Rapid Transformation - Making Change Happen Fast
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- 1. May 2010 Rapid Transformation Making Change Happen Fast Larry W Dyer Director, Process Improvement Master Black Belt Coventry Health Care
2. Agenda
- Lean and Six Sigma Overview
- What is Kaizen?
- How to execute a Kaizen
- Kaizen examples
- Where to start with Kaizen
- Top 10 reasons projects fail
Rapid Transformation WC Process & Strategy 3. Assumptions
- You have some exposure to Six Sigma and Lean
- You understand what the project charter is
- You understand that projects with a high return on investment and moderate to low effort are executed first
Rapid Transformation WC Process & Strategy 4. Every Firm Is Driven to Improve Quality, and Reduce Cost and Lead Time
- Customer loyalty and retention
- Shorter customer lead time demands
- Downward price pressure: lower costs
- Lower invested capital
- Capacity expansion
Rapid Transformation WC Process & Strategy 5. Why Do These Goals RequireBoth Lean and Six Sigma?
- In a value stream, thework often spends up to 95% of its time waiting
- Poor quality increases the lead time to customer
- 10% defect rate can increase lead time by 40% and reduces available capacity
- Capacity problems can be masked by slow cycle times
- Lean tools accelerate lead time reduction
- Six sigma brings a process under control
Rapid Transformation WC Process & Strategy 6. 95% of Time Waiting, For What? Customer Value Added Time Business Value Added Time Non-Value Added Time Wait Time
- Findings indicate:
- Long process time
- Process Cycle Efficiency Poor - 0.069%(World Class Standard = 50%)
- Wait times are extremely long
Rapid Transformation WC Process & Strategy 7. What is Lean Six Sigma?
- Lean Six Sigmais a combination of two process improvement methodologies Lean and Six Sigma
- Leanis all about speed.
- Pioneered by Ford and perfected by Toyota
- Focuses on eliminating waste and finding better ways to do things
- Helps eliminate steps that add no value
- Six Sigmais all about quality and repeatability.
- Started by Motorola in the 80s; improved by GE
- Focuses on reducing defects and variation and incorporates powerful statistical tools to control a process
- Six Sigma Quality literally means 3.4 defects per 1 million parts
- It is the origin of the DMAIC process
Rapid Transformation WC Process & Strategy 8. Greatest Challenges to Successful Deployment From ASQ, Quality Progress, August 2009 Why? Why? Rapid Transformation WC Process & Strategy 77 of 5,000 hospitals Confidence level 95% Confidence interval +-11% 9. Why Lean Six Sigma?
- Why use them together?
- Because Lean cannot bring a process under statistical control, and Six Sigma alone cannot dramatically improve process speed.
- Six Sigma is the Unifying Framework
- It provides the improvement infrastructure (role definitions, deployment model, etc.) and the overriding methodology (DMAIC).
- Lean provides additional improvement tools to turbo charge improvement efforts.
Rapid Transformation WC Process & Strategy 10. When to Use LSS for Process Improvement
- When to Use:
- You have a challenging goal to reach or issue to solve
- Driven by the business strategy
- Issues that are valuable for the business to resolve
- Problems that have stood the test of time
- Solution is not known
- You are willing to commit people to identify and resolve the issue
- You want a more robust solution than traditional methods can provide
- You want group ownership of a course of action
- When NOT to Use:
- You dont have a specific challenge or clear issue to solve
- You already have a solution and course of action
- You dont have a process to improve
Rapid Transformation WC Process & Strategy 11. Rapid Transformation
- Relies heavily on:
- Lean techniques
- Statistical Process Control
- Uses Kaizen Format
- Focuses on a subset of Six Sigma Tools
- Stakeholder Analysis
- FMEA
- Value Stream Mapping
- Non-Value Added Analysis
- Root Cause Analysis
- Quick Improvement Techniques
Rapid Transformation WC Process & Strategy Lean Is Cool! 12. What is Kaizen?
