The Path to the Lean City - Methods and Best Practices

LEAN MANAGEMENT INSTITUT
Dr. Jorgo Chatzimarkakis
and
Dr. Bodo Wiegand
THE WAY TO LEAN CITY
METHODS AND EXAMPLES

Starting Position
Lean Thinking
Lean Management methods in the public sector
- Lean Administration
- Lean Maintenance and Service
- Lean Management
Lean City Club
Examples from German local government
Agenda

Income and Expenditures Continue to Diverge
New York City is closing its zoos, turning off the street
lights on bridges, closing pediatric clinics and public
schools; 4,500 public sector jobs are being cut – all
because the city budget cannot be financed on credit.
Costs for the Swiss public healthcare system are rising at
twice the rate of GDP.
Budget balance for local
government in Germany
Healthcare system costs in Switzerland
The financial balance sheet for German
local government continues to deteriorate
The advertising revenues at ARD (German
public television) fell to 300.4 million marks
in 1996 compared to 576.7 million marks in
1992
Source: ARD-Werbung Sales & Services

Cities: A Case for Revitalization (1)
Freezing expenditures for investment, touch-up
repairs, and limiting activities to the bare necessities
Reorganizing all processes and reducing expenses
Releasing employees to help reduce outsourcing
and improve service
Starting marketing programs to increase
attractiveness and to boost income
Short-term measures

Cities: A Case for Revitalization (2)
Examining legal rules at the federal state (German:
Land) and regional level with an inverted burden of
proof.
Why do we need that particular law, rule, or
regulation?
Testing the efficiency of all tax-relevant laws in
terms of ROI.
What does it cost; what are the benefits?
Determining how useful laws, rules, and
regulations are in terms of enforcement; analyzing
the costs of enforcement in terms of cost and
benefit.
Do we really need the law if we can’t verify it?
Radically simplifying complicated laws and
regulations at the national level.
Medium- and long-term measures

The Four Competitive Factors of Business on Demand
also Apply to Cities.
A = Availability of service
Q = Quality of process
I = Individuality towards the customer
C = Cost savings in all areas
Business
on
Demand
Only Lean Business offers simultaneous optimization of all four
competitive factors.

LeanManagement
LEAN Thinking
LeanMaintenance
andService
LeanAdministration
LeanInnovation
LeanSupplyChain
Create value without waste
LeanProductionSystem
LEAN THINKING – THE LEAN BUSINESS SYSTEM

The Five Principles of Lean Thinking
Applying the five principles step by step comprehensively and permanently eliminates waste.
The central vision is of a value flow with no waste beyond the boundaries of each individual
company.
These principles apply the same way to industry, services, and administration as they do to
development, production (performance), and order processing (sales).
Define the value of a product or service from
the customer’s point of view
Identify the value flow
Create a continuous flow
Switch to a demand-driven
system: “Pull instead of Push”
Strive for perfection
1
2
3
4
5

Defining the Value of a Product or Service from
the Customer’s Perspective
Longer office opening hours
24-hour operation of light rail public transportation
One call, one visit one decision, one result
Availability of service: this means
that services have to be performed
in the least amount of time possible
and then provided to the customer.
Value specification from the customer’s perspective
Qualitatively perfect service
Individual service: everyone
receives the services they need
Costs have to be reasonable
No incorrect treatments for patients
No erroneous documents
No late buses or trains
Provision of infrastructure tailored to the specific
industry when new firms open
Simplified approval processes for smaller construction
projects
Citizens and residents should be able to understand
fees and surcharges
Prices must be comparable to those in the private sector
Examples

The Philosophy of Lean Thinking: Eliminate all Waste (muda)
Optimize!
Value-creating activities
Any activity that takes materials or
information and converts or transforms
them in a way that meets customers’
needs and that the customer is also
willing to pay for.
Reduce!
Non-value-creating
Any activity that is needed due to the
systems or processes in use today but
that does not contribute any value to
the product or service or to customer
satisfaction.
Eliminate immediately!
Waste
Activities, processes, time, materials, space, etc.,
that do not increase the value of the product or
service and that are not needed for the system or
process.
Muda
Type I
Muda
Type II
Value
creating

