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Lean Mindsets & BehaviorsCreating a High-Performance Climate for       Sustained Transformation      Mike Osterling & Kare...
Learning Objectives• The macro‐ and micro‐behaviors that are at the core of   excellence.• How to identify the gaps betwee...
Success with Improvement           2001 – The Economist70%                    63%60%50%40%30%20%        17%               ...
…A Decade Later           2010 – Accenture80%70%                                        69%60%                       58%50...
To Err is Human Institute of Medicine, 199998,000 lives lostImprovement Goal:Reduce by 50% in 5 years.                    ...
6
Something Is Terribly Wrong…Up to 98,000 people                                    180,000 Medicare  die from medical     ...
We need to    improve     how we improve.                       8
Self‐inflicted                 9
A Chaos‐Cracked Foundation   Can’t Support Excellence                              10
11                     Resilience                       AgilityBusiness Results                     Innovation            ...
ClarityEngagement        Focus        Discipline                          12
“Effectiveness is a       habit.”         — Peter Drucker                           13
Group Discussion1. Clarity2. Focus3. Discipline4. Engagement                                   14
Group Activity ‐ Behavioral Gaps• Part 1 – Rate your organization (company, facility,   department, etc.).  2 minutes   – ...
Activity: Behavioral Gaps                             Hard Costs          Soft CostsLack of ClarityLack of FocusLack of Di...
17                     Resilience                       AgilityBusiness Results                     Innovation            ...
18
Junk Words* (10 mins)• The line at Starbucks is long. _________________• That car is expensive.  ______________________• T...
Seek Unbridled Clarity Around…1. The direction your organization is heading in.2. Who your customers truly are and what ne...
“Going to the gemba has been life changing for me as a leader.”   ‐ Ginny Cattaneo, Sr. VP, Franklin  Templeton Investor S...
Lean Management System   Plant Manager    Standard Work Value Stream Manager      Standard WorkSupervisor Standard WorkTea...
Truth    Truth        Truth            Truth                Truth                    Truth                        Truth   ...
24                     Resilience                       AgilityBusiness Results                     Innovation            ...
Distraction Kills                    25
Focus Needs1. Priorities – What are you striving for? What’s    important to accomplish THIS year?  –   Products  –   Proc...
Booz & Company Findings90%                                    82%80%70%                       64%60%         49%50%40%30%2...
There is no such thing   as multitasking.*      * For cognitive tasks.                               28
The Myth of Multi‐tasking• It’s not possible to do two conscious activities at   once.• You are “switch‐tasking.”• David M...
A Key to Apple’s Success?“…saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. W...
Round 1      Task 1: Lack of focus causes chaos Task 2: 1   2   3   4   5   6   7   8   9   10   11     12 13 14 15 16 17 ...
Round 2     Task 1: Lack of focus causes chaos Task 2: 1   2   3   4   5   6   7   8   9   10   11     12 13 14 15 16 17 1...
The Countermeasure: Strategy Deployment Aka Hoshin kanri; policy deployment    Hoshin – Direction; compass; shining need...
Strategy Deployment Key Feature:                 CatchballWhat?How?    Executive Who?      TeamWhen?               What?  ...
Improve Productivity through Greater Focus                  Productivity (Pounds Produced / Hr Worked)115.0               ...
Activity: Achieving Focus  List Potential Projects               Lean Mindsets & Behaviors          Achieving Focus: Proje...
“Hoshin‐Lite” Annual Work PlanPRE ‐ Gain clarity around overarching business needs.1. List everything you could do (and th...
Achieving Focus    Categorize project list                        Lean Mindsets & Behaviors                   Achieving Fo...
To create new ideas is a gift, but to choose wisely is a skill.       ‐ Ryan Morgan                        39
Achieving FocusMove “Maybe’s” into Other Categories                               Lean Mindsets & Behaviors               ...
Label Four Flip Chart Pages & Hang on Wall                                  Must do        Maybe1. List what you could do ...
Must do    Maybe Step 4 Prioritize must‐do’s; Create Plan                Delay    Eliminate                               ...
PACE Improvement Prioritization Grid                                         9                       22            17     ...
Achieving Focus                                           Prioritize Must‐Do’s                         EasyEase of Impleme...
Annual Improvement Plan                                                                                 Company ABC       ...
Annual Improvement PlanTier 1 Priority:                                                 Executive Owner:                  ...
Frequent Status Meetings Assure Ongoing Alignment & Distraction Avoidance                        47
Sporting Goods Manufacturer  Product Launches Per Year80                    737060                            No additiona...
Rockwell Automation25      2020                            Projects15                            Started                  ...
Avoiding the Shiny Ball Syndrome         (Organizational ADD) Requires…• Clarity – about what really   matters & organizat...
51                     Resilience                       AgilityBusiness Results                     Innovation            ...
Greatness results fromDisciplined people engaged in disciplined  thinking that leads to disciplined         action.       ...
Building Mastery Requires Deliberate Practice                                                53
How much deliberate practice?10,000 hours   Tied deliberate practice  (10 Years)    to myelin development                 ...
Practice vs. Performance                                      Perform         Train                           99%100%    9...
Building Mastery© 2012 Karen Martin & Associates, LLC                      56
MASTERY          57
Discipline is Needed…•   Planning•   Decision making•   Executing•   Problem Solving & Improving•   Managing processes    ...
