creating successful change using continuous improvement methods

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

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Page 1: Creating Successful Change Using Continuous Improvement Methods

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

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Creating Successful Change Using Continuous

Improvement Methods

SWaMFest VIISeptember 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

Page 2: Creating Successful Change Using Continuous Improvement Methods

2Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 3: Creating Successful Change Using Continuous Improvement Methods

3Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 4: Creating Successful Change Using Continuous Improvement Methods

4Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

World Increasing Complex

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

Providers

Receivers

Alternatives

EnvironmentTechnology – Regulation – Economy – Culture

Funding

Materials

Equipment

HumanResources

Outputs

Requests / Requirements

Outputs

Any Organization

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

Page 5: Creating Successful Change Using Continuous Improvement Methods

5Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

“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

Page 6: Creating Successful Change Using Continuous Improvement Methods

6Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Continuous Improvement

Breakthrough Improvement

DailyImprovement

12

Page 7: Creating Successful Change Using Continuous Improvement Methods

7Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Principles ofContinuous Improvement

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 ActivityAn activity that changes the size, shape, fit, form, or function of material or information (for the first time) to meet customer demands and requirements.

An activity that consumes time or resources, but does not satisfy customer demands and requirements.

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

14

Page 8: Creating Successful Change Using Continuous Improvement Methods

8Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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.

ProcessInputs Outputs

Suppliers Customers

15

Process Examples

Business– Order entry– Invoicing– Product / service

development– Material / service

acquisition– Product / service

delivery– Personnel hiring– Budgeting

Other– Planning a family

vacation– Getting ready for work– Buying a car– Preparing dinner– Ordering shoes on-line– Obtaining a new

prescription

16

Page 9: Creating Successful Change Using Continuous Improvement Methods

9Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Two types of measures:1. Result - Describe the outputs of the process2. Driver - Describe the inputs and/or steps of the process

Measuring Process Performance

Drivers Results

ProcessInputs Outputs

Suppliers Customers

17

Variation and Waste

Variation is Everywhere

σ Materials

σ Equipment

σ Work Practices

σ People

σ Measurement

σ Demand

σ Environment

The 8 Wastes

Defects

Over Production

Waiting

Not Engaging Employees

Transportation

Inventory

Motion

Excess Processing

18

Generates

Generates

Page 10: Creating Successful Change Using Continuous Improvement Methods

10Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Hidden Costs of Variation and Waste

Overtime

Rework

Inspection/ChecksMissed Schedules

Budget Overruns

Hidden Costs(Difficult to measure)

Lost

Opportunity

Traditional Costs(Easily identified)

Lost Sales/Orders

Change Requests

Long Cycle Times

Expediting Costs

Productivity Loss

Employee Morale, Turnover

Late Delivery

Excess Inventory

Lost Customer Loyalty

Low Customer Satisfaction

Outsourcing

19

Improving Process Performance

ProcessInputs Outputs

Must change inputs & process To impact results

20

Page 11: Creating Successful Change Using Continuous Improvement Methods

11Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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– Shared Vision, Mission &

Core Values– Voice of Customer– Key Measures– Prioritization Matrix– Charter

Process Understanding / Documentation– Process Map/Flow Chart– Work Instructions– Visual Communication– Control Plan

Process Analysis– Value Analysis– Pareto Chart– Histogram– Run Chart– Basic Statistics– Scatter Plot– Fishbone Diagram

Team/Stakeholder– Action Register– Stakeholder Analysis– Communication Plan– RACI

22

Page 12: Creating Successful Change Using Continuous Improvement Methods

12Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 13: Creating Successful Change Using Continuous Improvement Methods

13Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Radical Change

Incremental Change

26

Page 14: Creating Successful Change Using Continuous Improvement Methods

14Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

27

From: John P. Kotter. Leading Change. Boston, MA: Harvard Business School Press, 1996.

28

Kotter’s Eight-Stage Change Process

1. Establish a Sense of Urgency2. Create the Guiding Coalition3. Develop a Vision and Strategy4. Communicate the Change Vision5. Empower Broad-Based Action6. Generate Short-Term Wins7. Consolidate Gains and Produce More Change8. Anchor New Approaches in the Culture

From: John P. Kotter. Leading Change. Boston, MA: Harvard Business School Press, 1996.

Page 15: Creating Successful Change Using Continuous Improvement Methods

15Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Five Elements Needed for Creating Change

29

Vision IncentiveSkills Resources Action Plan Change

IncentiveSkills Resources Action Plan Confusion

Vision Incentive Resources Action Plan Anxiety

Vision Skills Resources Action PlanGradualChange

Vision IncentiveSkills Action Plan Frustration

Vision IncentiveSkills ResourcesFalseStarts

Creativity

Innovation

AnxietyResistance

Confusion

Transition Zone

Bridges: Managing Change

30

Excitement

Anticipation

Confusion

FrustrationReservation

Denial

Ending

Uncertainty

Exploration

Commitment

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

AccomplishmentHigh Energy

Learning

ReliefUnsure

Ambivalence

New Beginning

Skepticism

Page 16: Creating Successful Change Using Continuous Improvement Methods

16Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Ending Transition Zone New Beginning Communicate the

