© 1992-2013 by Smarter Solutions, Inc. Austin, TX www.smartersolutions.com1Integrated Enterprise ExcellenceOne-day Worksho...
© 1992-2013 by Smarter Solutions, Inc. Austin, TX www.smartersolutions.com2Agenda1. Business Management and Improvement Pr...
© Smarter Solutions, Inc. 1 www.SmarterSolutions.comIntegrated Enterprise ExcellenceOne-day WorkshopForrest W. Breyfogle, ...
© Smarter Solutions, Inc. 2 www.SmarterSolutions.comReference Books• Much of this workshop’s content is taken from the Int...
© Smarter Solutions, Inc. 3 www.SmarterSolutions.comBusiness Management Practices• Exception management (from Wikipedia)– ...
© Smarter Solutions, Inc. 4 www.SmarterSolutions.comBusiness Management Practices• Quality Management System (QMS) [from W...
© Smarter Solutions, Inc. 5 www.SmarterSolutions.comBusiness Management Practices• Business process management (BPM) [from...
© Smarter Solutions, Inc. 6 www.SmarterSolutions.comTeam Exercise: Group Discussion• Do you think that this situation coul...
© Smarter Solutions, Inc. 7 www.SmarterSolutions.comImprovement Project Selection• In process improvement programs, projec...
© Smarter Solutions, Inc. 8 www.SmarterSolutions.comGraphic View on the 9 Steps toExcellence in Governance1. Describevisio...
© Smarter Solutions, Inc. 9 www.SmarterSolutions.com2. Create the Enterprise Value Chain1. Describe vision andmission.2. D...
© Smarter Solutions, Inc. 10 www.SmarterSolutions.com1. Describe vision andmission.2. Describe value chain,including satel...
© Smarter Solutions, Inc. 11 www.SmarterSolutions.comDevelopProductMarket Product Sell ProductProduce &Deliver ProductInvo...
© Smarter Solutions, Inc. 12 www.SmarterSolutions.com2. Create the Enterprise Value Chain1. Describe vision andmission.2. ...
© Smarter Solutions, Inc. 13 www.SmarterSolutions.comPerformance Reporting• The next four slides will describe/compare the...
© Smarter Solutions, Inc. 14 www.SmarterSolutions.comPerformance Reporting: Line ChartWhat conclusion would you make from ...
© Smarter Solutions, Inc. 15 www.SmarterSolutions.comPerformance Reporting: Bar ChartWhat conclusion would you make from t...
© Smarter Solutions, Inc. 16 www.SmarterSolutions.comPerformance Reporting: StoplightsRed/Yellow/Green visuals are themost...
© Smarter Solutions, Inc. 17 www.SmarterSolutions.comPerformance Reporting: BalancedScorecardThoughtsabout theBSCapproachm...
© Smarter Solutions, Inc. 18 www.SmarterSolutions.comProcess Tracking and PerformanceMetrics: Issues and ResolutionTYPICAL...
© Smarter Solutions, Inc. 19 www.SmarterSolutions.comProcess Tracking and PerformanceMetrics: Issues and ResolutionEFFECTI...
© Smarter Solutions, Inc. 20 www.SmarterSolutions.comTraditional Performance Reporting Example – Red-Yellow-Green Scorecar...
© Smarter Solutions, Inc. 21 www.SmarterSolutions.comBuilding a Better ScorecardIndividuals Control ChartCLCL=1.90UCL= 2.6...
© Smarter Solutions, Inc. 22 www.SmarterSolutions.comTargets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 J...
© Smarter Solutions, Inc. 23 www.SmarterSolutions.com• IEE Enterprise Performance Reporting System (EPRS)scorecard report-...
© Smarter Solutions, Inc. 24 www.SmarterSolutions.comIEE 30,000-foot-level ScorecardIEE Scorecard for Sales120000100000nUC...
© Smarter Solutions, Inc. 25 www.SmarterSolutions.comIEE 30,000-foot-level ScorecardIEE Scorecard for Sales150000nUCL=1367...
© Smarter Solutions, Inc. 26 www.SmarterSolutions.comTeam Exercise: Comparing PerformanceReporting Methodologies• Describe...
© Smarter Solutions, Inc. 27 www.SmarterSolutions.com2. Create the Enterprise ValueChain• Stoplight Scorecard data linkage...
© Smarter Solutions, Inc. 28 www.SmarterSolutions.com3. Analyze the Enterprise• Analyze the enterprise as a whole,looking ...
© Smarter Solutions, Inc. 29 www.SmarterSolutions.com5. Create Strategies• Develop strategies to improveperformance when s...
© Smarter Solutions, Inc. 30 www.SmarterSolutions.com6. Indentify High-Potential Imp. Areas& Establish Oper. Goals1. Descr...
© Smarter Solutions, Inc. 31 www.SmarterSolutions.com7. Identify and Execute Projects• A Lean Six Sigma project executionr...
© Smarter Solutions, Inc. 32 www.SmarterSolutions.comExample: Hospital 30,000-foot-level metric –Diagnosis to bed time• De...
© Smarter Solutions, Inc. 33 www.SmarterSolutions.com9. Maintain the Gain• Value-chain metrics are to be a part ofcompany-...
© Smarter Solutions, Inc. 34 www.SmarterSolutions.comTeam Exercise: Objectives• As a group, we will discuss how your organ...
© Smarter Solutions, Inc. 35 www.SmarterSolutions.comTeam Exercise:Input1. Describevision andmission.2. Describe value cha...
© Smarter Solutions, Inc. 36 www.SmarterSolutions.comTeam Exercise: InputReport Finances: Profit Margins Drill DownThe pro...
© Smarter Solutions, Inc. 37 www.SmarterSolutions.comTeam Exercise: InputReporting VOC: Dissatisfaction Drill DownThe proc...
© Smarter Solutions, Inc. 38 www.SmarterSolutions.comTeam Exercise: InputReporting Sales & Marketing: Market shareComment:...
© Smarter Solutions, Inc. 39 www.SmarterSolutions.comTeam Exercise: InputReporting Delivery of Services: LOSThe process is...
© Smarter Solutions, Inc. 40 www.SmarterSolutions.comHousekeeping: Value Chain Drill DownTeam Exercise: InputFunctionalGen...
© Smarter Solutions, Inc. 41 www.SmarterSolutions.comPatient Transportation: Value Chain Drill DownTeam Exercise: InputFun...
© Smarter Solutions, Inc. 42 www.SmarterSolutions.comTeam Exercise: Revisiting Objectives• Present results from the follow...
© Smarter Solutions, Inc. 43 www.SmarterSolutions.comIEE Business System Checklists• Let’s collective look at the followin...
© Smarter Solutions, Inc. 44 www.SmarterSolutions.comSELECTED ATTRIBUTES Integrated Enterprise Excellence (IEE)Typical MBA...
© Smarter Solutions, Inc. 45 www.SmarterSolutions.comIndividual Exercise: Your BusinessSystem Maturity Model Assessment• U...
© Smarter Solutions, Inc. 46 www.SmarterSolutions.comIntegrated Enterprise Excellence System• Can effectively integrate en...
© Smarter Solutions, Inc. 47 www.SmarterSolutions.comQ & AForrest W. Breyfogle IIIContact InformationPhone: 512.918.0280Em...
© Smarter Solutions, Inc. 48 www.SmarterSolutions.comPotential Team ExerciseSolutionStep 4 Step 5 Step 6 Step 7Copyright 1...
 Business System MaturityEPM/BPM based Business System in PlaceProcess aligned metric usagePredictive performance reportin...
 DescriptionThere is an orchestration of EPM and BPM efforts throughout the business for the enterprise and daily business...
Iee one day workshop handout  material, romania 5-9-13 [compatibility mode] (1)
Iee one day workshop handout  material, romania 5-9-13 [compatibility mode] (1)
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  1. 1. © 1992-2013 by Smarter Solutions, Inc. Austin, TX www.smartersolutions.com1Integrated Enterprise ExcellenceOne-day WorkshopSmarter Solutions, Inc.www.smartersolutions.cominfo@smartersolutions.com512-918-0280Referenced chapters, examples, and exercises are fromThe Integrated Enterprise Excellence System: Volumes IIForrest W. Breyfogle III, Bridgeway Books/Citius Publishing, 2008NoteAll contents of these materials are Copyright © 1992-2013 Smarter Solutions, Inc.. All rightsreserved. The phrases smarter solutions, satellite-level, 30,000-foot-level , 50-foot-level,Integrated enterprise excellence, IEE, and the logo featuring the words smarter solutions and anupwardly moving arrow are each trademarks or registered trademarks of Smarter Solutions, Inc.
