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© Operational Excellence Consulting. All rights reserved.
This 470+ slide presentation contains 30 commonly used
frameworks, models, methodologies and tools for business
process improvement.
Business Process Improvement
Frameworks Reference Guide
Business Process Improvement Frameworks &
Models Reference Guide
© Operational Excellence Consulting. All rights reserved. 2
Contents
1. Business Model Canvas 16. 8D Problem Solving Process
2. Design Thinking 17. 5S Principles
3. Customer Journey Mapping 18. Visual Management
4. Balanced Scorecard 19. Kaizen
5. Hoshin Kanri 20. Eight Wastes of Lean
6. Xerox Benchmarking Model 21. Lean Manufacturing System (TPS)
7. Kano Model 22. Value Stream Mapping
8. Cost of Quality Model 23. PDCA Problem Solving Process
9. Total Quality Management Model 24. Root Cause Analysis (RCA)
10. Baldrige Excellence Framework 25. Standard Work
11. EFQM Excellence Model 26. Total Productive Maintenance
12. Shingo Model for Operational Excellence 27. Gemba Walk
13. ISO 9001:2015 Quality Management System 28. Training Within Industry (TWI)
14. Business Process Reengineering 29. ADKAR® Model for Individual Change
15. Six Sigma 30. Kotter’s Change Management Model
NOTE: This is a PARTIAL PREVIEW. To
download the complete presentation, please visit:
https://www.oeconsulting.com.sg
© Operational Excellence Consulting. All rights reserved. 3
Business Model Canvas – Introduction
What It Is
§ The Business Model Canvas provides a canvas to
describe, visualize, develop and explore business
models.
§ The template is based on nine basic building blocks,
which can show at a glance how a company does its
business and earns money.
§ These elements cover the areas of the organization's
core offering, infrastructure, customers, and
finances. They include:
1. Customer Segments
2. Value Propositions
3. Channels
4. Customer Relationships
5. Revenue Streams
6. Key Resources
7. Key Activities
8. Key Partnerships
9. Cost Structure
Why We Use It
§ The Business Model Canvas is particularly suitable
to develop new and/or alternate business models.
§ A hands-on tool that fosters understanding and
creativity.
§ See the relationships among the parts of your
model.
§ Identify hypothesis, assumptions and risks.
§ Plan validation testing (market, channels, pricing).
§ Find ways to add value or reduce cost.
§ Brainstorm market disruption strategies.
When To Use It
§ The canvas can be used to generate new business
models and to foster ideas for and new ways of
doing business.
§ It is also a perfect tool to analyze the existing
business model of your organization and find areas
for improvement.
© Operational Excellence Consulting. All rights reserved. 4
The left-brain and right-brain problem solving approaches follow similar
divergent and convergent ways of thinking
PROBLEM
SOLUTION
PROBLEM
SOLUTION
RIGHT BRAIN
Intuition, Emotion
LEFT BRAIN
Rationality, Logic
Understand & observe
Define point of view (POV)
Ideate
Develop & test prototypes
Perform situation analysis
Find & define goals
Develop solution variants
Assess & select
Solution Space
Problem Space
FEEDBACK
LOOPS
ITERATIONS
Source: Adapted from Lewrick et al., 2018
© Operational Excellence Consulting. All rights reserved. 5
Key elements of a customer journey map
Elements Description
Persona § Identify the customer embarking on the journey.
Stages § All the stages or steps customers go through in chronological order.
Goals § Include the customer’s goals and expectations for each step.
Actions § Actions and activities to be performed by the customer in each step.
§ Often the interactions between the customer and the company are specifically
highlighted and referred to as touchpoints. These touchpoints are where activities by
the organization meet and overlap with activities by the customer: this is when
interaction occurs.
§ Touchpoints do not have to appear in every step.
Thoughts &
Feelings
§ The emotional experience of customers (their thoughts and feelings) at each step, with
a graphical representation of customer’s emotional state and their satisfaction levels
at each step of the process.
Metrics § Map quantitative data onto the journey to show the relationship to the qualitative
information.
Opportunities § Improvements or suggestions that would increase customer satisfaction in each step,
and/or improvements or suggestions that would ease customer transition to the next
step.