What, Why and How

Acknowledge emotions, don’t get defensive

Mark Endings

Allow resistance to surface

Provide information about the future/use personnel support structures

Encourage creativity and innovation

Talk to employees about individual transitions

Integrate details into meetings and events

Reward and Recognize

Celebrate

Ensure organizational support for new beginning

Managing Change: Tactics by Phase

31

Get leadership to play a role

Expose key leaders and stakeholders to these concepts/ conduct trainings

Communicate the What, Why and How

Consider how it integrates into other areas of the plan

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

32

Brain Barriers to Strategic ChangeRight Thing Wrong Thing

Done Well

Done Poorly

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

Brain Barrier 1: When opportunities or threats stare people in the face, they fail to see the need to change

Brain Barrier 2: Even when people see the need to change, they often fail to move

Brain Barrier 3: Even when people move, they fail to finish

Page 17: Creating Successful Change Using Continuous Improvement Methods

17Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

33

Leading Strategic ChangeRight Thing Wrong Thing

Done Well

Done Poorly

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

1. Repeat message2. Create high-

impact, inescapable confrontations of the facts

1. Make sure destination is clear

2. Provide skills, resources, tools

3. Deliver valuable rewards along the way

1. Provide champions

2. Make the results visible

Common Themes

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

35

Page 18: Creating Successful Change Using Continuous Improvement Methods

18Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Continuous Improvement Tools for Change

Key CI Tools for Managing Change Strategic Focus

– Shared Vision, Mission & Core Values

– Voice of Customer– Key Measures– Prioritization Matrix– Charter

Helping Employees “See”– Simple Flow Chart– Cross Functional Flow Chart– Histogram– Run Chart– Pareto Chart

Communication– Visual Communication– Stakeholder Analysis– Communication Plan

Action Planning– Action Register– RACI

Hold the Gains– Work Instructions– Control Plan

37

Page 19: Creating Successful Change Using Continuous Improvement Methods

19Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 20: Creating Successful Change Using Continuous Improvement Methods

20Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Strategic Change & Improvement

Strategic Change & Improvement

Identify Opportunities

Prioritize & Select

Charter

Scope

Shared Vision, Mission, Values, Key Measures & Voice of Customer

41

Shared Vision, Mission, Values, Key Measures & Voice of Customer

Identify Opportunities for Change/Improvement

Shared Vision & Performance Targets

Opportunities to reach the

goals

Problems, Defects, Dissatisfaction

Issues needing attention

Potential Opportunities

43

Vo

ice

of

the

Cu

sto

mer

Un

met

o

r n

ew

nee

ds

Missio

n &

Co

re Valu

es

Un

align

ed

Pro

du

cts &

Services

Page 21: Creating Successful Change Using Continuous Improvement Methods

21Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

45

Relationship Current State, Mission, Vision and Core Values

Vision

Time

Current State

Page 22: Creating Successful Change Using Continuous Improvement Methods

22Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 23: Creating Successful Change Using Continuous Improvement Methods

23Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

VOC Data Collection

Customer What & Why Reactive Sources

ProactiveSources Summary

Who is your customer –

internal and/or external?

What do you want to ask them and what information do you need to probe for?

Why are you asking these questions –what information are you expecting to gain?

What reactive actions will you take to gain the information –customer complaint data, monthly scorecard information, customer feedback, etc.

What proactive actions will you take to gain the information –surveys, interviews, customer focus groups, meetings, etc.

What information did you gain from the probing? What does the customer need from your process?

48

49

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!

Page 24: Creating Successful Change Using Continuous Improvement Methods

24Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 25: Creating Successful Change Using Continuous Improvement Methods

25Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Translate VOC to Customer Requirements

Voice of Customer(Actual Statements)

Key Customer Issue / Need

Customer Requirement

“This remote does not work!”

Does not understand the operation of the remote.

All remote functions are useable with little to no instructions.

“I don’t want to listen to a bunch of options and then wait on hold.”

Wants to talk to a person quickly when calls for customer service.

Less than 3 options on the phone tree and sufficient CSRs to handle peak calls.

“Why do I have to fill out another form? You already have my information on file.”

Does not want to spend time repeatedly providing the same information before obtaining service.

Verify information and update only when there are changes.

52

CTQ Tree Translates customer expectations into requirements.

53

Cup of Coffee

Temperature

Taste

Volume

Cost

Hot

Good

Full Cup

Cheap

Degrees F

Customer Taste Satisfaction

Number of Ounces

$

Between 150 & 155 Degrees F

At least 4 on Scale of 1-5

No Less Than 10 Oz

No More Than $1

Drivers CTQCs Measures RequirementNeed

Page 26: Creating Successful Change Using Continuous Improvement Methods

26Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 27: Creating Successful Change Using Continuous Improvement Methods

27Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Delighters

Must Be

Delight

Neutral

Dissatisfaction

Cu

sto

me

r S

ati

sfa

cti

on

Degree ofAchievement

FulfilledAbsent

PleasedResignedto Reality

NotPleased

Taken forGranted

The Kano Model

– Must be characteristics are generally taken for granted—unless they are absent!

– Delighters are generally not mentioned, since the customers are not dissatisfied with their absence.

– Customers generally discuss or bring up issues related to More Is Bettercharacteristics.

