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March 3, 2016
Linking Business Strategies to
Quality and Lean Management
Systems (QLMS)
Jd Marhevko
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Moderator
Jennifer Ashkenazy, CPA
Research Development Director
IMA
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Featured Presenter
Jd Marhevko, MBB, CSSBB,
CMQ/OE, CQE, ASQ Fellow
2016 ASQ Shainin Medalist
Vice President
Quality/Lean Management Systems & EHS
Accuride Corporation
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Jd Marhevko’s Biography
8
• Jd Marhevko is currently the VP of Quality, Lean and EHS for Accuride
Corporation. Three (3) Accuride sites have won the prestigious
Manufacturing Excellence Award (in 2014-2015). She has been involved
in Operations and Lean/Six Sigma efforts for almost 30 years across a
variety of industries.
• Jd will be honored in 2016 as one of the top 100 women in manufacturing
by the National Association of Manufacturers (NAM) via the STEP Ahead
Award. Jd is an ASQ Fellow, holds the CMQ/OE, CQE, CSSBB, and is
also an ASQ Certified Trainer for a variety of Quality Tools. She is an
MBB and has held various Baldrige Assessor roles.
• Ms. Marhevko is a Past-Chair of the ASQ Quality Management Division
(QMD), a 24,000 member organization, and supports several ASQ
divisions in a variety of capacities. She was recently awarded the QMD’s
Howard Jones Award, the QMD’s highest honor.
• Jd holds a BSE from Oakland University in MI and an MSA from Central
Michigan University.
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Learning Objectives
Upon completing this webinar, you will be able to:
1. Explain how the Hoshin Kanri method can be used to
tailor a plan that will meet your business needs.
2. Apply a “lessons learned” sharing of tools and
techniques that have effectively served multiple
organization types.
3. Describe an approach that enables cross-functional
team alignment both horizontally and vertically.
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Define
Change is not needed. It is not necessary to survive.
Charles Darwin
10
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Lean is an enterprise-wide
set of concepts and tools
aimed at strengthening
competitive advantages
realized from operating
your processes.
A Definition of Lean…
11
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QLMS & DMAIC: Strategically
Define
Measure
Analyze
Improve
Control
External/Internal customer needs
are identified.
Determine performance baselines.
Identify necessary target levels.
Investigate causes for gaps from
performance to target. Create a plan.
Execute the improvements identified.
Use tools to fit the problem.
Monitor the results. Hold gains via
accountability.
12
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Elements for QLMS Success
1. Lean “Operations”, Effective (quality), Efficient (lean) flow of Product
2. Transactional systems: Effective, Efficient flow of Data/Information
3. Align Product & Transactional Value Streams across the Enterprise
4. Incorporate External Partners: Customers, Supply Chain, Compliance
Organizations, Contract Services
13
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Define
14
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A process to convert Strategy to Reality by using
both horizontal and vertical alignment in the
organization
CEO’s 3-5 year Strategic Vision
Planning across Division(s).
Vertically supports CEO and Sites
Site planning. One year tactics to
support and execute the strategy
The “X-Matrix”
aka…Hoshin Kanri 15
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Polling Question 1
a) 50%
b) 25%
c) 10%
d) Less than 5%
How many businesses in North America typically share
their strategies with their personnel?
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Polling Question 1 Results (Placeholder)
17
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Bottom: Key strategies. Use a “SMART” format
Left: Initiatives on HOW to achieve the objectives
Top: TACTICAL actions to execute the initiatives
Right: Key METRICS used to monitor results
Far Right: WHO has tactic line item responsibility
Sample “X-Matrix” Format
Tactical Actions
Main Key
Initiatives Metrics
Key Strategies
Resources
18
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People that use the end product/service
Personnel that invest in the organization
(stockholders, investors)
Personnel that run the organization.
May be paid or voluntary
Businesses/donors that provide goods
and services usually for a fee
Local organizational. Surroundings.
Environment, tax-base…
Strategies for Whom*…
Customer
Stakeholder
Employee
Supplier
Community
*Interested Parties to Consider…
*Identified in ISO 9001:2015 for Risk-
Based Thinking and consideration of
impact to business
19
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QCD: Quality (PPM), Cost (CI), Delivery (OTD)
Margin, Revenue, Cash Conversion, Growth
Engagement, Turnover, Satisfaction, EHS
QCD, Growth
Social Responsibility, Compliance, EHS
Sample Strategies
20
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Define “SMART” Strategies
Improve Margin by 5% points by 4Q
Increase of $250K
~6-8 Key Strategies
While developing the Key Strategies, multiple tools may be used
such as SWOT, VOC, etc. Consider the inclusion of all “interested
parties” in the evaluation to support organizational robustness.
21
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Develop Initiatives
Reduce Warranty losses. $150K
Reorganize Product Portfolios.
$100K
~1-3 Main Initiatives
per Strategy
Improve Margin by 5% points by 4Q
Increase of $250K
22
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Develop Tactics
Improve Margin by 5% points by 4Q: Increase of $250K
~1-3 Tactical Plans per Initiative
Implement Warranty Team. Conduct CA/PA.
Conduct FMEA/CP Reviews on loss leaders
Conduct VSM on Portfolio. Rationalize
Reduce Warranty
losses. $150K
Reorganize
Product Portfolios.
$100K
23
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Develop Metrics
Reduce
Warranty
losses. 150K
Reorganize
Product
Portfolios.
$100K
Improve Margin by 5% points by 4Q:
Increase of $250K
Key Metrics
Implement Warranty Team. Conduct CA/PA Who: Joe
Conduct FMEA/CP Reviews on loss leaders Who: Tom
Conduct VSM on Portfolio. Rationalize Who: Sue
Margin
Warranty
Family
Portfolio
Margins
24
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Leading & Lagging Metrics
Leading
Metrics
Lagging Metrics
OTD PPM COPQ $Conversion
OEE: Operational Equipment Effectiveness + + + +
RTY: Rolled Throughput Yield + + + +
%Cpk: Processes Capable of Meeting >=1.33 + + + +
MTBF: Mean Time Between Failure + + +
C/A %Repeat: Repeating Complaints + +
Training Depth: Personnel Skill Levels + +
Linearity: Production Schedule Attainment + + +
C/A TTC: Time to Close Corrective Actions + + +
If you watch your pennies, your dollars will take care of
themselves – Benjamin Franklin
Lagging metrics are usually upper management results. Identify
and manage leading metrics that will affect these results.
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Polling Question 2
a) Rework
b) Overtime
c) Premium freight
d) All of the above
What are some potential leading indicator metrics to
margin?
