Creating Successful Change Using Continuous Improvement Methods

Creating Successful Change Using CI Methods
SWaMFest VII, September 15, 2011

Creating Successful
Change Using Continuous
Improvement Methods
SWaMFest VII
September 15, 2011

Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Susan O. Schall, Ph.D.
 President/Owner of SOS Consulting,
LLC since 2004 with clients in the
chemical, food & beverage,
automotive, industrial supply,
education, and printing industries.
 Over 20 years experience delivering
improved performance using
engineering, statistical and process
improvement methodologies.
 Prior to consulting, Susan held a
variety of process improvement and
leadership roles at RR Donnelley, GE
Lighting, DuPont and Eastman Kodak.
 B.S. in Mathematics from SUNY,
Fredonia; B.S., M.S., and Ph.D. in
Industrial Engineering from Penn
State University.
2

Copyright © 2011 SOS Consulting, LLC. All rights reserved. 1


Workshop Outcomes
At the end of this workshop, you will:
 Understand the basic principles of Continuous
Improvement and similarity with common
change management models.
 Be familiar with key Continuous Improvement
tools and how they can be used to successfully
manage change.
– What
– How
– Examples of application

3

Agenda
 Overview of Continuous Improvement
 Overview of Organizational Change Models
 Key Continuous Improvement Tools for Change
– Strategic focus
– Helping employees “see”
– Communication
– Action planning
– Hold the gains
 Workshop Summary

4



Overview of
Continuous Improvement

What is Continuous Improvement?
 Continuous Improvement (CI) is a never-ending
approach to improving organizational
performance.
 It is based on two premises:
– The world will continue to become increasingly
complex and competitive.
– The performance of a process will degrade over time
if energy is not applied to maintain and/or improve it.
 It is how you meet the increasing needs of
customers and stakeholders.

6



World Increasing Complex
Environment
Technology – Regulation – Economy – Culture

Any Organization
Funding
Materials
Providers Equipment
Outputs
Human
Resources

Receivers
Requests / Requirements

Outputs

Alternatives

Based on: Improving Performance: How to Manage the White Space on the Organization Chart, Geary A. Rummler & Alan P. Brache

7

“Now here, you see, it takes all the
running you can do, to keep in the
same place. If you want to get
somewhere else, you must run at
least twice as fast as that!”

Red Queen from Lewis Carroll’s
Through the Looking Glass



“In business, the competition will
bite you if you keep running; if you
stand still, they will swallow you.”
William Knudsen, industrialist

Process Degradation

Process
Degradation

10



Types of Continuous Improvement
 Daily improvement
– Incremental improvement made by those individuals that
are part of the process.
– Seeks to standardize and stabilize process performance
and to implement daily controls to sustain the
improvement over time.
– Involves use of basic process improvement tools.
 Breakthrough improvement
– Step change improvement.
– Usually created by fundamental changes to the process.
– Typically involves the use of advanced process
improvement tools such as Six Sigma, simulation/
modeling, new technology, etc.
11


Daily
Improvement

Breakthrough
Improvement

12



Principles of
 Value is in the eyes of the customer (receiver).
 All work is a process.
 Processes can be measured.
 Variation exists everywhere.
 Variation creates waste which leads to process
degradation.
 Understanding and reducing variation and waste
are key to successful improvement.
 Involve and empower employees.
13

What is Value?
Value Added Activity Non-Value Added Activity
An activity that changes the size, shape, An activity that consumes time or
fit, form, or function of material or resources, but does not satisfy customer
information (for the first time) to meet demands and requirements.
customer demands and requirements.

Value add is typically ≤ 5% Non-value add is typically ≥ 95%

14



What is a Process?
A process is a series of activities (value added and
non-value added) that converts inputs into outputs to
satisfy customer needs.