57

On-line Ordering Kano Model

59

Delighters

Must Be

Delight

Neutral

Dissatisfaction

Cu

sto

me

r S

ati

sfa

cti

on

Degree of

Achievement

FulfilledAbsent

Not

Pleased

Taken for

Granted

Received NextBusiness Day

Sizes &Colors

Catalog up-to-date

Website menus easy to navigate

Links to items correct

Page 28: Creating Successful Change Using Continuous Improvement Methods

28Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 29: Creating Successful Change Using Continuous Improvement Methods

29Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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 ExampleTitle 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

Page 30: Creating Successful Change Using Continuous Improvement Methods

30Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

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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 Importance

10 8 9 4 6

Impa

ct o

n C

usto

mer

Cos

t to

Im

plem

ent

Pro

babi

lity

of

Suc

cess

Res

ourc

es

Req

uire

d

Tim

e to

Im

plem

ent

Total

Option

1 Option A 3 9 3 1 3 1512 Option B 9 3 9 3 1 2133 Option C 3 1 1 1 3 694 Option D 3 3 1 1 9 121

Criteria

Page 31: Creating Successful Change Using Continuous Improvement Methods

31Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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 Opportunity (10)– 9: > $1 MM– 3 : $250 K to $1 MM– 1: < $250 K

Probability of Success (7)– 9: > than 80%– 3: 50 to 80%– 1: < 50%

Time to Complete (5)– 9: ≤ 4 months– 3: 5 to 6 months– 1: > 6 months

Customer Impact (8)– 9: strong positive and

visible impact– 3: low positive or no visible

impact– 1: negative or no impact

69

Page 32: Creating Successful Change Using Continuous Improvement Methods

32Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Rating of Importance ---> 10 7 5 8

Opportunities Do

llar

Imp

act

Pro

bab

ility

of

Su

cces

s

Tim

e to

C

om

ple

te

Cu

sto

mer

Im

pac

t

Total

Time Reconcile Balance Sheet 3 3 3 3 90Invoice Posting First Match Rate 9 3 3 9 198

Interco Manual Invoicing Errors 3 3 3 3 90Time to Archive Financial Docs 1 9 3 3 112Cost Center Splits 1 1 1 3 46Manual Payment Processing 3 3 9 9 168T&E Reconciliation Time 1 3 3 1 54Vendor Data Error Rate 9 3 3 3 150

Impact Ratings

Prioritization Matrix ExampleOpportunities Criteria

70

Prioritization Matrix Example

Rating of Importance ---> 10 7 5 8

Opportunities Do

lloar

Im

pac

t

Pro

bab

ility

of

Su

cces

s

Tim

e to

C

om

ple

te

Cu

sto

mer

Im

pac

t

Total

Invoice Posting First Match 9 3 3 9 198Manual Payment Processing 3 3 9 9 168Vendor Data Error Rate 9 3 3 3 150Time to Archive Financial Docs 1 9 3 3 112Time Reconcile Balance Sheet 3 3 3 3 90Interco Manual Invoicing Errors 3 3 3 3 90

T&E Reconciliation Time 1 3 3 1 54Cost Center Splits 1 1 1 3 46

71

Page 33: Creating Successful Change Using Continuous Improvement Methods

33Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

Page 34: Creating Successful Change Using Continuous Improvement Methods

34Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

EntitlementBaseline Closing the

Gap

GoalPerformance Gap

76

Page 35: Creating Successful Change Using Continuous Improvement Methods

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

Page 36: Creating Successful Change Using Continuous Improvement Methods

35Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

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36Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

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37Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Paint Manufacturing Simple Flow Chart

81

Loan Approval Simple Flow Chart

82

Page 39: Creating Successful Change Using Continuous Improvement Methods

38Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Kidney Transplant Flow Chart

83

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

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

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39Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Invoice Process Cross Functional Flow Chart

87

Sha

red

Ser

vice

C

ente

rP

lann

ing

&

Con

trol

Tea

m M

anag

erS

ecre

tary

Con

sulta

nt

Invoice Process Cross Functional Flow Chart

88

Clie

ntS

hare

d S

ervi

ce

Cen

ter

Acc

ount

Mgr

Page 41: Creating Successful Change Using Continuous Improvement Methods

40Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Paint Manufacturing Cross Function Flow Chart

89

Paint Manufacturing

Blen

der

Sche

dule

rLa

b Te

chFi

ll O

pera

tor

Phase

Recipe

Charge Materials Mix Sample

Test Ok?

Charge Additional Material

Fill Tank Empty?

Empty Fill Tank

Wait Drop to Fill Tank

Loan Approval Cross Functional Flow Chart

90

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41Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Identify Actual Process

You may think the process is:

When it is actually:

93

Go see the process!

Actual Process Example

94

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42Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Increasing Process Understanding

Changing and improving the process requires increasing understanding of process details.

95

Process Performance ChartsHow are the six sales regions performing?Region 4Qtr96 3Qtr96 4Qtr95

North East 1148 976 952

South East 1337 1197 1196

North West 806 688 878

North Central

702 743 670

Mid‐Atlantic

781 807 802

South Central

359 447 462

• Basic charts help employees “see” the overall process performance, including the location and variability and patterns/trends in performance.

• Facilitate comparisons to requirements or targets or benchmarks.

• Help focus change/improvement efforts.

• Help create a sense of urgency.

