Operational Excellence in Virgin Media
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Virgin Media's Shared Services department implemented an operational excellence program over 16 weeks to improve processes and reduce waste. Key activities included scoping current performance, engaging staff, providing Lean training, implementing 5S practices, mapping over 147 processes to identify waste, and establishing visual management systems. These changes reduced processing times, eliminated over 190 non-value added steps, and reduced the workforce by 14% while improving quality. The program established a foundation for continuous improvement through sustaining audits and a Lean coaching role.
Operational Excellence in Virgin Media
- 1. Operational Excellence in Virgin Media June 2010 Peter R Evans
- 4. Virgin Media
- 5. We Are Virgin Media… • Formed by merger of ntl, Telewest, Virgin.net, Virgin Mobile – Feb 2007 • Over 14,000 staff • Over 100 offices • Over 5,000 vehicles • Almost 10 million customers • UK’s first quad-play provider of broadband, TV, phone and mobile • Largest company in the Virgin Group “The Simple Choice in a Complex Digital World”
- 6. In 20 yrs…. I’ve learned that: – You can’t manage change with a toolkit - you facilitate change through hearts and minds and shared journey’s and experiences – The tools required are governed by the situational circumstances not the training manual and the chosen methodology – It’s not about having your leadership team at the front of everything – it’s about having them at the front of the right things • This Lean stuff Works!
- 7. Interesting times… “The greatest danger in times of turbulence is not the turbulence: it is to act with yesterday’s logic” Peter F. Drucker
- 8. The Objective… “Lets make Quality part of our DNA in Virgin Media” Neil Berkett, CEO
- 9. My Role as Leader… • Create the ‘North Star’ – “Getting Quality Into the DNA of Virgin Media” • Create the environment for change – People, People, People, – “Hard” link to annual objectives • Establish the governance – Personal accountability for delivery • Talk the talk…. – “Genchi Genbutsu” = “Go and Look For Yourself!” “Better Quality Might Just Be A Short Walk Away” “Norman Bodek - Kaikaku – The Power & Magic Of Lean”
- 10. Shared Services Operating Model Service Delivery Service Service Development Performance Accounting Services Service Continuous Insert graph or spreadsheet here Account Finance Services Management Improvement Measurement & Reporting Billing & Payment Services Employee Engagement Capacity Planning Business Process New technology Compliance Re-engineering Employee Services Lean 6 Sigma & Budget Service Assurance Services Management Information Services Transactional Services New Services External Project Locational Consolidation Change Activity Systems Integration & Development Revenue & Direct costs EPM – MI, CPR, GMIP, MDM, OBIEE+, BO, Essbase, SAS, Oracle New systems assurance systems & tools Clarity Accountability Delivery
- 11. Finance Shared Services (Bradford) Introduction Bradford Shared Services consists of 7 operational Teams across 3 core functions. Purchase to Pay Order to Cash Contractor Payments Invoice Data Entry Billing Services Contractor Payments Invoice Query Handling Credit & Collections • The Contractor Payments Function Payment Services has the responsibility Bank Reconciliation of validating 1.5 million work orders • In 2009 the value of • Billing Services per annum. invoices into AP processed c50,000 • Its turnover for amounted to invoices per year residential payments £3.263bn worth c£1bn alone per year is over • They process 12,500 • Credit and collections £120m collects £70 million • Business contractor invoices on average per MONTH payments has per month • Bank Recs. Reconcile processed over £54m £3bn annually work applications and £43m GRN’d
- 12. Operational Obesity…. SYMPTOMS: • Slow to move and to react • Processes are complex • Making Change is difficult • “Hard To Do Business With” • Clogged Arteries • Internal Comms Channels are slow • Controls and Checks everywhere • Getting Stuff Done is Too Hard - “Hard To Do Business In!” • Spirit is Willing …… • Lots of Change ---- Very Little Improvement!!
- 13. The Virgin Media Approach • Define & Create a Route to “Operational Excellence” • Understand the End To End Processes – “The Customer Journey” • Apply Lean Operations Techniques – “Learning To See” • Graduate to more Complex Interventions and Tools as we progress (Six Sigma & Design for Six Sigma)
- 14. The Various Production Systems Toyota Carnegie Melon Model ISO Strategy Customer Focus Techniques & Automation Leadership Technology Management Behaviour Performance Measures & JIT Process Understanding & Awareness Customer Process & Practice Process Management People Structure, Skills & Compliance Voice of Customer Decision Making People & Teamwork Supplier Roles & Responsibility Supplier Dvt Projects, Change Mgt & Training & Communication Improvement Jidoka Expertise
- 15. Our Operational Excellence Journey… • Strategy Linked Summit Top To Bottom • Improvement A Way of Life • Customers See and feel It in Every Basic Lean Interaction Principles In Place Base Camp “Learning To See” (We Are Here!) Swamp (This is where Most Of Us Start)
- 16. The Model…..
