Adding Real Business Value Through Simple Process Improvement

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Adding Real Business Value Through Simple Process
Improvement

• Marc Gunning
• ASQ Certified Six Sigma Black Belt
• June 2013

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Why I am Here Presentation Objectives

• I believe each of us has the opportunity to
  create a positive ROI though continuous process
  improvement
• Discuss tying Process Improvement to the
  organizations financial and business objectives
• Demonstrate accelerated process improvement
• Demonstrate the use of the core process
  engineering tool set

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Improvement - what is it? -

• Improvement is accomplished by
• better methods,
• better techniques,
• better machinery
• and by people continually finding better ways to
  do their job and to work together as a team.
• I will never see the day when there is no
• room for improvement.
• - Dave Packard, 1957

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What is a process?

• A series of interrelated steps consisting of
  resources and activities that transform inputs
  into outputs and work toward a common end.
• The Certified Six Sigma Black Belt Handbook
  second edition, T.M. Kubiak and Donald W. Benbow

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Six Sigma Model for Improvement
2 - Plan-Do-Study-Act steps occur in each phase
1 - Three questions set the charter of the project
What are we trying to accomplish?
How will we know a change is an improvement?
What changes can we make that will result in
improvement?
3 - The activities are organized into standard
project phases (DMAIC)
Improve
Control
Define
Measure
Analyze
Phase 3
Phase 1
Phase 2
Phase 4
Phase 5
Model for improvement 3 questions PDSA DMAIC
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TOOLS
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Project Scope
What are we trying to accomplish

How will know / measure we are successful How will know / measure we are successful How will know / measure we are successful
Measure Current State Future State

What Actions can / should we take

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Identifying Opportunities to Create Business Value
Executive Entity Key Performance Indicators
Shareholder Value
Stakeholders
Earnings
Capitol

• Revenue Growth
• Cost Reduction

• Return on equity

• Customer Satisfaction
• Employee engagement

Business Initiatives
Risk reduction / compliance
Improve Service Levels
Operating KPI Process / Function
Revenue growth
New tool deployed on time
Reduce Customer Incidents
Sales
OPs / IT
Customer Operations
Opportunities
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Critical to Quality
Identify our ability to deliver on the customer /
business requirements for a product or service
Quality
1st Level
2nd Level
3rd Level

• Serviceability
• Aesthetics
• Personal interface
• Flexibility
• Harmlessness
• Perceived quality
• Usability

• Performance
• Features
• Time
• Reliability
• Durability
• Uniformity
• Consistency

Milestones on time
Time to Market
Revenue Growth

• Transaction Costs
• Turn around Time
• Rework
• of Iterations
• Verification / inspection cycles

of customer trials
Market Acceptance
Customer Satisfaction
Need (General)
Requirement (Specific)
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SIPOC
Suppliers
Inputs
Process
Customers
Outputs

• Who provides the inputs?

• The transformation

• The product or service from the process

• Who receives the product or service?

• What resources activities are required?

Name of process
STOP
START
Step 4
Step 5
Step 1
Step 2
Step 3
Process A series of interrelated steps
consisting of resources and activities that
transform inputs into outputs and work toward a
common end. The Certified Six Sigma Black
Belt Handbook second edition, T.M. Kubiak and
Donald W. Benbow
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RACI Definitions

• Responsible for implementation Has the duty and
  obligation to do the work. Also, must exercise
  independent judgment and raise appropriate
  issues.
• Accountable decision owner Has the authority to
  decide and is the recipient of any consequences
  the ultimate decision maker. Also has the
  responsibility to learn from Responsible and
  Consulting parties.
• Consulted Stakeholder with expertise,
  experience, and interests who must be given the
  opportunity to influence plans and decisions
  prior to finalization by the accountable or
  responsible party.
• Informed Is informed of progress, key decisions
  and deliverables by the responsible party its
  necessary for them to know in order to
  collaborate well.

