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Shingo Prize for Operational Excellence


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Shingo process, history, initiation, rewards, and assessment criteria. All rights reserved to Shingo Institute.

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Shingo Prize for Operational Excellence

  1. 1. This presentation is intended to present the Shingo process only for learning purposes. Most of information are obtained from Shingo Institute and Shingo official references. Some images, illustrations, and explanations are added to make the presentation look nice and attractive. Shingo Prize is a long learning journey that any company should strive for it. All rights reserved to Shingo Institute, Uta University, Logan, Uta, USA.
  2. 2. The Shingo Prize for Operational Excellence is an annual award given to organizations worldwide by the Shingo Institute, part of the Jon M. Huntsman School of Business at Utah State University in Logan, Utah. In order to be selected as a recipient of the Shingo Prize, an organization "challenges" or applies for the award by first submitting an achievement report that provides data about recent business improvements and accomplishments and then undergoing an onsite audit performed by Shingo Institute examiners. Organizations are scored relative to how closely their culture matches the ideal as defined by the Shingo Institute. Those meeting the criteria are awarded the Shingo Prize. Other awards include the Shingo Silver Medallion, the Shingo Bronze Medallion and the Research and Professional Publication Award. What is Shingo Prize?
  3. 3. Beginnings: 1988 – 2000 In 1988, Utah State University conferred an honorary doctorate to Shigeo Shingo, a Japanese industrial engineer and author credited for his contribution to many of the elements, theories and tools associated with the Toyota Production System.That same year, Utah State University established what was then called the Shingo Prize for Excellence in Manufacturing in his honor. History and Origination Shigeo Shingo
  4. 4. About Dr Shigeo Shingo: Dr. Shigeo Shingo along with Frederick Taylor, Henry Ford andTaiichi Ohno are probably the four greatest manufacturing minds in the last 100 years. Dr. Shingo was born in 1909 in Saga City, Japan, graduated from SagaTechnical High School and earned a degree in Mechanical Engineering fromYamanashiTechnical College and received an honorary doctorate degree from Utah State University. He taught over 3000Toyota engineers in the principles stated in this new book Kaizen and the Art of Creative Thinking —The ScientificThinking Mechanism. Dr. Shingo authored over 20 books, six in English:
  5. 5. Shingo Prize The Shingo Prize for Excellence in Manufacturing was first only awarded to organizations within the United States. By 1994, however, Ford Electronics in Markham, Ontario, became the first Canadian organization to receive the award. By 1997, the award was given to the first Mexican organization, Industries CYDSA Bayer. In 2000, BusinessWeek referred to the Shingo Prize as the "Nobel Prize for manufacturing."
  6. 6. In 2008, Utah State University changed the name of the award to the Shingo Prize for Operational Excellence in order to reflect altered criteria that made the award available to organizations from all industries, not exclusively manufacturing.The focus of the award was also shifted away from recognizing the use of lean manufacturing tools to recognizing the overall organizational culture.This was in response to growing concern about the validity of what the Shingo Prize was supposed to signify about its recipients. Evolution of Shingo prize
  7. 7. Shingo PrizeToday ▪ With a change in scoring criteria in 2008, the average number of organizations receiving the Shingo Prize each year decreased from 11 to 2. ▪ It’s a high challenged mission for organizations to achieve Shingo prize.
  8. 8. Shingo Awards Shingo Prize for Operational Excellence according to the Shingo Institute, the Shingo Prize "is the world’s highest standard for operational excellence" and "a worldwide recognized symbol of an organization's successful establishment of a culture anchored on principles of enterprise excellence. "These principles are found as part of the Shingo Model.
  9. 9. ✓ Shingo Silver Medallion The Shingo Silver Medallion is awarded to "those [organizations that are] maturing on the journey [to excellence] with primarily a tool and system focus." ✓ Shingo Bronze Medallion The Shingo Bronze Medallion is awarded to "those [organizations] in the earlier stages of cultural transformation with primarily a tools focus. ✓ Shingo Research and Professional Publication Award The Research and Professional Publication Award is awarded to authors and researchers that advance "new knowledge and understanding of lean and operational excellence.Awards are given in four categories: (1) books (monographs), (2) published articles, (3) case studies and (4) applied publications/multimedia programs.
  10. 10. Shingo Assessment Criteria: Application & Guidelines
  11. 11. The Shingo Prize is awarded to organizations that demonstrate a culture where principles of operational excellence are deeply embedded into the thinking and behavior of all leaders, managers and associates. Performance is measured both in terms of business results and the degree to which business, management, improvement and work systems are driving appropriate and ideal behavior at all levels.