  2. 2. © 1992-2013 by Smarter Solutions, Inc. Austin, TX www.smartersolutions.com2Agenda1. Business Management and Improvement Practices Business Management Systems Team Exercise: Assessment of current business management and improvement practices2. Steps 1-2 of the 9-step Integrated Enterprise Excellence (IEE) Business Management System Vision and mission Value chain creation for integrating processes with performance measures Issues with traditional performance metric reporting An enhanced scorecard methodology with predictive scorecards Team Exercise: Comparing performance reporting methodologies Team Exercise: Creating an enterprise value chain with functional metrics3. Steps 3-9 of the 9-step IEE Business Management System Analysis of the enterprise Establishment of financial goals for corporate and operational units Creation of strategies Identification of high-potential improvement areas & establishment of operational goals Identification and execution of projects Assessment of each project’s final impact on goals Continuation of the gain4. Linkage of IEE with Business Process Management (BPM) Roadmap for IEE/BPM linkage Team Exercise: Creation of a hospital’s business management & improvement system5. Wrap-up IEE business system checklist Tabular comparison of systems, which illustrates the benefits of IEE Business system maturity model Individual Exercise: Determination of the maturity for your business management system IEE evolution and its benefits
  3. 3. © Smarter Solutions, Inc. 1 www.SmarterSolutions.comIntegrated Enterprise ExcellenceOne-day WorkshopForrest W. Breyfogle, IIISmarter Solutions IncSmarter Solutions, Inc.www.SmarterSolutions.comLearning Objectives• Summarize problems with current business managementsystems.• Describe issues with current process improvement efforts.• Describe benefits of predictive scorecards.• Describe an enhanced system where business metricimprovement needs pull for projects that benefit thebusiness as a whole.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 2
  4. 4. © Smarter Solutions, Inc. 2 www.SmarterSolutions.comReference Books• Much of this workshop’s content is taken from the IntegratedEnterprise Excellence five-book series.References will be made during this training to book sections for• References will be made during this training to book sections foradditional information about topics.– The primary workshop reference will be Integrated Enterprise ExcellenceVolume II, Business Deployment: A Leaders’ Guide for Going Beyond Lean SixSigma and the Balanced Scorecard (IEE Vol. II)Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 3Business Management Practices• Management by objectives (from Wikipedia)– Management by objectives (MBO), also known as management by results(MBR), is a process of defining objectives within an organization so that(MBR), is a process of defining objectives within an organization so thatmanagement and employees agree to the objectives and understand what theyneed to do in the organization in order to achieve them.– The term "management by objectives" was first popularized by Peter Druckerin his 1954 book The Practice of Management.– The essence of MBO is participative goal setting, choosing course of actionsand decision making.– An important part of the MBO is the measurement and the comparison of theCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 4An important part of the MBO is the measurement and the comparison of theemployee’s actual performance with the standards set.– Ideally, when employees themselves have been involved with the goal settingand choosing the course of action to be followed by them, they are more likelyto fulfill their responsibilities.
  5. 5. © Smarter Solutions, Inc. 3 www.SmarterSolutions.comBusiness Management Practices• Exception management (from Wikipedia)– Exceptions are special cases that deviate from the normal behavior in abusiness process and need to be cared for exceptionally, normally by humanbusiness process and need to be cared for exceptionally, normally by humanintervention.– Their cause might include: process deviation, malformed data, infrastructure orconnectivity issues, poor quality business rules, etc.– Exception management is the practice of investigating, resolving and handlingsuch occurrences by using skilled staff and software tools.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 5Business Management Practices• Management by wandering around (from Wikipedia)– The term management by wandering around (MBWA), also management bywalking around, refers to a style of business management which involveswalking around, refers to a style of business management which involvesmanagers wandering around, in an unstructured manner, through theworkplace(s), at random, to check with employees, or equipment, about thestatus of ongoing work.– The emphasis is on the word wandering as an impromptu movement within aworkplace, rather than a plan where employees expect a visit from managersat more systematic, pre-approved or scheduled times.– The expected benefit is that a manager, by random sampling of events orCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 6p g , y p gemployee discussions, is more likely to facilitate the productivity and totalquality management of the organization, as compared to remaining in aspecific office area and waiting for employees, or the delivery of status reports,to arrive there, as events warrant in the workplace.
  6. 6. © Smarter Solutions, Inc. 4 www.SmarterSolutions.comBusiness Management Practices• Quality Management System (QMS) [from Wikipedia]– QMS can be expressed as the organizational structure, procedures, processesand resources needed to implement quality management.and resources needed to implement quality management.– Early systems emphasized predictable outcomes of an industrial productproduction line, using simple statistics and random sampling.– By the 20th century, labor inputs were typically the most costly inputs in mostindustrialized societies, so focus shifted to team cooperation and dynamics,especially the early signaling of problems via a continuous improvement cycle.– In the 21st century, QMS has tended to converge with sustainability andtransparency initiatives as both investor and customer satisfaction andCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 7transparency initiatives, as both investor and customer satisfaction andperceived quality is increasingly tied to these factors.– Of all QMS regimes, the ISO 9000 family of standards is probably the mostwidely implemented worldwide - the ISO 19011 audit regime applies to both,and deals with quality and sustainability and their integration.Business Management Practices• Total Quality Management (TQM) [from Wikipedia]– TQM is an integrative philosophy of management for continuously improvingthe quality of products and processes.the quality of products and processes.– TQM is based on the premise that the quality of products and processes is theresponsibility of everyone involved with the creation or consumption of theproducts or services offered by an organization, requiring the involvement ofmanagement, workforce, suppliers, and customers, to meet or exceedcustomer expectations.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 8
  7. 7. © Smarter Solutions, Inc. 5 www.SmarterSolutions.comBusiness Management Practices• Business process management (BPM) [from Wikipedia]– BPM has been referred to as a "holistic management" approach to aligning anorganizations business processes with the wants and needs of clients.organization s business processes with the wants and needs of clients.– It promotes business effectiveness and efficiency while striving for innovation,flexibility, and integration with technology. BPM attempts to improve processescontinuously. It can therefore be described as a "process optimizationprocess."– It is argued that BPM enables organizations to be more efficient, more effectiveand more capable of change than a functionally focused, traditional hierarchicalmanagement approach.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 9g pp– This foundation closely resembles other Total Quality Management orContinuous Improvement Process methodologies or approaches.– BPM goes a step further by stating that this approach can be supported, orenabled, through technology to ensure the viability of the managerial approachin times of stress and change.Team Exercise• List the business management systems that yourorganizations are using.– List the positives and negatives of these systems• Your executive management has concluded that thehospital where you are employed has excessive costs andunsatisfactory customer satisfaction.– You have a new position, Director of Business OperationsSystems and Improvement You report to the CEOCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 10Systems and Improvement. You report to the CEO.– Your team is to improve the hospital’s operations.• What improvement projects does your team suggest should be created?• What else should be undertaken?
  8. 8. © Smarter Solutions, Inc. 6 www.SmarterSolutions.comTeam Exercise: Group Discussion• Do you think that this situation could occur?• Thoughts about typical business management systems thatorganizations are using; e.g., management by objective,management by exception, management by walkingaround, others?– What are the opportunities for improving these approaches?• Share the name of one improvement project that your teamCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 11selected.– How did you select that project? Who owns completion?– Do you think that the project could “fall off a process-improvement practitioner’s plate” because of other priorities?Team Exercise: Group Discussion• What else should be done when managing the hospital?• Four years from now the company’s industry sector willexperience hard times and even more financial pressures– Do you think that the process improvement function will survivedownsizing efforts?Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 12
  9. 9. © Smarter Solutions, Inc. 7 www.SmarterSolutions.comImprovement Project Selection• In process improvement programs, projects are typicallyselected from a ranked list of opportunities.– This push (using as a Lean term) for a project creation can lead tosignificant resources being spent on the sub-optimization ofprocesses, where the business as a whole does not benefit.• What other methods have you encountered for selectingimprovement projects?Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 13Other Actions• Organizational improvement efforts benefit if they areintegrated with a predictive scorecard andl ti ll /i ti l t t i l i t th t thanalytically/innovatively strategic planning system so that the– organization can move toward achievement of the 3 Rs of business;i.e., everyone doing the Right things, and doing them Right, at theRight time.• This objective is achieved through the Integrated EnterpriseExcellence (IEE) business systemCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 14Excellence (IEE) business system.
  10. 10. © Smarter Solutions, Inc. 8 www.SmarterSolutions.comGraphic View on the 9 Steps toExcellence in Governance1. Describevision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.3. Analyzeenterprise.4. EstablishSMARTsatellite-levelmetric goals.5 Create6. Identify highpotential improvement 7. Identify and8. Assess projectscompletion impact 9 Maintain theCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 155. Createstrategies.areas and establishrelated SMART 30,000-foot-level metric goals.executeprojects.completion impacton enterprisegoals.9. Maintain thegain.Figure 4.7 Integrated Enterprise Excellence, Volume II, Copyright 20081. Describe vision and missionMission, vision and values outlines• Who we are.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.• What we seek to achieve.• When and how we want to achieve it.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 16g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.
