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© Max Zornada (2005) Slide 1
The DMAIC Process DetailThe DMAIC Process DetailThe Define PhaseThe Define Phase
© Max Zornada (2005) Slide 2
The Define StageThe Define Stage
The Voice of the
Business
The Voice of the
Customer
The Voice of the
Process
Define
Business Case and Project Team Charter
Define the Customer and the Customer Requirements
Define and map the process
© Max Zornada (2005) Slide 3
The Define PhaseThe Define Phase
Identify and confirm the improvement opportunity; Develop a Project Team Charter Build an Effective Team; Define the Customer and Customer Requirement; Define and Map the Process.
© Max Zornada (2005) Slide 4
DMAIC Process StoryboardDMAIC Process StoryboardTEAM FORMATION DEFINE MEASURE
ANALYSE IMPROVE - I : Generate Potential Solutions
CONTROL - Standardise FUTURE PLANS
Define, Measure, Analyse, Improve, Control
Objective: Identify and implement the measures required to establish baseline performance and quantify the opportunity.
Output: Team Project Charter, Work Plan, Measurable Customer Requirements, Process Map/Process Analysis
Objective: Identify and verify the root cause(s) of the problem.
Output: Root cause(s) identified.
Cause and Effect Diagram(Fishbone)
Pareto Chart
Checksheet
Objective: Determine possible solutions that will address the identified root cause(s) of the problem.
Action Plan
Step 1Step 2Step 3Step 4Step 5Step 6
Output: Preferred solution or countermeasures
Key Steps:-
•Generate potential solutions•Assess potential solutions•Select preferred solution•Test/Pilot preferred solution•Develop implementation plan
Objective: Implement the preferred solution. Confirm that the problem and its root cause(s) have been reduced or eliminated.
Before
After
Output: Confirmation that the best solution to eliminate the problem & its root cause(s) has been implemented.
Key steps:-•Implement preferred solution•Verify effectiveness•Apply comparative methods if necessary.
Objective: Prevent the problem and its root cause from recurring.
Flowchart Standard procedure
Output: Solution embedded and “routinised” in relevant process, procedures and standards.
Key steps:-•Standardise the solution (standards & procedures)•Document project•Implement scorecard•Implement controls
Objectives: Review team effectiveness, plan to address remaining issues and institutionalise the learning.
Output: Recommendations for future projects and improvements to team processes. Project documentation and learnings “pack”
Potential Solutions
D
MA
C
I
IMPROVE - II: Implement and Check
Objective: Define the Problem/Opportunity, Customers, Customer Requirements, and Process.
Output: A quantified picture of the current process performance, problem impact. The process sigma rating.
Objective: Select problem/ opportunity theme, select team members
Output: Problem/Opportunity selected, Team members selected.
•Develop business case•Develop project team charter•Understand Customer Requirements•Understand the Process.
•Determine what to measure•Understand the measures•Understand Variation•Assess measurement system•Assess process performance
Problem Solving Team
Key Steps:-Key Steps:-
FlowchartTeam charter Cause and Effect Diagram Run chart or
control chart
•Analyse data•Analyse process•Determine potential root causes•Hypothesis Testing•Verify root causes
Key Steps:-
Key Steps:-•Review remaining project opportunities•Review other applications•Review learnings
© Max Zornada (2005) Slide 5
Team FormationTeam Formation
© Max Zornada (2005) Slide 6
Team – A DefinitionTeam – A Definition
Common people, working together to attain uncommon results;
A team is a small number of people with complementary skills, who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.
Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams, 1995
© Max Zornada (2005) Slide 7
The Components of Teamwork The Components of Teamwork
Teamwork
Content
Task Relationship
Process
What we do How we do it
How to do it How we feel
Technical inputs required to progress the problem solving process through to a solution. eg.
Technical skills; Technical knowledge; Knowledge of the process and
of the business; Data and information; Other specific inputs.
The DMIAC process Six Sigma Process Improvement
and Problem solving tools and techniques,
Statistical techniques.
Facilitating group processes;
Making the team fun to be a part of;
Recognising/appreciating contributions
© Max Zornada (2005) Slide 8
Characteristics of an Effective TeamCharacteristics of an Effective Team The atmosphere tends to be informal, comfortable, relaxed. There are no obvious
tensions; There is a lot of discussion in which virtually everyone participates, but it remains
pertinent to the task of the group; The task or objective of the group is well understood and accepted by the members; The members listen to each other; There is disagreement; Most decisions are reached by a kind of consensus, in which it is clear that
everybody is in general agreement and willing to go along; Criticism is frequent, frank and relatively comfortable; People are free in expressing their feelings as well as their ideas, both on the
problem and on the group's operation; When action is taken, clear assignments are made and accepted; The team leader does not dominate it, nor does the team defer unduly to him/her; The team is self-conscious about its own operations.
© Max Zornada (2005) Slide 9
Stages of Team DevelopmentStages of Team Development
Forming
Storming
Norming
Performing
Adjourning
Per
form
ance
Time
© Max Zornada (2005) Slide 10
Stages of Team DevelopmentStages of Team Development
Forming Storming Norming Performing Adjourning
Clarify the mission/ purpose of the team;
Establish specific objectives and tasks;
Identify roles and responsibilities of team members.
Get acquainted with one another;
Establish a set of ground rules;
Recognising that people are checking each other out.
Reestablish roles &/or ground rules;
Acknowledge & confront conflict by focusing on the facts;
Clarify & understand the team's purpose
Actively listen to all options;
Respond to feelings that emerge or are hidden;
Create focus to direct team efforts.
Develop decision making process;
Be prepared to offer ideas & suggestions;
Utilise all resources to support team effort.Support the team's decisions in and outside the team;
Give and receive feedback comfortably;
Respect individual differences.
Actively contribute ideas;
Achieve desired objectives;
Establish milestones for success.
Feel a sense of satisfaction;
Develop personal & professional relationships;
Find ways to sustain momentum and enthusiasm.
Evaluate efforts;
Tie up loose ends, discuss future plans;
Recognise and reward team efforts.
Express thanks and appreciation;
Discuss feelings, many may feel sad, depressed;
Create a sense of closure, reduce dependency on team
Tas
kR
elat
ions
hip
Job done!Cooperating and getting involved
We do not agree
Who are we? Getting to know each other?
This is as good as it gets!
© Max Zornada (2005) Slide 11
Launching the TeamLaunching the Team
Form the team; Establish ground rules; Develop a team
mission/purpose; Develop a shared team vision; Develop specific team goals,
objectives and performance targets.
From Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams, 1995
Team/ Project Charter
© Max Zornada (2005) Slide 12
Skills and Knowledge Required by the TeamSkills and Knowledge Required by the Team
Six Sigma Process Improvement/
Problem Solving Skills
Technical job skills and knowledge of the
business.
Group process facilitation and
interpersonal skills
Team Leadership Skills
© Max Zornada (2005) Slide 13
Successful Team FunctioningSuccessful Team Functioning Clarity in team goals; A plan to work to; Clearly defined roles; Clear communication; Beneficial team behaviours; Well-defined decision procedures; Balanced participation; Established group rules; Awareness of the group process; Use of the scientific approach (in Six Sigma DMAIC).
From Peter Scholtes: The Team Handbook.
In Six Sigma, provided by the project/ team charter
© Max Zornada (2005) Slide 14
Where teams and team based efforts have Where teams and team based efforts have failed, they typically:failed, they typically:
Lacked management support and resources; Lacked the training or the disciplines to apply "team basics" to their
work i.e. no formal process like PDCA or DMAIC; Worked on projects that were considered unimportant and not
connected to core business; Were not considered or integrated into long-term organisational plans; Were led by leaders that lacked leadership "know how" and/or had
minimal training as team leaders.Adapted from Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams, 1995
© Max Zornada (2005) Slide 15
Problem/Opportunity SelectionProblem/Opportunity Selection
© Max Zornada (2005) Slide 16
Six Sigma Project SelectionSix Sigma Project SelectionEstablishing the Business CaseEstablishing the Business Case
The business case establishes the importance of the project to the business in terms of meeting business objectives;
Components of a business case: The output unit for the customer of the process, usually the external customer; The primary business measure of the output unit; The baseline of the primary business measure; The gap in the baseline performance with the business objective.
The purpose is to establish the need in terms of business objectives - usually expressed in financial terms.
© Max Zornada (2005) Slide 17
Example: Business Case SEFPExample: Business Case SEFP
Output unit for the External Customer Boxes food product delivered to their customers;
Primary Business Measure of the output unit: Unit cost of Packaging in $/Box
Baseline of the primary business measure: $23.94 per box
Business Objective: $22.50 per box
Gap = $1.44 per box
© Max Zornada (2005) Slide 18
Develop a Problem/Opportunity Theme Develop a Problem/Opportunity Theme StatementStatement
The problem/opportunity theme statement provides the initial definition of the problem/opportunity area to be pursued;
It is on the basis of the problem/opportunity theme statement that management decide to allocate resources (the problem solving team) and time to develop a project team charter and determine whether the problem/opportunity is worth pursuing.
© Max Zornada (2005) Slide 19
Problem/Opportunity Theme StatementProblem/Opportunity Theme Statement
What is the area of concern? What first brought this problem or opportunity to the attention of your business?
What impact has this problem already had? What evidence is there that it is a problem worthy of attention?
What will happen if the business does not address this problem?
Summary problem statement (summarise the above in a concise statement).
Project Title:
© Max Zornada (2005) Slide 20
Problem StatementsProblem Statements Problem Statements should ideally describe the following:-
What is wrong? Where is the problem appearing? How big is the problem? (Quantify) What is the impact of the problem on the business.
What problem statement should not do:- State and opinion of what is wrong; Describe the cause of the problem; Assignment blame or responsibility for the problem; Describe a solution; Combine several problems into one.
© Max Zornada (2005) Slide 21
Identifying the problemIdentifying the problem
Developing a problem statement: What is the deviation - should vs actual? What is the symptom?
Be specific in what it is and what it is not; What is it? vs. what is it not? Where is it? vs. where could it also be but is not? When does it occur vs. when does it not occur? How many? How big?
© Max Zornada (2005) Slide 22
Problems as deviationsProblems as deviations
What should be happening
What is happening
What is happening= What should be happeningNo Problem!
What is happening different to What should be happening= Problem!
© Max Zornada (2005) Slide 23
Problems with Problem StatementsProblems with Problem StatementsDisguised Solutions!Disguised Solutions!
We’re experiencing delays in putting sales data in an understandable form. We have to purchase or otherwise obtain the necessary additional equipment. Turnover in the department is 20% higher than company average. Marketing reported a sudden increase in customer complaints about our
product. We need to redesign our main product to make it more modern? We must identify the specific training required to correct this performance. Error rates in the past two months are unacceptably high. We need to stream line the ordering process.
© Max Zornada (2005) Slide 24
DMAIC Process StoryboardDMAIC Process StoryboardTEAM FORMATION DEFINE MEASURE
ANALYSE IMPROVE - I : Generate Potential Solutions
CONTROL - Standardise FUTURE PLANS
Define, Measure, Analyse, Improve, Control
Objective: Identify and implement the measures required to establish baseline performance and quantify the opportunity.
Output: Team Project Charter, Work Plan, Measurable Customer Requirements, Process Map/Process Analysis
Objective: Identify and verify the root cause(s) of the problem.
Output: Root cause(s) identified.
Cause and Effect Diagram(Fishbone)
Pareto Chart
Checksheet
Objective: Determine possible solutions that will address the identified root cause(s) of the problem.
Action Plan
Step 1Step 2Step 3Step 4Step 5Step 6
Output: Preferred solution or countermeasures
Key Steps:-
•Generate potential solutions•Assess potential solutions•Select preferred solution•Test/Pilot preferred solution•Develop implementation plan
Objective: Implement the preferred solution. Confirm that the problem and its root cause(s) have been reduced or eliminated.
Before
After
Output: Confirmation that the best solution to eliminate the problem & its root cause(s) has been implemented.
Key steps:-•Implement preferred solution•Verify effectiveness•Apply comparative methods if necessary.
Objective: Prevent the problem and its root cause from recurring.
Flowchart Standard procedure
Output: Solution embedded and “routinised” in relevant process, procedures and standards.
Key steps:-•Standardise the solution (standards & procedures)•Document project•Implement scorecard•Implement controls
Objectives: Review team effectiveness, plan to address remaining issues and institutionalise the learning.
Output: Recommendations for future projects and improvements to team processes. Project documentation and learnings “pack”
Potential Solutions
D
MA
C
I
IMPROVE - II: Implement and Check
Objective: Define the Problem/Opportunity, Customers, Customer Requirements, and Process.
Output: A quantified picture of the current process performance, problem impact. The process sigma rating.
Objective: Select problem/ opportunity theme, select team members
Output: Problem/Opportunity selected, Team members selected.
•Develop business case•Develop project team charter•Understand Customer Requirements•Understand the Process.
