Improving Operation Performance and Productivitysaharapcc.skills4success.co/spcc/opr/Improving... · Americas, Asia, Europe, Africa and is on the growth scale to add more international

13 - 17 November 2016JW Marriott Hotel Dubai

Dubai, U.A.E

Presented by:

Improving Operation Performance and

Productivity

Dr. Anthony Greenfield

GLOMACS is an ISO 9001:2015 and ISO 29990:2010 Certified Training and Consultancy Company, established to cater to the ever increasing needs of people & their performance in the corporate world. Since its inception, GLOMACS has successfully delivered wide range of courses combining public and in-house training programmes benefiting thousands. With its immense choice of consultants, GLOMACS successfully covers and delivers courses in 4 continents spanning the Americas, Asia, Europe, Africa and is on the growth scale to add more international and strategic locations.

GLOMACS has an outstanding record for deliverance and has successfully delivered over 5,000 courses aiding professional development for over 1,000 clients and with more than over 100,000 professionals, by the courses it has provided.

ACCREDITATIONS:

AFFILIATED WITH:

(The PMI Registered Education Provider logo and PMI are registered marks of the Project Management Institute, Inc.)

ISO 29990 : 2010 Certi�ed

ISO 29990

IMPROVING OPERATION PERFORMANCE AND

PRODUCTIVITYDr.r. Anthony Greenfieldy

November 2016

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Course OverviewTo say that managing in any organization today is a challenge, is a true understatement. Just keeping one’s head above water is like running an obstacle course. Today’s organizational obstacle course is full of unexpected occurrences; potholes, pitfalls, roadblocks and unexpected detours. And it is mostly uphill to boot!How can one cope? Or better still, how can managers get ahead of the curve. That’s the $60,000 question. Outsourcing, downsizing, rightsizing and feel-good programs - you’ve probably done them all. And, you’ve probably seen little of the anticipated benefits. But, you’re still challenged to make significant improvement, build a culture of continuous improvement and get ahead of the curve.Impossible? Not really.

In this practical workshop, you will:• Learn that the opportunities for improvement are significant• Have the tools to create seamless processes will produce dramatic improvements in productivity and

response times to customers• Learn how to use measurement to improve accountability, and ownership• Be able to create a flexible and fast working environment

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Course OverviewObjectives - by the end of these 5 hands-on learning days, you will be able to:• create a high-performance culture• streamline processes that are too long and unpredictable• engage employees in a way that increases motivation, accountability and ownership• track performance gains for all stakeholders• create a proactive problem-solving culture

Training MethodologyThe workshop will be fast paced and laden with useful tools and skills. The participants will get the confidence and tools to create a culture of change and challenge. They will enjoy the informal, learning environment which will encourage active participation and sharing.The workshop will incorporate state-of-the-art adult learning techniques that enable people to learn by listening, seeing, discussion and hands - on practice. Theory, ideas and concepts will be presented in the context of real world issues. Participants will also be given time to share their ideas in open sessions and in small group settings. They will be constantly busy and engaged in hands-on exercises, case discussions and simulations that approximate the reality of their working world.Participants will go back to work with an action plan that they can put into practice right away.

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Course OverviewOrganisational Impact - Organizations will benefit from returning leaders who will:• reorganize, rebuild and rejuvenate the areas for which they are responsible• get employees committed to change and improvement• improve measurement system to encourage continuous improvement and innovation• benchmark work processes to identify new opportunities for improvement• improve response times and consistency dramatically• map work processes to identify and remove waste, duplication and non-value activities• know when and how to outsource non-strategic operations

Personal Impact - Participants will learn to:• lead a team on an ongoing journey of continuous improvement• facilitate problem solving and process improvement teams• create a modern measurement system that is aligned with corporate goals• benchmark their performance so that great ideas and systems from within and outside of their

organization are embraced• make a calculated and informed decision regarding outsourcing• create seamless work processes.

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Course OverviewWho Should Attend?

