IIE Annual Conference 2011 - Steps for establishing CI Culture

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Information about IIE Annual Conference 2011 - Steps for establishing CI Culture
Business

Published on April 22, 2014

Author: KhaledMabrouk

Source: slideshare.net

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Steps for establishing CI culture, and avoiding the "Rubberband Effect"

© Khaled Mabrouk “Processes + People Drive Performance” Page 1 Graspable Steps for Establishing a Continuous Improvement Program Facilitated by: Khaled Mabrouk Continuous Improvement Coach kmabrouk@ReduceOR.com (832) 331-6259

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 2 Presentation Outline • The LEAN/Six Sigma “Rubberband Effect” • Causes for the Rubberband Effect • Steps for Avoiding the Rubberband Effect

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 3 Seminar Facilitator Background • B.S. Industrial Engineering • Experience: - Fortune 500 Corporations (Transportation, Mfg) - Consulting Industry - Software Industry - Instructor for WSU & EMU • Additional Activities Include: - Active in various professional organizations - Member of Six Sigma Conference Board - Published 23 papers - Frequent presenter at professional conferences

© Khaled Mabrouk “Processes + People Drive Performance” Page 4 Causes for the LEAN/Six Sigma “Rubberband Effect”

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 5 “The Rubber Band Effect” Why do Productivity Programs (Lean, 6σ, etc.) not always deliver the desired results? Solutions that are not sustainable

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 6 Causes of the Rubberband Effect 1) Focus on the Wrong Measures • Number of green/black belts generated in a year • Number of projects completed in a year • Dollar savings within a silo of the organization

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 7 Causes of the Rubberband Effect 2) Lack of Clear Understanding of How to Use Productivity Tools • Not considering technical and cultural aspects of Productivity Tools • Not understanding that LEAN is for low-hanging fruit, and Six Sigma is for when you have significantly reduced variability • Thinking that a Six Sigma or LEAN certification is more valuable than a degree in Industrial Engineering • Ignoring other process improvement tools (beyond LEAN and Six Sigma) Fredrick Taylor (1900), Frank & Lillian Gilbreath brought more science to the Study of Practical Mechanics as it evolved to become Industrial Engineering (1920s-1940s)

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 8 Causes of the Rubberband Effect 3) Starting Workforce Engagement at Front Lines Only • Workforce Engagement training delivered only to front line teams • Improving Workforce Engagement skills for interactions with front line workforce, but not for front line managers • Focus more of their effort on the Actively Disengaged Actively Engaged Not Engaged Actively Disengaged ?????

© Khaled Mabrouk “Processes + People Drive Performance” Page 9 Steps for Avoiding the Rubberband Effect

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 10 Steps for Avoiding the Rubberband Effect 1) Leadership Team OWNS Productivity Program • Understand purpose and focus of Productivity Program • Ask the right questions in the field to support the program • Hold regular Productivity Program Updates; as often as financial reviews, and preferably tied to financial reviews

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 11 Steps for Avoiding the Rubberband Effect 2) Migrate from Causal to Effect Data as We Move Up Organization VP Sales & Mktg Manager Tech Sprt & Trng Manager Account Manger Tech Support Personnel SW Dvlpmnt Manager SW Developer Time to 1st Callback # Interactions to Resolution Sales Volume Number of New Accounts Operating Margin Customer Service Levels Actual vs. Estimated Time/Task Quality of Code Developed Release Features vs. Cust. Need M&S Renewal Rate Training Classes Fill Rate Turnover & Promotion Rate Customer Retention Rate Sales Volume Growth Rate Develop understanding of relationship between causal & effect data Software

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 12 Steps for Avoiding the Rubberband Effect 2) Migrate from Causal to Effect Data as We Move Up Organization Plant Manager Engineering Manager WH Manager Maintenance Mechanic Forklift Driver Mfg Manager Assembler Moves Per Hour Safety TBF TTR Operating Margin Customer Service Levels Good Parts Produced Rework Shop Throughput Rate % Orders Shipped On Time Inventory Turns MH Equipment Productivity Equipment Availability Power Usage Levels Develop understanding of relationship between causal & effect data Manufacturing

