Fundamentals of the Simpler? Business System 11 0 - 2a... · Simpler® Simpler Business System® 11.0 ... Quality-checks-as-we-go ... Joe Juran “Quality Control Handbook

®Simpler ®Simpler Simpler Business System® 11.0

© Simpler Consulting, Inc 1996-2006 ALL RIGHTS RESERVEDFOR USE OF SIMPLER MEMBERS ONLY

…Building Strategic Advantage through Enterprise Wide Improvement…

Tool

TechniqueBeliefs

SBS Tool Fundamentals of the Simpler® Business System

2 ®Simpler ®Simpler Simpler Business System® 11.0


Tool

TechniqueBeliefs

Quality-checks-as-we-goBy the end of this module we will have covered…….The timeline of improvementThe Simpler philosophyThe mechanics & human dimensions of changeTypical results achievedPhases of transformationHow to get the resultsElimination of waste, unevenness, and overburdenValue, value adding and the value propositionThe principles of the simpler systemTrue north metricsHow SBS is deployed

StrategyValue stream(s) analysisRapid Improvement EventsSustainment

Good



Tool

TechniqueBeliefs

SBS is a Business System based on a rich history of improvement methods

1955

Shigeo Shingo Begins working

with Toyota

1960 1969 1974 1980 1984 1987 1990

Shingo DevelopsMistake ProofingBased on Jidoka

Shingo DevelopsSingle Minute

Exchange of Dies

Toyota reveals to the worldIt’s Just In Time

Production System

Goldratt“The Goal”

Danaher BusinessSystem

MotorolaSix Sigma

Movement Begins

Koenigsaecker 1st U.S. Implementation

of TPS

1911 1920 1924 1926 1940 1949 1951

Frederick TaylorScientific Management

Ford – River RougeEconomies of Scale

Walter ShewhartBell Telephone Ops.

w/ Joe Juran &W. Edwards Deming

Ohno Starts Work on TPS

Joe Juran“Quality Control

Handbook”

Fokker Wolf inventsTakt Time concept

Deming lecturesPDCA in Japan

1902

Sakichi ToyodaLoom w/ Jidoka

Timeline of Business Improvement



Tool

TechniqueBeliefs

Simpler® Business System Philosophy

Based on two simple concepts

Respect for People and Society

Respect for Customers

Respect for all people is a foundational value that guides the Simpler® Business System



Tool

TechniqueBeliefs

The Mechanics of Improvement

It takes time to transform your organizations culture

Techniques

Tools

Beliefs

1-2 yrs

3-5 yrs

5+yrs

Principles



Tool

TechniqueBeliefs

Human Dimension of Improvement

BELIEFS

VALUES

HABITS

ACTIONS

DECADES

YEARS

MONTHS

WEEKS

CULTURE is the sum of our collective behaviors



Tool

TechniqueBeliefs

Results of Continuous ImprovementAutomobile Company Market

Capitalization

0

50

100

150

200ToyotaHondaDaimlerChryslerBMWNissanVolkswagenGMFord

60 Years of Continuous Improvement

15%/Yr Revenue Growth, 91%/Yr OI Improvement

0

100

200

300

400

2001 2002 2003 2004Size of MarketCompany RevenueCompany Operating Income

3 Years of the Simpler® Business System

2 Decades of Danaher Business System

Immediate results,Never-ending improvement



Tool

TechniqueBeliefs

Phases of a Transformation

N/10 pace and 1–3% dedicated to Continuous Improvement

ChangingActions

Apply tools

Borrowing then

Developing Technique

Developing

New BeliefsForever Im

prove

Culture Change

Impr

ovem

ents

in H

D, Q

, C, D

Introduction Year 1-2

IntenseYear 3-5

Development Year 5 - 10

ChangingHabits

ChangingValues

Understanding &

EmbeddingPrinciples



Tool

TechniqueBeliefs

Quality-How are we doing?The timeline of improvementThe Simpler philosophyThe mechanics & human dimensions of changeTypical results achievedPhases of transformation

Good

Can we check off any of your questions too?