•Determine what to measure•Understand the measures•Understand Variation•Assess measurement system•Assess process performance
Problem Solving Team
Key Steps:-Key Steps:-
FlowchartTeam charter Cause and Effect Diagram Run chart or
control chart
•Analyse data•Analyse process•Determine potential root causes•Hypothesis Testing•Verify root causes
Key Steps:-
Key Steps:-•Review remaining project opportunities•Review other applications•Review learnings
© Max Zornada (2005) Slide 25
The Define StageThe Define Stage During the Define Stage, we:
Define our problem or opportunity and improvement objectives; Define the customers and their requirements - the Critical-to-Quality issues (CTQ); Define the process that will be affected; Develop a plan for completing the project;
Key outputs of the Define Stage: Team Project Charter and Work Plan Measurable Customer Requirements - Customer Requirements Statement Process Map/Process Analysis.
© Max Zornada (2005) Slide 26
Process
Green Belt
Champion
Start Date
Expected Financial Impact
Telephone Number
Organization/Function
Target Completion Date
Six Sigma Project Team CharterProject Title
Objective
Problem/Opportunity Definition
What is the Problem to be solved or the opportunity this project will exploit.
Business Case
Team Members
Project Scope
Customer Benefit
Improvement target, impact on Sigma, COQ/COPQ and Customer Satisfaction
Schedule
What improvement in business performance is expected. $ impact and by when.
Who are the team members and key experts to be consulted.
Which part of the process will be investigated
Who are the final customers. What benefits will they see and what are their most critical requirements.
What are key milestone dates for completion of each stage.
Define completion
Measure completion
Analyse completion
Improve completion
Control completion
Project Completion
Cost of Waste Reduction Project
Jane VerdeJohn Briggs
1-April
Reduce net spoilage rate by 50% from 6% to 3%. Estimated Sigma level improvement from 3 to 3.4
Reduction in cost of waste of $253,000 p.a. from a baseline of $506,000. Will result in target processing cost/box being achieved.
634-5789Packaging Operations1- October
$253,000Box Packaging
Jane Verde (Team Leader), Paul Black, Rachel Cintura, Roland Thompson, Sdravo Krysevic, Giovanni Nero (Black Belt) Box packaging from start of box filling through to placement of product on buyer shelves.
The packaging customers for whom we package and deliver product to buyers such as supermarkets and wholesalers. Benefits: competitive costs and more accurate schedule compliance.
20-April1-June1-August1-September15-September1-October
The cost of waste in box packaging is excessive and causes box packaging operations to run at a loss. The cost of waste needs to be reduced to achieve target cost levels.
© Max Zornada (2005) Slide 27
Key Elements of the Project Team Charter Key Elements of the Project Team Charter
Problem/Opportunity Definition – see previous problem/opportunity theme statement; Objective – quantified objective to be achieved with a specified timeframe – usually
expressed in physical units; Business Case – business impact expected from the project, usually expressed in
financial terms; Team Members – who will be on the team; Project Scope – what is the project about, what is it not about. Provides focus. Customer Benefits – what impact will it have on the customer. Work Plan/Schedule with Key Milestones defined e.g. approximate time frame for each
stage of the DMAIC Process
© Max Zornada (2005) Slide 28
Setting ObjectivesSetting ObjectivesThe SMART PrincipleThe SMART Principle
S for Specific - Objectives have to be specific and describe exactly what you want to achieve. Need to be able to answer the question “How will I know I have achieved my objective?”
M for Measurable - if you cannot measure, you cannot manage. Objectives must be expressed in quantified (numbers) terms.
A for Achievable - Objectives need to challenge enough to provide incentive, but not be unattainable.
R for Relevant - Objectives must produce something of benefit. Phrase the objectives in results term - what you want to achieve, not how you will achieve it.
T for Time Targeted - Objective must always specific a time frame by when they need to be achieved. If you do not know when you want to achieve you objectives by, you will always be on track.
© Max Zornada (2005) Slide 29
Breaking Down “Big” ObjectivesBreaking Down “Big” ObjectivesExample: Transaction Processing OperationExample: Transaction Processing Operation
Ask why?to go up
Ask how?to go down Develop daily
schedules for allocatingwork to people
Improve allocationof work to people
Simplify workprocesses
Improve LabourProductivity
Reduce Rework
Reduce costs/transactionby 10%
© Max Zornada (2005) Slide 30
Gantt Chart Working Plan DevelopmentGantt Chart Working Plan DevelopmentLayout project tasks on planning proformaLayout project tasks on planning proforma
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Weeks
Task People
Finalise project charterDevelop CR statementValidate CR StatementDevelop process mapMile stone – end of define phaseDetermine measuresCollect measuresAnalyse measuresAssess process stabilityAssess process capability/ sigmaMile stone – end of measure phaseEtc.
© Max Zornada (2005) Slide 31
Gantt Chart Working Plan DevelopmentGantt Chart Working Plan DevelopmentEstimate durations and time phase to indicate work sequenceEstimate durations and time phase to indicate work sequence
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Weeks
Task People
Finalise project charterDevelop CR statementValidate CR StatementDevelop process mapMile stone – end of define phaseDetermine measuresCollect measuresAnalyse measuresAssess process stabilityAssess process capability/ sigmaMile stone – end of measure phaseEtc. …
Key Milestones
© Max Zornada (2005) Slide 32
Gantt Chart Working Plan DevelopmentGantt Chart Working Plan DevelopmentAllocate People to TasksAllocate People to Tasks
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Weeks
Task People
Finalise project charterDevelop CR statementValidate CR StatementDevelop process mapMile stone – end of define phaseDetermine measuresCollect measuresAnalyse measuresAssess process stabilityAssess process capability/ sigmaMile stone – end of measure phaseEtc. …
221111111122
2 2 2 2 2 2 3 3 2 2 22
© Max Zornada (2005) Slide 33
Example:Project Gantt Chart & Resource Histogram on ExcelExample:Project Gantt Chart & Resource Histogram on Excel
Schedule bars are drawn using the cell pattern function
Float drawn using the cell borders function.
© Max Zornada (2005) Slide 34
Gantt Chart Working Plan Implementation Gantt Chart Working Plan Implementation Updating ProgressUpdating Progress
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Weeks
Task People
Finalise project charterDevelop CR statementValidate CR StatementDevelop process mapMile stone – end of define phaseDetermine measuresCollect measuresAnalyse measuresAssess process stabilityAssess process capability/ sigmaMile stone – end of measure phaseEtc. …
221111111122
2 2 2 2 2 2 3 3 2 2 22
© Max Zornada (2005) Slide 35
Define the Customer and the Customer Define the Customer and the Customer RequirementsRequirements
© Max Zornada (2005) Slide 36
Who are our customers ? Who are our customers ? A customer is anyone who comes into contact with our workA customer is anyone who comes into contact with our work
External Customer
Supplier
Internal Customers
External Customers Those outside the organisation who use, buy or are affected by
our work. Internal Customers
Those within the organisation, who will be affected by our work. The next person in the process, those who may need to add to, respond to or adapt to our work.
