Tools to Achieve Performance Excellence

1
Tools to Achieve Performance Excellence
2
Presenter Biography- Sathish Selvaraju

• Lean, Lean Six Sigma and Business Transformation
• 5 years experience in applied process
  improvement methodologies
• M.S. in Industrial and Systems Engineering
• Research interests
• Organizational culture transformation
• Lean and Six Sigma methodology
• Leadership and Change Management
• Supply chain management
• 1 Patent, 2 publications and invited industry
  talks
• Member of IIE, SEMS and PEN
• Office Rochester, MN, Lives Rochester, MN
• Personal Married with 1 kid (1 YR)
• Email selvaraj_at_us.ibm.com

3
Lean8 Step Problem Solving Methodology
4
Learning Objective

• At the end of this module, the participants will
  be able to
• Describe the 8-Step Structured Problem Solving
  methodology
• Define an effective Problem and Goal Statement
• Integrate quality and process improvement
  techniques into the 8-step problem solving
  structure
• Explain how the 8-Step methodology allows for
  Corrective and Preventive Actions During Problem
  Solving
• Discuss the benefits of Root Cause Analysis
• Describe techniques for Measuring and Sustaining
  your process improvements
• Discuss how to apply the 8-Step Methodology on a
  business challenge or process improvement project

5
Benefits of Problem Solving

• Eliminate time lost in debate
• Identify weak points in the processes
• Discover systematic causes
• Explain why an incident occurred
• Gives factual representation of the incident
• Compare what actually happened against what
  should have happened

6
The 8-Step Structured Problem Solving process is
based on the Plan-Do-Check-Act process

• When to Use PlanDoCheckAct
• As a model for continuous improvement
• When starting a new improvement project
• When developing a new or improved design of a
  process, product or service
• When defining a repetitive work process
• When planning data collection and analysis in
  order to verify and prioritize problems or root
  causes
• When implementing any change or transformation
  effort

Reference W. Edwards Demings Continuous
Improvement Cycle (The Deming Cycle)
7
The number one reason why projects fail is
ineffective and insufficient planning

1. Ineffective and insufficient planning
2. Lack of customer focus and participation
3. Lack of Senior Management support
4. Badly defined requirements or objectives
5. Ineffective change control process
6. Lack of necessary resources
7. Poor monitoring and evaluation
8. Little or no risk analysis
9. Poorly trained project manager
10. Ineffective communications planning

Source Gallup Management Institute
8
8-Step Structured Problem Solving Process aligns
to the PDCA process.

• Describe the problem
• Identify the team
• Define problem statement
• Understand the process (and point of cause)
• Define Goal statement
• Implement containment actions
• Perform Cause/Effect analysis select root causes
  to fix
• Develop select countermeasures
• Implement countermeasures
• Measure results (Evaluate)
• Standardize the Process
• Recognize the team

Plan
Do
Check
Act
Source Gallup Management Institute
9
A3 Report
4, 5. Countermeasures, Project Plan

• Understanding the Process
• a. Team and Sponsor
• b. Problem Statement
• c. Understanding the Process
• ltEnter key findings from VOC, VSM, SIPOC, Process
  Mapgt
• d. Goal Statement

Countermeasure Who When Benefits






6. Measure Success
Internal Process Excellence Financial Excellence
Customer Satisfaction People/Employee Empowerment
2. Containment Actions
7. Standardize Process
3. Root Cause Analysis
8. Celebrate Success
10
Step 1 Define the problem has four sub-steps
with Step 1a being Form the team

• Teams
• Are limited in size, typically 4 to 8 people
• Identify a sponsor for the team
• Contains members from the areas where the problem
  or improvement opportunity exists
• Should have 80 of responsibility and authority
  to implement the required change

11
There are several key roles on an 8-Step team
Sponsor Defines high level team Links team mission to organizational objectives Addresses cross-organizational issues Sets expectations for project status readouts updates
Facilitator Provides guidance through the problem solving process Guides the team discussions stays objective and neutral Ensures everyone participates Requests reviews with Leader/Sponsor for effectiveness Adjusts direction when necessary Coaches teaches sponsor, leader and members in the 8-Step process
Team Leader Creates an environment of trust, open communication and creative thinking Provides the team with a vision of the project objectives Coaches helps develop team members help resolve dysfunctional behavior Maintains all pertinent data Intervenes when necessary to aid the group in resolving issues Communicates progress to Management, Status Meetings Plans team recognition/rewards
Scribe Captures meeting minutes Sends progress report as agreed highlights any open actions
Team member Provides ideas, discussion, data, direct observation Have decision-making power
Coach Problem solving process Subject Matter Expert (SME) Provides guidance on the 8 Step process Checks in with Team, Facilitator, Leader
12
After the team is formed, the project team begins
Step 1b Defining the Problem
13
A problem is an observable, measureable deviation
from a known standard

• In business, a problem is a difference between
  the actual conditions of our current state and
  those conditions that are required or desired.
• Problem statement needs relevant information to
  be effective!
• Current state, Target state and Business Impact
• It has to be clear, concise and complete

