Why Your Business Needs a Continuous Improvement Blog

Posted on11. Jun, 2009 by Monique.

Sharing online can be the source of tremendous rewards for many businesses and organizations.  A blog is an excellent way to connect with people outside your facility, location, department, or division.  Whether you decide to share via the internet or intranet, there is no better way to chisel away the walls of communication.

Here are four reasons why you should start a continuous improvement blog.

1. Connect with Multiple Locations: In order to avoid feelings of isolation, you can have a common platform to share successes, stumbling blocks, best practices, or benchmarks.  Within a large organization it may be easy to become disconnected from locations in different times zones.  Your company blog can be a medium for collaboration as well as a tool to help reduce variation in standard operating procedures. 
2. Develop Unity in the Organization:  As Forrest Breyfogle III teaches at Smarter Solutions, there should be two levels of planning within the organization – Enterprise planning and Project Planning.  Enterprise planning is the 10,000 foot view of the organization or the high level processes.  The project level is more of the functional, daily operations planning.  Whatever you are working on the project level should be directly tied to key enterprise level strategic goals and objectives.  The enterprise level metrics should be the same for the project level.  Everyone should be focused on the same goals.  Communicating on your blog would be an easy way for satellite locations to get direct feedback from corporate to confirm that you are indeed working on the right things, at the right time, and avoid project duplications.  Employees can stay up to date by subscribing to company RSS feeds via email.
3. Upload Training Materials:  With business process improvement projects you will map out new standards of work or establish new procedures for a particular function of the organization.  When you present project updates or tollgates, you will be responsible for releasing the details of the changes implemented.  Keep stakeholders and process owners in the loop of new expectations by posting the new standard work on the blog.  Get instant feedback to ensure the message was understood and clearly communicated.  Videos are also a great way to format training and accommodate multiple learning styles.  This training will also archive your steps toward meeting strategic goals and objectives.
4. Shareholder Value:  Publicly traded organizations can benefit from blogs by keeping shareholders up to date on improvements and having a medium to evaluate their return on investment.  You will always have to submit SEC filings, but what a better way to add value to the relationship than by providing a multimedia portal for two-way, transparent communication.

WordPress.org  is an excellent place to start to get your own continuous improvement blog started today!

I would love to hear your feedback on this post – Does Your Organization Currently Use a Blog?

Welcome back to Lean Six Sigma Source! Thanks for your continued support.

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The Misuse & Abuse of the Term – Efficient

Posted on27. May, 2009 by Monique.

If you are following me on Twitter, you might remember that Monday I sent out a series of tweets expressing why I feel the term “efficient” is often misused and abused in regard to business process performance.

This morning the most recent entry in my Lean Six Sigma news feed was the following Spokesman Review story:

City adds job to promote efficiency

Six Sigma overseer will cost $120,000

Staff writer, Jonathan Brunt, goes on to state

“As city leaders craft plans to lay off dozens of employees to meet an expected shortfall in next year’s budget, they decided Tuesday to create a new high-paying job responsible for overseeing ideas to save money.

The Spokane City Council approved the position – at a cost of about $120,000 a year in pay and benefits – that will promote government efficiency based on Lean Six Sigma, a business-efficiency program popularized by General Electric and other companies. “

My concern is that he describes Lean Six Sigma as a “business-efficiency program.”

What’s wrong with that description?

Lean Six Sigma is a systematic approach to identify, measure and reduce (if possible, eliminate) variation or waste in a process.  The business system should operate to produce profit.  If you are spending more than you are making you won’t have a business.   After the non-value added activities are elimated or reduced the Lean methodology gives you the tools to then focus on adding value to process.  Unfortunately some companies fail to understand this and bail before they get to this pivotal point.  What people fail to realize that there is usually so much waste in the process that you forget to go back and add value later.  This fallicy has led to layoffs being touted as Lean initiatives, which is far removed from the truth.  I think Ron von Stekelenborg said it best this morning on Twitter.