“It takes a different kind of thinking to solve a problem than the kind of thinking        that produced the problem.”    ...
“Most people spend more time and  energy going around problems          than in trying to solve them.  ”                 —...
The Scientific Method for Problem Solving                       and Improving                                             ...
Clarifying the PDSA Cycle                    Phase                             Detailed Steps                             ...
Developing PDSA CapabilitiesComplex   • A3 Management          • Kaizen EventsSimple    • Daily Kaizen                    ...
Group Discussion• How many of you are familiar with A3   Management?• How many of you have a disciplined A3   development ...
Discipline is Needed…•   Planning•   Decision making•   Executing•   Problem Solving & Improving•   Managing Processes    ...
Every key process…   Clearly documented       2‐5 Key Performance Indicators                Continually                  m...
How are you performing?              Gray – Highest industry quality scores              Purple – Median industry quality ...
Value Stream Maps: Gaining Clarity around Process Performance
Processes MUST be Clearly Documented,                      Monitored & Improved                                           ...
We need to shift our focus from    managing   people to managing processes.                                  70
Non‐standard Processes Yield Inconsistent Results                                     R1                                  ...
Process Ownership:         Working On The Business• All processes MUST have a process owner.  – Closer than farther from t...
Don’t Look Away. Ever.                         73
Before improving a process,        understand –  really understand – how it is being performed            today.          ...
Traditional Mapping Method:        Process Flow Chart How long does the process take?  How well is the process performing?...
The Genesis of MBPM               Second EditionAugust 2008     October 2012                                76
What is Metrics‐Based Process Mapping (MBPM)?• A visual process analysis tool, which integrates:  – Functional orientation...
Metrics‐Based Process Mapping (MBPM)
Why Create an MBPM?• To map admin / office processes• Understand the steps, disconnects, waste, and   delays – at a micro ...
Typical Current State Findings              Islands of value‐adding activities.             Shift the focus to the NVA ele...
MBPM Results                                                        %    Process         Before            After          ...
MBPM – Getting Started• Define a clear scope – narrow and deep   – Define the first and last steps for the process to be i...
Scope: Refining the Focus                                    Units                  Domestic       Consumables            ...
MBPM – Getting Started (continued)• Select the team (most effective within a kaizen  event)   – Highly cross‐functional – ...
Steps in Creating the Current State MBPM1.    Label the map (process, date, team or facilitator)2.    List the functions i...
Documenting the Current StateStep 1 – Label the map in the upper right hand   corner.  – Include process name, conditions ...
Document the Current StateStep 2 – Label the swim lanes with the functions   involved.  – Include external functions, if a...
Document the Current StateStep 3 – Document all activities/steps on 3” x 6”   post‐its.  Don’t include metrics yet!  – Use...
Document Each Activity    Activity               (Verb / Noun)                                Function that               ...
Step Step               Concurrent   1    2                 Activities       Ticking clock                                ...
Document the Current StateStep 4 – Review map for completeness    (someone other than the facilitator)  – Walk through the...
Document the Current StateStep 5 ‐ Number the activities  – Number the activities sequentially from left to right.  – For ...
Document the Current StateStep 6 – Add activity‐specific information  –       LT – Lead time  –       PT – Process time  –...
Key Metrics: Time• Process time (PT)  – The time it takes to actually perform the work to     complete one item, if it cou...
Key Metrics:  Quality• %Complete and Accurate (%C&A)  – % of the time the downstream customer can     perform task without...
Add Activity‐Specific Information                     Additional Information      # Staff    (if relevant)                ...
Adding Metrics:  Tips• LT, PT and %C&A are typically acquired via   interviews – ask high‐quality questions.• Usually look...
Adding Metrics: Tips (continued)• May be OK to group the LT for a series of   activities performed by the same function   ...
Barriers to Flow• Look at the process from “the thing’s”   perspective• Identify issues that prevent one‐piece‐flow of   t...
Document the Current StateStep 7 – Determine the “timeline critical   path” of the process  – For parallel activities:    ...
Timeline Critical PathCritical  Path                         101
Document the Current State Step 8 – Create the timeline    – Bring down the PT & LT from the critical path steps.Timeline ...
Document the Current StateStep 9 ‐ Calculate Summary Metrics  –   Critical Path PT  –   Critical Path LT  –   Activity Rat...
Summary Metrics: Time• Timeline Critical Path PT  – Quantifies how much of the response time (LT) is     spent actually wo...
Summary Metrics: Quality• Rolled Percent Complete and Accurate   (R%C&A) =   – %C&A × %C&A × %C&A × …   – Out of 100 occur...
Summary Metrics: Labor Requirements• Total PT  – Sum of all activities, not just critical path  – Factor in determining la...
Summary Metrics: Labor Effort• Total PT  – Sum of all activities, not just timeline• Labor Effort      Time     =     Tota...
Documenting the Current StateStep 10 – Identify Value‐adding (VA) &   Necessary Non‐value‐adding (N) activities  –   Use s...
Value‐adding activity   Necessary non‐value‐adding activities
Metrics‐Based Process      Mapping (MBPM)          Simulation          Order Fulfillment Process:          Demand = 2,500 ...
