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Creating a Continuous Improvement Culture
WebinarAugust 13, 2013
Welcome!• Argentina• Australia• Bermuda• Brazil• Canada• Finland• France• Great Britain (UK)
• India• Latvia• Netherlands• New Zealand• Spain• United States• Uruguay
www.ksmartin.com/subscribe
Coach / Facilitator / Consultant / Trainer: Lead Lean transformations & develop people across all industries.
Teacher: University of California, San Diego
Author & Speaker:
Karen Martin, PresidentThe Karen Martin Group, Inc.
www.ksmartin.com
3
October 2013 Shingo Prize winner!
© 2013 The Karen Martin Group, Inc. 4
Upcoming Webinars
• How Outstanding is Your Organization?: An Assessment– Tuesday, September 17, 2013 – 11:00 am‐12:15 pm– https://www2.gotomeeting.com/register/923117162
• Value Stream Mapping: Visualizing Work Flow and Aligning People for Organizational Transformation– Tuesday, October 8, 2013 – 11:00 am‐12:15 pm PT– https://www2.gotomeeting.com/register/151856458
• Improvement Facilitation & Coaching: An Open Forum– Tuesday, October 29, 2013 – 11:00 am‐12:15 pm PT– https://www2.gotomeeting.com/register/999232762
© 2013 The Karen Martin Group, Inc. 5
After the webinar…
• All recordings are available on:– www.vimeo.com/karenmartingroup– www.youtube.com/karenmartingroup– www.slideshare.net/karenmartingroup– www.ksmartin.com/webinars
• The materials are available on– www.slideshare.net/karenmartingroup
© 2013 The Karen Martin Group, Inc. 6
Key Topics
• The 4 conditions you need to create to build a continuous improvement culture.
• What continuous improvement looks and feels like.
• How to sell leadership on the management and leadership behaviors and skill development needs that lead to continuous improvement.
© 2013 The Karen Martin Group, Inc. 7
Kaizen
Kai = Change Zen = Good
Continuous Improvement: A Way of Life
© 2013 The Karen Martin Group, Inc. 8
Improvement needs to be part of
doing the work.
© 2013 The Karen Martin Group, Inc. 9
Continuous Improvement Classics
1982 1982 1986
Recent “Daily Kaizen” Books
© 2013 The Karen Martin Group, Inc. 11
The Toyota Way 2001• Respect for People
– Respect – We respect others, make every effort to understand each other, take responsibility, and build mutual trust.
– Teamwork – We stimulate professional growth, share the opportunities of development, and maximize individual and team performance.
• Continuous Improvement– Challenge – We form a long‐term vision meeting challenges with courage and
creativity to realize our dream. – Kaizen – We improve our business operations continuously, always driving for
innovation and evolution.– Genchi Genbutsu – We believe in going to the source to find the facts to make correct
decisions, build consensus, and achieve goals at our best speed.
© 2013 The Karen Martin Group, Inc. 12
Continuous Improvement: The Relentless
Pursuit of Perfection
© 2013 The Karen Martin Group, Inc. 1313
New Ideas Generated, Tested, Refined, and Implemented by Everyone, Everyday, Everywhere
© 2013 The Karen Martin Group, Inc. 14
True Continuous Improvement
CHECK
CHECK
CHECK
ACT
ACT
ACT
© 2013 The Karen Martin Group, Inc. 15
What does Continuous Improvement
look and feel like?
© 2013 The Karen Martin Group, Inc. 16
Meet Menlo Innovations
© 2013 The Karen Martin Group, Inc. 17
One million ideas a year.
© 2013 The Karen Martin Group, Inc. 18
What’s it take to create a true C.I. culture?
© 2013 The Karen Martin Group, Inc. 19
Creating a C.I. Culture: Requirements
• Will• Skill• Authority• Guidance
© 2013 The Karen Martin Group, Inc. 20
© 2013 The Karen Martin Group, Inc. 21
You have to want it.
© 2013 The Karen Martin Group, Inc. 22
You have to develop an intrinsic belief that good enough never is.
We need to pass the improvement baton from the elite few
to the common many
23
Respect for People: Develop & EngageThe people who do the work are the experts.