@leanstekel Cost-cutting is like cutting into fat as well as muscles; lean only removes fat 

I do find it refreshing that the Council voted 6-0 in favor of hiring a business process improvement manager.

How is the term “efficient” misused?

I think the term efficient is abused or misused when individuals neglect to quantify and define quality metrics.  Unfortunately, some use the term and never qualify with relevance or a description.  To give you an example you might think of a process such as an online checkout transaction. 

The organization might have reviewed the process and determined that the current process frustrates an overwhelming majority of clients, citing too many clicks are required to complete transaction.  The critical to quality metric should be defined as the number of page clicks required to complete checkout.  So, if you improve the process such that it now requires one click checkout rather than six clicks.  Then yes, that is a more efficient approach and a value to the customer.  It’s relative to the process and can be expressed as a number.

Another example that comes to mind is that say a mobile phone manufacturer wants to reduce the complexity of assembly by reducing the number of unique components for a design.  So instead of having one unique part for every digit and character on a phone, you may decide to develop on complete keypad.  If you previously had 18 unique keys and the keypad drops you down to one unique component, then you reduced the number of unique components by 17. 

So, again I would not describe this effort as just efficient.  I have defined the metrics that are critical to quality and express the improvement in terms of the metric not blanket, vague statements like, “It’s more efficient”.  Without a number, I’m not going to take your word for it that it’s more efficient.

Although, Brunt may have butchered the true meaning of what is Lean Six Sigma, he did a much better job of later citing in example of an efficiency improvement in the following statement,

“Danek said Six Sigma has already made the city more efficient, leading the city to streamline its approval process for contracts that don’t require City Council support from an average of 29 days to 10 days.”

During your next meeting or discussion, don’t let colleagues get away with labeling something as efficient without evidence.  What is the ocular proof or is it just smoke and mirrors jargon?

I want to hear what you think.  Leave a comment below.  Do you think the term “efficient” is often misused and abused?

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Creating Process Maps: Key Ideas for a Team Facilitator

Posted on28. Apr, 2009 by carolesf.

If your company is planning to start a Six Sigma or Lean project for business process improvement, chances are that some form of process maps will need to be created.  And a crucial variable leading to the success or failure of the team involved in that effort is the effectiveness of the team facilitator.

What if you are the person chosen to facilitate that process mapping team?  If you’re a Lean Six Sigma Black Belt, you may well be chosen for this role.  What kind of process do you need to follow to ensure that the process maps your team produces are as accurate and useful as they can possibly be? 

(1) Identify the scope of the process your team will be mapping. 

• This must include identification of: 
  • Customer,
  • Product,
  • Starting Point,
  • Ending Point.

(2) Identify all stakeholders to the process. 

• Make sure that all stakeholders are represented on the project team. 
• The team should include about 6 – 8 people; too few risks leaving out important stakeholders, while too many becomes unwieldy.
• Also ensure that these representatives come from varying levels in the organization, including some working-level members — who know what really goes on in the process.
• Determine what measures should be taken to gain buy-in (and take them).

(3)  Schedule an initial workshop with all the team members.  

• The workshop should be at least 3 hours long. 
• Invitations should be sent with enough lead time to get on people’s calendars.
• Always follow up with team members who didn’t respond to your initial invitation. 

(4)  On the day of the workshop, make sure you do the following:

• As facilitator…
  • Enforce the ground rules!  (This includes timekeeping.) 
  • Also, you must be seen as neutral to the process being studied.  If the team perceives you to have a preexisting agenda for the process (rightly or wrongly), it will be difficult to gain their honest and full participation. 
• Start by stating the ground rules for the workshop: 
  • Safe environment for brainstorming;
  • 5-Minute Rule (contentious topics will get “parked” after 5 minutes);
  • 80/20 Rule (focus on what happens 80% of the time);
  • Keep focused on value to the customer.
• Start by gaining consensus on the scope; modify as the group sees necessary. 
• Have team members write up the process as they see it on sticky notes, one note for each step in the process. 
• Participants then stick the notes on the wall in order.
  • Duplications of a step go underneath each other.
  • Team members should move the steps around until they are satisfied with the order.
• Lead team in discussion of…
  • Decisions points
  • Hand-offs
  • Bottlenecks
  • Gaps
  • Problems
• At the end of the workshop, the team decides if any stakeholders have been left out.  Is there anyone else who should provide input?
• Agree on the next steps your team needs to take.
• Schedule the next meeting.

Process maps

are a crucial tool in business process improvement.  And a good facilitator is key to achieving accurate and insightful process maps.  If you can provide that leadership, your team will benefit — and so will your company.

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Process Mapping: Creating Business Success

Posted on28. Apr, 2009 by carolesf.

Process Mapping

as a tool for creating business success has been around in one form or another for quite a long time.  The earliest forms of flowcharts were developed in the 1920′s and 1930′s as part of industrial engineering.  Since then, highly sophisticated Process Mapping tools and techniques have been developed.  Helping to drive the development of these tools was the certification standards of ISO 9001 and ISO 14001 in the early to mid 1990′s and the Sarbanes-Oxley Act in the early 2000′s. 

But perhaps even more important a driver is that old standby of capitalism:  Competition. 

If your competition has a shorter, less costly, and more effective process, they’ll eat your lunch.  Why would any customer pay more to wait longer for a less reliable product?  Of course, they won’t.  But under pricing pressures you can’t just price on a “cost-plus” basis.   Result?  Your prices are the same as the competition’s prices, but your costs are higher, so what suffers?  Your profitability.  Under such competitive pressures, businesses have come to scrutinize their processes in ever more detail, seeking waste that can be cut out.

Tools of Lean Manufacturing such as Value Stream Mapping have come to be used in every type of business process.  Lean Manufacturing was pioneered by Toyota and has since spread to every corner of the globe.  But Process Mapping is also a key part of Total Quality Management (TQM) and Six Sigma as well, plus combined methods such as Lean Six Sigma.

What is Process Mapping?  Simply put, it is a chart which shows every activity that must be completed in order to deliver a product or service to the end customer.  Modern versions typically include not just materials flow, but paper flow and information flow as well.  Put that way, it does sound simple.  But it’s harder than you might think, and requires an experienced business analyst and leader to do it effectively.

Here are some key areas to consider when beginning a project of Process Mapping:

(1) For one thing, you’ll need to set the boundaries of your process map.  Are you mapping a process at the macro or micro level?  Are you looking at an entire factory, or only one workcell within the factory?  How much of the upstream and downstream sub-processes do you need to show, to help inform your understanding of the area under study? 

(2) You’ll also need to identify the product, and maybe even the customer.  It’s not always as easy as you might think!  This is especially true in the case of service industries, or internal departments where the “customer” is another department of the same company.     

(3)  How much detail should your map show?  Too much detail and you risk losing the forest for the trees.  Too little detail and you may miss some important factors.

(4)  Who should be on your team?  It should be a multifunctional team from many levels, yet if it is too large the team becomes unwieldy.  Often only the workers know what really goes on, but you must be sure that these team members will not be intimidated by the views of higher-level members who have a different vision of what “should” be happening.  And when all of these people have their own “real” jobs to do (as of course they will in a multifunctional team), getting them to focus on the Process Mapping project is an art in itself.

Despite all these challenges, Process Mapping is a crucial part of business process improvement.  Just remember, your competition is monitoring their processes.  Literally, you can’t afford not to.

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Process Flow Chart: Tried and True

Posted on28. Apr, 2009 by carolesf.

A Process Flow Chart

is a visual diagram describing a process, and it is one of the oldest process improvement tools still in general use.  As such, it sounds simple but can be more challenging than you might think to create one. 