  12. 12. Leadership is strongly focused on ensuring that principles of operational excellence are deeply imbedded into the culture and regularly assessed for improvement.
  13. 13. Associates are taking responsibility for improving not only their work systems but also other systems within their value stream. Managers are focused on continuously improving systems to drive behavior that is closely aligned with the principles of operational excellence.
  14. 14. The Shingo Silver Medallion is awarded to organizations who demonstrate strong use of tools and techniques, have mature systems that drive improvement, and are beginning to align thinking and organizational behavior with correct principles of operational excellence. The Shingo Bronze Medallion is awarded to organizations that demonstrate strong use of tools and techniques for business improvement and are working to develop effective systems to create continuity and consistency of tools applied throughout the business entity.
  15. 15. 2. Achievement Report 3. SCOPE 4. SiteVisit Shingo Award 1.Application Form Eligible Recommendation for improvement Ineligible Advises & recommen dations Eligible Ineligible Accepted
  16. 16. The cultural assessment is broken into three distinct evaluation sections: 1. The achievement report, 2. The Shingo Cultural Online Performance Evaluation (SCOPE) 3. The site visit. The achievement report covers each dimension of the model and discusses the principles, systems and tools that are evident and the results they have produced.The achievement report, along with the SCOPE survey, is used by members of the Shingo Board of Examiners to evaluate an applicant’s eligibility to be awarded a site visit.
  17. 17. SCOPE will be administered to each applying entity.All data received from SCOPE will populate a Shingo database and be used to provide feedback to the applicant. Feedback from SCOPE will be part of a packet, which will be provided to each applicant regardless of whether or not they are awarded a site visit.
  18. 18. Site visits are conducted by a team of examiners that have been trained and selected by the Shingo Institute.The team spends two days at the site evaluating the culture of the applicant; duration of a site visit may be extended depending on the application. Examiners observe behaviors, review documentation and measures and ask questions of all levels and business systems of the applying entity. Examiners are provided all evaluation resources available that pertain to an applicant.
  19. 19. This robust assessment process is used for all entities applying for the Shingo Prize. It is the most rigorous cultural assessment available because it combines documentation in the achievement report along with two sources of direct observation, the SCOPE survey, and the site visit (actual reality).
  20. 20. Model Dimensions Cultural Enables (250 pts) Continuous Process Improvement (350 pts) Enterprise Alignment (200 pts) Results (200 pts) D1 D2 D3 D4
  21. 21. Guiding Principles • Lead with Humility • Respect Every Individual Supporting Concepts • Assure a Safe Environment • Develop People • Empower and Involve Everyone Systems • Individual development • On-the-job training/training within industry • Standard daily management • Leadership development • Idea sharing • Suggestion and involvement • Reward and recognition • Communication • Environmental, health and safety • Education/training • Community involvement • Recruitment and succession planning • Accountability 1. Cultural Enables Tools: • Arrangements with educational institutions • Personal development plans • Lean training curriculum and materials • Meetings • Suggestion forms and measures • Community open house • Fundraisers
  22. 22. Improvement Kata A part of personnel development and Lean Training
  23. 23. New Routine Forming New Habits Behavior Change New Way of Doing Things Culture Change Can be Routinely DoneThrough Forming New Habits
  24. 24. Survey Questions Is on-the-job coaching in lean practices a daily part of the culture? Is formal lean training and education ongoing and updated? Is there a process flow where suggestions are processed quickly and feedback is received by the originator? 4. Is the organization a safe and clean workplace where safety and environmental standards are continually improving? 5. Does the recognition system focus on performance that encourages ideal behavior; and is it frequent, timely and specific?