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 13 Steps for Avoiding the Rubberband Effect 2) Migrate from Causal to Effect Data as We Move Up Organization VP Switching Yard Dispatch Center Yard Master Dispatcher Locomotive Shop Shop Mechanic Station to Station Time Train Arrival/Departure # Cars Switched Switching Accuracy Operating Margin Customer Service Levels Time spent on inspection On Road Locomotive Failure Shop Throughput Rate Locomotive Availability Velocity Crew Hours on Train On Time Departure Train Accuracy Develop understanding of relationship between causal & effect data Railroad

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 14 Ford (1920s) Front line Improves processes Toyota (1960s) Give IE tools to front line GE (1990s) Process speed & Adherence ????? Steps for Avoiding the Rubberband Effect 3) One Individual Assigned to Drive Productivity Program • Has significant Goodwill with the organization • Brings in key support personnel to develop strategy and tactics for Productivity Program • Coaches leadership team on how to best support program

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 15 Steps for Avoiding the Rubberband Effect 4) Drive Process Thinking at All Levels • Process Map to Value Stream Map • Make processes transparent • Use Visual Management techniques • Generate consistent understanding of what is value added, Business value added, and Non-value added CustomerSales Credit& Invoicing ProductionShipping Order Entry Credit Check Order Fulfillment Generate Order 1 Complete Order 2 Receive Order 3 Check Credit 4 Credit OK? 5 Address Credit Problem 17 No Problem Solved? 18 Stop Order 19 Proceed With Order 6 Yes Prepare Invoice 12 Order Picked? 13 Send Invoice to Shipping 14 Enter Order 7 Schedule Production 8 Make Product 9 Assemble Packages 10 Pick and Pack Order 11 Ship Order 15 Process Payment 16 Yes No

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 16 1st 1Step - Reduce Variability 1) Documented standard processes 2) Measure process adherence 3) Document contingency plans 4) Ensure clear communications Daily Process Throughput 60 80 100 120 140 160 180 200 Passage of Time Thruput Daily Process Throughput 60 80 100 120 140 160 180 200 Passage of Time Thruput 2nd Step - Improve Process Identify causes of Signals and problem solve them. signal noise Variability in an operation is buffered by some combination of: Increasing Inventory, Increasing Capacity, and/or Increasing Process Times Steps for Avoiding the Rubberband Effect 5) Utilize Control Charts at All Levels

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 17 Steps for Avoiding the Rubberband Effect 6) Start Workforce Engagement at the Top • Ensure that leadership team gets trained on Workforce Engagement • Leadership team identifies behavior they need to (& will) project to support Workforce Engagement • Utilize Intrinsic Reward system (not just extrinsic) Leading for Choice: Handing Off Leading for Progress: Scorekeeping and Cheering Leading for Meaningfulness: Inspiring Leading for Competence: Coaching Leader’s Role Workforce Sense of Choice Sense of Progress Sense of Meaning- fulness Sense of Competence Choosing Activities Monitoring Progress Committing to Purpose Monitoring Competence

© Khaled Mabrouk “Processes + People Drive Performance” Page 18 Moving Forward

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 19 Tying CI to the Bottom Line Positively Impact Operating Ratio Productivity Pricing Power Customers are willing to pay more for your product/service than they will for others Resources (people, equipment, assets) are providing maximum return on the investment in them Improve operational coordination & flows (Standard Work, Visual Management, Decision Making Exercises) Be able to use data to gain insight into frequency, duration, and root cause of issues to be resolved (Data collection & mining, Data Interpretation) Add value to how you serve your customer, and how you develop & deliver your product/service (VOC, Work-Wait diagrams, VSM) Institutionalize “optimal” solutions (Workforce Engagement, Control Plans, Counter Measures) Can visualize how your operations truly work (Process Mapping) Experiment effectively with solution options (Kaizan, Action Plan, Process Simulation, DOE) = +

© Sustainable Productivity Solutions “Processes + People Drive Performance” kmabrouk@ReduceOR.com Page 20 Presentation Summary 1) Leadership Team OWNS Productivity Program 2) Migrate from Causal to Effect Data as We Move Up Organization 3) One Individual Assigned to Drive Productivity Program 4) Drive Process Thinking at All Levels 5) Utilize Control Charts at All Levels 6) Start Workforce Engagement at the Top

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