It’s always desirable to have visibility on upcoming work to plan ahead and optimize resources. That’s why forecasts are so attractive and also dangerous: they’re equal parts trending analysis and wishful thinking [how could a business run with no predictions?].
In the
Manufacturing Industry a build-to-stock model can be used to stack-up inventory
based on a forecast with the purpose of leveling the load and thus gaining
stability in the supply chain [what are
the associated risks of a build-to-stock strategy?]. It is less common to
find this scenario in the service industry as most of the work is on-demand. Either
with the use of a forecasting tool or with solid customer orders at hand it is
recommended to use a visual system to organize work.
Heijunka,
usually translated as “level loading” is a lean system designed as a strategy
to deal with “Mura” (unevenness) caused by demand fluctuation. This concept
goes deep but in its basic form it can be described as follows: Sales provides
demand, the demand is analyzed by Planning against Operations capacity until
agreement is reached (1st loop); the Heijunka box/board is loaded for a certain time period (shift, day,
week) and progress is measured, if the target is not met then Operations adjusts
capacity (2nd loop) or/and the demand is renegotiated (3rd
loop). The loops illustrate how the System learns and adjusts.
Fig1.
Heijunka (basic) System flowchart
The Heijunka box/board resides at Operations (or where the job is
administrated / happening). A typical arrangement of a Heijunka box looks like
a cluster mailbox. The actual set-up and appearance varies widely, depending on
the needs of the people using the box, but in its basic form one axis displays
the time period and the other the products or services so both the total
product/service load and mix are visible for every time slot.
Fig2. Example
of a Heijunka box
Heijunka
is the best tool I know to organize upcoming work in a Visual Management
environment but I’ve always wonder its limits in the service industry. That got
me to think in the Banker’s dilemma.
Ideally,
requests for service would always come “leveled”: exact amount of work for the
exact amount of resources. Picture yourself walking into a bank and the
customer before you leaving the cashier window right as you approach and the
same occurring for the customer after you. Of course, variation happens and the
banker is faced with a dilemma: hiring 6 clerks at the expense of having half
of them do nothing during low demand or hiring 2 clerks and make customers wait
during peak hours. I believe there are countermeasures that could make any of
these approaches manageable.
Let’s
imagine that the banker decides to split the difference and hires 4 clerks. During
low demand hours the extra cashiers could flex-out, if properly trained and
empowered, to do other value adding activities like assisting Customers on the
phone or opening accounts. It is of great importance to properly identify the
streams of revenue for the Company so employees don’t get buried under wasteful
tasks when flexing [what does their value
streams look like?]. During peak hours one countermeasure could be to increase
the comfort of the customers on their wait time by offering restful seating, free
coffee, climate control or other amenities that ease the pain of been trapped
at the bank. Also, another employee, like a walk-around supervisor, could
flex-in whenever needed. I’ve seen employees flexing work and comfort
increasing tools been partially successful (better if combined) but I will
venture that the situation can be furtherly improved by reflecting on Heijunka and its connection to Visual
Management.
Let’s
rethink the same scenario adding a simple idea: if we could somehow identify
the specific service the customer requires beforehand, and make it visible for
everybody, it would be easier to balance the load!
For
the sake of simplicity, let’s assume the bank reflects deeply on their value
creating activities and defines four value streams for its services. To avoid
entering in the financial services details, let’s call them A, B, C and D types.
Again for simplicity, let’s give types A and B an average completion of 5
minutes, C of 8min and D of 12min. Now let’s install one line for each type of
customer to arrive. When there is one customer on each of the lines the total
workload would be of 30min. The set-up would look something like this:
Fig3.
Hypothetical configuration for the Banker’s dilemma.
An
important question here is: if you’re in line for a transaction that should
take 5 minutes for how long will you be willing to wait? If you’re not the
patient kind, 15min might be close to unacceptable [how could these be confirmed?]. Assuming less than 15min is
desirable, let’s analyze some scenarios:
Scenario
1: if all lines have 2 people waiting it might be
time to flex-in an extra pair of hands.
Fig4. Demand
scenario 1: A=3, B=3, C=3, D=3.
Scenario
2: If line D is empty, C has one Customer in line
and A and B have three Customers waiting; it might be time to convert line D to
serve customers from either A or B.
Fig5. Demand
scenario 2: A=4, B=4, C=2, D=0.
In the same scenario, what would be
the wisest think to do if also c=4? When would it be time to flex-out an
employee? What could the signal be? These situations and more can be easily
simulated with real people during a lean transformation. Once the system gets
optimized, better comfort tools can be planned to enhance the Customer
experience.
Finally, the Lean Sigma practitioners
familiarized with Heijunka might wonder where the Heijunka box is. Like those
giant chess boards played with real people, you can imagine the Customers
entering each line position themselves inside a square of the Heijunka box. As
time advances, picture the squares been cancelled until the clock runs out for
the day.
Fig6.
Heijunka box view of the Banker’s dilemma.
This
reflection can be extended to any Customer facing business (like Supermarkets
or Hospitals). It also provides an extreme case of the use of Heijunka that challenges the general
belief that this tool can only be applied to certain environments (like
Manufacturing). It proves to me that when dealing with true Lean Sigma tools,
because they’re grounded on sound principles, the limits of their applications
are the limits of our own creativity.