Tool

TechniqueBeliefs

Seek Improvement through…..Continuously Reducing:

WasteOperationalProduct / Service design

UnevennessOverburden

Continuously Enhancing:Value PropositionPeople

Eliminating Waste is only part of the battle



Tool

TechniqueBeliefs

Operational Waste

Most Processes are NINE parts Waste to ONE part Added Value

In the eyes of the Customer everything an Enterprise does either ADDS VALUE or does not.

Definition of Non-Value AddedAnything that consumes time or resources but does not add value

Definition of Value AddingAny activity that directly contributes to satisfying the needs of a customer.



Tool

TechniqueBeliefs

Unevenness

Needs and demands have natural variation which we often make worse

Encourage over-consumptionSales/Volume Based DiscountsDelayingEconomies of ScaleNo StandardizationHandoffsLack of Skills & Training

2nd order improvements result from reducing variation



Tool

TechniqueBeliefs

OverburdenOverburden occurs when the human element of a work process is not:

SafeStress freeEngaging at some level

Causes of Overburden are many but typically stem from:

Too much wastePoor ergonomicsToo much to do and not enough time to do it

Tolerating Overburden demonstrates a lack of respect for people



Tool

TechniqueBeliefs

Principles of the Simpler®Business System

The Customer defines value

Deliver Value to Customers on Demand

Standardize and Solve to improve

Transformational Learning requires deep personal experience

Mutual Respect and Shared Responsibility enable higher performance

Basic ideals derived from decades of experience



Tool

TechniqueBeliefs

Deliver Value to Customers on Demand without waste

Flowing 1-by-1 at “Takt Time”Zero Defects is achievableCustomer Pull triggers actionIncreasing Velocity motivates improvement



Tool

TechniqueBeliefs

Standardize and Solve to Improve

Standard Work, the current best known wayRoot cause problem solving vs. firefightingDeming Cycle of Plan, Do, Check, ActConstant improvement is sustainment

PA

DC

STD WORK

Performance

Time

PA

DC

PA

DC

STD WORK

Performance

Time

POLICYUNTRAINED

LACK OF MOTIVATION

LOW STAFFING

APPROVALS

WORK FLOWINSTRUCTIONS

NO DUE DATESNO FOLLOWUP

SCHEDULE

COMMUNICATIONSUPPLIER

LATE POOR COORDINATION

POLICYUNTRAINED

LACK OF MOTIVATION

LOW STAFFING

APPROVALS



SCHEDULE



WRONG FUEL IN CAR

UNTRAINED

LACK OF MOTIVATION

LOW STAFFING

APPROVALS



SCHEDULE





Tool

TechniqueBeliefs

Transformational Learning

Rapid Improvement EventsA highly effective way to practice change.

How many will we have to do to be expert at change?

Postponed perfection is the enemy of improvement

Required deep personal experience.

Learn by doing.How many golf books did Tiger Woods read to get that good?



Tool

TechniqueBeliefs

Mutual Respect & Shared Responsibility

Enables Higher Performance Leaders and associates working togetherLeaders coach and model behaviorCommitment through involvement

Employ the whole person



Tool

TechniqueBeliefs

Simple MeasurementsThe “True North” Metrics

Focus equally on all four

Human DevelopmentImproved capability at all levels

QualityZero Defects

Timeliness

Cost

1 by 1, in sequence, on demand

100% Value Added



Tool

TechniqueBeliefs

Quality-How are we doing? Good

Can we check off any more of your questions ?

How to get the resultsElimination of waste, unevenness, and overburdenValue, value adding and the value propositionThe principles of the simper systemTrue north metrics



Tool

TechniqueBeliefs

Strategic Planning and Development

What are the aims and vision?

What is the 10, 20, 30 year vision?

S.W.O.T Analysis

What are the Strategic targets to be deployed to achieve True North?

