Presentation on theme: "NPA: Business Improvement Techniques"— Presentation transcript:
1NPA: Business Improvement Techniques Contributing to the Application of Continuous Improvement Techniques (Kaizen)
2Aim of the UnitThis Unit — Contributing to the Application of Continuous Improvement Techniques (Kaizen) — is designed to help you undertake improvement activities in your workplace and produce measurable benefits. It involves contributing to the planning of the continuous improvement process, carrying out activities to make improvements and recording business benefits.
3Objectives of the Unit To introduce: the ideas of value and waste the basic principles and benefits of performance measurement and process diagnosisthe use of key performance measures and process diagnostic techniques to drive continuous improvement
4Learning outcomes After completing the Unit, you should: understand what is meant by:value and wastethe Eight Wastesperformance measurementprocess diagnosisunderstand the importance of effective performance measurement and process diagnosisunderstand how performance measures and process diagnosis techniques can be used to monitor process performance and identify areas for improvement
5Kaizen Kaizen is a Japanese word meaning improvement. Kaizen calls for never-ending, continuous improvement.It involves everyone — managers and workers alike.It focuses on process improvement.
6Kaizen principles Everyone is involved: Quality begins with the customer.Customer needs are always changing and expectations are rising, so continuous improvement is required.Everyone is involved:Top management: establish the strategy, allocate resources, put systems, procedures and structures in placeMiddle managers: monitor performance, ensure employees are educated to use the appropriate toolsSupervisors: maintain the rate of suggestions, coach team membersEmployees: make suggestions, learn new jobs, use the tools, participate!
7Continuous Improvement Plan-Do-Check-ActContinuous ImprovementPlanDoCheckActWhat needs to bedone to improve?Does it work?Implement andstandardiseTry a solution ona small scale
8The three elements of work Value addingMaximise any work that changes the nature or shape of the work.Non-value addingMinimise any work that is unnecessary under current conditions, and does not increase the value of the work.WasteEliminate all unnecessary work.
9Eliminating waste The wastes apply to all sectors. The wastes relate to productivity.By reducing waste we work smarter rather than harder.The opposite of waste is value adding. If an activity does not add value it could be reduced or eliminated.You can remember the wastes by asking, ‘Who is TIM P. WOOD?’
10The Eight Wastes Transport Examples: Unnecessary movement of materials, products or information.Every move adds time to a process, and world-class organisations are passionate about reducing time.Examples:materials constantly being collected or deliveredthe actual or virtual chasing of information ('Who has that expenses figure? Marcy? Okay I'll ask Marcy… Marcy says Hector has it...’
11The Eight Wastes Inventory Examples: Any work-in-progress that is in excess of what is required to produce for the customer.Inventory tends to increase lead times, prevents rapid identification of problems and increases space, thereby discouraging communication.Examples:physical piles of forms (eg in inboxes)physical materials around the factorypeople standing in line waiting to be served
12The Eight Wastes Motion Examples: Needless movement of people. If people have to bend, pick up, stretch, etc, there is a higher risk of accidents, and ultimately, quality and productivity suffer.Examples:walking between offices or to equipmentconstantly switching between different computer domains or drivesbending or stretching to perform the task
13The Eight Wastes Poor utilisation of knowledge Any instance where human potential is not capitalised on. This requires clear communication, commitment and support.Examples:not acting on a suggestion for improvementputting people in roles that don’t require them to use their special skills and attributes
14The Eight Wastes Waiting Any delay between when one process step/activity ends and the next begins.Customers do not appreciate being kept waiting.Examples:waiting for informationmachines or people waiting to carry out the work
15The Eight Wastes Overproduction Production of goods or service outputs beyond what is needed for immediate use/adding more value to a service or product than customers want or will pay for.Overproduction leads to storage time and costs, risk of obsolescence, delay in detecting defects.Examples:overpurchasing office supplies, just in caseadding more information than is necessary to a report
16The Eight Wastes Over-processing Examples: Using processes that are not quality-capable/creating overly elaborate solutions where a simple one would suffice.Over-processing leads to increased chances of defects, longer lead times, transport etc.Examples:processes that involve too many approval steps and sign-offsexcessive distribution listsusing a sledgehammer to crack a nut
17The Eight Wastes Defects Examples: Any aspect of the service that does not conform to customer needs.Their impact may be felt further downstream from where they occurred. Defects need to be traced back. They cost money.Examples:missing a deadlinea bug in the websitefaulty goods
18Performance measurement — introduction What is a performance measurement?Why is it important to measure performance of a business, activity or process?
