Continuous Improvement [BQF Exam] Lesson 2.

ICUKU

[Impact, Controllable, Known, Unknown, Uncontrollable] We cannot solve everything, so it is important that we prioritize our issues before launching into solving problems. ICUKU is perfect for this purpose. ... You know the rest :)

"As Is"

current process already mapped

Performance Board

A performance board is the focal point for reviewing performance and agreeing actions. This generally happens on a weekly/daily basis. The board allows each team member to understand how they contribute towards the end-2-end process and the performance of the team. Everyone should visually see and understand: - How did we do yesterday? - What are we doing today? - What are we going to improve for tomorrow?

Piloting Changes

A pilot is a test of a proposed solution. It should be performed on a small scale, it is a way of fine-tuning. Critical to an effective pilot is that it is run in exactly the conditions that the solution will operate once rolled out, it should be "made" to work. It may be implemented at a single location or with a specific team. If it looks like the pilot is going to fail, then it has been a success -take it as a learning opportunity rather than fiddling things to prove it will work. Also, make sure you get detailed feedback from all people involved in the pilot.

Problem and Goal Statements

A problem statement is a simple, but powerful tool that makes us think a bit more before rushing in; What is it we want to fix? Why is it important to put it right? What do we plan to do? What is the output we are looking for? There are numerous elements that will be included in a problem statement: - Describe the issue - use any data you have to describe what's wrong. What's the problem? Be specific! - Build the business case - why is it important to do this project? What if we didn't? Does it fit with our business strategy? - Define the Scope - use terminology that helps define the scope of the project. What is included and excluded in the project? - Goal Statement - what will be the result of the project? This is about WHAT, not how. Should be quantitative e.g. Improve RFT by 5% - Milestones: What are the key steps along the way? - Roles - who do you need to make the project a success? How will ppl be involved? The statement should be drafted at the start of the project and reviewed with the Sponsor, project members and other key stakeholders. Be SMART about it! As the project progresses, the problem statement should be reviewed to ensure the project stays on track. You can also use the 5Ws and 2Hs to help you make sure your problem statement is descriptive enough.

Pugh Matrix

Also known as Criteria Based Matrix, is a method that helps determine which potential solutions are better than others. It is a scoring matrix used for concept selection, in which options are assigned scores relative to criteria. The best approach is selected based on the consolidated scores. - Identify the criteria that the solutions must address - Rank these criteria and award them a suitable weighting - Identify potential solutions - Rate each solution with how well it addresses that criterion - Enter the data on the matrix and multiply rating weighting to get actual scores - Total the scores for each potential solution - The solution with the highest score should normally be the best option, but sanity check this!

Project Management

Any CI project should follow the same basic steps: - Start with the End in Mind Know what your end point will look like, and describe it clearly. - Divide the Work into Chunks Once you know the end goal, you need to decide what are the major chunks of work that will need to be completed to get you to the goal. Try to keep the major chunks down to 5-6 topics at most. If you can't decide, use DMAIC tool. As you decided about the chunks, allocate them to owners. Then the main chunks can be divided into smaller ones. - Describe the Chunks Use the 'When we have' approach e.g. When we have measured the size of the problem, etc. Then you need to decide when you want this piece of work completed by, and how frequent updates you want from the owners. - Monitor Progress Don't just wait for the completion date and see what has happened, the 'day job' will get in the way and delay completion. Have regular calls/e-mail reviews, where the whole team can be up-to-date. Don't expect actions to complete as planned; there will be problems and delays, but if you know about them, you can manage them.

Process Change

Businesses and operational teams change, and processes do not always keep in step with the changing requirements. Process automation is often considered as the optimum solution but is very costly and is often initiated too soon. Before considering this option, ensure that the process is already working in the optimum way and then quantify the requirements . When planning what process changes to make, consider the following: - What will be the overall impact on the process in terms of business value? - What sponsorship is required to make changes? - Where combining functions, are there any other types of work that are not part of the process being analyzed that would be impacted? - What would the synergies be in combining process steps which may generate additional savings? - Understand where the bottlenecks are in the process and ensure they will not be compounded by making the changes. If possible, introduce a Pull based process system Any process changes should be planned involving all of the impacted parties so there is agreement to the changes and likely issues can be identified as early as possible.

