My Personal History
• Management Development & Training (ICL & TSB)• Mainstream Personnel (UDT & Mortgage Express)• General Management (TSB Homeloans)• Quality Management (Lloyds Banking Group)
– EFQM Assessor
– BQF Assessor
– Jury Member, Quality Scotland Foundation & Excellence South West
TSB HomeloansSome Successes
• Established as a centralised home loans operations in 1990
• Loan assets increased from £3.4 billion to £10 billion by 1996
• Productivity improved by 127%• Staff morale improved to 97% satisfaction• Customer satisfaction averaged 98.6%• Winner of the Quality Scotland Foundation Award
for Business Excellence 1996
22 Apr 2023 [email protected]
Agenda
QUALITY
• What is it?
• Does it work?
• Is it here to stay?
• What are the key components?
• Where do I start?
• How do I access support?
Quality
What is it?
Does it work?
Porsche – approach to quality
1991 - 1992 :Porsche were in a Crisis Situation
• 1990 profit of $10 million on sales of $3.1 Billion
• 1992 loss of $154 million on sales of $1.6 billion
• Sales not looking to rebound in the short term 1-2 years
• Company set to go under within 18 months
Porsche - Actions Taken
• Appoint the first CEO from outside of the Porsche family
• Wendelin Wiedeking came from auto parts industry
• Wiedeking makes the decision to use external consultants
• Toyota’s consulting wing is engaged
Paint / Body I & R
5-10 years skilled
Mechanical I & R
5 – 10 years skilled
Final I & R 20 years skilled
I = Inspectors R = Re-workers
Pre-Delivery
Inspection Centre 5 – 15 years
Pre-Delivery
Inspection Centre 5 – 15 years
CUSTOMERCUSTOMER
General I & R3-5 years
skilled
General I & R3-5 years
skilled
Production line worker 0-3 years
Production line worker 0-3 years
Production line worker 0-3 years
Production line worker 0-3 years
Production line worker 0-3 years
Production line worker 0-3 years
PRODUCTION LINE
Toyota’s General Observations
• The product that was delivered to the customer was a “quality product” (though still had much higher warranty costs than Toyota and Lexus)
• The change / revolution they needed was in the operational areas
• They needed to move from an industry of “checking” to a right first time process philosophy
Toyota’s Operational Observations
• Porsche had never in the history of the company built a car first time fault free
• Porsche “plan” to get it “wrong” every day• They had, built a system of checking and skilled
inspectors to find the faults• Built a system and skilled workforce to re-work
the faults• Developed checking and reworking in to the
career path for their “high performance” staff
Comparison with Toyota
• Checking and reworking had become an industry in Porsche
• All the highly skilled staff were removed from the actual process
• In Toyota they plan to get it right
• They get it right and self inspect early in the process not at the end
• The highly skilled guys are in the process “coaching and improving.”
Operational Performance: Post Lean
1991 1995 1997
Hours to build 911 with no engineering changes
120 hrs 76 hrs 45 hrs
Average defects per vehicle at end of line
105 45 25
Full cycle time from welding to finished car
6 wks 5 days 3 days
Work in progress inventories 17 days
4.2 days
3.2 days
Directors, managers, supervisors in Porsche ops
328 226 212
Summary
• Porsche took circa 30% out of their operational costs over 3 years
• 1993 loss of DM 239 million on sales of DM 1.9 billion• 1995 profit of DM 2 million on sales DM 2.6 billion• Productivity doubled in the period while defects
dropped by 75%• July 27 1994 a Carrera rolled off the production line
error free at final inspection, the first time in the companies 44 year history.
Is it here to stay?
Developments in Japan
• Marshall Aid• Dr W Edwards
Deming• The ‘vital’ visit of
1950• The Deming Prize for
industry• The Deming Prize for
schools.22 Apr 2023 [email protected]
What are the key components?