The Process Flow Chart shows inputs, outputs, and all activities in between.  The chart must represent the entire process from start to finish and show action points and decision points.  It can be used for training in proper production methods, or as a starting point for process improvement efforts. 

There are many different types of process maps, but variations are used in all business process improvement techniques.  Lean, Six Sigma, Lean Six Sigma — you name it, the art and science of process improvement must incorporate an understanding of the process as it currently exists.  And that means creating a Process Flow Chart. 

Some familiar types of flowcharts are: 

• Value Stream Mapping
• Swim Lanes
• SIPOC
• IDEF Mapping
• Activity Diagram
• Detailed Process Map

 
What’s the best way to go about it?  Teamwork, teamwork, teamwork. 

Perhaps an “expert” has sat down at his or her desk and drawn up a process map.  If so, accept their work with gracious thanks.  Then put together a team anyway.  No matter how great the expertise of a single person, the Process Flow Chart will be more accurate and useful if multiple viewpoints go into its development.  

Your project team should be cross-functional and taken from all levels of the organization.  Be sure to include some people who actually do the work — and make sure they know they are equal members of this team, no matter how high up in the company some other team members might be.  Often the working-level folks are the ones who know what really goes on.  If they feel that your process-improvement team is a safe place to be honest, you could learn some very useful things.  If they feel they’ll be punished for saying “The Emperor Has No Clothes” — then make sure you order the best doughnuts for your team meeting, because that’s the only good anyone will get out of the meeting. 

If your process improvement team is going to succeed in shortening lead times, cutting out waste, or both, you must avoid common pitfalls of constructing a Process Flow Chart.  These can include:

• Putting in too much or too little detail
• Defining the process under study too narrowly or too broadly
• Failing to capture the process as it currently exists
• Confusing materials flow and information flow
• Failing to identify the critical team members
• Suffering from poor team facilitation

 
Having a skilled team facilitator is crucial.  (In fact, many of the other problems listed above can be traced to poor facilitation.)  The facilitator need not be an expert in the process under study — in fact, it can even be helpful if he or she is not, since this will spark questions on topics that others on the team may take for granted.  But the team facilitator must be experienced in managing group dynamics and facilitating discussions.  Otherwise a loud or strong-willed individual can skew the results of the mapping project by overriding other, equally valid viewpoints from quieter team members.

What’s the value in constructing a Process Flow Chart?  Here are some thought-starters: 

• Helps standardize and streamline steps and sequences in a process
• Helps identify and eliminate wasted steps or activities
• Helps find better ways of doing things

 
You can’t solve a problem unless you know it exists.  In business process improvement, that starts with creating a Process Flow Chart.

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Value Stream Mapping: Get To Know Your Process

Posted on28. Apr, 2009 by carolesf.

Q:  When you start a project of business process improvement, what’s one of your most useful and versatile tools? 
A:  Value Stream Mapping. 

Value Stream Mapping

is a tool of Lean Thinking which enables you to identify the activities of a business process and their associated costs.  VSM is a great way to create and communicate process changes, and hence is a key component of any change management strategy.  Mapping the current process is usually applied during the “Measure” phase of DMAIC in Lean Six Sigma.  Mapping the desired future process is part of the “Improve” phase. 

The most basic philosophy of Lean Thinking is “Add only value — that the customer is willing to pay for.”  To achieve this, one of the most important activities you can undertake is to map out your process and discover which steps waste time and/or money.  In Value Stream Mapping, you’ll identify every activity currently required to produce your company’s product or service to the customer.  Each activity must then be assessed as to which of the following categories it falls into: 

(1) Value-add:  Activities which are required to produce what your customer wants to buy.  These are activities which the customer would gladly pay for, if they knew you were doing them behind the scenes.  By all means try to control these costs, but never at the risk of reducing the product’s value in the eyes of the customer.