• Include: Histogram, Run Chart, Pareto Chart

98

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Process Performance Charts

What Is This?A Picture is Worth a Thousand 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

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Potential Histogram Patterns

101

Bimodal

Skewed

Bell-Shaped

Sales by Region

103

Time Northeast Southwest Northwest N. Central Mid-Atlantic S. Central1992_Q1 924 1056 1412 431 539 3971992_Q2 928 1048 1280 470 558 3911992_Q3 956 1129 1129 439 591 4141992_Q4 1222 1073 1181 431 556 4071993_Q1 748 1157 1149 471 540 4151993_Q2 962 1146 1248 496 590 4421993_Q3 983 1064 1103 506 606 3841993_Q4 1024 1213 1021 573 643 4481994_Q1 991 1088 1085 403 657 4411994_Q2 978 1322 1125 440 602 3661994_Q3 1040 1256 910 371 596 4701994_Q4 1295 1132 999 405 640 4261995_Q1 765 1352 883 466 691 4451995_Q2 1008 1353 851 536 723 4551995_Q3 1038 1466 997 551 701 3631995_Q4 952 1196 878 670 802 4621996_Q1 1041 1330 939 588 749 4201996_Q2 1020 1003 834 699 762 4541996_Q3 976 1197 688 743 807 4471996_Q4 1148 1337 806 702 781 359

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Sales by Region

104

140012001000800600400

14

12

10

8

6

4

2

0

Northeast

Freq

uenc

y

Histogram of Northeast

140012001000800600400

7

6

5

4

3

2

1

0

Southwest

Freq

uenc

y

Histogram of Southwest

140012001000800600400

5

4

3

2

1

0

Northwest

Freq

uenc

y

Histogram of Northwest

Sales by Region

105

140012001000800600400

7

6

5

4

3

2

1

0

N. Central

Freq

uenc

y

Histogram of N. Central

140012001000800600400

9

8

7

6

5

4

3

2

1

0

Mid-Atlantic

Freq

uenc

y

Histogram of Mid-Atlantic

140012001000800600400

18

16

14

12

10

8

6

4

2

0

S. Central

Freq

uenc

y

Histogram of S. Central

Page 47: Creating Successful Change Using Continuous Improvement Methods

46Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Kidney Transplant HistogramOriginal Process

106

0

10

20

30

40

50

60

70

80

90

Number observations

Days for completion

Total Processing Time

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

Kidney Transplant HistogramImproved Process

107

0

5

10

15

20

25

30

35

40

Number observations

Days for completion

Total Processing Time

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

Page 48: Creating Successful Change Using Continuous Improvement Methods

47Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

109

2001601208040

14

12

10

8

6

4

2

0

Time

Freq

uenc

y

Histogram of Time

The addition of requirements to the Histogram allows one to see how the process performance compares to the requirements.

Page 49: Creating Successful Change Using Continuous Improvement Methods

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Variation and Customer Satisfaction

110

LSL USL

$

$

$

$

$$

$

$

$

$$

$

$

$

$

$

$

$

$$

$

$

$

$$

$

$

$

$

$

$

$

$$

$

$

$

$$

$

$

$

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

Page 50: Creating Successful Change Using Continuous Improvement Methods

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

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

40.000

45.000

50.000

55.000

60.000

65.000

70.000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Intermittent Variation

40.000

45.000

50.000

55.000

60.000

65.000

70.000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Shift

40.000

45.000

50.000

55.000

60.000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Trend

35.000

40.000

45.000

50.000

55.000

60.000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Cycle

35.000

40.000

45.000

50.000

55.000

60.000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Rapid Swings in Variation

113

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Sales by Region

115

1996

_Q4

1996

_Q2

1995

_Q4

1995

_Q2

1994

_Q4

1994

_Q2

1993

_Q4

1993

_Q2

1992

_Q4

1992

_Q2

1300

1200

1100

1000

900

800

700

Time

Nort

heas

t

Northeast Sales

1996

_Q4

1996

_Q2

1995

_Q4

1995

_Q2

1994

_Q4

1994

_Q2

1993

_Q4

1993

_Q2

1992

_Q4

1992

_Q2

1500

1400

1300

1200

1100

1000

Time

Sout

hwes

t

Southwest Sales

1996

_Q4

1996

_Q2

1995

_Q4

1995

_Q2

1994

_Q4

1994

_Q2

1993

_Q4

1993

_Q2

1992

_Q4

1992

_Q2

1500

1400

1300

1200

1100

1000

900

800

700

600

Time

Nort

hwes

t

Northwest Sales

Sales by Region

116

1996_Q41996_Q21995_Q41995_Q21994_Q41994_Q21993_Q41993_Q21992_Q41992_Q2

750

700

650

600

550

500

450

400

350

Time

N. C

entr

al

N. Central Sales

1996_Q41996_Q21995_Q41995_Q21994_Q41994_Q21993_Q41993_Q21992_Q41992_Q2

800

750

700

650

600

550

500

Time

Mid

-Atl

anti

c

Mid-Atlantic Sales

1996_Q41996_Q21995_Q41995_Q21994_Q41994_Q21993_Q41993_Q21992_Q41992_Q2

475

450

425

400

375

350

Time

S. C

entr

al

S. Central Sales

Page 52: Creating Successful Change Using Continuous Improvement Methods

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Run Chart of Paint Batch Cycle Time

117

50454035302520151051

225

200

175

150

125

100

75

50

Index

Tim

e

Batch Cycle Time

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

118

Run Chart: Lack of Standard Work

90817263544536271891

140

130

120

110

100

90

80

Page 53: Creating Successful Change Using Continuous Improvement Methods

52Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

180160140120100806040201

40000

30000

20000

10000

0

Production Run

Ove

rage

(lin

ear

feet

)

Overage by Production Run

Run Chart: Visualize Improvement

119

Work Instructionsimplemented Weekly audits

implemented

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

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Are the 4 Processes the Same?

