To Change with Intent...

1. To Change with Intent... ….For The Good of All …..Continual Improvement

2. Kaizen Events 1. Philosophy 2. Preparation 3. Training & the Event

3. CPI “You can know all there is to know about something except how to improve it. That requires a different set of skills, it requires new knowledge. A system cannot improve itself. That knowledge comes from outside the system, and only by invitation.” W. Edwards Deming

4. 1 Kaizen Events Philosophy!

6. Quality’s Chain Reaction Our Problem is Quality! Improve Productivity Improve Quality Decrease Cost Increase Market Share Grow The Business With Better Quality & Lower Price Decrease Prices How do you organize for Quality? W. Edwards Deming

7. Brief History • Has anyone heard of a gentleman named W. Edwards Deming? • Training, books, films, articles? • Has anyone heard of the “Toyota Production System?” • Training, books, films, articles, visit any plants? • The Toyota Production System is based on a philosophy that he calls “The System of Profound Knowledge” & The Fourteen Points • “The System of Profound Knowledge:” • Systems and Processes • Variation reduction in the Systems • Leadership requires “New Knowledge” to improve the Systems • Psychology of change in the people that work in the Systems • 5. What is a “System?”

8. What is a System? A “System”: A network of inter-dependent components (sub processes) that work together to try to accomplish the “Aim” of the “System.” The OUTCOME of any “System” pre-exist in the methods of that “System.”

9. Three Methods To Improve Quality 1. Improve The System: Improve the Process that creates the product, or service. (Factory #1) 2. Distort The System: Get the demanded result, but it will only be short lived. (Brut Force) 3. Distort the Figures: Use creative accounting to hide rework and waste. (VC Shuffle) CHOICES 2 & 3 ARE THE EASYEST BUT, THEN AGAIN, “SURVIVAL IS NOT MANDITORY”. W. Edwards Deming

10. The Organization As A System Management’s job is to improve the System, and to improve the people working in the system!

11. The Organization Viewed as a System G D Customer Welcome Center Owner Business Touch Points Experience G Survey Resort 1 Bonnet Ck Function 1 WCF SLT Owner Service Resort 2 Grand Desert M Function 2 HR D D Point Of Sale Purchase Process Function 3 Legal Resort 3 Information Data Information Data M Marketing Function 4 Owner Services Resort 4 X Resort 5 Function 5 Y D M X Suppliers Resort 6 Function 6 X VOC Y Resort etc. Function 7 “WEST” & “Medallia” Data Key: G G Y = f (X/CTQ) X G = Process Gap Quality Management Systems Process Alignment ~ Voice Of Customer ~ SOP & Control ~ Critical To Quality ~ SPC Design For Six Sigma ~ Best Practice ~ Leading Indicator Data ~ Gaps ~ PFMEA Process Control ~ Process Capability ~ Supplier Control & Development D = Data Needed

12. Moving to Process Management Develop Value Stream Map Organize Around The Process ~Team Based~ Gather The Voice of The Internal Customer *Measure Key Characteristics As Identified Conduct a SIPOC Analysis & Focus On Handoffs Establish Intrinsic Competition Based on Metric: Sigma Score / FPY Strategy: Establish Flow Establish Process Metrics Identify Gaps From VSM Conduct: Kaizens, Belt Projects Establish Supplier Score Cards & Feedback Methods The Aim is to Attack Waste In all Systems & Align The Processes Apply Lean~ Sigma Methodology

13. Customer Viewpoint: Process Results Guest / Front Desk Maintenance Purchasing Accounting Each HOA …For the Customer & the Business Becoming Aware Step 2….. Step X….. Successful or Unsuccessful Result The Process Mentality Business Viewpoint: Functional

14. “Four States Of A Process” Ideal State PROCESS IS PREDICTABLE 100% CONFORMING PRODUCT Control Charts: Maintain process in control Give timely warning of any troubles Threshold State PROCESS IS PREDICTABLE SOME NONCONFORMING PRODUCT Must either… Change process, or Change specifications Sorting is only a temporary fix Control Charts: Maintain process in control Evaluate efforts at improvement (A State of Continual Improvement) Entropy Brink of Chaos PROCESS IS NOT PREDICTABLE 100% CONFORMING PRODUCT All may seem okay, but…. Assignable Causes determine what is produced by the process! Quality and conformance can change in a moment. State of Chaos PROCESS IS NOT PREDICTABLE SOME NONCONFORMING PRODUCT Assignable Causes dominate process> Random fluctuations due to Assignable Causes will eventually frustrate efforts at process improvement Process Improvement Stuck Here!