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Authority to Make a Change
Yes
No
Responsible, Consulted
Responsible, Accountable
Yes
Knowledge necessary to make informed change
Informed
Accountable, Informed
No
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Swim Lane
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Sheppard/Wood Example
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Identifying Opportunities to create
ValueSheppard/Wood Example
S/W Customer (AJAX) Executive Entity Key
Performance Indicators
Shareholder Value
Stakeholders
Earnings
Capitol

• Protect Grow Revenue

• Leverage existing assets

• Market Share

Ajaxs Business Initiatives
Eliminate HAZMAT Risks
Close deliver on every deal 100
New Product Capabilities
Zero defects inventory mgmt.
Operating KPI Process / Function
100 fulfillment
Sales Ops
Operations
Sales
Eliminate discrepancies between Supplier and
Vendor Inventory Mgmt Systems
Poka-yoke inventory pick system
Establish priority delivery service
Opportunities
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Project Scope
What are we trying to accomplish
Improve the accuracy and timeliness of inventory information to Ajax to improve Ajax fulfillment and eliminate Hazmat risks
How will know / measure we are successful How will know / measure we are successful How will know / measure we are successful
Measure Current State Future State
S/W and Ajax systems 100 accurate to actual Ajax 98 S/W 100 Ajax 100 S/W 100
Timeliness of inventory info to Ajax Sales Monthly Weekly
Eliminate possibility of shipping wrong products Manual / voice verification Poka-yoke
What Actions can / should we take
Define and Analyze current state process (SIPOC RACI)
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Supplier Input Process Output Customer R A C I
Ajax Supplier Truck at Dock Receive Truck Bill of Lading Physical Inventory S/W Original Mfg Original Mfg Ajax S/W    
Truck BoLPackage Labels Verify product for compliance Trigger all Hazmat compliance S/W S/W Warehouse S/W Warehouse    
S/W Warehouse BoLPhysical Inventory Warehouse Inventory Product Stored Ajax S/W Warehouse S/W Warehouse   Ajax Warehouse
S/W Office BoL Pakage LabelPhysical Location Update S/W Inventory System Electonic Record of Ajax _at_ S/W S/W S/W Office S/W Office   Ajax Warehouse
S/W Office eMail or Phone communicaiton based on S/W Electonic Record Update Ajax Inventory System Electronic Record of Ajax Inventory Ajax Ajax Office      
S/W Office Sum of Electonic Record of Ajax _at_ S/WPhysical Inventory Monthly update of Ajax inventory _at_ S/W to Ajax Record for Ajax reconciliation Records for Invoicing Record for Ajax Sales of availability Ajax S/W Office      
Ajax Sales Ajax customer demand Ajax knowledge of availabel inventory eMail or Phone request for Fulfillment Trigger Ajax inventory pull/ship to Ajax customer Fulfillment to Ajax customer Adjustment to inventory Ajax S/W      
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Supplier Input Process Output Customer R A C I
Ajax Supplier Truck at Dock Receive Truck Bill of Lading Physical Inventory S/W Original Mfg Original Mfg Ajax S/W    
Truck BoLPackage Labels Verify product for compliance Trigger all Hazmat compliance S/W S/W Warehouse S/W Warehouse    
S/W Warehouse BoLPhysical Inventory Warehouse Inventory Product Stored Ajax S/W Warehouse S/W Warehouse   Ajax Warehouse
S/W Office BoL Pakage LabelPhysical Location Update S/W Inventory System Electronic Record of Ajax _at_ S/W S/W S/W Office S/W Office   Ajax Warehouse
S/W Office eMail or Phone communicaiton based on S/W Electonic Record eMail w/ Scanned BoL Update Ajax Inventory System Electronic Record of Ajax Inventory Ajax Ajax Office      
S/W Office Sum of Electonic Record of Ajax _at_ S/WPhysical Inventory Monthly Weekly update of Ajax inventory _at_ S/W to Ajax Record for Ajax reconciliation Records for Invoicing Record for Ajax Sales of availability Ajax S/W Office      
Ajax Sales Ajax customer demand Ajax knowledge of availabel inventory eMail or Phone request for Fulfillment Trigger Ajax inventory pull/ship to Ajax customer Fulfillment to Ajax customer Adjustment to inventory Ajax S/W      
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Swim Lane
RACI
Process
Inputs/Outputs
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Transition Cycle
HIGH PERSONAL CONTRIBUTION
DANGER
Denial
Commitment
teamwork satisfaction clear focus and
plan cooperation balance clear vision of the
future
it will be over soon this wont
happen apathy numbness minimizes the
change Ignores the change
Resistance
Exploration
sees possibilities willing to exploring
alternatives feeling I can make it high
creativity and energy TOO many new
ideas unfocused work start being in the future
sense of loss of control concerned with
abilities future contribution unclear Finds fault
with changes lack of focus or direction Withdrawal
s blaming
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Management of Change Cycle
Denial
Resistance
Exploration
Commitment
New Process Launch
Performance
Time
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Thank You