  25. 25. Guiding Principles • Focus on Process • Embrace Scientific Thinking • Flow and PullValue • Assure Quality at the Source • Seek Perfection Supporting Concepts • Stabilize processes • Rely on data and fact • Standardize processes • Insist on direct observation • Focus on value stream • Keep it simple and visual • Identify and eliminate waste • No defects passed forward • Integrate improvement with work Systems • Voice of the customer • Problem-solving (A3 Thinking, PDCA, • DMAIC) • Value stream analysis • Total productive maintenance (TPM) • Visual management Tools: • Customer surveys • Standard operating procedures (SOP) • Tools of quality (i.e. pareto charts, storyboarding, cause-and-effect diagrams, 5-whys, or similar problem-solving techniques) • Benchmarking visit • Right-sized equipment and facilities • Production control boards • Red tags • Floor tape 2. Continuous Process Improvement
  26. 26. Systems • 5S methodology • Supplier development • Continuous improvement methodology • Production Process Preparation (3P) • Quick changeover or setup reductions (SMED) • Error proofing/zero defects • New market development and current market exploitation • Quality function deployment, concurrent engineering, etc. for product development • Theory of constraints – managing bottlenecks • Systems that make the customer/supplier linkage visible throughout all stages of the process and encourage/require regular communication • Design for manufacturability, testing, maintenance, assembly — i.e. making it simpler and easier to deliver best quality and quickest, most reliable response to the customer at the lowest cost • Involve suppliers and customers in product/ service design and continuous improvement • Direct observation (go and see) and databased decisions and actions • Cellular design/layout •Variety reduction
  27. 27. Example Tools: 5S, Visual Management & Red Tags
  28. 28. Plan each step and understand the outcome expected at each point. Do the task as planned. Check that is the outcome is as expected “Audit”. Act –find out what is going wrong .Then repeat the cycle. Plan what you are going to do to put it right. Do make the corrections.Then continue the rest of the cycle, repeat the loop as necessary. Plan-Do-Check-Act. PDCA Cycle. Continuous Improvement Problems Solving Process: 1. Define the problem. (Plan) 2. Breakdown the problem into manageable pieces. (Plan) 3. Identify the root causes. (Plan) 4. Set the targets. (Plan) 5. Provide countermeasures & select proper solution. (Plan) 6. Implement the solution. (Do) 7. Check the outcomes and the impact. (Check) 8. Define what went wrong, repeat the cycle, adjust, and standardize. (Act)
  29. 29. Survey Questions 1. Is the current state and future state an ongoing continuous cycle that is actively pursued with a visual, detailed action plan and timeline? 2.Are standards and work instructions simple and visual for all work processes? Are they updated with improvements routinely? Are they followed with regard to timing and sequence? 3.Are managers and supervisors routinely observing the actual process in order to gather factual data to understand the problems and opportunities? 4.Are improvements made by following a scientific method, PDCA, DMAIC,A3 thinking, etc.? Is there a coaching process in place for problem-solving?Are problems being addressed at the lowest possible level of the organization? 5.Are problems, defects and abnormal conditions signaled and stopped immediately at the point of occurrence and the root cause pursued?
  30. 30. Guiding Principles • Create Constancy of Purpose • Think Systemically Supporting Concepts • See reality • Focus on long-term • Align systems • Align strategy • Standardize daily management Systems • Strategy deployment • Daily management • Assessment • Communication • Customer relationship management (CRM) • Information technology • Accounting/finance • Measurement/scorecard • Reporting/accountability Tools: • Daily management standard work sheets • Surveys • Meetings/Huddles • X-Matrix • Mission statement • Vision statement • Goals • Values • Business models 3. Enterprise Alignment
  31. 31. Example tool: X-Matrix Source:
  32. 32. Source:
  33. 33. Source:
  34. 34. Source:
  35. 35. Source:
  36. 36. Daily Management ✓ Management by Walk (Gemba) ✓ Daily problems solving (meetings and huddles) ✓ Standardization &Visualization to surface problems ✓ Motivating the workforce
  37. 37. Survey Questions 1. Is there a structured process for aligning goals and strategic priorities that is simple and visible at all levels of the organization? 2. Do leaders hold to the guiding principles through hard times? 3.Are support functions seamlessly integrated to aid operations in creating value (process based versus silo culture)? 4. Do information systems provide direct flow of pertinent information that is easily accessible and usable across the extended enterprise (no shadow systems or spreadsheets)? 5. Do leaders and managers have a standard work process that enables them to monitor and maintain company alignment?
  38. 38. Guiding Principles • CreateValue for the Customer Supporting Concepts • Measure what matters • Align behaviors with performance • Identify cause-and-effect relationships Systems •Voice of the customer • Strategy deployment • Communications •Visual management • Management reporting Tools: • Huddles • Control boards • Score cards • All employee meetings • Surveys 4. Results
  39. 39. Survey Questions 1.Are measures simple? Is there is a common understanding of what is measured and why it is measured? Are measures directly tied to the organization’s overall objective? 2.Are measures used to drive improvements? 3. Do performance measures drive the right behaviors? 4.Are tracking boards used routinely for open discussion and feedback so that adjustments can be made, and at what level? 5.Are principles, systems and tools aligned in such a way that guiding principles help align the systems to select appropriate tools to achieve performance targets?