Inputs Process Outputs

Suppliers Customers

15

Process Examples
 Business  Other
– Order entry – Planning a family
– Invoicing vacation
– Product / service – Getting ready for work
development
– Buying a car
– Material / service
acquisition – Preparing dinner
– Product / service – Ordering shoes on-line
delivery – Obtaining a new
– Personnel hiring prescription
– Budgeting

16



Measuring Process Performance
Two types of measures:
1. Result - Describe the outputs of the process
2. Driver - Describe the inputs and/or steps of the process


Suppliers Customers

Drivers Results

17

Variation and Waste
Generates
The 8 Wastes
Variation is Everywhere  Defects
σ Materials  Over Production
σ Equipment  Waiting
σ Work Practices  Not Engaging
σ People Employees

σ Measurement  Transportation

σ Demand  Inventory

σ Environment  Motion
 Excess Processing

Generates
18



Hidden Costs of Variation and
Waste
Traditional Costs Rework
(Easily identified) Budget Overruns Overtime

Missed Schedules Inspection/Checks

Hidden Costs
(Difficult to measure)
Low Customer Satisfaction
Lost Sales/Orders Late Delivery
Long Cycle Times Lost
Excess Inventory
Expediting Costs Opportunity
Productivity Loss
Outsourcing

Change Requests Lost Customer Loyalty

Employee Morale, Turnover

19

Improving Process Performance


Must change inputs & process To impact results

20



Involve & Empower Employees
 Employees understand the needs of the
customer.
 Employees think and solve problems.
 Employees on the front lines can identify and fix
the myriad of small problems that invariably add
up to big problems.

21

Key Continuous Improvement Tools
 Strategic Focus  Process Analysis
– Shared Vision, Mission & – Value Analysis
Core Values – Pareto Chart
– Voice of Customer – Histogram
– Key Measures – Run Chart
– Prioritization Matrix – Basic Statistics
– Charter – Scatter Plot
– Fishbone Diagram
 Process Understanding /
Documentation  Team/Stakeholder
– Process Map/Flow Chart – Action Register
– Work Instructions – Stakeholder Analysis
– Visual Communication – Communication Plan
– Control Plan – RACI

22



Overview of
Organizational Change
Models

What is Change?
 According to the dictionary, change is:
– The act, process, or result of altering or modifying.
– The replacing of one thing for another.
– A transformation or transition from one state, condition or
phase to another.
– Something different; variety.
 Synonyms for change include:
– Alteration
– Modification
– Transformation
– Adjustment
– Variation
24



Types of Change
 Incremental change
– Constant process to eliminate problems and improve
efficiencies.
– Seeks to maintain “fit” among all components of the
organization.
– Aligned with daily improvement.
 Radical change
– Usually brought on by fundamental shifts in the external
environment.
– Typically requires dramatic changes in strategy and abrupt
departures from traditional work structures, job
requirements, rituals, and habits.
– Aligned with breakthrough improvement.
25

Incremental vs Radical Change

Incremental
Change Radical
Change

26



Kotter: Why Organizational
Change Fails
 Allow Too Much Complacency
 Fail to Create a Sufficiently Powerful Guiding
Coalition
 Underestimate the Power of Vision
 Under Communicate the Vision
 Permit Obstacles to Block the Vision
 Fail to Create Short-Term Wins
 Declare Victory Too Soon
 Neglect to Anchor Changes Firmly in Organization
Culture
From: John P. Kotter. Leading Change. Boston, MA: Harvard Business School Press, 1996.

27

Kotter’s Eight-Stage Change
Process
1. Establish a Sense of Urgency
2. Create the Guiding Coalition
3. Develop a Vision and Strategy
4. Communicate the Change Vision
5. Empower Broad-Based Action
6. Generate Short-Term Wins
7. Consolidate Gains and Produce More Change
8. Anchor New Approaches in the Culture
From: John P. Kotter. Leading Change. Boston, MA: Harvard Business School Press, 1996.

28



Five Elements Needed for Creating
Change
Vision Skills Incentive Resources Action Plan Change

Skills Incentive Resources Action Plan Confusion

Vision Incentive Resources Action Plan Anxiety

Gradual
Vision Skills Resources Action Plan
Change

Vision Skills Incentive Action Plan Frustration

False
Vision Skills Incentive Resources
Starts

29

Bridges: Managing Change

Uncertainty Commitment

Creativity
Excitement Accomplishment
Innovation High Energy
Anticipation Learning
Ending Transition Zone New Beginning

Anxiety Relief
Confusion Resistance Unsure

Frustration Ambivalence
Reservation Confusion
Denial
Skepticism Exploration

Adapted from William Bridges. Managing Transitions. Cambridge, MA: Perseus Books,1991

30



Managing Change: Tactics by Phase
Ending Transition Zone New Beginning
 Communicate the  Allow resistance to  Reward and
What, Why and How surface Recognize