24
© 2013 The Karen Martin Group, Inc. 25
Foster an environment of curiosity
“Why?”“Why not?”“What if?”
© 2013 The Karen Martin Group, Inc. 26
= Development
© 2013 The Karen Martin Group, Inc. 27
Requisite Knowledge & Skills• Value‐adding vs. non‐value‐adding• Three conditions to eliminate:
– Mura ‐ unevenness– Muri ‐ overburden– Muda ‐ waste
• Eight types of waste• PDSA/PDCA (Plan‐Do‐Study‐Adjust or Check‐Act)
– Including root cause analysis
• Process metrics– Process time– Lead time– % Complete & accurate
• Process mapping & process documentation
© 2013 The Karen Martin Group, Inc. 28
Detailed Steps
1. Define and break down the problem.
2. Grasp the current condition.
3. Set a target condition.
4. Conduct root cause & gap analysis.
5. Identify potential countermeasures.
6. Develop & test countermeasure(s)
7. Refine and finalize countermeasure(s).
8. Implement countermeasure(s).
StudyEvaluate Results
9. Measure process performance.
10. Refine, standardize, & stabilize the process.
11. Monitor process performance.
12. Reflect & share learning.
Adjust
Do
Clarifying the PDSA Cycle
PlanDevelop
Hypothesis
Conduct Experiment
Refine Standardize Stabilize
Phase
Continuous Improvement
New Problem
50‐80% of the total time
© 2013 The Karen Martin Group, Inc. 29
Root Cause Analysis: 4 Key Tools
CauseCause--andand--Effect DiagramEffect Diagram
Machine Measurement Environment
People Material / Info Method
Budgets Submitted Late
Lack of experience
Time availability
No sense of import
No stnd spread sheet
Email vs. FedEx
No standard work
Input rec’d late
Forecast in other system
Manual vs. PC
System avail.
No milestones
$ vs. units
Weather delays
Dispersed sales force
Changing schedule
Machine Measurement Environment
People Material / Info Method
Budgets Submitted Late
Lack of experience
Time availability
No sense of import
No stnd spread sheet
Email vs. FedEx
No standard work
Input rec’d late
Forecast in other system
Manual vs. PC
System avail.
No milestones
$ vs. units
Weather delays
Dispersed sales force
Changing schedule5 Why’s
Why? Why? Why? Why? Why?
P a r e t o Cha r t Cr e di t Appl i c a t i on De l a y s
2 9 0 9
6 2 7 5 6 1
2 4 2 1 8 0
2 4 9 3
4 1 %
7 7 %8 6 %
1 0 0 %9 7 %9 4 %
0
500
1000
1500
2000
2500
3000
3500
N o S i g n a t u r e I n s u f f i c i e n t
B a n k I n f o
N o p r i o r
a d d r e s s
C u r r e n t
C u s t o me r
N o C r e d i t
H i s t o r y
O t h e r
Re a son f or D e l a y
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Check Sheets Quantify Occurrences
|Equipment failure
|||||||||||||Changing customer requirements w/ no adjustment to expected delivery
||||||||||Order entry error
|||Staffing/absenteeism
|||||Quality issue requiring rework
|||||||Material shortage
Tally Reason
|Equipment failure
|||||||||||||Changing customer requirements w/ no adjustment to expected delivery
||||||||||Order entry error
|||Staffing/absenteeism
|||||Quality issue requiring rework
|||||||Material shortage
Tally Reason
© 2013 The Karen Martin Group, Inc. 30
Empowerment
Work: Degrees of Granularity
Value Stream
Process Process Process
Step StepStep
31
Micro Perspective
• Identify the tactical “how”
• Heavy frontline involvement
• Metrics‐Based Process Mapping
Macro Perspective
• Define strategic direction (“what”)
• Heavy leadership involvement
• Value Stream Mapping
You may need to draw them
out.
© 2013 The Karen Martin Group, Inc. 33
BoundariesLearning & development
© 2013 The Karen Martin Group, Inc. 34
Give every team member“Freedom with Boundaries”
© 2013 The Karen Martin Group, Inc. 35
Loosening the Reins
36
C.I. Essentials:Supervisors & Managers must become proficient
Process Managers & Improvement Coaches
© 2013 The Karen Martin Group, Inc. 3737
How are you performing?