19Performance measurement – what is it? The practice of measuring how well an activity, process or system is performing and comparing the measurement to the planned level of performance.‘It is difficult to manage what you cannot measure.’19
20Why measure?provides factual data rather than ‘gut feeling’ or ‘hearsay’shows current performancereveals how well the process is operating to support the requirements of the customeridentifies and helps prioritise opportunities for improvementenables measurable improvement targets to be sethelps informed decisions to be madeputs the ‘stake-in-the-ground’enables the process or business to benchmarkprovides for a fair measurement systemprovides the basis for accepted accountability20
21What is benchmarking?A reference or measurement standard that is used for comparison.Internally:acting as the base/starting point of an improvement process so that improvement can be assessed and the methods to be used to raise the benchmark addressedacting as the basis for comparison between departments and/or companies in a groupExternally:for comparing the performance of the organisation with that of other organisations, to enable:specific competitor-to-competitor comparisons.the basis of comparison of similar functions, services or products with the industry in general, or to industry leaderscomparison of common business processes or functions, irrelevant of the industry concerned
22The benefits of benchmarking Benchmarking forms the basis for setting realistic targets for improvement and action plans to achieve those targets.Benchmarks give indications of the change in needs of the internal and external customers.Benchmarks give the starting point for continuous improvement, and allow realistic (small) targets to be set.Benchmarking allows assessment of how improvements are being made.Where critical/shortfalls are identified, benchmarking allows priorities to be established.In addition to helping to define how the organisation is performing, benchmarking can help in setting of performance standards and can be helpful in identifying new ways of doing things.
24Measurement and data analysis Characteristics of an effective measurement systemonly measure the things that matteraligned to the effective and efficient delivery of what the customer requiresquantitative, objective measures wherever possiblerapid and clear indication of performanceuse performance measurement and data analysis to drive, review and manage continuous improvementeffective feedback of measurement datafair measurement system24
25Measurement and data analysis Measures can either be:QuantitativeQualitativeThe quantity can actually be measuredSubject to personal judgement/ perception25
26What do customers want? What do you want when buying a meal? tasty foodnice presentationgood valuecheapno waitingpolite servicedoesn’t poison youQualityCostDeliveryHealth and safetyNOTE – animated slideGet the team to come up with what they would look for in buying a meal. Group them into QCD H&S, but get the team to guess the titles.All the meal characteristics can be measured in terms of QCD H&S
27What do customers want? What do clients want from a project? free from defectson budgeton timeno accidentsQualityCostDeliveryHealth and safetyNOTE – animated slideGet the team to come up with what they think a client would look for in a project and get group them into QCD H&S, but get the team to guess the titles.All the project characteristics can be measured in terms of QCD H&SMaybe useful to capture what the team currently measures on flipchart
28Measures used in industry sectors The seven QCDS & R ‘operational’ measuresMeasures are commonly classified into four or five categories:CategoryMeasureQualityNot right first time (NRFT)DeliveryAchievement of planPlanned activities completeCostPeople productivityBudget adherenceSafetyRelationshipsClient satisfaction
29Not right first time (NRFT) A measure of the ability to deliver the defined specification of worksQuantity of defectsNot right first time=Agreed unit of measureExample: a new build housing project measures the number of defects found in all properties being worked on for a given time period. The total number of defects measured was 112, in 22 properties.Therefore:The average not right first time = = 5.1 defects per house1122229
30No. of planned activities No. of incorrect activities Achievement of planA measure of whether planned activities have started on the planned date and taken the planned duration, and the accuracy of the planAchievement of plan=No. of planned activitiesNo. of incorrect activitiesx 100%30
31Planned activities completer (PAC) A measure of the percentage of planned activities completed as promised at a weekly planning levelPlanned activities complete=No. of planned activitiesNo. of incomplete activitiesx 100%31
32Number of person hours worked ProductivityA measure of the ratio between work completed and the person hours used to complete the workWork completedPeople productivity=Number of person hours workedExample calculation:Productivity of two gangs doing mechanical first fix in a construction projectGang A completes six rooms per week with a three person gang.Gang B completes five rooms per week with a two person gang.32
