Adding Real Business Value Through Simple Process

ImprovementMarc GunningASQ Certified Six Sigma Black Belt

June 2013

Why I am Here – Presentation Objectives

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

3

Improvement - what is it? -

“Improvement is accomplished by;– better methods,

– better techniques,

– better machinery

– and by people continually finding better ways to do their job and to work together as a team.

I will never see the day when there is no

room for improvement.“

- Dave Packard, 1957

What is a process?

• A series of interrelated steps consisting of resources and activities that transform inputs into outputs and work toward a common end.

The Certified Six Sigma Black Belt Handbook second edition, T.M. Kubiak and Donald W. Benbow

2 - Plan-Do-Study-Act steps occur in each phase

3 - The activities are organized into standard project phases (DMAIC)

1 - Three questions set the charter of the project

Model for improvement = 3 questions + PDSA + DMAIC

Six Sigma Model for Improvement

What are we trying to accomplish?

How will we know a change is an improvement?

What changes can we make that will result in improvement?

Define Measure Analyze Improve Control

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Define

Measure

Analyze

Improve

Control

Improvement Plan/Three QuestionsSIPOC DiagramCritical to Quality

Process FlowchartData Collection Plan

Cause and Effect/Fishbone Diagram Pareto Chart Time Series/Run Chart Process Map Analysis Affinity mapping

Process FlowchartData Collection Plan

Process documentationRACIControl Charts DashboardsMOC

TO

OLS

Project Scope

What are we trying to accomplish

How will know / measure we are successfulMeasure Current State Future State

What Actions can / should we take

Identifying Opportunities to Create Business Value

Executive & Entity Key Performance

IndicatorsEarnings Capitol Stakeholders

Shareholder Value

• Revenue Growth• Cost Reduction

• Return on equity• Customer Satisfaction• Employee engagement

Business Initiatives

Operating KPI

Process / Function

Market ExpansionNew Tooling

Risk reduction / compliance

Improve Service Levels

Revenue growth

New tool deployed on time

Reduce Customer Incidents

Sales OP’s / IT Customer Operations

Opportunities

Critical to Quality

Need(General)

Requirement(Specific)

1st Level 2nd Level 3rd Level

Revenue Growth

Time to Market

Market Acceptance

# of customer trials Transaction Costs:

• Turn around Time• Rework• # of Iterations• Verification / inspection cycles

Quality:

• Performance• Features• Time• Reliability• Durability• Uniformity• Consistency

• Serviceability• Aesthetics• Personal interface• Flexibility• Harmlessness• Perceived quality• Usability

Milestones on time

Customer Satisfaction

Identify our ability to deliver on the customer / business requirements for a product or service

Suppliers Inputs Process Customers

• Who provides

the inputs?

Step 1:

Outputs

Step 2:

Step 3: Step 4:

• The transformation • The product

or service

from the

process

• Who receives

the product or

service?

Step 5:

•What resources

& activities are

required?

Name of process

START STOP

SIPOC

Process: A series of interrelated steps consisting of resources and activities that transform inputs into outputs and work toward a common end.

The Certified Six Sigma Black Belt Handbook second edition, T.M. Kubiak and Donald W. Benbow

April 18, 2023 11

RACI Definitions• Responsible for implementation: Has the duty and obligation to do the

work. Also, must exercise independent judgment and raise appropriate issues.

• Accountable decision owner: Has the authority to decide and is the recipient of any consequences; the ultimate decision maker. Also has the responsibility to learn from Responsible and Consulting parties.

• Consulted: Stakeholder with expertise, experience, and interests who must be given the opportunity to influence plans and decisions prior to finalization by the “accountable’ or “responsible” party.

• Informed: Is informed of progress, key decisions and deliverables by the “responsible” party; it’s necessary for them to know in order to collaborate well.