Create the Current State MBPM                        Phase I1. Label the map in upper right corner.  •   Process name, dat...
Create the Current State MBPM                     Phase II7.   Define the critical timeline path.      • Longest LT unless...
Document Summary Metrics                                    Projected      Projected %     Metric        Current State   F...
Future State Design      • Goals         –   Reduce overall LT & PT         –   Improve quality (increase RFPY)         – ...
Future State Design Considerations•   Eliminate steps / handoffs      • Eliminate motion & •   Combine steps              ...
116                     Resilience                       AgilityBusiness Results                     Innovation           ...
Energy Crisis: Widespread Disengagement                                          11                                       ...
Engagement Drivers: The Three C’s              Connection     Creativity       Control                                    ...
Engagement Drivers• Connection ‐ to mission, annual goals,   immediate supervisor, people within the   organization, custo...
It’s disrespectful to…1. Not engage employees in work design and    improvement.2. First blame people instead of systems a...
Group Activity – Driving Engagement• Three groups:  – Connection  – Control  – Creativity• Each group:   – Identify activi...
Activity: Engage or Disengage?                         Engage           DisengageConnectionControlCreativity              ...
Reducing Self‐Inflicted Chaos:   Where Should You Start?                                  123
Places to Start…1. Develop an intolerance for ambiguity.2. Prioritize your work; reduce the number of    active projects a...
Group Activity – Closing the Gap• Go back to your “weakest corner” (Clarity, Focus,   Discipline or Engagement)  – List th...
As Outstanding as They Come…        Discipline                               12                               6
Mike Osterling, President          Karen Martin, Principal 4320 Woodland Drive              7770 Regents Road #635  La Mes...
Our Books        October 2012        Just released   Contributing Author                                              128
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Lean Mindsets and Behaviors

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In Lean conversations, we often hear “it’s 10% tools and 90% people,” “we need to change the culture,” and “they just don’t get it.” While each of these statements may be true, they all reflect that something is missing in our problem-solving and transformation attempts—and that missing element is helping people change their behaviors. In reality if we don’t change the way the organization thinks and behaves, on a day-to-day basis, we won’t significantly impact performance levels.

This workshop includes both theory and practical application around the behaviors of excellence: organizational clarity, focus, discipline, and widespread employee engagement. Activities include class discussions and four major activities representing each of the dimensions.

The clarity activity centers on the words we use and how ambiguity and "softened" language hinders performance. The focus activity is a timed simulation that demonstrates how working on fewer projects at a time increases the total number of projects completed in a comparable given time period. Participants learn metrics-based process mapping, a highly disciplined process for standardizing work. In the final activity, participants practice techniques that lead to engagement and disengagement.

Published in: Business

Lean Mindsets and Behaviors

  1. Lean Mindsets & BehaviorsCreating a High-Performance Climate for Sustained Transformation Mike Osterling & Karen Martin AMEChicago2012 October 15, 2012
  2. Learning Objectives• The macro‐ and micro‐behaviors that are at the core of  excellence.• How to identify the gaps between “what is” and “what  needs to be.”• How to create an operational climate that enables  people to grow and succeed.• How to develop Lean mindsets and behaviors  throughout your organization.• How to instill and reinforce the new ways of operating. 2
  3. Success with Improvement 2001 – The Economist70% 63%60%50%40%30%20% 17% 20%10%0% None Temporary Lasting 3
  4. …A Decade Later 2010 – Accenture80%70% 69%60% 58%50%40% 33%30%20%10%0% “Mixed” to  Minimal  Needs re‐evaluation,  “disappointing”  financial  restart or complete  results impact makeover 4
  5. To Err is Human Institute of Medicine, 199998,000 lives lostImprovement Goal:Reduce by 50% in 5 years. 5
  6. 6
  7. Something Is Terribly Wrong…Up to 98,000 people  180,000 Medicare  die from medical  patients die annually  errors. from medical errors. To Error is Human,  Office of the Inspector  Institute of Medicine 2005 General 2011 1999 Progress has been  2010 33% hospitalized  slow. patients are harmed;  7% result in permanent  Journal of the American  Medical Association injury or death. Health Affairs 7
  8. We need to  improve how we improve. 8
  9. Self‐inflicted 9
  10. A Chaos‐Cracked Foundation  Can’t Support Excellence 10
  11. 11 Resilience AgilityBusiness Results Innovation Continuous  Improvement Problem Solving that Reduce  Mindsets &  Behaviors  Chaos
  12. ClarityEngagement Focus Discipline 12
  13. “Effectiveness is a  habit.” — Peter Drucker 13
  14. Group Discussion1. Clarity2. Focus3. Discipline4. Engagement 14
