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# Analy probsolv gsw

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• ### Analy probsolv gsw

1. 1. Analytical Problem SolvingGemini Skills WorkshopAugust 1998
2. 2. Learning objectives• Understand the key steps in the problem solving process.• Learn tools and techniques that are available for each step of the process. -2- Anal Prob ol v5.ppt
3. 3. Analytical Problem Solving “The significant problems we face cannot be solved at the same level of thinking we were at when we created them” - Albert Einstein “The difficult is what takes a little time; the impossible is what takes a little longer” - Fridtjof Nansen -3- Anal Prob ol v5.ppt
4. 4. As consultants we need to have a structured approachto problem-solving• We work in groups.• We work with complex problems.• Other consultants or clients may have to continue our work (e.g. in later phases of the project or when implementing the solution). – Need to know “where we are” and what has been done – Need to understand the process that leaded to the result/recommendation• A structured approach helps the client follow “where we are”• Our solution will be shared with people that did not take part in the problem solving process.• It is easy to miss a step.• Current steps often seem less important than future steps. -4- Anal Prob ol v5.ppt
5. 5. Key steps in the problem solving process Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure1. Determine what 1. Identify possible 1. Determine 1. Determine 1. Compare with 1. Prepare action 1. Measure we know and causes criteria solution decision criteria plans expected what we don’t approach benefits 2. Design tests 2. Determine 2. Decide on 2. Prepare follow-2. Gather decision 2. Develop solution(s) up plan and 2. Collect information 3. Perform tests process solutions measures feedback 3. Validate3. Identify 4. Determine 3. Implement 3. Incorporate constraints causes or re- feedback into test ongoing work4. Determine if you should 5. Determine to proceed proceed There are many variations of this process, but these are the basic steps you should follow. -5- Anal Prob ol v5.ppt
6. 6. STEP 1: CLARIFY PROBLEM Clarify the problem Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure Steps Tools (examples) 1.Determine what we • What we know/What we don’t know and what we don’t • 5 W`s and 1 H 2.Gather information (What, Where, When, Who, Why and How) 3.Identify constraints • 5 Whys 4.Determine if you should proceed • SWOT (strengths, weaknesses, opportunities, threats) -6- Anal Prob ol v5.ppt
7. 7. STEP 1: CLARIFY PROBLEMClarifying the problem is the most important step inthis process • A problem can be defined as a gap between where we are and where we want to be. This gap should be measurable. • Be aware that “perception is reality”. Although some client problems we encounter are very logical and factual, such as machine breakdowns, most client issues are based on people’s perceptions of problems, such as poor customer service. • Because of this, most problems will no require an optimal solution, but will have many adequate solutions. • Ensure that the problem statement accurately depicts the client situation. It will determine your entire course of action. -7- Anal Prob ol v5.ppt
8. 8. STEP 1: CLARIFY PROBLEM - EXAMPLE These are the steps involved in clarifying the problem 1. Determine what we know and what we don’t. Using a table with What, Who, When, Where, How, and Why can help define what information needs to be gathered. Example: Urgent customer requests are not being addressed. What We Know What We Don’t Know What Customers are complaining about Are requests being lost, forgotten, or not lack of responsiveness answered initially? Who Only customers with urgent E-mail, voicemail,or telephone requests or rush orders communications? Where Headquarters Customer place of origin When Problem only in last two months Why No documentation of requests or System error? Not recorded by service orders agent? Message not received? How -8- Anal Prob ol v5.ppt
9. 9. STEP 1: CLARIFY PROBLEMSteps to clarify problem (continued)2. Gather the information you need in order to define the problem statement. You may begin to identify possible causes, but that should really be done at a later step.3. Identify constraints - Who is the client for this problem and what is important to that client? Consider time frame (short-term vs long-term), costs, resources required, level of effort vs value-added, etc.4. Define the problem statement. Validate the problem with the client. Do we agree that this is really the problem at hand?5. Determine how to proceed. Seriously consider if the time and effort involved creates enough benefit or if this problem will disappear as the result of other activities. Most importantly, this step frames the investigation before we begin tackling the causes. -9- Anal Prob ol v5.ppt