Gray – Highest industry quality scoresPurple – Median industry quality scoresBlue – Our quality scores
© 2013 The Karen Martin Group, Inc. 38
Daily Kaizen vs. Breakthrough Kaizen
(Kaikaku)
© 2013 The Karen Martin Group, Inc. 39
1. Increase sales 5%.3. Achieve 10% profit.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec IT Mktg Ops HR Bob Fin PE Pario COM Direct
CDs / AMs
PD Rec
PD Mgmt
BMD SWS
23,500 units sold by 12/31/2013 through al l channels (approx. $700K)
X X X X X X X X X X X X Bob Dana 2 3 3 3 2 3 3 1 1 3 3 1 3
11 Develop & del iver tra ining to top 50 Dealers X X X X X X Bob Rex/Tim 3 3 3
21 Revised course materia ls by 6/30/2013 X X X Bob Josh R? 2 3 3 2 2
5Education: 1 school dis trict spec'd/underperforming COM dis tributor (25) by 12/31 valued at min $35K each
X X X X X X X X X X X X Howard Michael S 1 3 2 3 3
810 new dea lers on board (net) ($500K per dealer this year)
X X X X X X X X X X X X Howard Mike B 2 3
95 new dis tributors bringing $200K annual rev (& 5 terminated)
X X X X X X X X X X X X Howard Howard 1 1 1 2 3
17 10 projects spec'd by 12/31; $300K rev by 12/31 X X X X X X X X X X Howard Dana 1 3 3 3
29 20 by year‐end X X X X X X X X X X X X Howard Mark H 2 3 3 3
32 TBD X X X Howard Howard
33 TBD X X X X X X X X X Howard Howard
10Useful reporting and metrics are establ i shed and in place
X X Jim Randal l 3 1 1 1 1 1 1
30 TBD X X X X X Jim Josh 3
31 TBD X X X X X X Jim Josh 1 1 1 3 1 1 1 1 1 1 1 1 1 1
25 TBD Jim Shannon 3 3 1 1 1 1 1
26 System 7.0's in place X X X Jim Randal l 3 2 1 2 1
15100% accurate payrol l ; 100% management sati s faction at Apri l mgmt. meeting
X X X Josh Phyl l is 1 3
20Internet task l i s t i s s impl i fied and streaml ined for PDs then plan i s rol led out to PDs
X X X X Michael M Michael M 2 3 2 3
22Des ign Calculator i s updated success ful ly and rol led out
X X X Neal l Matt D 3 1 1 3 2 2 3
24 Competi tive Analys is complete and distributed for use X X X Neal l Dana 2 3 3 3 3 3 3
1 Des ign changed to solve delam i ssue long‐term X X X X X Susan David R 3 2 3
1230 parts sourced in U.S.; completed plan for managing China ‐sourced parts
X X X X X X Susan Shannon 3 3 2 2
13Warehouse la id out; kanban revised; Syspro implemented
X X X Susan Shannon 3
14 Lay out complete; equipment ins ta l led X X X Susan David R 3 3
X = Planned
2013 Priorities
2013 Goals & Objectives4. Improve morale (metric TBD).2. Achieve 50% gross margin. Created: 01‐14‐13
Revised: Level of Effort/Involvement Required
Priority Goal or Measurable Objective Exec Owner
Plan review dates:
Tactical Owner
● = Actual
< Company Name >
Conten
trem
oved
for con
fiden
tiality
Tie Improvement to Annual Strategy Deployment Plans
Tie Improvement to Future State Value Stream Maps
Referring Physician
% C&A = 85 %
Send Reports
(Imaging)
Cycle Time = 3 mins.% C&A = 90 %
6
Hospital
Schedule apptPre-register
Cycle Time = 11 mins.Lead Time = 45 mins.% C&A = 98 %
6
CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate
0.0833 hrs.
1 mins.
0.583 hrs.
10 mins.
0.333 hrs.
10 mins.
0.0833 hrs.
2 mins.
2 hrs.
15 mins.
7 hrs.
1 mins.
0.0333 hrs.