  15. Group Activity ‐ Behavioral Gaps• Part 1 – Rate your organization (company, facility,  department, etc.).  2 minutes – Which of the four behaviors is it weakest in?• Part 2 – Move to the appropriate corner for your  weakest org behavior. 15 minutes – Give examples of the lack of that behavior – Which metric(s) do they affect (hard impact)? – How do they affect customers, employees and/or  suppliers (soft impact)? – Select one example & its impact to share with the full  group.• Part 3 – Report out. 10 minutes 15
  16. Activity: Behavioral Gaps Hard Costs Soft CostsLack of ClarityLack of FocusLack of DisciplineLack of Engagement 16
  17. 17 Resilience AgilityBusiness Results Innovation Continuous  Improvement Problem Solving
  18. 18
  19. Junk Words* (10 mins)• The line at Starbucks is long. _________________• That car is expensive.  ______________________• That would be a long commute. ______________ * Conceptualized by Sammy Obara, Toyota by Toyota 19
  20. Seek Unbridled Clarity Around…1. The direction your organization is heading in.2. Who your customers truly are and what needs  they have.3. What value you deliver.4. How specifically you deliver and support the  delivery of value.5. Who delivers and supports the delivery of  value.6. How you’re performing.7. The language you use. 20
  21. “Going to the gemba has been life changing for me as a leader.” ‐ Ginny Cattaneo, Sr. VP, Franklin Templeton Investor Services  21
  22. Lean Management System Plant Manager  Standard Work Value Stream Manager  Standard WorkSupervisor Standard WorkTeam Leader Standard Work Standardized Processes 22
  23. Truth Truth Truth Truth Truth Truth Truth Truth Truth 23
  24. 24 Resilience AgilityBusiness Results Innovation Continuous  Improvement Problem Solving
  25. Distraction Kills 25
  26. Focus Needs1. Priorities – What are you striving for? What’s  important to accomplish THIS year? – Products – Processes – Marketplace – Margins – People2. Meetings – What’s the purpose of the  meeting?  26
  27. Booz & Company Findings90% 82%80%70% 64%60% 49%50%40%30%20%10%0% No written Conflicting Competing priorities priorities demands 27
  28. There is no such thing  as multitasking.* * For cognitive tasks. 28
  29. The Myth of Multi‐tasking• It’s not possible to do two conscious activities at  once.• You are “switch‐tasking.”• David Meyer – University of Michigan – Engineers switched between projects 5‐8 times per  day – Each switch added 20 minutes of process time – If switch only 5x per day, adds 1.7 hrs per day or 407  hours (10 weeks) of process time per engineer – In company w/ 15 engineers = 3 FTEs* worth of labor. * FTE = Full Time Equivalent 29
  30. A Key to Apple’s Success?“…saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.” — Steve Jobs 30
  31. Round 1 Task 1: Lack of focus causes chaos Task 2: 1   2   3   4   5   6   7   8   9   10   11  12 13 14 15 16 17 18 19 20 21 22Round 1 – Letter, number, letter, number: L, 1, A, 2, C, 3, etc.__________________________________________________________________________________________________ 31
  32. Round 2 Task 1: Lack of focus causes chaos Task 2: 1   2   3   4   5   6   7   8   9   10   11  12 13 14 15 16 17 18 19 20 21 22 Round 2 – full sentence, followed by numbers 1‐22.__________________________________________________________________________________________________ 32
  33. The Countermeasure: Strategy Deployment Aka Hoshin kanri; policy deployment  Hoshin – Direction; compass; shining needle  Kanri – Management Two key parts: Creating the plan itself &  and fanatic management to that plan. Purpose: Organizational focus &  alignment  Aligns everyone toward a few high impact  objectives while also keeping them  accountable for their commitments through  visual management and review. 33
  34. Strategy Deployment Key Feature:  CatchballWhat?How? Executive Who? TeamWhen? What? How? Senior  Who? Mgmt When? What? How? Middle  Who? Mgmt When? What? How? Frontlines Who? When? 34
  35. Improve Productivity through Greater Focus Productivity (Pounds Produced / Hr Worked)115.0 Pactiv108.0 Implements Strategy 105.9 Deployment101.0 95.2 94.0 93.0 90.6 87.0 86.3 84.8 80.0 FY 06 FY 07 FY 08 FY 09 FY 10 YTD 11 35
  36. Activity: Achieving Focus  List Potential Projects Lean Mindsets & Behaviors Achieving Focus: Project Prioritization Project / Priority 36
  37. “Hoshin‐Lite” Annual Work PlanPRE ‐ Gain clarity around overarching business needs.1. List everything you could do (and that you are doing and  you plan to do).2. Categorize into: – Must‐do, can’t fail – Maybe – Eliminate – Delay (next fiscal year)3. Decide what you will do; gain consensus.4. Prioritize and create plan.POST ‐ Manage plan via weekly updates (may be able to reduce to monthly reviews – but be careful!). 37
  38. Achieving Focus Categorize project list Lean Mindsets & Behaviors Achieving Focus: Project Prioritization Project / Priority Must Do Eliminate Delay MaybeProject A XProject B XProject C XProject D XProject E XProject F XProject G XProject H XProject I X 38
  39. To create new ideas is a gift, but to choose wisely is a skill. ‐ Ryan Morgan 39
  40. Achieving FocusMove “Maybe’s” into Other Categories Lean Mindsets & Behaviors Achieving Focus: Project Prioritization Project / Priority Must Do Eliminate Delay Maybe Project A X Project B X Project C X Project D X Project E X Project F X Project G X Project H X Project I X 40