© Max Zornada (2005) Slide 37
What is quality ?What is quality ?Toyota or Rolls ?Toyota or Rolls ?
Both the Rolls Royce and the Toyota are consistently suited to
their customers' purposes.
Which is higher quality?
© Max Zornada (2005) Slide 38
Customer SegmentationCustomer Segmentation
Different customers have different requirements; Different customers have different priorities;
What Drives Customer Satisfaction
Perceived Quality
Perceived Value
+ = Customer Satisfaction
© Max Zornada (2005) Slide 39
How Customers See QualityHow Customers See QualityQuality = Perceptions - ExpectationsQuality = Perceptions - Expectations
Expectations Perceptions
Customer
Content Process
What the customer gets, the actual service or product. The "technical dimension“ or output.
How they get it, the process by which the service or product is delivered. The service or “experience”.
Perceived Quality
Parasuraman, Zeithaml and Berry (1988)
© Max Zornada (2005) Slide 40
Dimensions of QualityDimensions of Quality
Content Performance; Features; Reliability; Conformance; Durability; Serviceability; Aesthetics.
Process Tangibles; Reliability; Responsiveness; Competence; Courtesy; Credibility/Trustworthiness; Security; Access; Communication; Understanding the
Customer.
© Max Zornada (2005) Slide 41
Content – Detailed DefinitionsContent – Detailed Definitions
Performance. Does the product or service's primary operating characteristic measure up to the customer's expectation. eg. Is service prompt in a fast food restaurant, does the TV have good picture and sound, does the high-interest account give high interest.
Features. Do the characteristics that supplement the basic function measure up to the customer's expectations. eg. Extra "bells and whistles", ability to customise your purchase.
Reliability. Once you've bought it will it work for you. Conformance. Does the design conform to established standards and does your
purchase conform to the design. Durability. Will it work for you on an on-going basis. Serviceability. Speed, courtesy, competence, ease of repair or ease with which
problems are addressed. Aesthetics. Look, feel, sound, taste, smell. Personal judgement a significant factor.
© Max Zornada (2005) Slide 42
Process – Detailed Definitions Process – Detailed Definitions Tangibles. The physical evidence of service. eg. facilities, appearance of personnel,
tools/equipment used to provide the service, physical representations, other customers in the service facility.
Reliability. Consistency of performance, the organisation honours its promise and gets it right first time. eg. accuracy of billing, record kept correctly, no time delays.
Responsiveness. Willingness and readiness of employees to provide service. Promptness, timely follow-up, calling back quickly.
Competence. Skills and knowledge required to perform the service for contact and support personnel.
Courtesy. Involves politeness, respect, consideration and friendliness of contact personnel. Credibility. Trustworthiness, believability, honesty, having the customers best interest at heart.
Contributing to credibility are company name, reputation, personal characteristics of contact personnel, "degree of hard sell".
Security. Freedom from physical danger, financial risk, or doubt about confidentiality. Access. Service is easily accessible, waiting time not excessive, convenient hours of operation,
convenient locations. Communication. Keeping the customer informed and listening to them. eg. explaining the
service, costs, trade-offs, how problems will be handled. Understanding the Customer. Understanding the customer's needs. eg. learning the customer's
specific requirements, providing individualised attention, recognising the regular customer.
© Max Zornada (2005) Slide 43
How Customers form ExpectationsHow Customers form Expectations
Past Experience
External CommunicationsMarketing Strategies
QualityDimensionsProcess & Content
CompetitorsWord of Mouth
Controllable Expectation Creators
Un-controllable Expectation Creators
Personal Needs and Preferences
Expectationsof product or service
© Max Zornada (2005) Slide 44
Managing the Customer InterfaceManaging the Customer Interface
Percep-tions
Expect-ations
Quality
Customer
Internal ProcessesCustomer interface
Service Delivery
Perception
Disatisfaction
Delighted
Satisfied
© Max Zornada (2005) Slide 45
Focus on the ProcessFocus on the Process
Customers often assume content; Provided the content is in the right “ball park”
Customers often cannot tell the difference between good and bad content;
Most of what they judge is process; Process is important!
© Max Zornada (2005) Slide 46
The RATER FrameworkThe RATER FrameworkA framework for understanding customer processA framework for understanding customer process
The RATER framework consolidates the dimensions of service or customer process quality into 5 key themes.
Reliability - ability to perform promised service, dependably and accurately;
Assurance - Knowledge and courtesy of employees and their ability to inspire trust and confidence;
Tangibles - physical facilities, appearance of personnel etc.; Empathy - Providing personal understanding and customer support; Responsiveness - Willingness to help and provide prompt service.
Parasuraman, Zeithaml and Berry (1988)
© Max Zornada (2005) Slide 47
The RATER FrameworkThe RATER Framework The RATER framework provides us with a tool for understanding and
specifying the “service” or “process” dimension of the customer requirements;
Used for determining what we need to establish service standards for and what these standards should be in managing interactions with customers;
Can be used for designing the “operational infrastructure” required to deliver customer service to the required service standards. That is:- Processes, Organisation and Technology
© Max Zornada (2005) Slide 48
Applying the RATER FrameworkApplying the RATER FrameworkExample: The Room Service ProcessExample: The Room Service Process
Guest Calls Room Service, Service Cycle.Guest Calls Room Service, Service Cycle.
Quality Dimension Quality Service Standards – Customer Requirements
Responsiveness
Assurance
Tangibles
Empathy
Phone operator has thorough knowledge of menu and prices
There is a menu in the room giving full description of what is available. Specific delivery time stated
Effort to comply with any special requests. Prompt service.
Reliability Phone answered within five rings, 24 hours a day
Customer name used. Prescribed guest treatment procedure carried out with sincerity. Order taken in a courteous manner.
© Max Zornada (2005) Slide 49
Using RATER to Design Service Using RATER to Design Service ProcessesProcesses
Responsiveness
Assurance
Tangibles
Empathy
Reliability
Quality Dimension
Quality Service Standards
Supporting Infrastructure - Processes/People/Technology
What does it mean? How do we do it?
© Max Zornada (2005) Slide 50
Managing Perceptions of QualityManaging Perceptions of Quality
Responsiveness
Assurance
Tangibles
Empathy
Reliability
Think of a customer contact point associated with a service you currently provide to a customer(s), how are he following dimensions managed? What could you do?Service : .