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Polling Question 2 Results (Placeholder)
27
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“X-Matrix” How it looks
X-Matrix: Organization, Year
l 1.2a Conduct Portfolion Analysis. Rationalize l l l
l 1.1b Conduct FMEA/CP Reviews on loss leaders l l l l
l 1.1a Implement Warranty Team. Conduct CA/PA l l l l
1.2ReorganizeProductPortfolios.$100K
1.1ReduceWarrantyLosses.$150K
Margin
Warranty
PortfolioMargin
Joe
Tom
Sue
l l 1 Improve Margin by 5% Points by 4Q08 l l l
2 xxx l Primary
m Support
Resources
Key Tactics
"HOW 2"
Key Objectives
"WHAT"
Main
Initiatives
"HOW 1"
Key
Metrics
"BSC"
28
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Polling Question 3
a) They help to identify the critical metrics.
b) They help to maximize the amount of initiatives needed to meet
the strategies.
c) They help to minimize the potential for redundancy in the setting
of the initiatives.
d) They help to identify who owns which initiatives.
In the correlation section between the strategies and functional
initiatives, the correlation points help to show alignment between the
strategies and the functional initiatives. What is at least one other
purpose that they serve?
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Polling Question 3 Results (Placeholder)
30
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The QMD’s Sample X-Matrix
C:Documents and SettingsmarhevjdMy DocumentsASQQMD Strat Plan & BSC Data[QMD Strat Plan 08 Q2 QMP 08 09 v1.xls]Succession Plan
l 6.1e Develop/Execute go-forward functional conference committee structure -- Chair, F2F l l l l l l m m
l 6.1d Develop/Execute plan to better utilize volunteers -- Mmbrshp l l l
l l l 6.1c Share Lessons Learned across ASQ (Ex. DMA, X-Matrix…) -- Chair, Chair-Elect l l l l m
l 6.1b Manage and facilitate attainment of budgeted plan -- Treasurer l l l l l l m
l 6.1a Develop/Utilize succession planning, strategic management of board, and key measures -- Chair, Chair-Elect l l l l l l m
l 5.1a Develop a Strategy to Collaborate w/ASQ on EoQ/Social Responsibility (Mason) -- TC l l
l 4.1c Develop/Execute effective Web-site in which to grow exposure and customer support, and delivery mechanisms -- e-based l l l l l l l m l
l 4.1b Select organizations/venues w/in ASQ (Div's, Sections, HQ, etc.) and tailor service or product offerings and interaction methods -- Mktg l l l l l l l
l 4.1a Identify Opportunities and Leverage QMD offerings into non-ASQ/alternative venues (ie. State Award Program Offices, etc) -- Mktg l l l l l l l
l l l l 3.1a Develop Feedback/Feed Forward Loops, Review VOC data, Summarize results, Develop Next Steps and Feed into QMD Strategies -- Mktg l l l l l l l l l l m
l l l 2.1.c Execute to a defined Touchpoint Plan (Tradeshows, Conferences, Forums, Courses, etc.) include Lisa Bray (ASQ) l l l l l l l l l m m l
l l l l 2.1b Develop Partnership Plan w/ASQ on non-US Growth (China/India, ROW) -- Mktg l l l l l
l l l l 2.1a Develop Marketing Plan to grow Membership Base -- Mktg l l l l l l
l 1.2b Deliver CMQ/OE, CQE, CQIA Refresher Courses and Cost of Quality Courses as needed -- F2F l l l l l l l l m l
l l 1.2a Support the CMQ/OE Certification (BOK, Exam Review, Item Writing) - Ops l l l l l l l
l l l 1.1f Manage a project that utilizes F2F, Web & Print to bring pertinant information/training to QMD Members -- Print, F2F, e-Base l l l l l l
l l l 1.1e Grow QMD membership of certification holders (CMQ/OE, CQE, …) and conference attendees that are non-QMD members -- Mktg l l l l l l l l m
l l l l
1.1d Determine web-content (search engine, articles, courses, skills training webinars, forums, etc.) to be provided through the e-based market
channel based on VOC criteria with Tech Cmte input - e-based l l l l l l l l m m l
l l l l 1.1c Determine offerings (articles, courses, skills training, tracks) to be provided at relevant events based on VOC criteria -- F2F , e-based l l l l l l m l l
l l l l 1.1b Manage the annual QMC -- F2F l l l l l m l l
l 1.1a Publish/Maintain the Quality Management Forum -- Print l l l l l l
6.2UseStrategicPlanningmethods&ActionPlan
formats
6.1Followthroughonkeyplansandobjectives
5.1ContinuetodevelopanddeliverEoQresources
(multiple)
4.1Identifysponsoringpartnersanddevelopservice
orproductofferingmodel
3.1DevelopFeedbackLoopsandReviewVOC
input/data
2.1DevelopMarketStrategytoGrowMembership
base
1.2SupporttheCMQ/OEcertificationprocess
1.1Leverageourorganizationalstructuretodevelop
anddeliverproductsandservices
QtyofLearningDocuments/Events(OO3,5)
AttendanceatQMDactivities/sessions(OO2,3,4,5,6)
Web-SiteHits(OO1,3,4,5)
QtyofCMQ/OE's&Trend(OO1,2,4,5)
CheckingandSavingsBalance,Liquidity(OO4,5)
PeriodRevenue&ExpenseComparisons(OO4,5)
ForumUnitCost/Member(OO4,5)
MembershipRate(IncludeIntlGrowth)(OO1,2,3,4,5,
6)
RetentionRate(OO1,2,4,5,6)
NewMembershipRate(OO1,2,4,5,6)
Membersw/ASQCertification(s)(OO1,2,3,4,5)
MembersbyState/Country(OO1,2,3)
%ObjectivesAchieved(OO5,6)
SuccessionPlanningDepth(OO5,6)
Chair:HeatherMcCain
ChairElect:JdMarhevko
Treasurer:KatrinaHarris
VCPrintInitiatives:FredWalker
VCMarketing:MiltKrivokuca
VCMembership:JohnSharp
VCFacetoFace:DavidLittle
VCe-BasedIntiiatives:RonMeier
VCTechnicalCmte:SteveBabb
VCOperations:CarolKurtz
ConferenceCmte:Trepanier/Denney/Bane
l l l l l
1. (1, 2, 3) Membership Expertise: Provide products/services that develop continuous improvement and enhance our memberships'
skills l l l l l l
l l l 2. (1, 4) Membership Growth: Continue to grow the Membership base and improve upon retention l l l l l l l l l l l
l l l 3. (1, 2) Determine VOC: Get feedback so that the QMD can define the product and services that are needed l l l l l
l l l l l l 4. (1, 2, 3, 4, 5, 6) Define Markets: Develop/execute a cross-market strategy and delivery mechanisms utilizing current technologies
l l l l
l l 5. (2, 6) EoQ: Insure that the Economics of Quality (EoQ) are within the context of our products and services l l l
l l l
