As the new year comes to an end, new strategies, resolutions and goals kick into gear. We share with friends how much weight we want to lose. We talk with superiors about how we are going to improve and we set goals we've set before with the hopes of reaching them this year. Day one begins with the new goals. Day two, we are executing and day three one of them falls to the wayside. Why is this?
While there are many different reasons resolutions, goals and objectives might get misplaced one common way to avoid this is through the use of visual controls.
What is a visual Control?
A visual control refers to methods, devices, activities and or systems which are designed to assist in the management or control of activities. These means of control often employ other sensory characteristics along with a visual to better manage. A visual control is one method of communication that we can use to show at a glance:
1. How we are performing or progressing with our activity or work effort.
2. If anything is deviating from a standard.
3. What we need to do.
1. Progress/Performance - The visual control should show anyone who looks at it how the work effort or activity is performing in comparison to the standard or objective. One example of visual management that could be used for a new year’s weight loss goal might be a weight loss chart like the one shown below.
2. Deviations from a Standard - Visual management also seeks to identify abnormal conditions. While it is important that we see, and know when conditions are not meeting the expected level of performance, it is probably even more important that visual controls share knowledge throughout an organization allowing individuals to look, understand and act accordingly. If you had as part of your new year’s weight loss goal a diet, the plate shown below may be helpful to use at each meal. You can see what the standard is and you can see if the standard is being met or not and correct it accordingly. Now that's Lean.
3. What you need to do - Exception messages in ERP/MRP give us information and prompt us to act or receive information. A gas light on our car tells us we need gas and both our weight loss tracker and portioned plate show us what we are doing in relation to the standard. If we are not meeting a standard we need to understand the abnormality and act accordingly. If we are meeting the standard, we keep doing what we are doing or do a little better. The point is the means of communication being used for visual management should help us to make decisions of what needs to be done.
There you have it one easy tool you can use in 2017 to become much leaner. Just remember:
Twas the night before kaizen when all through the value stream, not a value added activity was flowing not even engineering. Stickies were hung on the wall with great care, In hopes that Lean Strategies International would soon be there.
The teams thought of processes, visions and hoshin kanri while waste sat in the value stream acting quite ornery. Transportation, inventory and even some waiting... their work would be hard, but with ©Treat 1,2,3 in their toolbelt the waste was not so large. Somewhere in the process of examining, a constraint showed up. The team ran to the gemba to see what was up. They grabbed their cameras, glasses and measuring tape, only a moment would pass before they had their current state. With review and examination not far behind a future state was almost ready, the improvements close behind.
Those team members were passionate, lively and quick it became very obvious this was not St. Nick. More rapid than eagles they wrote up their action plan, they whistled and shouted while improvements began. "Now kanban! Now 5S! Now TPM and Standards! To the top of the metrics to the top of the charts." They improved like crazy while employees bought in. Shortly thereafter the transformation came to an end.
The plant stood there watching as the consultants walked out, not a word of a purchase order not a face with a pout. Certificates, belts and knowledge in hand this plant became another successful lean six sigma land. Shortly thereafter the events continued on, kaizen had begun and it was far from gone. With tools, methods and strategy held tight in their belt, the organization realized quickly Lean Strategies was there to help. The coaches turned with a smile and a tilt of their ear we all felt their good spirit and joyous holiday cheer. Whether Lean, Six Sigma or Kaizen, every strategy takes time for new culture and behavior to set in. But as the minutes turned to hours, organizations found solutions igniting their powers. As the new year approaches and strategy begins remember Lean Strategies will help you earn the wins. As we close out this holiday week and approach the new year we just want to wish a Happy holiday to each of you and a joyous New Year.
"What gets measured gets done!" That's the saying and we've all heard it before, but what exactly to measure is amongst the most critical questions we can answer in relation to our lean six sigma projects. Lean six sigma is a data driven approach of improvement. With that in mind the data that we choose to establish in our improvement projects must be measurable and aligned with project goals.
There are three general categories of metrics that almost any lean six sigma (CTx's) objective will fall under: Quality, Cost and Time. However, these metrics are quite broad inherently and can still leave us wondering how "improvement" is defined. Which brings us to the most important point of project development, defining up front what "improvement" means.
Before any project kicks off or mapping begins all parties associated should know exactly:
1. What measurements will be used.
2. How those measurements constitute a win.
3. Why those measurements constitute a win.
Defining what metrics will be used to play the game helps employees to stay aligned with objectives and ensure that both the team and the organization get the results they want.
Like the game of basketball teams also need to understand how their metrics constitute a win. For instance an employee with a goal of reducing defects could simply show a traditional yield measurement. Although this measurement may show reduced defects and an improved yield, it may not be exactly "what" the organization wants as traditional yield often creates a hidden factory scenario. For this reason, teams, should understand clearly "how" the measurements align with project goals.
The team who puts the ball in the hoop on any given day more times than their opponent is the winner. The reason why is that there is correlation between a team’s skill, conditioning and teamwork and the amount of points they score. Understanding why they want to score more points helps the morale, motivation and dedication of the team. Going back to our yield calculation example it becomes clear that using a first time yield or a rolled throughput yield is a much truer measurement than a traditional yield would be. After all, why would anybody want 100% yield if there were months of rework involved?
While we sometimes end up on the short end of the stick with projects because what, how and why aren't clearly laid out up front many organizations may find that the wins they wanted were much bigger than what they actually saw. Establishing upfront what, how and why the "game" is being scored the way it is makes it much easier for both the organization and the teams to end with a winning score that aligns with everyones needs.
The benefits of lean six sigma are widely known now throughout the world. With organizations, such as Motorola and GE leading the way, where do small businesses sit in terms of the strategic benefits seen by these giants? Simply put, the same benefits that have been realized by organizational giants are usually more applicable to smaller organizations. Why? Smaller organizations have less people and often do not stretch across global boundaries. This gives them the ability to train more people, move quicker and create results in lightning fast fashions.
Reducing capital expenses, increasing efficiency and minimizing variability are only a few of the benefits any sized company can realize by undertaking strategic implementation of lean six sigma. But there are many other benefits that we don't see right away:
Engaged and Confident Employees
Along with reduced capital expenses, waste and increased efficiency lean six sigma gives employees a means of using their talents in a positive way. Since every strategy requires effective execution of tactics there is no better way to drive improvements than through the people who are closest to the work. Those people are the individuals who produce products and services day in and day out. They are the ones who live at the gemba. That makes those individuals the perfect resources to tap into when looking to improve the efficiency and effectiveness of a process. As these employees begin to engage in kaizen events and develop their skills confidence grows within each of them. As confidence grows within employees and they begin to see, feel and realize their positive impact the benefits reach far beyond performance and accountability, in fact "they are life changing" as Bob Chapman once put it. As people become confident, motivated and realize their talents they often times continue to search out opportunities and engage in continuous improvement.
Stronger Economic Conditions
As the years go by it becomes more and more obvious that we need lean and six sigma if we are to survive in changing times. If not for the more obvious reasons of reduced waste and stable processes but for the reasons we don't always see right away.... What reasons can you think of?
As the new year approaches we all have to wonder, what will happen with the economy? How will the United States respond with presidential changes and what will become of the unemployment rate? There is a lot to consider as the new year approaches and yet we do have to acknowledge this is not the worst of times. But where does lean and six sigma stand in these changing times?
Before we all start jumping off of the Lean or Six Sigma journey let's consider a few reasons why the lean six sigma organizations are so well equipped to have their biggest years just around the corner.
1. Knowing where you are headed - Most lean six sigma companies started their strategic planning by establishing a clear direction for your company. This is a huge advantage because you know where you want to be and can pivot if necessary to stay on course. Most companies that fail during economic shifts and downturns do not have stable processes in place and rely mostly on sales and marketing or reactive behaviors for their growth. The key advantage of knowing where you want to be or having a "future state" in mind is that you can consider both leading and lagging economic trends and plan accordingly. Lean organizations can be confident in knowing that with lower inventory, waste and strong flexible teams in place their profit margins will certainly be higher in both dowturns of the economy and upward swings.
