Adding Real Business Value Through Simple Process Improvement

1. Adding Real Business Value Through Simple Process Improvement Marc Gunning ASQ Certified Six Sigma Black Belt June 2013

2. Why I am Here – Presentation Objectives I believe each of us has the opportunity to create a positive ROI though continuous process improvement • Discuss tying Process Improvement to the organizations financial and business objectives • Demonstrate accelerated process improvement • Demonstrate the use of the core process engineering tool set

3. Improvement - what is it? - “Improvement is accomplished by; better methods, better techniques, better machinery and by people continually finding better ways to do their job and to work together as a team. I will never see the day when there is no room for improvement.“ - Dave Packard, 1957 3

4. What is a process? • A series of interrelated steps consisting of resources and activities that transform inputs into outputs and work toward a common end. The Certified Six Sigma Black Belt Handbook second edition, T.M. Kubiak and Donald W. Benbow

5. Six Sigma Model for Improvement 1 - Three questions set the charter of the project 2 - Plan-Do-Study-Act steps occur in each phase What are we trying to accomplish? How will we know a change is an improvement? What changes can we make that will result in improvement? 3 - The activities are organized into standard project phases (DMAIC) Improve Control Define Analyze Measure Phase 3 Phase 1 Phase 2 Phase 4 Phase 5 Model for improvement = 3 questions + PDSA + DMAIC

6. Improvement Plan/Three Questions SIPOC Diagram Critical to Quality Define Measure Process Flowchart Data Collection Plan Cause and Effect/Fishbone Diagram Pareto Chart Time Series/Run Chart Process Map Analysis Affinity mapping TOOLS Analyze Improve Process Flowchart Data Collection Plan Process documentation RACI Control Charts Dashboards MOC Control

7. Project Scope

8. Identifying Opportunities to Create Business Value Executive & Entity Key Performance Indicators Shareholder Value Stakeholders Earnings Capitol • Customer Satisfaction • Employee engagement • Revenue Growth • Cost Reduction • Return on equity Business Initiatives Market Expansion Risk reduction / compliance New Tooling Improve Service Levels Operating KPI Process / Function Revenue growth New tool deployed on time Reduce Customer Incidents Sales OP’s / IT Customer Operations Opportunities

9. Critical to Quality Identify our ability to deliver on the customer / business requirements for a product or service Quality: 1st Level 2nd Level 3rd Level • Serviceability • Aesthetics • Personal interface • Flexibility • Harmlessness • Perceived quality • Usability Milestones on time • Performance • Features • Time • Reliability • Durability • Uniformity • Consistency Time to Market Revenue Growth • Transaction Costs: • Turn around Time • Rework • # of Iterations • Verification / inspection cycles # of customer trials Market Acceptance Customer Satisfaction Need (General) Requirement (Specific)

10. SIPOC Suppliers Inputs Process Outputs Customers • Who receives the product or service? • Who provides the inputs? • What resources & activities are required? • The transformation • The product or service from the process Name of process STOP START Step 4: Step 5: Step 1: Step 3: Step 2: Process: A series of interrelated steps consisting of resources and activities that transform inputs into outputs and work toward a common end. The Certified Six Sigma Black Belt Handbook second edition, T.M. Kubiak and Donald W. Benbow

11. RACI Definitions • Responsible for implementation: Has the duty and obligation to do the work. Also, must exercise independent judgment and raise appropriate issues. • Accountable decision owner: Has the authority to decide and is the recipient of any consequences; the ultimate decision maker. Also has the responsibility to learn from Responsible and Consulting parties. • Consulted: Stakeholder with expertise, experience, and interests who must be given the opportunity to influence plans and decisions prior to finalization by the “accountable’ or “responsible” party. • Informed: Is informed of progress, key decisions and deliverables by the “responsible” party; it’s necessary for them to know in order to collaborate well.

12. Authority to Make a Change Yes No Responsible, Accountable Responsible, Consulted Yes Knowledge necessary to make informed change Informed Accountable, Informed No

13. Swim Lane

14. Sheppard/Wood Example

15. Identifying Opportunities to create ValueSheppard/Wood Example S/W Customer (AJAX) Executive & Entity Key Performance Indicators Shareholder Value Stakeholders Earnings Capitol • Market Share • Protect & Grow Revenue • Leverage existing assets Ajax’s Business Initiatives Product Extension Eliminate HAZMAT Risks Close & deliver on every deal – 100% New Product Capabilities Zero defects inventory mgmt. Operating KPI Process / Function 100% fulfillment Sales & Ops Operations Sales Poka-yoke inventory pick system Eliminate discrepancies between Supplier and Vendor Inventory Mgmt Systems Establish priority delivery service Opportunities

16. Project Scope

19. Swim Lane RACI Process Inputs/Outputs

20. Transition Cycle HIGH PERSONAL CONTRIBUTION DANGER Denial Commitment teamwork satisfaction clear focus and plan cooperation balance clear vision of the future it will be over soon this won’t happen apathy numbness minimizes the change Ignores the change Resistance Exploration sees possibilities willing to exploring alternatives feeling “ I can make it” high creativity and energy “TOO” many new ideas unfocused work start “being” in the future sense of loss of control concerned with abilities future contribution unclear Finds fault with changes lack of focus or direction Withdrawals blaming

21. Management of Change Cycle Denial Resistance Exploration Commitment New Process Launch Performance Time Encourage/ Motivate Control Workshop/ Listen Communicate/Train Facilitate

22. Thank You