  11. 11. © Smarter Solutions, Inc. 9 www.SmarterSolutions.com2. Create the Enterprise Value Chain1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.Basic “Business Value Chain” chartrepresents activities, without regard3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.to the organization chartCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 17g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.2. Create the Enterprise Value Chain1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Basic value chain can beCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 18g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.Basic value chain can beexpanded to include significantinputs and outputs
  12. 12. © Smarter Solutions, Inc. 10 www.SmarterSolutions.com1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.2. Create the Enterprise Value Chain3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Activities outside of the main flowActivitiesoutside of theCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 19g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.Activities outside of the main flowcan be added as standalone unitsoutside of themain flow canbe added asstandaloneunits2. Create the Enterprise Value Chain1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 20g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.Shaded steps can be“drilled down”
  13. 13. © Smarter Solutions, Inc. 11 www.SmarterSolutions.comDevelopProductMarket Product Sell ProductProduce &Deliver ProductInvoice andCollectPaymentReportFinancialsInformationHumanDays SalesOutstanding(DSO)PercentAnnualizedGain in GrossRevenueGrossRevenueDefective RateLead TimeDevelopedProduct DesignQualityProductDevelopmentLead TimeWork inProcess (WIP)Voice of theCustomer(VOC)LaborQuote QualityRFQ ResponseAcceptanceRateQuoteResponseTimeNet ProfitMarginsExistingCustomerAdditionsNew CustomerAdditionsTimely InputsEffective Inputs2. Create the Enterprise Value Chain1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.Step 1 Step 2 Decision Step 3NoStep 4YesEndStartInformationTechnology(IT)HumanRelations (HR)EnterpriseProcessManagement(EPM)On-timeDeliveryLaborRelations Safety andEnvironmentLegal FinanceInternalProcessReworksProductMarginsTOCThroughputLearning andGrowth3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 21Step 5 Step 7Step 6ProcessStep 6Start Step 6A Step 6B Step 6C Endg7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.Subprocess drilldown exampleVOC step drilldown ComplaintsAuditsReceivecomplaintEvaluation of complaintby Enterprise ProcessManagementDepartmentDocumentcomplaint indatawarehouseDocument results indata warehouse andgive feedback toperson whocomplainedWeeklysomeone actsas a customerand documentsfindingsDocumentresults in datawarehouseDevelopProductMarket Product Sell ProductProduce &Deliver ProductInvoice andCollectPaymentReportFinancialsInformationTechnology(IT)HumanRelations (HR)Days SalesOutstanding(DSO)PercentAnnualizedGain in GrossRevenueGrossRevenueDefective RateLead TimeDevelopedProduct DesignQualityProductDevelopmentLead TimeWork inProcess (WIP)On-timeDeliveryVoice of theCustomer(VOC)LaborRelationsSafety andEnvironmentQuote QualityRFQ ResponseAcceptanceRateInternalProcessReworksQuoteResponseTimeNet ProfitMarginsExistingCustomerAdditionsNew CustomerAdditionsTimely InputsCustomerSatisfactionwith FeedbackClient turnoverSurveysInternalSurveyConduct random survey to 1% ofend customers, asking aboutsystem problems and onesuggestion what should donedifferently to improve.Documentresults in datawarehousegConducts a survey of 1/12 of theemployees every month; e.g., asdescribed in chapter 43 ofI l ti Si SiDocumentresults in datawarehouseCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 22EnterpriseProcessManagement(EPM)Legal FinanceReworksProductMarginsTOCThroughputLearning andGrowthDataWarehouseMonthly statisticallyanalyze complaint,audits, survey, andretention dataReport on findings,making suggestions,when appropriate, forimprovementMonthly evaluate 30,000-foot-level reported defective and on-time delivery metrics, checkingfor metric degradation andimprovement project(s) statusImplementing Six Sigma
  14. 14. © Smarter Solutions, Inc. 12 www.SmarterSolutions.com2. Create the Enterprise Value Chain1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.Produce and Deliver Products3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Adding enterprise &operational levelf t iLead TimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 23g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.performance metricscompletes value chainDefective RateWIPOn-time Del.After determining what to measure, need to thenselect performance reporting methodology. Vol II, Fig. 7.1Performance Reporting: Table ofNumbersWhat conclusion would you make from this report?Performance Meas ure  F Y 2001 Actual F Y 2002 Actual F Y 2003 Actual F Y 2003  Amended F Y 2004 Amended Percentage of cus tomers  s atis fied with dis patch s taff 99.99% 100% 99.99% 98% 98%Percentage of priority one calls  dis patched to field crews  within 80 minutes  of receipt 99.99% 99% 99.99% 95% 95%L abor cos t per cus tomer call taken in Dis patch Operations   $4.20  $5.31  $5.09  $4.88  $5.09 Number of calls  taken through Dis patch Operations   62,054 59,828 63,046 60,000 60,000Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 24Number of priority one calls  dis patched to field crews   5,797 4,828 6,686 5,000 6,500Number of work orders  and component parts  (s egments ) created in databas e 8,226 4,724 7,742 5,500 6,700Reproduced from Table 3.1 of Integrated Enterprise Excellence Volume II, Business Deployment: A Leaders’Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard
  15. 15. © Smarter Solutions, Inc. 13 www.SmarterSolutions.comPerformance Reporting• The next four slides will describe/compare the revenue-generated performance of five sales personnel.– Instead of sales people, what is something similar in yourorganization that could be compared?– What response instead of revenue could be compared?Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 25Performance Reporting: Pie ChartWhat conclusion would you make from this report?12345PersonSales52112345PersonSales215Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 264343Reproduced from Figure 3.1 of Integrated Enterprise Excellence Volume II, Business Deployment: ALeaders’ Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard
  16. 16. © Smarter Solutions, Inc. 14 www.SmarterSolutions.comPerformance Reporting: Line ChartWhat conclusion would you make from this report?12345PersonSales60140100nue(ThousandDollars)Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 2720RevenMonths5 6 7 8 9 11 12 1 2 34Reproduced from Figure 3.1 of Integrated Enterprise Excellence Volume II, Business Deployment: ALeaders’ Guide for Going Beyond Lean Six Sigma and the Balanced ScorecardPerformance Reporting: Bar ChartWhat conclusion would you make from this report?100200400300enue(ThousandDollars)50060012345PersonSalesCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 28100Reve05 6 7 8 9 10 11 12 1 24 3MonthsReproduced from Figure 3.2 of Integrated Enterprise Excellence Volume II, Business Deployment: ALeaders’ Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard
  17. 17. © Smarter Solutions, Inc. 15 www.SmarterSolutions.comPerformance Reporting: Bar ChartWhat conclusion would you make from this report, where dataare from several years?200400300ue(ThousandDollars)500600500Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 29432143214321432143214321432143214321432143214321100RevenuYearMonth 5 6 7 8 9 10 11 12 1 24 3Reproduced from Figure 3.3 of Integrated Enterprise Excellence Volume II, Business Deployment: ALeaders’ Guide for Going Beyond Lean Six Sigma and the Balanced ScorecardWhat conclusion would you make from this report?Monthly SCORECARDBusiness Unit NameMeasurement Targets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05CUSTOMERCustomer Metric A 0.63574 0.653576 0.660404 0.732996 0.62521 0.708566 0.641873 0.727115 0.687201 0.6123 0.670894 0.6341Yellow if equal to or higher than 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720Performance Reporting: StoplightsGreen if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750Customer Metric B 1.866044 1.804823 1.777056 1.87373 1.791988 1.826504 1.824634 1.799849 1.822007 1.838969 1.87088 1.893155Yellow if equal to or higher than 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830Green if equal to or higher than 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860Customer Metric C 0.82475 0.730724 0.627179 0.728212 0.751174 0.801946 0.780248 0.761874 0.68133 0.790902 0.728168 0.790485Yellow if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750Green if equal to or higher than 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780FINANCEFinance Metric A 3.387525 2.965966 3.042505 2.891057 3.485847 2.867981 2.764183 3.297147 3.301612 2.892969 2.737161 3.0936Yellow if equal to or higher than 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05Green if equal to or higher than 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309 2.