2. The time to improve - Shifts in economy and "slow" times are even more of a reason to push the improvement journey. It's a well-known fact that the one asset that grows and appreciates with time is people. With that in mind we know that like every other business "shift" in history it will only be a matter of time before economic conditions "change" once more. When that happens the organizations who cross-trained, developed and invested in their people will have an enormous advantage over companies who laid off and let go.
3. Capital? - Stable organizations with less waste need less capital to operate efficiently. Using "times of change" to focus on improving the first three P's referenced in The Toyota Way supports the 4'th P. This type of long term thinking will leave you much better prepared for future changes that undoubtedly will come in time. Additionally, solving problems when you have
4. What gets measured, gets improved - Both Six Sigma and Lean use quantifiable measurements to track results. As times change it is much easier to develop effective, repeatable strategy for the future when you are tracking and gathering measurements already. Consider making this your focus in the new year, establishing metrics that can show the performance of the organization through the ups and downs of the economy. Remember keep the measurements simple. You don't need to gather scientific algorithms that can only be understood after years of study just track the basics: Lead time, Error rate, on time delivery to customer, on time delivery from vendor, Takt time, Improvements, Inventory turnover.
Change is bound to come; good or bad. Now is the time to focus on strengthen your business plan and build excitement around your company’s direction. The organizations who develop their people, relentlessly remove waste from processes and build a long-term mindset will be able to withstand the changes of time and grow stronger and stronger with each new year.
Ask anybody who has been through a "lean transformation" or strategic implementation of some type and they certainly will share with you that one of the greatest challenges associated with real change comes in the form of behavioral change. We as humans have a tendency to revert back to our natural "ways" as we go through or experience change of any type. Change itself can be a scary term. The Merriam-Webster dictionary defines the term in two different forms:
of implementation and change it will drive mid-level managers, frontline supervisors and ground level employees to accept and be a part of the change too.
3. Set clearly laid out targets that can be measured. knowing where you are headed is one thing and establishing tollgates or checkpoints that are measurable is another. Change is best done little by little and all parties should understand how successful implementation is defined. At each successful stage of implementation communication can be shared with the organization and rewards and recognition given for outstanding effort. Rewards and recognition can help reinforce positive change and acknowledgement of success.
4. Train and prepare everyone. All employees should be a part of at least a basic educational training in Lean and Six Sigma.
5. Lean and Six Sigma implementation is not a blitz. Both strategies take time to develop as the behaviors and culture of the organization align. You will need to ensure that implementation has enough time for the new tools, methodologies, principles, behavior and culture to firmly take root. This can range from a year to five years. You will be much better off with a sustainable strategy in place than a few clean areas. Sufficient time can be helpful for employees who do not yet understand that lean is a long-term strategy and their support is needed for the "long-haul."
While these five tips will help in managing the changes that naturally come with Lean and Six Sigma initiatives it is also important to be aware and prepare for resistance. Like a book pages sometimes need to be turned and paragraphs edited, it is best to have a plan in place prior to implementation that will help you manage forms of resistance. Taking these steps will help you ensure that when it comes time to publish your story, it's a success.
The last slide clicked, with jitters in his arms the young man set his clicker down. He knew something had gone desperately wrong. A loud voice soon called out " Okay, So what's the return?" For a moment the freshly trained black belt sank back into his suit. After a deep breath he replied "we have a faster process and everyone on the floor is much happier."
When it comes to understanding a process, few tools are as powerful as the SIPOC map. The SIPOC can be used in both process mapping and value stream mapping. When used as part of a value stream initiative the map shows material and information flow in forward and backwards loops, this allows teams to identify potential gaps from a systemic view which helps us understand the effects of activities both upstream and downstream. Today we will look at the SIPOC map from a process mapping perspective.
What does SIPOC mean?
The tools name SIPOC is rather catchy. Each of the letters provide us with insight as to portions of a process we should review when mapping from a high level. SIPOC map keep in mind that the suppliers provide the inputs to the process. The process which is what you are trying to improve should in some way provide value or transformation to the inputs which results in an output that needs to at minimum meet your customer's expectations.
When do we use a SIPOC Map?
The SIPOC diagram is most often used to identify opportunities for improvements before a project begins. Because the tool shows us all relevant aspects of a process it can also be useful when a team needs to:
What does a SIPOC Map look like?
How do I use a SIPOC Map?
One of the added benefits of a SIPOC diagram is how easy they are to create. Follow these simple steps and you will be able to create a SIPOC map:
1. Find an area as close to the process you are mapping as possible so that you can see the process happening and engage with people at the gemba.
2. Start by mapping the process out. You should map no less than 4 steps and no more than 7 high level steps.
3. Next identify the process outputs.
4. Now identify customers (internal/external) that will receive the outputs.
5. After you have identified customers, document the inputs of the process. These are the X's that are transformed into outputs or Y's by the process.
6. Lastly Identify any suppliers of the inputs.
7. If at all possible identify requirements that might be known already. If you are following the DMAIC method these CTQ's will be verified in the measure phase.
After using a SIPOC map we can now see all the elements of the process clearly.
1. There was an inquiry for a bike repair which resulted in a scheduled appointment date and time.
2. Next the owner came with his bicycle ready for a diagnosis which resulted in a recommendation and an estimate to the bike owner.
3. The bike rep. then received permission for the order and prepared his purchase order for the bike mechanic.
4. The parts were then ordered by the manager which was the internal approval for the bike rep.
5. The vendor then delivered the parts which was the approval for the bike mechanic to perform the repairs and ultimately resulted in the customer being called.
6. Then through observation the bike was repaired.
If you would like to download a free SIPOC template simply click on the link below.
One of the most effective tools any process orientated employee can use is the process map. The process map has been around since the dawn of time and has evolved into many different iterations in order to meet users needs. Along with the flexibility of a process map it's quite effective at showing a user where pain points in a process might be.
What is a process map?
Process mapping refers to a tool used to make business processes visual. The process map documents an entire process step by step which allows us to see relationships between inputs and outputs of a process along with clear identification of decision points and many other steps in the process series. The process map is generally used towards the beginning of initiatives in order to understand the flow of a process but it can also be used in support of almost every phase of improvement projects.
Different Types of process maps:
Traditionally there are many different types of process maps that have been developed and used. For example a SIPOC and a value stream map are forms of process maps but generally provide a much deeper level of understanding as they identify information flows too. In general there are three different categories of process maps:
Why do we process map?
In general process maps provide us with a visual display of the sequence of steps within a process. They can also be used as a method of communication. We have all been a part of a project that goes around and around in circles trying to remember and figure out what actually happens in a process. When we make those steps visible the process is communicated to everyone in a more understandable language. There may be times where you need to add in steps here and there but with the map visual and near the area where the process actually occurs, the communication of the process is much more accurately defined. Another very common reason for process mapping is that a visual map can aid us in the analysis of a business process. Some of the ways we can use process maps to analyze are:
How do we build a process map?
Process mapping is a fairly simple process to learn. But there are a few general rules to follow when you build a process map.
Different Tools for Building your Map:
Process maps can be built with stickie notes and butcher paper, excel, powerpoint, word or in vizio. Over the years I have grown to love stickies and butcher paper because it is much less restrictive and can be built anywhere. For our purposes today though we will use excel to build our process map. Today we will cover three types of process maps: The top down flow chart, the linear flow chart and the swimlane or cross functional flow chart. If you haven't downloaded a template yet, you can do so by clicking here.
The first thing you will want to look over is the first tab of the template. Excel makes it very simple to choose your symbols by simply clicking on the insert tab and selecting shapes. At the bottom of the shapes you will notice symbols for building a flowchart. You can try to memorize them right away but there is also a reminder of the symbols meaning in the first tab.