10. 10. STEP 2: INVESTIGATE CAUSES - EXAMPLE One very easy way to understand and define a problem is to ask “Why?” 5 times (5 Whys) Real Client Example: • Why are we shipping orders late? Because we can’t meet our production schedule. • Why can’t we meet our production schedule? Because we are constantly changing it. • Why do we change it? To accommodate late orders from our customers. • Why do we have late orders? Because many of our customers don’t know what their orders are by the order cut-off date. • Why do we have a cut-off date? So we can create a production schedule and meet our shipping dates. Client problems may require several iterations of the 5 Whys. - 10 - Anal Prob ol v5.ppt
11. 11. Strengths, Weaknesses, Opportunities, and Threats (S.W.O.T.) can clarify complex issues and define direction – S.W.O.T. analysis is a general tool that can be used across key areas: • Product mix • Profit/pricing • Promotions • Space management • Supply chain – Definitions: Strengths WeaknessesExploited strategic capabilities and/or market Exploited strategic capabilities and/or marketpositioning providing a competitive advantage in the positioning possessed by competitors creating amarket place. competitive disadvantage in the market place. Opportunities ThreatsUnexploited strategic capabilities and/or market Unexploited strategic capabilities and/or marketpositioning which could provide a competitive positioning which could provide a competitor aadvantage in the market place. competitive advantage in the market place. - 11 - Anal Prob ol v5.ppt
12. 12. STEP 2: INVESTIGATE CAUSES Investigate causes ( or perform analysis) Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure Steps Tools (examples) 1. Identify possible • Hypothesis causes • Surveys and interviews 2. Design test • Fishbone (cause and effect) 3. Perform test • Pareto 4.Determine causes or • Root cause analysis tools retest • DuPont tree 5. Determine to proceed • Financial, statistical, database analyses We use two general methods to approach problems - using analogies to previous experience and breaking the problem down into smaller pieces. - 12 - Anal Prob ol v5.ppt
13. 13. STEP 2: INVESTIGATE CAUSES Step 2 is to investigate causes of the problem 1. Identify possible causes. We need to do this in order to carve out a manageable piece of work by narrowing the scope of the problem to the most probably causes. There are many tools we can use to investigate causes. The two basic ways to analyse problems for causes are: – Use analogies. We naturally relate the current problem to our previous experiences. As experts, we should be able to develop plausible hypotheses to explain the problem. – Break the problem into smaller subsets of problems (chunking). In conjunction with our hypotheses we can also dissect the problem into its variable components and determine which of these components is most likely to be causing the problem. - 13 - Anal Prob ol v5.ppt
14. 14. STEP 2: INVESTIGATE CAUSES Now we are ready to test our possible causes 2. Design tests or analytics. Tests can include surveys, interviews, process flows, pareto analyses, control charts, etc. it is unlikely that you will have to create an entirely new analytic because so many already exist, in Gemini and externally. Well-designed tests should directly prove or disprove hypotheses and should consider one problem variable at a time. 3. Perform tests. Ensure that the test will not be a burden for the client and that they want to do it. Otherwise, the results may not be accurate. 4. Determine causes based on test results. (Or re-test, if necessary) 5. Determine how to proceed. Is the cause within our sphere of influence? How does it compare with our constraints? It seems logical that the next stop would be to develop solutions. but to make our time more effective, we should plan ahead to determine what a “good” solution looks like. - 14 - Anal Prob ol v5.ppt
15. 15. STEP 2: INVESTIGATE CAUSES - EXAMPLE The Fishbone or Cause and Effect Diagram is simple tool for investigating causes CAUSES FOR A CAR NOT TO START: Man Machine Dead battery No gas • Left lights on Lost keys Bad choke • Bad Switch • Electrical Wrong fuel Worn out Lemon No oil Vapor Lock Car will not start Out of tune Dont know Too cold how to start • Rental Parts Stolen No antifreeze Repod Gets wet in the rain Material Methods Milieu (Environment) “5“ M fishbone - Man, Machine, Materials, Methods and Milieu (Environment) - 15 - Anal Prob ol v5.ppt
16. 16. STEP 2: INVESTIGATE CAUSES - EXAMPLE Supply Chain fishbone is an ‘mental model’ for looking at a business Purchasing & Vendor Production Control, Mtg. Supplier Inventory Partnership selection Performance Capacity Reliability EDI measures Safety stock Maintenance Sourcing terms Vendor alliances Information Mgt. Lead time Reliability Certification Supplier base Auditing Common databases Networking Change over Cycle time reduction Contractor Lead time New product Accessibility Transparenting BOM Quality management development Real time Bar coding Forecasting Complexity Quality material MRO Aligned with operations User training Monitoring turns Labour training TQM JIT Timing of processing Cycle time Scheduling Stock accuracy All-in-one cost Forming consortiums Data accuracy Trust in the system Real time Data accuracy Transportation Procurement Measurements Reliability Standardised coding Labour climate Cycle time Raw material