  40. 40. 4. Results Measurements 4.1. Quality Quality to the customer (defect-free deliver). Unplanned scrap rate Overall cost of quality Customer returns Warranty costs Process variation measures Finished product first pass (Re work %) 4.3. Delivery On-time delivery Total lead time (from customer order till delivering the product). Process cycle time (into the process output). Miss-shipments Backorders rate Reorder rate 4.2. Cost/ Productivity Cash flow turns (of what is produced) Cost per unit Labor hr per unit Inventory turns Labor productivity Asset productivity Resources utilization Return on investment ROI Revenue per employee hour Maintenance profile 4.4. Safety/ Environment/ Morale No of ideas per employees and degree of implementing them Near miss Emissions Energy consumption Utilization at high potential talent 4.5. Customer Satisfaction Market share Customer surveys Customer engagement in product development New contract awards Success of new products
  41. 41. Key Measurements Frequency: How often do we see the behavior? Duration:Are we seeing behavior for the first time? Or have seen it for yrs? Intensity: Is there a sense of passion and importance of behaver? ie. deviate would create a problem? Scope: Do we see the behavior in just a few cells? Or through out the organization? Role: Do we see the appropriate focus on tools and behavior in all levels of organization : leaders, managers and associates? Behavior Assessment
  42. 42. Behavior Assessment Scale Lenses 0-20% 20-40% 40-60% 60-80% 80-100% Role Leaders L1 L2 L3 L4 L5 Managers L1 L2 L3 L4 L5 Associates L1 L2 L3 L4 L5 Frequency Rare Irregular Frequent Consistent Constant Uniform Duration Initiated Experimental Repeatable Established, Stable Culturally Ingrained Mature Intensity Indifferent Individual Commitment Local Commitment Wide Commitment Full Commitment Scope Isolated Silos Operation Multiple Business Processes Enterprise-wide Why it is conducted?To evaluate the entire applying entity to determine the degree to which the principles of operational excellence are deeply embedded into the culture of the entire organization
  43. 43. Measuring Results Assessment Scale Lenses Level 1 0-20% Level 2 20-40% Level 3 40-60% Level 4 60-80% Level 5 80-100% Stability 0-1 yrs 1-2 yrs 2-3 yrs 3-4 yrs 4+ yrs Trend Low, poor and no benchmark Moderate, Benchmarking is industry focus High level of attainment considering world-class Alignment Little alignment Performance measures aligned in operations, some areas are aligned Enterprise wide extend value stream, all measures align to cooperate goals from highest level to lowest level in the organizations Improvement Little, no systematic feedback Regular feedback in some areas, many areas (not all) have a process to set goals Routine feedback, almost all areas have goals that are realistic and business challenge
  44. 44. Year Awarded Level Company Country 2016 Silver Medallion Hospira Limited, a Pfizer Company Dominican Republic 2015 Silver Medallion Commonwealth Bank of Australia Australia 2014 Silver Medallion Rexam Beverage Brazil 2014 Silver Medallion Rexam Healthcare Germany 2012 Bronze State Farm Life Insurance Company USA 2012 Bronze Johnson Controls Lerma Plant Mexico 2009 Shingo Prize Autoliv Airbag Module Facility USA 2008 Shingo Prize Denso Mexico Plant Mexico 2008 Shingo Prize Baxter Healthcare Costa Rica 2005 Shingo Prize Boston Scientific USA Database Past Receptions
  45. 45. Success Case:Abbott Company
  46. 46. My team and I were incredibly proud to hear that Abbott received the award, because we never forget that the work each of us does ultimately affects the people who receive Abbott’s products” Said Kealy the operational manager. “Operational excellence isn’t just a phrase or tagline for us, it is the core of everything we do. Receiving the Shingo award validated not only my effort, but also my team’s efforts, and the efforts of all our teams and employees at the Clonmel site to improve every facet of our jobs every day. Following the Shingo method, we have built on the capabilities that existed at the site, and have strategically invested in employees engagement and development, Our experience of operational excellence is a akin to the best team sport-the end goal is to have everyone working together, in a synchronized effort, to achieve a common purpose.”
  47. 47. Specific achievements at the Abbott site: 1. A triple-digit increase in productivity over the past 7 years 2. A double-digit reduction in product unit cost over the least 7 years 3. The lead time from manufacturing to customer has been reduced significantly in the past 6 years 4. 300 percent increase in process improvement 5. Zero non-conformances in any external regulatory audit for Abbott’s vascular facility in Clonmel in the past 7 years
  48. 48. http://www.shingoprize.orgVisit
  49. 49. Literature References