The great thing about a top down chart is that we can still drill into each of the process steps below it. 2. We then can ask the subject matter expert, "what do you have to do to get the ingredients out?" The person baking the cake might say:
The next type of map you will find in your template is known as a linear flowchart. The linear flowchart is a diagram that displays the sequence of work steps that make up a process. It will show decision points, rework loops and a few other elements. Let's make a linear flow chart for our cake.
The final flow chart we will look at is the swimlane flowchart. These types of flowcharts are often referred to as deployment flowcharts too. The swimlane flowchart is used to distinguish what job function of the organization is performing what steps. They can be used to show back and forth activities between steps and unlevel workflows.
As you can tell in the swimlane diagram above we can see very clearly who is responsible for what process step. If there were overlapping steps we would see those stacked which may be a trigger that there is an opportunity for improvement.
What should process maps have?
Like any other map a process map has a few unspoken rules we should do our best to adhere to. First and foremost be sure to label the process name and the team somewhere on the map just in case there are any questions. You may also want to place a date on the map of when it was created. Next the process map should be very simple to read, it needs to go in one direction not up and down and side to side. Try to keep a flow that is either left to right or top to bottom. You will also need to identify start points and end point and keep all of your loops closed. Did I include all these unspoken rules?
Helpful things to look for in a map.
We mentioned a few items to look for in our process maps but let's summarize them here now that you are an expert.
Selecting a project in Lean Six Sigma can sometimes be a daunting task. But like any other project it is a necessary step that you will have to take at some point. One very important piece of this early decision comes in the form of a document called a project charter. The project charter is a very important piece of the puzzle that we have written about before in a post titled The Project Charter. The project charter is one of the first essential steps in many different types of projects. It acts as an informal contract between the organization and the team. The charter will set a clear outlook on what the team's objective is and how their success factors will be measured. Additionally it contains historical evidence for the project, a clearly defined problem statement, a goal statement, the boundaries associated with the project, team members, measurements and an estimation of the time needed to complete the project's implementation all on one sheet of paper.
Where does the charter come from?
In general a project charter will normally take one of two roads of development. The first is that a charter is developed by leadership or the top level management of the organization and then is presented to the team. The other very common way a charter can develop is through the team's discovery of opportunities or issues that might need to be solved or improved. The team then pieces together a project charter and presents their findings to upper management. No matter how the project charter is developed, consensus and buy in from upper management and the team is absolutely critical to the project's success. This agreement of the project's direction will show the rest of the organization that both the team and upper management approve and endorse the project moving forward and will provide the team with the support and empowerment they will eventually need.
What is included in a project charter?
Basic identifiers - The charter should always begin by defining basic elements such as the company name and the project title. Like a contract this identifies who the contract is between and a general title to keep projects organized.
Business Case (historical reasoning) - Next the charter should include a clearly written one or two sentence business case. This simple two sentence business case will define "why" the team has been formed and how the project aligns with the organization's strategic direction. In other words the charter will show how the project aligns with the vision and the mission of the company.
Problem Statement - After the business case is clearly defined the charter will very clearly tell us what the issue or opportunity is that the team is going to focus on. This is called the problem statement.
Goal Statement - The next important element is the goal statement. The goal statement lays out the objectives that the team is expected to achieve. These expectations or the goal statement should always be agreed upon by both the team and the team champion. A very important piece of the goal statement is to be sure that when it is written out, it is done in such a way that makes the statement measurable.
Scope - The project charter will also include the boundaries or the scope of the project. These boundaries make it clear what is acceptable and what is out of the project scope. It is very important that the boundaries are clearly defined in the scope. This part of the charter is what will empower and hold the team accountable for their actions. The scope will give team members the freedom and support they need to focus their energy on the important tasks at hand.
Measurements - As noted earlier the goal statement should be worded in such a way that makes the objective measurable. Those measurements or Key performance Indicators are placed on the charter so that the team can identify baselines of where they are starting from, where they are headed and eventually actuals that can be used for reflection or as a means to see how near or far the team landed in relation to their target.
Team Roles - Another important designation that is contained within the project charter are the roles of each of the team members. This simply lays out who's on the team, who the champion is and who the sponsors are along with any other members that might apply to the project.
Milestones (schedule) - Last but not least the charter will include a high level project schedule or a gantt chart.
All of the information outlined above is normally documented on one piece of paper, with each category being very clearly defined, concise, accurate and to the point as possible. It's quite a bit of information I know, so let's list some of the advantages related to documenting all this project information.
Example and walkthrough
If you haven't downloaded the charter template yet you will need to do so now. You can click right here to get your template. Now that you have your template let's get started.
STEP 1 - As we noted earlier on the first thing we will need to document is the basic identifiers. Let's say our company name is Bob's machine house, I know original right? Next we will input our project title. Our title will be Accounting Cycle Time Reduction.
STEP 2 - Now we are ready to identify our business case or the historical reasoning for the project. This is a short summary of our strategic direction and reasons for the project. In general your short summary should include either quality, cost or scheduling issues or opportunities. Most of the time the business case will be directly related to either:
Step 3 - After our business case is documented we are ready to define our problem statement. This statement should be as detailed as possible. The problem statement should provide insight in the following ways:
One thing to keep in mind as you define your problem statement is that it should not be leading in any way. Make sure the statement is neutral and does not pass preconceived judgements or diagnosis.
Example - Problem Statement
Our cash to cash cycle at the accounting process has not been meeting the standard of 30 days. As a result of this our funds are invested in inventory 50% longer than we expect. It is crucial that we improve this because we are not getting a return on our investments quick enough.
With a neutral statement like this, the team has no preconceived notions, allowing them to work towards the project objectives with an open mind.
STEP 4 - Our next step is to gain consensus on a goal statement. As a general rule of thumb goal statements are generally in the realm of 50% improvement or reduction depending on the goal. We will again use the standard goal statement format in the template. The statement might sound like this: The Goal is to reduce the cash to cash cycle time by 50% resulting in a reduced, cash to cash cycle of 15 days.
STEP 5 - Once everyone including the project champion have agreed on the goal statement we then need to define our project boundaries or the scope of the project. There are two boundaries you will need to clarify here. The first is the longitudinal scope which tells us where the process starts and where the process ends. One example of our cash to cash cycle time might be:
Start - When materials are acquired and End - When we receive payment.
The other boundary we need to define in our scope is the lateral scope. This refers to the "width" of the process. One example of the lateral scope for our cash to cash cycle time might be:
The cash to cash cycle time for our accounting project only applies to the accounting and purchasing department but no other department is applicable in the entire organization.
After combining the two boundaries our scope tells us that we need to be empowered from the point materials are acquired to the point where we receive payment only within accounting and purchasing. One thing to note with scope is that you may want to include more specific level of authority than just lateral and longitudinal.
Step 6 - Next we need to define our measurements. There are at minimum three measurements you should establish and track. A baseline, A future state and the actual results after the project is complete. Since our goal statement and problem statement already defined the metrics we need, we just need to input them into our template in the measurement section. The one that I will use is the number of days for the cash to cash cycle time, you may want to use others too though. Since we know our standard of 30 days is being exceeded by 50% as defined in the problem statement, we can input a baseline of 45 days (30 days + 50% of 30) in the current state. Our future state measure was defined in our goal statement. So we can input 30 days (45 days baseline - 15 days improvement) in the future state which tells us we need to improve by 15 days. The actuals will be measured when the project is complete. Remember since you more than likely will have more than 1 measurement to input those too.
Step 7 - Your team roles should be somewhat self explanatory, just be sure to input your sponsor, coach or champion and each of the team members in the template.
Step 8 - Last but not least we need to establish a schedule for our project. This schedule defines the amount of time you think you will need from the start of the project to the complete and full implementation. The template includes a scheduling tab that you can enter in the stages you want to measure. The dates will automatically populate back to your charter, but let's look at one example just to be clear. If I were using the DMAIC method I would want to make my start and complete dates visible for the Define, Measure, Analyze, Improve and Control Phase. If you are using another methodology simply plan the high level steps of that methodology the same as we did with the DMAIC example.