Operational Excellence

Each and every employee sees the flow of value to the customer and fix that flow before it breaks down. We need to know what EXCELLENT means in terms of design of value stream and process. If not so, we have no standard to compare to and we won't see if a suggested improvement is better or worse than any other. Operational Excellence is the definition of the endpoint of any value stream. The implication of the definition is: - we create flow so that we know whether the flow of value to the customer has been broken - eliminating waste is a by-product of creating this flow Each employee knows: - What I work on next - Where I get my work from - How long will it take me to do my work - Where I will send it - When I send it

Priority Matrix

If there are a number of ideas for consideration and limited resources, they need to be prioritized to identify which one we should focus on. For that, we need to create a 2x2 matrix where one axis reflects the impact you are trying to have and the other looks at the ease of delivering the change. Write the ideas on post-its, rate each idea for Difficulty of Implementation and Business Benefit and place them on the matrix according to their scores. Depending on where the item is posted, you know that: - it is relatively easy to do and has good benefits - it is harder to do but benefits are high - easy to do, but benefits are not great - it is hard and benefits are not great NOTE: if your initial list is too long, use the N/3 technique to reduce it: tally up the number of ideas that you have, divide it by three and give that number of votes to each member of the team to select their top choices.

Kano Analysis

Is a key to helping us understand that customers have stated and unstated needs and that the level to which we deliver these will impact on the overall customer experience. Kano analysis states that there are 3 characteristic categories our products can fall into: dissatisfiers, satisfiers and delighters. It is all about beating expectations!

Value Stream Mapping

Is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer. A value stream focus on areas of a firm that add value to a product or service, whereas a value chain refers to all of the activities within a company. At Toyota, it is known as "material- and information-flow mapping".

Poka yoke

It is a Japanese term meaning mistake proofing. It is any mechanism in a lean manufacturing process that helps an equipment operator avoid mistakes. Its purpose is to eliminate product defects by preventing, correcting or drawing attention to human errors as they occur. The concept was formalized in the Toyota version of Lean, called the Toyota Production System. More broadly, the term can refer to any constraint or procedure designed into a product to prevent incorrect operation by the user. In a poka-yoke system the operator is alerted when a mistake is about to be made, or the poka device actually prevents the mistake from being made. Jidoka is a form of poka yoke in which the machine will switch off when it detects a defect, giving the operator time to correct the fault before restarting the machine. Examples: IP addresses in BT system need to have 4 numbers separated by points and cannot be greater than 255.

KAIZEN

It is a Japanese word which can be translated as "Continuous Improvement". Kai means "change" and Zen means "good". Kaizen workshops bring together a combination of tools that are used to build CI. Kaizen workshops are used to capture the current process flow ("As Is") based on the customer's requirements; identify areas for process improvement and waste reduction; prioritize the changes

Product Family

It is a group of related products that can be managed through the same process. It is required to create a leveled schedule and is the starting point for cell manufacturing. In the same family, products follow the same product flow; flowing through the same value stream. For a level schedule of work (See Heijunka), we need a stable and connected flow for all the types of product and also need to know the demand for each product in the schedule. - Stabilize the process first - Study the work, identify what the value add steps are, whether there are clusters of like work (product families) - group these clusters of work to allocate resources Not all work will be suitable to be grouped within a product family. Start focusing on the "runners".

Process Capability

It is a measure of the ability of a process to meet customer requirements. The metric is used to assess capability will reflect those requirements. To increase process capability, we must reduce variation. The more we reduce the variation, the greater likelihood that we meet the CM needs. VoC data is used to set upper and lower specification limits that is the highest and lowest acceptable performance. Measuring actual performance than shows how well the process meets those standards. Items falling outside the specification limits are defects. E.g. CM wants us to deliver product within 2 hours - 1 hour is Lower Specification Limit (LSL) and 3 hours means the Upper Specification Limit (USL)

