Sort Before You Clutter

"How many of you have ever cleaned your garage or storage room?"

Everyone in the room raised their hand.

"How many of you have had to clean your garage or store room more than once?"

Every hand in the room remained raised.

"How many of you, in order to easily find things, regularly need to clean your garage?"

Only a few hands fell.

I recently gave a presentation on using Lean and Six Sigma tools to improve IT performance. One of the critical, and seemingly simplest, Lean tools is 5S. The 5S's stand for:

·         Sort (get rid of what we do not frequently use)

·         Set in Order (organize for ease of use)

·         Shine (regularly clean up the work area)

·         Standardize (have a standard method for how we do things)

·         Sustain (make sure we own keeping things in order)

5S helps us keep things organized so that it is easier to find things and easier to determine whether or not our equipment and processes are working. People that are really good at lean manufacturing claim that a focus on 5S is critical to success.

I told my presentation audience that there is an IT analogy to 5S. Many of our systems and processes are like our messy garages. We have so much clutter that it is hard for us to park a car in the garage (or add a new application or service). We also cannot tell how well we are utilizing our space or infrastructure. Often, our systems are so messy and complicated that we cannot define cause and affect relationships. And, just like our repeated cleaning of our garage, we fall into a cycle of un-sustained simplification and complexity reduction initiatives.

For example, one of our divisions has a chart of accounts with over 25,000 accounts. Having this many accounts leads to errors and rework (someone charges a transaction to the wrong account and then someone has to do a journal entry to reverse the error and a journal entry for the correct entry). If we treat this chart of accounts as our messy garage (one to which we are continually adding clutter) we need to do a 5S. 

In order to simplify our chart of accounts, we first defined sort criteria. Which accounts did we actually use? Which accounts did we need for financial reporting? How could we restructure the surviving accounts to simplify our design? Our sort criteria defined three types of accounts: 1) accounts we use all the time, 2) accounts we use for monthly, quarterly, and annual financial reporting, and 3) everything else. With the criteria defined, we did our sort. Of our 25,000 accounts, there were about a thousand that we needed. The other 24,000 fit perfectly in the "everything "category. Many of these 24,000 were created for accuracy in reporting. If anyone ever wanted a report that tells how much international FedEx one of our plants uses – as compared to their international UPS – the data is there. However, in our history, no one has ever asked for an analysis at this level of detail. And, if we did need such a report, we could get the data from FedEx or UPS. This highlights one of the other keys to 5S - there are no "mights" in 5S. We sort based on what we actually need, not what we think we might need.

As we were cleaning out and consolidating the accounts, it occurred to me that, in order to properly set in order and make our 5S sustainable, we needed to avoid cleaning out and consolidating the accounts in the future. To do this we needed to include our sort criteria in our process for adding new accounts. Those 24,000 accounts did not get there by themselves. If we apply our sort criteria as we approve (or reject) new account requests, we might never again need a simplification or consolidation project.

Working with our accounting staff, we developed some simple questions we now use when someone wants to add an account. In almost all cases, the requestor’s need can be met with an existing account. There is a lot less clutter in the chart of accounts. I also expect that this will make my life easier the next time we upgrade our ERP system.

I have applied the same 5S tool to IT processes, our reporting library, how we track project status, and how I conduct meetings. The net result has been a better focus on what really matters and less time and effort on meaningless activities.