The workshop is designed for organization leaders who are committed to moving away from the status quo. These change agents include:• Engineers• Team Leaders• Middle Managers• General managers• Senior leaders• Department heads• Project managers• Team leaders

ContentsDAY 1

New Organizational Challenges• The challenge of change• Thinking strategically about problems and

opportunities• The challenge of conflicting stakeholder

expectations• Identifying management/shareholder

expectations• Taking a holistic approach to continuous

improvement• Responsibility and accountability• 3 case studies that illustrate the power of

new technologies, common sense and organizational restructuring

• The 12 drivers of performance improvement

DAY 2

Measuring Performance to Enhance Engagement, Accountability and Ownership• The importance of having a modern

measurement system• Aligning matrix and the mission• Setting SMART objectives• Knowing how and when to benchmark

performance• The search for best practices• Planning for improvement• Linking rewards to performance

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ContentsDAY 3

A Team Approach to Performance Improvement• Facilitating team meetings• The role of the manager in building

ownership and commitment• Knowing how to facilitate information,

problem solving, decision making and planning meetings

• Pareto and the 80:20 rules• Tools for root cause analysis: the Fishbone• Collecting accurate and representative data• Encouraging creativity through

brainstorming

DAY 4

Process Mapping and Flowcharting• Process and the challenge of variation• Defining the opportunity: the 80:20 rule

and the 95:5 rule• Three alternative strategies to developing

a process map• The 12 steps to create a process map• The power of benchmarking• Identifying and removing waste,

duplication and non-value added activities• Redesigning the process to make it

“seamless”• Outsourcing decisions: the 10 best

guidelines to ensure success

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ContentsDAY 5

Implementing Change• Selling your ideas: a method of presentation that always works• Getting approval for radical improvements• Managing change: possible reactions from people and how to deal

with them• Forward thinking: prioritizing challenges at work• Setting up your first team• Creating an action plan• Presentations• Workshop review

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Welcome!• A journey of discovery – learning not instruction

• Learning through dialogue

• Learning through doing

• Teamwork & open forum

• Flexible agenda

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How the 5 days will workMix of:• Theoretical inputs and practical examples• Discussions• Case Study Work• Videos• Regular reflection and review• Working in 1¾ hour chunks of time

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Ground Rules• We will start and finish on time

• If I speak too quickly, tell me

• Use of English

• Diversity

• Mobile phones!

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Improving Operation Performance and ProductivityIs about…

• Increasing revenue and profitability

• Improving customer relationships and service

• Optimising organisation and team structures

• Improving operational processes (Time, Cost, Quality, Output)

• Improving leadership, employee capability and employee

engagement

• Leveraging technology

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Introduction- Anthony Greenfield

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Introduction – Anthony GreenfieldANTHONY GREENFIELD, PhD is a highly versatile, results-focused business professional with 25+ years wide-ranging experience in Change Management, People Development, Balance Scorecard, Talent Management, Strategy Facilitation and Culture Change.

He has worked as a consultant and line manager in the UK, South Africa and the US. He has proven ability to set up and lead large-scale, complex change programmes delivering tangible business benefits.

He is currently supporting major transformation programmes with the Royal Mail and Argos stores. Other clients include Northern Trust Bank, Marks and Spencer, Sainsbury's, UK Government. Spoornet and Discovery Health.

Anthony’s books on leading successful organisational change, The 5 Forces of Change, and 5 Tales of Change were published in 2008 and 2012. He runs seminars on organisational change at public conferences, business schools and for corporate clients.

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IntroductionsDraw a picture that tells us about you inside and outside of work

Your Name:

Company:

Country:

Role:

Main learning objective:

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ContentsDAY 1

New Organizational Challenges• The challenge of change

• Thinking strategically about problems and opportunities

• The challenge of conflicting stakeholder expectations

• Identifying management/shareholder expectations

• Taking a holistic approach to continuous improvement

• Responsibility and accountability

• 3 case studies that illustrate the power of new technologies, common sense and

organizational restructuring

• The 12 drivers of performance improvement

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The Challenge of Change5 Levers for IOP&P

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Thinking Strategically about problems & opportunities

Key changes affecting your industry/organisation

Impact on improvements you need to make to your operations?