Statistic Process A Process B Process C Process DAverage 70.0 70.0 70.0 70.0

121

Statistic Process A Process B Process C Process DAverage 70.0 70.0 70.0 70.0

Standard Deviation 10.0 10.0 10.0 32.4

Are the 4 Processes the Same?

Statistic Process A Process B Process C Process DAverage 70.0 70.0 70.0 70.0

Standard Deviation 10.0 10.0 10.0 32.4

Median 70.0 65.7 73.8 74.2

122

Statistic Process A Process B Process C Process DAverage 70.0 70.0 70.0 70.0

Standard Deviation 10.0 10.1 10.0 32.4

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

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

123

A

Freq

uenc

y

10090807060504030

70

60

50

40

30

20

10

0

Histogram of A

B

Freq

uenc

y

130120110100908070

140

120

100

80

60

40

20

0

Histogram of B

C

Freq

uenc

y

7260483624120

250

200

150

100

50

0

Histogram of C

Histograms of the 4 Processes

12010080604020

60

50

40

30

20

10

0

E

Freq

uenc

y

Histogram of E

124

Run Charts of the 4 Processes

500450400350300250200150100501

140

120

100

80

60

40

20

0

Index

E

Run Chart of E

500450400350300250200150100501

130

120

110

100

90

80

70

60

Index

B

Run Chart of B

500450400350300250200150100501

110

100

90

80

70

60

50

40

30

Index

A

Run Chart of A

500450400350300250200150100501

80

70

60

50

40

30

20

10

0

Index

C

Run Chart of C

Page 56: Creating Successful Change Using Continuous Improvement Methods

55Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Pareto Chart

Bar chart of the frequency of categories associated with a specific situation.

Helps “see” those categories that are having the greatest impact.– 80-20 Rule

Helps focus change/ improvement efforts.

125

Pareto Chart ExampleInjuries by Year

InjuryTotal for

Year% Cum

%

Eye 242 40.3 40.3

Hand 130 21.7 62.0

Back 117 19.5 79.5

Arm 64 10.7 91.2

Other 47 7.8 100.0

Total 600 100.0

126

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56Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Pareto Chart of Invoice Errors

0

10

20

30

40

50

60

Goods ReceivedMismatch

PO # Missing Goods Not Received PO # Misquoted Price Mismatch Customer InfoMismatch

Count

Error Type

Number of Invoice Errors by Type ‐ August 2008 

127

Pizza Delivery Pareto

0%

20%

40%

60%

80%

100%

120%

0

10

20

30

40

50

60

70

80

Count

Defect

Pizza Delivery Service Defects ‐Frequency

0%

20%

40%

60%

80%

100%

120%

0

50

100

150

200

250

impact

Defect

Pizza Delivery Service Defects ‐Customer Satisfaction Impact

128

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57Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Using Pareto Chart for Focus Use multiple levels to help narrow focus and identify root

causes:

129

Pareto Chart Procedure Make a list of categories to compare. Select standard unit(s) of measurement (count,

time, cost) and time period. Gather the data. Determine the total count, time, cost, etc for

each category. Put in decreasing order. Draw bars representing the magnitude of the

unit of measurement for each category. Review and act on the information!

133

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Key Tools for Communicating Change

Communication is key throughout all change and improvement efforts.

Key tools for communication include:– Stakeholder Analysis– Communication Plan– Visual Communication

134

Stakeholder Analysis A stakeholder is anyone who will be affected by a

project or change in the process.– Stakeholders may include suppliers, customers,

employees, management, other departments, competitors, etc.

Stakeholder analysis identifies all the key stakeholders who will be affected, their current level of commitment and their desired level of commitment and actions to move them from current level to desired level.– Communication plan– Relationship to / member of team

135

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Stakeholder Analysis Matrix

136

Stakeholders Current Commitment

Desired Commitment

Project Impact

Level of Influence

Key Concerns/ Needs/Issues

Action Steps (To move from Current

to Desired Commitment level?)

Relationship Owner

Include all levels that will

be affected and list out

specific names of key leadership/

management

Awareness= Has heard of the effort but hasn’t been affected yet Understanding= Know how will be affected by the effort and has started to tell other people Buy-in= Believe the new way of doing things will work for customers, company and self Ownership= Convinced this is the right way to go and trying to get others on the bandwagon

High= Significant change… Medium= Some change… Low=Minor change… to processes, roles & responsibilities or behavior/ skills

High=If this person/group supports this effort, everyone else will get on board Medium=If this person/group supports this effort, some others will be more likely to get on board Low=If this person/group supports this effort, it won’t

Identify the key issues of this stakeholder

that need to be addressed to move

from current to desired level of

commitment

List any key ideas to feed into key messages for

communication plan

Team member names who

will stay connected with

stakeholder

Levels of Commitment

“I feel personally accountable for the success of the effort, and I will lead the charge! ”

Complexity(depth of

information,interactivity,

etc.)

Time

Awareness

Understanding

Buy-in

Ownership

I have heard about the effort”

“I understand the business case and direction of the effort, and I will not stand in the way.”

“I agree with the business case and direction of the effort, and will participate moving forward.”

