GE Capital HowTo Driving Change and Continuous Process Improvement

8/12/2019 GE Capital HowTo Driving Change and Continuous Process Improvement

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how-to

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Driving change and continuous processimprovement


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Driving change and continuous process improvement how-to

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PI begins with understanding the customers values, goals and needs, andanswering the following four questions

?

What processes do youneed

to improve?

How will you define andmeasure success?

What are the barriersto your goals?

How do you make big changeacross a large,

multisite organization?

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What are the barriers to your goals?

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To achieve goals: Ensure alignment of corporate objectives with customervalue, ensure appropriate resource deployment

CorporateObjectives Energize and focusour commercial

efforts

Operate withdiscipline and

excellence

Mitigate risk andreduce cost

Compliancein everything

we do

Create a culturethat inspires

Business UnitObjectives

Build and runoutstandingCenters of

Excellence andplatforms

Simplify thebusiness

Drive a culture ofcontinuous

improvement

Compliance ineverything

we do

Create a culturethat inspires

SpecificDivisionalObjectives

Operate withexcellence Simplify the business

Compliance in everythingwe do

Create a culture thatinspires and strives for

perfection Sub-goal 1 Sub-goal 2 Sub-goal 3

Sub-goal 1 Sub-goal 2 Sub-goal 3



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What processes do you need to

improve?

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To drive improvements in processes, we offer an arsenal of effective tools

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Six Sigma

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Six Sigma encompasses six key concepts

Critical to Quality(CTQ)

Defect

Process Capability

Variation

Stable Operations

Design forSix Sigma

(DFSS)

Key attributes that are most important to the customer. If a business doesnt get

them right, the customer will react adversely.

Failing to deliver what the customer wants. Defects include anything that doesntmeet customer expectations or customer specifications; defects also cancontribute to failing to meet customer expectations in the final product or service.

The ability of your procedure to reach the same result every time. Repeatability, orhow consistently you do something, and accuracy, or how close you get to yourdesired outcome, are essential to a capable process.

Variation is the difference that the customer notices from one item to the next, aswell as the differences within processes. Six Sigma aims to reduce variation asmuch as possible for a repeatable result.

Ensuring consistent, predictable processes to improve what the customer seesand feels. Accuracy and repeatability are essential so you can predict what anoperation will do in the future.

Designing to meet customer needs and process capability. Organizations thatfollow the DFSS credo implement Six Sigma as early in the product or servicelifecycle as possible, especially at the design stage.

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Six Sigma practitioners follow analytical steps to measure, monitor andmodify a process to make a better product or service a process known

as DMAICDMAIC The Six Sigma Process

What docustomersexpect fromyour productsand services?

ControlImproveAnalyzeMeasureDefine

What is thefrequency ofdefects?

Why do defectsoccur?

What do wechange toimprove thedefect rate?

How can wesustainimprovement?

1 2 3 4 5

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The statistical objective of Six Sigma is to reduce variation in product quality

CenterProcess

ReduceSpread

Defects

Process Off Target Excessive Variation

Reduce variation and center process customers feel the variation more than the mean

Target

USLLSL

Target

USL LSL

Target

USL LSL

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Applying Six Sigma techniques dramatically improves quality

20,000 lost articles of mail per hour

Unsafe drinking water almost15 minutes each day

5,000 incorrect surgical operations per

week Two short or long landings at most

major airports daily

200,000 wrong drug prescriptions eachyear

No electricity for almost seven hourseach month

Seven lost articles of mail per hour

One minute of unsafe drinking waterevery seven months

1.7 incorrect surgical operations

per week One short or long landing at most major

airports every five years

68 wrong drug prescriptionseach year

One hour without electricity every 34

years

The Classical View of Quality99% Good (3.8 )

The Six Sigma View of Quality99.99966% Good (6 )

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Lean process design

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Lean is a continuous process to reduce waste executed in five distinct butinterconnected steps

Map the ValueStream

Specify Value

Work toPerfection

Implement Pull

Establish Flow

Map all process steps that bring aproduct or service to the customer andidentify which are value-added andwhich are non-value-added

Measure continuousmovement of products,services and information end-to-end throughout theprocess

Implement pull strategy(vs. push) since nothing is doneby the upstream process until thedownstream customer signals theneed

Complete elimination of wastesteps/tasks/elements so that asmany activities as possiblecreate value for the customer;ensure ongoing complianceand quality control

Define value from thecustomers perspective andexpress value in terms of aspecific product