Taiichi Ohno’s Seven Types of Waste are also Found in
Public Services
Overproduction1
Inventory2
Unnecessary transport3
Waiting/storage time4
Improper techniques/work
processes
5
Unnecessary moves6
Repair and material waste7
Examples
Documents and reports with no audience
Projects left filed away in drawers
Unnecessary patient stays in clinics
Construction material stored for use years in advance
Ambulance transports between clinics or wards
Procedures sent back and forth between departments
Procedures waiting for a clerk with available capacity
Patients in the waiting room
Expensive and oversized IT systems
Complicated approval processes for such simple
construction as errecting an arbor
Employees working in public bodies who have to walk
great distances to get to the only copier
Business trips with a poorly defined purpose
Wrongful approvals
Improper treatment of patients

Creating a Continuous Flow
Flow means providing a complete service
from beginning to end and without delay
Customers, residents, and patients
experience no waiting times
The completion time for each action
corresponds to the required process time
There are no stocks (stacks of waiting files)
Examples of flow in the public sector
A Residents’ Agency rather than
various public offices
Polyclinics instead of various
independent medical specialists
that patients have to consult one
after another
A Residents’ Agency rather than
various public offices
Infrastructure repaired by
interdisciplinary teams rather than
specialist teams

Switching to a Demand-Induced
System (Pull instead of Push)
Implementing this principle in practice in the public sector can mean:
Stelle dem Bürger die Wasser-, Strom-, Gasmengen zur Verfügung, die er benötigt.
Stelle dem Bürger die Leistung zur Verfügung, die er nachfragt.
Schaffe eine Infrastruktur, die den Bedürfnissen des Bürgers entspricht.
Mache Gesetzte, die er versteht und die er nachvollziehen kann.

Striving for Perfection
Perfection is an ideal state that is never attained
Public administration cannot rest on their past
achievements
Repeat the principles:
1. Define value from the customer’s
perspective
2. Identify the value flow
3. Create a continuous flow
4. Pull system
Top-down and bottom-up implementation

Starting Position
Lean Thinking
Lean Management methods in the public sector
- Lean Administration
- Lean Maintenance and Service
- Lean Management
Examples from German local government
Lean City Club
Agenda

Lean Management methods in public sector
LeanAdministration
LeanConstruction
LeanMaintenance
&
Service
Residents’ services
Building authorities
Public construction
Administrative bodies
Municipal utilities
Facility management
LeanManagement
Applications

Analysis Modularization Integration Implementation
Establishing a business
model
Organization analysis
Value flow analysis
Order structure analysis
Process analysis
Activity structure
analysis
Cost structure analysis
Starting to implement
immediate measures
Module definition
Module optimization
Standardization
Describing and
standardizing
interfaces
Defining the product
creation process
Assigning and
integrating the
modules into the
processes
Capacity adjustment
Implementing the
processes
Organization
adjustment
Introducing process
cost management
Introducing CIP
Serviceauftrag
abschließen
Faktura
freigeben
kaufmännisch
abschließen
Projekt extern
abschließen
Fakturaanforderung
aus Service/Projekt
ist vorhanden
Fakturarelevante
Belege aus
Fakturavorrat
auswählen
Sammelfaktura
ist zu erstellen
Einzelfaktura ist
zu erstellen
Zu fakturierende
Posten
zusammen-
stellen
Fakturaanforde-
rung ist in
Ordnung
Einzelfaktura ist
nachzuarbeiten
Fakturapositionen
und -konditionen
nacharbeiten
Fakturasperre
löschen
Faktura
buchen
Fatura
drucken
Faktura mit
Anlage
versenden
Faktura ist
Kunden
zugestellt
Einzelkontrakt
anlegen
Faktura zu
Einzelauftrag
erzeugt
Faktura gem.
Fakturaplan
erzeugt
Lean Administration – The Method