6. (4, 5) Infrastructure: Improve the management of the QMD…IT, Volunteer Utilization, Succession Planning, Budgeting, Follow
Through… l l l l l l l l l
Strategic X-Matrix: 2Q08 Quality Management Division v2
QMD Vision
Engage people, organizations, and communities in continual improvement
QMD Mission
Convey lifelong quality related knowledge through information, methods and
tools that add value to Organizations, Society and Individuals
1-2 Year Strategic Objectives
Top Level
Improvement
Priorities
2nd Level Tactical Improvement Plans
Key Success
Indicators
(KSI's)
and Outcomes
Resources
Primary Responsibillity
Secondary Responsibility
31
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ASQ QMD Result
• Largest division in ASQ…24,000 global members
• In the top 5 of all divisions for member growth and retention
• Most touch points (member-valued interactions) of any
division. >300/year
• Have completed >90% of all goals and objectives for the
past 5 years
A Non-profit Organization
32
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A For-profit X-Matrix Sample
14
l m 4.3.b. Conduct annual reviews and training updates on ISO/TS Core Tools by 2Q l l l l l l m m m m l
l m m 4.3.a. Increase QA personnel understanding & interpretation of product specs by 3Q l l l l l l l l l
l m m 4.2.a. Consolidate all sites to one registrar by 4Q l l l l l
m l m m m 4.1.b. Grow Quality/Lean skills and benchstrength by 15% YOY l l l l l m l l l l l l l l m l
m m l m 4.1.a. Upgrade corporated-wide APQP processes to achieve 95% compliance on TS System score by 2Q l l l l l m l l l l l l
m m l m 3.1.a. Leverage sub-teams to implement MRP conversion l l l m l l l l
m l m 2.2.c. Participate in monthly Council reviews l l l l l l l l l
m m l m 2.2.a. Implement Kanban flow plans to reduce DIOH by 20% by 4Q l l l l m l l l l
l 2.1.b. Create action plan to close customer feedback gaps by 3Q l l l m l
l 2.1.a. Review and upgrade existing Customer Feedback Process by 1Q l l m l
m m m m l m 1.2.c. Plan, develop, manage and implement automated SPC at appropriate processes l l l l l l l
m m m l m 1.2.b. Enable accurate SPC formats to meet 80% audit scores l l l m m l l l l m
m m m m m l m 1.2.a. Monthly Management to increase Capable Processes to >85% KPIs l l l l l l l l l
m m l 1.1.a. Reduce scrap/rework losses by 50% 4Q l l l m l l l l m
1 3 2 9 9 7 10 2 2 2 2 2 7 3 0
3 5 1 1 1 1 1 0 0 0 0 1 2 0 0
4.3EngineeringAlignment
4.2QMSExecution:TSSystems
4.1QMSExecution:APQP
3.1NewMRPImplementation
2.2Lean/ContinualImprovementIntegration
2.1CustomerSatisfaction
1.2ProcessControl(SPC/KPI)
1.1Scrap/DefectReduction
COPQ%COGS
OEE
OTD
PPM
RolledThroughputYield(RTY)
LeanSavings
Linearity
DIOH
8DTTC
%KPIsthatmeetcapability
MTBF
TS/ISOStatus
QMS/LeanScore
SkillsAssessmentLevel
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
l l l l l 1. Exceed financial income targets: Margin, Cash Conversion, etc. l l l l l l
l l l l l l 2. Increase production/process capacity l l l l l Responsible/Accountable m Consulting/Support
l l l l l 3. Reduce business costs in SGA and Supply Chain l l l l
l l l l l l l l 4. Improve customer satisfaction via quality/warranty and OTD performance l l l l l l
l l l l l l l 5. Grow team skills and talent levels l l l l
l l l l l l 6. Exceed safety/environmental standards l
l l l l l l l l 7. Enable competitive costing via lean processes l l l l l l
Level II Matrix - YEAR 20XX
Resources
Three (3) QMS Strategies
1. Improve upon what we do (reduce PPM/COPE, grow KPIV)
2. Deliver new products/processes well
(APQP/OTD/TS/DIOH/RTY)
3. Grow our skills to enable 1 & 2 (Blooms, QMS, TS)
2nd Level
Tactics
(To achieve the initiatives)
YEAR 20xx-xx
Strategic Priorities
BusinessStrategy
Top
Level
Initiatives
(To Achieve
Priorities)
KPIs
to Improve
Strategies
Metrics
Tactics
Initiatives
4.3 Engineering Alignment
4.2 QMS Execution: TS Systems
4.1 QMS Execution: APQP
3.1 New MRP Implementation
2.2 Lean/Continual Improvement Integration
2.1 Customer Satisfaction
1.2 Process Control (SPC/KPI)
1.1 Scrap/Defect Reduction
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Product Portfolio…5% Margin?
Lead TimeInitiative: Improve margin by 5%
Action: Conduct error-proofing
VSM review on portfolio mix.
Rationalize products. Continue to
prune
Results: Improvement in
margin base
Qty of Items at Targeted Margin
0
2
4
6
8
10
12
14
-100%
-75%
-50%
-25%
0%
25%
50%
75%
100%
125%
150%
Qty of Items at Targeted Margin
0
2
4
6
8
10
12
14
16
-100%
-75%
-50%
-25%
0%
25%
50%
75%
100%
125%
150%
Portfolio Review Results
0%
10%
20%
30%
40%
50%
60%
70%
Reduction in Portfolio Change in Margin
Ex: If targeted margin is 5%, then 8+ Items were meeting the 5% objective before and 14+ were meeting the objective after
22%
Original Process Improved Process
Visual Results
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Measure
What gets measured gets done.
Who knows, it works…
35
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Warranty %COGS
0
1
2
3
4
5
Yr1
Yr2
Yr3
Comp
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
History Performance Compare Goal
Sample BSC Format
Performance Goal
History (2-3 yrs)
Current Performance
Arrow for desired direction
Point of Comparison
36
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37
Polling Question 4
a) It is better to have more metrics.
b) It better controls the corresponding lagging indicator(s).
c) It is easier to measure.
d) It helps to understand the overall data impact.
What is the key benefit of including Leading Indicators
in the KPI process?
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Polling Question 4 Results (Placeholder)
38
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Analyze
To know and not to do is not to know.
Chinese Proverb
39
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A VSM defines an existing process. A Future Stream Map
(FSM) is the planned process after improvements are made.
An action plan (or bridge) on how to close the gaps between
the VSM and FSM is generated for implementation.
