Transcript Service Quality

The DMAIC Process Detail
The Define Phase
© Max Zornada (2005)
Slide 1
The Define Stage
Define
The Voice
of the
Business
The Voice
of the
Customer
Business Case
and Project
Team Charter
Define the
Customer and
the Customer
Requirements
© Max Zornada (2005)
The Voice
of the
Process
Define and map
the process
Slide 2
The Define Phase
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Identify and confirm the improvement opportunity;
Develop a Project Team Charter
Build an Effective Team;
Define the Customer and Customer Requirement;
Define and Map the Process.
© Max Zornada (2005)
Slide 3
DMAIC Process Storyboard
DEFINE
TEAM FORMATION
Objective: Select problem/
opportunity theme, select team
members
MEASURE
Objective: Identify and implement the measures required to
establish baseline performance and quantify the opportunity.
Key Steps:Cause and Effect Diagram
Run chart or
Objective: Define the Problem/Opportunity,
Customers, Customer Requirements, and Process.
Team charter
Key Steps:Flowchart
•Determine what to measure
•Understand the measures
•Understand Variation
•Assess measurement system
•Assess process performance
•Develop business case
•Develop project team charter
•Understand Customer Requirements
•Understand the Process.
Output: Problem/Opportunity
selected, Team members selected.
Output: Team Project Charter, Work Plan, Measurable Output: A quantified picture of the current process
Customer Requirements, Process Map/Process Analysis performance, problem impact. The process sigma rating.
ANALYSE
IMPROVE - I : Generate Potential Solutions
Objective: Identify and verify the root cause(s) of the problem.
Key Steps:•Analyse data
•Analyse process
•Determine potential root causes
•Hypothesis Testing
•Verify root causes
Cause and Effect Diagram
(Fishbone)
Checksheet
Pareto Chart
Output: Root cause(s) identified.
IMPROVE - II: Implement and Check
Objective: Implement the preferred solution. Confirm that the
problem and its root cause(s) have been reduced or eliminated.
Key steps:•Implement preferred
After
solution
•Verify effectiveness
•Apply comparative
methods if necessary.
Output: Confirmation that the best solution to eliminate the
problem & its root cause(s) has been implemented.
Before
control chart
Objective: Determine possible solutions that will address the identified root
cause(s) of the problem.
Key Steps:Potential Solutions
Action Plan
•Generate potential solutions
•Assess potential solutions
•Select preferred solution
•Test/Pilot preferred solution
•Develop implementation plan
Output: Preferred solution or countermeasures
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
CONTROL - Standardise
Objective: Prevent the problem and its root
cause from recurring.
Flowchart
Key steps:Standard
procedure
•Standardise the solution
(standards & procedures)
•Document project
•Implement scorecard
•Implement controls
Output: Solution embedded and “routinised” in
relevant process, procedures and standards.
© Max Zornada (2005)
FUTURE PLANS
Objectives: Review team effectiveness,
plan to address remaining issues and
institutionalise the learning.
D
C
Key Steps:Define,
I
M
•Review remaining project
opportunities
•Review other applications
•Review learnings
Measure,
Analyse,
Improve,
Control
A
Output: Recommendations for future projects
and improvements to team processes. Project
documentation and learnings “pack”
Slide 4
Team Formation
© Max Zornada (2005)
Slide 5
Team – A Definition
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Common people, working together to attain
uncommon results;
A team is a small number of people with
complementary skills, who are committed to a
common purpose, performance goals, and approach
for which they hold themselves mutually
accountable.
Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams,
1995
© Max Zornada (2005)
Slide 6
The Components of Teamwork
Teamwork
How we do it
What we do
Process
Content
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Technical inputs required to
progress the problem
solving process through to a
solution. eg.
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Technical skills;
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Technical knowledge;
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Knowledge of the
process and of the
business;
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Data and information;
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Other specific inputs.
Task
How to do it
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The DMIAC process
Six Sigma Process
Improvement and Problem
solving tools and techniques,
Statistical techniques.
© Max Zornada (2005)
Relationship
How we feel
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Facilitating group
processes;
Making the team fun to
be a part of;
Recognising/appreciating
contributions
Slide 7
Characteristics of an Effective Team
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The atmosphere tends to be informal, comfortable, relaxed. There are no obvious
tensions;
There is a lot of discussion in which virtually everyone participates, but it remains
pertinent to the task of the group;
The task or objective of the group is well understood and accepted by the members;
The members listen to each other;
There is disagreement;
Most decisions are reached by a kind of consensus, in which it is clear that
everybody is in general agreement and willing to go along;
Criticism is frequent, frank and relatively comfortable;
People are free in expressing their feelings as well as their ideas, both on the
problem and on the group's operation;
When action is taken, clear assignments are made and accepted;
The team leader does not dominate it, nor does the team defer unduly to him/her;
The team is self-conscious about its own operations.
© Max Zornada (2005)
Slide 8
Stages of Team Development
Performance
Performing
Adjourning
Norming
Forming
Storming
Time
© Max Zornada (2005)
Slide 9
Stages of Team Development
Forming
Performing
Adjourning
Cooperating and
getting involved
This is as good
as it gets!
Job done!
Develop decision
making process;
Be prepared to offer
ideas & suggestions;
Utilise all resources
to support team
effort.
Actively contribute
ideas;
Achieve desired
objectives;
Establish
milestones for
success.
Evaluate efforts;
Tie up loose ends,
discuss future plans;
Recognise and
reward team efforts.
Support the team's Feel a sense of
satisfaction;
decisions in and
outside the team;
Develop personal &
professional
Give and receive
feedback comfortably;relationships;
Respect individual Find ways to
sustain momentum
differences.
and enthusiasm.
Express thanks and
appreciation;
Discuss feelings,
many may feel sad,
depressed;
Create a sense of
closure, reduce
dependency on team
Norming
Task
We do not
agree
Clarify the mission/
purpose of the team;
Establish specific
objectives and tasks;
Identify roles and
responsibilities of
team members.
Reestablish roles
&/or ground rules;
Acknowledge &
confront conflict by
focusing on the facts;
Clarify & understand
the team's purpose
Relationship
Who are we?
Getting to know
each other?
Storming
Get acquainted with
one another;
Establish a set of
ground rules;
Recognising that
people are checking
each other out.
Actively listen to all
options;
Respond to feelings
that emerge or are
hidden;
Create focus to direct
team efforts.
© Max Zornada (2005)
Slide 10
Launching the Team

