A review of how to build a strategy for a project and how the IPO-FAT tool can be used for developing that strategy.

1. Section & Lesson #:
Pre-Requisite Lessons:
Complex Tools + Clear Teaching = Powerful Results
Project Strategy Using the IPO-FAT Tool
Introduction – Lesson 9
A review of how to build a strategy for a project and how the IPO-FAT tool
can be used for developing that strategy.
Intro #02 – Introduction to Lean and Six Sigma
Copyright © 2011-2019 by Matthew J. Hansen. All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted by any means
(electronic, mechanical, photographic, photocopying, recording or otherwise) without prior permission in writing by the author and/or publisher.

2. o What does it mean to have a project strategy?
• The project strategy outlines the “plan of attack” for the specific problem of the project.
 The DMAIC methodology is a general guideline that should influence how you attack the project.
 The project strategy consists of the process steps to specifically and logically attack the project’s problem.
o Example 1: Repeat Caller Alert (RCA) Analysis
• Problem: A call center uses the RCA in the system to detect when a customer recently called so
the agent can know if they’re calling for a recurring issue. Does this improve issue resolution (IR)?
• Strategy: Acquire customer satisfaction survey data and answer the following questions:
 1. How often is the RCA “On” (indicating the customer recently called in)?
 2. Is the RCA effective at finding repeat calls? (i.e., Did the customer’s survey confirm it’s a repeat call?)
 3. Is the RCA process effective at improving IR as expected for these verified repeat calls?
o Example 2: Improve Repeat Contact Prevention (RCP) at a Call Center
• Problem: RCP for the call center is 10% pts lower than Enterprise RCP.
• Strategy: Build an equation to find what factors (inputs) are causing the RCP performance gap:
Project Strategy: Introduction
Copyright © 2011-2019 by Matthew J. Hansen. All Rights Reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted by any means (electronic, mechanical, photographic,
photocopying, recording or otherwise) without prior permission in writing by the author and/or publisher.
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RCP Gap =
Process
Steps
+
Process
Execution
+
Customer
Caused
Call Ctr RCP = 50%
Enterprise RCP = 60%
What’s causing this gap?
Are there steps in our process
that don’t prevent repeat calls?
(in our control)
  
Is the Rep’s execution of process
steps not preventing repeat calls?
(in our control)
Is the customer doing something
that requires repeat calls?
(NOT in our control)

3. IPO-FAT Tool: Introduction
o What is the IPO-FAT tool?
• It’s a method of evaluating a business area to identify & prioritize potential opportunities.
• As opposed to a QFD that prioritizes existing, known opportunities, the IPO-FAT method can help
a team identify new/different opportunities that haven’t necessarily been considered.
o When is the IPO-FAT tool used?
• It’s most effective when a business area has several problems with potentially inter-related root
causes and it’s not immediately known what order to target the root causes and problems.
• It can be an effective method for building and communicating the project strategy.
o What is the premise behind the IPO-FAT tool?
• As previously discussed, virtually every area of the business has an INPUT that goes through a
PROESS to create an OUTPUT (a.k.a., “IPO”).
• Each IPO stage is viewed across 3 “FAT” perspectives:
 Flow – How items pass through each IPO stage.
 Accuracy – Effectiveness of each IPO stage.
 Timeliness – Efficiency of each IPO stage.
• The IPO-FAT tool also identifies the
priority for each opportunity
and the Lean and/or Six Sigma
methodology to use.
Copyright © 2011-2019 by Matthew J. Hansen. All Rights Reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted by any means (electronic, mechanical, photographic,
photocopying, recording or otherwise) without prior permission in writing by the author and/or publisher.
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Input
Process
(Efficiency)
Output
(Effectiveness)
Flow
Accuracy
Timeliness