14
An effective problem statement is key to solving
the problem

• An effective problem statement states both the
  current and the desired situation. An effective
  problem statement implies or states explicitly
  both
• The current situation
• The desired situation
• The impact statement

Simple Example Our order entry cycle time is 4
days per order, 1 day per order longer than
is acceptable resulting in a 10 loss of market
share

• Current situation
• Cycle time 4 days/order

• Desired situation
• Cycle time 3 days/order

• Impact Statement
• 10 loss of market share

15
Quick Quiz???

• Listed below are several examples of problem
  statements, some of which are effective and some
  are ineffective.
• 1. Loan application approval cycle time is taking
  3 weeks, which is above the acceptable rate of 2
  weeks and is resulting in a 15 applicant
  defection rate.
• 2. Clerks take ten days to check billing errors.
• 3. Our IT systems do not provide the required
  functions we need!!!
• 4. In October of 2012, we had 25 customer
  complaints compared to our standard of 10 per
  month and is causing a 10M drop in new orders

16
After the problem is defined, the project team
begins Step 1c Understand the process and
identify the point of cause

• Draw a process map to create a picture of the
  flow of information
• Capture whats happening in the process
• Look for waste
• Search for the Point of Cause (POC) the area
  where the problem originates
• Ask 5 Ws and 1 H Why, What, Where, When, Who,
  How much
• POC validates problem and narrows the scope

17
The 5Ws and 1H questions are Why?, What?, Who?,
Where?, When?, and How often?

• To understand the process and drive to points of
  cause ask why, what, who, where, when, and how
  often.

• Ask Why
• Why this problem?
• Why might it happen?
• Why did it occur?
• Why
• Ask When
• When was it found?
• When did it happen?
• When might it happen again?
• When
• Ask What
• What product?
• What equipment?
• What size?
• What is it made of?
• What

• Ask Where
• Where did it come from?
• Where did we find it?
• Where might we find more?
• Where
• Ask Who
• Who found it?
• Who made it?
• When checked it?
• Who
• Ask How
• How many?
• How often?
• How big
• How far?
• How

18
TQM Tools for Identifying the Point of Cause
19
After the process is understood, the project team
begins Step 1d Develop goal statements
20
Goals should be SMART

• S Specific
• M Measurable
• A Achievable
• R Relevant
• T Time-based

21
Here are guidelines for creating a goal statement

• Goal statements are written in the format ltaction
  verbgt ltobjectgt
• Do not use verbs that represent relative
  progress, for example, improve or Increase, since
  we cannot measure these relative improvements
• Do not use imprecise words, such as leverage,
  enable, partner, optimize, or focus on.
• An actual quote "My goal is to ensure our
  employees are enabled to leverage IBM's
  investment in our IT environment by providing
  information on the latest software, tools, and
  techniques.
• Goal statements should not be checkpoints, for
  example, Check with... or Make sure that....
  or Investigate
• Goal statements are new, high-impact targets to
  move the business forward, not business as usual,
  for example, Continue to ....
• Example Communicate to employees in a Direct,
  Open and Sensitive (DOS) manner to create a
  culture of mutual respect and trust.

22
Here are guidelines for defining the success
measures for a goal

• Success Measures
• Are the critical few things that tell us we are
  making progress in achieving our goal
• Are unique, observable, measurable, direct proof
  that our actions are producing tangible,
  sustainable results
• Show the desired trend or direction
• Increase in by or number
• Decrease in by or number
• Are not simply the implementation of the goal
• Define a balanced view of success using the
  Balanced Scorecard components
• People - Learning and Growth
• Internal Business Processes
• Customer Value
• Financial (ROI)

23
In the Balanced Scorecard, all the components are
equally important
Lagging Indicators
Financial Customer Value
Internal Business Processes People Learning and Growth
Leading Indicators
Process and People measures are great
predictors of Financial and Customer Value
measures
24
Lets consider an example of a goal statement
with success measures

• Problem Statement The Zoom Car Company is not
  meeting its daily quota of producing 100 of their
  popular Easy Drive cars per day causing a drop in
  Sales and Profits.
• Goal Statement Produce 100 quality-built cars
  that meet or exceed customer requirements and
  that create a net profit of 18 per car by the
  end of the year.
• Success Measures
• People All employees are cross-trained in at
  least two manufacturing operations
• Internal Processes Defective cars produced per
  day zero
• Customer Value The Easy Drive car is voted Car
  of the Year by Motor Trend Magazine
• Financial 18 net profit per car

25
Quick Quiz???

• The elements of the balanced scorecard are
• A) Customer Value, Financial Excellence, Process
  Excellence and Employee Growth
• B) Quality Metrics, Process Mapping and TAKT Time
• C) Histogram, Scatter Plot, Correlation Analysis
  and Check Sheet
• D) Plan, Check, Act, Do

26
After defining goal statements and success
measures, the project team moves to Step 2
Implement containment actions

• What are containment actions?
• A short-term / temporary corrective action
• Some problems must be confined until the root
  cause has been identified
• Examples of containment
• Stop production, Add inspection
• Install a concrete containment cap over a
  ruptured deep sea oil well.
• Apply a tourniquet on a bleeding arm

27
Lets discuss the criteria for selecting
containment actions
Business Impact The extent to which this action helps contain the problem.
Easy to Implement Making the change does not require a great deal of coordination and planning Making the change does not require a great deal of time and does not require a large investment of capital, of human resource or of equipment or technology. It is within the teams control
Reversible The action, when implemented, may not achieve the results expected. Its better if the team is able to change things back to the original way of doing things if the containment doesnt pan out.
In your Team, rate each of the above criteria
using the following rating scale High 9, Medium
3 and Low 1, then multiply the 3 criteria to
get a product for each potential containment
actions. Select those actions with the highest
ratings AND rate HIGH in Reversibility
28
Quick Quiz???