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.288786Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25Finance Metric C 0.762611 0.958071 1.051227 0.867969 1.158351 0.82278 0.800541 0.989747 0.980718 0.611179 0.789868 1.035084Yellow if equal to or higher than 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9Green if equal to or higher than 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95Finance Metric H 0.222716 0.480099 0.296397 0.203 0.3541 0.2326 0.1693 0.4552 0.2278 0.194 0.288 0.321Yellow if equal to or higher than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21Green if equal to or higher than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25Finance Metric I 0.490024 0.27568 0.190908 0.357 0.5284 0.4058 0.3391 0.3347 0.3247 0.327 0.286 0.383Yellow if equal to or higher than 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3Green if equal to or higher than 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35INTERNAL BUSINESS OPERATIONSIBO Metric A 1.7693 1.73499 1.80064 1.76888 1.76068 1.79877 1.863956 1.862206 1.829389 1.875557 1.741041 1.69758Yellow if equal to or higher than 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70Green if equal to or higher than 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73IBO Metric B 0.20531 0.18053 0.184817 0.16204 0.18 0.178 0.202 0.205 0.176 0.226 0.201 0.197Yellow if equal to or less than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25Green if equal to or less than 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22IBO Metric C 0.427692 0.505666 0.504354 0.568529 0.44906 0.464186 0.446241 0.422419 0.445758 0.475769 0.340339 0.366324Yellow if equal to or less than 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26Green if equal to or less than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21IBO Metric D 2.66634 2.64814 2.69324 2.67166 2.68 2.66 2.67 2.68 2.65 2.67 2.67 2.69Yellow if equal to or less than 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60Green if equal to or less than 2 58 2 58 2 58 2 58 2 58 2 58 2 58 2 58 2 58 2 58 2 58 2 58 2 58Let’s examinea different setof data.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 30Green if equal to or less than 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58IBO Metric F 0.113318 0.157456 0.163175 0.146534 0.113 0.143 0.143 0.173 0.143 0.163 0.133 0.143Yellow if equal to or less than 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086Green if equal to or less than 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068IBO Metric G 0.043949 0.078984 0.051823 0.055083 0.110424 0.068515 0.080985 0.076333 0.07306 0.077379 0.103885 0.069867Yellow if equal to or less than 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06Green if equal to or less than 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05IBO Metric H 1.222222 1.222222 1.166667 1 1 1 1 1.166667 1.333333 1.25 1.230769 1.266667Yellow if equal to or higher than 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33Green if equal to or higher than 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45LEARNING AND GROWTHL&G Metric A 4.47048 5.23666 4.17365 4.57158 4.54306 4.31449 4.67242 3.67574 4.94651 3.57205 4.92629 4.55868Yellow if equal to or less than 5 5 5 5 5 5 5 5 5 5 5 5 5Green if equal to or less than 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5L&G Metric B 68.1916 69.643 57.0598 62.4947 59.6528 74.1863 77.7315 54.8459 57.6235 83.5998 66.4914 54.2673Yellow if equal to or higher than 65 65 65 65 65 65 65 65 65 65 65 65 65Green if equal to or higher than 75 75 75 75 75 75 75 75 75 75 75 75 75Reproduced from Table 3.5 of Integrated Enterprise Excellence Volume II, Business Deployment: A Leaders’Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard
  18. 18. © Smarter Solutions, Inc. 16 www.SmarterSolutions.comPerformance Reporting: StoplightsRed/Yellow/Green visuals are themost popular concept inscorecards because of thestoplight relationship.– Only compares theinstantaneous performance toa set goal– No insight into trends orhistorical performanceCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 31historical performanceGraphics found at http://download.oracle.com/docs/cd/E15051_01/web.1111/b31973/dv_intro.htmIf the goal is not a specification, it is oftenignored. Is that a good behavior?Performance Reporting: BalancedScorecardIs your organization using the Balanced Scorecard?VisionandStrategyFinancialsProcessesCustomerBalanced Scorecard10 0CUSTOMER SATISFACTION 30PROFIT IN %30PROFIT IN %30PROFIT IN %Each Category has:Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 32Learning0QUALITYSPEEDCOURTESYCOMPETENCECOMMUNICATIONHELPFULNESS!010201 2 3 4 5 6 7 8 9 10 11 12!010201 2 3 4 5 6 7 8 9 10 11 12010201 2 3 4 5 6 7 8 9 10 11 12!Each Category has:Objectives, measures,targets, and initiativesReproduced from Table 3.5 of Integrated Enterprise Excellence Volume II, Business Deployment: A Leaders’Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard
  19. 19. © Smarter Solutions, Inc. 17 www.SmarterSolutions.comPerformance Reporting: BalancedScorecardThoughtsabout theBSCapproachmethodology?Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 33Vol. II, Fig. 3.6Performance Reporting: AlternativesTabular ReportingPerformance Meas ure  F Y 2001 Actual FY  2002 Actual F Y 2003 Actual FY  2003  Amended F Y 2004 Amended Percentage of cus tomers  s atis fied with dis patch s taff 99.99% 100% 99.99% 98% 98%Percentage of priority one calls  dis patched to field crews  within 80 minutes of receipt99.99% 99% 99.99% 95% 95%FinancialsBalanced ScorecardClassic Bar Charts80 minutes  of receipt L abor cos t per cus tomer call taken in Dis patch Operations   $4.20  $5.31  $5.09  $4.88  $5.09 Number of calls  taken through Dis patch Operations  62,054 59,828 63,046 60,000 60,000Number of priority one calls  dis patched to field crews   5,797 4,828 6,686 5,000 6,500Number of work orders  and component parts  (s egments ) created in databas e 8,226 4,724 7,742 5,500 6,700600000500000400000llars)12345PersonSalesVisionandStrategyProcessesLearningCustomer010 0QUALITYSPEEDCOURTESYCOMPETENCECOMMUNICATIONHELPFULNESSCUSTOMER SATISFACTION!01020301 2 3 4 5 6 7 8 9 10 11 12PROFIT IN %!01020301 2 3 4 5 6 7 8 9 10 11 12PROFIT IN %01020301 2 3 4 5 6 7 8 9 10 11 12PROFIT IN %!Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 34Month 3211211109876543000002000001000000Revenue(DolTargets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05 Aug05Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25What other approach might we use to present data?
  20. 20. © Smarter Solutions, Inc. 18 www.SmarterSolutions.comProcess Tracking and PerformanceMetrics: Issues and ResolutionTYPICAL METRICS• Based on fiscal yearBased on fiscal year• Unrelated to improvement system• Point to point comparisonsCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 35Process Tracking and PerformanceMetrics: Issues and ResolutionHowever …Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 36Xs Xs XsReproduced from Figure 4.8 of Integrated Enterprise Excellence Volume II, Business Deployment: ALeaders’ Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard
  21. 21. © Smarter Solutions, Inc. 19 www.SmarterSolutions.comProcess Tracking and PerformanceMetrics: Issues and ResolutionEFFECTIVE METRICS• View the enterprise as a system of processesp y p• Acknowledge the effect of variability• Support long-lasting systematic processimprovementCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 37Let’s next examine how we cancreate effective metrics.Monthly SCORECARDBusiness Unit NameMeasurement Targets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05CUSTOMERCustomer Metric A 0.63574 0.653576 0.660404 0.732996 0.62521 0.708566 0.641873 0.727115 0.687201 0.6123 0.670894 0.6341Yellow if equal to or higher than 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720Green if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750Customer Metric B 1.866044 1.804823 1.777056 1.87373 1.791988 1.826504 1.824634 1.799849 1.822007 1.838969 1.87088 1.893155Yellow if equal to or higher than 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830Green if equal to or higher than 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860Customer Metric C 0.82475 0.730724 0.627179 0.728212 0.751174 0.801946 0.780248 0.761874 0.68133 0.790902 0.728168 0.790485Yellow if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750Green if equal to or higher than 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780FINANCEFinance Metric A 3.387525 2.965966 3.042505 2.891057 3.485847 2.867981 2.764183 3.297147 3.301612 2.892969 2.737161 3.0936Yellow if equal to or higher than 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05Green if equal to or higher than 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309 2.