137

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Stakeholder Analysis ExampleStakeholders

Current Commitment

Desired Commitment

Project Impact

Level of Influence

Key Concerns/ Needs/Issues

Action StepsRelationship

Owner

AR Analysts Aware Buy-in High High

Accurate, timely cash allocation; no

additional tasks; job security

Weekly updates; involve in

brainstorming sessions

Andrea

AR Supervisor & Team Leaders

Understanding Ownership High High

Accurate, timely cash allocation; no

additional tasks or controls

Weekly updates; supron project team

Suzanna

Audit Dept Aware Understanding Low MediumAppropriate controls used; pass internal &

external audits

Monthly updates; involve in sol’ns

involving controlsAndrea

General Ledger Dept

Aware Understanding Low LowNo change to

systemsMonthly updates Peter

Banks Aware Buy-in Medium High No additional costs

Identify key contact major banks to serve as ext’l resource to

team; engage in select team activities

John

Business Unit Aware Ownership High High

Accurate, timely cash allocation; no

additional costs; no additional tasks or

controls

Weekly updates to all; add

representative to team

Andrea

Business Center

ManagementBuy-in Ownership Low High

Accurate, timely cash allocation, no

additional costs or resources

Weekly updates Andrea

138

Communication Plan

A tool to define key communication activities to address stakeholder communication needs.

StakeholderStakeholderConcern /

Need

Communication Description

(What)

Mechanism (How)

Sender (Who)

Frequency (HowOften)

139Roadmap

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Communication Plan Example

140

StakeholderStakeholderConcern /

Need

Communication Description

(What)

Mechanism (How)

Sender (Who)

Frequency (HowOften)

Country Key Users

Impact on their work load/changes to their daily work

Plans and audit results Teleconference Jason

Beginning & end of pilot

Country Financial Directors

Impact on vendors& cash flow

System monthly performance metrics KPI meeting Peter

Monthly during pilot

ApproversVolume, number

of banksDaily performance

metrics Team meeting Elaine Weekly during pilot

Cash & BankingWork load, frequency

Daily performance metrics Team meeting Jason

Weekly during pilot

AuditSecurity & policy

compliancePlans and audit

results F2F meeting PeterBeginning & end of pilot

Accounts Payable

Volume, workloadDaily performance

metrics Team meeting JasonWeekly

during pilot

TreasuryImpact on vendors

& cash flowSystem monthly

performance metrics KPI meeting PeterMonthly

during pilot

eInvoicing Communication Plan

141

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Building a Communication PlanAnswer the following questions: Who do you need to communicate with? What are their main concerns/needs? What is their current knowledge, commitment? What is the best medium?

– Newsletter, email, voicemail– Town hall or all hands, small groups– Memo/letter, video, intranet/internet– One-on-ones– Visual displays, visual controls

How often should they be communicated with?143

Visual Communication

Techniques that help us understand and make visible what’s happening in our workplace so that we can act on fact to achieve better results.

When anyone can walk into a workplace and visually understand the current situation.

Two forms:– Visual Displays– Visual Controls

Problems Have No Place To Hide !

144

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Visual Communication Where in your daily life do you come across

visual communication?

145

Visual Displays

Used to visually describe the performance of the process.– Includes all relevant metrics for the process.

• Example: Safety, Quality, Cost, Throughput, Service

– Includes the performance goal.– Graphical and colorful.– Readable from a distance.

Do not control what people or equipment do. Help drive change/improvement of the process.

– Need to be kept current!

147

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Scorecard Example

148

Scoreboard Example

149

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Visual Controls

Communicate information so that activities are performed according to standards.– Indicators for regulating the process– Labels– Signals

Help individuals control the performance of the process by indicating when to take action/when not to take action and/or type of action to take.

151

Visual Controls

152

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Key Action Planning Tools

Once the need for change/improvement is “seen” and understood, action planning is required to identify the tasks, responsibilities and timing for the change/improvement.

Two useful action planning tools are:– Action Register– RACI

153

Action Register Identifies actions to be taken, who is responsible

for each action, and timing. Reviewed at beginning and end of each

change/improvement team meeting.– Celebrate completed actions and capture lessons

learned.– Identify assistance needed to complete overdue

actions.

154

Date Who When StatusWhat

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67Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Action Register Example

155

Process: Order Entry

Date: 3/3/2005Project Began: 2/14/2005 Indicator

Champion: Mike Smith Green

Team Leader: Greg Thompson Yellow

Team Members:Mark Long, Cheryl Martin, Ken Short, Chris Bower

Red

Coach: Sarah Cohen

Date Who When Status2/14/2005 Greg 2/21/2005 Complete2/14/2005 Greg 2/21/2005 Complete2/14/2005 Cheryl 2/16/2005 Complete2/14/2005 Ken 2/17/2005 Complete2/28/2005 Mark 4/1/2005 In-process

Set up Team Meeting ScheduleSet up Department Reviews with SponsorObtain training for CSRs on electronic credit checksProvide CSRs access to electronic credit checksDefine look-up structure

Status

Task In-Process or Needs Follow-up

Alert! Task Behind Schedule

Task Complete

Action Register

What

RACI

Defines who is Responsible, Accountable, Consulted, and Informed for each task.