© Operational Excellence Consulting. All rights reserved. 6
Cause-and-effect relationships pervade the four perspectives of a
balanced scorecard
Financial
Customer
Internal/Business Processes
Learning and Growth
Process
Quality
Process
Cycle Time
Employee
Skills
On-time
Delivery
Customer
Loyalty
ROCE
Source: Kaplan & Norton
© Operational Excellence Consulting. All rights reserved. 7
Hoshin planning process – an illustrative example
Direction of
information flow
Catchball:
Negotiation &
Alignment between
two levels
MD/
Business Unit
GM
Dept Manager
Section
Manager
Engineer
Customer
Satisfaction
Feedback
Feedback
Feedback
Feedback
Set up & lead
kaizen team to reduce
rejects in Line A-1
To improve
quality
Improve
overall yield
Reduce
defects
Reduce rejects
in Line A-1
To improve
quality
Improve
overall yield
Reduce
defects
Policy Owner Objective Means
© Operational Excellence Consulting. All rights reserved. 8
1. IDENTIFY WHAT IS TO BE BENCHMARKED
2. IDENTIFY COMPARATIVE COMPANIES
3. DETERMINE DATA COLLECTION METHOD AND COLLECT DATA
4. DETERMINE CURRENT PERFORMANCE “GAP”
5. PROJECT FUTURE PEROFMANCE LEVELS
6. COMMUNICATE BENCHMARK FINDINGS AND GAIN ACCEPTANCE
7. ESTABLISH FUNCTIONAL GOALS
8. DEVELOP ACTION PLANS
9. IMPLEMENT SPECIFIC ACTIONS AND MONITOR PROGRESS
10. RECALIBRATE BENCHMARKS
v LEADERSHIP POSITION ATTAINED
v PRACTICES FULLY INTEGRATED INTO PROCESSES
Phase 1:
PLANNING
Phase 2:
ANALYSIS
Phase 3:
INTEGRATION
Phase 4:
ACTION
MATURITY
The Xerox Benchmarking Model helps to identify best practices which
can be adapted to improve business competitiveness
Source: Robert C. Camp
Xerox Benchmarking Model
© Operational Excellence Consulting. All rights reserved. 9
The Kano model classifies customer preferences into three distinct
categories and have a different impact on customer satisfaction when
fulfilled or unfulfilled
EXCITEMENT
(Delighters)
§ These are the unexpected and
pleasant surprises you provide
your customers.
§ They are the innovations that
differentiate your offering.
§ Some companies call them
Unique Selling Propositions
(USP’s), others call them the
WOW factor.
§ They delight the customer
when there, but do not cause
any dissatisfaction when
missing because the customer
never expected them in the first
place!
PERFORMANCE
(Satisfiers)
§ These are the requirements
that the customers are able to
articulate and are at the top of
their minds when making
choices and evaluating options.
§ They are the most visible of the
Kano requirements and likely
easiest to acquire because
customers freely talk about
these.
§ The better they are performed,
the more satisfaction they
bring, conversely, the worse
they are performed, the more
dissatisfaction they bring.
THRESHOLD
(Basics)
§ These are the requirements
that the customers expect.
§ They are taken for granted.
§ When done well, customers
are just neutral, but when
done poorly, customers are
very dissatisfied.
§ They are the requirements that
must be included and are the
price of entry into a market.
Kano Model
© Operational Excellence Consulting. All rights reserved. 10
Cost of non-conformance can be eliminated to improve quality
Cost of Quality (COQ)
Cost of Conformance
( COC )
Cost of Non-Conformance
( CONC )
Prevention
Cost
Appraisal
Cost
Internal
Failures Cost
External
Failures Cost
Sources: Based on J. M. Juran & Philip Crosby
Cost of Quality Model
© Operational Excellence Consulting. All rights reserved. 11
Baldrige Excellence Framework – Introduction
What It Is
§ The Baldrige Excellence Framework is a Presidential
award created in 1987 by Public Law 100-107
§ It is the highest level of national recognition for
performance excellence
§ The award is traditionally presented by the
President of the United States
§ The framework is an integrated approach to
organizational performance management that results
in:
! delivery of ever-improving value to customers and
stakeholders, contributing to organizational
sustainability
! improvement of overall organizational effectiveness
and capabilities
! organizational and personal learning
§ Identify organizations that will serve as role models
for other organizations
§ Help organizations assess their improvement efforts
§ Help to strengthen U.S. competitiveness
Why We Use It
§ Improve performance and achieve world-class
results
§ Seek “the most cost-effective, value-added business
audit available anywhere”
§ Objectively clarify your organization’s strengths and
weaknesses
Key Characteristics of the Framework
§ Focus on business results
§ Tools used to obtain results are non-prescriptive and
adaptive
§ The criteria support company-wide alignment of
goals and processes
§ Supports goal-based assessment
© Operational Excellence Consulting. All rights reserved. 12
Source: The Shingo Prize
The Shingo transformation process is a methodology for accelerating a
personal and enterprise-wide transformation to a culture of operational
excellence
The Shingo Model for Operational Excellence
Results
Enterprise Alignment
Continuous Process
Improvement
Cultural Enablers
Create Value for the Customer
Measure what Matters
Align Behaviors with Performance
Identify Cause & Effect Relationships
See Reality
Focus on Long-term
Align Systems
Align Strategy
Standardize Daily Management
Stabilize Processes
Relay on Facts & Data
Standardize Processes
Insist on Direct Observation
Focus on Value Stream
Keep it Simple & Visual
Identify & Eliminate Waste
No Defects Passed Forward
Integrate Improvement with Work
Assure a Safe Environment
Develop People
Empower & Involve Everyone
Create Constancy of Purpose
Think Systematically
Focus on Process
Embrace Scientific Thinking
Flow & Pull Value
Assure Quality at the Source
Seek Perfection
Lead with Humility
Respect Every Individual
