Reengineering, PokaYoke Process Improvement

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Reengineering, Poka-Yoke Process Improvement
Kaizen Events
Douglas M. Stewart, Ph.D. Anderson Schools of
Management University of New Mexico
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Reengineering
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What is Reengineering?

• Radical change
• Starting over from scratch, rethinking how things
  have always been done
• Possible because computer technology allows us to
  do things in new, more efficient ways

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Impact of Info Tech on Process

• Automational
• Eliminating human labor from a process
• Informational
• Capturing process information for purposes of
  understanding
• Sequential
• Changing process sequence or enabling parallelism
• Tracking
• Closely monitoring process status and objects

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Impact of Info Tech on Process

• Analytical
• Improving analysis of information and decision
  making
• Geographical
• Coordinating processes across distances
• Integrative
• Coordination between tasks and processes
• Intellectual
• Capturing and distributing intellectual assets
• Disintermediating
• Eliminating intermediaries from a process

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Caveat

• Dont automate Obliterate
• Then automate what is left

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Rules of Reengineering (1)

• Organize around outcomes not tasks.
• Case team rather than silos.
• Have those who use the output of the process
  perform the process.
• Purchase what you need vs. purchasing dept.
• Merge information processing into the real work
  that produces the information.
• EDI receipt of material automatically generates
  invoice.

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Rules of Reengineering (2)

• Treat geographically dispersed resources as
  though they were centralized.
• Economies of scale from central database used by
  field employees due to telecommunciations.
• Link parallel activities instead of integrating
  their results.
• Concurrent engineering.

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Rules of Reengineering (3)

• Put the decision point where the work is
  performed, and build control into the process.
• Decisions make of front line with support when
  needed.
• Capture information once at the source.
• Sales takes customer info, it automatically goes
  o accounting when the sale is made.

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Steps to a Reengineered Organization

• State a case for action
• Identify the process for reengineering
• Evaluate enablers of reengineering
• Understand the current process
• Create a new process design
• Implement the reengineered process

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Keys to Success

• Set an aggressive performance target
• Commit 20-50 of CEOs time to project
• Conduct comprehensive review of
• Customer needs
• Economic leverage points
• Market trends
• Assign an additional senior executive to
  implementation
• Conduct a comprehensive pilot

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Traps for Failure

• Assign average performers to the project
• Measure only the plan and not the actual process
  implemented
• Settle for the status quo, rather than pursue
  radical change
• Overlook communication, rather than implement
  ongoing communications program

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Techniques and Tools

• Inductive thinking
• Flowcharting
• Creative process redesign
• Process benchmarking
• Simulation
• Reengineering software

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Cultural Changes

• Overcoming the resistance to change
• Customer focus
• Contribution value added
• Empowerment
• Teamwork
• Continuous learning

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Enabling Info Technologies

• Voice systems
• Voice mail
• Interactive voice response
• Fax-back
• Voice recognition
• Automated input
• Magnetic strip readers
• Scanners
• OCR
• Magnetic ink character readers
• Voice activated systems

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Enabling Info Technologies (2)

• Geographic Information Systems (GIS) and GPS
• FEMA
• Market research
• Distribution
• Document imaging and management
• Email
• Electronic calendars and scheduling
• Task tracking
• Remote access
• Filtering agents

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Enabling Info Technologies (3)

• Groupware
• Shared information bases
• Meetingware
• Video conferencing
• Group scheduling
• EDI and Electronic commerce
• Mobile and remote (telecommuting) computing
• Wireless communication WiFi
• Cellular
• Bluetooth

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Enabling Info Technologies (4)

• Knowledge bases
• Professional Lexus, DowJones
• Personal AOL, MSN
• Electronic agents
• Internet
• Multimedia

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Poka-Yoke Process Improvement

• 5 necessary components for a fail-safe process
  improvement
• 1. Customer knowledge
• 2. Process knowledge
• 3. Metrics
• 4. FUT
• 5. A well structured method