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R- Responsible-Individual(s) who perform a task; the doer; responsible for action/ implementation (may be shared)A - Accountable- Individual who is ultimately accountable, includes yes/no power of veto (only one person can be accountable)C - Consulted-Individual(s) to be consulted prior to a final decision or action (two way communication)I- Informed-Individual(s) who need to be informed after a decision or action taken (one-way communication)

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# Task / Activity TimingConduct PEV Training for New PEVs

1 Serve as Lead Facilitator for PEV Training Mar-June A,R2 Serve as Lead Facilitator Coach / Mentor Mar-June A,R3 Register PEVCs for training Jan-May A

4 Request nominations for Training Mentors from Societies Dec-Jan A R

5 Nominate Training Mentors Dec-Jan C I6 Authorize PEV Training Mentors Dec-Jan A,R I7 Assign Training Mentor to PEVC Jan-May I I

8 Follow-up with PEVC re:Pre-work Mar-June C

9 Assemble/prepare PEV training materials; ship Mar-June A,C r r R

10 Support Facilitation Team (setup conf calls, team logistics) Mar-June A,R R

11 Make hotel reservations for PEVCs and Facilitators Mar-June C A,R R12 Process travel expenses for PEVCs and Facilitators Mar-June A R13 Provide back of the training room support Mar-June A,R R R r14 Provide feedback to Facilitators Mar-June A,R15 Gather feedback from Facilitators Mar-June A,R R R r

16 Assemble PEV Training metrics and other feedback Mar-June A,R R

17 Analyze PEV Training metrics and other feedback Jun-Jul A,R

18Select Facilitators (Lead and Support) for F2F training sessions

Nov R C C

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

157

RACI Definitions

Responsible – Individual(s) who perform a task; the doer, responsible for action/implementation. Responsibility can be shared.

Accountable – Individual who is ultimately accountable; includes yes/no and power of veto. (Buck stops here.) Only one person can be accountable.

Consulted – Individual(s) to be consulted prior to a final decision or action. 2-way communication

Informed – Individual(s) who need to be informed after a decision or action is taken.

RACI ExampleActivity Employee Admin Supervisor Regional

AccountingCorp

Accounting

Document Expenses A,R

Complete Expense Form A,R C

Forward to Supervisor A R

Review Expense Form C A,R

Approve Expense Form I A,R

Forward to Regional Accounting R A

Classify Expenses C A,R

Audit A,R

Determine Payment Type A,R

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

RACI 4-Step Process

1. Determine the tasks/activities to be performed.2. Prepare a list of individuals or roles.3. Create a matrix where tasks form the rows and

individuals/roles form the columns.4. Fill in the cells, as appropriate, with R, A, C,

and I.5. Get feedback and buy-in from all involved.

160

RACI Guidelines

Place accountability and responsibility at the lowest feasible level.

There can be only one accountability per activity. Authority must accompany accountability. Minimize the number of consults and informs. All roles and responsibilities must be

documented and communicated. Encourage teamwork.

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Key Hold the Gains Tools

Once change/improvement is made, efforts should be made to “anchor” the changes/ improvements into daily work.

Two CI common methods:– Work Instructions– Control Plan

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Work Instructions Written documents that describe the process and

the work practices in step-by-step detail. Describe standard work practices all agree to use to

run the process. Specify critical steps, methods, materials, forms,

equipment/instrumentation, and data. Provide a baseline of performance, allowing

personnel to evaluate effect of changes and/or improvements.

Allow employees to “get good at it.” Serves as organizational memory.

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Work Instruction

164

How Much Detail?

What’s and how’s critical to achieving minimal variation and waste.– Only essential information.

Dependent on knowledge and skill-level of individuals using work instruction.– Inexperienced: Detailed step-by-step instructions.– Expert: Checklist or simple flowchart.

Dependent on frequency of use.– Infrequent: Detailed step-by-step instructions.– Frequent: Checklist or simple flowchart.

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Text Work Instruction Format

166

Step Action Detailed Actions

1 Open pricing template Click on File>>Open

Double click on file to be opened Click on Enable Macros button

2 Apply pricing rules as determined by Supply Manager

Refer to Price Maintenance document, 9.0 below, for guidelines for using the functions listed in the **pricing** menu

3 Run Error Check report Select **pricing**>> error check from the toolbar

Select Yes from dialog box that asks if you’d like to proceed

Select OK when the “error check completed” dialog box appears (if errors detected then dialog box will show number of errors and open up the error worksheet tab when OK is selected)

Visual Work Instruction Format

167

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

168

Control Plan

One-page document that identifies the control methods for critical process inputs and outputs.

Provides protection against deviations to the new process through one or more control methods.

Includes a reaction plan to correct “out-of-control” situations.

Aid for process training and audit activities.

Elements of a Control Plan Critical inputs and outputs by process step,

including:– Desired conditions / tolerances / normal operating

range– Measurement technique– Measurement frequency– Control method– Reaction plan that describes what to do if problems

are encountered

References to applicable documentation and procedures.