 Acknowledge  Provide information  Celebrate
emotions, don’t get about the future/use
defensive personnel support  Ensure
structures organizational
 Mark Endings support for new
 Encourage creativity beginning
and innovation
 Get leadership to  Communicate the
play a role  Talk to employees about What, Why and How
individual transitions
 Expose key leaders  Consider how it
and stakeholders to  Integrate details into integrates into other
these concepts/ meetings and events areas of the plan
conduct trainings
Adapted from William Bridges. Managing Transitions. Cambridge, MA: Perseus Books,1991

31

Brain Barriers to Strategic Change
Right Thing Wrong Thing
Brain Barrier 1:
When
opportunities or
Done Well threats stare
people in the face,
they fail to see the
Brain Barrier 3: need to change
Even when people
move, they fail to Brain Barrier 2: Even
finish when people see the
need to change, they
Done Poorly often fail to move

From: J. Stewart Black & Hal B. Gregersen. Leading Strategic Change: Breaking Through
the Brain Barrier. New York: Prentice-Hall, 2002.

32



Leading Strategic Change
Right Thing Wrong Thing

1. Repeat message
2. Create high-
Done Well impact,
inescapable
confrontations
1. Provide of the facts
champions
2. Make the results 1. Make sure
visible destination is clear
2. Provide skills,
Done Poorly resources, tools
3. Deliver valuable
rewards along the
way

From: J. Stewart Black & Hal B. Gregersen. Leading Strategic Change: Breaking Through
the Brain Barrier. New York: Prentice-Hall, 2002.
33

Common Themes
 Strategic focus
 Helping employees “see” the need for change
 Communication
 Action planning
 Hold the gains

35



Tools for Change

Key CI Tools for Managing Change
 Strategic Focus  Communication
– Shared Vision, Mission & – Visual Communication
Core Values – Stakeholder Analysis
– Voice of Customer – Communication Plan
– Key Measures
– Prioritization Matrix  Action Planning
– Charter – Action Register
– RACI
 Helping Employees “See”
– Simple Flow Chart  Hold the Gains
– Cross Functional Flow Chart – Work Instructions
– Histogram – Control Plan
– Run Chart
– Pareto Chart

37



Role of Leaders in Managing
Change
 Create a climate where truth is heard*
– Lead with questions, not answers.
– Engage in dialog and debate, not coercion.
– Conduct autopsies, without blame.
– Build red flag mechanisms that turn information into
information that cannot be ignored.

* Jim Collins. Good to Great. New York: Harper Collins, 2001.

38

Strategic Focus Tools
 Shared Vision, Mission & Core Values
 Voice of the Customer
 Key Measures
 Prioritization Matrix
 Improvement Project Charter

39



Strategic Change & Improvement
Identify Opportunities

Scope
Shared Vision, Shared Vision,
Mission, Values, Mission, Values,
Prioritize
Key Measures & Key Measures &
& Select
Voice of Customer Voice of Customer

Charter

Strategic Change &
Improvement 41

Identify Opportunities for
Change/Improvement
Shared Vision & Performance Targets
Mission & Core Values

Voice of the Customer

Opportunities
to reach the
goals
Unmet or new
Products &
Unaligned
Services

Potential Opportunities
needs

Issues
needing
attention

Problems, Defects, Dissatisfaction
43



Mission, Vision & Core Values
 Mission: Statement of purpose
– Essence of organization; does not change over time.
 Core Values: Principles of the organization
– Guide behavior and decisions in pursuit of the Mission
and Vision.
 Vision: Description of the desired future state of
the organization
– Clarifies direction for change.
– Gap with Current State provides motivation to take
action.

44

Relationship Current State,
Mission, Vision and Core Values

Vision

Current
State
Time
45



Discovering Mission, Vision & Core
Values
 You do not create or set your organization’s
Mission and Core Values.
 You discover them by looking inside the
organization.
 Before a vision can emerge, an organization
must be clear about its identity.
– Organizational Identity = Mission + Core Values
 They have to be authentic.
– It needs to match in a way that persons familiar with
the organization will recognize it.