The A3 makes tangible the Strategic intent

Serving the DoD / MoD in 2006 & 2007, Version 10, 03/03/06 Simpler Confidential

2. Reflections on Previous Performance:

1. Previous Results / Targets:

Strengths:1. Excellent results and past performance => rapid growth, created “pull”2. We put lean on the map in DoD / MoD3. We have the greatest experiential knowledge (multiple years of experience)4. Established a few key Sr Officer relationships5. Some good site level leadership relationships6. We have good examples of our work in MRO, limited results in Strategic

and Operational7. Keep fresh with extensive hands on DoD / MoD, Commercial, Healthcare,

Non-traditional work experience8. Strong brand recognition9. Low Sensei turnover10. SBS Enterprise Transformation model 11. Sensei transfer of knowledge not “thump report” consultants12. Sensei have done well adapting SBS to specific client situations13. Strong margins will allow investment14. Strong in tactical areas in MoD / DoD15. Strong win rate16. Strong affiliations with institutions and key leaders17. MoD contracts direct, more smaller contracts makes us easier to work with18. In MoD we are the supplier of choice19. MoD is platform focused (end to end)

Weaknesses:a. Simpler infrastructure is limiting & hard on our membersb. Limited understanding of how governments work nor the military

culturec. We lack relationships at Sr Military levels (Sub & MajCom)d. Simpler has not demonstrated our “Strategic” ability, often don’t get

past toolse. Product offering & capabilities are tactical / insufficientf. No Processes to collect & leverage our results across Simplerg. A majority of our growth is reactive and RFP drivenh. No physical presence near client decision makers or client locationsi. We are forced to work through primes, reducing our margin and

impacting customers’ value equationj. A majority of our work is M.R. & O. and makes us look tacticalk. We have created few “incurably committed” leadersl. Unstructured growth with little strategym. We don’t understand who sees the bottom line and therefore we may

be missing major stakeholdersn. We have few members with “secret” clearanceo. Our Sensei could go stale with only DoD / MoD experiencep. Not all personalities and personal traits work in these environmentsq. We do not have sector marketing and SBS materialr. We lack any forecasting abilitys. Inconsistent in application of SBS by Senseit. Inf lexible, rigid, one size fits all SBS modelu. No process to release and deploy new material / informationv. We only sell “Lean” solutions, not TBS (SBS and TBS are not aligned)w. We lack a structured Sensei Development processx. Some clients perceive we have high ratesy. Minimal growth driven from Sensei level, VP / Director driving growthz. Lack a process to continuously develop and sharpen our Sensei skills

Threats:I. Contractualization of military support will leave us out in the cold, MoD

specific now, DoD in the futureII. Enterprise Transformation is not an important revenue stream to our

Primes Business ModelIII. TGG and others have successfully developed Sr Level relationships

and marketing their services / capabilitiesIV. DoD / MoD moves on to the “next thing”V. No one Company is gong to get all of the US Military workVI. Frequently not influencing SOW’sVII. Protecting IP is difficult in this sectorVIII. Competitors hiring our Sensei and our clientsIX. Making a mistake could cost us a lot of businessX. Government contract and compliance auditXI. Transformation funding competes with overall fundingXII. Leadership changes, loss of sponsorsXIII. High level DoD / MoD attention is developing high level attention at the

major consulting companiesXIV. “pay as you go” model is hard because there is no way to apply lean

savings to additional transformation support

Opportunities:A. UK, USArmy and AF Secretary directives to implement CPI / LeanB. Significant areas for growth in DoD / MoDC. Budget cuts driving interest in transformational workD. Align with retired military and SES individuals that are influential and

respected to build relationships with active Sr Level Officers and SES’sE. Prime opportunities emergingF. The opportunity exist to fully apply the SBS model (End to end Enterprise

Transformation)G. Leverage our work across DoD / MoD: use MoD RNavy results in US, use