The Global Response
• Excellence & Self-Assessment– Baldridge– EFQM
• Lean Thinking– Identifying & eliminating waste
• Six Sigma– Motorola
European Excellence Model
People
Partnerships& Resources
Policy &Strategy
Leadership
Enablers
PeopleResults
SocietyResults
CustomerResults
KeyPerformance
Results
Results
Processes
Innovation and Learning22 Apr 2023 [email protected]
•identifying communication needs•developing communication policies,strategies and plans based on need•developing and using a variety ofcommunication channels•sharing best practiceand knowledge
How to use the model
People
Partnerships & Resources
Policy &Strategy
Leadership
PeopleResults
SocietyResults
CustomerResults
KeyPerformance
ResultsProcesses
…planned, managed and improved
…identified, developed and sustained
... involved and empowered
…and the organisation have a dialogue
…rewarded, recognised and cared for
Lean Thinking
The Toyota Production System
(TPS)
Lean Thinking?
Exercise
Pass the ball
exercise
The 7 Wastes‘TIMWOOD’
• The waste of Transporting
• The waste of Unnecessary Inventory
• The waste of Unnecessary Motions
• The waste of Waiting
• The waste of Overproduction
• The waste of Over Processing
• The waste of Defects28 August, 2008 [email protected]
Waste of Talent
EffortEffort
PerformancePerformance
HeroesFoot
Soldiers
WalkingWounded
Terrorists
++----
++
(well poisoners)
22 Apr 2023
Inspection Exercise
How many “f” s in the following text?
Piccadilly “Number One”
cigarettes are made from the finest
rich matured Virginia leaf, grown
in districts famous for the smoothness
and flavour of their tobaccos.
THE HOUSE OF PICCADILLY, LONDON
22 Apr 2023
exercise
Inspection Exercise
How many “f” s in the following text?
Piccadilly “Number One”
cigarettes are made from the finest
rich matured Virginia leaf, grown
in districts famous for the smoothness
and flavour of their tobaccos.
THE HOUSE OF PICCADILLY, LONDON
22 Apr 2023
exercise
5 Key PrinciplesThere are five key principles that we focus upon with Lean:
1. Specify value
2. Identify the value stream
3. Create Flow
4. Create Pull
5. Strive for Perfection
People, Motivation, Workload & Culture
GEMBAThe point where value is created
Specifying value
To specify Value, you need to ask:
• Who is the customer?• What do they value in the service or
product that you provide?• What influences their ‘buying decision’?
The cost of value
Alternatively - ask yourself the question:
“Is this an activity that a customer would be prepared to pay for?”
To identify value and non value you need to understand the process
• Follow a product or service from beginning to end and ‘map’ it
• Identify those actions that add value and those that don’t
• Redesign the process
• Standardise and document.
Activity Map
Swim Lane Map
5 days
10 days
4
Cross-Functional Map
Value Stream Map
Branch
Branch Interview
room
CICACSearch
CICACreview
BusinessCentre
ART Qualitative
check
NSUOpen
accountNSU Order
New cards etcCICAC
5 mins
10 mins
5 mins
1 day
2 mins 18 mins
1 day
25 mins
1 day
15 mins
1 day
15 mins 5 mins
1 day 1 day
3 mins
3days
Customer
Branch allocates interview room / time
and commences A/C opening paperwork
Branch initiates Co. house search
WIP50
Units
WIP20
Units
20% Failure rate – 5 day potential wait 8% failure rate – 4 day potential wait
Sits in ‘in tray’
Business centreCompletes A/C
Openingpaperwork
Batch 1
Batch 1 Batch 1 Batch 1 Batch 1 Batch 1 Batch 1 Batch 1
Batch 1
How long does it take to open a Business Account?
Waitfor
Service
Total Lead Time (ideal world) – 12 DaysTotal Lead Time (actual) – 25+ daysTotal Processing Time – 1hour 28 minutes
5% complianceCheck, archive
CICAC initiate
search
3 days
CICAC reviewsearch
by TNTby TNTby TNTby TNT
WIP25
Units
System cannotgenerate
collateral on thesame day
by TNT
Customer receives Card 3 days
later
1.74% value added !
Types of process maps
22 Apr 2023 [email protected]
Supplier Input Process Output Customer
Process Name Process Purpose
Step 1: the basic processes/work stations
The process starts in the top left with the supplier and ends in the top right with the customer.The process has three main steps which are placed in between running from left to right.
Step 2: Flow type and inventory
The work is pushed through the process at every step. You have noticed that inventory is building up in the warehouse awaiting transport between Site A and Site B and between process steps at Site B.
