The Process of Process Improvement

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A presentation about process improvement covering Six Sigma concepts, root cause analysis, improvement methodology, and 3 case study/projects where I applied improvement concepts such as process identification, flowcharting, and surveying/customer observations (analyzing document workflow in a insurance processing center, bettering records & information management practices for a law firm, and applying voice of the customer (VOC) to strengthen our sales cycle).

Please note this was an internal presentation to my colleagues and was not meant to education them Six Sigma. I do not work in the manufacturing/R&D/sciences sectors where many of these key concepts are derived. The specific examples are meant to reflect our business support services and improve our own culture.

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The Process of Process Improvement

  1. 1. 99.73% + 3σ 95.46% + 2σ 68.26%Even slow progress is better than none at all + 1σDaniel S. Carroll version 1.0April 13, 2012 - 1σ 68.26% - 2σ 95.46% Average - 3σ 99.73% 1
  2. 2. 99.73% + 3σ 95.46%Is a data driven quality improvement methodology structured to reduce product or + 2σservice failures rates to near perfection. ∑ 68.26%= 99.73% = Six Sigmas outlining normal distribution = for 1M opportunities, there are 3.4 + 1σmistakesIn statistics, a bell-shaped curve represents the - 1σdistribution of values, frequencies, or probabilities of 68.26%a set of data. The middle is the “norm”(normal distribution / “norm” = a good thing!) - 2σ 95.46% 2 Average - 3σ 99.73% 2
  3. 3. 99.73% + 3σ 95.46% + 2σMethodology for improvement 68.26%Management philosophy + 1σStrategy for running a businessCreates a common language throughout an organization (small, medium or large) - 1σ 68.26%Method to transform culture (paradigm shift) - 2σ 95.46% Average - 3σ 99.73% 3 3
  4. 4. 99.73% + 3σ 95.46% + 2σLike most “quality management” programs, it started in manufacturing / industrial 68.26% + 1σHas been adopted in practically all verticalsMajor modern day focuses: Financial Services, Healthcare, Information TechnologyBaseline: mistakes are costly - 1σ 68.26% Effectiveness – the degree to which you meet and/or exceed customer needs or requirements - 2σ Efficiency – the amount of resources consumed in being effective 95.46% Average - 3σ 99.73% 4
  5. 5. 99.73% + 3σ 95.46%What it is What it is NOT + 2σScientific in nature Anecdotal 68.26%Hypotenuse applied to business (think HS Deviation in delivery (e.g. service delivery) + 1σscience class)Discovery, asking questions, challenging the Bandaid fix approach / “one size fits all”methods (investigative practice) Independent assumptionsTeam participation Lack of understanding of culture, evolution - 1σListening to the customer (VOC – voice of 68.26%the customer) A sliver bullet solutionLeaving no stone unturned, enterprise wide - 2σ Subjected to just one entity of anHigh level, top-down approach organization 95.46% Average - 3σ 99.73% 5
  6. 6. 99.73% + 3σ 95.46%What it is What it is NOT + 2σDe facto standard Status quo 68.26%Just because you’re not sick doesn’t mean + 1σ If it ain’t broke don’t fix ityou can’t get betterUse of tools Lacking a valuable apparatusKnowledge workers For everyoneMethod acting Single act show - 1σA Team* 68.26% Solely an individual processQuick, Complete Project Adoption*Six Sigma defines a team as “A group of motivated people with complementary skills and knowledge who are - 2σcommitted to a common purpose, set of performance goals, and approach for which they hold themselves mutually 95.46%accountable.” Average - 3σ 99.73% 6
  7. 7. 99.73% + 3σ 95.46% + 2σSS defines “customer” as… 68.26% A customer is a recipient of a product or services – internal or external + 1σ SS’ six recommendations to identify VOC…1. Interviews* (formal, direct, small) 4. Surveys (formal, direct, large)2. Focus Groups (informal, direct, medium) 5. Customer Observations* (formal, direct, small)3. Market Research (informal, indirect, large) 6. Complaints* (formal, direct, small) - 1σ 68.26% * Ideal opportunities to seek “pain points” - 2σ 95.46% Average - 3σ 99.73% 7