4. IPO-FAT Tool
o Below is the IPO-FAT tool:
• What does the suggested priority (1 to 6) mean?
 The priority suggests what could be the fastest & easiest path for finding & fixing potential opportunities.
 For example, why improve the handle time for items being processed (#6) if you can eliminate some of
them from the incoming volume in the first place (#1)? Doing #1 first will save time when doing #6 later.
• How do you use the tool?
 Review the tool with the team and brainstorm potential opportunities for each cell.
 Validate with the team if the suggested priority (1 to 6) is recommended for their opportunities.
Copyright © 2011-2019 by Matthew J. Hansen. All Rights Reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted by any means (electronic, mechanical, photographic,
photocopying, recording or otherwise) without prior permission in writing by the author and/or publisher.
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Input Process Output
Flow
Accuracy
Timeliness
= Potentially the fastest & easiest path for finding biggest opporutnities to  Preferred Methodology:
= 6 Sigma (Effectiveness)
= Lean (Efficiency)
= Lean &/or 6 Sigma
Incoming Volume
(What opportunities are there
to reduce the incoming volume
from the prior output?)
 Workflow Rhythm
(How can throughput (takt time) be
optimized by evaluating FIFO, batch
processing or schedule balancing?)

Readiness
(How complete or accurate are
the inputs before the process?)
 Quality/Value-Add
(What process steps don't add
value, aren't required or don't
meet policy/specs?)

Arrival/Setup Time
(How much delay between prior output
and current input? How much setup or
lead time is required before process?)
 Handle Time
(How much time to perform
value-added steps in process?)

Production Rate or RTY
(What does takt time or rolled throughput
yield (RTY) reveal about what processes
need improving?)
Defects (DPMO)
(What is the rate of defects, scraps
or First-time-yield (FTY)?)
Turnaround Time (TAT)
(How much time from current
input to current output?)

5. IPO-FAT Tool Example
o Below is an example of how the IPO-FAT tool was used for a project.
• Problem: A back office team was failing in some of its performance goals, yet the team didn’t
know what opportunities to target.
• Strategy: The team’s strategy was as follows:
 1. Identify & explore opportunities using the IPO-FAT tool. (example below)
 2. Pilot and implement improvements to the back office.
 3. Build controls to measure and sustain the improvements.
Copyright © 2011-2019 by Matthew J. Hansen. All Rights Reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted by any means (electronic, mechanical, photographic,
photocopying, recording or otherwise) without prior permission in writing by the author and/or publisher.
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Input Process Output
Incoming Volume
 1. Pending Adj Approvals
 2. Change of Ownership
X 3. Invalid Transfers of Disputes
Workflow Rhythm
X 4. Staffing Levels
Production Rate or RTY
N/A
Readiness
X 5. Fraud (Lost/Stolen)
Quality/Value-Add
N/A
Defects (DPMO)
N/A
Arrival/Setup Time
 6. System Import Delays
Handle Time
N/A
Turnaround Time (TAT)
N/A
Flow
Accuracy
Timeliness
 

 
Preferred Methodology:
= 6 Sigma (Effectiveness)
= Lean (Efficiency)
= Lean &/or 6 Sigma
= Potentially the fastest & easiest path for finding biggest opporutnities to 

6. Practical Application
o Think of a few previous projects you worked on:
• Was a project strategy developed for each one? If so, what was it?
 If any project didn’t have a strategy developed, would it have helped if you had one? If so, how?
o Review those previous projects in light of the 6 prioritized areas of the IPO-FAT tool?
• Were any of those 6 prioritized areas not considered in the project?
 If not, would it have made a difference in the results of the project?
• Did any of the projects follow a different priority than the 6 proposed in the IPO-FAT tool?
 If so, would it have made a difference if the priority posed in the IPO-FAT tool were followed?
Copyright © 2011-2019 by Matthew J. Hansen. All Rights Reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted by any means (electronic, mechanical, photographic,
photocopying, recording or otherwise) without prior permission in writing by the author and/or publisher.
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