Quality Dimension Quality Service Standards – Customer Requirements
© Max Zornada (2005) Slide 51
Moments of TruthMoments of Truth
A moment of truth is any episode in which a customer comes into contact with any aspect of the organisation, however remote, and gets an impression of the quality
of its service.
When the moments of truth go unmanaged, service quality regresses to mediocrity and the customer
experience of the service is poor.
© Max Zornada (2005) Slide 52
Typical Moments of TruthTypical Moments of Truth
Customer walks in the door; Customer telephones us; Customer receives a bill; Customer makes a special request; Customer discovers a slip-up; etc., etc.;
© Max Zornada (2005) Slide 53
Identifying the “Moments of Truth”Identifying the “Moments of Truth”
Review service critical incident reports to identify the types of things that go wrong;
Review compensation/warranty claims etc. to see what the cause was;
Understand the service cycle through "service blue printing" (process mapping); Anticipate the likely moments of truth;
© Max Zornada (2005) Slide 54
A Service System MapA Service System MapUnderstanding the Customer’s ViewUnderstanding the Customer’s View
Customer Front Line Assessm't Stamp Settlem'tManager Valuation Document'n Broker
© Max Zornada (2005) Slide 55
The Service CycleThe Service Cycle
Customer Front Line Assessm't Stamp Settlem'tManager Valuation Document'n Broker
© Max Zornada (2005) Slide 56
Identifying the Critical Moments of TruthIdentifying the Critical Moments of Truth
Customer Front Line Assessm't Stamp Settlem'tManager Valuation Document'n Broker
© Max Zornada (2005) Slide 57
Listening to the Voice of the CustomerListening to the Voice of the Customer
© Max Zornada (2005) Slide 58
Listening to The Voice of the CustomerListening to The Voice of the CustomerTools and TechniquesTools and Techniques
Focus groups; Face-to-face interviews; Periodic/regular formal surveys/questionnaires; Customer comment and complaint analysis; Follow-up telephone calls; Critical incident reports produced by front-line staff; Visits to major customers by management and employees; Toll-free telephone number; Follow-up customers who have discontinued dealing with us; Involve customers formally in product development; Mystery shopping.
Methods for obtaining feedback on customer expectations, perceptions and satisfaction.
© Max Zornada (2005) Slide 59
Customer SurveysCustomer Surveys
© Max Zornada (2005) Slide 60
Adapted QuestionnairesAdapted Questionnaires
Adapted questionnaires aim to measure those dimensions relevant to a specific organisation and/or important to a specific customer group(s);
They can be designed to have a small number of questions (eg. 10), results in an increased rate of return;
Can be flexible in mode of application. eg. Customer can fill out, staff can use in face-to-face or telephone interview;
Can be completed by staff and management. Comparison with customer returns can identify improvement priorities, "blind spots" and hidden strengths;
Questions need to test the perceptions/expectation “gap”.
© Max Zornada (2005) Slide 61
Using Adapted QuestionnairesUsing Adapted Questionnaires
Questionnaires should also allow customers to give free format feedback, and not restrict them to pre-structured questions;
Unstructured customer feedback can provide the spark for service and product extensions, cross-selling and innovation;
Use as an ongoing monitoring tool, job-by-job, weekly, monthly - not the “big” annual customer survey.
© Max Zornada (2005) Slide 62
Adapted Questionnaires - Scoring SystemAdapted Questionnaires - Scoring System
Expectations not met
Expectations met
Expectations exceeded
Unacceptable quality
Satisfactory quality
Ideal quality
-2-1012
"Much less than expected"
"Very disappointed"
"As I expected"
"Satisfied"
"Much more than I expected" Very impressed"
No need for paired expectation-perception questions; Use - to + scale corresponding to expectations not
met/met; Reduces the number of questions required to extract
the same information.
© Max Zornada (2005) Slide 63
Example: Hotel Customer Satisfaction Example: Hotel Customer Satisfaction QuestionnaireQuestionnaire
Assume a typical 10 question questionnaire
© Max Zornada (2005) Slide 64
Assessing Questionnaire ResultsAssessing Questionnaire ResultsHotel ExampleHotel Example
12345678910
0.91.00.50.30.80.41.20.90.81.1
1.21.30.91.91.30.80.61.01.21.1
-0.3-0.3-0.4-1.6-0.5-0.4+0.6-0.1-0.4 0.0
! : immediate corrective action required, C : check out for any obvious quick fixM : maintain standard, D : apparently delighting, find out why
MMC!CCDMMM
Item Guest Ave. Staff Ave. Gap Action
© Max Zornada (2005) Slide 65
Customer Monitoring: A Strategy Customer Monitoring: A Strategy OverviewOverview
Major Customer Survey
“Not very often”
Adapted QuestionnairesWeekly, by job, etc.
Identify Customer Priorities
Weekly Customer Performance Monitors
Monitor Questionnaires for relevance, general feedback and innovation opportunities.
Redo Major Survey when questions no longer reflect customer priorities.
© Max Zornada (2005) Slide 66
Customer Satisfaction and LoyaltyCustomer Satisfaction and Loyalty
© Max Zornada (2005) Slide 67
Impact of Customer Satisfaction on Impact of Customer Satisfaction on LoyaltyLoyalty
Using a 5 point customer satisfaction rating. From Heil, G., Service Quality Improvement Seminar, Sydney (1992)
Rating CategoryWould Repurchase
Would Recommend
Completely Satisfied 90% 96%
Somewhat Satisfied 56% 71%
Neither Satisfied Nor Dissatisfied 12% 19%
Somewhat Dissatisfied 3% 0%
Very Dissatisfied 7% 7%
© Max Zornada (2005) Slide 68
Managing Customer Perceptions of QualityManaging Customer Perceptions of Quality Identify the elements of customer expectations you can control; Expectation levels should be set high enough to attract business, but
accurately enough to reflect the reality of what is likely to be delivered 99.9% of the time;
Focus on improving areas where expectations are low and importance to the customer is high; Strategic gaps in the market that provide viable footholds.
Customer expectations will increase with time - so should your ability to meet them. Plan for it!;
Surprise is one way to exceed customer expectations. Promise what to expect, deliver more, sometimes surprise customers. E.g. “going the extra mile when it matters.