Form the team;
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Establish ground rules;
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Develop a team
mission/purpose;

Develop a shared team
vision;

Develop specific team
goals, objectives and
performance targets.
Team/ Project
Charter
From Katzenback, Jon R. and Smith,
Douglas K. The Wisdom of Teams, 1995
© Max Zornada (2005)
Slide 11
Skills and Knowledge Required by the Team
Team Leadership
Skills
Group process
facilitation and
interpersonal skills
Six Sigma Process
Improvement/
Problem Solving Skills
Technical job skills
and knowledge of the
business.
© Max Zornada (2005)
Slide 12
Successful Team Functioning
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Clarity in team goals;
In Six Sigma,
provided by the
A plan to work to;
project/ team charter
Clearly defined roles;
Clear communication;
Beneficial team behaviours;
Well-defined decision procedures;
Balanced participation;
Established group rules;
Awareness of the group process;
Use of the scientific approach (in Six Sigma DMAIC).
From Peter Scholtes: The Team Handbook.
© Max Zornada (2005)
Slide 13
Where teams and team based efforts have
failed, they typically:
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Lacked management support and resources;
Lacked the training or the disciplines to apply "team basics"
to their work i.e. no formal process like PDCA or DMAIC;
Worked on projects that were considered unimportant and
not connected to core business;
Were not considered or integrated into long-term
organisational plans;
Were led by leaders that lacked leadership "know how"
and/or had minimal training as team leaders.
Adapted from Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams, 1995
© Max Zornada (2005)
Slide 14
Problem/Opportunity Selection
© Max Zornada (2005)
Slide 15
Six Sigma Project Selection
Establishing the Business Case
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The business case establishes the importance of the project
to the business in terms of meeting business objectives;
Components of a business case:
 The output unit for the customer of the process, usually
the external customer;
 The primary business measure of the output unit;
 The baseline of the primary business measure;
 The gap in the baseline performance with the business
objective.
The purpose is to establish the need in terms of business
objectives - usually expressed in financial terms.
© Max Zornada (2005)
Slide 16
Example: Business Case SEFP
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Output unit for the External Customer
 Boxes food product delivered to their customers;
Primary Business Measure of the output unit:
 Unit cost of Packaging in $/Box
Baseline of the primary business measure:
 $23.94 per box
Business Objective:
 $22.50 per box
Gap = $1.44 per box
© Max Zornada (2005)
Slide 17
Develop a Problem/Opportunity Theme
Statement
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The problem/opportunity theme statement provides
the initial definition of the problem/opportunity area
to be pursued;
It is on the basis of the problem/opportunity theme
statement that management decide to allocate
resources (the problem solving team) and time to
develop a project team charter and determine
whether the problem/opportunity is worth pursuing.
© Max Zornada (2005)
Slide 18
Problem/Opportunity Theme Statement
Project Title:
What is the area of concern? What first brought this problem or opportunity to the
attention of your business?
What impact has this problem already had? What evidence is there that it is a problem
worthy of attention?
What will happen if the business does not address this problem?
Summary problem statement (summarise the above in a concise statement).
© Max Zornada (2005)
Slide 19
Problem Statements
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Problem Statements should ideally describe the following: What is wrong?
 Where is the problem appearing?
 How big is the problem? (Quantify)
 What is the impact of the problem on the business.
What problem statement should not do: State and opinion of what is wrong;
 Describe the cause of the problem;
 Assignment blame or responsibility for the problem;
 Describe a solution;
 Combine several problems into one.
© Max Zornada (2005)
Slide 20
Identifying the problem
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Developing a problem statement:
 What is the deviation - should vs actual?
 What is the symptom?
Be specific in what it is and what it is not;
 What is it? vs. what is it not?
 Where is it? vs. where could it also be but is not?
 When does it occur vs. when does it not occur?
 How many?
 How big?
© Max Zornada (2005)
Slide 21
Problems as deviations
What should be happening
What is happening
= What should be happening
No Problem!
What is happening different to
What should be happening
= Problem!
What is happening
© Max Zornada (2005)
Slide 22
Problems with Problem Statements
Disguised Solutions!
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We’re experiencing delays in putting sales data in an
understandable form.
We have to purchase or otherwise obtain the necessary additional
equipment.
Turnover in the department is 20% higher than company average.
Marketing reported a sudden increase in customer complaints
about our product.
We need to redesign our main product to make it more modern?
We must identify the specific training required to correct this
performance.
Error rates in the past two months are unacceptably high.
We need to stream line the ordering process.
© Max Zornada (2005)
Slide 23
DMAIC Process Storyboard
DEFINE
TEAM FORMATION
Objective: Select problem/
opportunity theme, select team
members
MEASURE
Objective: Identify and implement the measures required to
establish baseline performance and quantify the opportunity.
Key Steps:Cause and Effect Diagram
Run chart or
Objective: Define the Problem/Opportunity,
Customers, Customer Requirements, and Process.
Team charter
Key Steps:Flowchart
•Determine what to measure
•Understand the measures
•Understand Variation
•Assess measurement system
•Assess process performance
•Develop business case
•Develop project team charter
•Understand Customer Requirements
•Understand the Process.
Output: Problem/Opportunity
selected, Team members selected.
Output: Team Project Charter, Work Plan, Measurable Output: A quantified picture of the current process
Customer Requirements, Process Map/Process Analysis performance, problem impact. The process sigma rating.
ANALYSE
IMPROVE - I : Generate Potential Solutions
Objective: Identify and verify the root cause(s) of the problem.
Key Steps:•Analyse data
•Analyse process
•Determine potential root causes
•Hypothesis Testing
•Verify root causes
Cause and Effect Diagram
(Fishbone)
Checksheet
Pareto Chart
Output: Root cause(s) identified.
IMPROVE - II: Implement and Check
Objective: Implement the preferred solution. Confirm that the
problem and its root cause(s) have been reduced or eliminated.
Key steps:•Implement preferred
After
solution
•Verify effectiveness
•Apply comparative
methods if necessary.
Output: Confirmation that the best solution to eliminate the
problem & its root cause(s) has been implemented.
Before
control chart
Objective: Determine possible solutions that will address the identified root
cause(s) of the problem.
Key Steps:Potential Solutions
Action Plan
•Generate potential solutions
•Assess potential solutions
•Select preferred solution
•Test/Pilot preferred solution
•Develop implementation plan
Output: Preferred solution or countermeasures
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
CONTROL - Standardise
Objective: Prevent the problem and its root
cause from recurring.
Flowchart
Key steps:Standard
procedure
•Standardise the solution
(standards & procedures)
•Document project
•Implement scorecard
•Implement controls
Output: Solution embedded and “routinised” in
relevant process, procedures and standards.
© Max Zornada (2005)
FUTURE PLANS
Objectives: Review team effectiveness,
plan to address remaining issues and
institutionalise the learning.
D
C
Key Steps:Define,
I
M
•Review remaining project
opportunities
•Review other applications
•Review learnings
Measure,
Analyse,
Improve,
Control
A
Output: Recommendations for future projects
and improvements to team processes. Project
documentation and learnings “pack”
Slide 24
The Define Stage