Analyzing the Value Flow of the Main and Partial Processes
Value stream mapping
Auftrags-
management
40 % Auftrags-
annahme
18 4
RQ: 33 % / 5 min
PZ = 2 min
500
2,5 d
Disposition
35 % Auftrags-
annahme
8 4
RQ: 10 % /10 min
PZ = 3 min
Ø
Hausmeister
25 % Auftrags-
annahme
30 4
RQ: 5 % / 10 min
PZ = 10 min
100
0,5 d
ServiceteamLieferanten
ÜZ
RZ
Auftrag
bearbeiten
18 5
PZ = 6 min
100
0,5 d
10
%
5
m
in
60%
15min
Auftrag
disponieren
20 8
RQ: 10 %/10 min
PZ = 12 min
950
5 d
Service
durchführen
80 13
VZ = 105 min
PZ = 10 min
950
5 d
RQ: 10 %/20 min
Auftrag
abschließen
20 4
PZ = 8 min
1950
10 d
RQ: 40 %/10 min
14 4
PZ = 15 min
2500
13 d
RQ: 20 %/10 min
X-Produkt
Kunde
PZ
13.572
Aufträge pro Jahr
Verfügbar: 5/12
25
%15
m
in
Auftrags-
zentrum
Standardisiertes
Auftragsformular
1,1
Tage
Standardisierte
Auftragsbezeichnung
EDI@home
2,5
Tage
Rückmelde-
standards
2,5
Tage
JIT-Vorbestellung
gewerbespez.
Materialmodule 4Tage15%55min
Selbst-
kontrolle
3,6
min
4,4
min
0,5
Tage
7,2
min
6
min
5
Tage
3
min
12
min
5,8
Tage
6
min
18
min
12,5
Tage
6
min
8
min
13
Tage
2
min
15
min
37,9 Tage Übergangs-/Liegezeit
27,8 Minuten Rückfragezeit (30 %)
63,4 Minuten Prozesszeit (70 %)
ca. 38 Tage Durchlaufzeit
Fakturierung

ABC analysis XYZ analysis
Value
proportion
Quantity
proportion
A: 70%
B: 20%
C: 10%
A: 70%
B: 20%
C: 10%
Demand
Z products
Y products
X products
Time
The ABC analysis helps identify the orders
with the largest potential for modularization.
The XYZ analysis identifies the
standardization potential.
Order and Activity Structure Analysis