15. All processes belong to one of four states. But Processes do not always remain in one state. It is possible for a process to move from one state to another. In fact there is a universal force acting on every process that will cause it to move in a certain direction. That force is Entropy. It continually acts upon all processes to cause breakdowns and failures. Because Entropy is relentless it causes every process to migrate toward the State of Chaos. There is only one way to move a process up to the Threshold State or the Ideal State and that is to use Shewhart’s control charts effectively for Process Improvement. However, whenever the information provided by the charts is not effectively used, the cycle of improvement is broken. These breaks allow Entropy to degrade the process, and as an assignable causes continue to occur, the sporadic improvements obtained from the charts will not suffice to overcome negative forces. Therefore, the process will slowly deteriorate.

16. “Body of Knowledge Required for the Transformation” Leadership, Creativity, Innovation 5S Kaizen Events Lean Systems Six Sigma Quality Value Stream One Piece Flow Cells Visual Controls Pull Systems Kanban Setup Production TPM Quick Strike 1-6 Days Process Mapping Cause & Effect Basic “Blocking & Tackling” Tools DMAIC Process Statistical Tools Value Stream Mapping PFMEA Cp and Cpk Gage R & R EMS ANOVA, Hypothesis Test, DOE, Optimization Sort Set in Order Shine Standardize Sustain Knowledge of Tools Closed Loop Performance Focus on Improvement Separate Organized Clean Visual First 4 S Waste, (Non-Value Added) Speed & C/T Standardization Inventory Control Logistics Cost Variance Reduction Complex Problems Variation Reduction Process Capability Defect Prevention Stability, Predictability Design Excellence Simple Tactical Focus Obvious Quick Fixes Containment Plug Holes in Dike Teaming, Team Based, and Employee Involvement

17. (Chaos) That becomes your System! How do you break out of that? Conduct a Kaizen Event to Establish, Change or Improve The System How do you organize for Quality? By organizing around your Value Stream!

18. Develop A High-Performance Team!

19. The Lean ~ Sigma System ANALYZE GAPS Repeat The Cycle Continual Process Improvement!! ID ROOT CAUSE OF PROBLEM HOW IS IT MEASURED? IF DESIRED RESULT Plan Project Charter ~ Aim Business Case, Problem Statement, Project Scoping, Goals, Identify Team Members Plan Define Charter VOC SIPOC S.I.P.O.C. Analysis ID CUSTOMERS ID SUPPLIERS S.W.O.T., M.O.S.T., VOC, Alignment of Processes, TDF / Team Skills, (Pre~Kaizen Event, Kaizen Event), Feedback Loops Identified, Clear Aim of System ID Stake Holders Plan “S” “C” PROCESS MAPPING ID OUTPUTS ID INPUTS Flowcharting, Value Stream, 5S, Visual Management, Lean Methods, Spaghetti Diagram, Muda Walk, 7QT, CTX, CTP, CTD, CTC, CTQ – QFD, GO TO GEMBA Do Force Field Analysis, “As-Is vs. Should Be” Brainstorming, MSE / GR&R ID GAPS Measure Data Collection Plan / Rational Execution Plan Do Scatter Plot, Needs of VOC & VOP, Discussion of Aim, PFMEA, 7 MP, 7 QT, Map-It, Sigma Level, Cpk, FPY, Study Brainstorming, VOC, Radar Chart, Affinity Chart, Fishbone, 7 Step, Data Collection Plan Analyze Voice Of the Process / Process Analysis Root Cause Analysis Analysis of Data and Process CTQ, CTX, CTY, CTB Feed Forward Loop Feed Back Loop Study SUPPLIERS & THEIR INPUTS CUSTOMERS & OUR OUTPUTS ID PROBLEM OWNERSHIP Feed Back Loop Act Feed Forward Loop FPY, MSE / GR&R, SPC/Control Chart, Run Chart, Histogram, Cp, Cpk, Key Characterization Should Be Map, C&E Matrix, Project Management, Brainstorming, Kaizen Event, PFMEA, 5S, Lean Methods Plan Improve Develop Plan Deploy Plan (Test) Stake Holder Analysis of Test Kaizen DEVELOP PLAN TO IMPROVE Check measurement system / repeat cycle KAIKAKU Do Generate Actions / Responsibility Poka Yoke, Cycle Time, VOP, VOC, Throughput, Cost, FPY, DOE, SPC, Cp, CpK, Stake Holder Analysis TEST PLAN Jidoka Study Study IF NOT DESIRED RESULT Heijunka Control PFMEA Control Plan Response Plan Improvement Plan VOC Act Meet 5-S Requirements? Process Failure Mode Effects Analysis Control & Reaction Plan Improvement Plan STANDARDIZE Communicate (Share) Results & Train to Standard ~ Deploy CELEBRATE IMPROVEMENT Property of Frank Haas et.al. Repeat Cycle