Step 3: information flow
Step 4: quantification and measures
Step 5: improvement opportunities
Future state map
But before you start, clean up the mess!
Workplace Organisation
The 5Ss
Is everything I need here?
Find the order!
47
Think Break
22 Apr 2023
The 5SsOr the 5Cs and the meaning in English
• Seiri – sort – cleanup
• Setion – set in order - configure, orderliness or organisation
• Seiso – shine – clean and check – maintenance
• Seiketsu – standardise – conformity
• Shitsuke – sustain – custom & practice – training and routine
22 Apr 2023 [email protected]
Visual Control
15-51
Visual Controls
Six Sigma
Variation
Normal distribution
57 60 63 66 69 72 75 78 81
Height of adult males (inches)
22 Apr 2023 [email protected]
X-bar R chartActivity Characteristic Standard Sample size and frequency
Loan applications Working days to process Maximum 5 Five per day
Distribution of X
frequency
12 1
r 11 0
ab 10 1
-X 9 3
8 6
na 7 6
eM 6 10
5 16
4 22
3 18
2 14
1 3
Total 100
Remarks
Re-calculate excluding 20 June
X-bar-bar = 4.36 R-bar = 4.37
R
UCLx-bar = 6.88 LCLx-bar = 1.84 sigma hat = 1.88
eg Standard - X-bar-bar 5.5 - 4.36
n Sigma = ----------------------------- + 1.5 = ------------ + 1.5 = 2.1
a sigma hat
R
Yield =
Standard - X-bar-bar 5.5 - 4.36
Cpk = ----------------------------- = ------------ = 0.20
3 sigma hat
X-bar-bar = R-bar = sigma hat = R-bar / d2 =
UCLx-bar = X-bar-bar + A2 R-bar =
LCLx-bar = X-bar-bar - A2 R-bar =
Constants
n A2 D3 D4 d2
2 1.880 N / A 3.268 1.1283 1.023 N / A 2.574 1.6934 0.729 N / A 2.282 2.0595 0.577 N / A 2.114 2.326
Stan Bennett Sheet number: LA WD 01 06Process Improvement Chart X-bar/R Process owner: Tony Bendell Chart owner:
Fri 8
9.87.206 4 5
Mon 11
Tue 12
Wed 13
Thu 14
June 2001
UCLR = 9.2
X1 6
Tue 19
Wed 20
Mon 4
Tue 5Wed
6Thu
7
8 8 4
X4
X3
34 15
7
20
7 32 10 2 3
25
X5
Total X
X-bar 4.4
22
1 5 4
6.8
R
4416
21
4.2
5
X2
Wed 27
Thu 28
Fri 29
6
Thu 21
Fri 22
Mon 25
Tue 26
Fri 15
Mon 18
6 3 9 34 4 2 2 4 2 8 3 4 3 4 3 5 34 7 3 4 4 7 5 2 7 2 1 8 4 4 3
4 4 6 5 39
4 12 6 22 3 5 25 93 5 54 6 6 5 5 8 2 3 5 2
5 3 6 25 3 3 3 4 7 4 5 4 5 2 8
4.2 4.2 3.84.6 3.2 5.6 4.67.6
18 24 19 27 19 19 38 21 21 1923 16 28 23
3.0 4.0 5.0 3.6 4.8 3.8 5.4 3.8 3.8
7 6 2 4 4 2 7 3 3 3 4 10 5 4 5 7 3 3 6
2.004.654.52
LCLR = D3 R-bar = N / A
UCLR = D4 R-bar =
1.84
1.88
3 x 1.88
72.6%
0
1
2
3
4
5
6
7
8
9
0
2
4
6
8
10
12
Wednesday 20 J une.
12 day case.
Papers misfiled.
Filing codes clarified.
Clerks re- instructed.
Calculating SigmaExample
1. Number of units processed N = 500
2. Total number of defects D = 57
3. Number of opportunities O = 3
4. Defect per million opportunities
1,000,000 x {57/(500 x 3)} = 38,000
5. Look up table Sigma = 3.3
22 Apr 2023 [email protected]
Aim: To tackle problems using a method with a structured approach.
Output: A logical definition of a problem & implementation of solutions using root cause analysis.