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.288786Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25Finance Metric C 0.762611 0.958071 1.051227 0.867969 1.158351 0.82278 0.800541 0.989747 0.980718 0.611179 0.789868 1.035084Yellow if equal to or higher than 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9Green if equal to or higher than 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95Finance Metric H 0.222716 0.480099 0.296397 0.203 0.3541 0.2326 0.1693 0.4552 0.2278 0.194 0.288 0.321Yellow if equal to or higher than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21Green if equal to or higher than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25Finance Metric I 0.490024 0.27568 0.190908 0.357 0.5284 0.4058 0.3391 0.3347 0.3247 0.327 0.286 0.383Yellow if equal to or higher than 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3Green if equal to or higher than 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35Let’s examineFinance Metric BStoplightScorecardq gINTERNAL BUSINESS OPERATIONSIBO Metric A 1.7693 1.73499 1.80064 1.76888 1.76068 1.79877 1.863956 1.862206 1.829389 1.875557 1.741041 1.69758Yellow if equal to or higher than 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70Green if equal to or higher than 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73IBO Metric B 0.20531 0.18053 0.184817 0.16204 0.18 0.178 0.202 0.205 0.176 0.226 0.201 0.197Yellow if equal to or less than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25Green if equal to or less than 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22IBO Metric C 0.427692 0.505666 0.504354 0.568529 0.44906 0.464186 0.446241 0.422419 0.445758 0.475769 0.340339 0.366324Yellow if equal to or less than 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26Green if equal to or less than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21IBO Metric D 2.66634 2.64814 2.69324 2.67166 2.68 2.66 2.67 2.68 2.65 2.67 2.67 2.69Yellow if equal to or less than 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60Green if equal to or less than 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58IBO Metric F 0.113318 0.157456 0.163175 0.146534 0.113 0.143 0.143 0.173 0.143 0.163 0.133 0.143Yellow if equal to or less than 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086Green if equal to or less than 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068IBO Metric G 0.043949 0.078984 0.051823 0.055083 0.110424 0.068515 0.080985 0.076333 0.07306 0.077379 0.103885 0.069867Yellow if equal to or less than 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06Green if equal to or less than 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05IBO Metric H 1.222222 1.222222 1.166667 1 1 1 1 1.166667 1.333333 1.25 1.230769 1.266667Yellow if equal to or higher than 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33Green if equal to or higher than 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45LEARNING AND GROWTHL&G Metric A 4.47048 5.23666 4.17365 4.57158 4.54306 4.31449 4.67242 3.67574 4.94651 3.57205 4.92629 4.55868Yellow if equal to or less than 5 5 5 5 5 5 5 5 5 5 5 5 5Green if equal to or less than 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5L&G Metric B 68.1916 69.643 57.0598 62.4947 59.6528 74.1863 77.7315 54.8459 57.6235 83.5998 66.4914 54.2673Yellow if equal to or higher than 65 65 65 65 65 65 65 65 65 65 65 65 65Green if equal to or higher than 75 75 75 75 75 75 75 75 75 75 75 75 75Let’s examinethis corporation’sred-yellow-greenscorecardCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 3833% red & 50% green?Special or Common Cause?Green if equal to or higher than 3.1 3.1 3.1 3.1 3.1 3.1Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25C 3.1 3.1 3.1 3.1 3.1 3.1 3.12.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.2887862.2 2.2 2.2 2.2 2.2 2.2 2.22.25 2.25 2.25 2.25 2.25 2.25 2.250 82278 0 800541 0 989747 0 980718 0 611179 0 789868 1 035084
  22. 22. © Smarter Solutions, Inc. 20 www.SmarterSolutions.comTraditional Performance Reporting Example – Red-Yellow-Green ScorecardTargets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05 Aug05Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25TRADITIONAL  SCORECARD  EXCERPT                               Building a Better Scorecard2.72.62.52.42.32.22.12.0Response_X=2.2583UCL=2.6192Individuals Control Chart99959080706050403020105Percent32.657Normal Probability PlotIEE Improved Reporting for Process Assessment and Improvementq gINDIVIDUALS CONTROL CHARTThe metric is colored red when a goal is not being met and corrective action needs to be taken.This can result in counter‐productive initiatives, 24/7 firefighting, the blame game, and proliferation of fanciful stories about why goalsCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 3942.2HistogramAug05Jul05Jun05May05Apr05Mar05Feb05Jan05Dec04Nov04Oct04Sep04Aug041.9DateLCL=1.89742.62.52.42.32.22.12.01.91Response2.2blame game, and proliferation of fanciful stories about why goals weren’t met.  Most importantly, it tells us nothing about what to expect  in the future! Vol. II,Example 3.3Building a Better ScorecardTargets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05 Aug05Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25Traditional Performance Reporting Example – Red-Yellow-Green Scorecard1Integrated Enterprise Excellence (IEE) Scorecard SystemProcess ispredictableCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 40So what do we predict?If there is a recent region of stability, wecan say that the process is predictable.
  23. 23. © Smarter Solutions, Inc. 21 www.SmarterSolutions.comBuilding a Better ScorecardIndividuals Control ChartCLCL=1.90UCL= 2.621.82.02.22.42.6Mean = 2.26ResponseCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 41If a process is predictable, we can considerthat data from the recent region of stabilityare a random sample of the future.Observation2 41 3 5 6 7 8 9 10 11 12 13• The red criterion, of less than 2.2, canbe applied to the histogram for42.2NormalHistogram of ResponseHistogram2.234ency2.2HistogramBuilding a Better Scorecard– estimation of the percentage below 2.2;– however, it is difficult to estimate from thisgraphic.12Freque02.0 2.1 2.2 2.3 2.4 2.5Response• A probability plot is a better approachsince– if the sample data are from a predictable2.0 2.1 2.2 2.3 2.4 2.5Responset999580Normal ProbabilityPlotNormal Probability PlotCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 42• Conclude: Approx. 32.6% is below 2.2.if the sample data are from a predictableprocess, this tool can provide a long-termperformance estimate.2.232.657Percen2.0 2.1 2.2 2.3 2.4 2.5 2.61.9Response8050301012.232.61.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6Response
  24. 24. © Smarter Solutions, Inc. 22 www.SmarterSolutions.comTargets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05 Aug05Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25Traditional Performance Reporting Example – Red-Yellow-Green ScorecardBuilding a Better Scorecard1Individuals Control ChartResponseLCL=1.90UCL= 2.621 82.02.22.42.6Mean = 2.2622.232.657Percent99958050301012.232.6Normal ProbabilityPlotIntegrated Enterprise Excellence (IEE) Scorecard SystemCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 43Observation1.82 41 3 5 6 7 8 9 10 11 12 132.0 2.1 2.2 2.3 2.4 2.5 2.61.9Response1The probability plot provides process variability insight, which EdwardsDeming said was important.IEE reporting assesses predictability & then if the process is predictableprovides a prediction statement.Building a Better ScorecardTargets Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05 Aug05Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25Traditional Performance Reporting Example – Red-Yellow-Green Scorecard1Individuals Control ChartResponseLCL=1.90UCL= 2.621 82.02.22.42.6Mean = 2.2622.232.657Percent99958050301012.232.6Normal ProbabilityPlotIntegrated Enterprise Excellence (IEE) Scorecard SystemCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 44Observation1.82 41 3 5 6 7 8 9 10 11 12 132.0 2.1 2.2 2.3 2.4 2.5 2.61.9Response1Predictable process with an approximatenon-conformance rate of 32.6%3Reproduced from Table 3.5 of Integrated Enterprise Excellence Volume II, Business Deployment: A Leaders’Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard
  25. 25. © Smarter Solutions, Inc. 23 www.SmarterSolutions.com• IEE Enterprise Performance Reporting System (EPRS)scorecard report-out formatBuilding a Better ScorecardIEE Scorecard2.62.42.22.0999580502051lPercent2.232.657Mean 2.258StDev 0.1297N 13AD 0.531P-Value 0.141Aug05Jul05Jun05May05Apr05Mar05Feb05Jan05Dec04Nov04Oct04Sep04Aug042.62.42.22.0IndividualValue_X=2.2583UCL=2.6192LCL=1.8974Probability plotNormalI-chartCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 45The process is predictable since the last process changeThe process estimates about 32.657% non-conformance rateProcess valuesDateReproduced from Table 3.5 of Integrated Enterprise Excellence Volume II, Business Deployment: A Leaders’Guide for Going Beyond Lean Six Sigma and the Balanced ScorecardTraditional Performance ReportingPie Chart12345PersonSales511234PersonSales1512345PersonSales140100sandDollars)Line ChartSales datapresented indifferentformatsBar Charts60000050000012345PersonSales432452432060Revenue(ThouMonths5 6 7 8 9 11 12 1 2 34400ndDollars)500600500Bar ChartsCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 46Month 3211211109876544000003000002000001000000Revenue(Dollars)432143214321432143214321432143214321432143214321100200400300Revenue(ThousanYearMonth 5 6 7 8 9 10 11 12 1 24 3
  26. 26. © Smarter Solutions, Inc. 24 www.SmarterSolutions.comIEE 30,000-foot-level ScorecardIEE Scorecard for Sales120000100000nUCL=11404660000iationUCL=66576I-chart of Mean I-chart of Std. DeviationSales datapresented in IEEformat (beforechange)99.9999050rcent9050Mean 71884StDev 32910N 170AD 0.520P-Value 0.184343128252219161310741800006000040000Subgroup PeriodSubgroupMea_X=71884LCL=297213431282522191613107414500030000150000Subgroup PeriodSubgroupStd.Dev_X=31664LCL=-3249Probability plotNormalCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 47The process is predictable between subgroups and within subgroupsThe est. median is 71883. with 80% of the occurrences from 29708. to 1140592000001500001000005000001010.1Data valuesPe114059718842970810IEE 30,000-foot-level ScorecardIEE Scorecard for Sales120000100000nUCL=11404660000iationUCL=66576I-chart of Mean I-chart of Std. DeviationSales datapresented in IEEformat (beforechange)99.9999050rcent9050Mean 71884StDev 32910N 170AD 0.520P-Value 0.184107411074110741800006000040000Subgroup PeriodSubgroupMea_X=71884LCL=297211074110741107414500030000150000Subgroup PeriodSubgroupStd.Dev_X=31664LCL=-324916000012000080000tavaluesProbability plotNormalIndividual Value Plot of SalesCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 48The process is predictable between subgroups and within subgroupsThe est. median is 71883. with 80% of the occurrences from 29708. to 1140592000001500001000005000001010.1Data valuesPe11405971884297081054321400000categoriesDa