During the Define Stage, we:
 Define our problem or opportunity and improvement
objectives;
 Define the customers and their requirements - the
Critical-to-Quality issues (CTQ);
 Define the process that will be affected;
 Develop a plan for completing the project;
Key outputs of the Define Stage:
 Team Project Charter and Work Plan
 Measurable Customer Requirements - Customer
Requirements Statement
 Process Map/Process Analysis.
© Max Zornada (2005)
Slide 25
Six Sigma Project Team Charter
Project Title
Cost of Waste Reduction Project
Start Date
Box Packaging
Jane Verde
John Briggs
1-April
Problem/Opportunity
Definition
What is the Problem to be solved or the
opportunity this project will exploit.
The cost of waste in box packaging is excessive and causes box
packaging operations to run at a loss. The cost of waste needs to
be reduced to achieve target cost levels.
Objective
Improvement target, impact on Sigma,
COQ/COPQ and Customer Satisfaction
Reduce net spoilage rate by 50% from 6% to 3%. Estimated
Sigma level improvement from 3 to 3.4
Business Case
What improvement in business performance
is expected. $ impact and by when.
Reduction in cost of waste of $253,000 p.a. from a baseline of
$506,000. Will result in target processing cost/box being
achieved.
Team Members
Who are the team members and key experts
to be consulted.
Jane Verde (Team Leader), Paul Black, Rachel Cintura, Roland
Thompson, Sdravo Krysevic, Giovanni Nero (Black Belt)
Project Scope
Which part of the process will be investigated
Box packaging from start of box filling through to placement
of product on buyer shelves.
Customer Benefit
Who are the final customers. What benefits
will they see and what are their most critical
requirements.
The packaging customers for whom we package and deliver
product to buyers such as supermarkets and wholesalers.
Benefits: competitive costs and more accurate schedule
compliance.
Process
Green Belt
Champion
Schedule
Expected Financial Impact
Telephone Number
Organization/Function
Target Completion Date
Define completion
Measure completion
Analyse completion
Improve completion
Control completion
Project Completion
© Max Zornada (2005)
What are key milestone dates for completion
of each stage.
$253,000
634-5789
Packaging Operations
1- October
20-April
1-June
1-August
1-September
15-September
1-October
Slide 26
Key Elements of the Project Team Charter
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Problem/Opportunity Definition – see previous
problem/opportunity theme statement;
Objective – quantified objective to be achieved with a specified
timeframe – usually expressed in physical units;
Business Case – business impact expected from the project,
usually expressed in financial terms;
Team Members – who will be on the team;
Project Scope – what is the project about, what is it not about.
Provides focus.
Customer Benefits – what impact will it have on the customer.
Work Plan/Schedule with Key Milestones defined e.g.
approximate time frame for each stage of the DMAIC Process
© Max Zornada (2005)
Slide 27
Setting Objectives
The SMART Principle
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S for Specific - Objectives have to be specific and describe exactly what
you want to achieve. Need to be able to answer the question “How will I
know I have achieved my objective?”
M for Measurable - if you cannot measure, you cannot manage.
Objectives must be expressed in quantified (numbers) terms.
A for Achievable - Objectives need to challenge enough to provide
incentive, but not be unattainable.
R for Relevant - Objectives must produce something of benefit. Phrase
the objectives in results term - what you want to achieve, not how you
will achieve it.
T for Time Targeted - Objective must always specific a time frame by
when they need to be achieved. If you do not know when you want to
achieve you objectives by, you will always be on track.
© Max Zornada (2005)
Slide 28
Breaking Down “Big” Objectives
Example: Transaction Processing Operation
Reduce costs/transaction
by 10%
Ask why?
to go up
Ask how?
to go
down
Improve Labour
Productivity
Improve allocation
of work to people
Reduce Rework
Simplify work
processes
Develop daily
schedules for allocating
work to people
© Max Zornada (2005)
Slide 29
Gantt Chart Working Plan Development
Layout project tasks on planning proforma
Weeks
Task
1
2
3
4 5 6
7
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc.
© Max Zornada (2005)
Slide 30
Gantt Chart Working Plan Development
Estimate durations and time phase to indicate work sequence
Weeks
Task
1
2
3
4 5 6
7
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc. …
Key Milestones
© Max Zornada (2005)
Slide 31
Gantt Chart Working Plan Development
Allocate People to Tasks
Weeks
Task
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc. …
1
2
3
4 5 6
7
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
2
2
1
1
1
1
1
1
1
1
2
2
2 2 2 2 2 2 2 3 3 2 2 2
© Max Zornada (2005)
Slide 32
Example:Project Gantt Chart & Resource Histogram on Excel
Schedule bars are drawn using the
cell pattern function
Float drawn using the cell borders
function.
© Max Zornada (2005)
Slide 33
Gantt Chart Working Plan Implementation
Updating Progress
Weeks
Task
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc. …
1
2
3
4 5 6
7
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
2
2
1
1
1
1
1
1
1
1
2
2
2 2 2 2 2 2 2 3 3 2 2 2
© Max Zornada (2005)
Slide 34
Define the Customer and the Customer
Requirements
© Max Zornada (2005)
Slide 35
Who are our customers ?
A customer is anyone who comes into contact with our work
External
Customer
Supplier
Internal Customers
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External Customers
 Those outside the organisation who use, buy or are affected by
our work.
Internal Customers
 Those within the organisation, who will be affected by our work.
The next person in the process, those who may need to add to,
respond to or adapt to our work.
© Max Zornada (2005)
Slide 36
What is quality ?
Toyota or Rolls ?
Which is higher quality?
Both the Rolls Royce and the
Toyota are consistently suited to
their customers' purposes.
© Max Zornada (2005)
Slide 37
Customer Segmentation
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Different customers have different requirements;
Different customers have different priorities;
What Drives Customer Satisfaction
Perceived
Value
+
Perceived
Quality
© Max Zornada (2005)
=
Customer
Satisfaction
Slide 38
How Customers See Quality
Quality = Perceptions - Expectations
Customer
Perceptions
Expectations
Perceived Quality
Process
Content
What the customer gets, the
actual service or product. The
"technical dimension“ or output.
How they get it, the process by
which the service or product is
delivered. The service or
“experience”.
© Max Zornada (2005)
Slide 39
Parasuraman, Zeithaml and Berry (1988)
Dimensions of Quality
Content
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Performance;
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Features;
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Reliability;
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Conformance;
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Durability;
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Serviceability;