(2) Non-Value-add:  These are activities which the customer would not want to pay for, but which are required for legal, regulatory, or business reasons.  These also include supporting administrative functions such as HR and Accounting.  They may not directly lead to your customer’s desired product, but just try to run your business without them!  Certainly try to reduce these costs, but you will not be able to eliminate them outright.

(3) Waste:  These are activities which the customer would not want to pay for, and no one else should either.  In Lean Thinking Generates Value — And Profits, I give examples of the “Seven Deadly Wastes”.  Eliminate these immediately if not sooner. 

Makes a lot of sense, but if it were easy, everyone would do it, right?  So how is Value Stream Mapping done?

(1) Start by mapping the existing process.  Map not only materials flow, but also paper flow and information flow.  Such maps often seem complicated and even intimidating at first glance, but once you get to know what the different symbols mean, it will start to make a lot of sense. 

(2) Assess the current process in terms of Value-add, Non-value-add, and Waste activities.  (In some cases, Non-value-add and Waste are binned together.)

(3) Develop a map of the streamlined future process, eliminating wasteful activities.  This is where the art and science come in, and a Lean Six Sigma Black Belt can help.  Takt time, kaizen, kanban, and all those other concepts and techniques of Lean can be used individually or in combination to help you achieve this step. 

(4) Implement the future map. 

Value Stream Mapping is one of the key inputs to assessing how to streamline a given process.  Often once you have identified the costs and binned them into Value-add, Non-value-add, and Waste categories, the necessary process changes can seem to leap right off your computer monitor.  If you know the cost of the original process, and the cost of the streamlined process, the difference is the cost savings directly attributable to your project team’s efforts.

And that makes Value Stream Mapping a highly “valuable” tool for your career, too.

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Lean Thinking Generates Value — And Profits

Posted on24. Apr, 2009 by carolesf.

The Value of Lean Thinking

What does the “Lean” in “Lean Six Sigma” stand for? And what is “Lean Thinking”?

Both Lean and Six Sigma have their roots in manufacturing process improvement. Over the past decade or so, they have been integrated into a combined approach that has been applied to the full range of business processes, not just manufacturing.

The term “Lean” originated in “Lean manufacturing.” This is a manufacturing method which was famously pioneered by Toyota, as documented in the 1990 book “The Machine That Changed the World” by James Womack, Daniel Jones, and Daniel Roos. Womack and Jones later released another influential book titled “Lean Thinking” (1996) which sets forth the basic principles of the lean model of business.

The core concepts of Lean could be summed up as: (1) Add nothing but value. (2) Value is in the eyes of the customer. (3) Therefore, the enterprise should be oriented along lines that enable the customer’s needs to “pull” raw materials, services, and information along the most-efficient, least-wasteful path or “flow.” At the end of this flow, the customer has received the product or service he or she wanted.

Clear enough, but what does a Lean Thinking company look like in practice? And can it work in a non-manufacturing firm?

In the simplest terms, a Lean organization has a short order-to-delivery cycle. The shorter the cycle, the leaner the company.

It doesn’t really matter what the customer is ordering. It could be rapid transportation to a distant city (airline tickets). It could be showerheads (Home Depot). It could be the opportunity to buy or sell something at the best possible price (eBay). A sense of connectedness to friends and family (Twitter). In all cases, the customer wants to obtain something that he or she values, and some organization is trying to deliver whatever that something is.

What adds value to the order-to-delivery cycle? The activities of receiving the order, preparing the product or service to fulfill the order, and delivering the order.

What does not add value? In other words, what would customers not be willing to pay for, if they knew it was going on behind the scenes? How about stockpiling raw materials to enable the company to produce someone else’s order (inventory)? How about not having enough capacity to fulfill the customer’s order right away (backlog)? (A non-manufacturing example of this: Overbooking an airline flight.) How about an order entered incorrectly? Or a lost shipment? What if a particular webmail service kept crashing your web browser whenever you tried to check your email?