Geschäftsvorfall Instandsetzung (Fremdleistung) aus Wartung (Eigenleistung) - GMG
Lieferant
Objekt-
managemengt
Service(TP1)
Einkauf+Logistik
(TP4)
AKM(TP2)
Serviceleistung
erbringen und in
Rechnung stellen
Zahlungseingang
verfolgen
S
E
Auftrag anlegen
und Fremdleistung
aus RV abrufen
Leistung
fakturieren
M 2.1 M 2.2
M 1.1 M 1.2
M 4.1
M 5.1
Qualität
monitoren
M O.1
Phase I (Bedarfsidentifizierung und Beauftragung) Phase II (Leistungserbringung) Phase III (Zahlungsabwicklung)
S 1.1
S 1.2
S 1.4
S O.1
S 1.3
Instandsetzungs-
bedarf bei IspW
identifizieren
Neuen RV
abschließen
S 4.1
S 2.1
S 5.2
Serviceleistung
zurückmelden
S 5.1
S 1.5
M 1.3
KEINE Hausmeister-Aufträge
Keine HM-
Aufträge
Haus-
meister-
Aufträge
Haus-
meister-
Aufträge
Keine HM-
Aufträge
CS-Aufträge < 250 €
(ohne eindeutige HM-Produkte, ohne
evtl. HM-Produkte, ohne Wartungen)
48.592 3.904 T€
Evtl. Hausmeister-
Produkte
38.843 13.690 T€
116.066 44.194 T€
Hausmeister-Aufträge
Eindeutige
Haus-
meister-
Produkte
Wartungen
< 50 €
Wartungen
≥ 50 €
Wartungen
CS-Aufträge
≥ 250 €
(ohne eindeutige HM-
Produkte, ohne evtl.
HM-Produkte, ohne
Wartungen)
optionale Leistungen (Service)
Alle CS-Aufträge 2002
Anzahl: 180.799 Kosten: 52.511 T€
Anzahl: 67.290 Kosten: 9.840 T€Anzahl: 113.509 Kosten: 42.671 T€
41.816
9.274 T€28.230 4.301 T€
22.020
3.320 T€
6.000
940 T€
26.154 1.636 T€
13.912
997 T€
8.914
558 T€
10.349 2.380 T€
5.315
1.060 T€
4.940
1.292 T€
Gesamt: 64.733 8.317 T€
Nutzer/Dritte: 19.854 2.790 T€GMG: 41.247 5.377 T€
25.474
566 T€
15.725
22.697 T€
22.438
2.268 T€
10.613
9.389 T€
KEINE Hausmeister-Aufträge
Keine HM-
Aufträge
Haus-
meister-
Aufträge
Haus-
meister-
Aufträge
Keine HM-
Aufträge
48.592 3.904 T€
48.592 3.904 T€
Evtl. Hausmeister-
Produkte
38.843 13.690 T€
Evtl. Hausmeister-
Produkte
38.843 13.690 T€
116.066 44.194 T€
Hausmeister-Aufträge
Eindeutige
Haus-
meister-
Produkte
Wartungen
< 50 €
Wartungen
≥ 50 €
Wartungen
CS-Aufträge
≥ 250 €
(ohne eindeutige HM-
Produkte, ohne evtl.
HM-Produkte, ohne
Wartungen)
optionale Leistungen (Service)
Alle CS-Aufträge 2002
Anzahl: 180.799 Kosten: 52.511 T€
Anzahl: 67.290 Kosten: 9.840 T€Anzahl: 113.509 Kosten: 42.671 T€
41.816
9.274 T€28.230 4.301 T€
22.020
3.320 T€
6.000
940 T€
28.230 4.301 T€
22.020
3.320 T€
6.000
940 T€
26.154 1.636 T€
13.912
997 T€
8.914
558 T€
26.154 1.636 T€
13.912
997 T€
8.914
558 T€
10.349 2.380 T€
5.315
1.060 T€
4.940
1.292 T€
10.349 2.380 T€
5.315
1.060 T€
4.940
1.292 T€
10.349 2.380 T€
5.315
1.060 T€
4.940
1.292 T€
Gesamt: 64.733 8.317 T€
Nutzer/Dritte: 19.854 2.790 T€GMG: 41.247 5.377 T€
25.474
566 T€
15.725
22.697 T€
22.438
2.268 T€
10.613
9.389 T€
Activity Structure AnalysisValue Flow Analysis Order Structure Analysis
Timeframe for activitiesTimeframe for secondary and
core processes
Quantitative
framework
Duration and frequencyFunctions and offices involved Jobs and orders
Result
+ +
Nr.
Aufgabenbereich /
Aufgaben
Anzahl
Vorgänge
[pro Monat]
Zeitaufwand
pro Vorgang
[Min.]
Zeitaufwand
[Stunden pro
Monat]
Wieder-holung Min. Max.
1 Ersatzempfänger erfassen 100 5 8,3 Täglich 2 6
2 Taxen setzen/Ändern 40 15 10,0 Täglich 1 3
3 Bemerkungen erfassen 50 10 8,3 Wöchentlich 0 0
4 Risikomerkmale erfassen 20 25 8,3 Wöchentlich 1 1
5 Sonstige Daten erfassen 30 15 7,5 Täglich 0 0
6 CTV-Brief veranlassen 5 10 0,8 Wöchentlich 2 8
7 Internes Telefonat führen 200 3 10,0 Täglich 2 15
8 Externes Telefonat führen 200 10 33,3 Täglich 2 6
9 Teambesprechungen 4 60 4,0 Wöchentlich 0 0
10
Bearbeiten Mails (lesen,
bearbeiten, sortieren,
speichern, löschen etc.)
100 3 5,0 Täglich 0 0
11 Lehrgänge/Seminare 1 1.000 16,7 Jedes Halbjahr 0 0
Result Result
Cause-justified process cost allocation
Process Cost Analysis