- Kai = to take apart
- Zen = to make good
- Kai + zen = taking something apart to make it better
- Team activity
- Rapid improvement within a short time
- Well planned and highly structured
- Essentially an accelerated DMAIC project
Rapid Transformation WC Process & Strategy 13. When to Kaizen
- When obvious waste sources have been identified
- When the scope and boundaries ofa problem are clearly defined and understood
- When implementation risk is minimal
- When results are needed immediately - i.e., capacity constraints, setup reduction, acute quality problems, safety/ergonomic issues
- In the early stages of a project to gain momentum and build credibility
Rapid Transformation WC Process & Strategy 14. When to Use Kaizen Project Idea Incremental Improvement? Re-engineer Project Small Project? Large Project Process Speed? Process Quality Project Kaizen Perform Value Stream Mapping Break into Small Projects Yes No Yes Yes No No Use Inter-Ocular analysis Rapid Transformation WC Process & Strategy 15. Kaizen Goal
- Focus on each step in the process
- Reduce the Non-Value Added Steps
- Minimize the Business Value Added Steps
- Streamline the Customer Value Added Steps
- Eliminate All Waste
Product Lead Time Customer Value Added Non-Value Added Start Finish Business Value Added Rapid Transformation WC Process & Strategy 16. Kaizen Benefits
- Provides momentum for the project
- Drives value ($) early, thus improving ROI
- Helps the Company
- Eliminate hidden costs of waste
- Ensure work provides value
- Allows major improvements quickly
- Helps You
- Eliminate waste and interruptions
- Influence the work you do every day
- Be part of the solution
- Reduces stress on project team to Get Something Done!
Rapid Transformation WC Process & Strategy 17. Kaizen VS Traditional DMAIC Project
- Team is 5 Days Full Time vs. 4 Mo Part Time
- Actual team hours may be close
- Resources Dedicated
- 100% Dedicated for 5 days
- Scope Completed/Problem Identified Going In
- Team does not have time for scope assessment
- Basic Data Gathered
- May use Tribal Knowledge vs. Detail Analysis
- Solution may be known but historically not listened to
- 30-Day Follow Up Action Items
- Items that cannot be finished that week
Rapid Transformation WC Process & Strategy 18. Kaizen Structure Team Training Rapid Transformation WC Process & Strategy Issue List Area Discovery Cause & Effect GoalBrainstormed Ideas Final Presentation Effort Benefit .5 1.5 1.0 2.0 2.5 .5 3.0 3.5 4.0 4.5 5.0 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1 2 3 4 5 8 9 10 7 6 Action Items What Who When Status Implementation 19. Kaizen Preparation
- Begin preparation 2 weeks before start of the Kaizen event
- Collect necessary data
- Notify participants of their involvement
- Create introductory training for participants
- Share the project charter
- Collect preliminary process maps
- Complete any meeting logistic issues
- Hold Kaizen
- Meet for one week
- No interruptions
- No cell phones
Kaizen! Timeline(Maximum of 45 Days from Start of Event Prep, Through Event, to Final Follow-up) Pre-Event Prep (3-10 days) Kaizen! Event (3-5 days) Event Follow-up (30-35 days) Rapid Transformation WC Process & Strategy Meeting Logistics Order lunch Soft drinks Ice Tea Coffee Etc. 20. Facilitation Keys
- Keep Team On Track!
- No emails or blackberrys
- Event will be stressful
- Drive them to success
- Be a part of scope and team selection if possible
- Plant seeds but dont overpower the team with your ideas
Rapid Transformation WC Process & Strategy 21. Kaizen Team Rules
- Throw out all of your fixed ideas about how to do things.
- That is the way it has always worked!
- It has to be that way!It wont work any other way!
- Maintain a positive attitude (how will it work, not how it wont).
- Practice mutual respect.Treat others as you want to be treated. Never leave disagreements unspoken.
- The only stupid questions are the ones not asked.
- Ask Why? at least five times until you find the ultimate cause.
- Were not interested in assigning blame - only in creating solutions!
- One person, one vote position doesnt matter.
- Have fun!
- Understand the process, and JUST DO IT!
Rapid Transformation WC Process & Strategy 22. Toolset Used During Kaizen
- Any tool may be used to aid the team during a Kaizen event from a Process Map to a Designed Experiment.
- Bottom line is you use any tool that is needed!
- Pareto
- Fishbone
- Process map
- Spaghetti Diagram
- Cycle Time/Takt Time
- NVA Analysis
- Time Studies
Rapid Transformation WC Process & Strategy 23. Kaizen Toolset: Resource Flow Layout
- The Spaghetti Chart
Indicates an in-box or outbox where work (forms/information) waits to be worked on or transferred Lines indicate paper/information travel: - No set path - Lots of rework 230 yards Rapid Transformation WC Process & Strategy 24. Kaizen Schedule Rapid Transformation WC Process & Strategy 25. Weeks Activities
- Monday
- Team Training
- What is a Kaizen?
- Project and Goal Background
- Present Data/Burning Platform
- Specialized Training Geared Toward Project Goal
- Discovery
- Team Spends Afternoon in Project Area
- Map the Existing Process
- Gather Insights from Personnel
- Observe Issues/Conduct Studies
- Evaluate Risk
- Keep Detailed Notes
Rapid Transformation WC Process & Strategy 26. Failure Mode Effects Analysis
- Document
- What will happen if our project fails?