- 17. Scoping Tool
- 18. Shared Services – The Initial Scores Operational Excellence Management Operational Excellence Foundations Building Blocks Customer Awareness Managing 6.0 Supplier Customer Technology Awareness 5.0 6.0 TM Training Capacity & Development Planning 5.0 4.0 4.0 3.0 Skills Leadership Change Management and CI Supplier Management 3.0 2.0 2.0 1.0 Managing Process 1.0 Costs 0.0 Management 0.0 People Performance Operational Management Communication Work Productivity Process & Performance Measures Strategy & Leadership Organisation Management Improvement Quality & Risk Basics Workplace DeliveryManagement Environment Management People Skills & Resources Bradford Building Blocks June 2009 Bradford Foundations June 2009
- 19. Shared Services – The Plan to improve Base Camp Cap Planning Visual Management Data Capture Process 5S TRAINING ENGAGE SCOPE 14 Weeks
- 20. Scoping Shared Services SS Team Manager Activity v. Ideal Model Graph 1 Graph 2 SCOPE
- 21. Engaging Management and Staff "Without involvement, there is no commitment.” Stephen R. Covey ENGAGE
- 22. ‘Hearts and Minds’ with all Staff • Project Background • The purpose of the project • Overview of the Tools and Techniques of Lean Sigma and how they will apply in Shared Services • How each staff member will be involved • “What’s in it for them!” ENGAGE
- 23. Believe In Quality Day: All staff Effective Team Work Voice of the Customer Rapid Improvement The Impact of Variation in Process ENGAGE
- 24. Training for all staff • ‘Rough Guide to Lean Sigma’. Web Based • 5S Training • Virgin Accredited ‘Lean Sigma Green Belt’: • C. I. Green Belt Projects with onsite mentoring • Cardiff University Lean Basics 1a (1 day course). – Lean Tools – Role that each staff member plays in increasing performance and in Continuous Improvement in their day to day duties ENGAGE
- 25. Site visits • 12 Staff took the tour of Operation at Burnaston, Derby. • All Bradford Team Managers visited current Virgin Media Lean Model Office area at Telephony Operations, Manchester ENGAGE
- 26. ENGAGE
- 27. 5S The 5s Principles •SORT The Necessary from the Unnecessary •SET IN ORDER Locating according to frequency of use •SHINE A pleasant working environment •STANDARDISE Agreeing the Team Standard •SUSTAIN The 5s Audit & Competition 5S
- 29. AROUND THE WORLD IN 5S’s! 5S THE LEADERBOARD Leader board UPDATED 11/12/09 Australasia 614 Asia 587 Antartica 579 Americas 540 Africa 525 Europe 504 Week 12 Results: Week 13 fixtures: Europe vs Antartica Antartica Win Africa vs Antartica Africa vs Asia Africa Win Europe vs Americas Americas vs Austratasia Americas Win Asia vs Australasia Results Commentary: Australasia continue to hold on to the lead but Asia and Antartica are catching up and closing the gap, Americas and Africa are catching up after winning the competition this week and Europe are still going strong after winning the fortnightly competition. ENGAGE
- 30. Bringing the Team Together… Keeps staff updated, provides forum for questions and to give out prizes for all incentives ENGAGE
- 31. If all else fails….. Dress-up!