Value Stream Map (VSM)
What you
THINK it is
What it
ACTUALLY is
What it
SHOULD be
VSM
FSM
What you
THINK it is
What you
THINK it is
What it
ACTUALLY is
What it
ACTUALLY is
What it
SHOULD be
What it
SHOULD be
VSM
FSM
"Desk Top"
What we THINK it is
"Reality"
What it ACTUALLY is
"Future"
What it SHOULD be
Mgmt Trap VSM FSM
40
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Sample VSM: NPI
40 Days
170 Days
Original Process
Initiative: Reduce New
Product Introduction Lead
Time
Action: Conduct value stream
map review. Implement fixes
Results: 70% Lead time
reduction. Team able to
increase NPI output
Day 0 5 10 15 20 25 30 35 40 45 50 55 60 Total
HR HR Comm
Plan & ee
relations
Hiring Training
1 1 5 7
Mfg Eng,
Prod
Create Std
Rtg's
Make L/O.
Takt, Env,
Safety
Order
equip
TestEquip
Validate
Prod Line,
1st article
Manpower
in place
Run
production
Ship
5 4 2 1 0.5 1 1 3 18
Mfg Eng,
Eng
Modify
Facility
Install
Equip
12 5 2 19
Purch Vendor
notification
PO Valid &
change-
over
Issue POs
based on
gaps
5 5 15 25
Matl Create
bridge
schedule
Present
bridge
schedule
At sister loc,
valid inv:
qty, qa
Forecast
loaded,
history
1 5 5 1 12
Build bridge
send
w/parts
Shipit
Receive,
unload
Put away
goods
3 3 1 1 8
QA Supplier
record
review
Yield review,
cust
complaint
data
ID approval
bodies &
audit
Inform
bodies of
change of
mfgr
Valid rec'd
inv. Write
insp plan
4 3 2 1 33 43
Eng Proj review
Sched &
temp req's
David
Groh
approval
Design
process of
dox xfer
Impl
BOM's, IM
etc
5 3 10 15 10 43
Sales Cust info
history
Review
bridge. Do
SIOP
Create
accts
Cust notif
of change
5 1 5 5 16
IT Go live Reporting,
tweaking
15 5 5 3 1
Fin Approve all
fin data.
Inv, Std
cost
Mo review:
Outlook,
E201 spend
Mo review:
Outlook,
E201 spend
3 3 3
Queue Time 30 30
Max Time 15 5 5 10 12 15 33 5 1 3 10 1 0 3 103
VA 5 5
Map all data. Get cust tax data. Run
customer EDI's (test box). Load data.
Future Stream Map: New Product Introduction (Sister Site Transfer). 02/2006
Create WI's, FMEA/CP
ECO's (off-site coord.
Need on site approval)
Improved Process
Lead Time (Days)
0
20
40
60
80
100
120
140
160
180
Before Proj 1 Proj 2 Proj 3
Visual Results
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
Improve
Even if you’re on the right track, you’ll still get run over if
you just sit there.
Will Rogers
42
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
Hoshin Kanri is not the same as Management by Objectives (MBOs)
Source: Toyota Culture – Jeffrey Liker and Michael Hoseus (2008)
Management by Objectives (MBOs) Hoshin Kanri
Results-oriented evaluation of effort Concerned with both results and
process of getting those results
Top-down communication Top-down direction setting and bottom-
up flow of information and means
Directive Participative
Linear (no feedback, no second
chance, just start over from scratch
each time)
Circular (adds feedback loops (aka
Catchball) and cycles of improvement)
Leveraging Hoshin Kanri…
43
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
Control
There is nothing as useless as doing something efficiently
that which should not be done at all…
Peter Drucker
44
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
We Strategically Applied DMAIC
Define
Measure
Analyze
Improve
Control
We used an X-Matrix to define our
customer needs (internal/external).
We used a BSC to determine baselines
and set our target performance levels.
We used VSM to investigate causes for
gaps and created a plan of attack.
We executed improvements and used
tools to fit the problem (VSM, TPM, SUR, EP…).
We used the BSC and HR systems to
enable accountability.
45
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
Learning Objectives
In our time together, we have…
• Seen how to apply Define, Measure, Analyze, Improve
and Control (DMAIC) to the strategic planning process
• Tactically learned how to link strategic planning and the
Quality/Lean Management (QLMS) via the X-Matrix
process
• Seen how this lean tool can be applied to several types of
organizations
• Increased your understanding of how to develop, manage
and execute a strategic plan
Jd.Marhevko@Frontier.com 419-704-5603
46
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
There are hundreds of excellent books/tools/sites, etc. Here are few that
I have used as recent references:
• ASQ.org
• AME.org
• Lean Enterprise Institute (LEI) at Lean.org
• Superfactory.com
• Hoshin Kanri for the Lean Enterprise. Developing Competitive Capabilities and Managing
Profit. Thomas L. Jackson
• The Lean Pocket Guide: National Association of Job Shops and Small Manufacturers (NAJS)
• From Good to Great. Jim Collins
• The Tipping Point. How Little Things can make a big Difference. Malcolm Gladwell
• Blink. The Power of Thinking without Thinking. Malcolm Gladwell
• Toyota Production System. Beyond Large Scale Production. Taichii Ohno
• The Toyota Way. Jeffrey Liker
• The Executive Guide to Understanding and Implementing the Baldrige Criteria. Leonard &
McGuire
• The Executive Guide to Understanding and Implementing Lean Six Sigma.
Meisel, Babb, Marsh, Schlichting
Sources/Ideas
47
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
48
Questions & Answers
Use the Q & A Panel to send your questions to our panelists.
Jd Marhevko, MBB, CSSBB, CMQ/OE, CQE,
ASQ Fellow, 2016 Shainin Medalist
Vice President
Quality/Lean Management Systems & EHS
Accuride Corporation
Jennifer Ashkenazy, CPA
Research Development Director
IMA
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
49
Thank You to Our Presenter!
Jd Marhevko, MBB, CSSBB,
CMQ/OE, CQE, ASQ Fellow
2016 ASQ Shainin Medalist
Vice President
Quality/Lean Management Systems & EHS
Accuride Corporation
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
50
► Complete the Evaluation poll – on your screen
► Access to your CPE Certificate – 2 Options
• Click the “CPE” icon at the bottom of your console
or
• Click the link in your post-event email
► Please print a copy of the CPE certificate for your
records.
► Your CPE credit will be automatically recorded in your
transcript.
Final Reminders
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
51
Next Inside Talk Webinar:
• Rethink the Finance Function to Become a Trusted Business Partner
 Wednesday, March 30, 2016 1 p.m. Eastern Daylight Time
www.imanet.org/programs_events/IMAWebinars.aspx
For Upcoming Inside Talk Events:
• Visit IMA’s website at
www.imanet.org/programs_events/IMAWebinars.aspx
• Log-in with your User Name & Password
• Remember to check IMA’s Learning Spotlight for
upcoming webinar events
Notification of Future Webinar Schedules
© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk
52
Thank You!

