LeanSigma® Fundamentals Module 7 – Performance Measurement & Sustainment

Lean Sigma has six steps to optimize processes. Lean has a methodology (similar to DMAIC for Six Sigma). You’ll will use this methodology each time you run a kaizen or lean project.

Why do we need to measure process performance? Assess / validate the impact of changes to the process: Process improvement efforts Organizational changes Changes to upstream or downstream processes Changes to supporting systems Ensure that expected process performance levels are sustained over time Performance measures can help us to set a baseline, so we know when to intervene with more process improvement work.

Cycle time is commonly used to measure process improvement. Cycle time is the time devoted to performing process tasks without delays or wait time A reduction in process cycle time due to process improvements is often used to increase capacity for work performed in other processes.

KPIs are critical in sustaining process performance over time Examples of KPIs include: Production and delivery timeliness Query responsiveness Defect rates Productivity Thresholds distinguish “good” process results from results indicating the need for improvement The process owner is accountable for taking action when results fall below corresponding thresholds KPI results may reflect process improvements, if available before and after process changes are incorporated Thresholds are usually based on: - Historical results - Compliance/regulatory requirements - Benchmark data - Management judgment In most cases, IMS thresholds are one-sided specs/limits defined by internal customers - Coding Accuracy: Error (defect) rate < 1% - Panel fulfillment > 90% Thresholds are often documented in Service Level Agreements (SLAs) KPI results are reviewed in 30-60-90 day reviews following lean kaizen events.

We can assess whether we can expect the process to yield consistently acceptable results. A process capability assessment measures the inherent ability of a process to meet established thresholds or “specifications” Incapable Process: - This scenario occurs often in the six sigma projects; it’s more difficult to resolve than a centering issue - In this scenario, the process is centered between the specifications at the mean; however, process variability is high - Resolution: Identify the variables that will reduce variability in the process outputs and take the necessary action to modify them - Example: Data Investigation (DI) TATs are inconsistent. Variables that impact DI TATs may include availability of the mainframe or UNIX environments, training of investigators, etc. Off-Target Process: - In this scenario, process variability is relatively low, but the process consistently shows too many defects - Resolution: Identify the variables that will shift the process over to the mean - If we cannot change the specs, this is usually the easiest option to improve process capability LSL = Lower Spec Limit USL = Upper Spec Limit Target is usually the midpoint between the specs

The process owner is key to sustaining process improvements over time. Single point end-to-end process ownership More effective and efficient cross-functional decision-making Improved sustainment of efficient, well-defined processes On-going process improvement Cross-functional decision-making: - Fewer cross-functional committees - Fewer informal channels to challenge and overturn decisions by escalating decisions to senior executives Sustainment…and coordinated process improvements

Program metrics help us monitor the health and benefits of the LeanSigma program. Are we achieving our mission to deliver more value to our customers and stakeholders by identifying and implementing measureable process improvements? Regular Lean governance meetings help us: Align on priorities and targets Validate results meet expectations Ensure support Mitigate risks Costs Lean facilitator & SME time Travel $ Implementation costs Benefits Enable IMS to deliver on strategic priorities Transform the culture LeanSigma Mission: Pursue process opportunities that directly enable IMS to deliver on strategic priorities (transformation, revenue, EBIDTA, and sales excellence). Transform the culture so employees see opportunities for continuous improvement in everything they do. Governance meetings: With the lean council (Jim Berkshire, Paul Thomson, lean leads), with GTSO management, with Ari and his team.

Lean program reporting summarizes results across all Lean events. Cadence Pace of events by month, department & geography Benefits Net EBIDTA savings Annualized hours saved (capacity redeployed, FTE s) % improvement cycle / lead time, delays, etc. Highlights of exceptional events, case studies Implementation Progress Percent of identified savings removed from budget Percent of kaizen action items completed Cultural entrenchment Number of employees trained / certified Number of employees participating in kaizens Communications 95% of reporting is enabled by web queries against the Lean PMO

Annualized Labor Hours Saved Sample Dashboard U.S. Events by Month Process Focus to Date n= 110 completed events planned 2011 2012 80.23% of all U.S. kaizen action items completed 2012 U.S. EBIDTA Contribution: $817K *100% of savings realized Annualized Labor Hours Saved = 31,086

Case Study: U.S. Market Research Client Support Sponsor: Manny Triggiano Process Owner: Brenda Capobianco Lean Process Lead: Carissa Waltenbaugh Team: Kevin Downing, Chris Davies, Cathy Pileggi-Jefferson, Katrina Kulp, Kyle Burke, Michele Agnoli, Joy Cross, Gerard Avillo, Lisa Cooney, Jeff Northern Key Kaizen Findings 90 Days After the Kaizen Issues Noted Process Changes A pilot was completed to test the central support pool for smaller clients. The centralized model went live June 13, 2011. QMS was enforced as a central information system. Tier 1 (simple) and 2 (complex) resource pools were created. Checklists and decision trees were created to clarify info needs. Clients are assigned a CSA even if they call only a few times a year. Pool CSA resources so questions are answered by the first available CSA. Some CSAs less able to handle complex questions. Triage client questions and assign CSA resources to a Level 1 pool (simple) or Level 2 pool (complex). CSAs sometimes call multiple times to refine the client question. Create a checklist to guide CSAs when refining details of a client’s question. Create a decision tree to identify what research is required for a particular question. Improve how info is organized on ARC. CSAs sometimes do unnecessary research.

Case Study: U.S. Market Research Support Findings 15 months after implementation Results: The central service center remains in place successfully. Clients talk to CSAs directly more often. Very few clients have questioned the change. Three positions were eliminated. In addition, the team took on additional work without adding headcount. (SMART roll-out). Cycle time savings were estimated at 65% initially. The savings observed are about 50%. Critical factors made the change possible: Pilot to test client feedback Excellent communication to the team and clients about changes Extreme organization and focus

Process Priorities – Sample from Operations On an annual basis, lean leads and functional area management identify focus areas within each functional area. Plans are to assess lean program coverage in the future, e.g., percent of sub-processes that have been the focus of one or more process improvement activities.