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Miami University Lean: A Case Study Documenting the Lean Journey of Miami University in Oxford, Ohio

Featured in Quality Progress Magazine February 2015

Authors: Timothy C. Krehbiel, Alfred W. Ryan, and Dana P. Miller

Founded in 1809, Miami University is the 10th oldest public university in the United States and is well-known for its commitment to classroom teaching and picturesque 2,000-acre campus.1 Approximately 15,500 undergraduates and 2,200 graduate students are enrolled at the main campus in Oxford, Ohio. An additional 5,500 undergraduates attend two nearby branch campuses. Miami employs over 4,100 faculty members and staff, and 4,500 part-time student workers.

The economic downturn of 2008 placed many public universities in a financially unsustainable position. A tightening of state funds, decreased return on endowments, and growing resistance to increased tuition created an environment requiring dramatic changes to maintain quality and perhaps even to survive.

Despite its long history and strong reputation, this fiscal climate forced Miami to eliminate $30M from its budget in 2009. Although these deep cuts and associated layoffs met the then-current financial challenge, David Creamer, Vice President for Finance and Business Services (FBS), knew additional changes were needed: For Miami University to preserve its competitive advantage in a resource-constrained and rapidly-changing higher education marketplace, we needed strategies that would enable the University to restore service levels at the reduced staffing level, continuously improve service, and generate new ideas for resource creation and improvement into the future. I believed Lean strategies and tools could help us to build a culture that didn't just focus on these outcomes in a crisis, but every day.2

Dr. Creamer's assessment provided the catalyst to start the Miami University Lean Initiative (MU-Lean). The Lean journey has resulted in training for over 1,400 employees and the completion of 284 projects that have resulted in nearly $20 million in financial improvements. In addition, over 35% of the projects have directly supported the university's Green Initiative.

Implementation

Lean is a methodology proven to cut waste and drive a continuous improvement mindset with respect for people in the manufacturing, healthcare, and service sectors. As in most large organizations, waste exists in universities, specifically in admissions, curriculum, financial services, housing, dining, and physical facilities.3 Applications of Lean to higher education are uncommon, but early adopters are reporting positive outcomes.4 A moment of crisis, such as that experienced by Miami in 2008, is a common driver for implementing Lean in higher education.5

In 2009 consultants brought to campus assessed the situation and charted a course forward. The lead consultant, Alfred Ryan, had more than 30 years of industry experience in Lean and productivity improvement. He suggested a systematic approach to cost reduction and continual improvement within a Lean Service framework.

Mr. Ryan and Dr. Creamer formed an Executive Steering Team and began work on implementation plans. Mr. Ryan was appointed Director of MU-Lean and university-wide Lean Champion. The implementation process can be broken down into eight phases:

1. create a mission and define breakthrough objectives,
2. build an organizational structure,
3. develop training and certification,
4. build momentum in Finance and Business Services,
5. position early adopters in projects with impactful results,
6. expand to other areas of the university and reach out to all employees,
7. expand internal training and certification, and
8. create a sustainable culture of continuous improvement.
Phases 1-5 were completed from 2009 to 2012, and progress is ongoing in phases 6-8.

Creating a mission and defining breakthrough objectives

The Executive Steering Team decided that the mission of MU-Lean would be to support Miami University's Mission Statement.6 Thus, the initiative must reduce expenses without having any adverse effect on academic outcomes and the student experience. It was believed that MU-Lean could also help increase revenue, improve productivity, and support the university's Green Initiative. A set of five breakthrough objectives was developed: to increase revenue, to improve productivity, to reduce costs, to increase cost avoidance, and to support the Green Initiative.

Since Lean Service is unknown to many in higher education, the Executive Steering Team needed to define Lean in terms that the university community would understand, beginning with the following definitions:

What is Lean?

Lean is a set of principles, concepts, and techniques designed for a relentless pursuit of continuous improvement and the elimination of waste.

What is Lean to Miami?

Lean is a process that Miami uses to improve quality, responsiveness, and productivity, and to reduce costs by analyzing the work and finding ways to improve it.