© Max Zornada (2005) Slide 69
Kano AnalysisKano Analysis
Low Customer Satisfaction
High Customer Satisfaction
Done Very WellNot Done or Done Poorly
DelightersBreakthrough Customer Needs/Features
Dis-satisfiersBasic Requirements
SatisfiersCore Competitive Requirements
© Max Zornada (2005) Slide 70
Kano AnalysisKano Analysis
Low Customer Satisfaction
High Customer Satisfaction
Done Very WellNot Done of Done Poorly
DelightersBreakthrough Customer Needs/Features
Dis-satisfiersBasic Requirements
SatisfiersCore Competitive Requirements
© Max Zornada (2005) Slide 71
Defining the Customer Requirements and Defining the Customer Requirements and Critical-to-Quality RequirementsCritical-to-Quality Requirements
Cus
tom
er V
alue
Process/ Service/ Experience
Content
RATER Analysis
Critical Customer RequirementsCTQ Requirements
Optional KANO Analysis
Customer Requirements Statement & Ranking
Validate with Customers
Interviews, focus groups, questionnaires, complaints & feedback analysis
© Max Zornada (2005) Slide 72
Simple Customer Requirements StatementSimple Customer Requirements Statement
Customers need to have their food products packaged at a competitive price ($23.50) and
delivered to their customers as per their schedule and order quantity manifest (100%
compliance).
© Max Zornada (2005) Slide 73
Example: SEFP’s Customer Requirements StatementExample: SEFP’s Customer Requirements Statement
What is this customer’s major complaint? What issue would they want us to work on?
Outputs: Customer:
Customer Requirements Measure Importance to Customer
Customer Satisfaction
PriorityRating
1. Cost competitiveness
Boxed product delivered to buyers according to customer manifest.Contract Box Packaging Customers
(Importance x Satisfaction)
Target
2. Schedule compliance
2.1. On-time delivery/right day/right time.
2.2. Right product delivered
2.3. Product quality to specification
2.4. Right amount/ amount as per manifest.
Processing cost $/Box
% On timeReturns: wrong product %
Returns: off-spec product %Order shortfall %
Ranking SchemeImportance to customer: 1 = Nice to Have, 2 = Important, 3 = Critical, Must HaveCustomer Satisfaction: 1 = Very Satisfied, 2 = OK. Could be better, 3 = Unhappy, Must be improved
$22.50
97%
95%
99%
99%
3 3* 9*
2 1 2
2 1 2
3 2 6
3 3 9
*Note: customer has not complained about price because we are absorbing difference between market price and actual costs. If customer were charged actual cost we would lose the business.In addition to price, getting the delivery amount right is a Critical-to-Quality issue for the customer.
© Max Zornada (2005) Slide 74
Define the ProcessDefine the Process
© Max Zornada (2005) Slide 75
Define the ProcessDefine the Process
What process? Identifying the process; Tools for documenting and analysing our processes:
SIPOC Process Blocking Top-Down Process Map Process Mapping Process Deployment Chart Process Flow Analysis
© Max Zornada (2005) Slide 76
Identifying ProcessesIdentifying Processes
Ask the following questions: What are we doing for a customer? What is the first step in the chain of events that
lead to meeting the customer need ? What are all the steps in between including the
decisions and choices that need to be made? What order or sequence do the steps flow in from
start to finish ?
© Max Zornada (2005) Slide 77
Identifying the Customer and what it is Identifying the Customer and what it is we do for them ……we do for them ……
Customer
Outcome
Satisfaction
© Max Zornada (2005) Slide 78
Identifying what it is that tells us we have to Identifying what it is that tells us we have to do this for them … the “triggering event” do this for them … the “triggering event”
which kicks off an operation of the process.which kicks off an operation of the process.
Customer
Outcome
Satisfaction
TriggeringEvent
© Max Zornada (2005) Slide 79
Identify all of the tasks, operations, activities, Identify all of the tasks, operations, activities, judgements, decisions, inspections and checks which judgements, decisions, inspections and checks which
must be done along the way in order to deliver the must be done along the way in order to deliver the required outcome to the customer.required outcome to the customer.
Customer
Outcome
Satisfaction
TriggeringEvent
Task or activity required to progress the process
Decision, judgement, inspection, check point or choice.Yes/No, OK/Not OK outcome.
© Max Zornada (2005) Slide 80
Link them all up to to show the order in Link them all up to to show the order in which the process flows.which the process flows.
Customer
Outcome
Satisfaction
TriggeringEvent
Task or activity required to progress the process
Decision, judgement, inspection or check point.Yes/No, OK/Not OK outcome.
© Max Zornada (2005) Slide 81
This is a process map!This is a process map!
Customer
Outcome
Satisfaction
TriggeringEvent
Task or activity required to progress the process
Decision, judgement, inspection or check point.Yes/No, OK/Not OK outcome.
© Max Zornada (2005) Slide 82
Process Definition WorksheetProcess Definition Worksheet Objective : To specifically define the scope of the process being studiedObjective : To specifically define the scope of the process being studied
Process Name:
The Process Starts with:
The Process Ends with:
The Process includes:
The Process excludes:
Connecting Process:
© Max Zornada (2005) Slide 83
The SIPOC ModelThe SIPOC ModelSuppliers - Inputs - Process - Outputs - CustomersSuppliers - Inputs - Process - Outputs - Customers
Suppliers CustomerBusiness or Work Process
Inputs Outputs
Supplier 1Supplier 2Supplier 3
Input 1Input 2Input 3
Process Step 1Process Step 2Process Step 3Process Step 4Process Step ...
...............
Output 1Output 2Output 3
Customer 1Customer 2Customer 3
© Max Zornada (2005) Slide 84
DateSIPOC Analysis WorksheetProcess Name Page of
Suppliers Inputs Outputs CustomersProcess Steps
© Max Zornada (2005) Slide 85
DateSIPOC Analysis WorksheetProcess Name Page of
Suppliers Inputs Outputs CustomersProcess Steps
Purchase RequisitionCustomer Dept. Receives purchase req.
Reviews for completeness
Time stamps
Assigns to buyer
Complete Purchase
Requisition
Buyer
Procurement Process
© Max Zornada (2005) Slide 86
Process Block DiagrammingProcess Block Diagramming(Process Blocking)(Process Blocking)
Block diagramming a process provides an easy way to construct a "rough cut" view of the process;
Block diagramming identifies the major "chunks" in the process and which functions are involved;
Block diagramming may provide a suitable level of detail for a high level analysis of the process in many cases.
© Max Zornada (2005) Slide 87
Example of Process Block DiagramExample of Process Block Diagram
Raise
Order
Data Processing
Receive
Rejection
process
Purchasing Process
Dispatch
& Delivery
Start
Install &
Commission
Finish
Account
Payable
Credit Check
Warehouse
processOfficial
Order
picking
© Max Zornada (2005) Slide 88
Top-Down Process MapTop-Down Process Map
Order Receival
Credit Check
Product Sourcing
Technician Allocation
Etc.
Receive fax Raise formal
order documentation
Data process into system
Send to Credit section
Preliminary customer checks
Obtain credit details from Bank
Make credit decision.