GUIDING PRINCIPLES SUPPORTING CONCEPTS
ADMINISTRATION
SUPPLY
OPERATIONS CUSTOMER
RELATIONS
PRODUCT &
SERVICE
DEVELOPMENT
© Operational Excellence Consulting. All rights reserved. 13
ISO 9001:2015 quality management system establishes proven
processes that meet the requirements of interested parties
ISO 9001:2015 Quality Management Model
Organization and
its context (4)
Customer
Requirements
Customer
Satisfaction
Products
and services
Results of
the QMS
Needs and expectations
of relevant interested
parties (4)
Leadership
(5)
Performance
evaluation
(9)
Support &
Operation
(7,8)
Planning
(6)
Improvement
(10)
Plan Do
Check
Act
© Operational Excellence Consulting. All rights reserved. 14
Phases of BPR and the key activities
Organize
for BPR
Process
Diagnosis
Process
Redesign
Process
Deployment
§ Implement
process
improvement plan
§ Measure results
§ Obtain customer
feedback on
process
performance
§ Do it all over again
§ Benchmark the
process
§ Develop solutions
to close gaps
§ Get buy-in
§ Develop
improvement
plans
§ Determine
customer
requirements
§ Determine and
document current
process
§ Rate the process
§ Create business
process map
§ Prioritize areas for
improvement
§ Establish process
ownership
§ Form BPR team
§ Initiate project
1 4
3
2
© Operational Excellence Consulting. All rights reserved. 15
§ DMAIC allows for the utilization of multiple tools and techniques when improving
processes; including statistics and Lean techniques.
§ The Control phase allows teams to develop a process to ensure improvement
results will be sustained over the long-term.
§ Identify the
critical business
issues and
concerns
§ Understand the
current process
and it’s
customers
§ Characterize the
Y and potential
X’s
§ Collect data for
process elements
§ Verify/quantify
important X’s
§ Identify factors
(X’s) that have an
influence on the
business issue.
§ Implement
solutions to
improve Y
§ Adjust the factors
that influence the
business
concerns
§ Manage important
X’s and monitor
the Y over time
§ Mange routine or
day-to-day
operations for
these critical
factors
Define
Opportunity
Measure
Performance
Analyze
Opportunity
Improve
Performance
Control
Performance
Each step in the DMAIC process is required and results in deliverables
that ensures the team is focused on key process metrics
Six Sigma DMAIC Model
© Operational Excellence Consulting. All rights reserved. 16
The 8D Problem-Solving Process is an approach for solving problems in
a disciplined way
8D Problem-Solving Process
Plan
0
Initiate Project Team
1
Define the Problem
2
Implement Containment Actions
3
Identify Root Causes
4
Develop & Verify Solution
5
Implement Corrective Actions
6
Prevent Recurrence
7
Recognize Project Team
8
© Operational Excellence Consulting. All rights reserved. 17
The eight steps of 5S implementation lay out a clear roadmap for
workplace organization and standardization
5S Implementation Process
Establish a 5S
Steering
Committee
Define a 5S
Implementation
Plan
Launch
Communications
Campaign
Provide 5S
Training &
Education
Start
5S Pilots
Mass Rollout
Conduct
5S Audits
Review &
Improve
5S
IMPLEMENTATION
PROCESS
© Operational Excellence Consulting. All rights reserved. 18
Visual management triangle – Knowing, seeing and acting together as a
group
SEEING AS A GROUP
§ Production status
§ Inventory levels
§ Machine availability
ACTING AS A GROUP
§ Consensus on rules
and objectives
§ Involvement in
improvement activities
KNOWING AS A GROUP
§ Delivery commitments
§ Goals and schedules
§ Management rules
Source: Pascal Dennis
Visual Management Triangle
© Operational Excellence Consulting. All rights reserved. 19
The six steps of kaizen is a scientific method used by Toyota for general
problem solving and generating original ideas
Source: Based on Kato & Smalley
1. Discover
Improvement
Potential
3. Generate Original
Ideas
2. Analyze the
Current Methods
4. Develop an
Implementation Plan
5. Implement the
Plan
6. Evaluate the New
Method
Six Steps
of Kaizen
Six Steps of Kaizen
© Operational Excellence Consulting. All rights reserved. 20
The Lean Manufacturing system describes a holistic approach to
improving speed and quality
Source: Adapted from Toyota Production System
House of TPS
Stability
Heijunka Standardized Work Kaizen
Just-In-Time
• Continuous flow
• Takt time
• Pull system
• Flexible workforce
Jidoka
• Separate man &
machine work
• Abnormality
Identification
• Poka-yoke
Goals:
highest quality,
lowest cost, shortest lead times
Involvement
Stability
Standardization
Just-In-Time
Jidoka
Involvement
1
2
3
4
5
1
2
3 4
5
© Operational Excellence Consulting. All rights reserved. 21
The four phases of value stream mapping
Value Stream Mapping Roadmap
§ Define and scope
problem
§ Pick product family
§ Determine VSM objective
and benefits
§ Create VSM charter
§ Map current state value
stream
§ Quantify current state
value stream performance
§ Analyze and identify
improvement
opportunities
§ Develop future state
value stream map
§ Prioritize improvement
projects
§ Develop implementation
plan
§ Seek management
approval
§ Implement the plan
and monitor
progress
Create
Implementation
Plan
Design
Future State
Document
Current State
Define
Product
Family
Value Stream
Mapping
Roadmap
© Operational Excellence Consulting. All rights reserved. 22
The PDCA problem solving process is a generic approach to process
improvement and applies to all types of organizations
Select the Theme
Plan the Schedule
Grasp the Present Situation
Establish the Target
Analyze the Cause & Identify Corrective Action
Implement Corrective Action
Evaluate the Result
Standardize & Follow-up
PLAN
ACT
CHECK
DO
1
2
3
4
5
6
7
8
PDCA Problem Solving Process
© Operational Excellence Consulting. All rights reserved. 23
5 Whys Analysis – Example 1
Symptom: The machine stopped!