To be successful, MU-Lean would require support from the very top. Dr. Creamer convinced the Miami University Board of Trustees that MU-Lean could help ensure long-term financial stability. His passion to Lean spread to other members of the Executive Cabinet, including Miami University President, Dr. David Hodge. In his 2011 annual address, President Hodge remarked, Our commonly held attitudes, beliefs, goals, and practices about our surroundings and work environment are inherent, yet invisible. We must view our university through the lens of entrepreneurial thinking. The implementation of Lean methodologies begins to open doors to this type of thinking.

President Hodge completed the two-day Lean Leader training, inspiring the others in attendance and providing valuable feedback on the training and direction of the initiative. With the backing of the President, his Executive Cabinet, and the Board of Trustees, MU-Lean has been able to navigate the political hurdles that can cripple continuous improvement programs in large organizations.

The Executive Steering Team knew that ineffective or insufficient communication is one of the most common handicaps to the success of Lean initiatives.8 MU-Lean began delivering monthly newsletters, a website containing past newsletters and details on training workshops and certification requirements was created, and information-sharing sites were established on the university's course management system. Information began flowing to the President and the Board of Trustees via a quarterly report.

In 2013, the University passed an ambitious seven-year strategic plan known as the Miami University 2020 Plan, with the overriding goal to achieve Miami's vision:9 To provide the best undergraduate experience in the nation, enhanced by superior, select graduate programs." MU-Lean committed its support to the 2020 Plan and further aligned its continuous improvement objectives and metrics with Miami's goals and vision.

Building the organizational structure

Lean projects are completed by cross-functional Process Improvement Teams (PITs). To build a self-sustaining culture, a strong infrastructure was designed to support MU-Lean and develop future leaders (see Figure 1). At the top of the organizational structure is the Executive Steering Team, which provides overall direction, maintains program metrics, oversees training and certification, selects projects to pursue, and meets with PITs as time allows (see Table 1).

Because the organization is too large for the Executive Steering Team to provide direct support to all PITs, Steering Teams within targeted areas of the university are added as more individuals are trained in Lean methodologies. In addition to coordinating Lean efforts within their area, the Steering Teams ensure that individuals have time allotted for their training and projects, as well as dedicated space for meetings. At least one Steering Support Team Member is added to each PIT. These members make themselves available to provide support and resources as needed, and most importantly, serve as a direct link to an area's leadership to overcome obstacles to success.

Resource Team Members are added to provide expertise in specific areas if needed. For example, a PIT may need an HR specialist or IT expert to complete their project.

Developing training and certification

The main objectives in developing training and certification were to develop future leaders and recognize individuals' efforts to improve Miami. Initially, outside consultants and the Lean Champion performed most of the training. As expertise grows, more training is delivered internally. Some training modules will continue to come from external sources, ensuring that the best training on the newest methodologies is available. MU-Lean encourages individuals to seek outside knowledge in all areas of continuous improvement (E.g., Agile, ITIL, Six sigma, Deming's System of Profound Knowledge) and bring it back to campus to help create a vibrant learning culture of process improvement.

The first step in certification is a two-day team-leader workshop. Topics include Jeffrey Liker's 14 Management Principles10; types of waste; Lean tools; and MU-Lean's Standard Project Cycle, which stresses the evaluation of the current state to search for root causes rather than symptoms (see Figure 2). More than 400 employees have received this level of training.

Part of the team-leader workshop is devoted to developing a project proposal. If the project is approved and the individual agrees to lead a PIT, Lean Leader status is obtained. Lean Leaders form the foundation for the certification pyramid designed to build future leaders (see Figure 3).

After serving as a Lean Leader, individuals can apply for the Senior Lean Leader certification program. The 24-30-month program consists of participating in five projects, leading three projects, receiving additional internal and external training, completing written evaluations of all outside courses, and presenting a completed project to the certification board. To date, 27 individuals have received Senior Lean Leader certification.

Department Lean Leaders are selected from the Senior Lean Leaders. They help manage and coordinate Lean events, serve as mentors, and assist in training. Currently nine individuals have achieved this certification, which carries a $3,000 salary stipend per year.