Now you have all the necessary information on your project charter to move forward with your improvement. Be sure to remember though that the charter should be revisited every day of the event to adjust and monitor the charter. Even if you don't feel like doing it, just do it. There will be times where new people join the project and it will save you a lot of time and energy if you can hand them an up to date Project Charter to catch them up to speed.
Nobody can say it better than the master himself Mr. Taiichi Ohno. Learning to see waste is the first critical step along your personal journey, but sooner or later seeing waste will not be enough. Once you have learned to see waste the next step is moving towards "elimination."
We were excited to see that many of you took advantage of our November Sale for the Lean Six Sigma White Belt and 5S Course. While continued training is one way of developing your skills another important element that goes hand and hand with continued education is "experience." While it's not always easy to go and do a Kaizen Blitz in our home we can identify forms of waste in our everyday life.
Let's take for example " The missing kiss." Every morning before I head out into the world my children, wife and I gather around a board near our front door. We take a few moments to catch up on things we've been doing and find ways to support each other in accomplishing our goals. Along with our brief huddle every morning I stumble off right when the huddle breaks and grab my shoes for the day. About 50% of the time this results in me not getting a big hug from my daughters and a kiss from my beautiful wife. Why? I've built waste into my morning routine. Transportation, moving from the door to my bedroom on the other side of the house, Over Processing, going from one side back to the other and back again and of course unused skills and talents by not taking advantage of my families brilliant mind for solutions. So how does lean apply to this "everyday" situation? Well, if you are anything like me you love spending time with your family.
One day while working on a project at my desk a thought came to my mind. I pulled out an old design layout I had in my drawer of the home and upon further review realized that jackets, shoes and backpacks could be placed in a closet near the door. We began by conducting a 5S of the closet together. Upon completion there was more than enough room for our shoes. While the story might sound silly it gets sillier, don't worry. Not a moment later my little seven year old STEM cell winner decided to chart the flow of the morning routine.
Folks I want you to know that it has been well over a month now and every morning I get a hug and a kiss before we all head out, how? By eliminating waste. So what's the point?
While it might not be a hug and a kiss in the morning for all of us, it could be walking across the hall to pick up a sheet of paper you printed, maybe it's sifting through the closet to find supplies you need or excessive waiting when you really don't have the time. The point is, waste is everywhere and all around, by first learning to see and then learning to act you will find that not only will your job or career advance as you eliminate waste but you may just find that there was much more time, resources and energy to do the things you love.
Remember there are always FREE wonderful resources available on The Lean Six Sigma Glossary and in our blog Listen to the Gemba so please take advantage.
Let's keep transforming the world through the "complete and total elimination of waste" and continue sharing with one another. If you happened to come across some waste in your day today, don't forget to share your story in the comments section. Have a fantastic day everyone and until next time, keep on improving and we will keep on giving you solutions that ignite your power!
When looking to calculate metrics for a process one of the best performance metrics that you can use in relation to yield is Rolled throughput yield. Rolled throughput yield is the probability that a process with multiple steps will produce a defect free unit or service. RTY is often referred to as "True throughput yield" because it quantifies the cumulative effects of inefficiencies that often plague processes and drive hidden costs. Like we mentioned in our previous post entitled: First time Yield (FTY) most processes are linked together in a series so that tasks can be accomplished easily. As you can see in the flowchart shown for my friends unique pizza orders there is a series of interlinked processes.
In the first string of processes we pull ingredients, then assemble the pizza, next cook the pizza then ship to the customer. For processes that are more systematic like the one shown here, we use a measurement called rolled throughput yield.
What is Rolled Throughput Yield?
Rolled throughput yield is a percent that measures the probability that a unit can "roll through" a process without defects. This measure takes into account rework and scrap providing an organization with a more accurate assessment of internal waste and the cumulative effects of poor quality.
Why use RTY?
Traditionally yield calculations take place at the final step of a process. The thought is that rolled throughput yield measures the effectiveness of the overall process. Here is an example, Let's say we were evaluating my friends unique order pizza's. In our batch of pizza's we had 50 to start with, and out of those first 50 our first process step provided a yield of 78%. Our second process steps yield was 98% and our third was 93%. Finally we are ready to ship to the customer which gave us a throughput yield of 90% in our 4'th process step. When we calculate our RTY we see that the probability of a unit passing through the entire process defect free is 64%.
Now had we used a more traditional method of calculating our yield we would have a final yield percentage of 90%. While the numbers certainly look great, they are not accurate. The reality is that using the wrong yield measurement will hide inefficiencies by placing a mask over the waste in the process. These "hidden wastes" are often referred to as the "hidden factory." Rework and scrap both eat up time, resources and capital. The worst part about it is that you're left wondering why do I have 90% yield but my efficiency is terrible? The first way to begin dealing with these hidden factory measurements is to make them visible. Using Rolled throughput yield makes these hidden factory metrics much more visible and takes into account rework that might be performed at each process step. It will also expose the cumulative effects that poor quality has on a unit's probability of being produced defect free.
How to use RTY
Assuming our same pizza baker had measured his yield with the rolled throughput yield, we then would be able to quantify the cumulative effects of inefficiencies found in our pizza making process. This is done by figuring the FTY for each process step and multiplying the numbers. Let's give it a try. You can download the excel sheet here and follow along. Today our worker is required to bake 100 pizza's.
1. So in process step 1 we input or pull ingredients for 100 pizza's. The output again yields only 90 pizza's good giving us 10 "scrapped" or in our case that can not be made and 5 needing rework.
2. Now we have 90 pizza's going into process number two. However, when we look at the output we see there is again 10 scrapped and 7 needing rework.
3. By the third process step we input all 80 remaining pizza's. Our output shows us that 5 more pizza's will need to be scrapped and only 3 can be reworked.
At this point our rolled throughput yield is 62%, which is much different than the 90% yield we would have seen had we used the traditional yield method.
4. In our final process step of delivery we send off or "input" of 75 pizza's but 5 need to be scrapped and 10 can be reworked.
So why did we end up with 95% yield on our traditional calculation and 50% on our rolled throughput yield? Looking back on my friends pizza shop we can see that much of the factory was hidden. Probably not because anyone intentionally hid the amount of scrap and rework going on but simply because calculating yield alone only takes into consideration what goes in and what comes out. That would mean that if 100 pizza's went into the process and 100 came out you would have 100% yield. But what if 40 pizza's needed rework, is it still 100% yield? Hopefully not. Using RTY exposes those wasteful activities. The other benefit to using a rolled throughput measure vs. a first time yield measure is that first time yield measures what goes into a process step against the number of good parts produced, but it does not provide a cumulative view of the effects on an entire process series.
When it was all said and done at the pizza shop many opportunities were discovered simply by changing the way yield was measured. At the end of the day our improvement opportunities are only as good as the measures we use, but no measure will ever be as good as a "true measure."
In almost every project you perform in both lean and six sigma teams will bring a long list of experience, talent and solutions to the project table. But often times it can feel overwhelming when trying to decide which of the solutions to move forward on, especially if you have limited time for implementation. So how do we complete this important project task without losing all of our hair?
What is the tool used for?
The cause and effect matrix, C&E matrix or XY diagram is a great tool that can do the job quite effectively. The XY matrix takes a list of possible X's and narrows them down into a more manageable amount of inputs. Similar to the way a PPI measurement works in selecting projects the C&E/XY matrix helps us to prioritize solutions for implementation.
How do we use the tool?
First and foremost let's recall our formula that we use in six sigma projects, Y=F(X). We will use this same formula in our C&E/XY matrix. The Y's or the red cells represent process outputs and the cells above our Y's which are yellow represent our customer's voice or the level of importance the outputs are to the customer. Next we have the grey cells which shows us our input variables or our X's. The X's are what input variables you will use in your attempt to accomplish the Y or customer desire. Finally we have our blue cells which tell us the level of impact or correlation each input has on the output. So let's define a process for using the C&E and walk through an example.