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IMA Webinar_PPT_ 03MAR2016_Final_w_bio

  • 1. March 3, 2016 Linking Business Strategies to Quality and Lean Management Systems (QLMS) Jd Marhevko
  • 2. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 2 Webinar Features Should you experience any technical difficulty, please click the “Help” icon at the bottom of the console for audience support. Audio Broadcast: ► You should hear sound through your computer speakers or headphones ► To listen to the audio by telephone, click the “Request” icon on the bottom Panel for teleconference Asking Questions: ► Questions may be submitted using the Q&A icon on the left side of the console ► Questions will be addressed after the formal presentation Pop-up Blockers: ► Please temporarily disable your internet pop-up blockers Volume Slider
  • 3. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 3 Webinar Features #InsideTalk Join the conversation!
  • 4. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 4 • Download a PDF of the slides – Download Slides icon – Link in post-event email – IMA Webinar Library • IMA Members can also view this webinar again www.imanet.org/programs_events/imawebinars.aspx Visit IMA’s website: Webinar Materials and Access to Recording
  • 5. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 5 • CMAs, CFMs & CPAs can report 1 hour of CMA and NASBA approved CPE for today’s event. • Click the “CPE” icon at the bottom of your console to access your Certificate of Completion. Please print or save for your records. • Your CPE credit will be automatically recorded in your transcript. CPE Credit Requirements
  • 6. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 6 Moderator Jennifer Ashkenazy, CPA Research Development Director IMA
  • 7. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 7 Featured Presenter Jd Marhevko, MBB, CSSBB, CMQ/OE, CQE, ASQ Fellow 2016 ASQ Shainin Medalist Vice President Quality/Lean Management Systems & EHS Accuride Corporation
  • 8. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Jd Marhevko’s Biography 8 • Jd Marhevko is currently the VP of Quality, Lean and EHS for Accuride Corporation. Three (3) Accuride sites have won the prestigious Manufacturing Excellence Award (in 2014-2015). She has been involved in Operations and Lean/Six Sigma efforts for almost 30 years across a variety of industries. • Jd will be honored in 2016 as one of the top 100 women in manufacturing by the National Association of Manufacturers (NAM) via the STEP Ahead Award. Jd is an ASQ Fellow, holds the CMQ/OE, CQE, CSSBB, and is also an ASQ Certified Trainer for a variety of Quality Tools. She is an MBB and has held various Baldrige Assessor roles. • Ms. Marhevko is a Past-Chair of the ASQ Quality Management Division (QMD), a 24,000 member organization, and supports several ASQ divisions in a variety of capacities. She was recently awarded the QMD’s Howard Jones Award, the QMD’s highest honor. • Jd holds a BSE from Oakland University in MI and an MSA from Central Michigan University.
  • 9. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 9 Learning Objectives Upon completing this webinar, you will be able to: 1. Explain how the Hoshin Kanri method can be used to tailor a plan that will meet your business needs. 2. Apply a “lessons learned” sharing of tools and techniques that have effectively served multiple organization types. 3. Describe an approach that enables cross-functional team alignment both horizontally and vertically.
  • 10. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Define Change is not needed. It is not necessary to survive. Charles Darwin 10
  • 11. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Lean is an enterprise-wide set of concepts and tools aimed at strengthening competitive advantages realized from operating your processes. A Definition of Lean… 11
  • 12. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk QLMS & DMAIC: Strategically Define Measure Analyze Improve Control External/Internal customer needs are identified. Determine performance baselines. Identify necessary target levels. Investigate causes for gaps from performance to target. Create a plan. Execute the improvements identified. Use tools to fit the problem. Monitor the results. Hold gains via accountability. 12
  • 13. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Elements for QLMS Success 1. Lean “Operations”, Effective (quality), Efficient (lean) flow of Product 2. Transactional systems: Effective, Efficient flow of Data/Information 3. Align Product & Transactional Value Streams across the Enterprise 4. Incorporate External Partners: Customers, Supply Chain, Compliance Organizations, Contract Services 13
  • 14. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Define 14
  • 15. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk A process to convert Strategy to Reality by using both horizontal and vertical alignment in the organization CEO’s 3-5 year Strategic Vision Planning across Division(s). Vertically supports CEO and Sites Site planning. One year tactics to support and execute the strategy The “X-Matrix” aka…Hoshin Kanri 15
  • 16. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 16 Polling Question 1 a) 50% b) 25% c) 10% d) Less than 5% How many businesses in North America typically share their strategies with their personnel?
  • 17. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Polling Question 1 Results (Placeholder) 17
  • 18. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Bottom: Key strategies. Use a “SMART” format Left: Initiatives on HOW to achieve the objectives Top: TACTICAL actions to execute the initiatives Right: Key METRICS used to monitor results Far Right: WHO has tactic line item responsibility Sample “X-Matrix” Format Tactical Actions Main Key Initiatives Metrics Key Strategies Resources 18
  • 19. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk People that use the end product/service Personnel that invest in the organization (stockholders, investors) Personnel that run the organization. May be paid or voluntary Businesses/donors that provide goods and services usually for a fee Local organizational. Surroundings. Environment, tax-base… Strategies for Whom*… Customer Stakeholder Employee Supplier Community *Interested Parties to Consider… *Identified in ISO 9001:2015 for Risk- Based Thinking and consideration of impact to business 19
  • 20. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk QCD: Quality (PPM), Cost (CI), Delivery (OTD) Margin, Revenue, Cash Conversion, Growth Engagement, Turnover, Satisfaction, EHS QCD, Growth Social Responsibility, Compliance, EHS Sample Strategies 20
  • 21. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Define “SMART” Strategies Improve Margin by 5% points by 4Q Increase of $250K ~6-8 Key Strategies While developing the Key Strategies, multiple tools may be used such as SWOT, VOC, etc. Consider the inclusion of all “interested parties” in the evaluation to support organizational robustness. 21
  • 22. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Develop Initiatives Reduce Warranty losses. $150K Reorganize Product Portfolios. $100K ~1-3 Main Initiatives per Strategy Improve Margin by 5% points by 4Q Increase of $250K 22
  • 23. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Develop Tactics Improve Margin by 5% points by 4Q: Increase of $250K ~1-3 Tactical Plans per Initiative Implement Warranty Team. Conduct CA/PA. Conduct FMEA/CP Reviews on loss leaders Conduct VSM on Portfolio. Rationalize Reduce Warranty losses. $150K Reorganize Product Portfolios. $100K 23
  • 24. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Develop Metrics Reduce Warranty losses. 150K Reorganize Product Portfolios. $100K Improve Margin by 5% points by 4Q: Increase of $250K Key Metrics Implement Warranty Team. Conduct CA/PA Who: Joe Conduct FMEA/CP Reviews on loss leaders Who: Tom Conduct VSM on Portfolio. Rationalize Who: Sue Margin Warranty Family Portfolio Margins 24
  • 25. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Leading & Lagging Metrics Leading Metrics Lagging Metrics OTD PPM COPQ $Conversion OEE: Operational Equipment Effectiveness + + + + RTY: Rolled Throughput Yield + + + + %Cpk: Processes Capable of Meeting >=1.33 + + + + MTBF: Mean Time Between Failure + + + C/A %Repeat: Repeating Complaints + + Training Depth: Personnel Skill Levels + + Linearity: Production Schedule Attainment + + + C/A TTC: Time to Close Corrective Actions + + + If you watch your pennies, your dollars will take care of themselves – Benjamin Franklin Lagging metrics are usually upper management results. Identify and manage leading metrics that will affect these results.