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A key step in instituting Lean process KaizenKaizen means change for the better and is both a method and

a mind-set for continuous improvement

Value stream map Define product and

customers Timing & sequence

Identify waste Simplify process steps

Fewer ways to do tasks;mistake-proof/standardwork

Eliminate non-value-added steps

Customer pull

Visual management:make processes visible

Verify each step Shorten feedbackloops

Dont pass defects Single-piece flow

1stKaizen

2nd

Kaizen

3rdKaizen

n thKaizen

C o m

p l e x i t y / S o p h i s t i c a t i o n

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Key steps in kaizen execution include identifying opportunities, narrowingthe focus and prioritizing opportunities

Come from value stream map; identify the actions required to move from thecurrent state to the future state

Logically sequence each opportunity based on: Impact (from the customers perspective) Ease of implementation Other business/organization considerations Always looking for early wins that can be executed now

Use root-cause analysis so that each kaizen is actionable and targeted at thetrue underlying problem

Compare the future and current state maps to ensure that all requiredactions are captured

Identify opportunities

Narrow the focus

Prioritize opportunities

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Change Acceleration Process (CAP)

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The Change Acceleration Process or CAP is:

A flexible/nonlinear model used throughout a change process A strategy for influencing choices and behaviors A way to facilitate commitment and behavioral change through team dialog and action

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CAP includes a list of steps for successfully leading and managing change

CURRENT STATE FUTURE STATE

Systems and Structures

Leading Change

TRANSITION STATE

Monitoring Progress

Mobilizing Commitment

Shaping a Vision

Creating a Shared Need

Making Change Last

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Identifying committed leadership who can balance a technical strategywith an engagement strategy is key to realizing the benefits of CAP

TechnicalStrategy Q

EffectiveLeadership E

EngagementStrategy A

x =

Key Questions Key Mind-sets

What impact does leadership have? How can leaders invite others to make the

choice for change? What actions and behaviors will leaders of

change need to consistently model duringthe change initiative?

How should leaders be challengingthemselves to take personal initiative andappropriately challenge the status quo?

Change is life all that lives mustchange/adapt

In all change there is some loss Resistance is natural, normal, and necessary All change is a matter of individual choice Each individual must find his or her own way

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How will you define and

measure success?

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Define metrics to track results and to measure success against statedobjectives

Questions to ask yourself: What are your key customer-facing metrics? Can you link them to your organizations results?

Cycle time (Median)

Cycle time (Span)

Win rate/lost deals

TBD

TBD

TBD

Sample key metrics Your key metrics?Explained indetail on next

slide

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Measurement/Reporting

Reducing variation while reducingoverall cycle time

Median

Span

n=594Days 24/7, includes weekends

21 days 1815

99 days

76

53

36

Communication

Projects

Weekly Aging Report

Core Metrics Dashboard

Staff & Operating Meetings

G&Os Reflect Performance GoalsAll Employee Rollouts

Portfolio Management Team

Action WorkoutSystems Reduction

Doubled Field Credit Authority

Monthly Survey to Customers

Cycle Time

Example of a metric: Monitoring cycle time progress

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How do you make big change across

a large, multisite organization?

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Empowerment

Communication

Culture

Lastly, successful execution of a process improvement program relies uponempowering employees, communicating frequently and openly, and buildinga culture of continuous improvement

Empower employees through targeted company-wide trainingprograms

Use multiple channels to communicate importance of the processimprovement program throughout the organization

Use both a top-down approach led by the quality team and a bottom-up approach through the Lean program to enable change across theorganization

Description

1

2

3

rioritize

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Empowering employees

Getting everyone involved through organized training programs:

3-hour training class

~15 students per class, mentored by Six Sigma Black Belts

Project selection (scoped for


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Make a big deal about it Consider branding the initiative Tie it to goals and objectives

Multiple channels to communicate (use them all)

Employee newsletters Operating reviews Internal portals

Best-practice sharing Staff meetings Presentations

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In the first year

Top-Down ApproachQuality Team Deployment

CreateMetrics

Establish LeanProcesses

DesignCommunication

RhythmContinuously Improve

1,000employees

trained

800projects

completed

3,000steps

removed

54,000hours

eliminated

46% averagecycle timereduction

per project

Bottom-Up ApproachTraining Program, Mentoring and Goal Setting

Examplesof

Goals

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Key takeaways

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Key takeaways

Process improvement is a set of tools that can help your organization achieve its goals GE starts its business transformation program with a focus on what customers value,

which it translates into business objectives that cascade throughout the organization At GE, we leverage a number of tools and methodologies including Six Sigma, Lean and

CAP to implement continuous improvements We monitor a handful of key metrics to ensure that we are working toward achieving

corporate objectives Lastly, we have built a culture of continuous process improvement consistent with our view

that the ability to embrace change is a strategic and competitive advantage

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Driving change and continuous process improvement how-to 33

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GE Capital HowTo Driving Change and Continuous Process Improvement