46

Voice of the Customer
 Voice of the Customer (VOC) is used to describe
customers’ needs and their perceptions of your
product and/or service.
 VOC helps identify what is value added in the
process.
– Non-value added activities are sources of variation
and waste.
 Can be used to provide focus to change &
improvement efforts.
 Can also be used to create a sense of urgency in
the organization.
47



VOC Data Collection
Reactive Proactive
Customer What & Why Summary
Sources Sources
Who is your What do you What reactive What proactive What
customer – want to ask actions will you actions will you information did
internal and/or them and what take to gain the take to gain the you gain from
external? information do information – information – the probing?
you need to customer surveys, What does the
probe for? complaint data, interviews, customer need
monthly customer focus from your
Why are you scorecard groups, process?
asking these information, meetings, etc.
questions – customer
what feedback, etc.
information are
you expecting
to gain?

48

Proactive: Customer Interview
 Important information gathering technique to
understand voice of customer.
 Fosters cooperative working relationship with
customer.
 Ask open-ended questions such as:
– “Tell us about your job …”
– “What barriers do you face in doing your job …?”
– “What issues do you encounter when …?”
– “Tell me more about …”
– “Give me an example of ….”
– Use what, how, when or why words
 LISTEN!
49



Proactive: Customer Survey
 Measure of what a person knows, likes and dislikes,
and/or thinks about your product and/or service.
 Must be well designed.
– Identify needs and goals of survey.
– Define participants.
– Determine format and administration of survey.
– Generate survey questions.
• Keep short, simple and relevant
• Keep clean
• Provide instructions
– Test/pilot with several participants.
– Determine how survey results will be analyzed before
administration.
50

Proactive: Focus Group
 A small group of people are asked about their
perceptions, opinions, beliefs and attitudes towards
a product and/or service.
 Questions are asked in an interactive group setting
where participants are free to talk with other group
members.
 Useful when desired information about behaviors
and motivations is more complex than a survey is
likely to reveal and when the dynamic interchange
between the group members may result in more in-
depth and unbiased information than one-on-one
interviews.
51



Translate VOC to Customer
Requirements
Voice of Customer Key Customer Issue / Customer
(Actual Statements) Need Requirement
“This remote does not Does not understand the All remote functions are
work!” operation of the remote. useable with little to no
instructions.
“I don’t want to listen to Wants to talk to a person Less than 3 options on
a bunch of options and quickly when calls for the phone tree and
then wait on hold.” customer service. sufficient CSRs to handle
peak calls.
“Why do I have to fill out Does not want to spend Verify information and
another form? You time repeatedly update only when there
already have my providing the same are changes.
information on file.” information before
obtaining service.

52

CTQ Tree
 Translates customer expectations into requirements.
Need Drivers CTQCs Measures Requirement

Between 150 &
Temperature Hot Degrees F
155 Degrees F

Customer Taste At least 4 on
Taste Good
Satisfaction Scale of 1-5

Cup of
Coffee
Number of No Less Than
Volume Full Cup
Ounces 10 Oz

No More Than
Cost Cheap $
$1
53



Procedure for Creating CTQ Tree
 Identify customer needs.
 For each need, determine what fulfilling that
need would mean to the customer. This is a
“driver.”
 Keep asking the same question – “what would
that mean” – until you reach a level where a
clear and measurable specification can be
written.
– Example: “timely and accurate” means “quick
delivery”; “quick delivery” means receipt the next day.

54

On-line Ordering CTQ Tree

55



The Kano Model
Delight Delighters – Must be characteristics
are generally taken for
Resigned Pleased granted—unless they are
absent!
Customer Satisfaction

to Reality

– Delighters are generally
Neutral
not mentioned, since
Must Be the customers are not
dissatisfied with their
Not Taken for
Pleased Granted
absence.
– Customers generally
discuss or bring up issues
Dissatisfaction

Absent
Degree of
Fulfilled
related to More Is Better
Achievement characteristics.

57

On-line Ordering Kano Model
Delight Delighters

Received Next
Business Day
Sizes &
Colors
Customer Satisfaction

Neutral

Must Be

Catalog up-to-date
Not Taken for
Website menus
Pleased easy to navigate
Granted
Links to items
Dissatisfaction
correct

Absent Fulfilled
Degree of
Achievement

59



Key Measures
 High-level indicators of the success of the organization.
 Often reflect:
– Customer requirements
– Financial expectations
– Targets for each product/service family and market
– Expectations for each competitive advantage to be established
or enhanced
 Should be:
– Derived from strategic objectives.
– Defined and measurable.
– Clear to all who have to understand and be guided by them.
– Balanced between financial, customer, internal process, and
learning & growth.