packaging Data capture Management reports Consumption rate Supply Chain Order size Order Modes & lead times Driver training Cycle time Corporate scorecard Effectiveness Frequency EDI Transportation Return logistics CSF’s Planning & objective MTBF/MTTF Bar coding Cost order Vehicle maintenance Warehousing OEE setting Segmentation Pricing Network/routing Driver tracking KPI’s Break-even time Verification Know your customer DRP optimisation Modes of freight & Labour climate SOP’s Sales & op. planning Lead time on orders Perfect orders Cost of fuel packing ABM Customer loyalty Order processing Transportation costs Regulations LTL vs. FTL Cost of quality End-to-end measures Payment terms ECR Intermodel networks Compensatio Outsourcing Quality & availability of n rewards measures Distribution/logistics Promotions Scheduling Electronic tracking Budget variances Tracking & reporting Order error rate Accounts receivables Goods in transit Insurance Continuous Total consumption Discounts Inventories Sourcing Inventory management improvement systems Vendor mgt. Credit control HVOV’s Cross-docking Connectivity to other Customer Order status record Service point Damaged goods core processes Distribution Performance Order Fulfilment Logistics Measures - 16 - Anal Prob ol v5.ppt
17. 17. STEP 2: INVESTIGATE CAUSES - EXAMPLE A “DuPont” tree is a structured way to look at causes Price Revenue Volume Sales Earnings Materials Production Costs Overheads EVA Marketing Risk-free rate Capital employed Beta Cost of equity Cost of capital Risk premium Total equity Ave cost of capital Cost of debt Total debt - 17 - Anal Prob ol v5.ppt
19. 19. We use focus interviews on every Analysis and Design project Focus Interview GuideGeneral Information 1) Years with Company:: _______________________________ Years in current position: _______________________________ Number of reports: _______________________________ 2) a) What is your understanding of your company’s top three business objectives? b) What is your company’s vision? 3) a) What are your group’s top three business objectives? b) How are they (or will they be) measured? Your Group Overall efer back to the scope graphic on page 1 if the concept of GTS is not clear.) 4) What do you consider to be your group’s three greatest strengths? - 19 - Anal Prob ol v5.ppt
20. 20. Pareto’s Law states that 20% of the sources cause 80%of the problem \$35M Customer Service Complaints Pareto Analysis 30 Number of Occurrences/month 25 20 15 10 5 2 2 1 1 1 0 No one Routed to Don’t Unhelpful Don’t Hard to Gum Discourteous Answers wrong know the return understa chewing Phone person answer calls nd Customer Complaints about our Customer Service We can use this principle to determine where to focus our improvement efforts - 20 - Anal Prob ol v5.ppt
21. 21. STEP 3: DETERMINE DECISION CRITERIA Determine Decision Criteria Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure Steps Tools (examples) 1.Determine criteria • Decision modelling 2.Determine decision • RACI charting process • Criteria weighing • Quadrant analysis - 21 - Anal Prob ol v5.ppt
22. 22. STEP 3: DETERMINE DECISION CRITERIA The third step is to determine our decision criteria • Determine the decision criteria. Refer back to the constraints. Consider: – Needs vs. wants – Long-term vs. short-term – Interim steps – Risks – Costs – Timing – Desired benefits – Ranking or prioritizing the decision criteria (most important to least important) • Determine decision process. Who needs to be involved in the decision? Who has final say? What method will we use - voting, client chooses, numerical rankings, a dart board? Doing this now avoids looking foolish later. - 22 - Anal Prob ol v5.ppt
23. 23. Quadrant Analysis provides a framework for makingdecisions – Quadrant analysis is a general tool that can be used across different levels of analysis: • Corporate portfolios • Customers • Products – You can compare any two axes relevant to your problem: • Quality vs. cost • Market share vs. market potential • Volume vs. margin Market Share Sleepers Winners Market Growth Questionables Opportunity Gaps - 23 - Anal Prob ol v5.ppt
24. 24. And then helps determine possible actions based on your findings - Example Quadrant Decision Matrix Possible Quadrant Category Roles Possible ActionsOpportunity gaps Profit contributor • Review planograms - are category and fastest movers underspaced?(Higher growth/low share) Variety image • Review pricing mix - is pricing of key items too high versus market? • Review promotions - are category and key items under-promoted versus market? • Review product mix - is mix wrong for target customer segments? Any new, faster- moving items not being carried? • Tie-in promotions with higher margin consumption itemsWinners Traffic draw • Continue current programs(High share/higher growth) Cash generator • Increase promotional support Price image • Review space management to ensure minimal out-of-stock potential • Add good performing items not carried but available in market • Be first with new items • Review pricing and gross margins to see if selected price reductions can enhance image and increase growth and shareSleepers Profit contributor • Review product mix versus(Good share/lower growth) Transaction builderQuestionables Profit contributor • Review product mix versus market (variety index)(Low share/lower growth) Variety image • Delete poorest performance items (brands, flavors, sizes) • Raise prices if appropriate • Promote category to meet market • Minimize space allocated - 24 - Anal Prob ol v5.ppt