US Strategic results in UK……..H. Targeted presence at key strategic events for marketing and relationship

solidificationI. Extend our services into the Defense Industry Supply ChainJ. Extend service into other country’s military servicesK. Extend into adjacent sectors (city services)

15 MaCom’swe are in 3 (AMC, TRDOC, SMDC)

Only in Crane NSWC, USMC G3

8 MajCom’swe are in 1 (AFMC)

1 of 19 Airstaff Org’s0 of 15 SecAF Org’s0 of 14 Field Op Agencies

3 of 11 Field Op Agencies• Great results, some 1-page documentation, no standard formats• Work through multiple Primes in US and direct in the UK • % Revenue that is Transformational in nature:

• USAF = 78%• USArmy = 97%• USN = 100%• RAF = 90%• RNavy = 90%• UKArmy = 0%

• Business Development load is carried by VP’s & Directors, proposal writing by COO / MD and VP’s• Minimal investment in targeted sector marketing• 10x growth in US Revenue ’01 – ‘05 = $1.3MM - $13 MM• 23x growth in UK Revenue ’02 - ’05 = $0.25MM – $6.9 MM• Our growth has been reactive not targeted

• Primarily fueled by word of mouth and a few key relationships (gates)• Significant presence in conferences and forums

• 4 types of work: MoD DoD• Strategic = Policy / I.P.T 18% 4%• Operational = Front Line 36% 6%• Support / M.R. & O. = Depth 45% 90%• Defense Industry Supply Chain 1% 0%

• We don’t think about this business as Value Chains• Competition has forced us to discount our current rates (DoD)

Types of Contracts

11%

35%54%

IDIQ

Firm FixedPriceCost Plus

Proposal Outcom es

29%

71%Losses

Wins

Data = 31 proposals

M i n i s te rs

C h ie f o f d e f e n c e

s ta f f

V i ce C h ie f o f

d e fe n c e s t a f f

C i n C F l e e t C in C A ir C in C L a n d L o g is t i c s D L O P r o c u r e m e n t D P A D e f e n c e C o m m s

S t r a t e g i c / H Q / P o l i c y l e v e l

D e p t h / S u p p o r t / T a c t i c a l e . g . M R O

F o r w a r d / F r o n t - li n e / O p e r a t io n a l

M i n i s te rs


s ta f f

V i ce C h ie f o f



S t r a t e g i c / H Q / P o l i c y l e v e lM i n i s te rs


s ta f f

V i ce C h ie f o f



S t r a t e g i c / H Q / P o l i c y l e v e l

D e p t h / S u p p o r t / T a c t i c a l e . g . M R O

F o r w a r d / F r o n t - li n e / O p e r a t io n a l

5. Follow Up / Measures: • 2006 PD goals - DoD = $13.2MM, MoD = $7.8MM• Quarterly Review of progress and results• Schedule adherence to Action Plan

