Discussion Points

Leading in a Competitive Environment: Integrating Statistical Engineering, Lean, and QualityBill RodebaughHoneywell, Inc.

Discussion Points • Need for Leadership • Multiple and Maximized Objectives • Management Systems and Continuous Improvement Activities • Tools to Lead to the Goal

The Big Issue • Excellent Summary from Suárez-Barraza, Bou, and Cataldo. 2007 • Organizations need to cope with strong competition and a dynamic market environment with demanding customers • Organizations are required to be innovative…to capitalize on the knowledge and skills of employees • Work processes need to be managed efficiently and strictly • Three questions assist in understanding the challenges • How do organizations achieve competitive advantage? • Why do some organizations respond better to environmental change? • How can organizations be flexible, predictable, innovative, and efficient?

Competing Priorities • Corporate Level – Organizations need to cope with strong competition and a dynamic market environment with demanding customers • Factory Level – Requirement to make the right product at the right time with good cost structure and in keeping with all Environmental and Safety considerations while having an engaged workforce • Project Level – Complete each project in the required timeframe using the preferred processes…assuming that optimizing the variable of choice will make the overall process better

Competing Priorities Health, Safety, And Environmental Production Rates At Rate, High CpK, No Incidents Product Quality & Customer Satisfaction

Defining the Journey • Understanding organizational routines, standards, and non-routines • Organizational routines can be defined as “a repetitive, recognizable pattern of interdependent action, involving multiple actors” (Feldman, 2003). There is a sense of stability here. • “Standards are applied to activities that are repetitive in an identical fashion” (Takeyuki, 1995). The business process is where these standards exist….SOP. Follow the SOP meticulously yields results. • If the business process is variable, then the process difference must be viewed and understood, and specific procedures are activated. • Non-routine processes has vague input and are difficult to classify, so this is where non-predictable, surprising, and unfamiliar events exist.

Defining the Journey STANDARDS SOP ROUTINES 5S, ISO, Six Sigma NON-ROUTINES Experimentation Observation

The Tools – the Standard • Our Standards • Name our repetitive processes • Understand the way these processes should be done • Develop the standard • Train the standard • Chronicle the standard (SOP) • We can develop standard plans as well • Business Continuity • Disaster Recovery • Emergency Responses • Any return to standard

The Tools – the Routines • Our Routines – Systems that Guide Us • Toyota Production System, TPS, for Honeywell, HOS • 5S • Lean / Six Sigma (CI) • Statistical Engineering • ISO • RCA (Back to Standard) • Horizon Planning • Strategy Deployment (X-Matrix) • SWOT

The Tools – the Routines – Where I Am • Need to do three things • Bring back to Standard – TER / UOR • Total Event Report / Unusual Occurrence Report, RCA) • Improve from Standard (Short Term) – Statistical Engineering • Improve from Standard (Long Term) – Horizon / X-Matrix / SWOT

TER / UOR HES Steering Action Mgmt Process Issue or Upset Closeout /Audit UOR / TOPS Review COMMS TER Written (by multiple peoplemostly supervisors) Completed Report TOPS Investigation Super Gatekeepers 0930 TER Meeting Review Resolved At Mtng? UOR Meeting Attendees PSM / HES Actions to the TER board

Statistical Engineering • Continuous Improvement systems • Think about variation broadly • Engulfs our Lean & Six Sigma tools • Still battles with the methods • Key is to improve the problem • Favorite Tools? • More you use a hammer, themore everything looks like a nail

Horizon Assessments • Forces improvement • Horizon 1 is doing what you do well now (SOP) • Horizon 2 is building on Horizon 1 in the next few months (opportunity for DFSS) • Horizon 3 is years ahead, but you need to prepare now…big time strategy thinking

Strategy Deployment – X-Matrix • More Detail than the Horizon planning • Adds metrics and people • Able to do year over year analysis • Not easily presented… super complex

Easy to understand evaluation tool Definitions vary by output question Definitions (Internal/External Focus) S trengths -- What are the good things about the program? W eaknesses -- What are the possible issues with the program? O pportunities -- What benefits result from the application of the program? T hreats -- What issues arise from the application of this program? SWOT Analysis Internal Internal & External

SWOT Analysis Strengths & Weaknesses Refer to Process Input Factors Opportunities & Threats Refer to Additional Metrics or Customer Voices

The Non-Routines • CI Culture • Everyone observes how things could be better • Need to drive people to want to do it • Need to make it in their DNA • Safety Culture • Observing behaviors • Observing risks • Escalation • When is bad, really bad?

Conclusion • Need to balance • Standards, Routines, and Non-routines • Need to understand • Events that just happened, Improvements for tomorrow, Improvements for next year, and New Processes for 5 years • Need to be able to • Bring back to standard, Bring away from standard • Need to understand the behaviors that go with this

Discussion Points