20. Scope of Improvement EffortsDefine the Start and Stop Points of the Process Feedback Loop Feedback Loop Inputs Outputs Process Customers Suppliers Gaps Gaps Feed Forward Loop Feed Forward Loop The S.I.P.O.C. View & Processes Identify the Pit Crew!

21. What is A Lean / Sigma? Six Sigma • Lean • Speed + No Waste + Implicit Infrastructure • Goal – Reduce waste and increase process speed • Focus – Bias for action / Implementing Toyota tools • Method –Kaizen Events, Value Stream Mapping, process balancing, constraint identification, mistake proofing • Quality, Cost + • Explicit Infrastructure • Goal – Improve performance on • Customer CTQs • Focus – Use DMAIC with Quality • Tools to eliminate variation • Method – Management engagement, • 1% dedicated as Black Belts Six Sigma Quality Enables Lean Speed (Fewer Defects Means Less Time Spent on Rework) Lean Speed Enables Six Sigma Quality (Faster Cycles of Experimentation / learning)

22. 2 Kaizen Event Preparation

23. Characteristics of a Kaizen Event? A focused activity undertaken by a selected team of stakeholders that over a short period of time enables incremental step improvements. It has three parts: Preparation The Event – 3-5 Days 30-Day Actions Is fast Has SMART (Specific, Measurable, Achievable, Realistic, and Timely) goals. Has clear boundaries and allocated resources Is initiated and fully supported by management (CPI Steering Team) Involves a multi-disciplinary team made up of area employees, staff and external guests Is thoroughly planned in advance Is structured Includes training in appropriate tools (Active Learning). Achieves results quickly; the spirit is “Do It” by removing waste and variation from the process.

24. SPACER AFETY S URPOSE P GENDA A ONDUCT C XPECTATIONS E OLES R

26. Set up the Room AV Equipment Screen TV Paper Markers Post’ems Flip Charts Snacks Lunch Lap Top and Speakers

27. Projector Standard Kaizen Room Layout Projection Screen Laptop Power Strip *Note: power strip cord must be taped down to avoid tripping hazard Wall space Wall space Wall space

28. Agenda for Week • Event Kickoff / SPACER • Kaizen Training ~ “Re-calibrating Our Eyes!” • Document Current Processes • Identify Opportunities for Improvement • Prioritize Opportunities • Root Cause Analysis (5-Why’s / Fishbone / Grouping) • Paradigm Video + Lessons Learned • Vision of a “Perfect Process!” • Brainstorm Solutions and Prioritize • Create the “Should-Be” Process (“Swim Lanes”) • MAKE CHANGE HAPPEN! • Develop Key Performance Indicators • Develop Action Plan • Create Executive Report Out – How To Keep This In Front of Sr. Mgmt? • Team Celebration!

29. Agenda for Day One 7:30 am • Continental Breakfast • Event Kickoff / SPACER • Review Baseline Maintenance Data & Charter • Kaizen Overview Training • Sub Team Formation & Training: 5S & P.M. Process Mapping • Map P.M. Process, Hskg 5S Scan / 5S Audit / Sort • Lunch • Compile Findings • Sub-Team Report Outs • Sub-Team Activity: Hskg Sort Continued • Sub-Team Activity: • Map Flash P.M. Process ~ People, Material, Information Flow • Day One Pluses & Deltas • See You at 8:00am Tomorrow! • Leadership Team Develops Day Two Agenda 8:00 am Noon 12:45 pm 5:00 pm

30. Code of Conduct • Be on Time! Late? • Everyone participate! • No sidebars! (“Three Tap Rule”) • Attack process problems, not people! • Leave cell phones with a peer! • Practice active listening! • Leave Title and Position at the door. • Have Fun! • Others ?????