A fourth level of certification will soon be available. Divisional Lean Leaders will mentor, take an active role in training, and coordinate activities across entire divisions.

The Lean Champion is recognized as the university-wide Lean expert, and is the only individual whose full-time responsibility is MU-Lean.

MU-Lean stresses the human side of Lean. Accordingly, certification typically requires about 40% of the training in topics referred to as acceptance tools and about 60% in technical tools. Acceptance-tool training includes Myers-Briggs type indicator assessment, communication's role in management, conflict management, building a reputation of integrity, micro-inequities awareness, building and maintaining your team, and change management. Technical-tool training includes value-stream mapping, Plan-Do-Check-Act (PDCA) cycle, swim-lane charts, 6-S, metrics development, standardized work, Kaizen blitzes, and principles of Agile.

Reporting tools were customized to promote standardization and ease implementation. A workbook was developed to guide teams through all necessary steps in a project cycle and track all required information. In addition, a Visio template for building current and future states was developed, which links to an Excel template to ensure consistency and validity of metrics calculations.

Building momentum in Finance and Business Services

FBS and Academic Affairs are the largest two of the nine divisions at Miami. MU-Lean strategy was to build depth in FBS and then grow vertically to the other divisions. Thoughtful implementation positioned the early adopters in projects with impactful results.

Housing, Dining, Recreation, and Business Services is one of the largest departments in FBS, and directly touches customers on a daily basis. Reducing costs without adversely affecting the university's vision of providing the best student experience presented an enormous challenge. Prior to MU-Lean, an outside consulting group reviewed custodial services and identified over $2M in potential savings, but those recommendations were never implemented. A PIT was formed to review and implement the recommendations. The team applied their newly acquired knowledge in Lean to collect data (square footage, method of cleaning, types of floors, etc.) and determine the current state of custodial services. Next, the team designed the future state and developed standard work procedures. Implementation began in 2011 and accumulated over $3M in savings within two years. Reductions in labor and management costs came through increasing efficiency through standard work practices, attrition, and reassignments. The project resulted in a 20% reduction in the amount of chemicals used, thus significantly supporting Miami's Green Initiative. Importantly, quality metrics developed by the team indicated no adverse affect on the quality of the work performed.

The custodial project proved the effectiveness of the MU-Lean methodology and generated interest across many departments in FBS, perhaps most notably, the Police Department and Physical Facilities. Since 2009, FBS has completed 265 projects.

Reaching out to all areas of the university

MU-Lean has not been an enforced program from the President down. FBS has been a proof-of-concept test area, and others have been free to utilize the methods developed. Organic growth has come by nurturing select big-win projects with strategic importance outside FBS, reaching out to individuals with existing expertise in Lean and related methodologies, and through implementing a formalized suggestion program.

A PIT developed a suggestion-box approach to soliciting project ideas from across the university. The goal was to develop a bottom-up approach where everyone can be an agent of change. The team knew the process must be user-friendly, measurable, automated, and sustainable. After the "I Have a Lean Idea" initiative was piloted in 2013 to FBS, 150 suggestions were received and 45% became projects. "I Have a Lean Idea" was implemented campus-wide in January 2014. Over 300 ideas were submitted during its first five months, and almost 40% have become projects.

Although only 19 of the 284 completed projects are from outside FBS, currently 20% of all active projects involve other divisions, including Academic Affairs, Information Technology, University Advancement, Enrollment Management, and Intercollegiate Athletics. Significantly many of the completed projects originating in FBS included members from multiple divisions, and many of the active and future projects are inter-divisional.

There are areas outside of FBS where individuals have experience in quality and productivity improvement methodologies, including Agile, Six Sigma, ISO, ITIL, Deming System of Profound Knowledge, Lean Manufacturing, and the Shingo Model of Implementation. Additionally, some faculty members have research interests and expertise in these areas, which has helped to bridge the divide between academics and operations. Often these other skill areas develop their own silos of thought, and the challenge is incorporating the knowledge and skills into the Lean effort and realizing the different schools of thought that have the same intent: to make the workplace better by improving service or product.