  8. 8. 99.73% + 3σ 95.46% + 2σUsing VOC tact, we become more valuable in the marketplace 68.26% Professional, Consultative + 1σ Knowledge Experts, Thought Leaders Less commoditized! - 1σ 68.26% - 2σ 95.46% Average - 3σ 99.73% 8
  9. 9. 99.73% + 3σ 95.46% + 2σUsing VOC tact, we analyze client situations 68.26% + 1σCustomer Needs vs. Requirements Needs establish the relationship between the organization and the customer Requirements are the characteristics that determine whether or not the customer is - 1σ 68.26% happy  Q. what makes a client unhappy? - 2σ 95.46% Average - 3σ 99.73% 9
  10. 10. 99.73% + 3σ 95.46% + 2σ A. Variation – deviation in service delivery, or a large step away from the “norm” (average) 68.26% + 1σ Variation Norming Average Problem identification Get control Improve using VOC - 1σ 68.26% Caused by factors that can be in your control (Machines, Materials, Methods, Measurement,People) or the one not in control (Mother Nature) - 2σ 95.46% Average - 3σ 99.73% 10
  11. 11. 99.73% + 3σ 95.46% + 2σDefine 68.26% + 1σMeasureAnalyzeImprove - 1σ 68.26%Control - 2σ 95.46% Average - 3σ 99.73% 11
  12. 12. 99.73% + 3σ 95.46% + 2σDefine phase 68.26% + 1σ Identifying there’s a problem Develop a “problem statement” Identifying the solution (the target) - 1σ 68.26% Work with the knowledge experts - 2σ 95.46% Average - 3σ 99.73% 12
  13. 13. 99.73% + 3σ 95.46% + 2σ Problem statement (pain point): reduce the amount of indexing performed by a 3rd party in 68.26% + 1σ their mail scanning workflow Take a large problem and make it more granular 1. Process Map - 1σ 68.26% 2. Use VOC - 2σCase Study 1 95.46% Average - 3σ 99.73% 13
  14. 14. 99.73% + 3σ 95.46% + 2σ Analyze phase 68.26% + 1σ - 1σ 68.26% - 2σCase Study 1 95.46% potential area of process improvement Average - 3σ 99.73% 14
  15. 15. 99.73% + 3σ 95.46% + 2σ Microproblem statement (pain point): how do we control file tracking on-and-off site 68.26% + 1σ Take a large problem and make it more granular 1. Began with VOC 2. Enabled controls to ensure accountability and upkeep of related information - 1σ 68.26% - 2σCase Study 2 95.46% Average - 3σ 99.73% 15
  16. 16. 99.73% + 3σ 95.46% + 2σ Combined Improve and Control 68.26% + 1σ SOPs Continuity Consistency - 1σ 68.26% - 2σCase Study 2 95.46% Average - 3σ 99.73% 16
  17. 17. 99.73% + 3σ 95.46% + 2σ 68.26% + 1σ Problem statement (hypotenuse): what is the most important factor that yields a new sale? Key considerations 1. Use VOC 2. Identify their pain points of dealing with similar providers - 1σ 3. Gather feedback from decision makers on their needs and requirements 68.26% - 2σCase Study 3 95.46% Average - 3σ 99.73% 17
  18. 18. EXAMPLE ONLY Created 3 top-level categories to classify the type of question asked by a prospect: (1) about the company, (2) about our products, (3) about our services Timeframe Fall 2011 – Spring 2012 Prospects 5 Total Questions collected 47 Categories 3 Questions about the Company 28 (60%) Questions about its Product 5 (11%) Surprisingly, decision makers seemed Questions about its Service 14 (30%) to be more concerned with their potential business partner as a whole,Case Study 3 verse impressing them with superior product and/or service 18
  19. 19. 99.73% + 3σ 95.46%Areas: + 2σZero variation: tighter control with standard, universal procedures 68.26% + 1σTeam participationListening to the customer (VOC – voice of the customer)Leaving no stone unturned, enterprise wideQuick, Complete Project AdoptionHigh level, top-down approach - 1σ 68.26% - 2σ 95.46% Average - 3σ 99.73% 19
