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Lean at Work: Capacity Planning for Processes Utilizing Lean Techniques by Anne Cram, MLC Board Member

Tuesday, November 10, 2020 8:05 AM | Andi Barajas (Administrator)

2020 brought unexpected challenges for everyone this year. At the State of Michigan our office — The Office of Continuous Improvement (OCI) was quick to pivot our skills and lend a hand to many aspects of the COVID Response. One of the “asks” this summer was to assist the Department of Labor and Economic Opportunity with preparing to scale up the Workshare division to meet new customer needs. 

For those unfamiliar with what workshare is and why they would need to prepare for increased services:

Michigan’s Work Share Program allows employers to restart their business and bring employees back from unemployment. Employers can bring employees back with reduced hours - while employees collect partial unemployment benefits to make up a portion of the lost wages. Employers can also retain their current workforce and are given the flexibility to choose which of their employees are part of a Work Share plan.

It is a great program for Michigan businesses small and large to participate in during times like these.

One of our service lines we developed, and have really seen a demand in lately, is Capacity Planning. This methodology used by our office relies on basic Lean principles and activities to assist work areas in identifying staffing needs for the current or anticipated volume of work (scaling up or down). 

In this case, the workshare division anticipated they would need to scale up substantially to effectively meet demand this year. Our methodology included analyzing the current volume of work through process mapping and using Program Evaluation Review Technique (PERT) to identify the Expected Time of tasks in the current process. 

Expected Cost Time is found through the following PERT Calculation:

Optimistic Time (O): The minimum possible time required to accomplish a task, assuming everything proceeds better than is normally expected 

Most Likely Time (M): The estimate of time required to accomplish a task, assuming everything proceeds as normal. 

Pessimistic Time (P): The maximum possible time required to accomplish a task, assuming everything goes wrong (but excluding major catastrophes). 

Expected Time (TE): The best estimate of the time required to accomplish a task (the implication being that the expected time is the average time the task would require if the task were repeated on a number of occasions over an extended period of time). 

ET = (O + 4M + P) ÷ 6

Once we had a good snapshot of what the current process and volume looked like for the division, we used our Key Assumptions Activity to identify conditions that are assumed to be in place or that must occur for the future process to be successful. An example for this process was:

There is an increased awareness of the Work Share Program and we will never see the pre-pandemic “normal” numbers again (0-5 plans)

At this point, we shifted to facilitation of what the future capacity should look like by first identifying all of the current positions assigned to support the process with their total summary of hours for the year (sick, annual, and holiday leave removed, along with 15% of the hours removed for general administrative duties—per project management standard). In this case, the total hours per employee that they can allocate to tasks is 1,747 hours a year. We then did the following with the data from the PERT activity:

  • Calculated total hours for each main task/assignment for the year using the expected time data.
  • Assigned hours to each position. Determined if the hours are split by the team or the same for all. 
  • Unplanned hours are the left over extra or negative hours after all work is assigned. 
  • Divide the negative number of hours by 1,747 and that provided an estimated shortage of positions in the work area,
  • To wrap up the project, we identified issues and ideas to improve the process for the future and escalated those that would be high impact/low effort sprints for the team to get in place prior to the surge in workload. 

The results of this project were recommendations to the divisional leadership for additional positions and quick win improvements to meet the anticipated customer demand and improve the process. The data and methods used to determine positions justified the need for the division to agency leadership. 

The real success story of this project are the anticipated results for the customers (State of Michigan businesses and employees). There will be a decrease in the time to process the workshare plan and thus a reduction in wait time for unemployment benefits. Businesses can retain their workforce and employees can make up portions of lost wages. Helping State Departments achieve results like these is what makes Lean so valuable to the State of Michigan and to fellow Michiganders. 

Have a Safe, Healthy, and Happy Thanksgiving,

Anne Cram 

Lean Process Improvement Specialist, State of Michigan DTMB

MLC Board Member

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