61

SMART Measures
 Specific – identified with a relevant strategic
objective, strategy or process.
 Measurable – mechanisms exist or can be
developed to quantify the metric.
 Action-oriented – provide insight into action
required.
 Relevant – to the critical processes of the
organization.
 Timely – available at the right moment for
decision making.
62



Operational Definition
 A clear, precise description of what is being
measured.
 Used to remove ambiguity in measurement and
improve data integrity – no matter who does the
measuring, the results are the same.
– Example: One person may say an invoice is paid
when the request to pay is submitted to the
accounting system, while another person may say it is
paid when the check is cut, while yet another person
may say it is paid when the check is cashed.

63

Operational Definition Example
Title Average monthly invoice cycle time
Purpose Is the average time to pay invoices meeting target?
Description Invoice Cycle Time is the amount of time between
when the billing information is received from a CSR
as measured using the time stamp on the file to the
time the invoice is sent to the customer as measured
by the time stamp on the electronic customer
notification.
Source of Data Invoice tracking report
Calculation (Time invoice sent to customer) – (Time billing information
received from CSR)
Timeframe Calculated for all invoices processed in a given month (28
days)
Units Measured in minutes

65



Identifying Key Measures
 Identify critical dimension(s) associated with each
strategic objective, strategy or process: Quality,
Timeliness, Cost, Quantity
 Brainstorm potential key measures for each critical
dimension.
 Evaluate each brainstormed potential key measure:
– Does the measure assess performance of the strategic objective,
strategy or process?
– Can your organization influence the outcome of the measure?
– Can you establish a challenging goal for the measure?
– Will the measure result in a number that can be analyzed?
– Can you obtain an accurate and precise measurement?
– Is it cost effective to track and report?

66

Prioritization Matrix
 Narrows options (change/improvement
opportunities) by comparing and weighing choices
against a set of criteria.
 Identifies the option that best meets multiple
criteria.
Rating of
10 8 9 4 6
Importance
Probability of

Resources
Implement

Implement
Impact on
Customer

Criteria
Required
Success

Time to
Cost to

Total

Option

1 Option A 3 9 3 1 3 151
2 Option B 9 3 9 3 1 213
3 Option C 3 1 1 1 3 69
4 Option D 3 3 1 1 9 121

67



Prioritization Matrix Procedure
 Create a list of opportunities for change/improvement.
 Create a list of strategic criteria for evaluating the
change/improvement opportunities.
 Rate importance of each criteria on a scale of 1 to 10, 10
being highest.
 Rate each opportunity versus the criteria using 0, 1, 3, 9
weighting:
– 0 no impact
– 1 minimal impact
– 3 moderate impact
– 9 strong impact
 Cross multiply the criteria rating by the opportunity
rating to arrive at a total score for each opportunity.
68

Prioritization Matrix Example
 Dollar impact of  Time to Complete (5)
Opportunity (10) – 9: ≤ 4 months
– 9: > $1 MM – 3: 5 to 6 months
– 3 : $250 K to $1 MM – 1: > 6 months
– 1: < $250 K  Customer Impact (8)
 Probability of Success (7) – 9: strong positive and
– 9: > than 80% visible impact
– 3: 50 to 80% – 3: low positive or no visible
– 1: < 50% impact
– 1: negative or no impact

69



Opportunities Criteria

Rating of Importance ---> 10 7 5 8

Probability of
Dollar Impact

Customer
Complete
Success

Time to

Impact
Opportunities Total
Time Reconcile Balance Sheet 3 3 3 3 90
Invoice Posting First Match Rate 9 3 3 9 198
Interco Manual Invoicing Errors 3 3 3 3 90
Time to Archive Financial Docs 1 9 3 3 112
Cost Center Splits 1 1 1 3 46
Manual Payment Processing 3 3 9 9 168
T&E Reconciliation Time 1 3 3 1 54
Vendor Data Error Rate 9 3 3 3 150

Impact Ratings
70


Rating of Importance ---> 10 7 5 8
Probability of

Customer
Complete
Success

Time to
Dolloar
Impact

Impact

Opportunities Total
Invoice Posting First Match 9 3 3 9 198
Manual Payment Processing 3 3 9 9 168
Vendor Data Error Rate 9 3 3 3 150
Time to Archive Financial Docs 1 9 3 3 112
Time Reconcile Balance Sheet 3 3 3 3 90
Interco Manual Invoicing Errors 3 3 3 3 90
T&E Reconciliation Time 1 3 3 1 54
Cost Center Splits 1 1 1 3 46