  • 26. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 26 Polling Question 2 a) Rework b) Overtime c) Premium freight d) All of the above What are some potential leading indicator metrics to margin?
  • 27. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Polling Question 2 Results (Placeholder) 27
  • 28. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk “X-Matrix” How it looks X-Matrix: Organization, Year l 1.2a Conduct Portfolion Analysis. Rationalize l l l l 1.1b Conduct FMEA/CP Reviews on loss leaders l l l l l 1.1a Implement Warranty Team. Conduct CA/PA l l l l 1.2ReorganizeProductPortfolios.$100K 1.1ReduceWarrantyLosses.$150K Margin Warranty PortfolioMargin Joe Tom Sue l l 1 Improve Margin by 5% Points by 4Q08 l l l 2 xxx l Primary m Support Resources Key Tactics "HOW 2" Key Objectives "WHAT" Main Initiatives "HOW 1" Key Metrics "BSC" 28
  • 29. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 29 Polling Question 3 a) They help to identify the critical metrics. b) They help to maximize the amount of initiatives needed to meet the strategies. c) They help to minimize the potential for redundancy in the setting of the initiatives. d) They help to identify who owns which initiatives. In the correlation section between the strategies and functional initiatives, the correlation points help to show alignment between the strategies and the functional initiatives. What is at least one other purpose that they serve?
  • 30. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Polling Question 3 Results (Placeholder) 30
  • 31. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk The QMD’s Sample X-Matrix C:Documents and SettingsmarhevjdMy DocumentsASQQMD Strat Plan & BSC Data[QMD Strat Plan 08 Q2 QMP 08 09 v1.xls]Succession Plan l 6.1e Develop/Execute go-forward functional conference committee structure -- Chair, F2F l l l l l l m m l 6.1d Develop/Execute plan to better utilize volunteers -- Mmbrshp l l l l l l 6.1c Share Lessons Learned across ASQ (Ex. DMA, X-Matrix…) -- Chair, Chair-Elect l l l l m l 6.1b Manage and facilitate attainment of budgeted plan -- Treasurer l l l l l l m l 6.1a Develop/Utilize succession planning, strategic management of board, and key measures -- Chair, Chair-Elect l l l l l l m l 5.1a Develop a Strategy to Collaborate w/ASQ on EoQ/Social Responsibility (Mason) -- TC l l l 4.1c Develop/Execute effective Web-site in which to grow exposure and customer support, and delivery mechanisms -- e-based l l l l l l l m l l 4.1b Select organizations/venues w/in ASQ (Div's, Sections, HQ, etc.) and tailor service or product offerings and interaction methods -- Mktg l l l l l l l l 4.1a Identify Opportunities and Leverage QMD offerings into non-ASQ/alternative venues (ie. State Award Program Offices, etc) -- Mktg l l l l l l l l l l l 3.1a Develop Feedback/Feed Forward Loops, Review VOC data, Summarize results, Develop Next Steps and Feed into QMD Strategies -- Mktg l l l l l l l l l l m l l l 2.1.c Execute to a defined Touchpoint Plan (Tradeshows, Conferences, Forums, Courses, etc.) include Lisa Bray (ASQ) l l l l l l l l l m m l l l l l 2.1b Develop Partnership Plan w/ASQ on non-US Growth (China/India, ROW) -- Mktg l l l l l l l l l 2.1a Develop Marketing Plan to grow Membership Base -- Mktg l l l l l l l 1.2b Deliver CMQ/OE, CQE, CQIA Refresher Courses and Cost of Quality Courses as needed -- F2F l l l l l l l l m l l l 1.2a Support the CMQ/OE Certification (BOK, Exam Review, Item Writing) - Ops l l l l l l l l l l 1.1f Manage a project that utilizes F2F, Web & Print to bring pertinant information/training to QMD Members -- Print, F2F, e-Base l l l l l l l l l 1.1e Grow QMD membership of certification holders (CMQ/OE, CQE, …) and conference attendees that are non-QMD members -- Mktg l l l l l l l l m l l l l 1.1d Determine web-content (search engine, articles, courses, skills training webinars, forums, etc.) to be provided through the e-based market channel based on VOC criteria with Tech Cmte input - e-based l l l l l l l l m m l l l l l 1.1c Determine offerings (articles, courses, skills training, tracks) to be provided at relevant events based on VOC criteria -- F2F , e-based l l l l l l m l l l l l l 1.1b Manage the annual QMC -- F2F l l l l l m l l l 1.1a Publish/Maintain the Quality Management Forum -- Print l l l l l l 6.2UseStrategicPlanningmethods&ActionPlan formats 6.1Followthroughonkeyplansandobjectives 5.1ContinuetodevelopanddeliverEoQresources (multiple) 4.1Identifysponsoringpartnersanddevelopservice orproductofferingmodel 3.1DevelopFeedbackLoopsandReviewVOC input/data 2.1DevelopMarketStrategytoGrowMembership base 1.2SupporttheCMQ/OEcertificationprocess 1.1Leverageourorganizationalstructuretodevelop anddeliverproductsandservices QtyofLearningDocuments/Events(OO3,5) AttendanceatQMDactivities/sessions(OO2,3,4,5,6) Web-SiteHits(OO1,3,4,5) QtyofCMQ/OE's&Trend(OO1,2,4,5) CheckingandSavingsBalance,Liquidity(OO4,5) PeriodRevenue&ExpenseComparisons(OO4,5) ForumUnitCost/Member(OO4,5) MembershipRate(IncludeIntlGrowth)(OO1,2,3,4,5, 6) RetentionRate(OO1,2,4,5,6) NewMembershipRate(OO1,2,4,5,6) Membersw/ASQCertification(s)(OO1,2,3,4,5) MembersbyState/Country(OO1,2,3) %ObjectivesAchieved(OO5,6) SuccessionPlanningDepth(OO5,6) Chair:HeatherMcCain ChairElect:JdMarhevko Treasurer:KatrinaHarris VCPrintInitiatives:FredWalker VCMarketing:MiltKrivokuca VCMembership:JohnSharp VCFacetoFace:DavidLittle VCe-BasedIntiiatives:RonMeier VCTechnicalCmte:SteveBabb VCOperations:CarolKurtz ConferenceCmte:Trepanier/Denney/Bane l l l l l 1. (1, 2, 3) Membership Expertise: Provide products/services that develop continuous improvement and enhance our memberships' skills l l l l l l l l l 2. (1, 4) Membership Growth: Continue to grow the Membership base and improve upon retention l l l l l l l l l l l l l l 3. (1, 2) Determine VOC: Get feedback so that the QMD can define the product and services