1 / 35

Module 12 – Measuring Success

LeanSigma ® Facilitator Training. Module 12 – Measuring Success. Topics. Measuring Success Process performance measures……………………………………… 5 - 17 Process capability ………………………………………………………… 18 - 23 Program performance measures ………………………………… 24 - 34.

zulema
Download Presentation

Module 12 – Measuring Success

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. LeanSigma® Facilitator Training Module 12 – Measuring Success

  2. Topics Measuring Success • Process performance measures……………………………………… 5 - 17 • Process capability ………………………………………………………… 18 - 23 • Program performance measures ………………………………… 24 - 34

  3. Lean Sigma has six steps to optimize processes.

  4. Introduction • We’ll look at several types of measures: • Process performance: cycle time, KPIs, DPMO and yield • Process capability: capability indices • Program performance: pace, cost savings, implementation progress • Selected process measures should follow from CTQs • We want quantitative measures of a process because they’re much more objective than qualitative or ad hoc data. • Performance data can help us to set a baseline, so we know when to intervene with more process improvement work.

  5. Cycle time is our most common measure of process improvement. Annualized Labor Hours Saved You will receive a demo of the PMO within the next few weeks. We create an estimate of future state cycle time in kaizens based on the improvements we plan to make. After the future state is implemented, you’ll measure the actual cycle time improvement. This validates how much time we’ve redeployed to other work. You’ll capture this measure in the Lean Sigma PMO

  6. Other common process improvement measures Typical kaizen event measures • Reduction in lead time • May support a reduction in DAP; but often process improvements must first be implemented in other, related processes • Process improvement measures are often not measured on an on-going basis, but rather before and after process changes (2x)

  7. Key performance indicators (KPIs) are tracked to monitor the health of the process over time. Take Action Analyze Report Define Collect On-time delivery, query responsiveness, defect rate, throughput, etc. • Identify the “vital few” measures that tell the story of process performance

  8. Clear metrics definitions are important! • Each KPI must have an Operational Definition: • An exact definition of the measure • How it should be measured • Measurement frequency • Who should measure • The threshold or expected service level • Reporting: KPIs are evaluated in 30 / 60 / 90 day post-kaizen reviews. • KPIs are monitored on an on-going basis by Process Owners, who are accountable for taking the appropriate action when results fall below corresponding thresholds

  9. Defects per unit and per million opportunities are common process measures.

  10. Calculating DPMO • A project team is working on improving invoice accuracy • The number of defect opportunities per invoice is 10. The team evaluated 100 invoices and discovered 35 defects DPMO = (# of defects x 1,000,000) (# of Defect Opportunities/Unit) x # of Units DPMO = 35 x 1,000,000 10 x 100 • “Six Sigma quality” means DPMO ≤ 3.4

  11. Calculating DPMO A delivery process of a courier company has 3 defect opportunities (timeliness, accuracy of delivery, accuracy of invoice) The company has delivered 5000 mail pieces, 8 of them were too late, 3 of them delivered to the wrong address, and 2 had a wrong amount on the invoice The DPMO is

  12. Process Yield Concepts • LeanSigma Yield concepts are: • Throughput Yield – one process step: ratio of defects vs. defect opportunities • Rolled Throughput Yield (RTY) – multiple process steps: multiplication of Throughput Yields • Normalized Yield – multiple process steps: root of the multiplied Throughput Yields (“average process yield”) • “Traditional” Yield concepts: • First Time Yield – ratio of defectives vs. units processed • Final Yield – ratio of defectives (after rework) vs. units processed

  13. First Time Yield FTY + p(d) x 100% = 100% Percentage Defective FTY – the percentage of units that pass through an operation without any defects If you describe the yield as 80%, the true performance of the process is not measured FTY = 20%, therefore the percentage defective = 80%

  14. “Traditional” Yield Metrics No. of units: 1057 No. of defective: 58 FTY: 94.5% Step 4 Step 5 Step 6 Step 1 Step 2 Step 3 No. of units: 1057 No. of defective: 45 FY: 95.7% Step 4 Step 5 Step 6 Step 1 Step 2 Step 3 Rework • First Time Yield (FTY) • Final Yield (FY) Focus on Defectives and units