  41. Label Four Flip Chart Pages & Hang on Wall Must do Maybe1. List what you could do on  3x6” post‐its (active or  planned initiatives,  projects & improvement  activities). Gain consensus.2. Categorize them (place  post‐it on appropriate  page. Gain consensus. Delay Eliminate3. Decide what you will do.  (Move “maybe’s” onto one  of the other three pages.)  Gain consensus. 41
  42. Must do Maybe Step 4 Prioritize must‐do’s; Create Plan Delay Eliminate 42
  43. PACE Improvement Prioritization Grid 9 22 17 23 8 3 21 Easy 10 4 13 5 15Ease of Implementation 20 14 19 1 16 7 6 2 11 18 12 Difficult Low High Anticipated Benefit 43
  44. Achieving Focus Prioritize Must‐Do’s EasyEase of Implementation Difficult Low High Anticipated Benefit 44
  45. Annual Improvement Plan Company ABC Priorities FY 2012 FY 2013 Exec  Tactical  Priority Others Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Owner Owner MS‐2  MS‐1 Integrate DHR Begin Acct Brad P Ops Complete Complete New  Travel Program  Begin Complete Scott R Fred S Roll‐outRoll‐out Tablets to  Begin &  Brad P Installation Complete Lisa D,  Complete 360  Marina, Begin Complete Justin C Steve R Roll‐out SM, Tech, Hal, Doug Create Line‐item  Begin Complete Lisa B Mark C P.O.s Refinance credit  Begin Scott R facility Complete ADP  Begin Complete Gary O Roll‐out Not Develop & Roll‐out  MS‐1 MS‐2 MS‐3 Begin complete  Steve C TBD Handheld 2.2 Clean Code Pilot Go live until 2013 Complete GPS  RDs Cons.,  Begin Complete Steve C Roll‐out HR, FleetComplete "River"  (One Soft)  Begin Complete Lisa B Roll‐out Develop Safety  Begin Complete Gary O Program 45
  46. Annual Improvement PlanTier 1 Priority: Executive Owner: Date Created:Tier 2 Priority: Tactical Owner:Background/Scope: Next Review:Measurable Objective(s):Core work team: Input/Review needed by:Relationship to Annual Business Goal(s): Timeline Status = Original Plan X = Complete %  (Red,  Due  Complete Yellow,  2012 Date Green) # Action Item Owner Deliverable Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1 2 3 4 5 6 7 8 91011121314151617181920 46
  47. Frequent Status Meetings Assure Ongoing Alignment & Distraction Avoidance 47
  48. Sporting Goods Manufacturer Product Launches Per Year80 737060 No additional  resources; 50 higher quality 40 products  launched30 242010 0 Pre‐Focus Post‐Focus 48
  49. Rockwell Automation25 2020 Projects15 Started 12 1210 Projects 5 Completed 3 0 Pre‐Focus Post‐Focus 49
  50. Avoiding the Shiny Ball Syndrome  (Organizational ADD) Requires…• Clarity – about what really  matters & organizational  direction.• Consensus – about how best  to get there.• Courage – to actively choose  to “not do” or “not do now.”• Commitment – to stick with  the plan. From The Outstanding Organization, Karen Martin 50
  51. 51 Resilience AgilityBusiness Results Innovation Continuous  Improvement Problem Solving
  52. Greatness results fromDisciplined people engaged in disciplined  thinking that leads to disciplined action. — Jim Collins, Good to Great 52
  53. Building Mastery Requires Deliberate Practice 53
  54. How much deliberate practice?10,000 hours Tied deliberate practice  (10 Years) to myelin development  54
  55. Practice vs. Performance Perform  Train 99%100% 90%90%80%70%60% Train50% Perform40%30% Perform 20% 10% Train 1%10% 0% Athletes Businesses Jim Loehr & Tony Schwartz,               The Power of Full Engagement 55
  56. Building Mastery© 2012 Karen Martin & Associates, LLC 56
  57. MASTERY 57
  58. Discipline is Needed…• Planning• Decision making• Executing• Problem Solving & Improving• Managing processes 58
  59. “It takes a different kind of thinking to solve a problem than the kind of thinking  that produced the problem.” — Albert Einstein 59
  60. “Most people spend more time and  energy going around problems          than in trying to solve them. ” — Henry Ford 60
  61. The Scientific Method for Problem Solving         and Improving 61
  62. Clarifying the PDSA Cycle Phase Detailed Steps New    1.  Define and break down the  problem. Problem50‐80%    2.  Grasp the current condition. of the  Develop  Plan   3.  Set a target condition. total  Hypothesis   4.  Conduct root cause & gap analysis. time Continuous    5.  Identify potential countermeasures. Improvement   6.  Develop & test countermeasure(s) Conduct  Do   7.  Refine and finalize countermeasure(s). Experiment   8.  Implement countermeasure(s). Evaluate  Study   9.  Measure process performance. Results 10. Refine, standardize, & stabilize the process. Refine  Adjust Standardize  11. Monitor process performance. Stabilize 12.  Reflect & share learning. 62
  63. Developing PDSA CapabilitiesComplex • A3 Management • Kaizen EventsSimple • Daily Kaizen 63
  64. Group Discussion• How many of you are familiar with A3  Management?• How many of you have a disciplined A3  development program across your organization  (including coach development)?• If it’s a good idea, why aren’t more  organizations doing it?• What can you do about it? 64
  65. Discipline is Needed…• Planning• Decision making• Executing• Problem Solving & Improving• Managing Processes 65
  66. Every key process… Clearly documented 2‐5 Key Performance Indicators Continually   monitored & improved 66
  67. How are you performing? Gray – Highest industry quality scores Purple – Median industry quality scores Blue – Our quality scores 67
