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Adding Real Business Value Through Simple Process Improvement Marc Gunning ASQ Certified Six Sigma Black Belt June 2013.

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Presentation on theme: "Adding Real Business Value Through Simple Process Improvement Marc Gunning ASQ Certified Six Sigma Black Belt June 2013."— Presentation transcript:

1 Adding Real Business Value Through Simple Process Improvement Marc Gunning ASQ Certified Six Sigma Black Belt June 2013

2 Why I am Here – Presentation Objectives I believe each of us has the opportunity to create a positive ROI though continuous process improvement Discuss tying Process Improvement to the organizations financial and business objectives Demonstrate accelerated process improvement Demonstrate the use of the core process engineering tool set

3 3 Improvement - what is it? - “Improvement is accomplished by; –better methods, –better techniques, –better machinery –and by people continually finding better ways to do their job and to work together as a team. I will never see the day when there is no room for improvement.“ - Dave Packard, 1957

4 What is a process? A series of interrelated steps consisting of resources and activities that transform inputs into outputs and work toward a common end. The Certified Six Sigma Black Belt Handbook second edition, T.M. Kubiak and Donald W. Benbow

5 2 - Plan-Do-Study- Act steps occur in each phase 3 - The activities are organized into standard project phases (DMAIC) 1 - Three questions set the charter of the project Model for improvement = 3 questions + PDSA + DMAIC Six Sigma Model for Improvement What are we trying to accomplish? How will we know a change is an improvement? What changes can we make that will result in improvement? Define Measure Analyze ImproveControl Phase 1Phase 2 Phase 3 Phase 4Phase 5

6 Define Measure Analyze Improve Control Improvement Plan/Three Questions SIPOC Diagram Critical to Quality Process Flowchart Data Collection Plan Cause and Effect/Fishbone Diagram Pareto Chart Time Series/Run Chart Process Map Analysis Affinity mapping Process Flowchart Data Collection Plan Process documentation RACI Control Charts Dashboards MOC TOOLS

7 Project Scope What are we trying to accomplish How will know / measure we are successful MeasureCurrent StateFuture State What Actions can / should we take

8 Identifying Opportunities to Create Business Value Executive & Entity Key Performance Indicators EarningsCapitol Stakeholders Shareholder Value Revenue Growth Cost Reduction Return on equity Customer Satisfaction Employee engagement Business Initiatives Operating KPI Process / Function Market Expansion New Tooling Risk reduction / compliance Improve Service Levels Revenue growth New tool deployed on time Reduce Customer Incidents SalesOP’s / ITCustomer Operations Opportunities

9 Critical to Quality Need (General) Requirement (Specific) 1st Level2nd Level3rd Level Revenue Growth Time to Market Market Acceptance # of customer trials Transaction Costs: Turn around Time Rework # of Iterations Verification / inspection cycles Quality: Performance Features Time Reliability Durability Uniformity Consistency Serviceability Aesthetics Personal interface Flexibility Harmlessness Perceived quality Usability Milestones on time Customer Satisfaction Identify our ability to deliver on the customer / business requirements for a product or service

10 SuppliersInputsProcessCustomers Who provides the inputs? Step 1: Outputs Step 2: Step 3: Step 4: The transformation The product or service from the process Who receives the product or service? Step 5: What resources & activities are required? Name of process START STOP SIPOC Process: A series of interrelated steps consisting of resources and activities that transform inputs into outputs and work toward a common end. The Certified Six Sigma Black Belt Handbook second edition, T.M. Kubiak and Donald W. Benbow

11 May 11, RACI Definitions Responsible for implementation: Has the duty and obligation to do the work. Also, must exercise independent judgment and raise appropriate issues. Accountable decision owner: Has the authority to decide and is the recipient of any consequences; the ultimate decision maker. Also has the responsibility to learn from Responsible and Consulting parties. Consulted: Stakeholder with expertise, experience, and interests who must be given the opportunity to influence plans and decisions prior to finalization by the “accountable’ or “responsible” party. Informed: Is informed of progress, key decisions and deliverables by the “responsible” party; it’s necessary for them to know in order to collaborate well.