Causes:
2. The shaft wore down and seized up.
3. Metal cutting chips penetrated the area.
4. Chips passed through the lubrication system.
5. There was no strainer on the inlet pipe from the tank.
1. The circuit overload tripped.
1st Why
2nd Why
3rd Why
4th Why
5th Why
© Operational Excellence Consulting. All rights reserved. 24
Equipment Losses & OEE
Six Big Losses
Downtime
Losses
Quality
Losses
Speed
Losses
Fully
Productive
Time
Net Operating
Time
Planned Production Time
Operating Time
Equipment
Average total operating loss
30-50%
Breakdowns
Setups &
Adjustments
Reduced
Speed
Minor Stops
& Idling
Defects &
Rework
Startup &
Yield Loss
Breakdowns per machine
(stopped longer than 10 mins)
– less than once a month
Setup/adjustment time – less
than 10 mins
Achieve ideal cycle times
(design speed); increase 15%
or more
Minor stoppages and idling
per machine – under 10 mins
Rate (including products to be
reworked) – less than 0.1%
Startup yield – 99% or more of
lot
Ideal Cycle Time x Total Pcs
Operating Time
Good Pieces
Total Pieces
Operating Time
Planned Production Time
Availability
Quality
Performance
Greater than 90%
Throughput process
- Greater than 99%
Greater than 95%
OEE Factors
OEE = Availability x Performance x Quality
Source: Adapted from ‘TPM for Supervisors’, Productivity Press Development Team
© Operational Excellence Consulting. All rights reserved. 25
The four steps of Gemba Walk provides a structured process for leaders
to see the flow of value and uncover opportunities for improvement
Four Steps of Gemba Walk
1
Know Your
Purpose
2
Know Your
Gemba
3
Observe the
Framework
4
Validate
Four Steps
of Gemba
Walk
© Operational Excellence Consulting. All rights reserved. 26
Training Within Industry (TWI) skills enable supervisors with the
consistent ability to lead, instruct and improve work processes
Charles Allen
4-Step
Learning
Process
TWI
PDCA Cycle
Scientific
Method
Job
Instruction
Job
Methods
Job
Relations
Preparation
Prepare the
Worker
Breakdown the
Job
Get the Facts
Plan – observe
data and
reality; decide on a
problem; define it
Observation and
Description
Presentation
Present the
Operation
Question Every
Detail
Weigh & Decide
Do – Analyze the
problem; propose a
countermeasure
Formulation of
an
Hypothesis
Application
Try Out
Performance
Develop New
Method
Take Action
Check – Try the
countermeasure;
check
the results
Use the
Hypothesis
to make
Predictions
Testing Follow Up
Apply New
Method
Check Results
Act – if successful,
standardize
change; if not, start
the cycle over
Test the
Predictions
by Experiments
© Operational Excellence Consulting. All rights reserved. 27
The ADKAR® Model provides a simple and action-oriented framework for
taking control of individual change
Source: Based on Prosci® ADKAR® Model
A R
A
D K
KNOWLEDGE REINFORCEMENT
AWARENESS
DESIRE ABILITY
§ Understand the need for
change
§ Understand nature of the
change
§ Sustain the change
§ Build a culture and
competence around change
§ How to change
§ Implement new skills and
behaviors
§ Support the change
§ Participate and engage
§ Implement the change
§ Demonstrate performance
ADKAR® Model
© Operational Excellence Consulting. All rights reserved. 28
Kotter’s eight phases of change and the key management activities
Kotter’s Eight Phases of Change (Phases 1 to 4)
Source: Based on John Kotter, 1996 & 2014
Create a sense
of urgency
Form a
strategic vision
Enlist a
volunteer army
§ Research market
§ Analyze competition
§ Identify and discuss
(potential) crisis and
opportunities
§ Form a powerful and
influential coalition to
lead the charge
§ Align this guiding
coalition to work like a
team
§ Create a vision to
direct the change effort
§ Develop strategies to
realize the vision
§ Use every possible
way to communicate
the new vision and
strategies
§ Let guiding coalition
members be role
models for the rest of
the organization
Build a guiding
coalition
(see next slide for phases 5-8)
1 4
3
2
© Operational Excellence Consulting. All rights reserved. 29
About Operational Excellence
Consulting
• Operational Excellence Consulting is a management
training and consulting firm that assists organizations in
improving business performance and effectiveness.