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InformedAccountable, Informed

Responsible, ConsultedResponsible, Accountable

Know

ledg

e ne

cess

ary

to m

ake

info

rmed

cha

nge

No

Authority to Make a Change

Yes

Yes No

Swim Lane

Sheppard/Wood Receiving Process

Ajax

Sa

les

Ajax

O

pera

tions

S/W

Offi

ceS/

W

War

ehou

seTr

uck Deliver Truck at Dock

* Physical Inventory* Bill of Lading/Docs

Verify Documentation

Warehouse Inventory

Update S/W system

Send Scanned

Doc to Ajax

Update Ajax System

Place Fulfillment

Order

Sheppard/Wood Example

Identifying Opportunities to create Value

Sheppard/Wood ExampleS/W Customer (AJAX) Executive & Entity Key

Performance Indicators

Earnings Capitol Stakeholders

Shareholder Value

• Protect & Grow Revenue

• Leverage existing assets

• Market Share

Ajax’s Business Initiatives

Operating KPI

Process / Function

Product Extension

Eliminate HAZMAT RisksClose & deliver on every deal – 100%

New Product Capabilities

Zero defects inventory mgmt.

100% fulfillment

Sales & Ops Operations Sales

Opportunities

Eliminate discrepancies

between Supplier and Vendor

Inventory Mgmt Systems

Poka-yoke inventory pick

system

Establish priority delivery

service

Project Scope

What are we trying to accomplish

Improve the accuracy and timeliness of inventory information to Ajax to improve Ajax fulfillment and eliminate Hazmat risks

How will know / measure we are successfulMeasure Current State Future State

S/W and Ajax systems 100% accurate to actual Ajax 98% S/W 100%

Ajax 100% S/W 100%

Timeliness of inventory info to Ajax Sales Monthly Weekly

Eliminate possibility of shipping wrong products Manual / voice verification

Poka-yoke

What Actions can / should we take1. Define and Analyze current state process (SIPOC & RACI)

Supplier Input Process OutputCustomer R A C I

Ajax Supplier Truck at Dock Receive Truck

* Bill of Lading* Physical Inventory S/W

Original Mfg

* Original Mfg* Ajax* S/W    

Truck BoLPackage Labels Verify product for compliance

Trigger all Hazmat compliance S/W

S/W Warehouse

S/W Warehouse    

S/W Warehouse

BoLPhysical Inventory Warehouse Inventory Product Stored Ajax

S/W Warehouse

S/W Warehouse  

Ajax Warehouse

S/W OfficeBoL + Pakage LabelPhysical Location

Update S/W Inventory System

Electonic Record of Ajax @ S/W S/W S/W Office

S/W Office  

Ajax Warehouse

S/W Office

eMail or Phone communicaiton based on S/W Electonic Record

Update Ajax Inventory System

Electronic Record of Ajax Inventory Ajax Ajax Office      

S/W Office

Sum of Electonic Record of Ajax @ S/WPhysical Inventory

Monthly update of Ajax inventory @ S/W to Ajax

* Record for Ajax reconciliation* Records for Invoicing* Record for Ajax Sales of availability Ajax S/W Office      

Ajax Sales

* Ajax customer demand* Ajax knowledge of availabel inventory* eMail or Phone request for Fulfillment

Trigger Ajax inventory pull/ship to Ajax customer

* Fulfillment to Ajax customer* Adjustment to inventory Ajax S/W      

Swim Lane

Sheppard/Wood Receiving Process

Ajax

Sa

les

Ajax

O

pera

tions

S/W

Offi

ceS/

W

War

ehou

seTr

uck Deliver Truck at Dock

* Physical Inventory* Bill of Lading/Docs

Verify Documentation

Warehouse Inventory

Update S/W system

Send Scanned

Doc to Ajax

Update Ajax System

Place Fulfillment

Order

RACI Process

Inputs/Outputs

it will be over soonthis won’t happen

apathynumbness

minimizes the changeIgnores the change

sense of loss of controlconcerned with abilities

future contribution unclearFinds fault with changeslack of focus or direction

Withdrawals blaming

teamworksatisfaction

clear focus and plancooperation

balanceclear vision of the future

sees possibilitieswilling to exploring

alternativesfeeling “ I can make it”

high creativity and energy“TOO” many new ideas

unfocused workstart “being” in the future

Denial

Resistance

Commitment

Exploration

DANGERHIGH PERSONAL CONTRIBUTION

Transition Cycle

Time

Pe

rfo

rma

nc

e

Denial Resistance Exploration Commitment

Management of Change Cycle

New ProcessLaunch

Communicate/Train Workshop/Listen

Facilitate Encourage/Motivate

Control

Thank You