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Possible Control Methods• Inspection• Audits (second or third

party)• Standardization

– Checklists– Run Rules– Procedures/Instructions– RACI– Training

• SPC• Mistake-proofing • Automated Process

Control170

Bet

ter

Employee Recognition Payment Control Plan Example

171

SampleSize

Sample Frequency

Criteria

20 random Monthly ≥ 0 error

20 random Monthly <5 days

All transactions

on report are

reviewed

Monthly ≥ 0 error

Reaction Plan

Review controls for automatic process

and correct with HRIT

Review payments to determine cause of

any delay in processing payment

Correct any issues with the general

ledger account to charge payment

Input/Output to be Controlled

Nomination Form

Cycle Time

General Ledger Reject Report

Control Method

Payroll processor collects and reviews 20 random sample

from workflow database to verify

approval, employee eligibility, and amount

to be paid

Payroll processor collects from

workflow database, information to

determine cycle time (time from when

request received to being processed)

Payroll accountant reviews general ledger report to

payment request

Responsible for Sustaining Control

Payroll Processor

Payroll Processor

Payroll AccountantVerify payment was charged to correct

account

Process Requirement

Correct form received for processing with

no errors

Payment processed to employee without

errors

Payment charged to correct account

Process Step

Review nomination form for appropriate approval, cost center

and employee eligibility

Process payment in next available payroll

cycle

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Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Packaging Control Plan Example

172

Process Step

Input Output Process SpecificationMeasurment

techniqueSample Freq Control Method Reaction Plan Responsible person

Bag Building

AdjustmentsBag with even

sides Bag with even side height and no spills on the line

visual inspection and downtime analysis

The downtime analysis should be done each

production week to explain the OEE results.

Weekly pm: This pm is for preparing the line before production. It includes the adjustments to be verified

and it ask to produce bags and boxes. At this step the final product (bag in a box) is controled

The weekly pm also include specs of adjsutments . The mechanic

should verify and do all adjustments until the bags sides

are even

Mechanic assigned to do the pm

Bag Building

Compression cam assembly

Bag with good side

sealThe seal should be on all bag height

visual inspection and downtime analysis

The downtime analysis should be done each

production week to explain the OEE results.

Weekly pm: This pm is for preparing the line before production. It includes the adjustments to be verified

and it ask to produce bags and boxes. At this step the final product (bag in a box) is controled

The weekly pm also include specs of adjsutments . The mechanic

should verify and do all adjustments until the bags sides

are even

Mechanic assigned to do the pm

Bag Building

Stretching fingers assembly

Bag with good side

sealThe seal should be on all bag height

visual inspection and downtime analysis

The downtime analysis should be done each

production week to explain the OEE results.

Weekly pm: This pm is for preparing the line before production. It includes the adjustments to be verified

and it ask to produce bags and boxes. At this step the final product (bag in a box) is controled

The weekly pm also include specs of adjsutments . The mechanic

should verify and do all adjustments until the bags sides

are even

Mechanic assigned to do the pm

Bag Building

Lubrication

Bag with good seal, machine

parts with no unusual wear

Lub should present in every bearing, bushing and mecanism.

visual inspectionBefore each

production runPlanning the pms to be done right after sanitation. Emphase on pm completion Technical supervisor

Bag and box

Building

Weekly mechanical inspection

Mechanical breakdowns at beginning of production or Starch and

parrafine accumulation

Boxformer should produce good quality at the beginning of the

production day. The inside of the machine should be clear of any

substance accumulation.

Produce bags and boxes before production

and visual inspection inside the machine

Before each production run

Weekly pm: This pm is for preparing the line before production. It includes the adjustments to be verified

and it ask to produce bags and boxes. At this step the final product (bag in a box) is controled

Emphase on pm completion Technical supervisor

Bag and boxes

BuildingTiming

Bag well formed, good

seals, box well formed.

Timing should be exact, as described in the machine reference

manual available at the planner place

Produce bags and boxes before production

Before each production run

Weekly pm: This pm is for preparing the line before production. It includes the adjustments to be verified

and it ask to produce bags and boxes. At this step the final product (bag in a box) is controled

Emphase on pm completion Technical supervisor

Bag and boxes

BuildingPaper quality

Not enough starch (do not accumulate

on your finger when

touching) or paper layers

stuck together

Paper should have starch between every layer. The starch should be visible and accumulate on fingers

visual inspectionEach time a new roll is installed

It is obvious on the line when it happens. The layers are very difficult to separate, they seem like laminated

together.

Call the supplier and discuss the origin of the problem

Technical supervisor

Bag and boxes

Building

Training of mechanics

Minimum amount of

time to adjust the former

Mechanics should know all adjustments, timing etc …

Training documents should be filled, the mechanic should be

able to explain the way the machine works

Each time a new mechanic comes

to the dept.

Be sure all documents have been discussed with the new mechanic. Be sure the new mechanic have been

matched with an experienced one to explain the machine mecanisms.

Go through the training process again.

Technical supervisor and line mecanic

Workshop Summary CI is a never-ending approach to improving

organizational performance. Change is the act or process of altering or

modifying; transforming from one state to another. Common themes to organizational change models

include:– Strategic focus– Helping employees “see” the need for change– Communication– Action planning– Hold the gains

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76Copyright © 2011 SOS Consulting, LLC. All rights reserved.

Creating Successful Change Using CI MethodsSWaMFest VII, September 15, 2011

Key CI Tools for Managing Change

Strategic Focus– Shared Vision, Mission &

Core Values– Voice of Customer– Key Measures– Prioritization Matrix– Charter

Helping Employees “See”– Process Map / Flow Chart– Histogram– Run Chart– Pareto Chart

Communication– Stakeholder Analysis– Communication Plan– Visual Communication

Action Planning– Action Register– RACI

Hold the Gains– Work Instructions– Control Plan

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Questions?

[email protected]