that are needed l l l l l l l l l l l 4. (1, 2, 3, 4, 5, 6) Define Markets: Develop/execute a cross-market strategy and delivery mechanisms utilizing current technologies l l l l l l 5. (2, 6) EoQ: Insure that the Economics of Quality (EoQ) are within the context of our products and services l l l l l l 6. (4, 5) Infrastructure: Improve the management of the QMD…IT, Volunteer Utilization, Succession Planning, Budgeting, Follow Through… l l l l l l l l l Strategic X-Matrix: 2Q08 Quality Management Division v2 QMD Vision Engage people, organizations, and communities in continual improvement QMD Mission Convey lifelong quality related knowledge through information, methods and tools that add value to Organizations, Society and Individuals 1-2 Year Strategic Objectives Top Level Improvement Priorities 2nd Level Tactical Improvement Plans Key Success Indicators (KSI's) and Outcomes Resources Primary Responsibillity Secondary Responsibility 31
  • 32. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk ASQ QMD Result • Largest division in ASQ…24,000 global members • In the top 5 of all divisions for member growth and retention • Most touch points (member-valued interactions) of any division. >300/year • Have completed >90% of all goals and objectives for the past 5 years A Non-profit Organization 32
  • 33. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk A For-profit X-Matrix Sample 14 l m 4.3.b. Conduct annual reviews and training updates on ISO/TS Core Tools by 2Q l l l l l l m m m m l l m m 4.3.a. Increase QA personnel understanding & interpretation of product specs by 3Q l l l l l l l l l l m m 4.2.a. Consolidate all sites to one registrar by 4Q l l l l l m l m m m 4.1.b. Grow Quality/Lean skills and benchstrength by 15% YOY l l l l l m l l l l l l l l m l m m l m 4.1.a. Upgrade corporated-wide APQP processes to achieve 95% compliance on TS System score by 2Q l l l l l m l l l l l l m m l m 3.1.a. Leverage sub-teams to implement MRP conversion l l l m l l l l m l m 2.2.c. Participate in monthly Council reviews l l l l l l l l l m m l m 2.2.a. Implement Kanban flow plans to reduce DIOH by 20% by 4Q l l l l m l l l l l 2.1.b. Create action plan to close customer feedback gaps by 3Q l l l m l l 2.1.a. Review and upgrade existing Customer Feedback Process by 1Q l l m l m m m m l m 1.2.c. Plan, develop, manage and implement automated SPC at appropriate processes l l l l l l l m m m l m 1.2.b. Enable accurate SPC formats to meet 80% audit scores l l l m m l l l l m m m m m m l m 1.2.a. Monthly Management to increase Capable Processes to >85% KPIs l l l l l l l l l m m l 1.1.a. Reduce scrap/rework losses by 50% 4Q l l l m l l l l m 1 3 2 9 9 7 10 2 2 2 2 2 7 3 0 3 5 1 1 1 1 1 0 0 0 0 1 2 0 0 4.3EngineeringAlignment 4.2QMSExecution:TSSystems 4.1QMSExecution:APQP 3.1NewMRPImplementation 2.2Lean/ContinualImprovementIntegration 2.1CustomerSatisfaction 1.2ProcessControl(SPC/KPI) 1.1Scrap/DefectReduction COPQ%COGS OEE OTD PPM RolledThroughputYield(RTY) LeanSavings Linearity DIOH 8DTTC %KPIsthatmeetcapability MTBF TS/ISOStatus QMS/LeanScore SkillsAssessmentLevel xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx l l l l l 1. Exceed financial income targets: Margin, Cash Conversion, etc. l l l l l l l l l l l l 2. Increase production/process capacity l l l l l Responsible/Accountable m Consulting/Support l l l l l 3. Reduce business costs in SGA and Supply Chain l l l l l l l l l l l l 4. Improve customer satisfaction via quality/warranty and OTD performance l l l l l l l l l l l l l 5. Grow team skills and talent levels l l l l l l l l l l 6. Exceed safety/environmental standards l l l l l l l l l 7. Enable competitive costing via lean processes l l l l l l Level II Matrix - YEAR 20XX Resources Three (3) QMS Strategies 1. Improve upon what we do (reduce PPM/COPE, grow KPIV) 2. Deliver new products/processes well (APQP/OTD/TS/DIOH/RTY) 3. Grow our skills to enable 1 & 2 (Blooms, QMS, TS) 2nd Level Tactics (To achieve the initiatives) YEAR 20xx-xx Strategic Priorities BusinessStrategy Top Level Initiatives (To Achieve Priorities) KPIs to Improve Strategies Metrics Tactics Initiatives 4.3 Engineering Alignment 4.2 QMS Execution: TS Systems 4.1 QMS Execution: APQP 3.1 New MRP Implementation 2.2 Lean/Continual Improvement Integration 2.1 Customer Satisfaction 1.2 Process Control (SPC/KPI) 1.1 Scrap/Defect Reduction
  • 34. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Product Portfolio…5% Margin? Lead TimeInitiative: Improve margin by 5% Action: Conduct error-proofing VSM review on portfolio mix. Rationalize products. Continue to prune Results: Improvement in margin base Qty of Items at Targeted Margin 0 2 4 6 8 10 12 14 -100% -75% -50% -25% 0% 25% 50% 75% 100% 125% 150% Qty of Items at Targeted Margin 0 2 4 6 8 10 12 14 16 -100% -75% -50% -25% 0% 25% 50% 75% 100% 125% 150% Portfolio Review Results 0% 10% 20% 30% 40% 50% 60% 70% Reduction in Portfolio Change in Margin Ex: If targeted margin is 5%, then 8+ Items were meeting the 5% objective before and 14+ were meeting the objective after 22% Original Process Improved Process Visual Results
  • 35. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Measure What gets measured gets done. Who knows, it works… 35
  • 36. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Warranty %COGS 0 1 2 3 4 5 Yr1 Yr2 Yr3 Comp Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec History Performance Compare Goal Sample BSC Format Performance Goal History (2-3 yrs) Current Performance Arrow for desired direction Point of Comparison 36
  • 37. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 37 Polling Question 4 a) It is better to have more metrics. b) It better controls the corresponding lagging indicator(s). c) It is easier to measure. d) It helps to understand the overall data impact. What is the key benefit of including Leading Indicators in the KPI process?