Aesthetics.
Process
 Tangibles;
 Reliability;
 Responsiveness;
 Competence;
 Courtesy;
 Credibility/Trustworthiness;
 Security;
 Access;
 Communication;
 Understanding the
Customer.
© Max Zornada (2005)
Slide 40
Content – Detailed Definitions
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Performance. Does the product or service's primary operating characteristic
measure up to the customer's expectation. eg. Is service prompt in a fast food
restaurant, does the TV have good picture and sound, does the high-interest account
give high interest.
Features. Do the characteristics that supplement the basic function measure up to
the customer's expectations. eg. Extra "bells and whistles", ability to customise your
purchase.
Reliability. Once you've bought it will it work for you.
Conformance. Does the design conform to established standards and does your
purchase conform to the design.
Durability. Will it work for you on an on-going basis.
Serviceability. Speed, courtesy, competence, ease of repair or ease with which
problems are addressed.
Aesthetics. Look, feel, sound, taste, smell. Personal judgement a significant factor.
© Max Zornada (2005)
Slide 41
Process – Detailed Definitions
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Tangibles. The physical evidence of service. eg. facilities, appearance of personnel,
tools/equipment used to provide the service, physical representations, other customers in the
service facility.
Reliability. Consistency of performance, the organisation honours its promise and gets it right
first time. eg. accuracy of billing, record kept correctly, no time delays.
Responsiveness. Willingness and readiness of employees to provide service. Promptness,
timely follow-up, calling back quickly.
Competence. Skills and knowledge required to perform the service for contact and support
personnel.
Courtesy. Involves politeness, respect, consideration and friendliness of contact personnel.
Credibility. Trustworthiness, believability, honesty, having the customers best interest at heart.
Contributing to credibility are company name, reputation, personal characteristics of contact
personnel, "degree of hard sell".
Security. Freedom from physical danger, financial risk, or doubt about confidentiality.
Access. Service is easily accessible, waiting time not excessive, convenient hours of operation,
convenient locations.
Communication. Keeping the customer informed and listening to them. eg. explaining the
service, costs, trade-offs, how problems will be handled.
Understanding the Customer. Understanding the customer's needs. eg. learning the customer's
specific requirements, providing individualised attention, recognising the regular customer.
© Max Zornada (2005)
Slide 42
How Customers form Expectations
Controllable Expectation Creators
External Communications
Marketing Strategies
Past
Experience
Quality
Dimensions
Process &
Content
Expectations
of product or service
Competitors
Personal Needs
and Preferences
Word of
Mouth
Un-controllable Expectation Creators
© Max Zornada (2005)
Slide 43
Managing the Customer Interface
Delighted
Perception
Service
Delivery
Customer
Percep
-tions
Satisfied
Expect
-ations
Quality
Internal Processes
Customer
interface
Disatisfaction
© Max Zornada (2005)
Slide 44
Focus on the Process




Customers often assume content;
Provided the content is in the right “ball park”
 Customers often cannot tell the difference
between good and bad content;
Most of what they judge is process;
Process is important!
© Max Zornada (2005)
Slide 45
The RATER Framework
A framework for understanding customer process
The RATER framework consolidates the dimensions of service
or customer process quality into 5 key themes.
 Reliability - ability to perform promised service, dependably
and accurately;
 Assurance - Knowledge and courtesy of employees and their
ability to inspire trust and confidence;
 Tangibles - physical facilities, appearance of personnel etc.;
 Empathy - Providing personal understanding and customer
support;
 Responsiveness - Willingness to help and provide prompt
service.
Parasuraman, Zeithaml and Berry (1988)
© Max Zornada (2005)
Slide 46
The RATER Framework



The RATER framework provides us with a tool for
understanding and specifying the “service” or
“process” dimension of the customer requirements;
Used for determining what we need to establish
service standards for and what these standards
should be in managing interactions with customers;
Can be used for designing the “operational
infrastructure” required to deliver customer service
to the required service standards.
 That is:- Processes, Organisation and Technology
© Max Zornada (2005)
Slide 47
Applying the RATER Framework
Example: The Room Service Process
Guest Calls Room Service, Service Cycle.
Quality Dimension
Reliability
Assurance
Tangibles
Empathy
Responsiveness
Quality Service Standards – Customer Requirements
Phone answered within five rings, 24 hours a day
Phone operator has thorough knowledge of menu and
prices
There is a menu in the room giving full description of
what is available. Specific delivery time stated
Customer name used. Prescribed guest treatment
procedure carried out with sincerity. Order taken in a
courteous manner.
Effort to comply with any special requests. Prompt
service.
© Max Zornada (2005)
Slide 48
Using RATER to Design Service
Processes
Quality
Dimension
What does it mean?
How do we do it?
Quality Service
Standards
Supporting Infrastructure Processes/People/Technology
Reliability
Assurance
Tangibles
Empathy
Responsiveness
© Max Zornada (2005)
Slide 49
Managing Perceptions of Quality
Think of a customer contact point associated with a service you currently
provide to a customer(s), how are he following dimensions managed?
What could you do?
Service : .
Quality Dimension
Quality Service Standards – Customer Requirements
Reliability
Assurance
Tangibles
Empathy
Responsiveness
© Max Zornada (2005)
Slide 50
Moments of Truth
A moment of truth is any episode in which a
customer comes into contact with any aspect of
the organisation, however remote, and gets an
impression of the quality of its service.
When the moments of truth go unmanaged,
service quality regresses to mediocrity and the
customer experience of the service is poor.
© Max Zornada (2005)
Slide 51
Typical Moments of Truth