3. Analysis / Justification for Future Activities:

4. Action Plan and Milestones:

Simpler is unprepared for Global opportunity from DoD/

MoDin 2006 & 2007

Relationships Manpower Measurement / Standards

Environment Method Materials

V, VIII, XII

XI, XIV

I, II

IV

VI

I

III, XII, c, k

j, t, v

f, uX

l

b, h, n

s

y

e

m

c

r

VII

a

x

o, w, z, IX

g

Simpler is unprepared for Global opportunity from DoD/

MoDin 2006 & 2007

Relationships Manpower Measurement / Standards

Environment Method Materials

V, VIII, XII

XI, XIV

I, II

IV

VI

I

III, XII, c, k

j, t, v

f, uX

l

b, h, n

s

y

e

m

c

r

VII

a

x

o, w, z, IX

g

People• s - Link the need for an effective SBS deployment method and sensei alignment tool to Ed’s A3. • b, n, h – Create Key Point sheet detailing dress code and actions defining “Sector Norm’s” – Ron Orr volunteered. • b, n, h – Modify recruiting process in US capturing UK military criteria – C Cooper. • y – RIE for onboarding and shadowing to include the development of specific Learning Objectives to develop situational awareness for identifying additional sales opportunities. • o, w, z, IX – Create Value Stream based org., linked to Ed’s Organization A3. • o, w, z, IX - Broaden Sensei with experience outside of Mili tary, will need a compensation change for VP’s. • I, II, r, x, VI, l, - Invest in an enabling infrastructure for BD and Contracting, hire a Contracts Manager and resource Proposal writing • Xi, XIV, VI, l – Provide permanent perspective of how to work in Government and support DoD/MoD strategies, recommend a Military / High Level SES for BOD membership.Products / Services• s – RIE, writing cell for Dod/Mod Specific skin once SBS core complete. • e, j, t, v, c – Improve SBS to reflect Transformation including all principles, focus on transformation vs tools, modify “pay as you go” to selling transformations– linked to Ed’s A3.• I – In sector specific SBS, include material, methods, logic so that we influence Military Commercial contracts to include CPI as part of the dealPlace / Value Chain• V, XIII, VIII – Begin Baby A3’s for each Service / Agency, target 50% improvement in penetration by year end•III, III, k, c, m - Get expert help (Ron Orr and Prime Retired “Stars”) help to get introduced to the 3 and 4 star levels. • XIII, III, k, c, m - RIE to create standard work and format for relationship maps, then create maps.Price:• Work with US primes to revise their GSA/MOBIS rates to reflect our costs. Become prime.

Feb Mar Apr May Jun ……..S im pl er

St ruc ture Decis i on

D oD / M o D A3 S tabili zed

D oD / M oD Stra tegy D ev elop ed

Cre ate & S ta nd ard iz e F low s to m a nag e m ater ials ac r os s S im p ler

E sta blis h V S B as ed O rg an iz at ion

Bu ild S eg m en t S pecif ic A 3’s

B uild , M ana ge , Im prov e S eg m ent Sp ec if ic St ra tegie s

Crea te M ateri als an d P opu late Datab as e

Cr eate Se ctor Sp ec ific Sk in s for Do D / M oD

Hir e Ap pro pri ate res o urc es: Co ntrac ts , P rop osa l W ritin g, C ont ra c t M a nag em ent . B eco m e Pri m e























Action Plan Summary:7 RIE’s1 Project7 Doit’s3 Linkages to other A3’s

Critical Countermeasures Summary:Promotion• u & f – Establish standard process and standard work for knowledge sharing and leveraging results globally. Create a standard visual 1-pager format.• y - Develop good case studies for End to End, specific event results, transformation results. • I, II, r, x, VI, l, - Complete Prime contracting strategy• I, II, r, x, VI, l, - Develop MoD/DoD Business Development Strategy and Service Specific Business Development plans via “Baby A3’s. These should include a decision logic chart to determine best contracting approach for specific situations. • IX – Develop Standard Work for Managing Sr Officer / SES command transition to help embed CPI in MoD/DoD culture• VI - Develop BD capabilities specific to each Service / agency – linked to Baby A3’s by Service / agency• III, III, k, c, m - Get expert help (Ron Orr and Prime Retired “Stars”) help to get introduced to the 3 and 4 star levels.• VI Develop key relationships in all Services / Agencies and develop BD capabilities specific to each Service / agency – linked to Baby A3’s by Service / agency.• Create unique website for Simpler DoD / MoD / Government. Sponsor Shingo Public Sector conference

