applying pdca, a3 thinking & problem solving

Discussion Workshop

Applying PDCA A3 Thinking and Problem Solving

John S. KiffLean Summit 2012

Introduction

• Purpose: – Is: to share experiences of the use of a common problem-

solving process in organizations– Is not: to teach A3 Thinking

• Process: – Presentation of (anonymised) survey results. “Indicative!”– Discussion of experiences of using PDCA, A3 Thinking

• People: – 41 delegates to this workshop– 15 of these contributed to the survey– 37 other Summit delegates contributed

52 responses in total

Extent to which there is a process Q1. Would you say that there is a

Common Problem-Solving Process in your organization?

28%

43%

23%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

No Yes, to some extent Yes, definitely

Source: LEA Survey of 53 delegates to Lean Summit, November 2012

A significant proportion have

no common problem-solving

process

Number of problem-solving methods in use by an organization

Q2. Which of the following problem-solving methods are used?

29%

11% 10%

2% 1%0%

5%

10%

15%

20%

25%

30%

35%

One Two Three Four Five


A significant proportion use more then one

(common) process

Proportion of respondents that said their organizations were using…Q2. Which of the following problem-solving methods are used?

81%

37%29%

17%13%

4%0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

PDCA DMAIC FMEA 8D Other TRIZ RPR


Proportion using:• Both PDCA and DMAIC: 21%• Both PDCA and FMEA: 27%• PDCA, DMAIC and FMEA 12%

Most use PCDA But some use

other processes as well

Formal problem-solving trainingQ3. Does your organization have a formal

problem-solving training course?

68%

32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Yes No


But only two-thirds have

formal training courses

Proportion of people trainedQ4. What proportion of the people in your organization has been TRAINED in a

Common Problem-Solving Process??

66%

13%8% 8% 6%

0%

10%

20%

30%

40%

50%

60%

70%

<20% 20-40% 40-60% 60-80% 80-100%


…and in most organizations, most people have NOT

been trained!

Problem Solving at Various LevelsQ5. To what extent is a Common Problem Solving Process

used in your organization?

0%

10%

20%

30%

40%

50%

60%

NONE <20% 20-40% 40-60% 60-80% 80-100%

At a Strategic levelAt a Value Stream LevelAt an Operational level


= Not at all = (Almost) Always

More at an operational level than at

value stream or strategic level

Use of A3s at Various LevelsQ6. To what extent are A3s REGULARLY used

in your organization for problem solving??

0%

10%

20%

30%

40%

50%

60%

NONE <20% 20-40% 40-60% 60-80% 80-100%

At a Strategic levelAt a Value Stream LevelAt an Operational level


= Not at all = (Almost) Always

A3s significantly

less used than problem-solving

process……but some use

at a strategic level

Why are A3s not more widely used?Q7. What do you think the causes are that prevent

wider use of A3 in your organization?

• Primary reason: lack of knowledge (60% cited)– In some cases no awareness of the tool at all

• Combined with: lack of leadership (8% cited)• Or: ‘perceived to be too time consuming’ (3%)

• Other reasons:– No common problem-solving process anyway– No culture of problem solving – jump to solutions


wider use of A3 in your organization –

• Verbatim quotes:

Natural tendency is to jump to solution, we need to change the mindset that it’s

worth while slowing down to think deeper, get to root cause and then address the

root causes

NO FACTS TO ANSWER THIS!

Historical culture of jumping to the perceived solution

Some people don't feel as comfortable as others.

Some people think A3s take "too much time" to create and they are already busy.

Mental blocks e.g. that if we are supposed to use A3 as

the tool, it will take very long time, and we don't have that

time to solve the problem


wider use of A3 in your organization –

Lack of training and understanding.

No clear expectation from Senior Management. Perceived as too time

consuming (again lack of training)

Poor management training. Top down hierarchical (i.e. senior opinions) and non-evidence based (no data) 'dictats'

and poor performance management measures that drive the wrong solutions

and behaviours

High turnover of management staff, so less than 2 years in post.

Constant drive to achieve results in a short time scale so theirs is a culture of

'massaging the data' and kicking the can down the road for

the next manager to deal with.

We write plenty, but more are charters and mission

statements rather than 'usable' A3's


Why are A3s not more widely used?8. What do you think the causes are that prevent more effective (‘better’)

use of A3s in your organization?

• Primary reason: lack of knowledge (38%)– a) Awareness and b) understanding - of the tool itself– Of the value of, and purpose of, A3s

• Again combined with lack of leadership (25%)– Setting an example and/or demanding the use of A3s– “Traditional thinking predominates”

• Again: perceived to be too time consuming




Lack of knowledge & training. For those that are trained and

should do so: - lack of leadership.