  68. Value Stream Maps: Gaining Clarity around Process Performance
  69. Processes MUST be Clearly Documented,  Monitored & Improved Current State Metrics-Based Process Map PT Units Process Details Mapping Team Seconds Hours Process Name Order Fulfillment Dianne OShea Ryan Austin Minutes Days Specific Conditions Domestic orders through sales force Sean Michaels Mary Townsend LT Units Occurrences per Year 37,500 Sam Parks Seconds Hours Hours Worked per Day 8 Paul Dampier Minutes Days Date Mapped 26-Nov-07 Michael Prichard Step # ? 6 7 8 9 Function / Department Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LTCustomer Notify customer Fax PO toSales Rep Approve PO 15 240 100% 5 20 100% when they can 15 300 95% Account Manager expect delivery Review andAccount Manager approve PO; send 5 240 100% to Order Entry Enter order intoOrder Entry 10 240 SAPFinance / Credit 69
  70. We need to shift our focus from managing people to managing processes. 70
  71. Non‐standard Processes Yield Inconsistent Results R1 R2 Inconsistent People R3 Results R4 Inconsistent Processes Standard Processes Yield Predictable Results DesiredPeople Results Standardized  Processes 71
  72. Process Ownership: Working On The Business• All processes MUST have a process owner. – Closer than farther from the work. – Recognized as having the authority to lead  improvement.• Accountable for process performance. – Frequent measurement and review. – Lead/organize cross‐functional problem solving. 72
  73. Don’t Look Away. Ever. 73
  74. Before improving a process, understand – really understand – how it is being performed today. 74
  75. Traditional Mapping Method: Process Flow Chart How long does the process take?  How well is the process performing?  Where are the problems? 75
  76. The Genesis of MBPM Second EditionAugust 2008 October 2012 76
  77. What is Metrics‐Based Process Mapping (MBPM)?• A visual process analysis tool, which integrates: – Functional orientation of traditional swim lane           process maps – Key Lean metrics: • Lead Time • Process Time • Quality (Percent Complete and Accurate) 77
  78. Metrics‐Based Process Mapping (MBPM)
  79. Why Create an MBPM?• To map admin / office processes• Understand the steps, disconnects, waste, and  delays – at a micro level• Measure process performance in terms of: – Time (lead time and process time) – Quality• Visualizes the steps and flow• Use as standard work for training and process  monitoring 79
  80. Typical Current State Findings Islands of value‐adding activities. Shift the focus to the NVA elements. ReworkFirst Step Last Step Adding Value Lead Time 80
  81. MBPM Results % Process Before After ImprovementNew Hire LT = 25.75 days LT = 17.5 days 32%LogisticsPurchase LT = 21 days LT = 8 days 62%RequisitionSales Order PT = 2.7 hours PT = 1.3 hours 52%ChangeSupplies 17 steps 11 steps 35%replenishmentProduct Demo %C&A = 2% %C&A = 20% 900% 81
  82. MBPM – Getting Started• Define a clear scope – narrow and deep – Define the first and last steps for the process to be improved – Lay out the specific conditions for the process to be mapped Metrics-Based Process Mapping Charter Improvement Scope Leadership Mapping Schedule Value Stream Executive Date(s) Process Name Sponsor Specific Start/End Process Owner Conditions Times Customer Demand Facilitator Location Trigger First Step Mapping Team Food Last Step Lead Provided Boundaries & Briefing Limitations Dates/Times Required Briefing Attendees FS Implementation Logistics Timeframe Coordinator Improvement Drivers / Current State Issues Mapping Team 1 Function Name 2 1 3 2 4 3 5 4 Improvement Goals & Measurable Objectives 5 1 6 2 7 3 8 4 9 5 10 Potential Deliverables On-Call Support 1 Function Name Contact Information 2 1 3 2 4 3 5 4 Possible Obstacles Approvals 1 Executive Sponsor Value Stream Champion Facilitator 2 3 Signature: Signature: Signature: 4 Date: Date: Date: 82
  83. Scope: Refining the Focus Units Domestic Consumables Warranty Service Parts Order  Non‐Fulfillment Warranty Units International Consumables Warranty Service Parts Non‐ Warranty 83
  84. MBPM – Getting Started (continued)• Select the team (most effective within a kaizen  event) – Highly cross‐functional – workers, upstream suppliers,  downstream customers, outside eyes, etc. • Those who currently do the job – No more than 10 individuals – Don’t avoid the “difficult” people – Include “outside eyes” if possible• Use a skilled, objective facilitator• Have a room with (long) wall space for 36” wide  butcher paper• Map on consecutive days 84
  85. Steps in Creating the Current State MBPM1. Label the map (process, date, team or facilitator)2. List the functions involved3. Document all activities / steps4. Review the map for completeness5. Number the activities6. Add activity‐specific information (metrics, etc.)7. Determine the timeline critical path8. Create the timeline9. Calculate the summary metrics10. Identify value‐adding (VA) and necessary non‐value‐adding  (N) activities 85
  86. Documenting the Current StateStep 1 – Label the map in the upper right hand  corner. – Include process name, conditions mapped, date,  and facilitator name and/or team members. 86
  87. Document the Current StateStep 2 – Label the swim lanes with the functions  involved. – Include external functions, if appropriate (e.g.  customers, suppliers/contractors, etc.) – Sequence in which functions are listed is not  important 87