Push System

It is a process that creates work regardless of the level of demand or capacity of the subsequent process step. So work is pushed onto the market or next step in the process. Characteristics: - traditional approach - move the job on when finished Problems: - create excessive inventory - relies on a predetermined schedule - gives any and all incoming work to the first process step as soon as it arrives - very difficult to control cycle time - very difficult to control amount of WiP - defects can take a long time to surface

"Pull" Systems

It is a process that only creates work when requested by the CM. Characteristics: - co-ordinated production - driven by demand - extensive use of visual triggers - very low and predictable cycle times - very low levels in WiP - defects are spotted immediately In BT, our processes are often a mixture of push and pull systems, working at the same time. The key to introduce the system is to properly schedule the resources so that they are ready and available as soon as the work reached them. Pull based systems can be implemented most effectively when there is a simple process with the minimum number of people involved.

Kanban

It is a way to implement a pull system. Cards are attached to the products. When the product is moved or consumed, the card is used to authorize the upstream process step to create more input. With a pull system the downstream process step signals to the upstream process step that it is now ready to do more work, or that it requires more parts. The signal arriving at the upstream process step is the trigger for the operators (engineers, planners, ...) to produce more output. It there is no signal, there is no production/output. Kanban can only be effectively introduced to a process that is stable. A Kanban card is used to signal to the upstream process, holding information about the product to be produced, quantity, where to deliver, etc.

Reinforcement

It is about designing the formal and informal rewards and consequences for moving to the new way of working. It's about making it easy for ppl to undertake the journey, positively acknowledging those who do and being prepared to initiate negative consequences for those who don't. Reinforcement usually involves: - UNFREEZING the old behaviour - REFREEZING the new behaviour It always involves the careful design of both REWARDS and PENALTIES/negative consequences. Reinforcement activities must cover both FORMAL approaches (links to performance management, pay etc) and INFORMAL approaches (local, project specific arrangement - new/different) Reinforcement tactics must be specific such as: - tangible - awards, prizes, bonuses - tasks - relief from unpleasant duties - development - access on trainings - recognition - personal and private - personal - benefits, TOIL - intrinsic - solving a problem, being part of the team, appreciation

Measurement Accuracy

It is easy to overlook the quality of our measurement as a factor when looking at data, but heaving a bad measurement system can make our data useless, so it is important to make sure we can trust our data. There are several factors which can influence measurement accuracy: - Equipment: measuring instruments, calibration, fixturing, etc. - People: operators, training, education, skills - Process: test method, specification - Environment: temperature, humidity, conditioning - Management: training programs, support of people, and quality management, etc. There are 2 types of measurement errors we should consider: - Reproductibility error: several ppl look at the same information and come up with different answers - Repeatability error: one person looks at the same info several times and comes up with different answers It is advisable to run a trial on your data collection to see how well it performs, hence avoiding the above errors. Analysis of how good your measurement system is is called Measurement System Analysis (MSA).

Little's Law

It is used in queuing theory and enables us to calculate expected through-put within a process based on lead time, WiP and the average time required to complete a task. It is named after John Little, proposed the theory in 1954, stating that the long-term average number of customers in a stable system is equal to the long-term average effective arrival rate, multiplied by the average time a CM spends in the system. SO we need to minimize waste and increase speed. In Little's Law, the waste is Work in Progress (Inventory), Speed is represented by the Lead Time. WiP= Throughput * Cycle Time WiP means items of work, sales orders, repair calls, etc. Cycle Time is the lead-time in hours, days.. Throughput is items per hour, per day. If we move the terms around, we get: CT=WiP/Throughput Throughput=CT/WiP If one of the 3 terms changes, one or both of the other two change. Little's Law can be used to help understand and manage flow, identifying bottlenecks and staffing shortfalls.