Customer walks in the door;
Customer telephones us;
Customer receives a bill;
Customer makes a special request;
Customer discovers a slip-up;
etc., etc.;
© Max Zornada (2005)
Slide 52
Identifying the “Moments of Truth”



Review service critical incident reports to identify
the types of things that go wrong;
Review compensation/warranty claims etc. to see
what the cause was;
Understand the service cycle through "service blue
printing" (process mapping);
 Anticipate the likely moments of truth;
© Max Zornada (2005)
Slide 53
A Service System Map
Understanding the Customer’s View
Customer
Front Line
Manager
Valuation
Assessm't
Document'n
© Max Zornada (2005)
Stamp
Settlem't
Broker
Slide 54
The Service Cycle
Customer
Front Line
Manager
Valuation
Assessm't
Document'n
© Max Zornada (2005)
Stamp
Settlem't
Broker
Slide 55
Identifying the Critical Moments of Truth
Customer
Front Line
Manager
Valuation
Assessm't
Document'n
© Max Zornada (2005)
Stamp
Settlem't
Broker
Slide 56
Listening to the Voice of the Customer
© Max Zornada (2005)
Slide 57
Listening to The Voice of the Customer
Tools and Techniques
Methods for obtaining feedback on customer expectations,
perceptions and satisfaction.











Focus groups;
Face-to-face interviews;
Periodic/regular formal surveys/questionnaires;
Customer comment and complaint analysis;
Follow-up telephone calls;
Critical incident reports produced by front-line staff;
Visits to major customers by management and employees;
Toll-free telephone number;
Follow-up customers who have discontinued dealing with us;
Involve customers formally in product development;
Mystery shopping.
© Max Zornada (2005)
Slide 58
Customer Surveys
© Max Zornada (2005)
Slide 59
Adapted Questionnaires





Adapted questionnaires aim to measure those dimensions
relevant to a specific organisation and/or important to a
specific customer group(s);
They can be designed to have a small number of questions
(eg. 10), results in an increased rate of return;
Can be flexible in mode of application. eg. Customer can fill
out, staff can use in face-to-face or telephone interview;
Can be completed by staff and management. Comparison
with customer returns can identify improvement priorities,
"blind spots" and hidden strengths;
Questions need to test the perceptions/expectation “gap”.
© Max Zornada (2005)
Slide 60
Using Adapted Questionnaires



Questionnaires should also allow customers to give
free format feedback, and not restrict them to prestructured questions;
Unstructured customer feedback can provide the
spark for service and product extensions, crossselling and innovation;
Use as an ongoing monitoring tool, job-by-job,
weekly, monthly - not the “big” annual customer
survey.
© Max Zornada (2005)
Slide 61
Adapted Questionnaires - Scoring System
No need for paired expectation-perception questions;
 Use - to + scale corresponding to expectations not
met/met;
 Reduces the number of questions required to extract
the same information.

Expectations not met
Unacceptable quality
Expectations met
Expectations exceeded
Satisfactory quality
Ideal quality
© Max Zornada (2005)
-2 "Much less than expected"
-1 "Very disappointed"
0 "As I expected"
1 "Satisfied"
2 "Much more than I expected" Very
impressed"
Slide 62
Example: Hotel Customer Satisfaction
Questionnaire
Assume a typical 10 question questionnaire
© Max Zornada (2005)
Slide 63
Assessing Questionnaire Results
Hotel Example
Item
1
2
3
4
5
6
7
8
9
10
Guest Ave.
0.9
1.0
0.5
0.3
0.8
0.4
1.2
0.9
0.8
1.1
Staff Ave.
Gap
Action
1.2
1.3
0.9
1.9
1.3
0.8
0.6
1.0
1.2
1.1
-0.3
-0.3
-0.4
-1.6
-0.5
-0.4
+0.6
-0.1
-0.4
0.0
M
M
C
!
C
C
D
M
M
M
! : immediate corrective action required, C : check out for any obvious quick fix
M : maintain standard, D : apparently delighting, find out why
© Max Zornada (2005)
Slide 64
Customer Monitoring: A Strategy
Overview
Major Customer
Survey
“Not very often”
Identify
Customer
Priorities
Adapted
Questionnaires
Weekly, by job, etc.
Weekly Customer
Performance Monitors
Redo Major Survey
when questions no
longer reflect
customer priorities.
Monitor Questionnaires for relevance, general
feedback and innovation opportunities.
© Max Zornada (2005)
Slide 65
Customer Satisfaction and Loyalty
© Max Zornada (2005)
Slide 66
Impact of Customer Satisfaction on
Loyalty
Would
Repurchase
Rating Category
Would
Recommend
Completely Satisfied
90%
96%
Somewhat Satisfied
56%
71%
Neither Satisfied Nor Dissatisfied
12%
19%
Somewhat Dissatisfied
3%
0%
Very Dissatisfied
7%
7%
Using a 5 point customer satisfaction rating. From Heil, G.,
Service Quality Improvement Seminar, Sydney (1992)
© Max Zornada (2005)
Slide 67
Managing Customer Perceptions of Quality