Method:
Define, Measure, Analyse, Improve & Control (DMAIC)
Refer to p;rocessRefer to p;rocess
Define Measure Analyse Improve Control
Review Charter
Implement mistake proofing
Develop potentialsolutions
Identify potential rootcauses
Value StreamMap for deeperunderstanding
Validate Voice Of Customer & Voice of Business
Validate financial benefits
Identify highlevel Process Map (SIPOC)
Create communicationplan
Select & launchteam
Complete Improvement plan
Validate problem statement & goals
Implement Solution & Ongoing processmeasurements
Identify waysto apply learning (PIR)
Transfer control& monitoring toProcess Owner
Develop SOPs, training plan &process controls
Develop “To-Be”Value StreamMaps
Develop & Implement Pilotsolution
Confirm attainment of improvement goals
Develop full-scaleimplementationplan
Evaluate, select,& optimise best solutions
Confirm root cause effect onoutput
Estimate impactof root causeson key outputs
Prioritise rootcauses
Reduce list ofpotential rootcauses
DevelopOperationalDefinitions
Develop data collection plan
Validatemeasurementsystem
Collect baselinedata
Determine processcapability
Identify keyinput, process &output metrics
Agree Scope
Revalidate problem statement& goals
What is a ‘Belt’?
• Yellow Belt – a process worker who has the skills to support a 6 Sigma project within the scope of his own role
• Green Belt – a practitioner who may work full-time on a 6 Sigma project
• Black Belt – a highly skilled practitioner who will work full-time leading 6 Sigma projects
• Master Black Belt – one who trains other Black Belts.
Improving the Transformation Process
• Lean manufacturing– Elimination of waste (anything that does not add value to the final service, as recognised
by the customer) in all operational areas including customer relations, product design and supplier networks
– Aimed at waste, cycle time, reduction of work in progress, standardisation, cost reduction, flexibility and responsiveness
– A bias to action
• Six sigma– Improvement in the capability of business process to reduce variation in the final service
e.g. time and quality (often measured by errors)
– Aimed at complex problems, process capability, stability
– A bias to analysis
• Lean six sigma– A mix of both methodologies to establish throughout the organisation a set of rules and
procedures that work to continuously generate results
28 August, 2008 [email protected]
Where does it fit strategically?
Continuous Improvement – Lean &Kaizen
Top down – Dubai QASelf assessment
CultureCulture
Process Excellence – Lean & 6 Sigma
Quality Management
The Human Side of the Enterprise
People
• Measuring and monitoring employee competence
• Measuring and monitoring organisational culture
• Measuring and monitoring employee commitment.
28 August, 2008 [email protected]
Measuring and monitoring employee competence
Name: Alan Power0 25 50 75 100
COMPETENCY No Knowledge Appreciation Work under Experienced Expert - ScoreSupervision Worker Can teach
Applications Administration 75
Underwriting 50
Completions Processing 0
Further Advances 0
Telephony 50
Personal Index 35
Name: Paula Coniglio0 25 50 75 100
COMPETENCY No Knowledge Appreciation Work under Experienced Expert - Supervision Worker Can teach
Applications Administration 100
Underwriting 50
Completions Processing 25
Further Advances 25
Telephony 75
Personal Index 55Company Index 45
Organisational Culture Inventory
1
Conventional: rule bound conservative, bureaucratic
Avoidance: punish mistakes, shift blame, avoid taking risks
Oppositional: critical of ideas, confrontational
Power: non-participative control, expert compliance
Perfectionistic: preoccupied with detail, use detail to block new ideas or to beat others
The model reflects leadership styles in three groupings aggressive/defensive, passive/defensive and constructive.
Self-actualising: value creativity, quality and individual growth
Humanistic-Encouraging: involvement and participation
Affiliative: constructive and collaborative relations
Approval: wanting to be liked, telling boss only what he wants to hear
Dependent: hierarchical, do what told and refer upwards
Achievement: value setting and achieving challenging but realistic goals
Competitive: win-lose, besting, working against each other to win
How OCI is used in Lloyds Banking Group
• Too much - Aggressive/Defensive
– A competitive, win-lose organisation
– People oppose new ideas from others
– Use detail to challenge or block others
– Things get done through power & control.
