5. The System- the Fight to LEAN
• “LEAN is the pursuit to create a
culture of continuous
improvement. Its not about a
magic silver bullet, there’s no
secret, it about everyone doing
exactly as there supposed to each
and every day. The pursuit of
perfection”
• HOW…
• “The Toyota system is the
playbook.”
• Mr. Troy Gamble, MBA, LEAN
Expert, 6 Sigma Green and Black
Belt, Disney…
7. 6 Points
Specify the WorkEliminate Waste Structure Communications
Address Problems…NOW One Step at a Time Leaders gotta Lead
(and haters gonna hate…)
9. Symptoms of the Problem
• Competition was increasing from new
venues
• Metropolis Casino was relocated and
renovated
• Non-Gaming options needed to be
improved as a significant element of the
overall entertainment experience
• Hirsch recognized that challenges lay
ahead for LEAN implementation aimed
at customer service and operational
effectiveness
10. Symptoms of the Problem
• The economic environment was a
concern
• Macroeconomic collapse of the Great
Recession caused reduced customer
spending
• Declining revenues
• Market Share competition was intensifying
• Corporate Operating Strategy had
embraced the need for enhanced
Customer Service performance
11. Symptoms of the Problem
• Jobs were viewed as Stressful
and that needed to change
• Customer Service Rating
needed to change from B to A
• Morale was down and needed
to improve
• Team Member bonuses needed
to grow positively
12. Support the Underlying Problem
• Caesars culture was strongly
oriented toward optimizing the
customer experience
• They realized there was increasing
competitive pressure and new more
aggressive corporate financial goals
going forward
• Hirsch felt he had the body of
experience to effect the needed
initiatives and subsequent change
13. Support the Underlying Problem
• Experience demonstrated that
employees who were engaged
viewed the effort as an effective
way to instill continuous
improvement mindset into the
organization
• Hirsch felt that he intuitively saw
opportunities for elimination of
waste
• Hirsch felt that ignoring the
opportunity to improved doomed
them to death by a “thousand
small cuts”
14. Clarify the Nature of
the Decision Problem
• The new financial goal had created the needed motivation
to intensify improvement efforts at Metropolis
• Successes at earlier efforts clarified the need to address
the issues of waste with LEAN processes
• Hirsch felt that “We thought that our behavior would speak
louder than our words, and it did” about LEAN processes
being GOOD for everyone
• Tunica demonstrated that comprehensive buy in buy all 34
VP’s at kaizen events would fuel overall success of the
effort
• Hirsch was convinced that based on experience the “shock
and awe” approach was effective
15. Major Decision Problem
How can Caesars become more profitable while
improving employee satisfaction/bonuses and levels
of customer service (B to A) in the face of increasing
competition and economic headwinds?
16. Solutions/Alternatives
• Implement Organization Wide
Process Improvement Initiatives
based on LEAN principles and high
involvement Kaizen
• Implement LEAN principles using
Process Excellence Experts
• Keep it as it is – Open the new
operation utilizing current business
practices
17. Implement Organization Wide Process
Improvement Initiatives based on LEAN
principles and high involvement Kaizen
Advantages
• Hirsch is committed
and trusts the process
• Company has
experience with the
LEAN process
• Elimination of
inefficiencies and
waste
Disadvantages
• Need for high
involvement causes
coverage issues
• Expense in training
and on-going
implementation
18. Implement LEAN principles using
Process Excellence Experts
Advantages
• Would already have
employees that
know this process
• The knowledge from
experts that can see
the big picture is
there
• Other resources
could be applied to
other projects
Disadvantages
• Potential knowledge
from future
participants
• Employees may not
buy-in to the process
as they were not
involved with the
process
19. Keep it as it is:
Open the new operation utilizing
current business practices
Advantages
• No new resources
needed to do
additional training
• Current systems are
good and allow for
some improvements
• There would be no
disruption to current
work flow
Disadvantages
• Current systems may
not be able to achieve
new performance goals
• Increasing competition
• Increase in customer
expectations in the
non-gaming operations
could impact existing
gambling operations
24. Lean Management
• Adapted in the West
from Toyota Production
System
• Philosophy of continuous
improvement that seeks
to increase the
competence with which
an organization’s
processes can deliver
value to costumers
26. Choice and Rationale
Implement Organization Wide Process Improvement Initiatives
based on LEAN principles and high involvement Kaizen
27. Choice and Rationale
• Monitor progress before
proceeding to each
subsequent step in the
process
• Market competition
demands better LEANer
ways to do business
where waste and
inefficiencies are found
and eliminated
• Involving greater
numbers of employees
strengthens the depth of
the movement and
increases its benefits
and probability of
success
• Looking to generate the
continued momentum
from the successes of
the previous projects
28. Choice and Rationale
• The benefits of collective
intelligence are most
realized as more
participants and
perspectives are included
in the analysis
• Acceptable ROI might be
gotten if this concept
were adopted thus
allowing for the BEE
advantages and
social/moral imperatives
to be realized and
expanded upon
• Management has demonstrated a
significant level of support for the
overall initiative and therefore
would support the enhancement of
the new operations inclusion under
the leadership of Hirsch and his
team
29. Action Plan Goal
Improved Profitability along with enhanced Employee
Satisfaction and Customer Satisfaction with associated
operational efficiency improvement is the goal despite
facing increasing competition and economic pressure
30. Implementation Action Plan
Who
Led by Hirsch
When
would start with the
kickoff event and
initial engagement
of the
Who
involved personnel.