31. Expectations • Introductions… • Name / Key Job Responsibility • Your Expectation(s) • What is Your Hobby aside from Family and Work?

32. 3 KAIZEN EVENT TRAINING Lean Six Sigma Methodology

33. Roles & Responsibilities • Facilitators • Focus on participant expectations • Deliver effective training materials • Keep participants and Kaizen Event on track • Facilitate application of training to Kaizen Objectives • Relentless pursuit of learning from YOU! • Participants • Ask questions • Challenge status quo • Actively apply new knowledge/skills to MAKE CHANGE HAPPEN!

34. Gap Identification People/Process Flow Information Flow Material Flow • Transportation • Inventory • Movement/Motion • Talent* • Waiting • Overproduction • Over-processing • Defects What “Pain” Interrupts Flow?

35. Kaizen Mindset! • Throw out all fixed ideas about how to do things! • Think of how the new method will work - not how it won’t • Don’t seek perfection. 50% on the spot is excellent! • Correct mistakes the moment they’re found! • Ten people’s ideas are better than one person’s!

36. Improvement Pitfalls To Avoid • Let’s solve world hunger!! • Let’s impose our ideas on others! • But we’ve always been doing things that way! • We’ll just push the problem upstream or downstream! • We need to go into “analysis paralysis!” • That’s a lousy idea! We already tried that 20 years ago!

37. Kaizen Event Principles • The goal of a Kaizen Event is NOT to create a PERFECT process. The goal is simply to create a better process. • A Kaizen Event does not present the luxury to think of BIG, EXPENSIVE SOLUTIONS. • Continuous Improvement means - Simplify, Combine, and Eliminate! • Key building blocks to a Kaizen Event are - Waste Elimination, Workplace Organization (5S), and Standardized Work.

38. Continual Improvement Flow Diagram Define Problem Develop Measurements for Success Measure Current Performance Develop 60 Day Action Plan Identify Waste in Current Process Standardize Operating Procedures Conduct Gap & Root Cause Analysis Improve Current Process Define Should-Be Process

39. How would you improve this process? • Who is the • customer? • What is their short term need? • What is their long term need? • How can we • improve the process?

40. One Potential Solution... • Short term solutions can create long term problems. • “Re-engineering can’t be accomplished in small cautious steps, it is an all or nothing proposition that produces dramatic results...

41. Improvement Practices Typical Company VA NVA Original Lead Time VA Traditional Improvement NVA Minor Improvement VA NVA Major Improvement Waste Reduction Time Buying bigger, faster processing equipment addresses only the small value added portion of work performed. Concentrate on eliminating non-value added work to achieve major improvements in lead time. Operational Cycle Time $$$$$$$$$$$$$

42. Waste - Defined Any activity that consumes resources but creates no value. Anything that the customer will not pay for - Anything that does not show up in the finished product.

43. Learning to See MUDA Calibrating the Eyes

44. Learning to See MUDA Calibrating the Eyes

45. Learning to See MUDA Calibrating the Eyes

46. Process Flow - Spaghetti Charting Sample Spaghetti Diagram • A Spaghetti Chart is a visual representation of how people, materials, and information flow through the workplace. • The Spaghetti Chart reveals Wastes such as Motion, Transportation, Searching, etc & measures them. -- Why do we need to travel so far? -- Why do we repeatedly go back and forth? -- What tools, materials, & info do we not have in order to perform our job?

47. Process Flow – P.M. Stream-lining! Before After

48. Visual Workplace In a Visual Workplace: • A customer entering the area will know the who, what, when, where, why, and how within 5 minutes • There is a place for everything and everything is in its place • There is nothing extra or unneeded, and storage areas are clearly identified and organized • The workplace is consistently clean • It is easy to identify what is normal and what is abnormal

49. Standard Work • Tool Shadow Boards • Color Coding • Performance Scoreboards • Labeling • Footprinting Visual Management Techniques

50. Workplace Organization - 5S’s • Sort: keep only what you need currently • Set in Order: a place for everything, and everything in its place - what, how often, where, how much? • Shine: cleaning, and looking for ways to keep it clean and organized • Standardize: all employees maintain the 3 previous points • Sustain: having the self-discipline to follow standard procedures and help people do the right things naturally, all the time.