Chapter 10 case articles

Process Improvement & Statistical ThinkingCarey Turner and Felix LlanosOctober 31, 2012

What we will cover…

(1) Case Study: Best Practices In Process Improvement(2) Case Study: The Role of Statistical Thinking in

Management(3) Questions

Case: Best Practices in Process Improvement

Process Improvement is “used to evaluate business processes ranging from employee satisfaction to customer desk support”

Surveyed Participant’s Problems

Recommendations(1) Identify the cause of the problem, and why there is a need for change• Impacts Customer Satisfaction• Employee Involvement• Financial Return • Potential Risks

(2) Choosing your team. • Cross-functional • Unbiased opinions are important, so employees from unrelated departments

are essential

(3) Answer the question “What is broken?” and “Why Should it be Improved?”• Process Mapping: tool used to visually display the overall process and identifies

gaps in the process• Set aggressive goals instead of incremental improvements• Move Fast: “Don’t let the project drift…It is better to reschedule or cancel the

project than to let it coast”

Recommendations (cont.)(4) Communicate, Communicate, CommunicateDevelop a communication plan that articulates the vision and status of the project, whether it be through regular meetings or a software, employees need to be informed about the progress and benefits from the project.

(5) Empower based on Action“Management will be more receptive to accepting change if you demonstrate a financial benefit for the company”

(6) Celebrate MilestonesBy celebrating and recognizing team achievements, it will build enthusiasm

(7) Build for the Future…It is important to ensure sufficient controls are in place to prevent the backslide of problems.

Case: The Role of Statistical Thinking in Management Statistical techniques such as statistical process control and experimental design has played an important role in the U.S business and industry.

Unfortunately, the effective integration of statistics into management science has been hampered due to plenty of issues.

Four Issues: • Understanding• Developing• Taking measures• Assessing

What Managers Should Know about Statistics• The word “statistics” invokes fear in many people

• Interconnected processes that are variables and reduction of variation provides improvement opportunities

• Short term: it can improve quality of decisions

• Long term: it can help turn managers into leaders

Key Components of Statistical Thinking

Statistical Thinking: a philosophy of learning and action based on viewing all work as a system of interconnected process, understanding that variation exists in all processes, and recognizing that understanding and reducing variation are keys to success

Key Components:• Process Thinking• Understanding Variation• Using Data whenever possible to guide actions

Key Aspects of Process Thinking:• All work is a series of interconnected processes• The Majority of the problems are in the process• Managers must focus on fixing processes, not blaming people

Key Aspects of Understanding Variation• Reducing the number of suppliers reduces variation in the quality of incoming materials • Over-controlling processes increases variation

Learning Methods

Learning Methods are important when using data whenever possible to guide actions• Learning Workshops

Each manager should report on five ket items at these workshops• Uses of Statistical Thinking• What worked?• What should be done differently?• Key lessons from the experience• Concerns and questions

Will help them plan future “learn-use-evaluate” cycle

Levels of Activity

Three fundamental levels of activity:• Strategic Level• Managerial Level• Operational Level

Statistical Thinking Reaps Many Benefits

Overall, managers will benefit greatly by understanding statistical thinking and the principles that are necessary to capitalize on it advantages.

Statistical Thinking creates mind-sets such as:• Providing leadership• Delighting customers• Promoting team-work• Working towards continuous improvement• Creating innovative channels of communication

Questions?

References• Dolan, T. (2003). Process improvement: Best practices in

process improvement. Retrieved from www.asq.org• Hare, L., Hoerl, R., Hromi, J., & Snee, R. (1995). The role of

statistical thinking in management. Retrieved from www.asqc.org

• Evans , J. R., & Lindsay, W. M. (2011). Managing for quality and performance excellence. (8th ed.). Thomas South-Western.

• Harvard Business Review. (2010). Improving business processes. (p. 12). Harvard Business School Publishing