1. The first thing we want to do is define the the process outputs. This is simply the end result or customer desire that we are trying to achieve. Let's say we are listing some important outputs for a hamburger we are making.
will score each of the outputs on a scale of 10 to 1. 10 being the most important and 1 being the least important. For best practice your most important Y will be your only 10, however your other Y's can and may score the same.
Inputs could be anything from initiatives to projects or other activities you will use in order to achieve the outputs. There are many different ways that you can gather suggestions for improvements like brainstorming and gemba walking. Any way is acceptable just be sure to place those inputs in the grey boxes.
5. When this data is in the cells you see a total number and percentage number automatically populate. We first want to look at the total column. In the case of our hamburgers our priority would be first creating a standard for making the burgers, then adding a special sauce to our burgers. The way we read is by looking for the highest number and placing our options in descending order going down.
Although our hamburger example was only in theory the XY/C&E matrix will be a very valuable tool for your team to use when you have multiple solutions in mind. As always using any data that may exist is the best way to get the most accurate results, however if there is no type of data qualitative information will be very helpful. Just remember that if you use the matrix based on qualitative data that the best thing you can do to get accurate results is make the team cross-functional.
How a human being can obtain so much knowledge is a miracle in itself. Our brains are quite compact in comparison to the amount of knowledge they can obtain. With literally hundreds and sometimes thousands of activities we need to take in, I've always found it fascinating that every time a memory is made our brain forms a new connection, building a set of historical events, or hard drive if you will, encompassed within our skulls. Interesting enough but Neuroscientists theorise that these new "connections" only happened in our long term memory, however short term memory is built mainly on patterns of neuron activity which take place in the prefrontal cortex (Interested in a reference?). Moving and shifting memories, creating new connections and 5Sing our minds system are a few of the ways that we can gather so much information and retain what is important.
Similar to our minds a kaizen event gathers multiple pieces of information from mapping, to issues and times, while at the same time brings people of different backgrounds, personalities and behaviors together in hopes that they will accomplish a common goal. As you may have guessed sharing every bit of a blitz might be hard to do, fortunately we have the A3 report. We have wrote about A3's before but today's focus will be focused on how the A3 format influences our thinking.
Individual unique "memories"
Although it may not seem like it the way we solve problems is directly related to the examples we saw in our developmental years. The A3 report that we hear of so often works in the same fashion. Because the name A3 is only in reference to the 11 by 17 size of paper we have complete freedom to attach any format we would like to that A3. For instance Toyota and many other lean practitioners format their A3's using PDCA while a six sigma specialist might format their A3 with the DMAIC methodology. Whichever methodology you choose to populate your A3 report is not really as important as how the use of that methodology will stick with the user. Because the A3 report helps to jog our "short term" memory initially it must be used regularly in order to create new "connectors" in our mind. This is done through repetition or continued use of the tool. Given that important fact we are at an advantage when we create A3 "memories" that we do not have when we create brain memories. The advantage is, we can control the memory being created. If we want employees to think in a plan, do check act pattern we give them a PDCA A3 and multiple experiences to learn, grow and create connectors. If we want employees to think in a define, measure, analyze, improve and control manner, we give employees DMAIC A3's and lot's of opportunities to use them. This powerful influence can also be targeted to develop very specific skills through continued "kata" or repeated patterns for the purpose of learning.
Communication in our mind works in a few different ways. One way the mind communicates is in an inward manner receiving information that comes in and storing it in our "database." The other way the mind works is in an outward fashion, using signals to trigger or start the process of actions we wish to do. After some time we learn to control what triggers are sent and filter out some information we receive.
An A3 report influences our thinking in a similar fashion, teaching us over time how to structure the report and what to share. After multiple experiences we create new connections in our mind which allow us to develop a new connector that is instantly triggered when we come across an opportunity or an issue to use that connector. Obviously the more you see, hear and do, the stronger that trigger becomes. This tells us that to develop a "problem solving people" we must strengthen their connectors. The A3 format helps us to develop a structured method by which we take in information and how we communicate that same information, which then strengthens our connectors associated with the information on the A3 report.
When we learn something new we change the physical structure of our brain, organizing and reorganizing different experiences. It sometimes takes longer for others to learn not because they don't want to, but because that part of the brain might not be ready to learn quite yet. If we want to speed learning up in any aspect of our lives we must find ways to shift information in our brain quicker. Some do this through increased reading, activity, visual means or auditory experiences. Whatever the style of learning, the more you do the quicker the mind can shift. Knowing this helps us to connect that if we want people to think in a problem solving method we must allow them to prepare, be involved and perform activities. Then we can confirm to what level they have retained learning. Users of the A3 report must do all of these activities. First preparing the report then being involved in the activities that develop the report and at some time performing the information the A3 contains, which eventually leads to A3 thinking for all types of learning styles (visual, auditory, reading/writing, Kinesthetic).
It's no real secret that the A3 problem solving method is a powerful tool, but making the connection with how that tool creates problem solving minds is often a "grey" topic. The tool itself will not transform one's mind, but just as we see in schools different vehicles of learning help us to prepare for later use of that knowledge when the appropriate time comes along. The more often these times present themselves the stronger our connector or connection becomes with the knowledge associated. So, when is the last time you, or somebody you know engaged their A3 connectors? If you would like you can download an A3 template by clicking on the button below and start today!
Like a contract between you and a car salesmen the project charter acts as an informal contract between the organization and the team, department or group of individuals who will be executing the improvement initiative. Project Charters are used in Lean, Six Sigma and many other Project Management Initiatives to provide guidance and direction for what you have been tasked to do.
What is a project charter?
Let's start by first defining what a project charter actually is. The project charter is one of the first essential steps in many different types of projects. Like we mentioned earlier the charter acts as an informal contract between the organization and the team. It sets a clear outlook on what the team's objective is and how their success factors will be measured.
We have included a business case sample format in the charter template for you to use when you download it. The next piece of information that a charter includes is a problem statement. The problem statement gives a more detailed look at the issues or the symptoms that are a result of the problem the team will be focusing on. A good problem statement will answer what is wrong, where it is occurring, how big the magnitude of the problem or opportunity is and explain why the opportunity or problem is so important.
After the problem statement the charter will typically define the goal. In summary this is a statement that describes the anticipated results of the project. The goal statement is usually connected to predefined measurements. The measurements are referred to as key performance indicators. These measurements should define the baseline or the current state so that the team knows where they are starting from. The team will also define where they think they can get to or the future state measurements. These measurements must be agreed upon. The final set of KPI's that will be collected and added to the charter afterwards are the actuals. The actuals will help establish measurements for tracking and continued improvement.
Like a contract would do we also outline the project scope. A simple way to understand the project scope is to think of your scope as boundaries for the project. They help the team understand what is acceptable and what is not. This is very important so that the Organization get's the results they want and the team is empowered enough to be able to get results.
There are two more critical aspects of a project charter that should be defined. The first is your team structure. This one is pretty self explanatory just be sure to outline each member of the team all the way up to the sponsor. The last piece of our project charter puzzle is the schedule or inch, foot or mile stones. These are critical parts of your project that show your start date, estimated completion and the total number of days for each one. Remember the charter is an informal contract between the organization and the team so whatever schedule you put on their is what the team will go by.
It's not always easy to get buy in on a project or a strategy. Fortunately many have blazed the dusty road of pitching ideas and many have succeeded. But, how did they do it?
Obtaining buy in is one of the most overlooked elements of both lean and six sigma. Especially if you are on the front lines and see the issues first hand. That frontline connection with what is going on often makes the ideas you have, something that you're passionate about. Well the solution is simple, make others passionate about that same thing too and you will obtain buy in. Okay, not so simple. But let's look at a few important elements that will help show others just what, why, how, when and where we gained this passion for a specific improvement or strategic initiative. These tips will help you gain buy in on both strategic and tactical level initiatives.