• Which of the following is an important attribute
  of a Containment Action?
• A) It is fun
• B) It is reversible
• C) It can takes a long time to implement them
• D) It is supported by a majority vote

29
After implementing containment actions, the
project team begins Step 3 Root Cause Analysis

• What is Cause and Effect Analysis?
• A method to identify all possible causes of a
  problem
• What is the 5-Why Method?
• A technique of asking Why? 5 times (approx.)
  to get beyond symptoms to identify actionable
  root causes

30
8 Step Formal Structured Problem Solving
Observations ? Problem ? Root Cause ?
Countermeasures
Observable
Analysis
Observations (Symptoms)
Problem or Point of Cause
Countermeasures (Brainstorm actions)
Root cause(s)

1. Water on the living room floor
2. Water on living room ceiling
3. Water on bath room floor
4. Water overflowing from bath room sink

1. Daughter combs hair over sink
2. Daughter cannot see herself in her room when she
   combs her hair

• Install a mirror in daughters room
• Use the mirror in the hallway
• Dont use a mirror just guess!
• Other actions ...?

1. Daughters hair in sink

1. Daughters hair in sink

31
Root Cause Analysis and the Fishbone Diagram
When creating a cause and effect diagram using
causal categories, each bone represents one of
the 6Ms. . .
32
The Five Whys technique is useful for identifying
root causes for each top problem
A simple, effective tool for getting to the root
causes of problems is the Five Whys technique.
For each top problem

1. Ask Why is this a problem?
2. Keep asking "Why?" until you identify a root
   cause that you cannot change or influence -- then
   stop.

33
Activity Conduct a 5-Why Analysis for the Poor
Training

• Effect The number of shipping errors was 50
  more than target.
• WHY?
• The employees have poor training
• WHY?
• There is excessive turnover in the employee
  population
• WHY?
• Employees are disgruntled
• WHY?
• They dont like the new policy
• WHY?
• Their input was not solicited when setting the
  policy

34
After completing cause and effect analysis and
selecting root causes, the team begins Step 4
Develop and select countermeasures
Countermeasures are actions that need to be taken
to overcome the identified problem to reach the
defined goal.
35
Here are guidelines for stating effective
countermeasures

• Countermeasures
• Are stated as Dos and not Donts
• Are in the format ltaction verbgt plus ltobjectgt
• Avoid verbs that represent relative progress for
  example, Improve or Increase
• Do not use soft, fluffy words
• Leverage, Enable, Ensure, Partner, Review,
  Optimize, Support, Focus on, Drive
• Answers the question What must we do to
  overcome the root causes and make significant
  progress in achieving our goal?

36
The Dos and Donts of Effective Brainstorming
37
In Step 5, the project team implements
countermeasures and identifies success measures
for each countermeasure

• For each selected countermeasure, identify
  success measure(s)
• The success measure(s) should align to the
  overall success measure(s) of the Goal Statement
  (step 1d)
• Success measures The unique, observable,
  measurable, direct proof that our actions are
  producing sustainable results

38
In Step 6, the project owner measures and
reports results of implementing the countermeasure

• What do I record for results?
• Compare results against the initial condition and
  the goal statement
• Confirm effectiveness of countermeasures with
  data
• Use Balanced Scorecard components for reporting
• Financial (ROI)
• Customer Value / Satisfaction
• Internal Business Processes
• People Learning and Growth
• Verification
• Can we now go back and eliminate any containment
  activities that were put in place (Step 2) ?

39
Measuring success can also be demonstrated
through the Quality Management Tools

• Trend Charts

• Histogram

• Bar Charts

40
In Step 7, the project team standardizes the
successful new process

• Create a plan for Sustaining
• How do I standardize?
• Create a Control Plan to make the new way the
  way to do the task.
• Train all parties involved or affected by the new
  system.
• Document the new process (SOP, DOM, Desk
  Procedure, etc.)
• Measure, track and report results.
• Institutionalize Does this countermeasure apply
  in other areas?

41
In Step 8, the project team is recognized for its
accomplishments

• Recognize and Share Achievement
• The more you do the 8th step, the more they do
  the 8 Steps

42
(No Transcript)
43



Hebrew
Gracias
Russian
Spanish
Grazie
Italian
Obrigado
Traditional Chinese
Arabic
Thank You
Portuguese
Merci
Simplified Chinese
French
Danke
English
German
Japanese
Korean
Thai