The document describes Phil Williford's Lean Enterprise Operational Excellence Framework. It outlines the key elements of the framework including replacing traditional business "silos" with cross-functional value streams focused on customer value. It also describes the visual management system, problem-solving approach using DMAIC, replenishment systems, standard costing, operational analytics, and role of ERP in the framework. The framework has been proven in various industries and sites internationally to successfully implement enterprise-wide lean programs.

1. Operational Excellence
Framework
For The Lean Enterprise
Created and Proven by Phil Williford

2. Sales&Marketing
CustomerService
PlanningandPurchasing
Manufacturing
Engineering
Quality
Research&Development
Value CUSTOMERS
Traditional Operational Business Structure
ShippingandReceiving
Finance
A traditional operational business structure is made up of individual business
departments or “silos”, which are not aligned with the creation of value for the
customers. Each department is focused on departmental objectives and goals
instead of the creation of overall customer value.

3. Sales & Marketing
Customer Service
Value Stream #2
Value Stream #4
Value Stream #3
QA/RA
Value Creation
EXTERNAL
CUSTOMERS
Lean Enterprise Operational Business Structure
The Lean Enterprise operational structure replaces the traditional “silo” structure
with product Value Streams, where the focus is the elimination of waste and the
creation of value for the customer. Support functions are aligned with the value
streams in the creation of value and the value streams in turn are aligned with the
customer facing functions which interact directly with external customers.
Value Stream #1
Value Stream #5
Value Stream #6
Distribution #7
HR
Finance
R&D / NPD
I.T.
Value Creation
Support Functions
Customer Facing
Functions
Facilities
Receiving

4. VisualManagement
VisualReplenishment
ContinuousImprovement
Elements of the Lean Enterprise Operational Excellence Framework
LeanOperationalAnalytics
LeanStandardCost
DMAICProblemSolving
Operational Excellence Framework
Operational Excellence Framework
Lean operational excellence is not achieved by superficial imitation or the
isolated and random use of lean tools & techniques and systems, but instead
requires an understanding of the underlying principles and how those systems
are applied as a unified framework with a clear strategy to drive financial
results.

5. P
Lean Enterprise Visual Management System
Value Stream
Daily Departmental
Boards
Visual Leadership Center
Boards &
Support Boards
Visual Leadership Center
Policy Deployment
Board
The Lean Enterprise Visual Management System is the primary Enterprise communication
systems to manage operations on a daily basis. The system consists of individual Value
Stream Boards and a Visual Leadership Center for a centralized daily operational debrief.

6. Lean Enterprise DMAIC Problem Solving
The Lean Enterprise Operational Excellence Framework focuses on employee knowledge
creation through problem solving with the Lean DMAIC approach.
Under the Lean Enterprise Operational Excellence Framework, employees are developed
by teaching them to continuously solve problems with Lean DMAIC to improve their
processes. Because the employees are directly involved in the problem solving activities,
the employee themselves become agents of changes. The acceptance of changes
introduced through problem solving activities is directly proportional to the level of
employee participation and involvement. Once employees apply Lean DMAIC and begin to
develop skills through “Learning by Doing”, continuous improvement becomes an integral
employee activity that does not need to be pushed onto them.
Lean DMAIC is a structured problem solving approach that breaks
problem solving into five phases. Define , Measure , Analyze,
Implement and Control. Lean DMAIC directly involves employees
in problems solving activities and encourages them to “Learn
by Doing”.

7. Lean Enterprise Continuous Improvement System
Employees
Ideas & Creativity
Continuous Improvements activities are documented using the Standard A3 Report which
captures all of the phases of the Lean DMAIC problem solving approach.
LEAN
DMAIC
A3 Report

8. Lean Enterprise Visual Replenishment System
Two Bin System
For Raw Materials and Subassemblies
KV (Kanban-Visual) Loop
For Finished Goods
The Two Bin system for raw materials/subassemblies and the KV Loop for finished
goods, allow for visual inventory management and visual production control which
is directly tied to customer demand. Build what you need, when you needed.

9. Lean Enterprise Lean Standard Cost System
Std. Flat Labor RoutingValue Stream Map Earned Hours
@ Standard
Labor and
Overhead Rates
Plus
Materials @
Standard cost
Standard
Product
Cost
In the Lean Enterprise Standard Cost System; products are organized by Value Streams
and “Standard Work” is captured in Value Stream Maps, from which the corresponding
Standard Flat Labor Routings are calculated. “Standard Work” results in “Standard
Costing”, which forms the baseline for continuous improvement measurements. As the
Standard Work is improved, the Standard Flat Labor Router is improved, which results in
a reduction of manufacturing lead times, inventories and product costs. Improving
standardized work is a never-ending process.
Standard Work

10. Lean Enterprise Operational Analytics
The Lean Enterprise Operational Analytics System, provides weekly, month to date, and
year to date Value Stream operational reports with the necessary information to measure
Value Stream performance against the Standard Gross Profit Margin that is expected from
the Standard Work processes. If the standard processes are generating negative
manufacturing variances, the Value Streams will engage in Continuous Improvement
activities to resolve the cause of the manufacturing variances. Once the processes are
capable of maintaining the Standard Gross Profit Margin, continuous improvements
activities are focused on generating positive manufacturing variances to increase the Gross
Profit Margin. The Value Stream Reports include, Labor Efficiency, Cost Center Spending,
Price Purchase Variance, Material Usage, Scrap, Raw Material / Finished Goods Inventory ,
Shipping Revenue and Back Orders / Back Log.
Work
Orders
Mfg.
Variance
Analysis
Labor
Material
Burden
@ Standard
@ STD Gross
Profit Margin
If Variance = 0
If Variance =
Negative
If Variance =
Positive
Below STD Gross
Profit Margin
Above STD Gross
Profit Margin
Continuous
Improvement

11. Lean Enterprise and The Role of ERP
ERP
Database
ERP
System
Lean Operational
Reports
In the Lean Enterprise Operational Excellence Framework, the ERP system functions as the
core database and transaction engine. Daily operational management is executed using the
Visual Management and Visual Replenishment Systems. Manufacturing work orders,
purchase orders, receiving transactions and shipping transactions are captured daily by the
ERP System and data is stored in the ERP database.
Visual Management
Visual Replenishment
Mfg. Work Orders
Inventory Mgmt.
ERP Transactions

12. About Phil and Lean Enterprise
Operational Excellence
The Lean Enterprise Operational Excellence Framework is the result of Phil Williford’s
20+ years of combined experience in Lean Management within the Automotive and Medical
Device industries; with the goal of creating a clearly defined path to a successful and
sustainable implementation of an Enterprise Wide Lean Program.
The Lean Enterprise Operational Excellence Framework has been proven in both Domestic
and International sites.
(North Carolina, Florida, Texas, California, Connecticut, Missouri, Puerto Rico, France, Germany and the Czech Republic)
• It was used as the foundation for the Medtronic Corporate Lean Sigma Platform.
• Utah State University (School of Business) case study in the Shingo Prize modeling for
Operational Excellence.
• Including the awarding of both the Shingo Prize for Operational Excellence in 2003 and
The Shingo Silver Medallion in 2010.