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Office Kaizen With Customer Involvement - Joseph Vitalo and Mark Guy

The Problem as Presented

An industrial machine manufacturing company was experiencing problems with fulfilling its foreign orders, the largest number of which were from Mexico. Customers were complaining that the lead time for orders was too long and the orders, even with that lead time, did not arrive when promised. The irritation was mounting to the point that future business was now at risk. To head off the potential loss of business, the Sales department asked for help from the Continuous Improvement (CI) team. We on the CI team were told that the problem was the Houston facility. While foreign orders might be completed by any one of six different plants, the Houston site supplied the special packaging containers for each order and that element was needed before the order could be fulfilled. When problems rose to the level of anger, the question to the fulfilling plant was always "Where's my order?" and the response would be "Held up. We are waiting for Houston to ship so we can complete it."

So to Houston we went to develop a clearer understanding of the problem. Since there was very little information about the problem, we arranged to get all the key stakeholders together to map the end-to-end work process and build a good description of what was going wrong. This was very beneficial because what we learned from the session indicated that Houston had nothing to do with the problem.

Houston Meeting

At the meeting were two of the company's CI team members, myself as an outside consultant, the Regional Manager for the business, four representatives from Sales and Order Processing, four people from the Houston facility including the head of the facility, and two representatives from the major Mexican customer including a senior vice president.

Before we began the meeting, we had people introduce themselves. We reviewed the Working With Others (WWO) skills everyone would use in the session. We issued people prompt cards for the WWO skills. The skills are clarifying and confirming, which help you build an accurate picture of what another person is sharing; and constructive criticism and hitchhiking, which allow you to add your ideas in a way that builds better solutions while maintaining positive relationships. Together, using the skills keeps people relating decently with each other even when they deal with a contentious issue. Given the problem we were addressing, these skills were critical to keeping a constructive atmosphere during the meeting.

After opening the session, we mapped the work process from the customer issuing an order to the customer receiving the product. This was very well received, as the business never had a map of their process before. The process was multi-departmental, so we explored each department's responsibilities and challenges when dealing with international orders. We concluded the meeting by summarizing what we had learned about the problem and its reasons and then deciding our next steps.

The meeting served several purposes very successfully. First, it put faces to names—no one had met each other before in person, except for the sales representative. All had worked together on the phone. Meeting each other and using the WWO skills with each other created a more positive feeling among all the parties. Next, it documented the work process. Mapping the process proved to be a positive experience for everyone. People were amazed at what actually went into the process and really enjoyed and received a lot of benefit from the mapping. The customer really gained an understanding of what the company went through in processing its orders. Using the map, we were able to appreciate each department's responsibilities and challenges when dealing with international orders. In the end, we had a better understanding of why the process was not working.

The Real Problem

The bottleneck wasn't Houston. When we looked at all the delays we had documented in the map, it was clear that the lead time and failed on-time delivery were due to problems elsewhere.

Order processing, for example, had unnecessary operations and imposed unnecessary delays when information not critical to the order was being corrected.

The order fulfillment facilities had no process for handling international order inquiries and no special handling for such orders even though they required expedited treatment. They also misunderstood the "ship dates" for orders and would credit themselves as registering an "on time" shipment even when the shipment was late. As a result, from their perspectives, there never was a problem—at least one that involved them.

The customer also acknowledged contributing to the problem. For example, a portion of the delays was due to sometimes sending orders in Spanish. Since most orders were made in English, the order processing group had no one who read Spanish. Hence, they had to request that the order be re-issued in English. Added to this, the customer did not understand the affect a slow response to a request for order clarification had on on-time delivery. The customer had assumed that the order would be processed in parallel as order information other than quantity or product was clarified.

Based on this analysis, we decided that the greatest improvements would come from eliminating waste from the order handling process. In parallel, the fulfillment plants would correct their understanding of the ship date that they needed to satisfy and the customer would standardize the issuing of orders in English and investigate more timely response to inquiries.