- 32. The ‘Lean Model Office’ Main Steps Base Camp Cap Planning Visual Management Data Capture Process 5S TRAINING ENGAGE SCOPE 16 Weeks
- 33. Process Mapping and Eliminating Waste • We have mapped 147 processes • Eliminated >190 ‘Non Value Add’ steps • Each process step in all 147 maps has been risk assessed, the outcome being the formation of ‘Critical Control Points’ that will be audited and monitored weekly to reduce Risk Events. • The Mapping and Critical Control Points form the basis of each teams Skills Matrix and Quality measure Process
- 34. Accounts Payable: Data Entry Time to Input Summary for Time to sort and Input A nderson-D arling N ormality Test • of all A -S quared 2.59 P -V alue < 0.005 Invoices fail to M ean 5.1538 meet the 48 hr S tD ev 4.8425 V ariance 23.4494 SLA S kew ness 0.95917 Kurtosis 1.99294 N 39 M inimum 0.0000 •Average speed of 1st Q uartile M edian 0.0000 8.0000 invoice 0 5 10 15 20 3rd Q uartile M aximum 8.0000 22.0000 processing in Data 95% C onfidence Interv al for M ean Entry was days 3.5841 6.7236 95% C onfidence Interv al for M edian 1.0000 8.0000 •Oldest Invoice 95% C onfidence Interv al for S tD ev 9 5 % C onfidence Inter vals 3.9575 6.2409 was in backlog Mean for days Median 0 2 4 6 8 Data Capture
- 35. Accounts Payable: Data Entry COPQ (cost to our business) of not paying on time •Graph shows Pareto Chart of Type of Query because of the 1000 100 time it takes to be paid; 39.5% of the query 800 80 demands are ‘Progress 600 60 Percent Count Updates’, basically our 400 40 suppliers chasing 200 20 payment. •We have 11.5 0 0 FTE currently Type of Query Progress Update Other Doc Copies Receipting List of Invs Others C ount 393 293 91 64 53 100 working in the Percent 39.5 29.5 9.2 6.4 5.3 10.1 team ‘Query C um % 39.5 69.0 78.2 84.6 89.9 100.0 Resolution’. Data Capture
- 36. Accounts Payable: Data Entry Visual Management Introduced Short Interval Control •2 weeks, cleared their backlog of 11 days of invoices. •Ever since, ALL invoices processed within 48hours
- 37. Accounts Payable: Data Entry Results • 25% less Overtime (hours) resource 120 100 Overtime (hours) 80 60 Overtime (hours) 40 20 November = 12 hours 0 Jun Jul Aug Sep Oct Nov (average overtime 71.5 hours per month) Data Capture Process
- 38. Visual Management - Example Cost Measure Quality Measure Delivery Measure Risk Cross People Development Measure Problems & Countermeasures 5s Audit Daily Huddle
- 39. Accounts Payable: Data Entry Process Flow – UKTV Invoices 7. DATA ENTRY 4. STICKER Query Resolution Post Desk 8. QR PROCESS 2. SORT 5.SCAN Scan Station 3. QR PROCESS 6. QR PROCESS 9/ QR TRANSPORT 1 START (AFTER POST ROOM TO FILE ROOM SORT IN OTHER BUILDING) NB: INVOICE JOURNEYS DIFFERED BASED ON THE SUPPLIER Process Data Capture
- 40. Accounts Payable: Data Entry Process Flow – All Invoices 5. QR PROCESS 4. DE DATA ENTRY ANY QUERIES 3.SCAN Scan Post Desk Station 2. STICKER &SORT 6. QR TRANSPORT TO FILE ROOM 1 START (AFTER POST ROOM SORT IN OTHER BUILDING) Process Data Capture NB: ALL INVOICES FOLLOW THE SAME JOURNEY
- 41. Future State - The Value Stream Layout Making Value Flow Whilst Creating Increased Process Visibility BRADFORD SHARED SERVICES CONTRACTOR BANK Value Stream PAYMENTS RECONCILIATION ACCOUNTS ACCOUNTS Value Stream RECEIVABLE PAYABLE
- 42. Sustainability Audits….. Re-visit the Scoping Tool and create the plan for Continuous Improvement – 6 Monthly Operational Excellence Management Foundations Customer 6.0 5.0 4.0 Change Management and CI 3.0 Supplier 2.0 1.0 0.0 Process & Performance Measures Strategy & Leadership People Skills & Resources
- 43. Lean Coaches role and responsibilities….
- 44. Finance Shared Services Closure & Benefits Realised ORIGINAL IN-SCOPE FTE FINANCE MGR 6 TEAM MGR 8 These results happened in 16 weeks CO-ORDINATOR 4 PROCESSING and with the Sustaining and C. I. plan 62 OVERALL going forward Shared Services is set 80 to make exponential improvement and become the flag ship Lean Operation in Virgin Media. Due to the FTE REDUCTION FINANCE MGR success of Bradford, Birmingham 6 TEAM MGR Billing and Payment Services and 6 CO-ORDINATOR Preston Business Billing & Payments 4 PROCESSING 53 are now replicating the Lean Model OVERALL 69 Office PROC FTE RED 15% TOTAL FTE RED 14%
- 45. The summit is only attainable as a whole organisation….. • The Business Leadership Team defining strategy and enabling cascade mechanisms that ensure E2E Alignment • The Business Leadership Team leading by example, visiting ‘The Gemba’, using the same ‘Visual Management’ techniques, driving ‘Continuous Improvement’ at all levels, aligning ‘Reward & Recognition’ to delivery of the strategy …. Hoshin Kanri starts here!!!
- 46. In conclusion…. • It depends where you start…. – Obvious but rarely acknowledged – Can only work if Organisation Mobilised and Up-Skilled to support the effort – Sophistication of approach determined by internal capability (Not by your Consultants) A Fool With a Tool….. Is Still A Fool!