Continuous Improvement

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Continuous Improvement

• Lean and Six Sigma

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Speakers

• Betsy Rudden, Vice President
• The Phoenix Companies, Inc.
• Robert DAmore, Principal
• Moffitt and Associates
• Michael Mullin
• The Phoenix Companies, Inc.
• Joseph OConnor
• GE Asset Management
  
  

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Continuous Improvement Methodologies

• Business Process Reengineering
• Total Quality Management - TQM
• Lean
• Six Sigma

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Current Business Conditions

• Intense scrutiny from the outside
• Competition is fierce - Speed to Market
• The need to do more with less
• Focus on value added opportunities
• Eliminate non-value added activities

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Improving your Organization

• How can you change the way your company works?
• How can you increase your bottom line while
  reducing expenses?
• How can you focus your organization on value
  added activities?

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By Practicing Continuous Improvement

• History of Lean - Bob DAmore
• The Phoenix Story - Mike Mullin
• The GE Story - Joe Connors

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Lean Improvement Process
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History Of Lean

• Henry Ford
• Toyota
• Harley Davidson

Pioneered the concept of an assembly line with
synchronized and standardized operations. Iron
ore in barge on Monday morning to completed Model
T on Tuesday afternoon
Camry every 57 seconds
Assembly process 45 Minutes
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History Of Lean

• Military/Aerospace
• Medical
• Financial

Reduce aircraft turn around time cost
Reduce processing timeeliminate waste
Customer focused processes faster, higher
quality, lower cost
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Processes are Processes
Manufacturing
Business Process

• Machine a part

• Fill out a form

• Assemble parts

• Post to a record

• Pack

• Look up a customer

Operation

• Heat Treat

• Make entry in file

• Identify

• Sort Orders

• Move part to next unit

• Take to a persons in-basket

Transportation

• Walk to tool crib

• Walk to copier

• Deliver paperwork

• Deliver a package

• Walk to parts crib

• Walk to file cabinet

• Check form for completeness

• Inspect the part

• Check paperwork

Inspection

• Verify figures on report

• Verify stamps

• Check design drawing

• Check tooling

• Proofread memos

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• Engineered
• Customer oriented
• Timely output
• Cost effective

• Breakdown
• Customer is compromised
• Divided responsibilities
• More mistakes rework
• Lead time increases
• Activities increase
• Change attempts seen
• as job threats

• Modified
• Business changes
• Different requirements
• Organizational changes
• New managers
• New employees

Process Life Cycle

• Decay
• Quality problems surface
• Rework required
• Check points added - redundancy built in
• Functional specialists
• Rigid procedures mandated (gospel)
• Turf wars common

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Principles of Lean

• Understand value from the customers perspective
• Identify the value stream link processes
• Make the product flow without interruptions,
  eliminate waste
• Pull dont push the product through the process
• Continue to seek perfection using
• kaizen approach

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Lean Tools
IMPROVES
DETERMINES
DETERMINES
Approach
Situation
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Ranking Areas of Competitiveness
Product Commissions
Sales Distribution
Brand Recognition
Customer Systems
Areas of Competitiveness
Production Systems
Product Performance
Production Processes
Product Innovation
Product Availability
Advantage
Minor Deficiencies
Even
Major Deficiencies
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Lean ToolsOrganizational Analysis
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Lean Tools Value Stream Process Maps
Customer
Order Process
Planning
Production
Distance

• Indicate
• Value Added
• Non Value Added but required
• Non Value Added
• with different colors
• Measures (turn backs, handoffs, lead time)

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Beneficial Philosophy for all Businesses
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Becoming Lean
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Becoming Lean

• Principles and techniques used by Lean companies
  are proven, effective, and powerful
• To be successful, pay careful attention to the
  cultural aspects of becoming Lean

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The Cultural Aspects of Becoming Lean

• Lean transformation requires everyone to change
• It impacts all levels of the organization
• The change will be traumatic
• Lean changes how people work and think
• People are at the center of the system

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Obstacles Encountered

• People resist change, they will
• Attack the methodology
• Attack the people introducing it
• Make excuses
• Support it in public, but work against it in
  private
• Maintain status-quo hoping change will go away

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Obstacles Encountered

• Functional Silos
• Operate independently
• Are internally focused
• Have difficulty working together
• Customer processes weave through
• Focus on their own improvements disregarding
  customer delivery

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Obstacles Encountered

• Complacency
• Mutually owned company low focus on
  profitability
• Most sales were made through a captured
  distribution channel
• People didnt feel a need to change
• No sense of urgency