Critical Elements Action Plan Completion Target Status1. Source Contracts Manager – J Smith Initiate Feb 13, In position May 1 Deployed MH2. Create 1 pager visual format – C Cooper Feb 28 ??3. Insure SBS A3 has Leadership Training, Enterprise Focus vs Tools – J Smith Now Deployed EC4. Insure SBS A3 has effective Deployment Process for SBS – J Smith Now Deployed EC5. PT Approval of Global DoD/MoD A3, commission baby A3’s by Service / Agency – J Smith Feb 28 Comp. Feb 106. PT / Exec Team Agreement to VS Based Org, with DoD/MoD VS President – J Smith Feb 28 No7. Writing Cell for Managing Sr Leadership Turnover – L Alves Mar 3 Sch 3/278. RIE to establish Std Work for Relationship Maps & create first Service Maps – L Alves Mar 3 Sch 3/279. Complete and document Contracting Strategy, include decision logic chart – J Smith Mar 1 Sch 3/1010. Create DoD/Mod Cultural Norm’s Key Points sheet – R Orr Mar 1511. Develop Key Points to define method of reaching Sr Leaders – R Orr Mar 1512. Add DoD/MoD Criteria to Sensei Personal Development Document – C Cooper Mar 2713. Gain BOD agreement to add a DoD/MoD Experienced Executive to BOD – J Smith Mar 2814. Create BD Strategy for Global DoD/MoD, source BD Support – VS Owner April15. Writing Cell to create DoD/MoD SBS 11 Skin – VS Owner May

Metrics to track:• Sustainable Revenue growth• % Revenue that is transformational• Proposal outcomes, and Contract type• Penetration Map Improvement (50% Improvement)



Tool

TechniqueBeliefs

Strategy Deployment

Chaos Vision

Momentum Execution

Turning top level goals into local actions

Create a visionBuild momentum for changeExecute strategy at all levelsMonthly management and Corrective ActionForward looking

It’s about FOCUS



Tool

TechniqueBeliefs

EVENTTOPIC

May Jun Jul Aug Sep Oct

Do-

Its P

roje

cts

E

vent

s

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

PROJECT

PROJECT

PROJECT

PROJECT PROJECT

PROJECT

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

EVENTTOPIC

May Jun Jul Aug Sep Oct

Do-

Its P

roje

cts

E

vent

s

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

EVENTTOPIC

PROJECT

PROJECT

PROJECT

PROJECT PROJECT

PROJECT

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

ACTION ITEM

Deliverables

Agree on the Key Performance Measures

Three Value Stream Maps

Baseline current performance against Key Performance Measures

Rapid Improvement Plan

conducted with leadership team

Value Stream AnalysisAp

proa

ch fo

r Suc

cess

Value Stream Analysis avoids drive by Kaizen



Tool

TechniqueBeliefs

RI Events are the engine of Change3 weeks before – Steering Committee reviews plans2 weeks before – Select teams and collect data1 week before – Finalize data, review goals

Day 1 – Training, study current conditionsDay 2 – Apply tools and make big changesDay 3 – Train stakeholders and run the new processDay 4 -Standard workDay 5 - Presentation

1st week after – leadership audit, root cause problem solving2nd week after – measure, measure, measure3rd week after – daily management and sustain

Rapid Improvement Events are the Vehicle of Change

Information

Support Direction

Involvement &Encouragement

Denial

Blame

Shock

Problem Solving

Renewal

Exploring new ways

Anger

Confusion

TIME

MO

RA

LE Open

Past Future

Hidden

Elizabeth Kubler Ross



Tool

TechniqueBeliefs

Sustaining the TransformationVisual Management - Information Centers

Provide a structure for managing and solving problems

Institutionalises an improvement culture

Practical Problem Solving Problem Solving when the real “root” cause is not known

5 Whys spoken with data!

A3A communication tool and method for process improvement

Conveys a team’s logic such that others can contribute

Information Centers provide essential focus to support Sustainment



Tool

TechniqueBeliefs

Summary

The organization wants to adopt SBS principlesLeadership is committedThere is an investment in:

TimePeopleResources

Our mutual goal is to develop your business system

Let’s Do It !

Documents

Fundamentals of the Simpler? Business System 11 0 - 2a... · Simpler® Simpler Business System® 11.0 ... Quality-checks-as-we-go ... Joe Juran “Quality Control Handbook