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Customer

• Internal
• External
• Intermediate customers
• Consumers
• Cannot delight every customer
• Agree on Critical Customer

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Process

• Be an order
• Direct observation
• Spot the overlooked

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Metrics

• Verifiable
• Relates to a standard
• Past experience
• External standard

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FUT

• Focus (bounds of analysis)
• Urgency (full-time task)
• Time compression (deadlines)

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Well structured method

• (1)  Identify the key customers.
• (2)  Describe what constitutes value.
• (order winners, order qualifiers, order losers).
• (3)  Convert attributes into metrics.
• (4)  Identify important/critical traits of the
  product.
• (5)  Identify the critical processes.

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Well structured method

• (6)  Document the process as is
• (7)  Evaluate the process using the metrics
  (8)  Determine how to improve the process.
• (9)  Implement the changes.
• (10)  Generate an action list.
• (11)  Repeat the process.

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The New Approach

• Merge
• Kaizen perspective
• Regular short-cycle workshops (events)
• Called
• Kaizen Event
• Rapid Kaizen
• Rapid BPR
• Kaikaku
• Compass
• Short Cycle Kaizen

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Ready, Fire, Aim

• Kaizen Events Are
• Very Short-Term/Finite in Life
• Highly Focused
• Creativity Before Capital
• Team-Oriented
• Action-Oriented
• Verifiable Metrics
• Repetitive
• Results
• Significant benefits from their regular use
• Used to change corporate culture
• Not confined to the shop floor

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Kaizen Events in Use

• Toyota (originator)
• Honda.
• General Motors.
• Chrysler.
• Lear Corporation.
• Moore Plastic Products.
• Rubbermaid.
• Masco Corporation/MascoTech

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Strategic Level

• Top management buy-in
• Accept the validity of approach
• Participate in a Kaizen Event
• Public kaizen event
• Work with another firm

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Strategic Level

• Assessment of current processes
• Work with key customers
• Their needs
• Perceptions of current system
• Map current processes
• Identify the critical processes
• bottlenecks
• obvious to the customers consume disproportionate
  resources

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• These become the subjects for initial Kaizen
  Events
• Develop the metrics
• assess current performance
• describing the level of improvement
• provides the resources, in the form of people,
  time and facilitators

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The Main Event

• Usually takes place within a 3 ½ day time period
• begin on a Tuesday morning
• end Friday afternoon
• Formal training
• Completed within a six-hour time span
• Introduce concepts
• Kaizen
• Just-in-Time Manufacturing
• Processes Knowledge
• Kaizen Event Tools

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• Kaizen
• For next two days
• Analyze existing processes
• Identify problem areas
• Propose changes
• Predict the impact of changes
• Implement changes
• any change approved by the group is immediately
  implemented.
• changes must not require any major funding or
  capital requests.

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• New system is run and documented
• Floor space occupied by the process
• Operators required per day
• Distance traveled by an order
• Work-in-Process Inventory (in piece count)
• Setup, as measured in minutes
• Quality
• Recommendations generated
• Safety improvements implemented
• Prepare presentation to top management
• Friday morning
• Describe projects
• Identify the changes introduced
• Improvements achieved
• Present Action List
• issues that the team could not address but which
  should be considered to improve the overall
  performance of the process
• other

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Tools of the Trade

• Traditional Quality Tools

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Tools of the Trade

• Takt Time
• Calculate net available operating time (NAOT)
• Converting customer requirements from units to
  TAKT time
• Calculate operating cycle time and machine cycle
  times
• Adjust process capacity to achieve balance
  between rate of demand and rate of supply

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Tools of the Trade

• 5S program
• Seiri (Sort) Segregate and Discard
• Seiton (Straighten) Arrange and Identify for
  Ease of Use
• Seiso (Scrub) Clean Daily
• Seiketsu (Systematize) Revisit Fequently
• Shitsuki (Standardize) Motivate to Sustain

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One Firms Experience
Impact of Kaizen Events Overall
Benefits(January 1, 1996 through December 31,
1996)