  15. FTY Example FTY + percent defective = 100% FTY = 87.5%, percent defective = 12.5% 1056 invoices were processed in one day. 924 passed and 132 failed for various reasons # of bad units + # of good units = Total # of units # of bad units can be expressed as a probability of a defective, p(d): or a percentage defective: p(d) x 100% = percent defective

  16. LeanSigma Yield Metrics No. of defect opportunities per unit: 4 No. of units processed: 268 No. of total defect opportunities (4x268): 1072 No. of defects: 34 Throughput Yield: 96.8% Step 1 • Throughput Yield (TY) • Focus on Defects and defect opportunities

  17. Rolled Throughput Yield 86.5% probability an invoice will pass through defect-free What is the probability of producing this product error free?

  18. How can we establish thresholds for selected process measures? • Thresholds or “specifications” should be established for all KPIs to flag the need for adjustment to the process • Specifications are usually based on: • Historical results • Compliance/regulatory requirements • Benchmark data • Management judgment • In most cases, IMS specs are one-sided limits defined by internal customers • Coding Accuracy: Error (defect) rate < 1% • Panel fulfillment > 90% • Specifications are often documented in Service Level Agreements (SLAs)

  19. How can we determine if our process measures can routinely comply with established specs? • Process capability is the inherent ability of a process to meet the specifications • The performance of the process when it is stable and predictable, or operating in a state of statistical control, i.e., the mean and the variation in the process are not shifting • Assumes no “special cause” variation, e.g., a “market event”, or a hurricane and resulting production delays. Verify this! • Process capability measures provide insight as to whether the process has: • A centering issue relative to the specifications • A variation issue • A combination of centering and variation issues • Inappropriate specifications • Process capability measures provide a baseline assessment

  20. When specifications cannot be changed, actions must be taken to improve process capability • LSL = Lower Spec Limit • USL = Upper Spec Limit • Target is usually the midpoint between the specs

  21. Standard deviation describes how far results in a process vary from the mean result. Variation (Dispersion) Normal Distribution (“Bell”) Curve Standard Deviation = Processes with higher standard deviations have more variation. They are less predictable and less stable than healthy processes. Processes with less variation will have a higher “sigma level” and fewer defects.

  22. We assess process capability using process capability indices. specification width process width (USL – LSL) 6s (USL – X) 3s (X - LSL) 3s • Cp = = • What is possible if your process is perfectly centered • The process potential • Cpk = minimum ( , ) • The reality of your process performance • How the process is actually running relative to the specifications • The “k” is the penalty for being off-center

  23. The “sigma level” of the process provides another measure of process capability. (USL – X) s (X - LSL) s Process capability should be periodically reassessed, especially following the implementation of process improvements. • σlevel = minimum ( , ) • Number of standard deviations between the center of the process and the nearest specification • “Six-sigma quality” means: • Cp ≥ 2.0 • Cpk ≥ 1.5 • σlevel ≥ 4.5

  24. Program metrics help us monitor the health and benefits of the LeanSigma program. • Are we achieving our mission to deliver more value to our customers and stakeholders by identifying and implementing measureable process improvements? • Regular Lean governance meetings help us: • Align on priorities and targets • Validate results meet expectations • Ensure support • Mitigate risks

  25. Lean program reporting summarizes results from all Lean events. 95% of reporting is enabled by web queries against the Lean PMO • Cadence • Pace of events by month, department & geography • Benefits • Net EBIDTA savings • Annualized hours saved (capacity redeployed, FTE savings) • Percent improvement cycle / lead time, delays, etc. • Highlights of exceptional events, case studies • Implementation • Percent of identified savings removed from budget • Percent of kaizen action items completed • Focus areas • Prioritization of processes based on exec sponsor discussions • Pipeline of Lean events • Cultural entrenchment • Number of employees trained / certified • Number of employees participating in kaizens • Communications