  27. 27. © Smarter Solutions, Inc. 25 www.SmarterSolutions.comIEE 30,000-foot-level ScorecardIEE Scorecard for Sales150000nUCL=1367821(Baseline) 2(New)60000ation1(Baseline) 2(New)I-chart of Mean I-chart of Std. DeviationSales datapresented in IEEformat (afterchange)999050rcent9050Mean 103046StDev 20979N 25AD 0.798P-Value 0.0333733292521171395110000050000Subgroup PeriodSubgroupMean_X=103046LCL=69311373329252117139514500030000150000Subgroup PeriodSubgroupStd.Devia_X=19362UCL=41818LCL=-3094Probability plotNormalCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 49Vol. II, Figure 9.6The process is predictable since the last process changeThe est. median is 103046 with 80% of the occurrences from 76160. to 1299321500001250001000007500050000101Data values in current stagePe1299321030467616010IEE 30,000-foot-level ScorecardIEE Scorecard for Sales150000nUCL=1367821(Baseline) 2(New)60000ation1(Baseline) 2(New)I-chart of Mean I-chart of Std. DeviationSales datapresented in IEEformat (afterchange)999050rcent9050Mean 103046StDev 20979N 25AD 0.798P-Value 0.033195195195110000050000Subgroup PeriodSubgroupMean_X=103046LCL=6931119519519514500030000150000Subgroup PeriodSubgroupStd.Devia_X=19362UCL=41818LCL=-3094150000125000100000sincurrentstageProbability plotNormalIndividual Value Plot of SalesCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 50The process is predictable since the last process changeThe est. median is 103046 with 80% of the occurrences from 76160. to 1299321500001250001000007500050000101Data values in current stagePe1299321030467616010543217500050000categoriesDatavalues
  28. 28. © Smarter Solutions, Inc. 26 www.SmarterSolutions.comTeam Exercise: Comparing PerformanceReporting Methodologies• Describe the differences in reporting methodologies.• What are the benefits of using predictive scorecards?Pie Chart12345PersonSales5432112345PersonSales2154312345PersonSales2060140100Revenue(ThousandDollars)Months5 6 7 8 9 11 12 1 2 34Line ChartIEE Scorecard for Sales195195195115000010000050000Subgroup PeriodSubgroupMean_X=103046UCL=136782LCL=693111(Baseline) 2(New)1951951951600004500030000150000Subgroup PeriodSubgroupStd.Deviation_X=19362UCL=41818LCL=-30941(Baseline) 2(New)I-chart of Mean I-chart of Std. DeviationTraditional Performance Reporting IEE ScorecardingCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 51Bar ChartsMonth 3211211109876546000005000004000003000002000001000000Revenue(Dollars)12345PersonSales432143214321432143214321432143214321432143214321100200400300Revenue(ThousandDollars)500600Year500Month 5 6 7 8 9 10 11 12 1 24 3Bar ChartsThe process is predictable since the last process changeThe est. median is 103046 with 80% of the occurrences from 76160. to 1299321500001250001000007500050000999050101Data values in current stagePercent12993290103046507616010Mean 103046StDev 20979N 25AD 0.798P-Value 0.033543211500001250001000007500050000categoriesDatavaluesincurrentstageProbability plotNormalIndividual Value Plot of Sales2. Create the Enterprise Value Chain1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.Produce and Deliver Products3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.The resultingvalue chain Lead TimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 52g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.value chainfunctional linkagesbridging silosLead TimeDefective RateWIPOn-time Del.Figure 7.1 Integrated EnterpriseExcellence, Volume III, Copyright 2008
  29. 29. © Smarter Solutions, Inc. 27 www.SmarterSolutions.com2. Create the Enterprise ValueChain• Stoplight Scorecard data linkage with IEE valuechainIEE S d1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.DevelopProductMarket Product Sell ProductProduce &Deliver ProductInvoice andCollectPaymentReportFinancialsInformationTechnology(IT)HumanRelations (HR)EnterpriseProcessManagement(EPM)Days SalesOutstanding(DSO)PercentAnnualizedGain in GrossRevenueGrossRevenueDefective RateLead TimeDevelopedProduct DesignQualityProductDevelopmentLead TimeWork inProcess (WIP)On-timeDeliveryVoice of theCustomer(VOC)LaborRelations Safety andEnvironmentLegal FinanceQuote QualityRFQ ResponseAcceptanceRateInternalProcessReworksProductMarginsQuoteResponseTimeTOCThroughputNet ProfitMarginsExistingCustomerAdditionsNew CustomerAdditionsTimely InputsEffective InputsLearning andGrowthIEE Scorecard99958050205Percent32.657Mean 2.258StDev 0.1297N 13AD 0.531P-Value 0.1412.62.42.22.0IndividualValue_X=2.2583UCL=2.6192LCL=1.8974Probability plotNormalI-chart 3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 53The process is predictable since the last process changeThe process estimates about 32.657% non-conformance rate2.62.42.22.01Process values2.2Aug05Jul05Jun05May05Apr05Mar05Feb05Jan05Dec04Nov04Oct04Sep04Aug04Dateg7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.• Together we will create the high-level functional steps of ahospital’s enterprise value chain.Team Exercise: Creating an Enterprise ValueChain with Functional Metrics• We will then break into groups where each team isassigned a function.• Each team is to note on a flipchart– Performance metrics for their function.– A comparison between this metric selection approach and othersCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 54that you have seen.• Report out to the class.
  30. 30. © Smarter Solutions, Inc. 28 www.SmarterSolutions.com3. Analyze the Enterprise• Analyze the enterprise as a whole,looking for1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.– constraints– defective reduction opportunities– waste– speed to market– other restraints3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 55g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.4. Establish Financial Goals forCorporate and Operational Units• Satellite-level metric goals (e.g., profitmargins and revenue growth) are to beSMART S ifi M bl1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.SMART: Specific, Measurable,Actionable, Relevant, and Time-based.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 56g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.
  31. 31. © Smarter Solutions, Inc. 29 www.SmarterSolutions.com5. Create Strategies• Develop strategies to improveperformance when satellite-level metricsare not achieving goals1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.are not achieving goals.– Focus on creating strategies that are specificand benefit the big picture.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 57g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.6. Indentify High-Potential Imp. Areas& Establish Oper. Goals• Identify high potential target areas– Set 30,000-foot-level (operational) metric performance1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.goals– Other business area 30,000-foot-level metrics are notto degrade from current performance levels.• Things to consider:– Performance of value-chain metrics– Statistical analysis of value-chain drill downsCompetitive pressures3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 58– Competitive pressures– Business environment– Bottle necks– New business opportunitiesg7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.
  32. 32. © Smarter Solutions, Inc. 30 www.SmarterSolutions.com6. Indentify High-Potential Imp. Areas& Establish Oper. Goals1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.Business Goal Strategies High Potential Areas ProjectsImprovemarketingff tiImprove product groupC h iStep 4 Step 5 Step 6 Step 73. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Increasemonthly profitmargins by 2%in 10 months.Increasemonthly grossrevenue by 8%in 10 months.Reduce DSOmean by 3days in 7 mo.Reduce DSO ofproduct group D andleverage benefits toother business groups.effectivenessby 15% in 10mo.C search engineranking by 25%.Improve RFQacceptancerate byimprovingCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 59g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.p gquote responsetime so that allquotes arecompleted in14 days. To becompleted in 5mo.Increase TOCDeveloped inExample 12.1Figure 12.1 IntegratedEnterprise Excellence,Volume II, Copyright 2008Enterprise Improvement Plan (EIP)7. Identify and Execute Projects• Project execution could follow one of thefollowing methodologies:1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.– Special cause condition (solution known)• Just do it– Special cause condition (solution unknown)• Root Cause Analysis: Fault tree analysis– Common cause condition (solution known)• Lean Project: 5S, kaizen, value stream map3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 60j , , p(VSM), low hanging fruit– Common cause condition (solution unknown)• Plan-Do-Check-Act (PDCA): Continuousimprovement• Lean Six Sigma DMAIC or DMADV roadmapg7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.