What
Kaizen events based
around the
How
LEAN Team concept
as was the case in
previous successes.
What
The 5 day workshops
would
When
follow the kickoff
event that would be
attended by as
many team
members as
possible.
Who
The event facilitators
would guide the
learning and practical
work to be very
productive and
specific to the actual
work processes in the
environment.
31. Action Plan Follow Up
When &
How
Once all 5
days of the
event had
been
completed by
all the
required
personnel
Then the
ongoing
effort to
maintain
the
momentum
would
ensue
The start to
this phase
would be
marked
with the
same CEO
calls that
took place
for Tunica
How
The KPI
Boards and
the weekly
assessments
would
become the
new
standard.
Editor's Notes
TOYOTA SYSTEM Most significant invention since production automation and the Factory system
First applied to repetitive tasks.
Seeking perfection - What is that to this sysytem
History of TOYODA System
Post WWII 1948-1975
Socio-Technical System
Original called JIT – make only what's needed
JIDOKA – automation with a human touch
Ohno saw US SuperMarkets as models of JIT
Kaizen – Continuous improvement
Genchi Genbutsu – go to the source
Pull System
Heijunka – work like a tortoise not a hair – work load level
Kanban - New inventory is produced when there is consumption
Jidoka – detect an abnormality, STOP, FIX the problem, research and fix the root cause
Demings influence:
USArmy in post war Japan to help with the Census
Deming's message to Japan's chief executives was that improving quality would reduce expenses while increasing productivity and market share.
https://en.m.wikipedia.org/wiki/Toyota_Production_System
https://en.m.wikipedia.org/wiki/W._Edwards_Deming
https://www.slideshare.net/mobile/DebashishBanerjee/toyota-production-system-7684496
5S – actually Japanese words with "S" when literally translated.
How to organize a work space for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order.
7 Wastes –
1. Overproduction
2. Unnecessary Transport
3. Inventory
4. Worker Motion
5. Defects
6. Over processing
7. Waiting
In knowledge work this is found in:
1. Printing Docs
2. Requesting Info
3. Setting up Meetings
Who can name a few others???
Https://www.slideshare.net/mobile/DebashishBanerjee/toyota-production-system-7684496
https://en.m.wikipedia.org/wiki/5S_(methodology)
1.Relentless attention to detail
2. Commitment to Data Driven Experimentation
3. Charging worker with the on-going task of increasing efficiency
4. Eliminating waste in their jobs
Combined this is LEAN
Troys Steps to LEAN SUMMARY:
Organizational Readiness
Baseline identification and Planning
Learning to See (the opportunity at hand)
Work the Process Improvement (7 Wastes, 5 Why's )
Continuous Pursuit of Perfection
Definition: Tacit Knowledge
Tacit knowledge is knowledge that's difficult to write down, visualize or transfer from one person to another.
Tacit knowledge is a particular challenge for knowledge management. Firms would like to prevent knowledge loss due to employee turnover. However, tacit knowledge almost always goes with the employee.
Tacit knowledge is essential to competitive advantage because it's difficult for competitors to copy. It's the reason some firms pump out innovation after innovation while other firms struggle. Ex APPLE
The following examples:
How to speak a language
2. Innovation KEY TO THIS CASE
3. Leadership
4. Aesthetic Sense
5. Sales
6. Body Language
7. Intuition
8. Humor
9. Physical Coordination
10. Emotional Intelligence
Eliminate Waste
7 Wastes
5 Whys?? – assume the process is wrong and ask why, why why
Look for all waste BIG and SMALL
Its take effort to achieve
Periodically review structure and content of every job
Specify the Work
KEY – change assumption that knowledge work is tacit
4 Steps:
1. Codify repeatable Steps
2. Not everything will fit
3. Get buy in
4. If its Tacit today… try again tomorrow
Structure Communications
Define WHO should be communicating, how often and what
Create Shared understanding
Understand their job at hand
Resolve disagreements with facts, not opinions
Address Problems Quickly and Directly
Turn the organization into a PROBLEM SOLVING engine – HOW??