• The firm’s mission is to create business value for
organizations through innovative operational excellence
management training and consulting solutions.
• OEC takes a unique “beyond the tools” approach to enable
clients develop internal capabilities and cultural
transformation to achieve sustainable world-class excellence
and competitive advantage. For more information, please visit
www.oeconsulting.com.sg
© Operational Excellence Consulting. All rights reserved.
END OF PREVIEW
To download this presentation,
please visit:
www.oeconsulting.com.sg

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Business Process Improvement Frameworks Reference Guide

  • 1. © Operational Excellence Consulting. All rights reserved. This 470+ slide presentation contains 30 commonly used frameworks, models, methodologies and tools for business process improvement. Business Process Improvement Frameworks Reference Guide Business Process Improvement Frameworks & Models Reference Guide
  • 2. © Operational Excellence Consulting. All rights reserved. 2 Contents 1. Business Model Canvas 16. 8D Problem Solving Process 2. Design Thinking 17. 5S Principles 3. Customer Journey Mapping 18. Visual Management 4. Balanced Scorecard 19. Kaizen 5. Hoshin Kanri 20. Eight Wastes of Lean 6. Xerox Benchmarking Model 21. Lean Manufacturing System (TPS) 7. Kano Model 22. Value Stream Mapping 8. Cost of Quality Model 23. PDCA Problem Solving Process 9. Total Quality Management Model 24. Root Cause Analysis (RCA) 10. Baldrige Excellence Framework 25. Standard Work 11. EFQM Excellence Model 26. Total Productive Maintenance 12. Shingo Model for Operational Excellence 27. Gemba Walk 13. ISO 9001:2015 Quality Management System 28. Training Within Industry (TWI) 14. Business Process Reengineering 29. ADKAR® Model for Individual Change 15. Six Sigma 30. Kotter’s Change Management Model NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg
  • 3. © Operational Excellence Consulting. All rights reserved. 3 Business Model Canvas – Introduction What It Is § The Business Model Canvas provides a canvas to describe, visualize, develop and explore business models. § The template is based on nine basic building blocks, which can show at a glance how a company does its business and earns money. § These elements cover the areas of the organization's core offering, infrastructure, customers, and finances. They include: 1. Customer Segments 2. Value Propositions 3. Channels 4. Customer Relationships 5. Revenue Streams 6. Key Resources 7. Key Activities 8. Key Partnerships 9. Cost Structure Why We Use It § The Business Model Canvas is particularly suitable to develop new and/or alternate business models. § A hands-on tool that fosters understanding and creativity. § See the relationships among the parts of your model. § Identify hypothesis, assumptions and risks. § Plan validation testing (market, channels, pricing). § Find ways to add value or reduce cost. § Brainstorm market disruption strategies. When To Use It § The canvas can be used to generate new business models and to foster ideas for and new ways of doing business. § It is also a perfect tool to analyze the existing business model of your organization and find areas for improvement.
  • 4. © Operational Excellence Consulting. All rights reserved. 4 The left-brain and right-brain problem solving approaches follow similar divergent and convergent ways of thinking PROBLEM SOLUTION PROBLEM SOLUTION RIGHT BRAIN Intuition, Emotion LEFT BRAIN Rationality, Logic Understand & observe Define point of view (POV) Ideate Develop & test prototypes Perform situation analysis Find & define goals Develop solution variants Assess & select Solution Space Problem Space FEEDBACK LOOPS ITERATIONS Source: Adapted from Lewrick et al., 2018
  • 5. © Operational Excellence Consulting. All rights reserved. 5 Key elements of a customer journey map Elements Description Persona § Identify the customer embarking on the journey. Stages § All the stages or steps customers go through in chronological order. Goals § Include the customer’s goals and expectations for each step. Actions § Actions and activities to be performed by the customer in each step. § Often the interactions between the customer and the company are specifically highlighted and referred to as touchpoints. These touchpoints are where activities by the organization meet and overlap with activities by the customer: this is when interaction occurs. § Touchpoints do not have to appear in every step. Thoughts & Feelings § The emotional experience of customers (their thoughts and feelings) at each step, with a graphical representation of customer’s emotional state and their satisfaction levels at each step of the process. Metrics § Map quantitative data onto the journey to show the relationship to the qualitative information. Opportunities § Improvements or suggestions that would increase customer satisfaction in each step, and/or improvements or suggestions that would ease customer transition to the next step.