  • 38. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Polling Question 4 Results (Placeholder) 38
  • 39. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Analyze To know and not to do is not to know. Chinese Proverb 39
  • 40. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk A VSM defines an existing process. A Future Stream Map (FSM) is the planned process after improvements are made. An action plan (or bridge) on how to close the gaps between the VSM and FSM is generated for implementation. Value Stream Map (VSM) What you THINK it is What it ACTUALLY is What it SHOULD be VSM FSM What you THINK it is What you THINK it is What it ACTUALLY is What it ACTUALLY is What it SHOULD be What it SHOULD be VSM FSM "Desk Top" What we THINK it is "Reality" What it ACTUALLY is "Future" What it SHOULD be Mgmt Trap VSM FSM 40
  • 41. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Sample VSM: NPI 40 Days 170 Days Original Process Initiative: Reduce New Product Introduction Lead Time Action: Conduct value stream map review. Implement fixes Results: 70% Lead time reduction. Team able to increase NPI output Day 0 5 10 15 20 25 30 35 40 45 50 55 60 Total HR HR Comm Plan & ee relations Hiring Training 1 1 5 7 Mfg Eng, Prod Create Std Rtg's Make L/O. Takt, Env, Safety Order equip TestEquip Validate Prod Line, 1st article Manpower in place Run production Ship 5 4 2 1 0.5 1 1 3 18 Mfg Eng, Eng Modify Facility Install Equip 12 5 2 19 Purch Vendor notification PO Valid & change- over Issue POs based on gaps 5 5 15 25 Matl Create bridge schedule Present bridge schedule At sister loc, valid inv: qty, qa Forecast loaded, history 1 5 5 1 12 Build bridge send w/parts Shipit Receive, unload Put away goods 3 3 1 1 8 QA Supplier record review Yield review, cust complaint data ID approval bodies & audit Inform bodies of change of mfgr Valid rec'd inv. Write insp plan 4 3 2 1 33 43 Eng Proj review Sched & temp req's David Groh approval Design process of dox xfer Impl BOM's, IM etc 5 3 10 15 10 43 Sales Cust info history Review bridge. Do SIOP Create accts Cust notif of change 5 1 5 5 16 IT Go live Reporting, tweaking 15 5 5 3 1 Fin Approve all fin data. Inv, Std cost Mo review: Outlook, E201 spend Mo review: Outlook, E201 spend 3 3 3 Queue Time 30 30 Max Time 15 5 5 10 12 15 33 5 1 3 10 1 0 3 103 VA 5 5 Map all data. Get cust tax data. Run customer EDI's (test box). Load data. Future Stream Map: New Product Introduction (Sister Site Transfer). 02/2006 Create WI's, FMEA/CP ECO's (off-site coord. Need on site approval) Improved Process Lead Time (Days) 0 20 40 60 80 100 120 140 160 180 Before Proj 1 Proj 2 Proj 3 Visual Results
  • 42. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Improve Even if you’re on the right track, you’ll still get run over if you just sit there. Will Rogers 42
  • 43. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Hoshin Kanri is not the same as Management by Objectives (MBOs) Source: Toyota Culture – Jeffrey Liker and Michael Hoseus (2008) Management by Objectives (MBOs) Hoshin Kanri Results-oriented evaluation of effort Concerned with both results and process of getting those results Top-down communication Top-down direction setting and bottom- up flow of information and means Directive Participative Linear (no feedback, no second chance, just start over from scratch each time) Circular (adds feedback loops (aka Catchball) and cycles of improvement) Leveraging Hoshin Kanri… 43
  • 44. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Control There is nothing as useless as doing something efficiently that which should not be done at all… Peter Drucker 44
  • 45. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk We Strategically Applied DMAIC Define Measure Analyze Improve Control We used an X-Matrix to define our customer needs (internal/external). We used a BSC to determine baselines and set our target performance levels. We used VSM to investigate causes for gaps and created a plan of attack. We executed improvements and used tools to fit the problem (VSM, TPM, SUR, EP…). We used the BSC and HR systems to enable accountability. 45
  • 46. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk Learning Objectives In our time together, we have… • Seen how to apply Define, Measure, Analyze, Improve and Control (DMAIC) to the strategic planning process • Tactically learned how to link strategic planning and the Quality/Lean Management (QLMS) via the X-Matrix process • Seen how this lean tool can be applied to several types of organizations • Increased your understanding of how to develop, manage and execute a strategic plan Jd.Marhevko@Frontier.com 419-704-5603 46
  • 47. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk There are hundreds of excellent books/tools/sites, etc. Here are few that I have used as recent references: • ASQ.org • AME.org • Lean Enterprise Institute (LEI) at Lean.org • Superfactory.com • Hoshin Kanri for the Lean Enterprise. Developing Competitive Capabilities and Managing Profit. Thomas L. Jackson • The Lean Pocket Guide: National Association of Job Shops and Small Manufacturers (NAJS) • From Good to Great. Jim Collins • The Tipping Point. How Little Things can make a big Difference. Malcolm Gladwell • Blink. The Power of Thinking without Thinking. Malcolm Gladwell • Toyota Production System. Beyond Large Scale Production. Taichii Ohno • The Toyota Way. Jeffrey Liker • The Executive Guide to Understanding and Implementing the Baldrige Criteria. Leonard & McGuire • The Executive Guide to Understanding and Implementing Lean Six Sigma. Meisel, Babb, Marsh, Schlichting Sources/Ideas 47
  • 48. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 48 Questions & Answers Use the Q & A Panel to send your questions to our panelists. Jd Marhevko, MBB, CSSBB, CMQ/OE, CQE, ASQ Fellow, 2016 Shainin Medalist Vice President Quality/Lean Management Systems & EHS Accuride Corporation Jennifer Ashkenazy, CPA Research Development Director IMA
  • 49. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 49 Thank You to Our Presenter! Jd Marhevko, MBB, CSSBB, CMQ/OE, CQE, ASQ Fellow 2016 ASQ Shainin Medalist Vice President Quality/Lean Management Systems & EHS Accuride Corporation
  • 50. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 50 ► Complete the Evaluation poll – on your screen ► Access to your CPE Certificate – 2 Options • Click the “CPE” icon at the bottom of your console or • Click the link in your post-event email ► Please print a copy of the CPE certificate for your records. ► Your CPE credit will be automatically recorded in your transcript. Final Reminders
  • 51. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 51 Next Inside Talk Webinar: • Rethink the Finance Function to Become a Trusted Business Partner  Wednesday, March 30, 2016 1 p.m. Eastern Daylight Time www.imanet.org/programs_events/IMAWebinars.aspx For Upcoming Inside Talk Events: • Visit IMA’s website at www.imanet.org/programs_events/IMAWebinars.aspx • Log-in with your User Name & Password • Remember to check IMA’s Learning Spotlight for upcoming webinar events Notification of Future Webinar Schedules
  • 52. © 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk 52