Tools to Achieve Performance Excellence

Presenter Biography- Sathish Selvaraju

 Lean, Lean Six Sigma and Business Transformation  5+ years experience in applied process improvement methodologies  M.S. in Industrial and Systems Engineering  Research interests: – Organizational culture transformation – Lean and Six Sigma methodology – Leadership and Change Management – Supply chain management  1 Patent, 2 publications and invited industry talks  Member of IIE, SEMS and PEN  Office – Rochester, MN, Lives – Rochester, MN  Personal – Married with 1 kid (1 YR) Email: [email protected]

Lean–8 Step Problem Solving Methodology

Learning Objective

•

At the end of this module, the participants will be able to: • Describe the 8-Step Structured Problem Solving methodology • Define an effective Problem and Goal Statement • Integrate quality and process improvement techniques into the 8-step problem solving structure • Explain how the 8-Step methodology allows for Corrective and Preventive Actions During Problem Solving • Discuss the benefits of Root Cause Analysis • Describe techniques for Measuring and Sustaining your process improvements • Discuss how to apply the 8-Step Methodology on a business challenge or process improvement project

Benefits of Problem Solving

• • • • • •

Eliminate time lost in debate Identify weak points in the processes Discover systematic causes Explain why an incident occurred Gives factual representation of the incident Compare what actually should have happened happened against what

The 8-Step Structured Problem Solving process is based on the Plan-Do-Check-Act process

Act / Adjust Plan Check Do When to Use Plan–Do–Check–Act

 As a model for continuous improvement  When starting a new improvement project  When developing a new or improved design of a process, product or service  When defining a repetitive work process  When planning data collection and analysis in order to verify and prioritize problems or root causes  When implementing any change or transformation effort Reference: W. Edwards Deming’s Continuous Improvement Cycle (“The Deming Cycle”)

The number one reason why projects fail is ineffective and insufficient planning…

1. Ineffective and insufficient planning

2. Lack of customer focus and participation 3. Lack of Senior Management support 4. Badly defined requirements or objectives 5. Ineffective change control process 6. Lack of necessary resources 7. Poor monitoring and evaluation 8. Little or no risk analysis 9. Poorly trained project manager 10.Ineffective communications planning Source: Gallup Management Institute

8-Step Structured Problem Solving Process aligns to the PDCA process.

Plan Do Check Act

1. Describe the problem a) Identify the team b) Define problem statement c) Understand the process (and point of cause) d) Define Goal statement 2. Implement containment actions 3. Perform Cause/Effect analysis; select root causes to fix 4. Develop & select countermeasures 5. Implement countermeasures 6. Measure results (Evaluate) 7. Standardize the Process 8. Recognize the team

Act / Adjust Steps 7, 8 Plan Steps 1, 2, 3, 4 Check Step 6

Source: Gallup Management Institute

Do Step 5

A3 Report

1.

Understanding the Process a. Team and Sponsor: b. Problem Statement: c. Understanding the Process: 4, 5. Countermeasures, Project Plan

Countermeasure Who When Benefits

6. Measure Success

Internal Process Excellence Financial Excellence

d. Goal Statement: 2. Containment Actions

Customer Satisfaction People/Employee Empowerment

7. Standardize Process 3. Root Cause Analysis 8. Celebrate Success

Step 1: Define the problem has four sub-steps with Step 1a being Form the team

Plan Act Do Check

• • • • Teams Are limited in size, typically 4 to 8 people Identify a sponsor for the team Contains members from the areas where the problem or improvement opportunity exists Should have 80% of responsibility and authority to implement the required change

Sponsor Facilitator Team Leader Scribe Team member Coach

There are several key roles on an 8-Step team

                     Defines ‘high level’ team Links team mission to organizational objectives Addresses cross-organizational issues Sets expectations for project status readouts & updates Provides guidance through the problem solving process Guides the team discussions; stays objective and neutral Ensures everyone participates Requests reviews with Leader/Sponsor for effectiveness Adjusts direction when necessary Coaches & teaches sponsor, leader and members in the 8-Step process Creates an environment of trust, open communication and creative thinking Provides the team with a vision of the project objectives Coaches & helps develop team members; help resolve dysfunctional behavior Maintains all pertinent data Intervenes when necessary to aid the group in resolving issues Communicates progress to Management, Status Meetings Plans team recognition/rewards Captures meeting minutes Sends progress report as agreed; highlights any open actions Provides ideas, discussion, data, direct observation Have decision-making power    Problem solving process Subject Matter Expert (SME) Provides guidance on the 8 Step process Checks in with Team, Facilitator, Leader

After the team is formed, the project team begins Step 1b: Defining the Problem

Plan Act Check Do

A problem is an observable, measureable deviation from a known standard

• In business, a problem is a difference between the

actual

conditions of our

current

state and those conditions that are

required

or

desired

. • Problem statement needs relevant information to be effective!

•

Current

state,

Target

state and Business

Impact

• It has to be clear, concise and complete

An effective problem statement is key to solving the problem

An effective problem statement states both the current and the desired situation. An effective problem statement implies or states explicitly both: The

current

situation The

desired

situation The

impact

statement

Simple Example: Our order entry cycle time is 4 days per order, 1 day per order longer than is acceptable resulting in a 10% loss of market share

•

Current situation Cycle time = 4 days/order

•

Desired situation Cycle time = 3 days/order

•

Impact Statement 10% loss of market share

Quick Quiz???

Listed below are several examples of problem statements, some of which are

effective

some are

ineffective

. and

1. Loan application approval cycle time is taking 3 weeks, which is above the acceptable rate of 2 weeks and is resulting in a 15% applicant defection rate.

2. Clerks take ten days to check billing errors.

3. Our IT systems do not provide the required functions we need!!!

4. In October of 2012, we had 25 customer complaints compared to our standard of 10 per month and is causing a $10M drop in new orders

After the problem is defined, the project team begins Step 1c: Understand the process and identify the ‘point of cause’ Plan Act Do Check

1. Draw a process map to create a picture of the flow of information – – Capture what’s happening in the process Look for waste 2. Search for the “Point of Cause” (POC) – the area where the problem originates – – Ask 5 W’s and 1 H : Why, What, Where, When, Who, How much POC validates problem and narrows the scope

The 5Ws and 1H questions are Why?, What?, Who?, Where?, When?, and How often?

• To understand the process and drive to points of cause ask why, what, who, where, when, and how often. • • • Ask Why… – Why this problem?

– Why might it happen?

– Why did it occur?

– Why… Ask When… – When was it found?

– When did it happen?

– – When might it happen again?

When… Ask What… – What product?

– What equipment?

– What size? – What is it made of?

– What…    Ask

Where

… – Where did it come from?

– Where did we find it?

– Where might we find more?

– Where… Ask

Who

… – Who found it?

– Who made it?

– When checked it?

– Who… Ask

How

… – How many?

– How often?

– How big – How far? – How…

Pareto Chart TQM Tools for Identifying the Point of Cause Control Chart

Process Map

Trend Chart

Ishikawa Diagram

Check Sheet Scatter Plot

After the process is understood, the project team begins Step 1d: Develop goal statements Plan Act Check Do

Goals should be SMART

S – Specific M – Measurable A – Achievable R – Relevant T – Time-based

Here are guidelines for creating a goal statement

• • • • • Goal statements are written in the format +