  88. Document the Current StateStep 3 – Document all activities/steps on 3” x 6”  post‐its.  Don’t include metrics yet! – Use verb/noun format; clear and concise – Include function. – Separate tasks that have different quality outputs  or timeframes; combine tasks otherwise. – Place post‐its in appropriate swim lane,  sequentially. 88
  89. Document Each Activity Activity               (Verb / Noun) Function that  performs the  task Best to use 3 x 6” Post‐its 89
  90. Step Step Concurrent  1 2 Activities Ticking clock  90
  91. Document the Current StateStep 4 – Review map for completeness  (someone other than the facilitator) – Walk through the map, reading aloud. – Verify sequence – Add missing steps and barriers to flow (“flow‐ stoppers”) if any. 91
  92. Document the Current StateStep 5 ‐ Number the activities – Number the activities sequentially from left to right. – For parallel (concurrent) activities, add “A,” “B,” etc. • Example: Step 8A, Step 8B, etc. – Don’t number the post‐its until the map is “final.” 92
  93. Document the Current StateStep 6 – Add activity‐specific information – LT – Lead time – PT – Process time – %C&A – Percent Complete & Accurate – Number of people who perform the work – Barriers to flow • Batches • Equipment downtime • Shared resources, etc. 93
  94. Key Metrics: Time• Process time (PT) – The time it takes to actually perform the work to  complete one item, if it could be worked on  uninterrupted.• Lead time (LT) – The elapsed time from when work is available to be  worked on until it’s completed and made available to  the next person or department in the process 94
  95. Key Metrics:  Quality• %Complete and Accurate (%C&A) – % of the time the downstream customer can  perform task without having to “CAC”: • Correct information or material that was  supplied • Add missing information that should have been  supplied • Clarify information provided that should have  been clear 95
  96. Add Activity‐Specific Information Additional Information # Staff   (if relevant) Barriers to flow  (if relevant)% Complete &  PT Accurate LT 96
  97. Adding Metrics:  Tips• LT, PT and %C&A are typically acquired via  interviews – ask high‐quality questions.• Usually looking for the “typical” LT and PT;  what happens 80% of the time?• Select units of measure that are easiest to  comprehend (e.g. 6 hours instead of 360  minutes).• PT is the time required to complete one “thing”• If your LT is 4 hours, don’t debate a PT of 5 vs.  7 minutes. 97
  98. Adding Metrics: Tips (continued)• May be OK to group the LT for a series of  activities performed by the same function  (rather than each individual step). • Place %C&A value on the post‐it of the source  step. – If %C&A issues are identified by multiple  downstream customers, record each of the  %C&As on the Post‐it of the source step (can also  indicate on the Post‐it which step reported the  problem).  – 0% C&A is not uncommon 98
  99. Barriers to Flow• Look at the process from “the thing’s”  perspective• Identify issues that prevent one‐piece‐flow of  the work – Batching / periodic processing – Rework – Bottlenecks – Handoffs – Inventory – Setup / changeover – Physical layout 99
  100. Document the Current StateStep 7 – Determine the “timeline critical  path” of the process – For parallel activities: • Don’t include “dead end activities” – Steps / path which don’t move the process forward  (e.g. filing a document) • If both paths are required to move forward,  select the path with the longest total lead time 100
  101. Timeline Critical PathCritical  Path 101
  102. Document the Current State Step 8 – Create the timeline – Bring down the PT & LT from the critical path steps.Timeline 102
  103. Document the Current StateStep 9 ‐ Calculate Summary Metrics – Critical Path PT – Critical Path LT – Activity Ratio (AR) – Rolled Percent Complete and Accurate  (R%C&A) – Total PT – Labor Requirements – Number of Activities 103
  104. Summary Metrics: Time• Timeline Critical Path PT – Quantifies how much of the response time (LT) is  spent actually working on the “thing”• Timeline Critical Path LT – Measures speed of delivery to customer & an  indicator of cash flow• Activity Ratio (AR) – The percentage of time work is being done to the  patient/item/data passing through the process – AR = (Σ PT ÷ Σ LT) × 100 – 100 – AR = Idle time 104
  105. Summary Metrics: Quality• Rolled Percent Complete and Accurate  (R%C&A) =  – %C&A × %C&A × %C&A × …  – Out of 100 occurrences, the number of times the  data/material/people pass through the entire  process with no rework required (expressed as a  percentage). 105
  106. Summary Metrics: Labor Requirements• Total PT – Sum of all activities, not just critical path – Factor in determining labor requirements• # FTEs* Required (Total Labor Effort) # FTEs  Total PT (in hrs) X # occurrences/year Required = Available work hrs/year * FTE = Full‐time Equivalent (2 half time employees = 1 FTE) 106
  107. Summary Metrics: Labor Effort• Total PT – Sum of all activities, not just timeline• Labor Effort Time = Total PT (in hrs) x # occurrences/year Total PT (in hrs) x # occurrences/year # FTEs* = Available work hrs/year/employee** Freed  = Current State FTEs – Future State FTEs Capacity * FTE = Full‐time Equivalent (2 half time employees = 1 FTE) ** Available work hrs/year = 2,080 ‐ paid holidays and vacations 107