  33. 33. © Smarter Solutions, Inc. 31 www.SmarterSolutions.com7. Identify and Execute Projects• A Lean Six Sigma project executionroadmap that truly integrates Lean and SixSi t l i1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.Sigma tools is: 3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.D M A I CPlan ProjectWisdomof theMSABaseline LeanControlAnalyzeDefine Measure ImproveD M A I CPlan ProjectWisdomof theMSABaseline LeanControlAnalyzeDefine Measure ImproveCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 61g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.PROCESS IMPROVEMENT PROJECT: P-DMAICPlan Projectand Metricsof theOrganizationMSABaselineProjectLeanAssessmentPROCESS IMPROVEMENT PROJECT: P-DMAICPlan Projectand Metricsof theOrganizationMSABaselineProjectLeanAssessmentFrom Figure 2.1, Integrated Enterprise Excellence Volume III, ImprovementProject Execution: A Management and Black Belt Guide for Going BeyondLean Six Sigma and the Balanced Scorecard, Copyright 20088. Assess Each Project’s Final Impacton Goals• Each project should be judged againsthow well it positively impacted the30 000 f t l l t i f1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.30,000-foot-level metric performance. 3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 62g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.
  34. 34. © Smarter Solutions, Inc. 32 www.SmarterSolutions.comExample: Hospital 30,000-foot-level metric –Diagnosis to bed time• Demonstrated project’s process improvement91817161514131211113002001000Time(Minutes)_X=45.7UCL=80.0LCL=11.5Diagnosis to Bed Before ChangeDiagnosis to Bed After Change200150100500999050101Percent7.0651.8293045.72 10.69 50 0.191 0.893124.9 45.40 50 0.767 0.043Mean StDev N AD PDiagnosis to Bed After ChangeDiagnosis to Bed Before ChangesubI Chart of DiagnosistoBed by sub Probability Plot of DiagnosistoBedNormalCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 63Week 51 there was a reduction from about 98% to 93% non-conf rate to 30 min. or less criterionProcess is predictable since day 51 with approx 93 % non-conformance rate to 30 min. criteriaDay DiagnosistoBedExample: Hospital 30,000-foot-level metric –Errors per 1000 patient days• Demonstrated project’s process improvementI Chart of Errors4137332925211713951806040200WeekErrorsperthousandpatientdays_X=10.84UCL=15.30LCL=6.39Med Errors Before Med Errors AfterC a o o sCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 64Pred proc since week 30 with approx 11 errors per 1000 patient daysProcess improvement was made in week 30 where error reduced from 48 to 11Week
  35. 35. © Smarter Solutions, Inc. 33 www.SmarterSolutions.com9. Maintain the Gain• Value-chain metrics are to be a part ofcompany-wide management reviewmeetings for the assessment of day-to-1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.1. Describe vision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.g yday performance and process-stepsexecution.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.3. Analyze enterprise.4. Establish SMARTsatellite-level metric goals.5. Create strategies.6. Identify high potentialimprovement areas andestablish related SMART30,000-foot-level metricgoals.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 65g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.g7. Identify and executeprojects.8. Assess projectscompletion impact onenterprise goals.9. Maintain the gain.Linkage of IEE with BPMCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 66Reproduced from https://www.smartersolutions.com/business-system-iee/
  36. 36. © Smarter Solutions, Inc. 34 www.SmarterSolutions.comTeam Exercise: Objectives• As a group, we will discuss how your organization’s structure would differfrom the following hospital IEE value chain.• After being shown various performance attributes of a hospital’s value chainAfter being shown various performance attributes of a hospital s value chain,your team is to present results from the following in a flip-chart presentation:– Create an EIP for the determination of improvement projects, which wouldbenefit the enterprise as a whole.– List attributes of a business management policy (rules) that addressesday-to-day activities, performance monitoring, and improvement efforts.D t diff b t th IEE/BPM t l ti t t diti lCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 67– Document differences between the IEE/BPM system relative to traditionalapproaches in the following areas (include positives and negatives foreach entry):• Improvement project selection• Business managementTeam Exercise: InputVision Statement: Our hospital will maintain an occupancy1. Describevision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.3. Analyzeenterprise.4. EstablishSMARTsatellite-levelmetric goals.5. Createstrategies.6. Identify highpotential improvementareas and establishrelated SMART 30,000-foot-level metric goals.7. Identify andexecuteprojects.8. Assess projectscompletion impacton enterprisegoals.9. Maintain thegain.p p yrate in the top 10% in our city while maintaining a full staffof employees and providing quality of services equal to orbetter than other hospitals in our area for all forms ofservice, achieving a cost structure that allows formaintaining excellent physical condition of the property.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 68More on followingslides
  37. 37. © Smarter Solutions, Inc. 35 www.SmarterSolutions.comTeam Exercise:Input1. Describevision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.3. Analyzeenterprise.4. EstablishSMARTsatellite-levelmetric goals.5. Createstrategies.6. Identify highpotential improvementareas and establishrelated SMART 30,000-foot-level metric goals.7. Identify andexecuteprojects.8. Assess projectscompletion impacton enterprisegoals.9. Maintain thegain.How would your organization’svalue chain differ?Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 69Will demonstrate clickable Enterprise Performance Reporting System (EPRS) approachto integrate “real-time” predictive performance metrics with processes; i.e., Y=f(X).Team Exercise: InputReport Finances: Value Chain Drill DownFunctionalGeneric flowchart orvalue-stream mapmetricsrelative toquality,cost, andtimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 70Y=f(X)
  38. 38. © Smarter Solutions, Inc. 36 www.SmarterSolutions.comTeam Exercise: InputReport Finances: Profit Margins Drill DownThe process ispredictable since thelast process change.The estimatedmedian is 9.9 with80% of theoccurrences from8.7 to 11.2.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 71Comment: On10/1/2007 profitmargins declinedfrom an estimatedmedian of about11.9% to about9.9%.Voice of the Customer: Value Chain Drill DownTeam Exercise: InputFunctionalGeneric flowchart orvalue-stream mapmetricsrelative toquality,cost, andtimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 72
  39. 39. © Smarter Solutions, Inc. 37 www.SmarterSolutions.comTeam Exercise: InputReporting VOC: Dissatisfaction Drill DownThe process is nowpredictable. Theestimatedperformance orcapability is a 0.131non-conformancerate.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 73Comment: Customerfeedback:Poor roomcleanliness,unfriendly staff, andspent a of timewaiting.Sales and Marketing: Value Chain Drill DownTeam Exercise: InputFunctionalGeneric flowchart orvalue-stream mapmetricsrelative toquality,cost, andtimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 74
  40. 40. © Smarter Solutions, Inc. 38 www.SmarterSolutions.comTeam Exercise: InputReporting Sales & Marketing: Market shareComment: On9/1/2007 k tPredictable processsince last change. Theestimated median is52.6 with 80% of theoccurrences between51.3 to 53.8.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 759/1/2007 marketshare decreased fromabout 56% to about53%.Delivery of Services: Value Chain Drill DownTeam Exercise: InputFunctionalGeneric flowchart orvalue-stream mapmetricsrelative toquality,cost, andtimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 76
  41. 41. © Smarter Solutions, Inc. 39 www.SmarterSolutions.comTeam Exercise: InputReporting Delivery of Services: LOSThe process ispredictable betweensubgroups and withinsubgroups. Theestimated median of262 8 with 80% of theCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 77Comment: There areno comments.262.8 with 80% of theoccurrences between149.6 to 375.9Team Exercise: InputReporting Del. of Services: Weekly ErrorsThe process ispredictable. Theestimated error rate is10.84 per thousand.Comment: ProcessCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 78Comment: Processimprovement wasmade in week 30where error ratereduced fromapproximately 48 to11 per 1000 patients
  42. 42. © Smarter Solutions, Inc. 40 www.SmarterSolutions.comHousekeeping: Value Chain Drill DownTeam Exercise: InputFunctionalGeneric flowchart orvalue-stream mapmetricsrelative toquality,cost, andtimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 79Team Exercise: InputReporting Housekeeping: QualityComment: OnThe process ispredictable since thelast process change.The estimated medianis 6.8 with 80% of theoccurrences from 6.1to 7.4.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 80Comment: On9/1/2007 cleaningservices qualitydecreased after beingoutsourced as part ofa cost reductionprogram.
  43. 43. © Smarter Solutions, Inc. 41 www.SmarterSolutions.comPatient Transportation: Value Chain Drill DownTeam Exercise: InputFunctionalGeneric flowchart orvalue-stream mapmetricsrelative toquality,cost, andtimeCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 81Team Exercise: InputReporting Transportation: Diag. to BedComment: Week 51The process ispredictable since thelast process change.The process estimatednon-conformance rateis about 92.9%Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 82Comment: Week 51there was a reductionfrom about 98% to93% non-conformance raterelative to a criterionof 30 minutes or less.