Process Stability

It means that we can deliver consistently to the CM every day. Performance is predictable and in control. We can use Control Charts to measure process stability. Output quality is due to "Common Cause" variation in the input, where any variation is random and predictable within a certain limit. In an unstable process, spikes in output occur due to "Special Cause" variation - one or more inputs are highly unpredictable. Example: getting to work in the summer(common) and in the winter(special) Tools to aid control are: - 5S - Standard Work - Process Confirmation - Address interruption - PDCA cycles

Muda

Japanese word, meaning a type of 'Not Adding Value', preventing processes to operate efficiently. The word Muda means WASTE, leading to delays, excess WiP, unpredictable cycle time, etc. Whenever Mura or Muri occur, Muda will follow. The TIMWOODS acronym can be used to identify the 8 key wastes that may cause some of the symptoms of waste within processes. The intention of Muda is to remove the non-value adding (NVA) steps of the process to reduce the operating tome, so what remains are the value adding (VA) process steps only. Most Muda can be eliminated from local processes at the local/team level by the people that operate the process. (bronze level)

Mura

Japanese word, meaning a type of 'Not Adding Value', preventing processes to operate efficiently. The word Mura means IMBALANCE/UNEVENNESS, leading to delays, excess WiP, unpredictable cycle time, etc. Whenever Mura or Muri occur, Muda will follow. Uneven demand caused peaks and troughs, the predictability is removed and variations get introduced. The ability to deliver to the customer on time becomes unpredictable, as people in the process are left waiting for work to arrive and then get overburden.

Muri

Japanese word, meaning a type of 'Not Adding Value', preventing processes to operate efficiently. The word Muri means OVERLOAD/OVERBURDEN, leading to delays, excess WiP, unpredictable cycle time, etc. Whenever Mura or Muri occur, Muda will follow. It is a waste by overburdening ppl and machines. If ppl have more work than what they can handle, it will lead to delays, waiting, defects, etc. It is genereally assumed that if we try and utilize ppl or machines to above 85% of the capacity, then problems will occur. It can be eliminated across the end-2-end value stream level, silver.

Improvement Kata

Kata is a Japanese word for describing detail choreographed patterns of movements. Practicing kata allowed people to engage in a struggle using a systematic approach, rather than individually in a disorderly manner. Simply, we refer to Kata as a routine to make improvement a daily habit. It is based on a 4-phase routine: In consideration of a VISION and challenge, grasp the CURRENT CONDITION. Define the next TARGET CONDITION. Move toward that target condition with PDCA, which uncovers OBSTACLES that need to be worked on. The Improvement Kata focuses on HOW you work on an improvement and not on WHAT you are working on. Think in baby steps. Remove the obstacles. Repeat this over and over again.

Lean Management

Lean assumes that it is the manager who sets the tone, who recruits, trains, owns the design and the running of processes. Lean will get frontline people to do more work more effectively, but through the guidance of the manager. Unless the manager understands their role and are capable in that role, the business will not get sorted out. In Lean Management, managers must create and foster a culture focused on process improvement to deliver strategy and meet customer requirements. Lean organization operates stable and predictable processes, built on standard work, on a day-2-day basis. How to apply it? Lean management is about using the tools available, BUT can't simply be superimposed on an existing mind-set. This means fundamental changes to how the organization thinks collectively. Tools are: Hoshin Kanri, A3, Standardised Work - with standardized management and continuous kaizen.

Overall Equipment Effectiveness (OEE) / Overall Process Effectiveness (OPE)

OEE/OPE measurement is commonly used as a key performance indicator (KPI) to provide an indicator of success in Lean. The KPI is: OPE=Availability * Performance * Quality AVAILABILITY: The portion of the OEE metric that represents the percentage of scheduled time that the operation is available to operate. Often referred to as UPTIME PERFORMANCE: The portion of the OEE metric that represents the speed at which the process, or a part of it, runs as a percentage of its designed speed QUALITY: The portion of the OEE metric that represents the good units produced as a percentage of the total units. Often referred to as FIRST PASS YIELD (FPY). The OPE Metric can be used by a team or a value stream owner to track the performance and to direct improvement efforts. Can be part of he performance huddle topics. Can be connected to short-interval-control, to get feedback on the performance of the process or value stream.

Push and Pull as Influencing Tool

PUSH: Tries to change other person on their views, uses force of argument - SEEKS COMPLIANCE - Authority - Reason - Assertion PULL: Demonstrates that you are open to change - SEEKS COMMITMENT - Alignment - Attraction - Vision Push and Pull are 2 styles of influencing which are valid for different scenarios. Push will see more immediate results as they are driven by compliance, but the risk with using only this style is that the change won't stick as commitment may not have been achieved - even if you have to implement a compliance driven change through Push or JDI style, you should still follow up with Pull to ensure commitment. There will be occasions when you can fully employ Pull styles, where a change is contained within a small team. The most common is to mix Push and Pull.