  108. Documenting the Current StateStep 10 – Identify Value‐adding (VA) & Necessary Non‐value‐adding (N) activities – Use small post‐its in different colors to  differentiate VA and N – Monitor time allowed for debate – Unlabelled activities = waste 108
  109. Value‐adding activity Necessary non‐value‐adding activities
  110. Metrics‐Based Process  Mapping (MBPM)  Simulation Order Fulfillment Process: Demand = 2,500 orders per yearAvailable work hours per employee per year = 1,800 110
  111. Create the Current State MBPM Phase I1. Label the map in upper right corner. • Process name, date, facilitator and/or team members2. List the functions involved in left column.3. Document all activities/steps. No metrics yet! • Verb/noun; concise language; include function as well.4. Review the map for completeness.5. Number the activities.  One number per column; concurrent activities are labeled A, B, C, etc.6. Add activity‐specific metrics (PT, LT, %C&A). (We are not  considering number of workers and barriers to flow in  this simulation.) 111
  112. Create the Current State MBPM Phase II7.   Define the critical timeline path. • Longest LT unless “dead‐end” step; use colored marker8.   Create the timeline.9.   Calculate the summary metrics • CP PT Sum, CP LT Sum, AR, R%C&A, Total PT, Labor Required10. Identify the VA and necessary NVA activities • Use small colored post‐it labeled with “VA” and “N.”11. Circle the step‐specific metrics that indicate the greatest  opportunity for improvement. • Use red marker. • Long LTs, low %C&As, high PTs, low step‐specific ARs 112
  113. Document Summary Metrics Projected Projected % Metric Current State Future State ImprovementTimelineCritical Path PTTimelineCritical Path LTActivity RatioRolled %C&ATotalProcess TimeFreed capacity
  114. Future State Design • Goals – Reduce overall LT & PT – Improve quality (increase RFPY) – Increase % activity – Improve LT, PT, and %C&A at individual steps • May need to perform root cause analysis before  determining countermeasures to realize the future  state • Mapping steps – Clean sheet or modify current state map – Same steps as current state – Calculate projected metrics114
  115. Future State Design Considerations• Eliminate steps / handoffs • Eliminate motion & • Combine steps transportation• Create parallel paths • Standardize work• Alter task sequencing and/or  • Eliminate unnecessary  timing approvals / authorizations• Implement pull • Stop performing non‐value • Reduce / eliminate batches adding (NVA) tasks• Improve quality • Co‐locate functions based  on flow; create cells • Create an organized, visual  (teams of cross‐functional  workplace staff)• Reduce changeover • Balance work to meet takt time requirements 115
  116. 116 Resilience AgilityBusiness Results Innovation Continuous  Improvement Problem Solving
  117. Energy Crisis: Widespread Disengagement 11 7
  118. Engagement Drivers: The Three C’s  Connection Creativity Control 118
  119. Engagement Drivers• Connection ‐ to mission, annual goals,  immediate supervisor, people within the  organization, customers.• Control – heavy involvement in decisions that  influence their work life.• Creativity – Full use of talents, capacities,  potentialities, and skills 119
  120. It’s disrespectful to…1. Not engage employees in work design and  improvement.2. First blame people instead of systems and processes.3. Not help employees develop skills.4. Not coach employees through problem solving – on an  ongoing basis.5. Have poorly designed processes which inhibit  performance.6. Fail to create and clearly communicate organizational  goals and priorities.7. Lack honesty and omit relevant information. 120
  121. Group Activity – Driving Engagement• Three groups: – Connection – Control – Creativity• Each group:  – Identify activities and practices within your  organization that engage or disengage employees in  that area.• Report out 121
  122. Activity: Engage or Disengage? Engage DisengageConnectionControlCreativity 122
  123. Reducing Self‐Inflicted Chaos:  Where Should You Start? 123
  124. Places to Start…1. Develop an intolerance for ambiguity.2. Prioritize your work; reduce the number of  active projects at once.3. Ban electronic devices from meetings.4. Adopt a problem‐solving methodology and  deploy it broadly; get a coach!5. Document, standardize and improve all major  processes with significant involvement of the  workers themselves.6. Identify process owners and KPIs for each. 124
  125. Group Activity – Closing the Gap• Go back to your “weakest corner” (Clarity, Focus,  Discipline or Engagement) – List the lean practices/methods/tools that can be used  to improve your organizations’ behaviors – Report out to the class• Next, look at your “self‐assessment” notecard,  select one of your organization’s weakest areas,  and begin creating a plan for how to start moving  the needle (what’s the problem, what are  potential root causes, what are potential  countermeasures, who needs to be involved, etc.)  125
  126. As Outstanding as They Come… Discipline 12 6
  127. Mike Osterling, President Karen Martin, Principal 4320 Woodland Drive 7770 Regents Road #635 La Mesa, CA 91941 San Diego, CA 92122 619.572.3632 858.677.6799 mike@mosterling.com ksm@ksmartin.com Twitter: @karenmartinopex Subscribe: www.ksmartin.com/subscribe 127
  128. Our Books October 2012 Just released Contributing Author 128

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