He who broke it (identified the problem) should fix it
Solve problems where they occur and immediately
It takes YEARS to build the PROCESS
Start with small projects
Codify lessons learned with a central leader
Continue to look for new ways to work
Its not for every situation – visionary, experimental or inventive work might not fit
Engage the Leaders
Engaged involved leaders were more successful – big surprise
Senior level engagement, long term commitment, training, culture shift and process reinvention are the building blocks
https://www.lean.uky.edu/reference/terminology/
1. Competition was increasing from new venues
2. Metropolis casino was relocated and renovated (Neighboring states within a short driving distance had change laws that put numerous outlets for limited gaming in many areas that would be traditional draw areas for the casino). To keep their existing customers and encourage others to try the casino, Harrah’s Metropolis needed to offer a total entertainment experience that went beyond gaming.
3. Non-Gaming options needed to be improved as a significant element of the overall entertainment experience (Harrah would need to provide value – added experiences)
Bringing the expertise of having elevated customer service to a high level while reducing waste in Tunica, Caesars believed Mr. Hirsch could be just as effective in Metropolis.
When in 2014 Brad Hirsch assumed the position of Senior Vice President and General Manager at Harrah’s Metropolis Casino and Hotel at Metropolis, Illinois, he had previously been successful in implementing LEAN operation principles at three different Caesar properties in Tunica, Mississippi.
1. Industry – leading loyalty – card program
2. Introduced sophisticated customer-service measurement systems
Hirsch recognized that challenges lay ahead for LEAN implementation aimed at customer service and operational effectiveness.
* The economic environment was a concern
* Macroeconomic collapse of the Great Recession had led to reduced customer spending on the entertainment
* As a consequence, casinos in the region experienced declines in revenues
* And competition for Market Share was intense
* Jobs were viewed as Stressful and that needed to change
* Customer Service Rating needed to change from B to A
* Morale was down and needed to improve
* Team Member bonuses needed to grow positively
All Caesars-owned properties embraced Customer Service as an essential element of the corporate operating strategy, and strove to continuously increase customer satisfaction as gauged by rating scores.
Every week, Caesars surveyed a random sample of recent customers for each property for various dimensions of their Caesars experience (staff helpfulness, staff friendliness, speed of service, and other metrics). Data showed that moving a customer from a B to an A score resulted in up to 12% increase in customer spending, and in increased the bonuses for team members.
The goal at the end of 2008 was to deliver more conversions from B to A scores, both to increase customer loyalty in a hypercompetitive landscape, and to maximize team-member bonuses and enhance employee satisfaction.
* Caesars culture was strongly oriented toward optimizing the customer experience
* They realized there was increasing competitive pressure and new more aggressive corporate financial goals going forward
* Hirsch felt he had the body of experience to effect the needed initiatives and subsequent change
* Experience demonstrated that employees who were engaged viewed the effort as an effective way to instill continuous improvement mindset into the organization
* Hirsch felt that he intuitively saw opportunities for elimination of waste
* Hirsch felt that ignoring the opportunity to improved doomed them to death by a “thousand small cuts”
Overall, Hirsch recognized that LEAN, with its easy-to-understand tools and concepts, could create a consistent and focused approach to process improvement for all layers of the business.
An IT manager observed, “Having done a few kaizen events, I continue to see that this is a true employee engagement tool.”
* The new financial goal had created the needed motivation to intensify improvement efforts at Metropolis
* Successes at earlier efforts clarified the need to address the issues of waste with LEAN processes
* Hirsch felt that “We thought that our behavior would speak louder than our words, and it did” about LEAN processes being GOOD for everyone.
* Tunica demonstrated that comprehensive buy in buy all 34 VP’s at kaizen events would fuel overall success of the effort.
* Hirsch was convinced that based on experience the “shock-and-awe” approach was effective
The team designed the kaizen events to be lightning fast and generate immediate results that would convince the rest of organization that the initiative had merit. Hirsch observed: “Our regional leadership team wanted to make it so big that our team members could feel the earth tremble with operational improvements. This occurred as a direct result of how the Tunica team began to embrace the intense kaizen spirit and the support we received in areas from the senior leadership team to Facilities to IT and everyone in between. Everyone played a part.”
Hirsch believed the organization had created innovation around, and embraced, the grand objective of creating a culture where problem solving, waste removal, and customer service improvement were ongoing parts of everyone’s job.
Advantage: The advantage/benefits of this is that the system is already a known entity to Hirsch. He’s emotionally committed to the structure and process.
Advantage: There would be less learning to scale this system throughout the organization as other in the company have had experience and would communicated the positive results
Advantage: Improved B to A customer service rankings are a stated goal of the company and a direct goal of the system. Clear alignment of activity and goals.
Advantage: Elimination of inefficiencies and waste would help to satisfy ever-increasing ROI and financial goals.
Disadvantage: High involvement Kaizen event activities would result in insufficient coverage of key service areas based on their limited staffing resources.