Current status and the journey ahead

As of July 2014, 1,405 employees had received 18,702 hours of Lean training, and 85 had completed or were pursuing certification (see Table 2). Completed projects have addressed a wide range of topics, including reducing energy costs, recovering helium gas in chemistry labs, improving parking ticketing processes, and increasing fresh herb production. The 284 completed projects have accumulated $19.8M in financial improvements ($11,601,000 in cost avoidance, $5,269,597 in budget cuts, and $2,919,785 in increased revenue). Over 75% of these projects show productivity improvement, and over 35% contribute to Miami's Green Initiative.

MU-Lean outcomes have succeeded without detrimental affects to the academic mission and have increased the University's financial efficiency. In 2013, U.S. News & World Report ranked Miami as the second most highly-efficient university in the nation (rankings are based on schools' ability to efficiently spend their limited resources in order to produce the highest possible educational quality).

To reach its ultimate goal of creating a sustainable culture of continuous improvement, MU-Lean needs to expand training and certification, and aggressively pursue expansion to all areas of the university. It will be critical that senior leadership understands the mission and breakthrough objectives of MU-Lean. Lean has become an element of survival in manufacturing, health care, and the service sector, and is now moving into higher education.

Lessons learned

The central financial area is a natural place to start a Lean initiative for a higher education institution. Expansion into other divisions can be frustrating and slow due to federated organizational challenges inherent in the university setting. Adoption of Lean outside the central financial area requires both divisional leadership support and the initiative of individuals who can lead Lean teams to improve areas that are strategically important to the division and the university.

Many teams will be tempted to quickly conclude what the future state process should look like before completing all steps of the project cycle. Team members may argue to forego walking the process (going to the gemba) and justify the shortcut with their perceived familiarity and knowledge of other offices across campus. Leaders must stress that there are really three states of any process: what we think the current state is, what the current state really is, and what the future state should embody. Until the current state is fully understood, root causes may remain elusive and indistinct from the symptoms.

It is essential to first design an improved process and then automate it, if appropriate. Teams may wish to rush to automation as the answer and consequently build a future state that automates a bad process. Without a thorough understanding of the current-state and future-state customer requirements, organizations risk implementing a technical solution that falls far short of expectations. Second, it is too easy to assume that software solutions can and will be delivered as promised. Adoption of software requires due diligence, and implementing bad software solutions is an organizational disaster to be avoided.

Many individuals resist documenting standardized work. Some fear that their superiors will use the documentation to increase their workload or to eliminate their position altogether. Everyone must recognize that Lean does not stand for "Less Employees Are Needed." Documenting the process measures and evaluates the process, not the person. Ultimately, the individual's work should become less stressful and more impactful on the organization. Others believe that their work is highly creative and it is impossible to document in a standardized-work form. It is important to stress that creativity is found through iteratively applying the PDCA cycle in an effort to improve a standard work process.

It is essential to embrace change and definitively bury the "this-is-the-way-we-have-always-done-it mentality." Change must occur to the initiative as well. Learning will allow improvements to the structure, implementation, and certification needs, as well as the tools required to complete Lean events.

The challenge is to not become viewed as disciples or evangelicals of Lean, but rather to be seen as catalysts for change who reach out to partner with individuals with expertise, interest, and motivation in all types of continuous improvement methodologies. Leaders need to emphasize that the goal is to support the mission of the organization rather than the Lean journey itself.

The Lean journey is a marathon and not a sprint. Training takes time. Implementing new processes takes time. Changing organizational culture takes even more time. Research shows that changing the way work is organized has a more profound and lasting impact on organizational culture than training employees in problem-solving methods.12 Do not expect a big culture shift until individuals in the organization have experienced for themselves a better and more effective work experience achieved through the Lean effort.
Most importantly, to produce exceptional results, one must have continuous support from the very top of the organization. There are too many hurdles and setbacks to navigate without the backing of your organization's leaders.

References and Notes

1. Based on a U.S. News and World Report survey conducted in spring 2013, Miami ranked third in the country for commitment to undergraduate teaching. See "Best Undergraduate Teaching: National Universities." U.S. News and World Report, September 13, 2013. http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/national-universities/undergraduate-teaching.