Identify the elements of customer expectations you can control;
Expectation levels should be set high enough to attract
business, but accurately enough to reflect the reality of what is
likely to be delivered 99.9% of the time;
Focus on improving areas where expectations are low and
importance to the customer is high;
 Strategic gaps in the market that provide viable footholds.
Customer expectations will increase with time - so should your
ability to meet them. Plan for it!;
Surprise is one way to exceed customer expectations. Promise
what to expect, deliver more, sometimes surprise customers.
 E.g. “going the extra mile when it matters.
© Max Zornada (2005)
Slide 68
Kano Analysis
High Customer Satisfaction
Delighters
Breakthrough Customer
Needs/Features
Satisfiers
Core Competitive
Requirements
Not Done or
Done Poorly
Done Very Well
Dis-satisfiers
Basic Requirements
Low Customer Satisfaction
© Max Zornada (2005)
Slide 69
Kano Analysis
High Customer Satisfaction
Delighters
Breakthrough Customer Needs/Features
Not Done of
Done Poorly
Satisfiers
Core Competitive Requirements
Dis-satisfiers
Basic Requirements
Done Very Well
Low Customer
Satisfaction
© Max Zornada (2005)
Slide 70
Customer Value
Defining the Customer Requirements and
Critical-to-Quality Requirements
Process/
Service/
Experience
RATER
Analysis
Optional
KANO
Analysis
Customer
Requirements
Statement & Ranking
Content
Critical Customer
Requirements
CTQ Requirements
Validate with Customers
Interviews, focus groups, questionnaires, complaints & feedback analysis
© Max Zornada (2005)
Slide 71
Simple Customer Requirements Statement
Customers need to have their food products
packaged at a competitive price ($23.50) and
delivered to their customers as per their
schedule and order quantity manifest (100%
compliance).
© Max Zornada (2005)
Slide 72
Example: SEFP’s Customer Requirements Statement
Customer:
Outputs:
Customer Requirements
Measure
Contract Box Packaging Customers
Boxed product delivered to buyers according
to customer manifest.
Target
Importance Customer
to Customer Satisfaction
Priority
Rating
(Importance x
Satisfaction)
1. Cost competitiveness
Processing
cost $/Box
$22.50
3
3*
9*
2.1. On-time delivery/right day/right time. % On time
97%
2
1
2
2.2. Right product delivered
95%
2
1
2
99%
3
2
6
99%
3
3
9
2. Schedule compliance
Returns: wrong
product %
Returns: offspec product %
2.4. Right amount/ amount as per manifest. Order
shortfall %
2.3. Product quality to specification
What is this customer’s major complaint? What issue would they want us to work on?
*Note: customer has not complained about price because we are absorbing difference between market price and
actual costs. If customer were charged actual cost we would lose the business.
In addition to price, getting the delivery amount right is a Critical-to-Quality issue for the customer.
Ranking Scheme
Importance to customer:
Customer Satisfaction:
1 = Nice to Have,
1 = Very Satisfied,
2 = Important,
2 = OK. Could be better,
© Max Zornada (2005)
3 = Critical, Must Have
3 = Unhappy, Must be improved
Slide 73
Define the Process
© Max Zornada (2005)
Slide 74
Define the Process


What process? Identifying the process;
Tools for documenting and analysing our processes:
 SIPOC
 Process Blocking
 Top-Down Process Map
 Process Mapping
 Process Deployment Chart
 Process Flow Analysis
© Max Zornada (2005)
Slide 75
Identifying Processes

Ask the following questions:
 What are we doing for a customer?
 What is the first step in the chain of events that
lead to meeting the customer need ?
 What are all the steps in between including the
decisions and choices that need to be made?
 What order or sequence do the steps flow in from
start to finish ?
© Max Zornada (2005)
Slide 76
Identifying the Customer and what it is
we do for them ……
Customer
Outcome
Satisfaction
© Max Zornada (2005)
Slide 77
Identifying what it is that tells us we have to do
this for them … the “triggering event” which
kicks off an operation of the process.
Customer
Outcome
Triggering
Event
Satisfaction
© Max Zornada (2005)
Slide 78
Identify all of the tasks, operations, activities,
judgements, decisions, inspections and checks which
must be done along the way in order to deliver the
required outcome to the customer.
Customer
Outcome
Triggering
Event
Satisfaction
Task or activity required to progress the process
Decision, judgement, inspection, check point or choice.
Yes/No, OK/Not OK outcome.
© Max Zornada (2005)
Slide 79
Link them all up to to show the order in
which the process flows.
Customer
Outcome
Triggering
Event
Satisfaction
Task or activity required to progress the process
Decision, judgement, inspection or check point.
Yes/No, OK/Not OK outcome.
© Max Zornada (2005)
Slide 80
This is a process map!
Customer
Outcome
Triggering
Event
Satisfaction
Task or activity required to progress the process
Decision, judgement, inspection or check point.
Yes/No, OK/Not OK outcome.
© Max Zornada (2005)
Slide 81
Process Definition Worksheet
Objective : To specifically define the scope of the process being studied
Process Name:
The Process Starts with:
The Process Ends with:
The Process includes:
The Process excludes:
Connecting Process:
© Max Zornada (2005)
Slide 82
The SIPOC Model
Suppliers - Inputs - Process - Outputs - Customers
Outputs
Inputs
Suppliers
Business
or Work
Process
© Max Zornada (2005)
Customer
Slide 83
Date
SIPOC Analysis Worksheet
Page
Process Name
Suppliers
Inputs
Process Steps
© Max Zornada (2005)
Outputs
of
Customers
Slide 84
Date
SIPOC Analysis Worksheet
Process Name Procurement Process
Suppliers
Customer Dept.
Inputs
Purchase Requisition
Page
Process Steps
Receives purchase req.
Reviews for completeness
Time stamps
Outputs
Complete Purchase
Requisition
Customers
Buyer
Assigns to buyer
© Max Zornada (2005)
of
Slide 85
Process Block Diagramming
(Process Blocking)



Block diagramming a process provides an easy way
to construct a "rough cut" view of the process;
Block diagramming identifies the major "chunks" in
the process and which functions are involved;
Block diagramming may provide a suitable level of
detail for a high level analysis of the process in
many cases.
© Max Zornada (2005)
Slide 86
Example of Process Block Diagram
Start
Receive
Order
Raise
Official
Order
Purchasing
Process
Data
Processing
Credit
Check
Warehouse
picking
process
Rejection
process
Dispatch
& Delivery
Account
Payable
Install &
Commission
Finish
© Max Zornada (2005)
Slide 87
Top-Down Process Map
Etc.
Order
Receival




Receive fax
Raise formal
order
documentation
Data process
into system
Send to Credit
section
Credit
Check



Product
Sourcing
Preliminary
customer
checks
Obtain credit
details from
Bank
Make credit
decision.