• About average - Passive/Defensive
– A lack of self-determination
– Sense of powerlessness
– People refer decisions upward
– People avoid taking risks and making mistakes
– Rule bound & bureaucratic organisation
• Not enough - Constructive Styles
– Achievement led
– Value in quality, creativity, growth and relationship behaviours
– Driver to be a value based business
5 4 3 2 1
Fast to change Slow and methodical
Entrepreneurial Stable steady
Proactive Reactive
Empowering Controlling
Democratic Autocratic
Open Secretive
Creative Traditional
22 Apr 2023 [email protected] 65
A Simple Approach to Culture AuditsHow Is It in Your Organisation?
Commitment
Employee Engagement
Engaged employees are…..
• More productive (by up to 43%)
• More profitable (by up to 200%)
• More customer focussed
• Safer
• Less likely to leave.
22 Apr 2023 [email protected]
Yet, a Gallup survey shows…..
• Less than a third (29%) of employees are engaged
• More than half (54%) of employees are not engaged
• While 17% of employees are actively disengaged!
22 Apr 2023 [email protected]
Lean Thinking
Productivity Measurement
Why measure productivity?
Without productivity measures how can you:• Know what to expect from your people?
• Compare the performance of teams and individuals?
• Make delivery promises?
• Plan your day – work allocation and crewing?
• Assess the impact of performance improvement initiatives?
• Carry out forecasting and planning?
• Cope with peaks and troughs of business?.
• Output per paid hour– good output ‘v’ paid hours
• Effectiveness– time spent processing ‘v’ time at work
• Efficiency– ‘actual’ time taken to produce good output compared to
‘expected’ time (i.e. the ‘should take’ time)
What can we measured?
Effectiveness =54
91x 100 = 59%
Calculating Effectiveness
Time spent walking in the right direction – doing the right thing
Effectiveness
Processing Time
54
Meetings & Training20
Other 17
Time spent in the office = 91
Processing Time
Time spent doing the right
thing
Efficiency =42
54
x 100 = 78%
Calculating Efficiency
Walking quickly
Efficiency
Output Produced
Useful‘Output’ produced
(hrs)
42Processing
Time54Time spent ‘processing’
42
126x 100 = 33%
Calculating Output per Paid Hour
Value for Money
Output per Paid
Hour
or
Processing Time54
Meetings & Training20
Other 17Processing Time Paid For 126 hrs
Absence 35
Value delivered
Output Produced 42
The Complexity of Performance
P = A x M x O
Quality ManagementCustomer Feedback
Net Promoter Score
&
Complaints Management
The "Net Promoter Score"
In the following test, we will go through ten surveys based on the "Net Promoter Net Promoter ScoreScore" paradigm.
The selected criterion is a zero-to-ten scale, according to the degree of agreement to the selected unique statement:
"Would you recommend Brand X to a friend or a colleague?" from 0 ="not at all likely" to 10="extremely likely".
"Would you recommend Brand X to a friend or a colleague?"
Net Promoter Score
A company’s net promoter score is defined as the percentage of customers who are promoters of the company or brand, minus the percentage who are detractors. Reichheld (2003) has observed this measure to correlate with a company’s rate of growth.
How likely are you to recommend this product/service/company to a friend or colleague?
Extremely Likely
Neutral Extremely Unlikely
Total Feedback
• The voice of the process
• The voice of your employees
• The voice of your customer.
Quality Management
A strategic approach
What Business are you in?
MISSION
How will you beat the
competition?
STRATEGY
What do you need to
do to pursue your strategy?
Business Processes
How will you organise
your processes?
Operating Model
How will you
monitor performance?
SCORECARDSCORECARDSCORECARD
How will you conduct
your business?
Stakeholders
What beliefs do you hold
about your stakeholders?
Beliefs
Prioritise Beliefs
What are the
opportunities & threats?
PEST Analysis
What are
your strengths?
To whom do your
values & ethics apply?
Organisational Capability
What could you
become in the future?
VISION
What needs to
be done to deliver the vision?
3-5 Year Plan
How will you action
your plan?
Policy Deployment
How will you
ensure compliance?
People Processes
VALUES ETHICS
How will beliefs guide people’s actions?
Making the time to understand
I don’t want to see any crazy salesmen - Can’t you seeI’ve got a battle to fight
So, what’s next for you?
What should be your approach?
&
How can Octara help & support?