time get 5 people to do the same 20 jobs. Do not let them know how long the other people took. (promote the quickest and sack the longest.) I am joking but this is like painting by numbers. Take the average. People who are working normally should be +/- 5%. If the range is much more than this one or more of the people are taking you for a ride. Ask thier supervisor for advice. Be careful they may be in on the scam. A good engineer does not study what we call free effort work that he has no experience of.
Run a trial PDCA if the work backs up review the results. If they are all sitting around talking go back to step one.
If you want to measure the time the office spend on different things. waiting, talking, working, sharpening pencils, etc. you can do ACTIVITY SAMPLING. This is a method used to measure the efficiency of fork lift trucks in a plant. You will need to read up on this but there are calculations to see how large a sample size is required to get the accuracy you want. The bigger the sample the more accurate the result.
This is not LEAN MANUFACTURING but pure INDUSTRIAL ENGINEERING.
ps. You will get a better idea of the time if you check 20 document of each type if they are very different. The average time would mean establishing the total time for a mixed bag. 5 x Type A =10 mins : 8 x type B = 18 mins. 7 x Type C = 32 mins. Total for 20 parts 60 mins.
Hope this helps.