1 mins.
0.5 hrs.
3 mins.
LT = 11.3 hrs.
CT = 43 mins.CT/LT Ratio = 6.32%
Lead Time = 45 mins.Lead Time = 15 days
PrepPatient(Tech)
Cycle Time = 10 mins.% C&A = 100 %
2
Check-inPatient
(Imaging)
Cycle Time = 1 mins.% C&A = 98 %
3
CompleteExam(Tech)
Cycle Time = 10 mins.% C&A = 90 %
2
TransmitImages(Tech)
Cycle Time = 2 mins.% C&A = 100 %
2
Read/DictateExam
(Radiologist)
Cycle Time = 15 mins.% C&A = 95 %
2
ReviewDraft/Sign
(Radiologist)
Cycle Time = 1 mins.% C&A = 95 %
2
PrintReports
(Imaging)
Cycle Time = 1 mins.% C&A = 99 %
220 mins. 5 mins. 120 mins. 420 mins. 2 mins. 30 mins.35 mins.
E Pay
Excel
Symposium
Internet
Waiting RoomManagement
System
Fax OrderSolutions
PACS
5 mins.
Set-upReduction
Remove Check in
and ReduceSystem Access
Work Balancing
StandardWork
Pull System(Supplies Kanban)
VisualWorkplace
Voice Recognition
Batch Reductions
5S
Co-locate
StandardWork
Work Balance
ContinuousFlow
Value StreamAlignment
Auto Fax 80% Us Mail 15%MD Mailbox 5%
Rolled First Pass yield = 40%
Rework Loop via Fax 10% of the time
Customer Demand:15 patients per Day
(Takt Time 1920 seconds)8 hours per day
123
4 5 6 7 8 9 10 11
Risk Reduction
(Joint Commision)
Meditech
Tie Improvement to A3s
41
© 2013 The Karen Martin Group, Inc. 42
Attaining Mastery
From The Outstanding Organization, p. 115
© 2013 The Karen Martin Group, Inc. 43
Skill Development Progression*
Unconscious Incompetence
Conscious Incompetence
Conscious Competence
* Commonly attributed to Noel Burch, Gordon Training International
Start Goal
Unconscious Competence
Consciou
sness
Competence
1 4
32
© 2013 The Karen Martin Group, Inc. 44
What you can do immediately no matter where you sit…
1. Make sure you know and are highly skilled in improvement basics.
2. Begin asking “why,” “why not?” and what if?” in every encounter/meeting.
3. Establish an improvement‐safe zone in your sphere of influence; quantify the number of ideas implemented.
4. Coach, coach, coach…and then coach some more.5. Quantify results when possible and broadcast,
broadcast, broadcast.
© 2013 The Karen Martin Group, Inc. 45
Upcoming Webinars
• How Outstanding is Your Organization?: An Assessment– Tuesday, September 17, 2013 – 11:00 am‐12:15 pm– https://www2.gotomeeting.com/register/923117162
• Value Stream Mapping: Visualizing Work Flow and Aligning People for Organizational Transformation– Tuesday, October 8, 2013 – 11:00 am‐12:15 pm PT– https://www2.gotomeeting.com/register/151856458
• Improvement Facilitation & Coaching: An Open Forum– Tuesday, October 29, 2013 – 11:00 am‐12:15 pm PT– https://www2.gotomeeting.com/register/229489922
© 2013 The Karen Martin Group, Inc. 46
Karen Martin, President7770 Regents Road #635San Diego, CA 92122
858.677.6799
For Further Questions
Blog & newsletter: www.ksmartin.com/subscribe
© 2013 The Karen Martin Group, Inc. 47
Your Questions1. Are there unique challenges that exist with establishing
CI cultures in union workforces?2. Companies I worked for push Return on Investment as
the metric for gauging CI activities and culture effectiveness. Is this the best metric, and are there others that we should be looking at?
3. How long does it take to change a 125‐year old culture? 4. How do you recommend broadcasting successes and
making them relevant?5. Our division president wants to implement a long‐term
vision, whereas corporate seeks quarterly results. How do I interact w/ president & direct reports to ensure buy‐in?
6. What are things that a middle manager can to do drive Lean culture?