Lean Thinking is a mindset that doesn’t so much seek to avoid wasteful mistakes in a step as to eliminate a wasteful step entirely.

For example, if an order is entered incorrectly, the Lean approach would ask, “Do we need to do order-entry at all?” Maybe if the customer orders on-line, then we automate the order-entry process and eliminate that wasteful step in the process. On the other hand, maybe your particular customers want to “be taken care of” and would resent an expectation that they “do it themselves.” If that is the case, then, yes, we must continue to do order-entry and moreover, it should provide a personal touch to these customers. This is why understanding the customer’s wants and needs is so central to designing Lean processes. One customer’s trash is another one’s treasure — and you need to know which customer you’re dealing with.

In embracing Lean Thinking, a company is dedicated to discovering what their customers want, and providing it to them in a way that adds nothing but value — that the customers will pay for. By doing so, the company will create value (profits) for itself as well.

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Lean Six Sigma: What Is It?

Posted on24. Apr, 2009 by carolesf.

Lean and Six Sigma

Most people in business today have heard the term “Six Sigma.”  Over the past few years, though, we’ve also begun to see the term “Lean Six Sigma.”  You may be wondering, “What exactly is Lean Six Sigma?  Is it different from “regular” Six Sigma?”

Originally, Lean and Six Sigma were seen as competing methods.  The Lean approach focused on minimizing lead time for a given process, seeking speed and efficiency.  Six Sigma focused on minimizing variability in a given process, seeking to minimize minimizing defects in output.  Followers of each approach were quick to point out the shortcomings of the other method.  A Lean process could still produce poor-quality outputs; and a Six Sigma process may not necessarily have been faster or more efficient than the process it replaced.

But why should you have to choose between quality and speed?  Shouldn’t the ideal business process result in both quality and speed?

This realization led business leaders to see Lean and Six Sigma as the complementary tools that they are.  Using the integrated Lean Six Sigma approach, a company can improve both efficiency and quality — at the same time.

Sound good?  Broadly speaking, here’s how Lean Six Sigma works.

The basic problem-solving framework is known as DMAIC:  Define, Measure, Analyze, Improve, and Control. 

Define & Measure: 

Identify the process and problem we want to work on.  Then, measure the extent of the problem. 

For the target process, the Black Belt leading the project will produce a an As-Is map.  The idea here is to capture the process as it currently exists.  Not as it was designed to be.  Not as we wish it could be.  But as it is.  (This is typically quite an eye-opening exercise.)  The value stream map identifies costs in the process. 

Analyze

Next, the Black Belt will want to capture the voice of the customer, to identify issues that are critical to quality — in the customer’s eyes.  Remember, the customer is the key stakeholder in any business process.  If the business doesn’t keep its customers happy, none of the other stakeholders will be around for long.  Therefore, the costs in the value stream map can be put into one of two bins from the customer’s perspective:  Either value-add or non-value-add costs.  In other words, ask yourself this question about any of the identified process costs:  “Will the customer be willing to pay for this?”  If YES, it’s a value-add cost.  If NO — get rid of it; it’s a non-value-add cost. 

Here I want to remind you of something I said in an earlier post:  Defects are a waste that the customer does not want to pay for.  This fact illustrates why the Lean and Six Sigma methods of process improvement, in reality, work so well together:  Both approaches zero in on this point. 

Improve:

Now that the Lean Six Sigma team has identified areas of wasted cost, wasted time, and/or sources of defect-producing variability, we can revisit the process map.  Now we define what the process should look like. 

Control:

The team’s work doesn’t end with a new and improved process map.  We must also consider how to avoid a similar problem in the future, and how to recognize it more quickly if it does occur.  In other words, we must ensure that we can maintain control over this new process as it is moved from the Powerpoint slide into the real world.  This is the Control phase of the DMAIC framework. 

If the Lean Six Sigma team has done its job well, the new process should be shorter, faster, less costly, and more effective than the old process.

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