33Cumulative planned cost Cumulative actual cost Budget adherenceA financial measure of actual cost against planned cost to dateBudget adherence=Cumulative planned costCumulative actual costx 100%Budget adherenceThis measure is related to the cost predictability measure as mentioned previously.As a project proceeds there should be a related cost plan — ie how much will be spent as a cumulative total through the life of the project. Here ‘life’ often just refers to the construction period, but could also include costs from cradle to grave of a project and would include design, mobilisation, construction and maintenance.Effectively, it gives a measure of how well the project costs are being controlled in-line with a defined rate of spend and an on-going total of spend.Again as for the planned activities complete, a percentage calculation is made to assess how closely the budget is being followed.This is an important measure since it will indicate the flow of cash for a project.33
34Health and safetyA measure of the organisation’s safety performance. Examples of measures include:accidents recorded within a given time periodnumber of days without reported accidentsreportable accidentsnear misses or non-reportable accidentsnumber of accidents relative to number of people on-siteAdditional measures are used to help define the level of health and safety competence on-site, and these include:percentage of people on-site with health and safety qualificationspercentage of people on-site who have been site-inducted34
35Customer satisfaction This is a qualitative measure.With qualitative measures come subjectivity.To ensure fairness and consistency, a rating scale is often used.35
36Display of dataIt is important to display data in a form that is easy to see and understand.To be useful, collected data needs to be:analysed and displayed in a timely mannerclear and conciseto a recognised standard that everyone knowsCommon ways to display data include:trend chartsbar charts or histogramspie chartsPareto charts36
37Display of data The trend chart A chart used to show performance over a time period. It is possible to track the trend of the recorded data and to compare performance against a defined target.37
38Display of data The bar chart Number of defects per property246810121413579Property numberQuantityTARGETData period: 19–23 Mar 07Sample size: nine propertiesDate drawn: 26 Mar 07Drawn by: J SmithA chart used to display the quantity or frequency that a particular measured factor occurs within the measurement period.Quantity could be the number of times it occurs and/or the associated cost.38
39Display of data The pie chart An easily recognisable way to show the number of factors that contribute to the item being measured and the quantity or percentage proportion that each factor contributes to the whole.39
40Display of data The Pareto chart The Pareto chart shows the related items that are embodied within the measured quantity, ranked in order of magnitude. Additionally, the proportion that each factor contributes to the measured quantity is shown as a cumulative percentage line.40
41The data trail Using measured data to direct focus for improvement What makes up the 50% defects?What contributes to the radiator defect problem?41
42Root cause analysis — Five Whys Why am I always late for work?Because the bus that I get takes the long route.Why?Because I usually miss the direct bus.Because I leave the house late.Because it takes so long to get ready.Because I can never decide what to wear.
43Root cause analysis — fishbone used to brainstorm the possible causes of a problemknown as a Fishbone, Cause and Effect or Ishikawa diagramthe problem is stated at the head of the fishcauses are stated under a number of headings on the bonessome headings you could use:Men/Machines/Methods/Materials/Measures/MotherNaturePlaces/Procedures/People/PoliciesSurroundings/Suppliers/Systems/Skills
45Standardisation through SOPs Standard Operating Procedures (SOPs) are used to make sure that the fixed problem remains permanently fixed.They ensure that the quality procedures are maintained.SOPs can be used as training aids to ensure mistakes are not repeated.
46How to produce a SOP Inconsistent process Capture current way of working through example:work observation of more than one process expertcollated statements from more than one process expertIdentify key points pertaining to safety, quality and ease.Where work methods differ, agree the current best method of working.Document agreed method in the Standard Operation Sheet (SOS).Deploy and monitor as appropriate.
47How to produce a SOP Consistent process Conduct a Work and Waste activity on current process.Identify improvements.Incorporate improvements to existing Standard Operating Sheet (SOS).If current SOS does not exist, capture current way of working, incorporating improvements into the SOS.Agree and trial the improved process.Deploy and monitor improved ways of working.Agree next review of the SOS.
49Summary What is the definition of value or value added? What is the PDCA Cycle?What are the Eight Wastes?Why is performance measurement important to a Kaizen activity?Why is it important to solve the root cause of a problem?