  26. Sample Dashboard Process Focus to Date U.S. Events by Month n= 110 completed events planned 2011 2012 80.23% of all U.S. kaizen action items completed 2012 U.S. EBIDTA Contribution: $817K *100% of savings realized Annualized Labor Hours Saved = 31,086

  27. Cost Savings Detail Example

  28. Qualitative Reporting Sample

  29. Case Study: U.S. Market Research Client Support February 2011 Sponsor: Manny Triggiano Process Owner: Brenda Capobianco Lean Process Lead: Carissa Waltenbaugh Team: Kevin Downing, Chris Davies, Cathy Pileggi-Jefferson, Katrina Kulp, Kyle Burke, Michele Agnoli, Joy Cross, Gerard Avillo, Lisa Cooney, Jeff Northern Key Kaizen Findings 90 Days After the Kaizen Issues Noted Process Changes • A pilot was completed to test the central support pool for smaller clients. • The centralized model went live June 13, 2011. • QMS was enforced as a central information system. • Tier 1 (simple) and 2 (complex) resource pools were created. • Checklists and decision trees were created to clarify info needs. Clients are assigned a CSA even if they call only a few times a year. Pool CSA resources so questions are answered by the first available CSA. Triage client questions and assign CSA resources to a Level 1 pool (simple) or Level 2 pool (complex). Some CSAs less able to handle complex questions. Create a checklist to guide CSAs when refining details of a client’s question. CSAs sometimes call multiple times to refine the client question. Create a decision tree to identify what research is required for a particular question. Improve how info is organized on ARC. CSAs sometimes do unnecessary research.

  30. Case Study: U.S. Market Research SupportFindings 15 months after implementation • Results: • The central service center remains in place successfully. • Clients talk to CSAs directly more often. • Very few clients have questioned the change. • Three positions were eliminated. • In addition, the team took on additional work without adding headcount. (SMART roll-out). • Cycle time savings were estimated at 65% initially. The savings observed are about 50%. • Critical factors made the change possible: • Pilot to test client feedback • Excellent communication to the team and clients about changes • Extreme organization and focus

  31. Focus areas – Completed Events SAS Incentive Compensation Implementation Process MMS Screening & Validation MAS RFP Response mini kaizen • Billing Initiation Process MAS Custom Project Process Performance Analytics Deployment Standardization Opportunity Management / CRM Improvement Improve the process for IC implement-ations Reduce time spent screening & validating data Improve quality & consistency of RFP responses Reduce admin burden for GTM resources Improve process workflows for custom deliverables Reduce time to implement Reduce admin burden Objectives MAR 6-8 APR 16 MAY 1-3 MAY 15-17 MAY 15-17 JUN 11-12 JULY 17 -19 31% reduction in cycle time Process improve-mentsimple-mented Identified 3 improve-ment work streams Results to be rolled out at July 10 report out Delivery time reduced by 25% Eliminated time spent entering detail into early stage opps Results

  32. Process Priorities – Sample from Operations

  33. Evidence of Cultural Entrenchment

  34. Lean Measurement & Reporting Tools • Lean Event Executive Summary Template: • http://arc.imshealth.com/gm/document-1.9.1639940 • Guidelines for 30 / 60 / 90 Day Reviews • http://arc.imshealth.com/gm/document-1.9.2276470 • Lean PMO • http://arc.imshealth.com/gm/leansigmaroadmap • PMO Users Guide: • http://arc.imshealth.com/gm/folder-1.11.1540558 • Project Statistics (PMO Web Query): • http://arc.imshealth.com/gm/folder-1.11.1517854 • Guidance on standard metrics and metrics-monitoring tools • Under development. Contact Tamra Kirkpatrick.

  35. US & Canada: ISO Compliance 15 Number of kaizen events per quarter, based on a rolling four quarters ≥ • In the US and Canada, the Kaizen management process is maintained in compliance with ISO standards • Facilitators are required to comply with the Kaizen Management procedure • http://arc.imshealth.com/gm/document-1.9.2241809 • The procedure is written to provide a great deal of flexibility in selecting, planning and conducting kaizen events • Process effectiveness is assessed: • Results are reviewed in quarterly internal management reviews, and periodically, by external ISO auditors

More Related