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Welcome Angelo Baratta
PresidentPerformance innovation
Getting From Understanding to Execution
2 April 21-23, 2008
Renaissance Washington, DC
What is the constraint?
At any given point in time• There is at least one constraint• Which limits a system's performance• Relative to its goal
Finding that constraint and dealing with it should be a key management activity.
3 April 21-23, 2008
Renaissance Washington, DC
OrgChart view Command & Control
• Single component – people• Personal vantage point.• Doesn’t provide a full picture.
• Who is responsible?
• Who did this or didn’t do this?
• Who gets blame/credit?
• Who should we replace ….?
Business Unit
Vantage Pointre
spo
nsib
ility
4 April 21-23, 2008
Renaissance Washington, DC
Business Unit
Process Vantage Point Customer View
1. Do we understand the need that we are trying to fulfill?
2. How well is the process fulfilling the needs?
3. How effectively is the need being fulfilled? How much waste is in the process?
4. What element should we change in order to do better?
Multiple integrated components
resp
ons
ibili
ty
accountability
Process B
Process A
Process C
CustomerNeed
NeedFulfillment
5 April 21-23, 2008
Renaissance Washington, DC
Performance Management
To
ols &
Tech
niq
ues (L
ean, R
oo
t-Cau
se …)
1 2
34
Process Model Blueprint
Process A
people (capability )
technology (capability )
method outputinput
MM
EM
Process Performance Measurement
VALUE
- Customer- Employee- Supplier- Shareholder
CAPABILITY
THROUGHPUTPERFORMANCE
ATTRIBUTES
- Integrity (Quality)- Capability- Demand-Capacity- Availability- Responsiveness- ...
PROCESS-RISKCAPABILITY
Process Change Management
6 S
igm
aB
PM
met
h.
Process Performance Management
Gap
Process Performance Management
6 April 21-23, 2008
Renaissance Washington, DC
Process
outputinput Transform
Full ProcessFramework
method
MM
EM
people(capability)
technology(capability)
A process is a mechanism of interdependent components for fulfilling a customer need:1. That produces a defined output2. From some consumed input3. Using a sequence of operations – the transform method4. Executed by an operator - people and/or technology5. Based on a mental model and emotional mindset.6. Exhibiting measurable performance
THROUGHPUT + PERFORMANCE-RISK
7 April 21-23, 2008
Renaissance Washington, DC
549
59184
504
576
753X531
X
S1
S2
S3
S4
753
Anatomy of a process
We sell the product of 3 by 3 numbers
Result
orde
rs
Lead(1)
Last(4)
(2) (3)2 factors
Productof 3#
Theory
Behaviour
Product Process
Technology Capability1. Paper for recording2. Pen/pencil to write
People Capability1. Multiply times tables 0 – 92. Add column with max 3 rows
- Defectives- Effort/Cost- Time2deliver- $Revenue
DASHBOARD
MethodOperations required to get the product
inputoutput
8 April 21-23, 2008
Renaissance Washington, DC
Task Method via example
1. Multiply 3 & 5 to get 15
PP
1. Since 15 > 9 carry 1
PP
2. Multiply 3 & 5 to get 15
PP
2. Since 15 > 9 carry 1
PP
3. Multiply 3 & 3 to get 9
PP
4. Multiply 2 & 3 to get 6
PP
5. Add columns:
805PP
23X 35 5
1 23X 35 115
11 23X 35 115 9-
11 23X 35 115 69-
23X 35 115 69- 805
1111
Alternative ways to define the method:
1. Task level flow
2. Example
3. Procedure
4. …
9 April 21-23, 2008
Renaissance Washington, DC
Outcome
manages
Output
accountable
Task
responsible
m
n
3 Tier Model for Accountability
What we do.
We execute tasks to produce an output. Tasks relate to functions and jobs.
What’s left when we’re done.
We produce an output in order to achieve an outcome. Outputs relate a culmination of tasks & the flow of value.
What we got out of it.
We achieve an outcome to fulfill a vision. Outcomes relate to system goals.
10 April 21-23, 2008
Renaissance Washington, DC
Output Model
Ones Product
S1
Tens Product
S2
Delivered Answer
S4
3x3 Product
3x3
Ord
er
Hundreds Product
S3
Effort
Hundreds
DPMO
IS Tar
Effort
Answer
DPMO
IS Tar
DPMR
Throughput
Contrib$
240k
Revenue$
Demand
4000
360k
60k
240k
4
120k
360k
IS Targ
549
59184
504
576
753X531
X
S1
S2
S3
S4
753
11 April 21-23, 2008
Renaissance Washington, DC
Separate value effort from drag effort– 3 Streams
failure
control
value
pure waste
dragburden Value
throughputwaste
12 April 21-23, 2008
Renaissance Washington, DC
3 Tiers + 3 Streams = big picture
Outcome
manages
Output
accountable
Task
responsible
m
n
Outcome
manages
Output
accountable
Task
responsible
m
n
Outcome
manages
Output
accountable
Task
responsible
m
n
Value Stream Control Stream Failure Stream
ActualRE/FM
PredictedRE/FM
Ideal –Zero Risk
13 April 21-23, 2008
Renaissance Washington, DC
Add controls
Ones
ProductS1
Tens
ProductS2
Answer
S4
Hundreds Product
S3
Delivered Answer
=
Scheduled
OrderS0
Compare all cells
Rework
wrong cells
Rework wrong cells
not =Quality Productmanages
VerifiedAnswer
Optimized Resources
manages
CorrectedFailuremanages
CorrectedAnswer
3x3 Value S
tream
Failure
Stream
Control S
tream
3x3
Ord
er
Sum products
operator
DPMR
Throughput
Contrib
240k
Revenue
Demand
4k
360k
60k
240k
1k
120k
360k
IS Targ
14 April 21-23, 2008
Renaissance Washington, DC
Add failure
Ones
ProductS1
Tens
ProductS2
Answer
S4
Hundreds Product
S3
Delivered Answer
=
Scheduled
OrderS0
Compare all cells
Rework
wrong cells
Rework wrong cells
not =Quality Productmanages
VerifiedAnswer
Optimized Resources
manages
CorrectedFailuremanages
CorrectedAnswer
3x3 Value S
tream
Failure
Stream
Control S
tream
3x3
Ord
er
Sum products
operator
DPMR
Throughput
Contrib
240k
Revenue
Demand
4k
360k
60k
240k
1k
120k
360k
IS Targ
15 April 21-23, 2008
Renaissance Washington, DC
Business Unit
Org Chart focused view Task objective bias
Operationalize Strategy
Strategy
ExternalStimulus
Business Objective
Individual PerformanceMonitoring/Assessment
Functional/Individual objectives
16 April 21-23, 2008
Renaissance Washington, DC
Business Unit
Process Performance Framework
Process A
CustomerNeed
Process Performance ManagementFramework
VALUE
- Customer - Shareholder
CAPABILITY
PERFORMANCE DASHBOARD
Process A
people (capability)
technology (capability)
method outputinput
MM
EM
change
change
actual Processtargets
Operationalize Strategy
Strategy
Business Objective
Feedback
Individual PerformanceMonitoring/Assessment
P
Process B
people (capability)
technology (capability)
method outputinput
MM
EM
Gap
ChangeProcess
Process Performance Management
D
C
A
17 April 21-23, 2008
Renaissance Washington, DC
Thank You!Angelo BarattaPresidentPerformance Innovation
Contact Information:[email protected]