2. Personal correspondence between authors and Dr. David K. Creamer, Vice President, Finance and Business Services, Miami University, July 3, 2014.

3. Bob Emiliani, "Getting Lean," BizEd, May/June 2005, pp. 56-57.

4. William K. Balzer, Lean Higher Education: Increasing the Value and Performance of University Processes, Productivity Press, 2010. Electronic.

5. Dragomir Cristina and Surugiu Felicia, "Implementing Lean in a Higher Education University," Analele Universitatii Maritime Constanta, 2012, Vol. 13 Issue 18, pp. 279-282.

6. The Miami University Mission Statement adopted by the Board of Trustees on June 20, 2008 http://miamioh.edu/about-miami/leadership/president/mission-goals/.

7. Excerpt from "A Culture of Entrepreneurial Spirit," 2011 Annual Address by Miami University President, Dr. David C. Hodge, September 29, 2011 http://www.miamioh.edu/about-miami/leadership/president/reports-speeches/annual-address/2011/index.html.

8. Clare L. Comm and Dennis F. X. Mathaisel, "An Exploratory Study of Best Lean Sustainability Practices in Higher Education," Quality Assurance in Education: An International Perspective, 2005, Vol. 13, No. 3, pp. 227-240.

9. Miami University 2020 Plan and Vision Statement adopted by the Board of Trustees on May 26, 2013 http://www.miamioh.edu/2020plan/.

10. Jeffrey, K. Liker, The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer, McGraw Hill, 2004.

11. Bob Morse, "Weighing the Efficiency of Highly Ranked Universities," U.S. & World Report, online, December 19, 2013. http://www.usnews.com/education/blogs/college-rankings-blog/2013/12/19/weighing-the-efficiency-of-highly-ranked-universities

12. Jiju Antony, Netasha Krishan, Donna Cullen, and Maneesh Kumar, "Lean Six Sigma for Higher Education Institutions (HEIs): Challenges, Barriers, Success Factors, Tools/Techniques," International Journal of Productivity and Performance Management, 2012, Vol. 61 No. 8, pp. 940-948.


Roles and responsibilities / Table 1

Executive Steering Team
VP Finance and Business Services, Lean Champion, department/division administrators
• Provides overall direction
• Identifies target areas for improvement
• Selects which projects to undertake and when
• Approves team goals and metrics
• Assures sustained results
• Evaluates and approves Lean suggestions

Lean Champion
Devoted full time to MU-Lean; member of Executive Steering Team
• Reviews all MU-Lean initiatives
• Maintains program metrics
• Serves as resident expert, trainer, facilitator, and coach
• Oversees training and certification program
• Ensures quality

Steering Teams
Department Lean Leaders, Senior Lean Leaders, department/division administrators
• Coordinates and supports Lean projects in their area
• Ensures dedicated space for team meetings
• Ensures that time is available for training and team meetings
• At least one Steering Team member is assigned to each PIT

Process Improvement Teams (PIT)
Cross-functional, multi-layered
• Walks process and collects real-time data
• Redesigns processes
• Develops action plans
• Creates standard work
• Develops metrics
• Implements process changes

Resource Support Team Members
Process owner, key customer, important stakeholder, subject matter expert; assigned to PIT
• Provides direction, resources, and expertise to PIT as needed
• Attends PIT meetings if necessary
• Approves process redesigns
• Supports implementation of new process

Results / Table 2

Training
• 1,405 employees trained
• 18,702 hours of programming
• 2020 Goal: Lean Introduction to 100% of Miami University employees

Certification
• 400+ Lean Leaders
• 27 Certified Senior Lean Leaders
• 58 currently in certification program
• 9 Certified Department Lean Leaders
• Certified Divisional Lean Leaders – None to date
• 1 Lean Champion

Project Outcomes
• 284 projects completed, 67 projects active, 64 future projects identified
• Total financial improvements: $19,790,382
• Cost Avoidance: $11,601,000
• Cost Reduction: $5,269,597
• Revenue Generated: $2,919,783
• 75% resulted in productivity improvement
• 35% supported Green Initiative