71



Charter Opportunities
 A charter is a one-page document that defines in
clear, specific terms the task an individual or
team is to accomplish.
 Includes:
– Process and process owner (senior leader who has
responsibility for the process and its results)
– Opportunity statement
– What’s in/out of scope
– Objectives (metrics, baseline, goal, entitlement)
– Milestone dates
– Team members
72

Opportunity Statement
 Factual statement of situation including a
description of what key measure is involved and
current level of performance.
– Does not assign blame.
– Does not assume cause(s) or include solution(s).
 Example:
– Accounts Payable processes over 150,000 invoices per
year; of those, 35% are being paid out after the
contracted 60 day terms. Overdue payments to our
enterprise partners are the number one reason for
ship and credit holds, resulting in a loss of $2 Million
of revenue and on-time performance.
73



Improvement Project Objectives
 Baseline –performance over recent past.
– Preferably last 12 months.
 Entitlement – best conceivable performance.
 Goal – desired performance at end of the
change/improvement effort; chosen to close the
gap between baseline and entitlement.
 Note: Effort should include “balance” metrics.
– Primary key measure: Reduce cycle time
– Balance measure: Product quality

75

Closing the Performance Gap

Performance Goal
Gap

Baseline
Closing the
Entitlement
Gap

76


IMPROVEMENT TEAM CHARTER

Dept/Location: Process Owner/Champion:

Process: Date Created/Revised:

Opportunity Statement:

In Scope (What is in focus): Out of Scope (What will not be considered):

Objectives: Metric Baseline Goal Entitlement

Financial Impact:

Milestone Dates:

Team:
Name Role


Tools for Helping Employees “See”

 Process Variation and Waste
– Simple Flow Chart
– Cross Functional Flow Chart
 Process Performance
– Histogram
– Run Chart
– Pareto Chart

77

Process Flow Charting
 Makes the process visible to all members of the
process.
 Encourages a deeper and broader understanding of
the process.
 Helps identify process disconnects.
 Used to identify opportunities to reduce variation
and waste and to create a sense of urgency for
change/improvement.
 Two common types:
– Simple flow chart
– Cross functional flow chart

78



Simple Flow Chart
 Detailed representation of the process including:
– Action steps
– Decision points
– Delays
– Movement
 Helps employees “see” the sequence of steps in the
actual process.
 Helps employees “see” the opportunities for
variation and waste needing change/ improvement.
 Basis for identifying result and driver measures of
the process.
79

Invoice Process Simple Flow Chart

80



Paint Manufacturing Simple Flow
Chart

81

Loan Approval Simple Flow Chart

82



Kidney Transplant Flow Chart

Based on: Matthew Franchetti &
Kyle Bedal. “Perfect Match,” Six
Sigma Forum Magazine, August
2009.

83

Cross Functional Flow Chart
 Rearranges flow chart process steps into rows or
“swim lanes”.
– Rows represent individuals, roles or functions.
– Steps fall in appropriate row.
– Also known as swim lane flow chart.
 Clearly shows hand-offs between individuals
and/or functions.
 Helps employees “see” opportunities for
variation and waste needing change/
improvement.
86



Invoice Process Cross Functional Flow Chart

Consultant
Secretary
Team Manager
Planning &
Control
Shared Service
Center

87

Invoice Process Cross Functional Flow Chart
Account Mgr
Shared Service
Center
Client

88



Paint Manufacturing Cross
Function Flow Chart
Paint Manufacturing

Phase
Scheduler

Recipe

Charge
Blender

Charge Fill Tank Drop to Fill
Mix Sample Additional Wait
Materials Empty? Tank
Material
Lab Tech

Test Ok?
Fill Operator

Empty Fill
Tank

89

Loan Approval Cross Functional
Flow Chart

90



Identify Actual Process
 You may think the  When it is actually:
process is:

Go see the process!
93

Actual Process Example

94



Increasing Process Understanding
 Changing and improving the process requires
increasing understanding of process details.