Disadvantage: There is significant expense involved in training and ongoing system implementation.
Advantage: There would be less employees learning this system throughout the organization based on the expert’s participation. Those who already know what they’re doing would lead the effort in looking for inefficiencies thus the overall process is more efficient.
Advantage: The development/knowledge of a greater depth of new best practices and service offerings from experts who can see a larger picture
Advantage: The overall resources of the company could be applied to other customer facing or service providing projects with better ROI possibilities making it a better value generation strategy for the company and its shareholders.
Disadvantage: A disadvantage would be the potential loss of future participants who have knowledge and experience in LEAN and kaizen practices
Disadvantage: Loss of “by-in” and internalization from the front-line customer facing personnel.
Advantage: No new resources would be needed to do the additional training beyond the established expert group.
Advantage: Current systems are good and do accommodate some improvements in process
Advantage: There would be no disruption to the current work flow. Employees would participate to a lesser degree through various means including, “focus groups, suggestion systems and other avenues.”
Disadvantage: It’s questionable if the current systems can achieve newly established performance goals.
Disadvantage: Increasing competition could cause reduced profitability
Disadvantage: Increasing customer expectations in the service and non-gaming operations could obsolete existing gambling operations.
The Kaizen events lasted over a 5 day span.
Day 1: consisted of education about LEAN concepts
Teach employees to recognize waste using the acronym DOWNTIME
Defects, Overproduction, Waiting, Not engaging people, Transportation, Inventory, Motion, Extra processing
Day 2: participants mapped the work processes targeted for improvement and did a waste walk where each participant observed a process and wrote down every waste they identified.
Day 3: the team identified the root cause of each waste into quadrants by impact and ease of removing waste. So it could have a large impact and be an easy process to remove the waste or a small impact and easy to remove the waste and these would be attempted to be resolved during the Kaizen week. Those that were high impact but hard to remove would be handled in a follow-up project and anything that was a low impact and hard to remove would be ignored.
The 5 Whys were also introduced on Day 3. This is the process used to identify the root causes of the problem or waste.
The example in the case involved silverware.
Why are attendants spending 4 hours a day polishing silverware?
Because the silverware has spots on it which is unacceptable on the dining table
Why does the silverware have spots?
Because that’s the way it comes out of the dishwasher
Why does the dishwasher leave spots on it?
The dishwasher does not hold a consistent temperature during one phase of the cleaning cycle
Why is the one phase of the cleaning cycle not holding consistent temperature?
The maintenance is not being done on a regular basis as suggested by the manufacturers guide
How can we remedy that situation?
Have maintenance done that is in line with the manufacturers guide.
Day 4: was devoted to try-storming. This is where they proposed and tested possible remedies to the root causes of the problems identified the previous day. During this day the 5 S’s were introduced.
Sort, Set in Order, Shine, Standardize, Sustain
Day 5: the team presented its work to the property executive team and managers. The team members shared their value stream maps, waste analysis and try-storm solutions, and described the follow-on improvements they plan to make. Senior leaders recognized the members of the team for their hard work and reinforced the cultural shift taking place.
Caesar’s continued the Kaizen work after the 5 day event as well. This is an on-going process and they developed the 3 post-kaizen pillars.
Standard Work – Make sure documentation was done (instructions, pictures, tools required, etc.). This way employees stayed using these new processes.
Key Performance Indicators – You had to be able to use metrics to see the results. There were KPI boards posted in each area so the employee could see what they had done is saving the company time and money and continuing to be tracked.
Daily problem solving – Every day team members did a Gemba walk to focus on daily problem solving. They met at the KPI board to discuss performance, report barriers, share improvement ideas, and decide on next steps.
Lean management adapted in the West from the Toyota Production System, continuous improvement that seeks to increase the competence with which an organizations processes can deliver value to costumers.
It is core aim to eliminate waste that occurs in the form of waiting, rework, excess production etc.
A costumers journey inside a casino, from arrival to departure, involves any different value streams, each of which delivered a product or service experience: valet parking, hotel check in, food and beverage services, gaming, housekeeping operations, retail, spa services etc. Each of these value streams was a potential target of opportunity where waste could be identified and eliminated with the objective of improving the costumer experience and company profibility by delivering a product or service batter, faster and a lower cost.
Lean five key principles are:
Determine what the customer wants: it is important to know what the costumer values on a product and/or service
Eliminate waste from the value stream: determine how value is currently delivered to customers and cut unnecessary steps
Wherever possible, use continuous flow: keep the work, the progress going without adding any unnecessary steps.
Use pull (not push) to govern how material flows between steps: Let the costumer demand govern how much and when to produce. This helps to avoid spoilage
Manage towards perfection: Continuously improve every service/process.
Kaizen- refers to activities that continually improve all functions and involve all employees from the CEO to the assembly line workers