  44. 44. © Smarter Solutions, Inc. 42 www.SmarterSolutions.comTeam Exercise: Revisiting Objectives• Present results from the following in a flip-chart presentation:– Create an EIP for the determination of improvement projects, which would benefitthe enterprise as a whole.the enterprise as a whole.– List attributes of a business management policy (rules) that addresses day-to-dayactivities, performance monitoring, and improvement efforts. Consider the 9-stepIEE system with BPM integration.• Example responses are: 1. Each process owner daily monitors their value chain 30,000-foot-level metric to determine if there any special cause events that need to beaddressed. 2. Divisional management is given a monthly status update on how EIPtargeted metrics are performing and status of related improvement projects.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 83– Document differences between the IEE/BPM system relative to traditionalapproaches in the following areas (include positives/negatives for each entry):• Improvement project selection• Business managementRevisiting: Graphic View on the 9 Stepsto Excellence in Governance4 Establish1. Describevision andmission.2. Describe value chain,including satellite-level and30,000-foot-level metrics.3. Analyzeenterprise.4. EstablishSMARTsatellite-levelmetric goals.5. Createstrategies.6. Identify highpotential improvementareas and establishrelated SMART 30,000-7. Identify andexecuteprojects.8. Assess projectscompletion impacton enterprisegoals9. Maintain thegain.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 84foot-level metric goals.goals.Reproduced from Figure 4.7 of Integrated Enterprise Excellence Volume II, Business Deployment: ALeaders’ Guide for Going Beyond Lean Six Sigma and the Balanced ScorecardLet’s now examine a checklist for accomplishing the IEE system attributes
  45. 45. © Smarter Solutions, Inc. 43 www.SmarterSolutions.comIEE Business System Checklists• Let’s collective look at the following IEE implementationchecklists. Each person should highlight a couple importantit th t diff ti t IEE f t diti l th ditems that differentiate IEE from traditional methods.– Define: IEE Vol. II, Section 6.2, page 170– Measure: IEE Vol. II, Section 7.2, page 194– Analyze: IEE Vol. II, Section 8.2, page 229– Improve: IEE Vol. II, Section 13.2, page 370C t l IEE V l II S ti 14 2 397Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 85– Control: IEE Vol. II, Section 14.2, page 397• We will discuss items that were highlightedRevisiting: Linkage of IEE with BPM• IEE needs to beable to challengeor improve theor improve therules/policies in anorganization.• Thoughts aboutIEE integrationwith BPM?Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 86Reproduced from https://www.smartersolutions.com/business-system-iee/
  46. 46. © Smarter Solutions, Inc. 44 www.SmarterSolutions.comSELECTED ATTRIBUTES Integrated Enterprise Excellence (IEE)Typical MBA ProgramTraditional Six SigmaTraditional LeanOriginal Balanced ScorecardDefines process for improvements at operational/project level ++ ‐ ++ ++ ‐Defines a process for improvements at enterprise level ++ ‐ + + ‐Comparison of Systems++: Attribute included+: Partial/incomplete Inclusion- : Not includedDerives improvement projects from enterprise value chain metric performance needs ++ ‐ ‐ ‐ ‐Uses DMAIC process to implement process improvements (P‐DMAIC) ++ ‐ ++ + ‐Uses DMAIC process to integrate enterprise scorecards, strategic planning, business improvements, and control (E‐DMAIC)++ ‐ ‐ ‐ ‐Supports standardized graphical representation of selected data (dashboard) ++ + ‐ ‐ +Aligns enterprise level business metrics (satellite‐++ ‐ ‐ ‐ ‐level) and operational metrics (30,000‐foot‐level) ++ ‐ ‐ ‐ ‐Includes process for definition of rational metrics, aligned at operational and enterprise level ++ + ‐ ‐ ‐Includes process for distinguishing between "common cause" and "special cause" problems so as to eliminate firefighting++ ‐ ‐ ‐ ‐Integrates best practices of multiple disciplines: SS, Lean, DOE, etc. ++ ‐ ‐ ‐ ‐Business System Maturity Model• Attributes of a business system maturity model– EPM/BPM based Business System in PlaceProcess aligned metric usage A business system– Process aligned metric usage– Predictive performance reporting– Automation in reporting– Decisions based on performance metrics– Entire enterprise linked through a single reporting system– Strategies developed from performance gaps– Strategic alignment of improvement effortsA business systemmaturity model form isprovided near the end ofthe course material.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 88g g p• A 1-10 score is to determined for each attribute, where 10 isperfection.– The lowest of the eight attribute scores is the overall organization maturitymodel score.
  47. 47. © Smarter Solutions, Inc. 45 www.SmarterSolutions.comIndividual Exercise: Your BusinessSystem Maturity Model Assessment• Using the blank business system maturity model form thatis provided near the end of the workshop hand-out material,h t d t i ti ’ ll t it d lwhat do you rate your organization’s overall maturity modelscore to be?• At the beginning of this workshop, I said you reporteddirectly to your CEO. You now no longer have thisreporting.Wh t ld b t t f i i it b i tCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 89• What could be your next step for increasing its business systemmaturity?• To address this question, you could gain insight to addressingthis question by examining the attributes that have the lowestmaturity model scores.IEE Business System EvolutionCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 90
  48. 48. © Smarter Solutions, Inc. 46 www.SmarterSolutions.comIntegrated Enterprise Excellence System• Can effectively integrate environmental impact efforts, VOC, supplychain, etc. activities; i.e., silo activity avoidanceOne of the five book IEE series is available as a free e book• One of the five-book IEE series is available as a free e-book• Descriptive IEE Videos– Issues with our Current Business Management System and Resolution– The Integrated Enterprise Excellence Business Management System• Documented IEE case study– Oracle Packaging, which manufactures aluminum foilCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 91– Case study documentation in Smarter Solutions’ website resource library• American Management Association article• VideoSee www.smartersolutions.comReaddressing Learning Objectives• Summarize problems with current business managementsystems.• Describe issues with current process improvement efforts.• Describe benefits of predictive scorecards.• Describe an enhanced system where business metricimprovement needs pull for projects that benefit thebusiness as a whole.Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 92
  49. 49. © Smarter Solutions, Inc. 47 www.SmarterSolutions.comQ & AForrest W. Breyfogle IIIContact InformationPhone: 512.918.0280Email: forrest@smartersolutions.comWeb: www.smartersolutions.comCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 93Potential Team ExerciseSolutionCopyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 94
  50. 50. © Smarter Solutions, Inc. 48 www.SmarterSolutions.comPotential Team ExerciseSolutionStep 4 Step 5 Step 6 Step 7Copyright 1992 – 2013. All rights reserved. Smarter Solutions, Inc. (www.SmarterSolutions.com) 95
  51. 51.  Business System MaturityEPM/BPM based Business System in PlaceProcess aligned metric usagePredictive performance reportingAutomation in reportingDecisions based on performance metricsEntire enterprise linked through a single reporting systemStrategies developed from performance gapsStrategic alignment of improvement efforts10EPM/BPM part of the culture100%100%100%100%100%100%100%990%100%100%80%85%100%100%85%880%100%85%60%70%85%100%70%770%100%70%40%55%70%80%55%655%100%55%20%40%55%60%40%540%80%40%few25%40%40%25%425%60%25%few10%25%20%10%310%40%10%fewfew10%SomeSome25%20%fewfewfewfewSomeSome1No uniform business systemfewfewfewfewfewSomeSome
  52. 52.  DescriptionThere is an orchestration of EPM and BPM efforts throughout the business for the enterprise and daily business processes, where the most appropriate processes are automatedA EPM system is being used to  determine targeted strategies that are aligned to financial  metric improvement desires, which results in time‐series predictive measurement goals that pull process improvement efforts, which in turn have enterprise‐as‐a‐whole benefitOperational managers are using predictive performance reporting and statistical analyses in their status meetings and decision‐making process within their BPM implementationSoftware is being used to automatically update the value chain’s operational and financial time‐series predictive operational and financial performance metricsA value chain is linking business and operational processes throughout the organization with predictive scorecard performance reports‐outs, when appropriateBusiness and operational processes are time‐series tracked so that when a process is stable a predictive statement is providedProcesses are being documented (and in some cases automated) through a Business Process Management (BPM) initiative; a Lean Six Sigma process improvement program has been undertaken; and/or a Lean program using Kaizen events has been implemented with value‐stream assessmentsKPIs’ performance are being tracked and reported over time; however, there is no systematic linkage between these metrics and a structured process improvement methodologyExecutive management has  identified some overall business KPIs and are using them is some decision making and strategic planning.Limited use of defined processes, performance metrics.

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