Performance Dialogue

Performance needs to be measured and talked about at all levels, in an open and honest way. This will help highlight problems, prompting structured problem solving. Each manager is responsible for coaching and attending performance dialogue meetings. Answer the fundamental questions with the use of data. It is also used to communicate longer term strategy and top down messages. A forum for escalating issues that cannot be solved locally. The dialogue should be done the same time ,every time. The length depends on its frequency, which is based on the management level. Normally, dialogues last between 10-60 minutes. Actions will need to be taken when stg cannot be closed off during the meeting - these need owners, update the team on the next meeting.

PDCA

Plan, Do, Check, Act. It is a core concept for step-by-step improvement and is reflected in many improvement methodologies. It was popularized in the 1950s by Dr W Edward Deming and is based on the scientific method developed from the work of Francis Bacon. The method involves systematic observation, measurement, experiment, formulation, testing and modification of hypotheses. Variant of PDCA is Plan-Do-Study-Act (by Shewart).

Process Functionalization

Processes are often designed by routing work to teams who have the needed skills to perform the given task. Process Functionalization defines the key business processes and aligns the key resources to them. Resources are dedicated to the process for the duration of the scheduled tasks so work flows through the process more effectively. Techniques such as FOUR FIELDS and ROUTING BY WALKING ABOUT are effective to identify all of the resources involved in a specific process. When resources are identified that are not part of the process owning organization, the rationale for this team being involved in the process and the amount of labour effort consumed over a specific period should be estimated.

Influence V Control

Stephen Covey examined in one of his books how you can take a proactive approach to life, work, etc and be in the driving seat for your choices and actions through this by choosing your responses - what he calls being "response-able". There are 3 layers: CONTROL - what we can change ourselves, INFLUENCE - what we can influence others to change, and CONCERN - what we have no direct control or influence over but which has an impact on us. Look at yourself and understand where you focus your energy: are you a VICTIM with reactive focus, concentrating on the concern and influence? Or, are you an OWNER with proactive focus, dealing with the things you can manage on your own? With this method, you can prioritize the things you need to deliver. If you prioritize correctly, you'll enhance your reputation and credibility which in turn will help you increase your scope of influence, pushing the boundary of what you can control. By proactively focusing on influencing, you can reduce the list in your circle of concerns.

Pareto

The Pareto Principles (also known as the 80-20 rule) assumes that only a handful of "vital few" factors are responsible for producing most problems. Although its roots are in economics, the principle is widely used in business management. It says that around 80% of problems are caused by 20% of the contributing causes. Therefore, we should concentrate on correcting those vital few problems to have the greatest effect.

Kingman's VUT Equation

The lead time of a value stream is not just the sum of the average time work takes to be completed at each step. Kingman's VUT Equation spells out what factors impact the overall lead time: it states that the cycle time in queue (before processing) is the product of a VARIABILITY FACTOR (V), time a UTILIZATION FACTOR (U), times the effective process TIME (T). Reducing process time is not enough to reduce the lead time, we need to address all the 3 factors. We can never achieve zero variation, or 100% utilization with zero wait time, but we need to recourse to 3 buffers: TIME, CAPACITY, and INVENTORY. The key to success is understanding the effects of variability on your value stream and managing the trade-offs to your advantage. Where a process has many interruptions and defects, there is no need for Kingman: start by fixing these issues. Once the processes are stable, we can begin to investigate how we use the 3 buffers in the value stream and what we can improve upon the stream for the customer.

Resilience

There is an expectation set that we all have resilience and confidence, which is described as: - Is resilient and views setbacks as an opportunity to learn - maintains a positive attitude in coping with multiple pressures and demands - says no excessive demands - makes sound decisions despite uncertainties and pressure - constructively challenges others regardless of position or status - makes tough decisions and takes calculated risks In terms of managing our change projects, as well as all the members of your project team, sponsors, stakeholders and those impacted by the change YOU will experience changing emotions and reactions to the change and OTHERS reactions. Your awareness and skill in managing your own reactions is a key tool in your successful implementation of change.