95

Process Performance Charts
How are the six sales regions • Basic charts help employees
performing? “see” the overall process
performance, including the
Region 4Qtr96 3Qtr96 4Qtr95
location and variability and
North East 1148 976 952 patterns/trends in
South East 1337 1197 1196 performance.
North West 806 688 878 • Facilitate comparisons to
North requirements or targets or
702 743 670
Central benchmarks.
Mid‐ • Help focus
781 807 802
Atlantic change/improvement efforts.
South • Help create a sense of
359 447 462
Central urgency.
• Include: Histogram, Run Chart,
Pareto Chart
98



Process Performance Charts
A Picture is Worth a Thousand
What Is This? Words

99

Histogram
 A frequency bar chart where
the bars show the number
of times a value or range of
values occurs in the data.
 A Histogram can be used to:
– “See” the overall process
performance.
– “See” the variation or spread
in the performance data.
– Compare the process
performance against
specifications or targets.

100



Potential Histogram Patterns
Bimodal

Bell-Shaped

Skewed

101

Sales by Region
Time Northeast Southwest Northwest N. Central Mid-Atlantic S. Central
1992_Q1 924 1056 1412 431 539 397
1992_Q2 928 1048 1280 470 558 391
1992_Q3 956 1129 1129 439 591 414
1992_Q4 1222 1073 1181 431 556 407
1993_Q1 748 1157 1149 471 540 415
1993_Q2 962 1146 1248 496 590 442
1993_Q3 983 1064 1103 506 606 384
1993_Q4 1024 1213 1021 573 643 448
1994_Q1 991 1088 1085 403 657 441
1994_Q2 978 1322 1125 440 602 366
1994_Q3 1040 1256 910 371 596 470
1994_Q4 1295 1132 999 405 640 426
1995_Q1 765 1352 883 466 691 445
1995_Q2 1008 1353 851 536 723 455
1995_Q3 1038 1466 997 551 701 363
1995_Q4 952 1196 878 670 802 462
1996_Q1 1041 1330 939 588 749 420
1996_Q2 1020 1003 834 699 762 454
1996_Q3 976 1197 688 743 807 447
1996_Q4 1148 1337 806 702 781 359
103



Sales by Region
Histogram of Northeast Histogram of Southwest
14 7

12 6

10 5

Frequency
Frequency

8 4

6 3

4 2

2 1

0 0
400 600 800 1000 1200 1400 400 600 800 1000 1200 1400
Northeast Southwest

Histogram of Northwest

5

4
Frequency

3

2

1

0
400 600 800 1000 1200 1400
Northwest

104

Sales by Region
Histogram of N. Central Histogram of Mid-Atlantic

7 9

8
6
7
5
6
Frequency

Frequency

4 5

3 4

3
2
2
1
1

0 0
400 600 800 1000 1200 1400 400 600 800 1000 1200 1400
N. Central Mid-A tlantic

Histogram of S. Central
18

16

14

12
Frequency

10

8

6

4

2

0
400 600 800 1000 1200 1400
S. Central

105



Kidney Transplant Histogram
Original Process
Total Processing Time
90

80

70
Number observations

60

50

40

30

20

10

0

Days for completion Based on: Matthew Franchetti &
2009.
106

Kidney Transplant Histogram
Improved Process
Total Processing Time
40

35

30
Number observations

25

20

15

10

5

0

Days for completion Based on: Matthew Franchetti &
2009.
107



Histogram Procedure
 Collect at least 30 data points. Calculate the range (R).
Choose the number of bars (k) for the histogram
• # of data points number of bars
– 30 - 50 7 - 10
– 51 - 100 10 - 15
– 101 - 200 15 - 20
– Over 200 20 - 25
 Calculate the width (w) of the bar intervals: w = R/k.
Round to a convenient number.
 Set up the intervals for each bar starting at (or just
below) the smallest data value.
 Set the boundaries for each bar using w.
 Count the number of points falling into each interval.
 Draw bar graph of counts for each interval.
108

Paint Batch Cycle Time Histogram
The addition of requirements to the Histogram allows one to see
how the process performance compares to the requirements.

Histogram of Time

14

12

10
Frequency

8

6

4

2

0
40 80 120 160 200
Time

109



Variation and Customer
Satisfaction
LSL USL

$ $
$ $
$ $ $
$
$
$
$
$
$ $

110

Histogram and Requirements
 The addition of specifications or requirements to the
histogram allows one to see how the process
performance compares to the requirements but tell
nothing about when out of specification observations
occurred. Target

When did
these occur?

