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Pros and Cons:Picking The Right Process Improvement Approach

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Agenda

• Continuous Improvement• Employee Buy In• Organizational Fit / Pros and Cons

– DMAIC– PDCA– Kaizen - SCORE– Lean

• Selection• Implementation

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Continuous Improvement

• Philosophical belief of changing for the better • Everyone's job• Drives innovation to:

– Improve processes– Reduce risk– Improve the customer satisfaction & engagement– Exceed regulatory requirements– And of course:

• Do it … Safer! Better! Faster! • Without it your business will fail!

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Employee Buy In

• Sponsorship• Knowledge• Participation• Across all levels• WIIFM

– Improved decision making– Reduced variability– Better results

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Organizational Fit

• Have you started your journey?• Do you use metrics?• Do you have a plan?• Do your metrics support your plan?• How do problems get addressed today?• What resources are available?

– Financial, Training, Employee, Executive etc.

• Are there competing methodologies in other departments?

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DMAIC – Six Sigma

• DMAIC – Define, Measure, Analyze, Improve, Control

• Originated from Motorola in order to prove process improvements

• Specifically target defects• Implies a dollar value to any

“defect”• Requires a large statistical

capability

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DMAIC - continued

• Define – Creating a charter with clear defined goals including SMART metrics

• Measure – Collecting data relevant to the critical need of the process and the customer

• Analyze – Using statistical means to identify trends, root causes, and solutions

• Improve – Selecting and implementing solutions that eliminate defects

• Control – Monitoring the new process over time with statistical tools to ensure defect elimination

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DMAIC - continued

Pros Cons

Results Complexity

Repeatability Cost

True root cause solution Resource intensive

Higher return on projects Extensive training

Business alignment Preconceived expectations

Focuses on customer need Extended duration projects

Long term solutions Limited use outside of manufacturing

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PDCA

• PDCA – Plan Do Check Act• Developed by Walter A. Shewhart in 1940’s, and

popularized by W. Edwards Deming in the 1980’s• Follows the scientific method of hypothesis,

experiment, evaluate• Most widely used improvement methodology

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PDCA - continued

• Plan – Identify the issues at hand• Do – Run pilot runs or experiments to determine solutions• Check – Review the results and repeat as necessary• Act – Implement the best solution to the process or repeat

the PDCA cycle from the beginning

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PDCA - Continued

Pros Cons

Easy to implement Iterative process

Not process specific Limited tools dedicated

Ample resources Requires pre-existing metrics

Not affected by scope Over simplification of problems

Low cost to train / implement Difficult to qualify / qualify results

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Kaizen

• Kaizen – Japanese = To make Better through Good Change• Originated in Japanese manufacturing, and popularized by

Toyota Motor Company• Based on an iterative process that many small improvements

add up to big changes• Typically addresses the 8 wastes of business

– Defects, Overproduction, Waiting, Non-utilized resources, Transportation, Inventory, Motion, Excess processing i.e. - Manual Touches

• Designed to provide low cost / no cost solutions

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Kaizen – SCORE

• SCORE – Select, Clarify, Organize, Run, Evaluate• Can effectively use any tool from any other methodology• Intended to include front line workers with the most

“experience”

• Use of 12 Strategies for idea generation

• Eliminate, Perspective, Deviation, Adaptation, Proportion, Distribution, Functionality, Economy, Direction, Rearrange, Comparison, Redefine

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Kaizen Continued

Pros Cons

Easy to implement Iterative process

Not process specific Under usage

Ample resources Over usage

Applicable across the enterprise Limited Expertise

Low cost to train / implement “Manufacturing” only

Scalable Based on other principles

Rapid Deployment Limited Certification / Standardization

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Lean

• Lean - creating more value for customers with fewer resources• Focuses on efficiency through eliminating the “8 wastes”• Originating in Japanese manufacturing addressing Waste,

Burden, Variation• Uses the “6 S’s”

– Sort, Straighten, Sweep, Standardize, Sustain, + Safety

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Lean - Continued

• EFFICIENCY!• Work• Home • School• Relationships• Managing from the

bottom up!

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Lean- Continued

Pros Cons

Low cost solutions Induces Fear

Universal applicability Typically cost driven

Proven track record Used as a catch all

Scope Indeterminate Oversimplified

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PDCA

Focus: Improve key sub-processGoal: Big effectiveness / efficiency

improvementLead: Green Belt / Yellow Belt / Project

Mgr.Tools: Blended methodologies, best practices,

change managementSource: Corporate Goals, Process

Excellence, Business Performance issue, Regulatory/Risk concern

DMAIC

Focus: Radical Process ChangeGoal: Dramatic effectiveness

improvementLead: Sr. Leader or Black BeltTools: Benchmarks, blended

methodologies, external experts, change management

Source: Corporate Goals, significant Regulatory or Risk concern

Kaizen

Focus: Small issue with sub-processGoal: Resolve issue / make

improvementLead: Process Owner – Kaizen trained

facilitatorTools: Basic tools – blended

methodologiesSource: Process Excellence, Business

Performance issue, 12 sources of Idea Generation

Lean

Focus: Structured process Goal: Continuous

effectiveness / efficiency improvements

Lead: TRIZ PractitionerTools: 40 Principles IFR, single

piece flowSource: Process

Excellence, Business Performance issue, 6S’s

Low

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f Pr

oble

m /

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igh

Narrow Scope of Problem Broad

Selecting the Approach

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Implementation

• Identify the Change Agent– Experienced, recognized, capable

• Secure management buy in– The higher the better

• Sell the appropriate methodology– Have a project in mind

• Select initial projects with easy wins– Political power is easy with successes

• Partner with your friends– They will be the most willing to give cooperation and feedback

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Implementation – Continued

• Improve what you already measure • Use as many of the available tools as needed• Follow the methodologies closely• Include any financial considerations• Use a dedicated project manager• Have a published plan• Provide regular and ample updates• Hand pick the first team• Delegate appropriately• Maintain scope

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Resources

• isixsigma.com• Gembapentarei.com• LEAN.ORG• Wikipedia.com• All knowing

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Charter - Example

Name: Date:

Scope Process Start

Process end

Project ObjectivesGeneral InformationProject Name:

Time Frame:

Key Dates (tentative): Kickoff

Management Committee Meetings:

Follow up:

Project Team Metrics Throughput

Yield

Cycle time

Takt Time

Key Challenges Environmental factors

Demand drivers

Future changes

Expected Benefits Increased capacity

Reduced Defects

Increased flow

Reduced inventory

Streamline

Automate

Stop

Start

Project Sponsor:

Management Team:

Core Team:

Extended Team:

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Storyboard – A3 Report

Implementation Results

ImprovementsProblem Statement

Root Cause Analysis

Current Situation

Ideal Situation/ Target Measures

Standardizing and Sustainment Plans

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Another Charter Example

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Depository Trust &Clearing Corporation

Project Charter

Project : Off-Boarding

Business Case:

Opportunity Statement

Goal Statement

Project Scope: Process:

Start Point: End Point:

Business Parts:

Project Plan Team Members Task/Phase Start Date End Date Actual End Sponsor:

Form Team Process Owner:

Finalize Charter Master Black Belt :

Data Collection Member:

Analyze Data Member :

Recommend/ Implement Improvements SPR Operations

Member :

Monitor/assess/ modify improvements

Member :

Implement Improvements Member :

Monitor improvements SME :

M C I A D - Example -