The first step towards gaining buy in is to share what it is you want to do. Believe it or not most great ideas fail at this first step. Either the improvement never gets brought up or for other reasons it gets turned down and that's the end. Before identifying what it is you want to do, understand first the direction the organization is headed. This may require you to become more familiar with either the organization or the leader's vision and mission in order to ensure that what you want to do is aligned with the direction of the organization. Another good idea when seeking buy in is to speak with others about what it is you would like to do, this gives you an opportunity to gather support and in many cases hear what others think about your pitch. Speaking with others may also give you insight pertaining to other attempts at similar projects and challenges. Historical evidence and support can give a much firmer grasp on your business case and will pay off big time when the opportunity arises for you to present your business case.
After defining what it is you want to do, be sure to keep your ears open. Sometimes after you express what you want to do others will agree and anymore explaining may frustrate or talk yourself out of the initiative. Most of the time you will need to back your business case with why you are making the suggestion. This can come from any number of evidences. The first one might be to show the current performance of what it is you are trying to improve. Highlight critical issues and try to show others why it is the issues are causing so much pain. After showing the current state performance, assessment or analysis providing a benchmark helps your audience to understand not just why you're suggesting the improvement but it helps clarify why you feel the improvement will be a success. By gathering benchmarks you can show others success and help them understand what is possible. Just be sure the benchmarks that you share are somewhat similar or that you have a very clear model of "how" you will make your why connect. The last very important thing to share with executives or managers is the ROI. Typically the ROI is the why most people are interested. For instance, "If we invest 40 hours of resource time, we can generate $200,000 dollars in savings." That statement provides a very definitive answer to why we should move forward and segways perfectly into our next topic for gaining buy in. How.
The how connects all of the dots for you. It brings context and reality to your benchmarks, interviews and every other piece of your business case. The how should lay out a very clear plan for how you will correct, improve or fix what it is you are suggesting and document how you will accomplish results related to your benchmarks and or ROI. Be sure that those you are suggesting your initiative to understand that training alone will not be enough for success. There must be buy in and continued action after training is complete. A change in culture and behavior is often the hardest how to explain, but it is a necessary explanation if you hope to gain support.
One common method of laying out the how is to first suggest or offer a "pilot project." The pilot project if a success will give executives a taste of how the how can be successful. It is a good idea to also lay out a 1 year plan that shows 2 years of results. Your one year plan can include projects, training and any other activities that might be needed to reach your objective. At each step of your plan no matter what the timeline you need to show how the plan will result in a return and accomplish the "what" that you first suggested. This makes it very easy for others to understand, they can connect the dots and see clearly how each piece forms a complete concept or initiative.
As part of your explanation of how you plan to accomplish results, you will also need to give a timeline of when you plan to execute the necessary activities. This allows the organization to plan for resources and funds that may be needed to support your initiative.
When we talk about where, we are not talking about where the projects will be conducted or where the strategy will take place. Although that may be helpful for large organizations. The where that we are talking about is where it will affect the company's bottom line. For example if a black belt completes three projects per year, where will those savings be applicable? The important thing here is to not just show where savings are applicable, but also where investments such as training, software, travel, supplies and other investments are applicable too. This gives executives or sponsors a clear understanding of what they need to put in and what they will get in return, allowing them to make a more educated decision. It is common knowledge that when all facts are laid out if buy in is accomplished you will have a much deeper level of support than if everything was not laid out.
Coordinating and connecting all these pieces of information will help you to gain buy in on suggestions and ideas. Most of the time connecting all the pieces to your proposal and making it easy to understand will get the job done. Although being able to tell a good story and supporting your story with real facts may have you leaving the room thinking, "did he just say, okay?"
With the Olympics ending just a short time ago there has been a lot of talk about Michael Phelps and his absolutely stunning performance at the Olympics. What a great swimmer Mr. Phelps is. One of the toughest challenges of being amongst the elite in sports like track, swimming and many other racing sports is just staying in your lane. But those lanes are put there to help guide athletes and allow them to perform at their very best.
As you can tell on the left hand side are the departments or process owners of the steps in their swimlanes. We then see from left to right each of the process steps laid out in the appropriate order. There are a few differences between a "process map" and a value stream map that you will want to be sure to include but in general you will follow a SIPOC format showing suppliers, inputs, process steps, outputs and customers.
Differences in process map and VSM
1. The first key difference that you will see is in the connecting lines. These lines are meant to show the information flow that you would capture in a vsm. In our example a simple textbox is added to the connectors in order to identify the information that travels along the connector.
2. Next we notice that the shapes are not the typical format of a process map. The main reason for this is because we want to include the appropriate metrics for our project. Metrics can be time based, money based or anything else that might align with the objective you are trying to achieve. Along with metrics we need to show inputs of the process and outputs of the process, those can be identified in a traditional manner breaking your sipoc into columns or showing the inputs and outputs of each process step like our example shows above.
3. It is necessary for us to identify va, nva and bva when constructing a value stream map. There are multiple ways of doing this, but our example shows red, green and orange dots to signify va, nva and bva.
Adding these three elements will help you collect metrics that you need to focus on and tell us what is va, nva and bva while still connecting the information flow of the value stream.
What to look for?
In process mapping we look for many different things such as rework loops, crossover in lanes and points that may not be needed. When we look at a value stream map using metrics and swimlanes we look for similar elements such as crossover, repetition, large gaps in metrics or excessive issues, non value and business value and any steps that may be stacked could identify a trouble area in the process. One other thing that we commonly look for is inputs that produce no output. There can on occasion be circumstances where this may happen but generally if something is going into a step something should come out too or it may fall into the category of wasteful activities.
Steps to build
1. Identify the starting point and stopping point of the your map.
2. Identify process owners, departments or individuals.
3. Establish appropriate metrics that are aligned with objectives. Examples might be if you want to reduce time collecting time based metrics.
4. Begin mapping the value stream including inputs and outputs. *Note - Suppliers and customers are identified by looking upstream or downstream.
5. Connect value stream steps with information flow.
6. Identify va, nva and bva.
7. Analyze looking for improvement opportunities
8. Create future state.
Though this type of SIPOC format may seem a bit foreign it actually is quite effective in mapping processes that are cross functional such as an order to cash request or any other process that maps the activities of multiple departments. Though the map itself may not win you gold medals in the Olympics it will certainly identify who's swimming in what lane and where resistance may be occurring.
What decision would you make if your manufacturing plant could make a product for $40.00 but the same product could be made for $15.00 in another country? Would you outsource the product or would you make it?
This is a situation that almost all supply chain professionals professionals face every single day. Depending on where you are at in the world the economy may have drastically underpaid workers, material costs could be inflated or maybe technology just doesn't meet the needs. We all face different problems within the supply chain but the issue of outsourcing or not outsourcing can only be made accurately with one measurement. Total cost of ownership.
I recently had the opportunity to attend a manufacturing summit organized by the Coalition for a Prosperous America. Many manufacturing, pharmaceutical, consulting and government organizations came together to network and brainstorm the seemingly declining state of manufacturing in California. Although I won't outline the entire conference I would like to touch on two topics that were brought up.
Total Cost of Ownership
The total cost of ownership is defined by Apics as; the total cost of ownership of the supply delivery system is the total costs associated with every activity of the supply stream. The key word in this definition is "every." Often times when a decision to outsource is made it is based on the material and labor "piece price" used in quoting and proposals. However this piece price fails to account for, logistics, possible storage, travel fees, additional packaging and any other costs you might receive as a result of outsourcing activities. Let's create an example to help us understand. If a company were making a screw they would most likely quote the material, labor associated with making the screw and any processing fees that may be associated. Let's say that total adds up to $33.00. Now, supposing you receive a quote from a supplier with a piece price of $12.00. Well that sounds like a good price $21.00 off for me and my customer to split. Sounds like a pretty sweet deal right? Well not exactly. The piece price and the total cost of ownership are two very different pricing points. When a piece price is used as the basis for a subcontract opportunity we miss out on quite a few "hidden costs" and we factor in the variability of an organization's "shop rate."