  20. 20. 99.73% + 3σ 95.46% + 2σControls aren’t just tools used to govern and regulate 68.26% + 1σ Develop consistencies behind routine, “course setting” actions Standard procedures offer ways to control, benchmark, and study outcomes You can’t improve upon something that varies each and every time it’s preformed - 1σ 68.26%The analysis of result-driven outcomes cannot be compared against variedperformances - 2σ 95.46% Average - 3σ 99.73% 20
  21. 21. 99.73% + 3σ 95.46% + 2σAreas:Zero variation: tighter control with standard, universal procedures 68.26% + 1σTeam participationListening to the customer (VOC – voice of the customer)Leaving no stone unturned, enterprise wideQuick, Complete Project Adoption - 1σHigh level, top-down approach 68.26% - 2σ 95.46% Average - 3σ 99.73% 21
  22. 22. 99.73% + 3σ 95.46% + 2σNow, more than ever, organizations must be dynamic to face tomorrow’s challenges 68.26% Expertise isn’t the only thing that should lend itself sideways, backwards and forwards + 1σ With raised expectations of select knowledge workers, there should be more contributions ofother individuals as well - 1σ 68.26% Eliminate “silos” while broadening partial and central ownership - 2σ 95.46% Average - 3σ 99.73% 22
  23. 23. 99.73% + 3σ 95.46% + 2σAreas: 68.26%Zero variation: tighter control with standard, universal procedures + 1σTeam participationListening to the customer (VOC – voice of the customer)Leaving no stone unturned, enterprise wideQuick, Complete Project Adoption - 1σHigh level, top-down approach 68.26% - 2σ 95.46% Average - 3σ 99.73% 23
  24. 24. 99.73% + 3σ 95.46% + 2σOrganizations rely on business intelligence from all facets within 68.26% + 1σ Cross-account analytics for benchmarking (prospecting) Multilevel TQM Reporting analysis (current clients) Marketing Analytics (external) - 1σ 68.26% We have data to become industry thought leaders and shape customer wants - 2σ 95.46% Average - 3σ 99.73% 24
  25. 25. 99.73% + 3σ 95.46% + 2σAreas:Zero variation: tighter control with standard, universal procedures 68.26% + 1σTeam participationListening to the customer (VOC – voice of the customer)Leaving no stone unturned, enterprise wideQuick, Complete Project AdoptionHigh level, top-down approach - 1σ 68.26% - 2σ 95.46% Average - 3σ 99.73% 25
  26. 26. 99.73% + 3σ 95.46% + 2σA Lean Six Sigma organization has everyone’s participation 68.26% + 1σ Everyone identifies an opportunity to leverage Lean or Continuous Improvement Craft a problem statement (a “pet project”) Identify key team resources, execute - 1σ 68.26%Create a heightened sense of cause  effect  execute  realize  improve - 2σ 95.46% Average - 3σ 99.73% 26
  27. 27. 99.73% + 3σ 95.46% + 2σAreas:Zero variation: tighter control with standard, universal procedures 68.26% + 1σTeam participationListening to the customer (VOC – voice of the customer)Leaving no stone unturned, enterprise wideQuick, Complete Project Adoption - 1σHigh level, top-down approach 68.26% - 2σ 95.46% Average - 3σ 99.73% 27
  28. 28. 99.73% + 3σ 95.46% + 2σA Lean organization is one that is agile, reliant on firm leadership and decision making 68.26% + 1σ Build solid business cases using business intelligence Carve out time to listen, understand and react Do not let initiatives fall by the wayside - 1σ 68.26%Project/program adoption and group participation should never take longer thandevelopment which usual involves high level information gather, preparation, etc. - 2σ 95.46% Average - 3σ 99.73% 28
  29. 29. 99.73% + 3σ 95.46% + 2σAreas: 68.26%Zero variation: tighter control with standard, universal procedures + 1σTeam participationListening to the customer (VOC – voice of the customer)Leaving no stone unturned, enterprise wideQuick, Complete Project Adoption - 1σHigh level, top-down approach 68.26% - 2σ 95.46% Average - 3σ 99.73% 29
  30. 30. Pres./ CEO traditional thinking short-term gains unchanged mindset silo adoption satisfactory sacred cows EVPs VPs Committees Internal ExternalDivisions Departments Customers Departments 30

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