- What will happen if the implementation fails?
Rapid Transformation WC Process & Strategy 27. Weeks Activities (Cont.)
- Tuesday
- Area Discovery (Cont.)
- Review Monday Activities
- Process Map
- Gather Insights from Personnel
- Document Problems Found
- Analyze Problems to Determine Root Causes
- Begin to Define Future Metrics
Our ability to assess the performance of a process we wish to improve is only as good as our ability to measure it. Rapid Transformation WC Process & Strategy 28. There are usually three views of a process: Process Mapping Rapid Transformation WC Process & Strategy What youTHINKit is.. 1 What itACTUALLYis.. 2 3 What itSHOULDbe.. 29. The Hidden Operation Rapid Transformation WC Process & Strategy Work Arounds Op i Op i + 1 Analysis Scrap Off-Line Correction Correctable ? Verified ? No Yes Quick Fixes Inspections Scrap Rework Extra Equipment Increased Inventory Increased Cycle Time Frustration Defects Customer Dissatisfaction Cost 30. Example: High-level Swim Lane Process Map Rapid Transformation WC Process & Strategy 31. Example: High-level Swim Lane Process Map Rapid Transformation WC Process & Strategy 32. Identify Waste
- Each process activity can be tested for its value-add contribution
- Ask the following two questions to identify non-value added activity:
- Is the form, fit or function of the work item changed as a result of this activity?
- Is the customer willing to pay for this activity?
NVA NVA NVA NVA NVA NVA NVA Rapid Transformation WC Process & Strategy Call for an Order Answer phone Asks for more? Greetings and mention specials Calculate price Rewrite Order Order still OK? Gets address & phone # Add to Order Give order to Cook Rewrite order Yes Yes No No Request order from customer Writes on scratch pad Asks cook for time estimate Inform customer of price/time No Thanks customer & hangs up Completes order from from note pad Another call waiting Writes time on scratch pad Writes time on scratch pad Confirm order Yes 1 1 New order? No No Verify with notes Yes 2 2 OK Not OK 3 3 33. Get to the Root Cause
- Ask Why 5 times
- The follow-up time with clients is inconsistent.Why?
- Client follow-up expectations vary.Why?
- The Account Managers set unrealistic expectations with the clients.Why?
- Account Managers are not trained on what expectations to set. Why?
- No training has been developed about setting expectations.Why?
- Each client has a unique service level agreement and that information has never been published.
34. Weeks Activities (Cont.)
- Wednesday
- Brainstorm Issues
- Capture Ideas/Solutions
- Evaluate Studies
- Reduce and Prioritize Ideas
- Affinitize Ideas/Solutions
- Multivoting
- Rank using Benefit/Effort Matrix
- Midweek Status Meeting
- Brainstorm Improvements
2. Multivoting 3.Rank by Benefit/ Effort/Cost 135 93 33 Rapid Transformation WC Process & Strategy 35. Mid-Kaizen Review
- Mid-Week Status Meeting:
- Purpose:
- Review team successes with management team
- Review proposed Kaizen activities for implementation
- Address any obstacles impacting implementation
- Gain agreement from Management to proceed
- Responsibility for Conducting the Meeting:Kaizen Team and Project Sponsor
- Frequency:End of third day
- Duration:30-45 Minutes
- Attendees:Kaizen Team, Project Sponsor ,Management
Rapid Transformation WC Process & Strategy 36. Weeks Activities (Cont.)
- Thursday-Friday
- Improve
- Build the new process
- DocumentAction Items
- Develop plan to pilot the new process
- Control
- Train in the new process
- Pilot the process
- Create/Update Company Procedures to document and sustain improvements
- Finalize metrics to measure new process
- Present results to Management Team, complete follow-up, monitor results over time
Rapid Transformation WC Process & Strategy 37. More on Process Mapping 38. Process Mapping Hints
- If your process handles or creates a work product or thing, then use this as part of your map indicating the information that is added, used, or changed.
- Header sheets are a good example
- Include samples of all information referenced as a part of the process .
- If you use a chart, graph, report, or other information as part of your task, include a physical copy on the map.
- This can not be done as separate parts pasted together.
- It is a group activity where each person teaches the others what their role is and what work they perform.
- It ALWAYS takes longer than you think
Rapid Transformation WC Process & Strategy 39. Example: Simple Process Map Rapid Transformation WC Process & Strategy 40. Example: Moderately Complex Process Map Rapid Transformation WC Process & Strategy 41. Example: Complex Process Map Rapid Transformation WC Process & Strategy 42. Example: Value Stream Map Rapid Transformation WC Process & Strategy 43. Why is it Important to Complete Projects Fast?