Lack of awareness, lack of training, lack of understanding of the

benefits.

Lack of history or working with 'rigorous' methods.

Individualism.

Lack of training in A3. Since it is not demanded to use it, it

is also difficult to achieve good skills from using it.

Lack of clarity and sponsor alignment over the 'true' problem

and best route / 'cost' of implementing the solution.




Seen as a tool rather than a systematic

process for management thinking and

development.

See it as a template not the means to challenge

deeper thinking

Easier to get a decision from a more traditional method where managers

'know' what to expect.

No clear expectations from management and

management are not properly trained in the use of A3 to challenge and coach the

organisation




As above (too time consuming)

plus seen by many as a very

'Japanese' approach. People are conditioned to PowerPoint etc.

Read Chris Argyris work Double Loop Learning in Organizations.

Because we don't have senior managers at the top of the organisation who use A3,

there is no peer to peer (or top down) challenge or demonstration of 'Think Slow' problem solving.

Anyone challenging or demonstrating upwards and revealing the paucity of our managers' problem solving capability is likely to be seen as a threat and the person

and their 'better process' will be rejected from the organisation.

Learning respectful challenge is the most difficult skill. Thus is the way of the world.

Lean Thinking…

• …also holds that: “Any activity that consumes resources

but creates no value from the customer’s perspectiveis a waste of one form or another

that needs to be eliminated.”• …and holds that:

Wastes can be seen as gaps (or problems) versus the desired performance of any process step or output

and PDCA used to eliminate them.

Jim Womack

“I’m paying

for that!”

The proven method for solving problems and maintaining / improving solutions

• Main Lean tool forstructured problem-solving by peopleat ALL levels usingPDCA Grasp the

Situation

At the ‘gemba’ (workplace) facts!

“Go See!”

Check Do

PlanAct

1. Clarify, break down and define the problem

2. Grasp the situation: measure and map to get proof / evidence

3. Define the desired outcome (gap) QCDP

4. Analyse the problem (5W 1H) and causes

5. Develop possible countermeasures “Hypothesis”

6. Give the ideas for change a try-out

“Experiment”

7. Evaluate results“What was learned?”

“Study & Reflect”

8. Incorporate the learning intothe process.

Standardise and stabilise theimprovement and/or go around the improvement cycle again

“Standardise and/or Adjust”

Go See!

Don’tjump to solutions

18

Storyline of the Problem Solving A3Making PDCA visual – in order to gain agreement

Plan Do, Check, Act

Background

Current Situation

Goals

Root Cause Analysis

Countermeasures

Effect Confirmation

Follow-up Actions

Theme:

Storyline of the Problem Solving A3- early to mid-stage

Plan Do, Check, Act

Background

Current Situation

Goals

AnalysisPossible Countermeasures

Theme:

Analysis contd.

Defining the Problem.

The hardest part!

“Go slow in order to go fast”(Jeffrey Liker)

Title: Increasing IPUD* in New and Used Car Sales

Current Situation: Dealer vs a basket of 16 UK VX dealers, 14 have BMs, All on same package (VB) Data includes commission from Finance, PPP & GAP but excludes Safeguard

New & Used remuneration package: £50/unit - but NB no incentive to retain GPFinance:10% commission on Dealer’s earnings excl VB. GAP & Safeguard: £50 / unit over 5

Preferred supplier: GMAC poor on Used albeit criteria eased July 09. Slow systems so use Black Horse

Owner: Brian Edwards Version No. 5 Date: 03/08/09

Background: New and Used sales under volume pressure Limited scope to increase metal profit (new) or margin (used). Purpose: To close Sales Dept profit gap by increasing IPUD* from financial products

Proposed Countermeasures:

Topic of Analysis Who + Support When by: Status @ 03/08/09

Next Step

Understand process used by Tony vs others in team BE 12/06 Persistence, detail Evaluate more

Understand why team use Black Horse vs GMAC BE 12/06 Now paid on VB None

Understand Used Finance rate spread BE 15/06 Now paid on VB None

Develop pros & cons for Business Manager BE 30/08 In progress Ongoing

Follow Up Issues:Checking routine – simple, quick and visual - HOW? – Phoning a sample of customers?