Analysis Modularization Integration Implementation
Serviceauftrag
abschließen
Faktura
freigeben
kaufmännisch
abschließen
Projekt extern
abschließen
Fakturaanforderung
aus Service/Projekt
ist vorhanden
Fakturarelevante
Belege aus
Fakturavorrat
auswählen
Sammelfaktura
ist zu erstellen
Einzelfaktura ist
zu erstellen
Zu fakturierende
Posten
zusammen-
stellen
Fakturaanforde-
rung ist in
Ordnung
Einzelfaktura ist
nachzuarbeiten
Fakturapositionen
und -konditionen
nacharbeiten
Fakturasperre
löschen
Faktura
buchen
Fatura
drucken
Faktura mit
Anlage
versenden
Faktura ist
Kunden
zugestellt
Einzelkontrakt
anlegen
Faktura zu
Einzelauftrag
erzeugt
Faktura gem.
Fakturaplan
erzeugt
Lean Administration – The Method
Establishing a business
model
Organization analysis
Value flow analysis
Order structure analysis
Process analysis
Activity structure
analysis
Cost structure analysis
Starting to implement
immediate measures
Module definition
Module optimization
Standardization
Describing and
standardizing
interfaces
Defining the product
creation process
Assigning and
integrating the
modules into the
processes
Capacity adjustment
Implementing the
processes
Organization
adjustment
Introducing process
cost management
Introducing CIP

What are process modules?
Process modules are standardized
subprocesses
They include several related
activities
They can be used in several product
creation processes
Process modules include
1. Job instructions/assistance
2. Process times
3. Manpower needed
4. Qualification requirements
5. Aids (equipment, material,
documentation)
What do process modules provide?
Transparency
Measurability
Quality improvement
Comprehensibility
Process-internal flexibility
Structured approach
Clearly defined input and output
Clear allocation of responsibilities
Description of the resources used
Unambiguous definition of interfaces
Customized product creation processes can be represented by standardized
modules
Structuring - Modularization

Module Matrix
Numeric
identification
Brief description
Description of
task sequence
Required
resources
Staff required /
manpower planning
Standard
operation
times for task
execution
Rules and
directives
Modulnummer Modul Modulinhalt
Maschinen, Geräte,
zusätzliches Personal
Mitgeltende
Unterlagen
Modulzeit/Einheit in
Fh/Einheit
(Format hh:mm:ss)
Anzahl Mitarbeiter
bzw. Maschinen,
MINDEST
Qualifikation
Fb In 1.1. Prüfungen der Gleisgeometrie
Fb In 1.1.1.
Prüfung mit Gleismeßfahrzeug
OMWE
keine Modulsarsierung
DS 820 01 15
Ril 821. 2001
1. Bezl Fb
Fb In 1.1.2.
OMW
DS 820 01 15
Ril 821. 2001
1. Bezl Fb
Fb In1.1.3.
GMTZ
DS 820 01 15
Ril 821. 2001
1. Bezl Fb
Fb In 1.1.4. Handmessung
Fb In 1.1.4.1.
Längshöhe in Gleisen und Weichen
mit Gleisvermarkung
Messen der Längshöhe in Bezug auf
Gleisvermarkungspunkte mit optichem
Visiergerät einschließlich Anschreibung der
Bezugspunkte und deren Dokumentation vor
Ort
Gleisüberhöhungsmesser,
Nivelliergerät, Visiergerät,
CEMAFER- bzw.
BRIESEMEISTER-Messlatte oder
Geodimeter, Bandmaß,
(Sakra/Sipo entsprechend der
örtlichen Rahmenbedingungen
DS 820 01/ 03
Ril 820 / 821/ 824
00:00:10 Fh/m/Gleis 2 MA (1 M Fb, 1 Bua)
Fb In 1.1.4.2.
Längshöhe in Gleisen und Weichen
ohne Gleisvermarkung
Messen der Längshöhe mit optischem
Visiergerät durch Festlegung von Hochpunkten
einschließlich Anschreibung der Bezugspunkte
und deren Dokumentation vor Ort
Gleisüberhöhungsmesser,
Visiergerät, Bandmaß,
(Sakra/Sipo entsprechend der
örtlichen Rahmenbedingungen )
DS 820 01/ 03
Ril 820 / 821/ 824
00:00:08 Fh/m/Gleis 2 MA (1 M Fb, 1 Bua)
keine Modularisierung

Specified by process modules
Exchange data between modules
Define data quality, volume, and transfer
format
Lay down clear agreements between
customer and supplier concerning data
quality
Describe the internal and external
customer-supplier designations
Define complaint and escalation levels
Consistent implementation solves data quality problems
Process
service
request
Plan
CS order
Interface
CS
order
Process Interfaces
Basis for exchanging data and information effectively