International Order Processing

International orders are processed in the northeast at one central location. That is where we went to complete our Kaizen event. The process itself includes receiving the orders, processing them administratively, selecting the plant to fill the order, assigning the order to the fulfillment location, processing shipping documents, arranging shipping for the completed order, and completing final shipping paper work.

Before the event, we completed a scope document that spelled out the focus of the Kaizen event, the reasons for performing it, and provided other information vital to preparing for the event. Based on the scope definition, we built a straw person direction for our 3-day Kaizen event at Order Processing. The proposed mission was to increase customer satisfaction by improving on-time delivery and reducing lead times for international orders. It specified both the business result we sought to produce and the work process improvement we would make. Using the scope information and the results of our mapping and diagnostic work in Houston, we defined the following goals for the event:

  • Reduce wait by 50%
  • Reduce inspection time by 66%
  • Eliminate rework by 100%
  • Reduce unnecessary processing by 80%
The goals spelled out the specific work process changes that would realize the mission for the event.

Our team was made up of the international sales manager, the international order processing manager, a worker who processed international orders, two representatives from the key foreign customer, and a Houston plant representative. We wanted to sustain the collaboration between customer and sales and between administrative office and plants so we made sure to include everyone in the event.

The Event

After introducing the event and doing an ice breaker exercise to get people familiar with each other, the customer did a presentation on his company, the challenges it faced and the importance of the product they purchased to their business's success. This provided a solid foundation for understanding the importance of the event to the customer and as well as our company.

Next, we overviewed the Kaizen process, set ground rules for working together, and took care of administrative issues. Before building a detailed picture of the work process itself, the team completed a warm-up exercise in which members thought about and shared with each other what seemed to work well in order processing and what was problematic. This exercise gave us an opportunity to start thinking about the work process. It uncovered both the team's concerns and the concerns that the team had heard from other employees. We built a list of pluses and minuses with respect to how the work process currently operates, posted this list, and used it as a reference during the event.

Focus the Event

We followed the Kaizen process as described in the Kaizen Desk Reference Standard (Exhibit 1) making the adjustments for doing an office Kaizen that it provides in the Customizing the Kaizen Process chapter.


Exhibit 1. Tasks Completing the Kaizen Event



Once we mapped the work process, we taught the team about waste and how to detect it. Then we used this skill as we "walked through" the work process. For each operation, the order processor talked through what she did to accomplish it. She identified the information and equipment she needed and where she obtained each. Since the event was happening in her work area, we could see where each task was performed and each resource was located. For computer operations that involved working with input and output screens, she displayed the actual screen with which she worked and what she had to do with it. Team members asked clarifying questions guided by our walk through handouts. They also recorded instances where they thought waste existed. After the walk through, we gathered together the team's observations of waste. Team members were consistent in their judgments.

Based on these observations, no changes were required to the pre-event mission and goals. We also verified the "Do's and Don'ts" list we built prior to the event did not need modification.

Evaluate the Target Work Process

We then moved to evaluate the work process. Here, our scope work before doing the event paid off. We understood from that work that the order processing cycle time could run anywhere from 9 hours to 16 days (not a error). The difference was not due to what was ordered but to either incorrect or incomplete information or coordination among departments. Because of these times, a usual process observation was not possible. We adjusted—before the event—by asking the order processor to keep a time log for processing each order that was received for a period of two weeks prior to the event. We had this information to analyze during the event.

By applying our evaluation tools, the team uncovered the following key forms of waste.