25. 25. Key steps in the problem solving process Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure Steps Tools (examples) 1.Determine solution • Various Gemini approach methodologies 2.Determine solutions - 25 - Anal Prob ol v5.ppt
26. 26. STEP 4: IDENTIFY SOLUTIONS Finally, we can develop solutions 1. Determine solution approach. This can be almost anything, like: – Brainstorming – Benchmarking – Best practices – Modelling techniques, e.g., decision modelling, business modelling, process modelling – Vision engineering – Organisation design – Any number of Gemini methodologies 2. Develop solutions. It is good practice to develop alternative scenarios, if applicable. - 26 - Anal Prob ol v5.ppt
27. 27. Benchmarking can provide a gauge of “what good looks like” - Purchasing KPI Benchmarks Average Benchmark Key Performance Indicator Benchmark Range • Purchasing function expense as a 0.3 % 0.06% -> 3.0% percentage of sales • Purchasing function expense as a 1.2 % 0.7% -> 7.0% percentage of purchase value • Purchasing headcount as a percentage of 1.1% 0.3% -> 4.5% total company headcount • Active suppliers per purchasing employee 50 6 -> 182 1 • Percentage of all active suppliers that account for 90% of total purchase value 20% 5% -> 75% 2 • Average actual time to develop/negotiate a contract 9 wks 2 -> 26 wks • Percent of deliverables received on-time within the most recent 12 month period 88% 63% -> 98%1: Median = 392: Median = 91Source: Center for Advanced Purchasing Status - 27 - Anal Prob ol v5.ppt
28. 28. We can also benchmark best practices - PurchasingBest Practices Company Best Practice/Strength• Outboard Marine • Partnering: establishes 3-5 year contracts with suppliers Corporation• Ford Motor Company • Partnering: 70% of North American Automotive Operations’ contracts are long term (3-5 years) • New product development: with preferred suppliers, Ford uses “black box” design responsibility. Ford specifies a parts function and lets suppliers figure out the best way to manufacture it• Motorola • Partnering: suppliers participate in developing design guidelines for new products • Supplier management: communications sector trimmed its supplier base from 4,200 in 1985 to 1,155 in 1989 • Technology: supports a common global database for critical material purchases • Supplier management: has created “Motorola University”, an education and training center in Schaumburg, Illinois where suppliers and its own employees brush up on basic quality concepts as well as learn the more advanced techniques in quality controlSource: Purchasing - 28 - Anal Prob ol v5.ppt
29. 29. STEP 5: EVALUATE SOLUTIONS Key steps in the problem solving process Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure Steps Tools (examples) 1.Compare with decision • Impact/Effort matrix criteria 2.Decide on solution(s) 3. Validate - 29 - Anal Prob ol v5.ppt
30. 30. STEP 5: EVALUATE SOLUTIONS Evaluating solutions becomes easy because we have already laid the groundwork 1. Follow the decision process and compare with decision criteria 2. Decide on solution(s) 3. Validate solutions with initial constraints and your sphere of influence - 30 - Anal Prob ol v5.ppt
31. 31. An Impact/Effort Matrix is a useful tool for prioritizing work and identifying “early wins”High ActionLevel of impact (results) 4 Action 3 Action Action 1 5 Action 6 Action 2 Low High Level of effort required - 31 - Anal Prob ol v5.ppt
32. 32. Key steps in the problem solving process Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure Steps Tools (examples) 1.Prepare actionj plans • Workplans 2.Prepare followup plan • RACI charting and measures) 3. Implement - 32 - Anal Prob ol v5.ppt
33. 33. STEP 6: IMPLEMENT SOLUTIONS Step 6 is to implement the solution(s) 1. Prepare action/implementation plans. Include responsibilities and time frames 2. Prepare follow-up plan and measures 3. Do it! - 33 - Anal Prob ol v5.ppt
34. 34. Key steps in the problem solving process Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria Measure Steps Tools (examples) 1.Measure expected • Key performance benefits indicators 2.Collect feedback • Balanced Scorecard 3. Incorporate feedback • Benefits dashboard into ongoing work - 34 - Anal Prob ol v5.ppt
35. 35. STEP 7: MEASURE AND FOLLOW UP Don’t forget to measure and follow-up! 1. Measure improvements and compare with expected benefits 2. Collect feedback 3. Incorporate feedback into on-going work You will learn more about performance measurement in later sessions - 35 - Anal Prob ol v5.ppt
36. 36. In everything we do, Plan (think) - Do - Review Determine Follow-up Clarify Investigate Decision Identify Evaluate Implement Problem Causes Solutions Solutions Solution and Criteria MeasureTHINK DO THINK DO THINK DO REVIEW - 36 - Anal Prob ol v5.ppt