12 12 Informed Accountable, Informed Responsible, ConsultedResponsible, Accountable Knowledge necessary to make informed change No Authority to Make a Change Yes No

13 Swim Lane

14 Sheppard/Wood Example

15 Identifying Opportunities to create Value Sheppard/Wood Example S/W Customer (AJAX) Executive & Entity Key Performance Indicators EarningsCapitol Stakeholders Shareholder Value Protect & Grow Revenue Leverage existing assets Market Share Ajax’s Business Initiatives Operating KPI Process / Function Product Extension Eliminate HAZMAT Risks Close & deliver on every deal – 100% New Product Capabilities Zero defects inventory mgmt. 100% fulfillment Sales & OpsOperationsSales Opportunities Eliminate discrepancies between Supplier and Vendor Inventory Mgmt Systems Poka-yoke inventory pick system Establish priority delivery service

16 Project Scope What are we trying to accomplish Improve the accuracy and timeliness of inventory information to Ajax to improve Ajax fulfillment and eliminate Hazmat risks How will know / measure we are successful MeasureCurrent StateFuture State S/W and Ajax systems 100% accurate to actual  Ajax 98%  S/W 100%  Ajax 100%  S/W 100% Timeliness of inventory info to Ajax Sales  Monthly  Weekly Eliminate possibility of shipping wrong products  Manual / voice verification  Poka-yoke What Actions can / should we take 1.Define and Analyze current state process (SIPOC & RACI)

17 SupplierInputProcessOutput Custo merRACI Ajax SupplierTruck at DockReceive Truck * Bill of Lading * Physical Inventory S/W Original Mfg * Original Mfg * Ajax * S/W Truck BoL Package LabelsVerify product for compliance Trigger all Hazmat compliance S/W S/W Warehouse BoL Physical InventoryWarehouse InventoryProduct Stored Ajax S/W Warehouse Ajax Wareh ouse S/W Office BoL + Pakage Label Physical Location Update S/W Inventory System Electonic Record of S/W S/WS/W Office Ajax Wareh ouse S/W Office or Phone communicaiton based on S/W Electonic Record Update Ajax Inventory System Electronic Record of Ajax Inventory AjaxAjax Office S/W Office Sum of Electonic Record of S/W Physical Inventory Monthly update of Ajax S/W to Ajax * Record for Ajax reconciliation * Records for Invoicing * Record for Ajax Sales of availability AjaxS/W Office Ajax Sales * Ajax customer demand * Ajax knowledge of availabel inventory * or Phone request for Fulfillment Trigger Ajax inventory pull/ship to Ajax customer * Fulfillment to Ajax customer * Adjustment to inventory AjaxS/W

18 SupplierInputProcessOutput Custo merRACI Ajax SupplierTruck at DockReceive Truck * Bill of Lading * Physical InventoryS/W Original Mfg * Original Mfg * Ajax * S/W Truck BoL Package Labels Verify product for compliance Trigger all Hazmat complianceS/W S/W Warehou se BoL Physical Inventory Warehouse InventoryProduct StoredAjax S/W Warehou se Ajax Warehous e S/W Office BoL + Pakage Label Physical Location Update S/W Inventory System Electronic Record of S/WS/W S/W Office Ajax Warehous e S/W Office or Phone communicaiton based on S/W Electonic Record w/ Scanned BoL Update Ajax Inventory System Electronic Record of Ajax InventoryAjax Ajax Office S/W Office Sum of Electonic Record of S/W Physical Inventory Monthly Weekly update of Ajax S/W to Ajax * Record for Ajax reconciliation * Records for Invoicing * Record for Ajax Sales of availabilityAjax S/W Office Ajax Sales * Ajax customer demand * Ajax knowledge of availabel inventory * or Phone request for Fulfillment Trigger Ajax inventory pull/ship to Ajax customer * Fulfillment to Ajax customer * Adjustment to inventoryAjaxS/W

19 Swim Lane RACIProcess Inputs/Outputs

20 it will be over soon this won’t happen apathy numbness minimizes the change Ignores the change sense of loss of control concerned with abilities future contribution unclear Finds fault with changes lack of focus or direction Withdrawals blaming teamwork satisfaction clear focus and plan cooperation balance clear vision of the future sees possibilities willing to exploring alternatives feeling “ I can make it” high creativity and energy “TOO” many new ideas unfocused work start “being” in the future Denial Resistance Commitment Exploration DANGER HIGH PERSONAL CONTRIBUTION Transition Cycle

21 Time Performance DenialResistanceExplorationCommitment Management of Change Cycle New Process Launch Communicate/Train Workshop/ Listen Facilitate Encourage/ Motivate Control

22 Thank You


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