Product Creation Process
Interlinking the functional areas – integrating process modules
Product creation processes
A B
C D
PRODUCTION
E F
G I
CONTROLLING
H
J L
M N
FINANCE
K
Process modules
e.g. providing services
B
E F
D
O
OCMBMOM
A
Prepare incidental leasing cost sheet
B
D
N
OCMBMKFM
A
CustomerCustomer
CustomerCustomer

TABG
Invoice
request
Report back
service
Convert
service to
account
Remove
invoice block
FASL
KFA
Billing
cycle
Print and
dispatch
invoice
FGEB
Commercial
completion
Fulfil
service order
Release
invoice
Commercial
completion
Complete
project externally
Invoice request
from service/project
is present
Select invoice-
relevant documents
from invoice
store
Collective invoice
must be created
Individual invoice
must be created
Assemble
items to be
invoiced
Invoice
request is
in order
Individual invoice
must be reworked
Rework invoice
items and
terms
Remove
invoice block
Book
invoice
Print
invoice
Dispatch
invoice with
enclosure
Invoice
is delivered
to customer
Create individual
contract
Invoice
generated for
individual order
Invoice
generated as per
invoicing plan
Process module before
Throughput time approx.
10 days
Interfaces within
module = 3
Offices involved = 3
Individual activities = 8
Throughput time
approx. 3 days
Interfaces within
module = 0
Offices involved = 1
Individual activities = 5
High complexity Low complexity
Structuring - Modularization
Process module after
EXAMPLE

Time taken
Module 2 = ... h
Calculating Capacity on a Modular Basis Example
Activity Structure Analysis
Core activity
File a report 5 min
Open a CS order 7 min
Factor performance 5 min
Process module
Process time = module time = 17 min
Process 1
5 min
Process 2
7 min
Process 3
5 min
+
+
637.5 h
Time taken per module and
month
75%
Probability of the module in
business occurrence
3,000Business occurrences per
month
17 minModule time 1
Quantitative framework
Object structure
Order structure
=
Time taken
Module 1 = 637.5 h
Time taken
Module n = ... h
Total time taken
for core activities
per function

The secondary activities in particular hold high optimization potential because they are
mainly attributable to deficiencies at the process interfaces
Project Potentials
Avoiding waste
Main activities
Secondary
activities
Organizational
activities
Potential
Current
status
Target
status
Capacity requirement
Reduction to a
necessary amount
Optimizing
Individual procedures

Industrializing Business Processes with Lean Administration
Increases transparency and quality,
Enables clear and measurable processes,
Describes areas of responsibility and resource use,
Clearly defines input, output, and interfaces,
Enables individual and customer-specific solutions based on
standardized process modules,
Enables clear capacity planning and process cost accounting,
Reduces organizational and IT costs.

Lean Maintenance and ServiceD
isposition
ofm
aintenance
and
services
C
om
plete
services
M
odularization,
standardization
Lean
Adm
inistration
M
odule-supported
planning
Technicalequipm
ent
m
anagem
ent
Logistics
ofm
aterials
and
spare
parts
M
odule-supported
purchasing
Im
plem
entation
ofw
ork
organization
M
anagem
entof
externalservices
Increasing Efficiency of Maintenance Processes

Lean Maintenance and Service
MODULARIZATION
AND INTEGRATION
Process analysis
Modularization and
standardization
Process optimization
- Creating integrated
teams
- Defining complete
services
- Harmonizing schedules
- Consolidating space
- Harmonizing capacity
- Increasing productivity
1 3
PURCHASING
MANAGEMENT AND
PLANNING
Purchasing management
- Module-supported
purchasing
- Optimized warehouse
planning
- Optimized outsourced
services
Make-or-buy decisions
Planning/dispatch
Support base concept
TECHNICAL
PLANT/EQUIPMENT
MANAGEMENT
2 4
IMPLEMENTATION
Project management
Project controlling
Adjusting capacity
Adjusting the support
organization
Process cost accounting
Introducing CIP
Plant/equipment
management
Separating loss classes
for plant/equipment
modules
Maintenance strategy
Complexity management
Cost analysis