Receive order
details
Determine
stock
availability
Issue to stock
picker
Pick stock
Take to
Despatch dock
Pass order onto
Technical
© Max Zornada (2005)
Technician
Allocation




Receive order
details
Identify
schedule date
Book into
scheduling
system
Allocate
technician
Slide 88
Process Mapping Symbols
Symbol
Name
Brief Definition
Operation or
process step
Depending on the level of detail being developed,
can be used to denote anything from a simple task,
major activity or a whole sub-processes.
Decision Point
Point where a decision must be made before
any further action can be taken.
Document
Generated
Point at which a form or report is generated
by the process.
Continuation
Point
Used to indicate the process is continued
elsewhere on the flow diagram or on another sheet.
Input/Output
Block
Optionally used to describe an input or output
from a processing block.
Flow lines
Use to connect all blocks to display the
sequence in which operations are performed.
Termination
point
Used to indicate the start and end of a process.
© Max Zornada (2005)
Slide 89
Sample Process Map: Taking a Customer Order
Note:
Some computer based
flow charting
packages use
1
to indicate a
continuation point on
another page, and
to indicate a
1
continuation
point on the same
page.
An extended oval shape is used to
indicate the start or finish of a
process.
Start
Greet
customer
Take customer's
order
A rectangle represents a processing step
A line with an arrowhead
indicates flow and direction of
the process
Repeat order to
customer
A diamond shape
represents a
decision point
No
Customer
confirms
Change order
Yes
Confirm order on
terminal
Verbally announce
to kitchen
Continues onto the
Cook’s part of the
process.
1
1
A numbered circle represents a continuation point.
Cook's part of process continued page 2.
© Max Zornada (2005)
Slide 90
Process Deployment Chart





Re-draw the Process Map laying out each of the process segments
in "bands" or "streams" which correspond to the part of the
process performed by each functional position in the process;
Identifies how the process is deployed through the functional
organisational structure – add functions in the order that they are
first “touched” by the process;
Can highlight process steps performed within functions that may
not be apparent from initial process map. Good at highlighting
parallel processes;
Identifies hand-overs and inefficient "zig-zagging" in the process;
Rule of Thumb: Changes that reduce the amount of zig-zagging
usually result in improved performance.
© Max Zornada (2005)
Slide 91
Process Deployment Chart
Customer
Sales
Clerk
Data Proc.
Credit
Technical
© Max Zornada (2005)
Dispatch
Service
Bank
Slide 92
Process Deployment Chart Variation: Service System Map
The Line of Visibility Approach
Customer
Interface
Customer
Front
Line
Line of Visibility
Direct Front Line support
In-Direct Front Line support
Manager
Valuation
Assessm't Document'n
© Max Zornada (2005)
Stamp
Settlem't
Broker
Slide 93
A Service System Map
The Line of Visibility Approach
Could be moved to a back office operation
Front office
Customer
Front
Line
Manager
Valuation
Assessm't Document'n
© Max Zornada (2005)
Stamp
Settlem't
Broker
Slide 94
Process Complexity Analysis
© Max Zornada (2005)
Slide 95
Complexity



Concept first put forward by the Hewlett-Packard
Company;
Complexity is defined as being those extra process
steps that are required to deal with external errors
(errors generated by factors outside the process) and
to recover from internal errors (errors generated by
the process).
Classified all work into two categories:
 Real Work
 Complexity
© Max Zornada (2005)
Slide 96
Identifying Complexity
To identify complexity, ask the question:
"If the process were running perfectly, would this
activity be performed ?"
YES = Real Work
NO = Complexity
© Max Zornada (2005)
Slide 97
Two Views of Work Time
Conventional View
Time Available
for Real Work
Time Unavailable
for Work
Complexity View
Complexity Internal Errors
Time Unavailable
for Work
Time Available
for Real Work
Complexity External Errors
© Max Zornada (2005)
Slide 98
Indicators of High Complexity







Lots of work-in-progress materials. Many shelves and interim storage
facilities to hold materials.
Many people walking from place to place, standing in line waiting for
something, standing idle.
Work areas that are in disarray. Dusty boxes on floors, bookcases full of
dusty binders, desks and walls covered in little scraps of paper serving as
reminder notes.
People who can give only brief and vague explanations of what they are
working on and why it is important.
Humorous signs taped to the walls that say things like "You want it when ?
Ha ! Ha !" or " A clean desk is a sign of a sick mind"
In office areas, piles of processed and unprocessed documents, stored in
the work area.
Supervisors and managers pacing around the area trying to find out what's
going on, ascertain who made a critical mistake and expediting late orders.
© Max Zornada (2005)
Slide 99
Indicators of Low Complexity







Small amount of work-in-progress. Few shelves and temporary storage areas to
hold work.
Few people walking around. Most people working at a steady, relaxed pace. No
one waiting in line at copy machines, office supplies stores etc.
Work areas that are neat. Everything in a department has a place and a use.
People using time management systems instead of scraps of paper. Desk tops
containing only what the person is working on at the time.
People on shop floor or office areas can give complete descriptions of what they
do, why they do it, who their customers are, and what's important to those
customers.
The most common item displayed on department walls are monthly performance
graphs, daily control charts, pareto charts of problems.
In office areas all documents are received, processed and filed. In-baskets are
clean.
Supervisors and managers who are relaxed, walking around the area talking with
employees, asking them what they are working on, and looking for ways to
make their employees' jobs easier and more satisfying.
© Max Zornada (2005)
Slide 100
A Simple Retail Purchasing Process
The Manager's View
Customer
Clerk
Select goods
from shelf
Read price tag
Enter data in register
Announce Total
Offer to Pay
Make change
Wrap Goods
Leave
© Max Zornada (2005)
Slide 101
The Reality of Complexity
caused by Error !
Customer
Store person
Supervisor
Clerk
Pick Goods from shelf
No
Is
Price Tag OK ?
Yes
Look up Printed list
Explain Difference
Accept ?
Yes
No
Exit Angry !
?
Goods
Damaged ?
No
Wrap etc.
Explain to Customer
Apologise to Customer
Yes
Discuss with supervisor
Inquire if available from storeroom
Discuss situation
Bring to Clerk
No
Available ?
Yes
Fetch and
Notify Supervisor
Etc., Etc. ...
© Max Zornada (2005)
Slide 102
A “generic” process map