Here is one thing that you can do when making the decision to subcontract or to manufacture.
1. Map the value stream out at a high level for manufactured products or services and for subcontracted products or services.
2. After mapping the value stream out review value - added items and business necessary items such as first articles, set-up and any other charges that may be necessary to the products compliance. Be aware that business necessary items are non-value and many will not pay for these items entirely.
3. Compare the two charges in order to make your decision based on the entire value stream not just the unit price.
Suggestion - After you have made the value stream visible, standardize a template that can be repeated for other similar items or activities, allowing you to analyze the total cost of ownership with minimal modifications.
Once you begin to see quotes and proposals as a value stream and not a unit or piece price then you can truly factor in everything that should be. This type of approach allows you to really see which is the better approach; make or buy.
At one point in the conference one attendee asked what I thought to be a very important question but do to time constraints I was not able to address the topic. I'd like to do so here. The question as accurately as I can recall was: "We've been talking a lot about trade and total cost of ownership, do you think that we should focus more on automation opportunities instead of labor opportunities?"
1. Before considering any level of automation to a process a cost to benefit analysis should be performed in order to see what level of automation fits your needs. As a side note the highest level of automation (level 5) is not always the best option.
2. Before even considering a cost to benefit analysis remove every form of waste possible from the process. Dare I say but this is often the one that is most overlooked of the two. With technology at such an advanced state we have a tendency to buy a much higher level than we really need. But the first step before pouring heavy investments into expensive high maintenance machines is to remove all forms of waste and variation prior to purchase. Taking an intricate view of our organizations various value streams often reveals that we have opportunities to improve changeovers, reduce setups and streamline processes which requires much less investment than automation. Then and only after removing all possible forms of waste should we consider automation. The other important data you can gather from reviewing the value stream is how safe the process is for employees. Of course it goes without saying but if a process is necessary to produce the required product or service and proves to not be safe for an employee to perform automation is something you should consider.
In closing both concepts elude to the fact that by applying lean principles in our organizations we often times can not only create a more efficient, effective and resourceful organization but we can make decisions based on real data and information. Of course establishing a strong supply chain is a given as it will assist your organization in getting what you need, when you need it without concern. However we should also consider ways to maintain a level of manufacturing that is healthy for our organizations based on true analysis which often results in reduced logistics costs, better control of product and services and often cuts down on many other forms of waste.
When I was a young boy I walked in once on my father drawing on a notepad. Focused on what he was drawing and his then knife whittled pencil I asked my father "what are you doing dad?" His response at the time seemed ingenious to me. He shared "I'm finishing this design for a project." Just as curious as ever I asked, "can I see?" Of course my father said, "sure!" Upon further review he had designed a system full of clamps, materials and the necessary tooling associated to produce a product of high quality at twice the speed. Later I recall going to my father's shop as he pieced together the kit for testing. I learned that my father's design was such that a worker could simply grab the organized kit, clamps and everything, load the tooling and they were off and running. Essentially he had improved the setup and changeover. His brilliant design eliminated waste and inefficiencies and provided a repeatable system that still operates today. Those young years would leave a profound impact on me.
Similar to the story of my father and I, recently I had the wonderful opportunity to attend a STEM (science, technology, engineering, math) award ceremony. Children from all over were given recognition for their outstanding project efforts. Many of those projects will go on to creating life changing experiences for these young accomplished children. From kindergarten to seventh grade I watched as the future leaders, designers and developers of our world received praise. Astounded at the seemingly spiritual experience I was having I could not help but think what a bright future this world has in store.
Despite the frequent political posts and state of economies around the world we in whatever capacity we stand have a fantastic opportunity right before us today. Whether that opportunity is with a curious child or an award winning stem research candidate. Everyday we have the opportunity to influence others to in some way influence the world. Given that thought who have we influenced today? What did we influence? How did we do it? A lot of questions to answer, but here is a thought. With organizations like Apics, STEM, SME and AME and a wealth of other influential networking opportunities we can share a little of what we know today in support of a better brighter tomorrow. Take Lean manufacturing for example. What once started as one strategy in a focused industry has now spread across multiple industries in the world because someone somewhere decided to share what they knew with someone else.
Let's imagine for just a second that Yokoten was applied on the world creating communication, learning and continuous improvement in margins that might not even be measurable because they are so large. That may be a brief glimpse into a beautiful future. We have this opportunity right before us to take what we know and empower another. Call it yokoten, sharing or just being good natured human. Whatever you call it those opportunities result in actions which inevitably result in a better brighter future for all of tomorrow. Sound to big to accomplish. It's not it starts with one person at a time, each individual. The underlying message here is that by developing others we can develop and shape a world of individuals who receive awards and in hindsight if those same people go to work with that same sharing principle, well then we have just set a new and improved standard. Starting first with Kaizen and resulting in Kaikaku.
Quality is absolutely one of the most important aspects of an organization. Quality can be the difference between award winning excellence and complete disaster. In 1986 The space shuttle challenger launched for its mission. Just barely over a minute into lift off the challenger blew apart. Why? One of the O-ring seals on the shuttle broke down. Speculation had it that a supplier had failed to meet requirements and the issues were never addressed ultimately contributing to the disaster that took those astronauts lives. Now I'm sure you understand the lives of human beings is a big cost of poor quality that rarely happens but it certainly sets a tone for how important quality is. Phillip Crosby said it best when he said “quality is free, it’s not a gift, but it’s free.” He went on to say, “what costs money are the unquality things.”
One might assume that the term cost of poor quality defines itself, but it often times is misunderstood. We can officially define this term by saying the cost of poor quality are the costs associated with providing poor quality products and or services at any point of the products life cycle. Now the level of cost can vary from pennies to the lives we just spoke about earlier.
What is the purpose of tracking the cost of poor quality?
Understanding the cost of poor quality helps make the costs real and shows us the extent to which poor quality is affecting our organization. By understanding and monitoring the costs of poor quality we are also better able to see how are resources are spent in our efforts to improve quality and mitigate the costs related to poor quality.
There are four main areas that we monitor with regards to COPQ. Those areas are:
1.Internal failure costs
2.External failure costs
3. Appraisal costs
4. Prevention costs.
Internal failure costs are the costs associated with errors, re-work and any other sort of defect that are found before the customer receives the product or the service.
External costs are those costs that are often found by a customer. The worst kind as you can imagine. These costs are associated with poor service or product after it has left the organization.
Appraisal costs are the costs that you incur in order to diagnose or determine the effects of defects, errors, rework or a lack of conformance to some quality requirement.
Prevention costs are the costs associated with any activities that you may pursue in order to keep appraisal costs to a minimum expense.
Before we wrap this up this introduction on the cost of poor quality we need to remind ourselves that like any other system you use COPQ measurements should be monitored and measured frequently. They need to stay alive. By having an effective in place for monitoring, measuring and improving COPQ a company can rest easy at night knowing that the resources, capital and investments associated with quality are in fact saving lives and that is good enough reason for anyone.
A while back we posted an article entitled Lean-in on Sales and Marketing. The article received quite the response via email and proved the notion that as powerful of a strategy lean is, it still is somewhat misunderstood in sales and marketing. The basic idea at hand with almost anything that we do in life or work is that if we do something and it works, we should at least try to apply it to other aspects of our life in hopes of obtaining the same results. The same concept applies with lean in sales and marketing. Lean principles are applied in operational environments, quality environments and accounting environments with great success and they can be applied with the same level of success in sales and marketing too. In this week's edition of Listen to the Gemba we will outline the ©SALES methodology that we use to help others with the application of lean to increase sales, improve marketing and free up sales and marketing resources to focus on what they need to; building relationships and closing sales.