  • 6. © Operational Excellence Consulting. All rights reserved. 6 Cause-and-effect relationships pervade the four perspectives of a balanced scorecard Financial Customer Internal/Business Processes Learning and Growth Process Quality Process Cycle Time Employee Skills On-time Delivery Customer Loyalty ROCE Source: Kaplan & Norton
  • 7. © Operational Excellence Consulting. All rights reserved. 7 Hoshin planning process – an illustrative example Direction of information flow Catchball: Negotiation & Alignment between two levels MD/ Business Unit GM Dept Manager Section Manager Engineer Customer Satisfaction Feedback Feedback Feedback Feedback Set up & lead kaizen team to reduce rejects in Line A-1 To improve quality Improve overall yield Reduce defects Reduce rejects in Line A-1 To improve quality Improve overall yield Reduce defects Policy Owner Objective Means
  • 8. © Operational Excellence Consulting. All rights reserved. 8 1. IDENTIFY WHAT IS TO BE BENCHMARKED 2. IDENTIFY COMPARATIVE COMPANIES 3. DETERMINE DATA COLLECTION METHOD AND COLLECT DATA 4. DETERMINE CURRENT PERFORMANCE “GAP” 5. PROJECT FUTURE PEROFMANCE LEVELS 6. COMMUNICATE BENCHMARK FINDINGS AND GAIN ACCEPTANCE 7. ESTABLISH FUNCTIONAL GOALS 8. DEVELOP ACTION PLANS 9. IMPLEMENT SPECIFIC ACTIONS AND MONITOR PROGRESS 10. RECALIBRATE BENCHMARKS v LEADERSHIP POSITION ATTAINED v PRACTICES FULLY INTEGRATED INTO PROCESSES Phase 1: PLANNING Phase 2: ANALYSIS Phase 3: INTEGRATION Phase 4: ACTION MATURITY The Xerox Benchmarking Model helps to identify best practices which can be adapted to improve business competitiveness Source: Robert C. Camp Xerox Benchmarking Model
  • 9. © Operational Excellence Consulting. All rights reserved. 9 The Kano model classifies customer preferences into three distinct categories and have a different impact on customer satisfaction when fulfilled or unfulfilled EXCITEMENT (Delighters) § These are the unexpected and pleasant surprises you provide your customers. § They are the innovations that differentiate your offering. § Some companies call them Unique Selling Propositions (USP’s), others call them the WOW factor. § They delight the customer when there, but do not cause any dissatisfaction when missing because the customer never expected them in the first place! PERFORMANCE (Satisfiers) § These are the requirements that the customers are able to articulate and are at the top of their minds when making choices and evaluating options. § They are the most visible of the Kano requirements and likely easiest to acquire because customers freely talk about these. § The better they are performed, the more satisfaction they bring, conversely, the worse they are performed, the more dissatisfaction they bring. THRESHOLD (Basics) § These are the requirements that the customers expect. § They are taken for granted. § When done well, customers are just neutral, but when done poorly, customers are very dissatisfied. § They are the requirements that must be included and are the price of entry into a market. Kano Model
  • 10. © Operational Excellence Consulting. All rights reserved. 10 Cost of non-conformance can be eliminated to improve quality Cost of Quality (COQ) Cost of Conformance ( COC ) Cost of Non-Conformance ( CONC ) Prevention Cost Appraisal Cost Internal Failures Cost External Failures Cost Sources: Based on J. M. Juran & Philip Crosby Cost of Quality Model
  • 11. © Operational Excellence Consulting. All rights reserved. 11 Baldrige Excellence Framework – Introduction What It Is § The Baldrige Excellence Framework is a Presidential award created in 1987 by Public Law 100-107 § It is the highest level of national recognition for performance excellence § The award is traditionally presented by the President of the United States § The framework is an integrated approach to organizational performance management that results in: ! delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability ! improvement of overall organizational effectiveness and capabilities ! organizational and personal learning § Identify organizations that will serve as role models for other organizations § Help organizations assess their improvement efforts § Help to strengthen U.S. competitiveness Why We Use It § Improve performance and achieve world-class results § Seek “the most cost-effective, value-added business audit available anywhere” § Objectively clarify your organization’s strengths and weaknesses Key Characteristics of the Framework § Focus on business results § Tools used to obtain results are non-prescriptive and adaptive § The criteria support company-wide alignment of goals and processes § Supports goal-based assessment
  • 12. © Operational Excellence Consulting. All rights reserved. 12 Source: The Shingo Prize The Shingo transformation process is a methodology for accelerating a personal and enterprise-wide transformation to a culture of operational excellence The Shingo Model for Operational Excellence Results Enterprise Alignment Continuous Process Improvement Cultural Enablers Create Value for the Customer Measure what Matters Align Behaviors with Performance Identify Cause & Effect Relationships See Reality Focus on Long-term Align Systems Align Strategy Standardize Daily Management Stabilize Processes Relay on Facts & Data Standardize Processes Insist on Direct Observation Focus on Value Stream Keep it Simple & Visual Identify & Eliminate Waste No Defects Passed Forward Integrate Improvement with Work Assure a Safe Environment Develop People Empower & Involve Everyone Create Constancy of Purpose Think Systematically Focus on Process Embrace Scientific Thinking Flow & Pull Value Assure Quality at the Source Seek Perfection Lead with Humility Respect Every Individual GUIDING PRINCIPLES SUPPORTING CONCEPTS ADMINISTRATION SUPPLY OPERATIONS CUSTOMER RELATIONS PRODUCT & SERVICE DEVELOPMENT