Show the task structure and
underlying logic;
Would be useful to link a
process to resources and
costs;
Process Flow Analysis (PFA)
is a technique that allows us
to do this. (note: PFA is also
referred to as Value Stream
Analysis by some).
Customer
© Max Zornada (2005)
Slide 103
Process Flow Analysis
(Also referred to as Value Stream Analysis)
Symbol
Name
Brief Definition
Operation
A task or activity which results in intentional
changes to one or more characteristics.
Delay
Temporary storage between operations or waiting
for some event which will allow work to continue.
Transportation
Moving of an object or document from one
physical location or work station to another.
Storage
Storing materials or documents in a protected
storage area, requiring authorisation for removal.
Inspection
Combined
An examination to determine quality or quantity.
Combining two symbols indicates simultaneous
activities eg. inspection is conducted at the same
time as the operation.
© Max Zornada (2005)
Slide 104
Date
Process Flow Analysis Chart
Page
Store
Description
Operation
Inspection
Transport
Delay
Process Name
Estimated Quantity Distance
Time
of
Notes
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D Zornada (2005)
© Max
D
Slide 105
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
5. Place in out-trays and wait for pick-up
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
8. etc., etc. ....
Store
Description
Operation
Inspection
Transport
Delay
Process Flow Analysis Chart
Process Name
Internal Mail Distribution Process
D
D
D
D
D
D
D
D
D
D
Estimated
Time
Date
Page
Quantity Distance
1 hr
300
30 min
30 min
10 min
300
2 hrs
15
15
1
15 min
15 min
of
Notes
Delivered 8:00am
300
15
One bundle /Dept.
100m
Average distance of all depts.
D
D
D
D
D
D
D
D
D
D Zornada (2005)
© Max
D
Slide 106
Using PFA with a Process Map
Stream A:
Dominant
flow through
the process
Stream B:
Secondary
flow
Stream C:
Secondary
flow

Secondary flows are caused
by:
 Variations required to the
dominant process to
handle different products
or variants of the main
product through the
process;
 Extra steps required to
deal with errors and
mistakes in the dominant
flow e.g. rework and
correction activities.
© Max Zornada (2005)
Slide 107
Quantifying the process by using PFA
Stream B:
Secondary
flow
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
Operation
Inspection
Transport
Delay
Store
D
D
D
5. Place in out-trays and wait for pick-up
D
D
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
D
D
8. etc., etc. ....
D
Process Flow Analysis Chart
Process Name
Internal Mail Distribution Process
Description
%
Process Flow Analysis Chart
Process Name
Internal Mail Distribution Process
Description
Volume X Time through B
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
5. Place in out-trays and wait for pick-up
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
D
D
8. etc., etc. ....
D
1 hr
300
30 min
30 min
10 min
300
2 hrs
15
15
1
15 min
15 min
of
Page
Quantity Distance
1 hr
300
30 min
30 min
10 min
300
2 hrs
15
15
1
15 min
15 min
of
Notes
Delivered 8:00am
300
15
One bundle /Dept.
100m
Average distance of all depts.
D
D
Notes
D
Delivered 8:00am
300
15
Date
Estimated
Time
D
D
Page
Quantity Distance
D
D
D
D
D
Date
Estimated
Time
Operation
Inspection
Transport
Delay
Store
Stream A:
Dominant
flow through
the process
D
D
D
One bundle /Dept.
100m
D
D
D
Average distance of all depts.
D
D
D
D
D
D
D
D
D
%
D
D
D
D
D
D
Volume X Time through C
Description
Volume of product or
transactions going through
stream A (Total Volume)
X Time
= Hours of Work
Generated by the work
flow.
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
Stream C:
Secondary
flow
© Max Zornada (2005)
Operation
Inspection
Transport
Delay
Store
Process Flow Analysis Chart
Process Name
Internal Mail Distribution Process
D
D
D
5. Place in out-trays and wait for pick-up
D
D
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
D
D
8. etc., etc. ....
D
Date
Page
Estimated
Time
Quantity Distance
1 hr
300
30 min
30 min
10 min
300
2 hrs
15
15
1
15 min
15 min
of
Notes
Delivered 8:00am
300
15
One bundle /Dept.
100m
Average distance of all depts.
D
D
D
D
D
D
D
D
D
D
D
D
D
Slide 108
Quantifying the process by using PFA



Apply a volume to the dominant flow and weighted
volumes to the secondary flows and calculate the
workload generated;
From the workload generated, calculate the number
of Full Time Equivalents required (FTE);
 Apply accepted conversion factors from work
standards;
Convert to number of people required to resource
the process by taking into account hours worked
and rostering arrangements.
© Max Zornada (2005)
Slide 109
Using PFA



The full PFA for a process can be set up as a
spreadsheet model;
This can then be used to test the viability of various
opportunities for improvement when selecting what to
focus on;
Can be used to model proposed changes and simulate
the impact on the organisation.
Review
Spreadsheet
PFA Model
© Max Zornada (2005)
Slide 110
Value-Added and Non-Value Added Analysis



Process steps can be categorised as being value added or
non-value added;
Value-added steps are steps considered essential to the
process;
Value-added process steps pass the following three tests:
 Is the step related to doing it right the first time ?
 Does the step get you one step closer to delivering the
product or service to the customer ?
 Would the customer be willing to pay for the step ?
© Max Zornada (2005)
Slide 111
Non-Value Added Work






Internal failure: steps related to correcting in-process failures
due to errors in prior activities in the process;
External failure: steps related to fixing errors in the product
or service the customer has found and re-addressed to you;
Set-up: Steps that prepare work for subsequent activity;
Control/Accuracy: Steps that relate to internal process
review and monitoring, appraisal steps in COQ terminology;
Moves and transport: Steps related to the physical transports
that occur between activities in a process;
Delay or wait: Time spent waiting for the next processing
step
© Max Zornada (2005)
Slide 112
Using PFA for Value Analysis
Value Added
Non - Value Added
All Non - Value Added
© Max Zornada (2005)
First pass through
the process
If done as rework,
internal or
external failure
Slide 113
Tollgate Review: Define Phase
© Max Zornada (2005)
Slide 114
Toll Gate Review: Define








Project has been confirmed as a valid improvement priority and is
supported by management.
A business case has been prepared, showing the potential business
impact of this project in financial terms.
A problem statement has been prepared and agreed.
Objectives defining the results we are expecting from this project have
been stated in the form of measurable targets.
A full Project Team Charter has been prepared including a preliminary
plan/schedule.
The charter has been reviewed with the project sponsor and their
support has been confirmed.
The primary customer and their key requirements have been identified.
The process concerned has been documented in the form of a process
map.
© Max Zornada (2005)
Slide 115
Conclusion of Define Stage Module
© Max Zornada (2005)
Slide 116