  • Wait (e.g., wait for correction of a purchase order, sales to release the PO, non-custom product ID that is issued by another department and required by government regulation, customer to return leased shipping containers, selected fulfillment site to check a requested order and report back whether they could fill it, order status feedback from fulfilling site(s), weights and dimensions from fulfilling site(s), certificate of origin, and corporate logistics to make the shipment and report final shipping information)
  • Inspect (e.g., check order against PO, PO for serial numbers, status of an order, status of shipment in computer system, weights and volumes for order)
  • Rework (e.g., correct PO amendments, obtain sound shipping containers when a damaged container was provided, re-fax certificates of origin, correct weights and dimensions, correct PO for serial numbers, resubmit order to another plant when rejected by first choice)
  • Unnecessary Processing (e.g., sales reviewing POs since there was no action they could or would take on the order)

Solve the Performance Issue

With the sources of waste identified, the team generated improvement ideas. We got ready for brainstorming by building brainstorming sheets—one sheet per goal. On each sheet we wrote a goal and listed the observations of waste that related to it. For example, Goal 1 was "Reduce wait by 50%." On this sheet we listed all the observations we made relative to wait. This allowed us to check whether we were addressing each goal with solutions and to roughly calibrate whether we had enough improvements to realize it.

The team produced nine ways to reduce wait time. Some of actions also reduced inspection. The producer-side improvements were (1) standardize order sending including e-mailing all documents and submitting all orders in English; (2) build a simple spreadsheet marco to automate the computation of weights and dimensions; (3) provide the customer a quarterly updated price list for products; (4) build a fulfillment site procedure for processing international orders; (5) train fulfillment site personnel in the new procedure; (6) review order status just once daily; and (7) have fulfillment sites review orders for fulfillment capabilities within 24 hours of receipt. On the customer side, they implemented a rule that all order inquiries would be responded to within 24 hours and resolved to submit all order in English.

The actions to reduce rework were (1) eliminate dead stop on processing orders when an incorrect serial number for a shipping containers was discovered; (2) create a check sheet for discussion during the weekly conference call so all issues were addressed and repeat contacts were unnecessary; and (3) create an information resource identifying which sites were available to fulfill orders.

To reduce unnecessary processing, the review of orders by Sales was eliminated. To reduce search time for information about orders, all e-mails about an order were stored in one shared MS Outlook folder that could be accessed from any location.

Act to Improve the Target Work Process

All improvements but three were made during the event. One team member programmed the marco in Excel that would compute the weights and measurements. Other team members prepared revisions of procedures, check sheets, information lists, and other processing aids. Setting the requirement for 24-hour response to order inquiries by the customer and by each fulfillment site was scheduled for execution two weeks after the event. Building the procedure that fulfillment sites would use to process international orders was scheduled for execution three weeks later at a meeting where all sites could be represented. Training in the procedure followed the week after along with the start-up of the procedure.


The changes realized each of our goals and the overall mission of the event. The event reduced the time to process orders to just 4 hours. After six months, on-time delivery went from 75% of orders (as measured by the producer) to 94% as measured by the customer. Customer satisfaction skyrocketed. The customer had been complaining about these problems for more than a year with no results. Within the 3-days of the Kaizen event and the 3-week follow through period, the customer's representatives reported the company's concerns as resolved. Even more, goodwill was restored and a new strengthened commercial relationship was built.


  1. Involve the customer whenever possible because you gain information and perspective you would not have and build immense goodwill. No one understood what the customer was dealing with in doing his business nor how critical the timely receipt of products was to his success. Only one person had ever met any of the customer's representatives face-to-face. These experiences shattered the smug approach of each fulfillment site judging on-time delivery by when the site got the product out of its door. Seeing the producer work on the problem and take corrective actions undid months of frustration and ill feeling. Of course, the results in the end cemented this renewed positive feeling.
  2. Changes in business information (e.g., pricing, procedures) can't be ad hoc. They must occur at predefined intervals and be fully communicated to all stakeholders. One of the hold ups with the orders was getting pricing correct. The manufacturer changed pricing on no particular schedule and the customer would not always have the correct pricing information. When the price of the product was more then what was listed on the order, the fulfillment process would stop until all parties could come to terms on pricing.
  3. Set a deadline for responding to requests; otherwise they linger forever. Before the event, order processing would ask a site about the status of an order and wait for a response. Usually, they would make repeated callbacks as time went on. The request never specified a timeline for answering, so it was prioritized based on local concerns. Given a response time, plants factored that into their behavior and questions got answered in a timely manner.


Revised November 2004
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