Receive order details
Determine stock availability
Issue to stock picker
Pick stock Take to Despatch
dock Pass order onto
Technical
Receive order details
Identify schedule date
Book into scheduling system
Allocate technician
© Max Zornada (2005) Slide 89
Process Mapping SymbolsProcess Mapping SymbolsSymbol Name Brief Definition
Operation orprocess step
Decision Point
DocumentGenerated
ContinuationPoint
Input/OutputBlock
Flow lines
Depending on the level of detail being developed, can be used to denote anything from a simple task, major activity or a whole sub-processes.
Used to indicate the process is continued elsewhere on the flow diagram or on another sheet.
Point at which a form or report is generated by the process.
Point where a decision must be made before any further action can be taken.
Optionally used to describe an input or output from a processing block.
Use to connect all blocks to display the sequence in which operations are performed.
Termination point
Used to indicate the start and end of a process.
© Max Zornada (2005) Slide 90
Start
Change order
Yes
No
An extended oval shape is used to indicate the start or finish of a process.
A numbered circle represents a continuation point.Cook's part of process continued page 2.
1
A rectangle represents a processing step
A line with an arrowhead indicates flow and direction of the process
A diamond shape represents adecision point
Sample Process Map: Taking a Customer OrderSample Process Map: Taking a Customer Order
1Continues onto the Cook’s part of the process.
Greet customer
Take customer's order
Repeat order to customer
Customer confirms
Confirm order on terminal
Verbally announce to kitchen
1
Note:Some computer based flow charting packages useto indicate a continuation point on another page, andto indicate a continuation point on the same page.
1
© Max Zornada (2005) Slide 91
Process Deployment ChartProcess Deployment Chart Re-draw the Process Map laying out each of the process segments in "bands" or
"streams" which correspond to the part of the process performed by each functional position in the process;
Identifies how the process is deployed through the functional organisational structure – add functions in the order that they are first “touched” by the process;
Can highlight process steps performed within functions that may not be apparent from initial process map. Good at highlighting parallel processes;
Identifies hand-overs and inefficient "zig-zagging" in the process; Rule of Thumb: Changes that reduce the amount of zig-zagging usually result in
improved performance.
© Max Zornada (2005) Slide 92
Process Deployment ChartProcess Deployment Chart
Customer Sales Credit Dispatch ServiceClerk Data Proc. Technical Bank
© Max Zornada (2005) Slide 93
Process Deployment Chart Variation: Service System MapProcess Deployment Chart Variation: Service System MapThe Line of Visibility ApproachThe Line of Visibility Approach
Customer
Front Line Assessm't Stamp Settlem'tManager Valuation Document'n Broker
Line of VisibilityCustomer Interface Direct Front Line support
In-Direct Front Line support
© Max Zornada (2005) Slide 94
A Service System MapA Service System MapThe Line of Visibility ApproachThe Line of Visibility Approach
Customer
Front Line Assessm't Stamp Settlem'tManager Valuation Document'n Broker
Could be moved to a back office operationFront office
© Max Zornada (2005) Slide 95
Process Complexity AnalysisProcess Complexity Analysis
© Max Zornada (2005) Slide 96
ComplexityComplexity Concept first put forward by the Hewlett-Packard Company; Complexity is defined as being those extra process steps that are
required to deal with external errors (errors generated by factors outside the process) and to recover from internal errors (errors generated by the process).
Classified all work into two categories: Real Work Complexity
© Max Zornada (2005) Slide 97
Identifying ComplexityIdentifying Complexity
To identify complexity, ask the question:"If the process were running perfectly, would this activity be performed ?"
YES = Real Work
NO = Complexity
© Max Zornada (2005) Slide 98
Two Views of Work TimeTwo Views of Work Time
Time Unavailable for Work
Time Available for Real Work
Time Unavailablefor Work
Complexity -Internal Errors
Complexity - External Errors
Time Available for Real Work
Conventional View
Complexity View
© Max Zornada (2005) Slide 99
Indicators of High ComplexityIndicators of High Complexity Lots of work-in-progress materials. Many shelves and interim storage facilities to hold materials. Many people walking from place to place, standing in line waiting for something, standing idle. Work areas that are in disarray. Dusty boxes on floors, bookcases full of dusty binders, desks and
walls covered in little scraps of paper serving as reminder notes. People who can give only brief and vague explanations of what they are working on and why it
is important. Humorous signs taped to the walls that say things like "You want it when ? Ha ! Ha !" or " A
clean desk is a sign of a sick mind" In office areas, piles of processed and unprocessed documents, stored in the work area. Supervisors and managers pacing around the area trying to find out what's going on, ascertain
who made a critical mistake and expediting late orders.
© Max Zornada (2005) Slide 100
Indicators of Low ComplexityIndicators of Low Complexity Small amount of work-in-progress. Few shelves and temporary storage areas to hold
work. Few people walking around. Most people working at a steady, relaxed pace. No one
waiting in line at copy machines, office supplies stores etc. Work areas that are neat. Everything in a department has a place and a use. People
using time management systems instead of scraps of paper. Desk tops containing only what the person is working on at the time.
People on shop floor or office areas can give complete descriptions of what they do, why they do it, who their customers are, and what's important to those customers.
The most common item displayed on department walls are monthly performance graphs, daily control charts, pareto charts of problems.
In office areas all documents are received, processed and filed. In-baskets are clean. Supervisors and managers who are relaxed, walking around the area talking with
employees, asking them what they are working on, and looking for ways to make their employees' jobs easier and more satisfying.
© Max Zornada (2005) Slide 101
A Simple Retail Purchasing ProcessA Simple Retail Purchasing ProcessThe Manager's ViewThe Manager's View
Select goodsfrom shelf
Read price tag
Enter data in register
Announce TotalOffer to Pay
Make change
Wrap GoodsLeave
Customer Clerk
© Max Zornada (2005) Slide 102
The Reality of ComplexityThe Reality of Complexitycaused by Error !caused by Error !
Customer Clerk Supervisor Store person
Pick Goods from shelfIs
Price Tag OK ?
Look up Printed list
Explain Difference
Accept ?
Exit Angry !
GoodsDamaged ?
Discuss with supervisor
Inquire if available from storeroom
Discuss situation
Bring to ClerkFetch and
Notify SupervisorApologise to Customer
Explain to Customer Available ?
No
Yes
No
Yes
No
Yes
No
Wrap etc.
Yes
?
Etc., Etc. ...
© Max Zornada (2005) Slide 103
A “generic” process mapA “generic” process map
Customer
Show the task structure and underlying logic;
Would be useful to link a process to resources and costs;
Process Flow Analysis (PFA) is a technique that allows us to do this. (note: PFA is also referred to as Value Stream Analysis by some).