Number of employees: 16,000
Establishments: 7
Local offices: 35
167 maintenance areas
Project DB Netz AG
Reducing maintenance
costs
Locking in the
maintenance-quality at a
high level
Reducing purchasing costs
Higher level of
transparency for planning
maintenance processes
Increasing the availability of
tracks
Objectives
Enhancement of order
processes
Standardized and lean
purchasing processes
(-20 % costs)
Higher planning reliability
Optimized technical
equipment
Productivity improvement
+30%
Reduction of costs
225 million €/year
ResultsApproach
Modularization
Module-supported purchasing
Central order management
SAP R/3
Technical equipment
management

Waste in Indirect Areas
Waste caused by
- the flood of papers and documents
- looking for files, etc.
- unneeded trips around the office (for
copying, faxing, printing, etc.)
- unnecessary copying and filing
- lengthy training periods due to
increasingly complex systems
- lengthy approval processes
- inefficient meeting scheduling
- inefficient telephone conversations
- disturbances at the workplace
- poor design of computer workplaces
The waste category criteria also apply to indirect work areas

Continuous Improvement Process (1)
CIP is a business philosphy:
Improving the competitiveness of the firm by increasing
quality and efficiency, with all employees constantly helping
to provide solutions to problems
in small steps.
time
Productivity
Standard
5.
Evaluate
1.
Identify
Problem-
lösungs-
prozess
4.
Implement 2.
Analyze
3.
Plan

Source: Agnus Consult, 1996
Continuous Improvement Process (2)
Improving business performance with CIP
80%
11%
27%
94%
94%
98%
21%
3%
36%
0% 25% 50% 75% 100%
CIP reduces throughput times
CIP reduces inventories
cost reductions of over 20%
cost reductions of up to 20%
CIP lowers costs
Profits from CIP exceed costs
Example
Studies at 113 firms showed that

Optimizing processes on the basis of tried and tested Lean
Management methods
Creating transparency in internal processes and showing
their strengths and weaknesses
Creating cost transparency and a clear view of costs and
benefits
Providing concrete and practice-based ideas for improving
efficiency
Conveying the Lean Thinking frame of mind and point of
view
Supporting active implementation
Providing the foundation for fundamental customer
orientation for internal administrative, service, and
maintenance organizations
Lean City Club
Objectives

Lean City Club
The objective of the Lean City Club is to continue pursuing the reform efforts that have
already been realized in many local governments and government bodies.
In keeping with the industrial model, the rationalization potentials found in public
administration need to be utilized, allowing cities and municipalities to be refounded as
enterprises for the purpose of
- city revitalization,
- debt reduction,
- improved orientation to residents,
- achieving a more promising starting position in the race to attract private enterprise
and residents
- regaining a forward-looking orientation in cities and municipalities.
Benefits

Reorganizing communal work processes with the aid
of the tried and tested tools of Lean Business
Systems
Fees for the cities = €1 per resident
Conducting an EU-funded project* in cooperation with
the Lean Management Institutes in the Netherlands
and England
Management of the project is led by the Lean
Management Institut Deutschland.
Procedure
Lean City Club
* Forthcoming

LeanAdministration
LeanConstruction
LeanMaintenance
&
Service
Public construction
Administrative bodies
Municipal utilities
Facility management
Reorganizing on the Basis of Lean Business Tools
LeanManagement

Creating Thematic Teams
Public construction
Public transport
Municipal utilities
Facility management
Seelze
DüsseldorfNeuenkirchenHomburg
City5
.....
.....
City20
Short- and
medium-
term
measures
Long-term
efforts at
changing the
law

Lean City Club
Short-term immediate measures to optimize processes
Process costs for the processes studied
Modules and interfaces that can be assembled – like Lego bricks – to form the necessary
administrative, service, and maintenance products individually into complete services
Optimization recommendations for legislative solutions
Results of the Workgroups

NOTE:
Some pages which were shown
at the Lean Service Summit 2004 are not
published in this documentation.
These documents included dates from
customers and were not released.
Please do not hesitate to contact us
for questions and further information.
Contact person: Heiko von Damnitz
Steinbachstraße 25
D - 52074 Aachen
Tel: +49(0)241-89 49 99 93
Fax: +49(0)241-89 49 99 94
E-Mail: info@lean-management-institut.de
www.lean-management-institut.de
THE WAY TO LEAN CITY

The Path to the Lean City - Methods and Best Practices

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