Honest Conversation

There may be occasions where you find yourself having a difficult conversation. Here is one model to use. Environment, Data and Plan should be set well. Model: A4 MINDSET in the middle; POINT OF VIEW (Candour, Influence) --> RATIONALE (Data, reasoning, assumptions) --> ENQUIRY (Learning, exploration, feedback) --> DIALOGUE this is a cyclical model, but at the end, you should close the loop. You need to pay attention to: maximizing comfort, minimizing negative emotions, offering win, appearing too rational, giving or taking unilateral control. Create the right level of pressure! If there is too much pressure, this can result in a heated debate, or the opposite where the other person doesn't participate.

Quantification of Benefits

They key focus is the delivery of 1st order benefits, however, people engagement and customer experience benefits are also extremely important and can be expresses in 2nd or 3rd order benefits. Measuring benefits is important to be able to identify the impact of the improvement made. There is no point in spending effort rolling out changes if they are not having the desired impact, plus if there are significant improvements you will want to share this information with others. Benefits are quantified in 3 ways: - 1st Order Benefit: a benefit that delivers actual cash saving or revenue growth for the business. This should be validated by the relevant Financial Lead. - 2nd Order Benefit: a benefit that improves efficiency, productivity, RFT, Cycle Time. If any of these can be converted to actual money, then benefit becomes a 1st Order Benefit. All 2nd Order Benefits are directly measurable. - 3rd Order Benefit: any benefit that is difficult to quantify but improves the flow of a process or reduces the risk of failure (e.g. improved network records). Once the benefits have been measured and proven to the satisfaction of the client and project team, the improvement project can be closed.

Influencer Model - Kerry Patterson, Joseph Grenny, David Maxfield, Ron McMillan and Al Switzer

This model can be used to plan the influences you should employ to embed your changes. PERSONAL: Motivation - Make the undesirable desirable "If I want to do it" Ability - Surpass your limits "If I can do it" SOCIAL: Motivation - Harness peer pressure "If others encourage me to do it" Ability - Find strength in numbers "If others help me to do it" STRUCTURAL: Motivation - Design reward & demand accountability "If my environment encourages me to do it" Ability - Change the environment "If my environment supports me to do it"

Influence Model - McKinsey

This model can be used to plan the influences you should employ to embed your changes. Leadership Role-Modeling; Understanding and Commitment; Aligned Processes and Structures; Skills and Competences. Go through all the 4 aspects to see if you prepared your team to embed the changes.

Organizational Stress Assessment

To conduct an organizational stress assessment, the best way to go is talking to people to get their insight and understanding them. It can help you understand how high the current stress level of the team is. If too many, or poorly planned changes are attempted to be implemented at the same time, it can increase the risk of the success of the change. Things to think about: how will it impact your scope area? Will it be seen as positive or negative? What level of influence do you have to ensure alignment and prioritization? What is the sponsorship model? etc. After determining these aspects, you need to plan how you can mitigate the risks and issues identified: can the sequencing or timing be adjusted? Who else do you need to involve? Does this change the stakeholder group? What do you need to escalate and to whom? etc.

Process Measurement

To understand the performance of a process, it needs to be measured. The key metrics to measure a performance of a process are: - Input quality: This is most frequently measured by the cost of failure or rework within the process. Refer to Routing By Walking Around to quantify the impact, and Eliminating Waste to minimize the problem. - Input variability: This depends on what the nature of the input is. A large input variation will drive a large variability with output. Where output variability stability is important, standard lead times should be established with the teams that raise the work - these must comply with the Input Quality measures. - Output quality (Right First Time): Simply means that an output met the requirements; delivered on time, or not. - Output variability (Cycle Time variability): measured as variability in the end-2-end process cycle time, although it can also be applied to each process stage. As it is a more variable metric, more sophisticated measurement techniques are needed, like the Graphical Statistics section. - Process cost (materials and/or labour consumed)