© Max Zornada (2005) Slide 104
Process Flow AnalysisProcess Flow Analysis(Also referred to as Value Stream Analysis)(Also referred to as Value Stream Analysis)
Delay
Transportation
Storage Storing materials or documents in a protected storage area, requiring authorisation for removal.
Moving of an object or document from one physical location or work station to another.
Temporary storage between operations or waiting for some event which will allow work to continue.
Operation A task or activity which results in intentional changes to one or more characteristics.
InspectionAn examination to determine quality or quantity.
Combined Combining two symbols indicates simultaneous activities eg. inspection is conducted at the same time as the operation.
Symbol Name Brief Definition
© Max Zornada (2005) Slide 105
D
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Process Flow Analysis ChartProcess Name Page of
Date
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Ope
rati
on
Insp
ecti
onT
rans
port
Del
ay
Sto
reDescriptionEstimated
TimeQuantity Distance Notes
© Max Zornada (2005) Slide 106
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Process Flow Analysis Chart
Process Name Page of
Date
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rati
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ecti
onT
rans
port
Del
ay
Sto
reDescriptionEstimated
TimeQuantity Distance
Notes
Internal Mail Distribution Process
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
5. Place in out-trays and wait for pick-up
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
8. etc., etc. ....
30 min30 min
10 min
2 hrs
15 min
15 min
300
300
300
15
15
15
1
100m Average distance of all depts.
Delivered 8:00am
One bundle /Dept.
1 hr
© Max Zornada (2005) Slide 107
Using PFA with a Process MapUsing PFA with a Process MapStream A: Dominant flow through the process
Stream B: Secondary flow
Stream C: Secondary flow
Secondary flows are caused by: Variations required to the
dominant process to handle different products or variants of the main product through the process;
Extra steps required to deal with errors and mistakes in the dominant flow e.g. rework and correction activities.
© Max Zornada (2005) Slide 108
Quantifying the process by using PFAQuantifying the process by using PFA
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Process Flow Analysis Chart
Process Name Page of
Date
D
Ope
ratio
nIn
spec
tion
Tra
nspo
rtD
elay
Stor
eDescriptionEstimated
TimeQuantity Distance
Notes
Internal Mail Distribution Process
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
5. Place in out-trays and wait for pick-up
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
8. etc., etc. ....
30 min30 min10 min
2 hrs
15 min
15 min
1 hr 300
300
300
15
15
15
1
100m Average distance of all depts.
Delivered 8:00am
One bundle /Dept.
D
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Process Flow Analysis Chart
Process Name Page of
Date
D
Ope
ratio
nIn
spec
tion
Tra
nspo
rtD
elay
Stor
eDescriptionEstimated
TimeQuantity Distance
Notes
Internal Mail Distribution Process
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
5. Place in out-trays and wait for pick-up
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
8. etc., etc. ....
30 min30 min10 min
2 hrs
15 min
15 min
1 hr 300
300
300
15
15
15
1
100m Average distance of all depts.
Delivered 8:00am
One bundle /Dept.
D
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Process Flow Analysis Chart
Process Name Page of
Date
D
Ope
ratio
nIn
spec
tion
Tra
nspo
rtD
elay
Stor
eDescriptionEstimated
TimeQuantity Distance
Notes
Internal Mail Distribution Process
1. Mail sitting in mail room
2. Date Stamp all envelopes
3. Determine addressee
4. Sort in bundles by department
5. Place in out-trays and wait for pick-up
6. Internal Mail pick-up and delivery
7. Placed in department secretary in tray
8. etc., etc. ....
30 min30 min10 min
2 hrs
15 min
15 min
1 hr 300
300
300
15
15
15
1
100m Average distance of all depts.
Delivered 8:00am
One bundle /Dept.
Stream A: Dominant flow through the process
Stream B: Secondary flow
Stream C: Secondary flow
Volume of product or transactions going through stream A (Total Volume)X Time = Hours of Work Generated by the work flow.
%
%
Volume X Time through B
Volume X Time through C
© Max Zornada (2005) Slide 109
Quantifying the process by using PFAQuantifying the process by using PFA
Apply a volume to the dominant flow and weighted volumes to the secondary flows and calculate the workload generated;
From the workload generated, calculate the number of Full Time Equivalents required (FTE); Apply accepted conversion factors from work standards;
Convert to number of people required to resource the process by taking into account hours worked and rostering arrangements.
© Max Zornada (2005) Slide 110
Using PFAUsing PFA
The full PFA for a process can be set up as a spreadsheet model;
This can then be used to test the viability of various opportunities for improvement when selecting what to focus on;
Can be used to model proposed changes and simulate the impact on the organisation.
Review Spreadsheet PFA Model
© Max Zornada (2005) Slide 111
Value-Added and Non-Value Added AnalysisValue-Added and Non-Value Added Analysis
Process steps can be categorised as being value added or non-value added;
Value-added steps are steps considered essential to the process; Value-added process steps pass the following three tests:
Is the step related to doing it right the first time ? Does the step get you one step closer to delivering the product or
service to the customer ? Would the customer be willing to pay for the step ?
© Max Zornada (2005) Slide 112
Non-Value Added WorkNon-Value Added Work
Internal failure: steps related to correcting in-process failures due to errors in prior activities in the process;
External failure: steps related to fixing errors in the product or service the customer has found and re-addressed to you;
Set-up: Steps that prepare work for subsequent activity; Control/Accuracy: Steps that relate to internal process review and monitoring,
appraisal steps in COQ terminology; Moves and transport: Steps related to the physical transports that occur between
activities in a process; Delay or wait: Time spent waiting for the next processing step
© Max Zornada (2005) Slide 113
Using PFA for Value Analysis Using PFA for Value Analysis
Value Added Non - Value Added First pass through the process
If done as rework, internal or external failure
All Non - Value Added
© Max Zornada (2005) Slide 114
Tollgate Review: Define PhaseTollgate Review: Define Phase
© Max Zornada (2005) Slide 115
Toll Gate Review: DefineToll Gate Review: Define
Project has been confirmed as a valid improvement priority and is supported by management. A business case has been prepared, showing the potential business impact of this project in
financial terms. A problem statement has been prepared and agreed. Objectives defining the results we are expecting from this project have been stated in the form
of measurable targets. A full Project Team Charter has been prepared including a preliminary plan/schedule. The charter has been reviewed with the project sponsor and their support has been confirmed. The primary customer and their key requirements have been identified. The process concerned has been documented in the form of a process map.
© Max Zornada (2005) Slide 116
Conclusion of Define Stage ModuleConclusion of Define Stage Module