Effect Confirmation:Graphs of plan vs actual – improvement in IPUD for 2009 using Dealer numbers not GMAC/Black Horse – need easy method of measuring monthly or at least quarterly. Discuss with SJH about getting easily from Close It. SM to propose Pinnacle method by 04/08/09

Analysis:

Problem statement: IPUD is too low and needs urgent increase

Cause Deliverable Description of Countermeasure Target Who + Support

When by

Status @03/08/09

Next Step

A, B & C 1. Fully trained & FSA regulated team

Mentor F&I online training and qualification. 10 exams per person – needs a plan / cadence (NB new starter allowed 2 weeks)

All sales team qualified

BE & SJH 31/08/09DONE

Checks+12month tests

A(i) & (ii)

2. Increased GAP penetration and standard process

Develop std sales process (inc JI) for selling GAP to incl. Close-It based deal presenter (nearly ready) with assumptive inclusion of GAP. Routine checking std. process by BE/IC.Identification of training needs by salesperson

Standard in placeChecking process in place

BE + IC & SJH

31/08/09 Not started Develop plan. Date with SJH needed

A(i) & (ii)

3. Increased GAP penetration for Katrina

Alex to share best practice with Katrina but involve Tony when understand his ‘best practice’

Kat to 20% BE 31/09/09 Kat selling GAP, Alex S’guard

Monitor progress for both

A (i) 4. Increase GAP penetration

Double documenting at handover – one without GAP etc., one with, to show cost/month diff to protect

100% of relevant docs

BE Put back to 30/09/09

GMAC sys teething troubles

Spk SJH re payouts

A (i) 5. Increase GAP penetration

‘Unprotected’ Stamped on each Finance Document (or IDD for Black Horse) where not taking GAP already

100% of relevant docs

BE 12/06/09 (Actual 14/07)

DONE Ongoing checking

B (i), (ii) & (iii)

6. Improved rate spread

Decide, set & communicate new HQ base rate policy. Develop std. work JI for process & new starters. Identify training esp.objectionhandling

Raise to 1.00%

BE + BF & SJH

JIs by 30/09/0931/12/09

Paying on VB + New rate 14/07

Check expected increase

C. 7. Increase Used finance penetration

Increase finance awareness on website so customer can propose self on-line

finance@ hutchings.

BE 05/06/09DONE Ongoing

checking

C(i) & (ii)

8. Increase Used finance penetration

Develop standard process and identify training needs – esp. Alex & Gavin

Both to 30%

BE + IC 31/12/09 Begun, ongoing

Check progress

C (iii) 9. Each (New as well as) Used sales person reaching target on all financial products

Different remuneration method – based on IPUD –as per Dealer B. Pay on VB ASAP to max. oppty. to do bus with GMAC but must sell 100% products to100% customers100% of timeStandard process VITAL

New method. All Used sales team > XX% pen

BE + BF & SJH & IC

New method 30/09/09Target by 31/12

Not started Develop plan & new method

C 10. Improved S/guard revenue (& IPUD) by Alex & Lewis

Katrina to share best practice with Alex and Lewis. Maybe involve Tony

Alex to15% Lewis 15%

BE + IC 30/09/09 Alex now selling S’guard

Check progress for both

(*Income Per Unit Delivered)

A. New car GAP too low: Causes:i) Variation in process ii) Untrained staff

B. New & Used Rate Spread too low: Causes: i) No policy, ii) Variation in process iii) Untrained staff

C. Used Fin Pen too low: Causes: i) Variation in process ii) Staff untrained inc negotiation skills,

iii) Remuneration

Dealer Average Max

Target/Goal – and thus the gap to close is: £38,000:IPUD (£/unit)(inc VB, excl Safeguard)

DealerCurrent

GMAC:“a good job”

Dealer Target

Gap to Close(Target – Current)

Close By: Rate of Climb / monthJuly to December:

New £167 £350 £280 £113 31/12/09 7%-10%-9%-10%-8%-5%

Used £112 £250 £230 £118 31/12/09 14%-19%-11%-10%-5%-9%

Circulation: JH BF. SH SM NC

Summary: A3 Planning / Thinking (PDCA)

Background(why are we talking

about this?)

Current Situation

(what’s happening now?)

Target/Goal(where, quantitatively, in QDCP terms do we

want to get to?)

(Root Cause) Analysis(showing the working out) Early analysis informs the

Current Situation

Countermeasures(with timing plan – who is going to do what by

when)

Effect Confirmation

(Did the countermeasures

work?)

Follow-up Issues (what still needs

sorting)

Team members

Plan Do, Check, Act

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Title (summary of problem) Project Owner / Sponsor

Discussion Workshop

Applying PDCA A3 Thinking and Problem Solving

John S. KiffLean Summit 2012

applying pdca, a3 thinking & problem solving

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