  • 13. © Operational Excellence Consulting. All rights reserved. 13 ISO 9001:2015 quality management system establishes proven processes that meet the requirements of interested parties ISO 9001:2015 Quality Management Model Organization and its context (4) Customer Requirements Customer Satisfaction Products and services Results of the QMS Needs and expectations of relevant interested parties (4) Leadership (5) Performance evaluation (9) Support & Operation (7,8) Planning (6) Improvement (10) Plan Do Check Act
  • 14. © Operational Excellence Consulting. All rights reserved. 14 Phases of BPR and the key activities Organize for BPR Process Diagnosis Process Redesign Process Deployment § Implement process improvement plan § Measure results § Obtain customer feedback on process performance § Do it all over again § Benchmark the process § Develop solutions to close gaps § Get buy-in § Develop improvement plans § Determine customer requirements § Determine and document current process § Rate the process § Create business process map § Prioritize areas for improvement § Establish process ownership § Form BPR team § Initiate project 1 4 3 2
  • 15. © Operational Excellence Consulting. All rights reserved. 15 § DMAIC allows for the utilization of multiple tools and techniques when improving processes; including statistics and Lean techniques. § The Control phase allows teams to develop a process to ensure improvement results will be sustained over the long-term. § Identify the critical business issues and concerns § Understand the current process and it’s customers § Characterize the Y and potential X’s § Collect data for process elements § Verify/quantify important X’s § Identify factors (X’s) that have an influence on the business issue. § Implement solutions to improve Y § Adjust the factors that influence the business concerns § Manage important X’s and monitor the Y over time § Mange routine or day-to-day operations for these critical factors Define Opportunity Measure Performance Analyze Opportunity Improve Performance Control Performance Each step in the DMAIC process is required and results in deliverables that ensures the team is focused on key process metrics Six Sigma DMAIC Model
  • 16. © Operational Excellence Consulting. All rights reserved. 16 The 8D Problem-Solving Process is an approach for solving problems in a disciplined way 8D Problem-Solving Process Plan 0 Initiate Project Team 1 Define the Problem 2 Implement Containment Actions 3 Identify Root Causes 4 Develop & Verify Solution 5 Implement Corrective Actions 6 Prevent Recurrence 7 Recognize Project Team 8
  • 17. © Operational Excellence Consulting. All rights reserved. 17 The eight steps of 5S implementation lay out a clear roadmap for workplace organization and standardization 5S Implementation Process Establish a 5S Steering Committee Define a 5S Implementation Plan Launch Communications Campaign Provide 5S Training & Education Start 5S Pilots Mass Rollout Conduct 5S Audits Review & Improve 5S IMPLEMENTATION PROCESS
  • 18. © Operational Excellence Consulting. All rights reserved. 18 Visual management triangle – Knowing, seeing and acting together as a group SEEING AS A GROUP § Production status § Inventory levels § Machine availability ACTING AS A GROUP § Consensus on rules and objectives § Involvement in improvement activities KNOWING AS A GROUP § Delivery commitments § Goals and schedules § Management rules Source: Pascal Dennis Visual Management Triangle
  • 19. © Operational Excellence Consulting. All rights reserved. 19 The six steps of kaizen is a scientific method used by Toyota for general problem solving and generating original ideas Source: Based on Kato & Smalley 1. Discover Improvement Potential 3. Generate Original Ideas 2. Analyze the Current Methods 4. Develop an Implementation Plan 5. Implement the Plan 6. Evaluate the New Method Six Steps of Kaizen Six Steps of Kaizen
  • 20. © Operational Excellence Consulting. All rights reserved. 20 The Lean Manufacturing system describes a holistic approach to improving speed and quality Source: Adapted from Toyota Production System House of TPS Stability Heijunka Standardized Work Kaizen Just-In-Time • Continuous flow • Takt time • Pull system • Flexible workforce Jidoka • Separate man & machine work • Abnormality Identification • Poka-yoke Goals: highest quality, lowest cost, shortest lead times Involvement Stability Standardization Just-In-Time Jidoka Involvement 1 2 3 4 5 1 2 3 4 5
  • 21. © Operational Excellence Consulting. All rights reserved. 21 The four phases of value stream mapping Value Stream Mapping Roadmap § Define and scope problem § Pick product family § Determine VSM objective and benefits § Create VSM charter § Map current state value stream § Quantify current state value stream performance § Analyze and identify improvement opportunities § Develop future state value stream map § Prioritize improvement projects § Develop implementation plan § Seek management approval § Implement the plan and monitor progress Create Implementation Plan Design Future State Document Current State Define Product Family Value Stream Mapping Roadmap