Standardize activities - While we outlined this concept in our earlier post Lean-in on Sales and Marketing, the concept of setting standards still rings true today. There are activities that simply must happen when it comes to sales and marketing: nurturing relationships, follow up, generating quotes and letting people know you're still alive. Many of these activities can be attached to standard functions or activities that take place on a regular basis. When we use successful process benchmarks to document what should be happening we can easily see what is not happening which inevitably prompts an informative exception guiding and driving targeted actions that we don't necessarily have to search, think or worry about.
Automate activities - In today's day and age technology provides a powerful assistance for our workers. Many activities in marketing don't require manual clicking or hours and hours of labor to be put into the workflow. You can use email automation to assign specific market segments to a workflow that nurtures the relationship as they travel through the sales funnel. Workflows can also be as advanced or simple as you want sending simple content communication or tracking who opens, clicks and views and who does not. They also can be designed so that when a prospect has a question the customer service team knows it and can answer that question according to the customers needs.
Level activities - Let's suppose you get an order in hand, how do you ensure you can follow through on your commitments and make sure nothing goes astray. Having a S&OP process in place can help organizations align supply with demand. The basic premise of sales and operations planning is to ensure that your supplies can match the demand being placed on the organization with the supply of resources, materials or services you have or adjust accordingly to meet the needs.
Eliminate - Just like any other process flow eliminating muda or non - value added activities can provide opportunities for sales and marketing employees to focus on transforming leads into sales. Mapping the value streams current states will make visual all activities that take place and could reveal possible variations in the process that lead to lost sales or conversion of prospects and leads. Aside from reviewing what is actually happening designing a focused future state can actually help clarify the process to your team which better enables them to guide or pivot the funnel.
Sale - Last but not least sale! If you can successfully implement all the activities listed above your marketing and sales team will have much more time on their hands to build relationships and nurture them. This extra time allows sales and marketing to work on building long term and lasting relationships that create a win - win situation for both the customer and the supplier.
Although it is often one of the last areas that we look at in our lean journey, lean applied to sales and marketing can in fact be one of the most beneficial elements of a lean journey. Having target objectives and a vision of where you want the process to go can assist in influencing the effectiveness of the funnel.
DPU, DPMO, DPO and DOE. Sometimes it's hard to keep track of six sigma acronyms which makes it even harder to remember what the heck they do. DPMO is the acronym for defects per million opportunities. So, why do we need to know that. Well roughly because six sigma is in large part based on 3.4 defects per million opportunities or 3.4 DPMO. That's right, in order to reach a six sigma rating a company must have no more than 3.4 defects per million opportunities or 99.9997% yield. To put it simply DPMO is the average or ratio of the number of defects in one million opportunities. Lets first understand an important concept before moving forward.
Defect and Defective
We want to be sure that defect and defective are not confused before diving into DPMO. If a part is said to be defective it may have more than one defect associated with it. For example we may have one defective shirt but the shirt may have a rip in it, a loose button and a stain. That means our one defective shirt has three defects associated with it. When we calculate DPMO we use the number of defects to figure our calculation.
How is it calculated?
The easiest way to calculate DPMO is to multiply DPO by 1,000,000 which will then give you your DPMO. As a reminder for calculating DPO visit our recent post in Listen to the Gemba titled Calculating Defects Per Opportunity (DPO).
Pretty easy right. In short DPMO is the measure used to gauge business process performance. By calculating and monitoring DPMO you will have a better understanding of how to improve processes.
Choosing between DPU and DPO can be a bit tricky but as a general rule of thumb DPU is usually used when there is only one performance measurement available. DPO is used when there are more than one available. So how exactly do we calculate DPO? These few steps will help you in obtaining your defects per opportunity measurement.
Step 1 - Assuming you have your total number of measurements or sample batch or lot size figured out already, you will need to gather your team together and brainstorm a list of potential defects that customers might be concerned with. There is not much risk involved in this step but be cautious that you do not repeat "opportunities" as it could skew your data.
Step 2 - Once you have all the opportunities the team can come up with you need to calculate the total number of defect opportunities. This is done by multiplying the number of units in your sample lot or batch by the number of opportunities the team came up with.
Step 3 - Divide the total number of defects in the sample lot or batch by the total opportunities for defects, which was the answer you came up with in step 2. This will give you your DPO.
This number can now be used to calculate your Defects per million opportunities.
A full time worker spends about 8 hours a day 5 days a week at work. A part time worker may spend anywhere from 1 hour to 7 hours a day at work. With long hours like that work is often considered a "second home."
The term ergonomics is often used in cooperation with workstation and checklist to denote comfortable and functional working conditions. Although there are many different criterion available that one might benchmark, ultimately the satisfaction of the employee lies in the hands of the organization they work for. Some other very important reasons to ensure that employees have a functional, safe and efficient working environment are directly related to:
One very useful tool that can be used to improve all of the four elements listed above is the workstation checklist. The general outline of a workstation checklist outlines an established criterion from such notable organizations like: Osha, Cornell University and of course various labor organizations like Ontario ministry of Labour.
For many years now Toyota has used one of the most effective practical problem solving approaches ever developed. There phenomenal development and use has created opportunities for many others to innovate and develop problem solving approaches specific to ones own need. Though many approaches vary in nature the simple concept of an organization using formal methods such as DMAIC, A3 thinking and many other approaches continues to provide stability and positive results for organizations around the world.
Solutions is a 9 step approach that can help individuals and teams completely transform business process.
The format of the Solutions methodology is as follows:
Borrowing from the PDCA cycle Solutions accomplishes its planning in steps 1 through 5 and then moves on to number 6 for the doing. Once doing is complete number 7, observe full-fills the "check" phase of PDCA before coming full circle in steps 8 and 9.
Step 1 - Simplify - Sticking with the common idea that a problem can be classified as either a deviation from a standard, a gap or an unfulfilled customer need or want stage 1 focuses on simplifying the issue through direct observation. While there are many ways to "observe" an issue experiencing it first hand can help make seemingly difficult issues much simpler.
Step 2 - Organize - When a problem is broken down or simplified for a team to solve it often times comes by way of making one "huge" issue into many contributing causes. As the problem you are dealing with becomes simpler there will be a need to analyze various elements of the issue and keep the issues organized.
Step 3 - Lock-In - Now that the initial problem has been simplified and the various causes have been organized and broken down to a manageable level we are ready to lock in our targets and objectives. Here we need to clarify the resources needed and estimated amount of time required to complete the project. After a target has gained consensus with the team and any committees involved it's time to go to "work."
Step 4 - Understand - Root cause is the important idea at this point of the project. Of course one of the best practices when seeking out a root cause is to go to the cause itself and see what is happening. At this point in the problem solving journey be aware that our one issue has most likely multiplied and each of those issues will need root cause analysis performed. There usually is not just one "root cause," but many break offs.
Step 5 - Transform - Having now discovered the root cause of your problems we are ready to transform our problems by creating solutions. It goes without saying but the biggest impact solutions should be top priority.
Step 6 - Implement - Here we begin implementation of the solutions. This is the "do" of our plan, do, check act. As you may understand already pdca is cyclical by nature and with every pass approaches the target. Given that you may not hit your locked in target on the first "go around" be sure that you are aware new problems may show up that were not discovered before. Implementation of solutions like most processes is much more effective and efficient if it is performed in a single piece fashion. Try one solution at a time this will give you a better opportunity to control your solutions and adjust as needed.
Step 7 - Observe - Often times as implementation of solutions takes place there will be some adjustments needed. Step 7 is all about monitoring the outcome of your solutions and making any necessary adjustments or improving on the solutions you have used.
Step 8 - Normalize - As with any other improvement, the standard now changes and the new level of performance must become the measure.
Step 9 - Share - There is a good possibility that your solutions can help others too. Be sure to share with others too.