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Overcoming Obstacles

• Plan for a resistance to change
• Involve the Senior Staff, identify other
  champions
• Develop robust communications and training
• Mandate participation in Lean
• Identify projects with smaller scopes
• Empower people to change
• Create a safe environment for improvement

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Overcoming Obstacles

• Moving to a customer focused organization
• Focus on the End to End customer process
• Project teams should be Cross-Functional
• Teach teams how to work together
• Engage the organization
• CEO visibly drives the effort
• Set aggressive goals for improvements

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Benefits from Lean
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Benefits from Lean

• Annuity Contract Assembly
• From Batch to Flow Production

8th day
210
60 hrs
40
150
75
60
24 hrs
Nextday
Contract Mailing
Employee hours
Contract Processing Capacity
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Next Steps

• Embed Lean practices into the business
• Engage the support of each business leader
• Develop business facilitators
• Align Lean with corporate and line of business
  strategy
• Transformation Event
• Focus on improvement opportunities that align
  with goals

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Defining Success
When continuous improvement and Lean principles
are embedded into the culture and become part of
everything we do
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NICSA 2005
Joe Connors February 2005
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Agenda / Outline

• 6s Concepts
• Leadership and Organization / Resources
• Deployment into the Business
• Execution Challenges
• Secrets to Success

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6s Operationally Defined
What Is 6s?

• Metric for quality measurement
• Method of continuous improvement
• Enabler for cultural change

6s originally developed by Motorola in mid-1980s
adopted by GE in mid-1990s
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6s As Improvement Philosophy

• Customer
• Opportunity
• Successes vs. Defects

• Know whats importantto the customer (CTQ)
• Reduce variation (standard deviation)
• Center around target (mean)
• Reduce defects (DPMO)

6s objective is to identify and reduce variation
that negatively impacts customers
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6s As Quality Metric
s
Yield
DPMO
69 308,537 2.0 93.3 66,807 3.0 97.7 22,750 3.5
99.4 6,210 4.0 99.87 1,350 4.5 99.9997 3.4 6.0
Non-linear concept increase in Sigma Value
requires exponential defect reduction
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6s Roles Leadership
ROLES RESPONSIBILITIES
BUSINESS QUALITY COUNCIL
HI V A L U E A D D A C T I V I T Y LO
BUSINESS CHAMPION

• Strategic direction for business
• Aligns 6s quality goals to business
  strategy/financial goals
• Prioritize, select projects team
• Reviews 6s deployment progress
• Assesses quality teams performance

PROJECT SPONSOR
MASTER BLACK BELTS BLACK BELTS
GREEN BELTS
6s involves business leadership engagement, not
just quantitative analysis roles
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6s Roles Leadership
Champions/Sponsors
Master Black Belts
Black Belts
Green Belts
Team Members
EVERYONE is Involved!
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How 6s Relates To The Business
Customer, Shareholder, Others
PLANNING THE BUSINESS
CTQ Prioritization
Core Processes and Output Measures
Portfolio Management
Securities Trading
Trade Settlement
RUNNING THE BUSINESS
Enablers
Technology Compliance Risk
Key Sub-Processes And Input Measures
SupplierQuality
IMPROVING THE BUSINESS
6s
6s Project Selection Charter
Execution
6s aligned to business strategy priorities and
business process measurement gaps
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Six Sigma Application
How Does GEAM Apply 6s To Investments?

• Measure best execution
• Customer information delivery
• Speed up monthly close cycle
• Call center service
• Optimization
• Monitor supplier performance
• Control account recons

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Basic Improvement Process in 5 Phases

• What is important to the customer?
• What is the frequency of defects?
• When, where and why do defects occur?
• How can we improve the process?
• How can we sustain the improvement?

Define Measure Analyze Improve Control
Customer Focused Variation, Data - Driven
Disciplined Approach
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6s Deployment Evolution
1997
1998
1999
2000-04
Starting Up Laying The Foundation
Building The Momentum, Expanding The Engagement
Attacking Eliminating Variation
Becoming Customer Centric
Deploy 6s broadly, add capability
Prove / validate that 6s can work
Learn power of variation thinking
Get customers to benefit from 6s
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6s Start-Up, Deployment, Issues
Barriers To Success
Sustainability Challenges

• No business leadership team support
• No alignment business strategy and six sigma
  goals
• No clear measure of financial results or process
  success
• No time allocated to work on improvement projects
• Employees not trained / resistance

• Total systems effort a way of doing business
• Long term process with many steps
• Empowered workforce normal business practice
• New leadership skills, attitudes and behaviors -
  defined, trained, coached, rewarded, and
  institutionalized over time

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Lessons Learned
Become Customer Centric
Eliminate Process Variation
Engage All Associates
All With Strong, Active Business Leadership