  • 22. © Operational Excellence Consulting. All rights reserved. 22 The PDCA problem solving process is a generic approach to process improvement and applies to all types of organizations Select the Theme Plan the Schedule Grasp the Present Situation Establish the Target Analyze the Cause & Identify Corrective Action Implement Corrective Action Evaluate the Result Standardize & Follow-up PLAN ACT CHECK DO 1 2 3 4 5 6 7 8 PDCA Problem Solving Process
  • 23. © Operational Excellence Consulting. All rights reserved. 23 5 Whys Analysis – Example 1 Symptom: The machine stopped! Causes: 2. The shaft wore down and seized up. 3. Metal cutting chips penetrated the area. 4. Chips passed through the lubrication system. 5. There was no strainer on the inlet pipe from the tank. 1. The circuit overload tripped. 1st Why 2nd Why 3rd Why 4th Why 5th Why
  • 24. © Operational Excellence Consulting. All rights reserved. 24 Equipment Losses & OEE Six Big Losses Downtime Losses Quality Losses Speed Losses Fully Productive Time Net Operating Time Planned Production Time Operating Time Equipment Average total operating loss 30-50% Breakdowns Setups & Adjustments Reduced Speed Minor Stops & Idling Defects & Rework Startup & Yield Loss Breakdowns per machine (stopped longer than 10 mins) – less than once a month Setup/adjustment time – less than 10 mins Achieve ideal cycle times (design speed); increase 15% or more Minor stoppages and idling per machine – under 10 mins Rate (including products to be reworked) – less than 0.1% Startup yield – 99% or more of lot Ideal Cycle Time x Total Pcs Operating Time Good Pieces Total Pieces Operating Time Planned Production Time Availability Quality Performance Greater than 90% Throughput process - Greater than 99% Greater than 95% OEE Factors OEE = Availability x Performance x Quality Source: Adapted from ‘TPM for Supervisors’, Productivity Press Development Team
  • 25. © Operational Excellence Consulting. All rights reserved. 25 The four steps of Gemba Walk provides a structured process for leaders to see the flow of value and uncover opportunities for improvement Four Steps of Gemba Walk 1 Know Your Purpose 2 Know Your Gemba 3 Observe the Framework 4 Validate Four Steps of Gemba Walk
  • 26. © Operational Excellence Consulting. All rights reserved. 26 Training Within Industry (TWI) skills enable supervisors with the consistent ability to lead, instruct and improve work processes Charles Allen 4-Step Learning Process TWI PDCA Cycle Scientific Method Job Instruction Job Methods Job Relations Preparation Prepare the Worker Breakdown the Job Get the Facts Plan – observe data and reality; decide on a problem; define it Observation and Description Presentation Present the Operation Question Every Detail Weigh & Decide Do – Analyze the problem; propose a countermeasure Formulation of an Hypothesis Application Try Out Performance Develop New Method Take Action Check – Try the countermeasure; check the results Use the Hypothesis to make Predictions Testing Follow Up Apply New Method Check Results Act – if successful, standardize change; if not, start the cycle over Test the Predictions by Experiments
  • 27. © Operational Excellence Consulting. All rights reserved. 27 The ADKAR® Model provides a simple and action-oriented framework for taking control of individual change Source: Based on Prosci® ADKAR® Model A R A D K KNOWLEDGE REINFORCEMENT AWARENESS DESIRE ABILITY § Understand the need for change § Understand nature of the change § Sustain the change § Build a culture and competence around change § How to change § Implement new skills and behaviors § Support the change § Participate and engage § Implement the change § Demonstrate performance ADKAR® Model
  • 28. © Operational Excellence Consulting. All rights reserved. 28 Kotter’s eight phases of change and the key management activities Kotter’s Eight Phases of Change (Phases 1 to 4) Source: Based on John Kotter, 1996 & 2014 Create a sense of urgency Form a strategic vision Enlist a volunteer army § Research market § Analyze competition § Identify and discuss (potential) crisis and opportunities § Form a powerful and influential coalition to lead the charge § Align this guiding coalition to work like a team § Create a vision to direct the change effort § Develop strategies to realize the vision § Use every possible way to communicate the new vision and strategies § Let guiding coalition members be role models for the rest of the organization Build a guiding coalition (see next slide for phases 5-8) 1 4 3 2
  • 29. © Operational Excellence Consulting. All rights reserved. 29 About Operational Excellence Consulting • Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. • The firm’s mission is to create business value for organizations through innovative operational excellence management training and consulting solutions. • OEC takes a unique “beyond the tools” approach to enable clients develop internal capabilities and cultural transformation to achieve sustainable world-class excellence and competitive advantage. For more information, please visit www.oeconsulting.com.sg
  • 30. © Operational Excellence Consulting. All rights reserved. END OF PREVIEW To download this presentation, please visit: www.oeconsulting.com.sg