- Minimize the number of active projects
- Maximize the allocation of resources (intellectual capital) to the projects with the greatest return on investment
Black Belt with 8 Simultaneous Projects AndNo Prioritization :Black Belt focused on 2 Projects at a time ofHighest Priority :WC Process & Strategy 44. October 13, 2009 Three Project Examples 45.
- Problem
- It takes too long to load software on new servers for customers
- Services and licenses are not billed to the customer until the customer takes the server live (60-120 days)
Hardware Conversion Cycle Time Reduction
- Background
- Healthcare company upgrades/optimizes servers for customers to enable their products to run efficiently and effectively
- Results
- HW revenue billed in 15 days
- 80% of services revenue billed in 30 days
- A $125,000 one time revenue increase was achieved by accelerating the billing of inventoried hardware
- A $137,000 cost avoidance was achieved by reducing project hours and interest on inventory.
- 1 staff member was redeployed to fix a bottleneck in the Systems Integration Group
- Approach
- The DMAIC methodology was used in this Lean project to reduce cycle time and hours
- Process mapping identified non-value added work in the existing processes
- SMEs accelerated parallel tasks to the front of the process
- Finance compressed the revenue recognition to the front of the life cycle
46. University Hiring Process
- Background
- There is a mix of centralized and decentralized (automated and manual) hiring processes with no clear process ownership, resulting in different hiring processes for different types of employees
- Problem
- 4 manual hiring processes
- No clear process ownership
- 30% of the hiring forms have multiple defects
- Many workarounds and shadow systems
- Approach
- Process mapped all four systems
- Identified the sources of defects
- Removed reliance on Cat Card
- Accelerated other activities
- Automated new process in PeopleSoft
- Results
- Centralized HR process
- Virtual and in-person services
- Removed Cat Card as a requirement
- Accelerated hiring dramatically
- Reduced department workload
- Root Causes
- No forms tracking
- Lost/incomplete forms
- Process redundancies
- No hiring process training
- Needed services require Cat Card
Rapid Transformation WC Process & Strategy 47. Sales to Project Scheduling Process
- Problem
- Interfaces were not scheduled
- Staff had inconsistent workload
- Forecasting revenue was impossible
- Background
- The time required to schedule interfaceswas highly variable with a mean of 30 days from the receipt of the Purchase Order.This variability made it difficult to predict revenue on a monthly basis.
- Results
- A new scheduling process was developed, trained and validated.
- The sample mean of the time to schedule was reduced by 90% from 30 days to 3 days.
- Statistical control achieved, weekly monitoring confirms compliance to process SOPs.
- Approach
- A Kaizen was used to quickly understand the problem and the data.
- The DMAIC methodology was used to redesign the scheduling process.
- Process mapping identified non-value added work in the existing processes and highlighted areas for improvement.
- New tools were developed to accurately track call events
- New procedures were written and employees were trained in the new process.
Sample Mean reduced by 82% from 37 to 7. Rapid Transformation WC Process & Strategy 48. Where to Deploy Kaizen in the Hospital 49. Lean Deployment Locations and Success From ASQ, Quality Progress, August 2009 Rapid Transformation WC Process & Strategy 50. Six Sigma Deployment Locations and Success From ASQ, Quality Progress, August 2009 Rapid Transformation WC Process & Strategy 51. Greatest Challenges to Successful Deployment From ASQ, Quality Progress, August 2009 Why? Why? Rapid Transformation WC Process & Strategy 77 of 5,000 hospitals Confidence level 95% Confidence interval +-11% 52. To 10 Reasons for Less Than Successful Projects
- Project Sponsor not active
- Project not linked to corporate strategy
- Poorly defined Charter Team has to spend time to get the charter right
- Scope too large or scope creep
- Poor understanding of requirements
- Process
- Customer
- Business
- No organizational buy-in stakeholders not involved
- This is not a lean or six sigma project to begin with
- Team focus
- Not honoring time commitment
- Trying to do too much (boil the ocean)
- Jumping from Define to Improve
Rapid Transformation WC Process & Strategy 53. References
- Six Sigma
- Thomas Pyzdek (2004).TheSix Sigma Handbook.New York: McGraw-Hill
- Lean (Kaizen)
- Jeffrey K. Liker(2004).The Toyota Way , New York: McGraw-Hill
- James P. Womack and Daniel T. Jones,Lean Thinking , New York: McGraw-Hill
- Lean/Six Sigma
- George, M. L. (2002).Lean six sigma: Combining six sigma quality with lean speed . New York: McGraw-Hill
- George, M. Rowlands, D. & Kastle, B.(2003).What is lean six sigma? New York: McGraw-Hill.
Rapid Transformation WC Process & Strategy
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