111



Run Chart
 An XY plot of data where
the X-axis is always time.
 A Run Chart can be used to:
– “See” the overall process
performance.
– “See” the variation or spread
in the performance data.
– Compare the process
performance against
specifications or targets.
– “See” shifts, trends,
intermittent and cyclic
patterns that occur over
time.

112

Patterns in Run Charts
Intermittent Variation Shift
70.000 70.000
65.000 65.000
60.000 60.000
55.000 55.000
50.000 50.000
45.000 45.000
40.000 40.000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Trend Cycle
60.000 60.000

55.000 55.000

50.000 50.000
45.000
45.000
40.000
40.000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 35.000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Rapid Swings in Variation
60.000
55.000
50.000
45.000
40.000
35.000
113 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29



Sales by Region
Northeast Sales Southwest Sales
1300 1500

1200 1400

1100
1300

Southwest
Northeast

1000
1200
900
1100
800

1000
700
2 4 2 4 2 4 2 4 2 4 2 4 2 4 2 4 2 4 2 4
_Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q _Q
92 92 93 93 94 94 95 95 96 96 92 92 93 93 94 94 95 95 96 96
19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19
Time Time

Northwest Sales
1500

1400

1300

1200
Northwest

1100

1000

900

800

700

600
2 4 2 4 2 4 2 4 2 4
_Q _Q _Q _Q _Q _Q _Q _Q _Q _Q
92 92 93 93 94 94 95 95 96 96
19 19 19 19 19 19 19 19 19 19
Time

115

Sales by Region
N. Central Sales Mid-Atlantic Sales
750
800
700
750
650

600 700
Mid-Atlantic
N. Central

550 650

500
600
450
550
400

350 500
1992_Q 2 1992_Q 4 1993_Q 2 1993_Q4 1994_Q2 1994_Q4 1995_Q2 1995_Q4 1996_Q2 1996_Q4 1992_Q 2 1992_Q 4 1993_Q 2 1993_Q4 1994_Q2 1994_Q4 1995_Q2 1995_Q4 1996_Q2 1996_Q4
Time Time

S. Central Sales
475

450

425
S. Central

400

375

350
1992_Q2 1992_Q4 1993_Q2 1993_Q 4 1994_Q2 1994_Q4 1995_Q2 1995_Q 4 1996_Q2 1996_Q4
Time

116



Run Chart of Paint Batch Cycle Time
The addition of requirements to the Run Chart allows one to see how the
process performance compares to the requirements.

Batch Cycle Time
225

200

175

150
Time

125

100

75

50

1 5 10 15 20 25 30 35 40 45 50
Index

117

Run Chart: Lack of Standard Work

140

130

120

110

100

90

80

1 9 18 27 36 45 54 63 72 81 90

118



Run Chart: Visualize Improvement
Overage by Production Run

40000

30000
Overage (linear feet)

20000

Work Instructions
implemented Weekly audits
10000
implemented

0

1 20 40 60 80 100 120 140 160 180
Production Run

119

Run Chart Procedure
 Measure process performance over time in
sequence.
 Draw a graph with a vertical line and a
horizontal line.
– The vertical line should cover the full range of
measurements.
– The horizontal line should cover the time period over
which the data was collected.
 Plot the data on the graph.
 Connect the points to form a line.

120



Are the 4 Processes the Same?

Statistic Process A Process B Process C Process D
Average 70.0 70.0 70.0 70.0

Average 70.0 70.0 70.0 70.0
Standard Deviation 10.0 10.0 10.0 32.4

121

Are the 4 Processes the Same?
Average 70.0 70.0 70.0 70.0
Median 70.0 65.7 73.8 74.2

Average 70.0 70.0 70.0 70.0
Median 70.0 65.7 73.8 74.2
Minimum 29.8 62.9 1.87 11.78
Maximum 103.3 130.4 77.1 132.8

122


Creating Successful Change Using Continuous Improvement Methods

Creating Successful Change Using Continuous Improvement Methods

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (19)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Creating Successful Change Using Continuous Improvement Methods

Ähnlich wie Creating Successful Change Using Continuous Improvement Methods (20)

Mehr von saw2w

Mehr von saw2w (6)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Creating Successful Change Using Continuous Improvement Methods