Political

Economic

Social

Technology

Environmental

Legal

Stakeholders & their Expectations

Internal Stakeholders(management, teams etc.)

External Stakeholders(shareholders, customers, community etc.)

1. What do these stakeholders expect from you / your organisation?2. How might stakeholder expectations conflict?

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Improvement CultureQuestion: How would you describe a culture in which Performance improvement would flourish?

Dissonance

Dissonance

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ActionEmpowerment• Can do• Action Taking• Iterative systems• Sustainability

Prescriptive• Do on demand• Some limited action• One-off• Short lived

CURRENTREALITY

VISION

Stream of resultsSome fixes

1 2

What is Performance Improvement?

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Performance

Time

Should

Actual

Improvement Methods

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• Process Re-engineering • Value Re-engineering• 5S• Lean (Manufacturing/Office)• Six Sigma• Kaizen / Continuous

Improvement• The Balanced Scorecard• ISO9001• EFQM

Drivers of Performance Improvement

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1. IT / Technology2. Process driven3. Structural driven4. Environment / political / social / legal driven5. People driven6. Common sense driven!

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Holistic Approach to Continuous Improvement

Organisation

People

Technology

ExternalRelationships

Processes

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1.Discovery

2.Consensus

3.Mobilisation

IOP&P Process

3.Mobilisation

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M2.

ConsensusCo1.

Discovery

IOP&P Process

Discovery

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1.Discovery

i. Observe

ii. Collect Data

iii. Analyse

• Observation• Questioning

Discovery

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Activity: Observation

Questioning

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1. Closed questions

2. Open questions (WWWWH)

3. Softening questions

4. Why don’t we ask questions?

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Q : WHY did the machinestop?

1 x Why

A : The overload protectionhas been activated!

Q : WHY has the overloadprotection been activated?

2 x Why

A : There was not enoughoil on the axis!

Q : WHY hasn't there beenenough oil on the axis?

3 x Why

A : The oil pump has beenineffective!

Questioning – 5 Whys?

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Q : WHY is the oil pumpineffective?

4 x Why

A : The bearing is worn!

Q : WHY is the bearing worn?

5 x Why

A : The oil filter is contaminated!

Cause

Questioning – 5 Whys?

Discovery

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Activity: Questioning

Air crew

Performance Improvement

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Activity: Identifying Performance Improvement OpportunitiesSimpsons Juice – Part 1 CS1/2

Read = 25

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Conveyor BeltUnscrambler

Cap Hopper

Juice Filler

Pallet

Hopper

Check Weigher

Discovery

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1.Discovery

Observe

Collect Data

Analyse

• Should vs Actual• Cycle Time• Bottlenecks

Collect Data

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Principles:1. ‘Follow the Money’2. Detail3. End-to-End

Performance

Time

Should

Actual

Cycle Times

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Questions:You need to be able to observe the start and finish point to measure the cycle time.1. On a clock, what would be the start point and the finish point for a

cycle of the minute hand?2. If you wanted to measure the cycle time for knocking in a nail what

would you choose as the cycle start point and the cycle finish point?

Time

Cycle Times

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Cyclic processes:• nail and hammer

• car manufacturing

• processing an insurance claim

• refining a 1000 barrels of oil

• Creating and sending a invoice

Cycles in your business?

Cycle Times

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Questions:Each cycle produces 1 item1. What is the total output per minute?2. What is Total Time?3. What is Average time per cycle?4. What is Best Observed?5. Why is it called Best Observed?

CYCLE TIME (secs)1 42 63 34 85 9Average 6Total 30

0123456789

10

1 2 3 4 5 AVG

Tim

e (s

ecs)

Cycle

EXAMPLE

Operational Efficiency & TMT

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Operational Efficiency = Best Observed x 100 % = ? Actual (Average)

Actual number of items per minute = 10

Theoretical Maximum Throughput (TMT) is the output (number of items) that could be achieved (per minute) from a process if the Best Observed cycle time achieved for every cycle.

TMT = 60 seconds x 1 (item per cycle) = ? x 1 Best Observed Time

x 100 = 6

50%3

= 20 itemsper minute

603

Operational Efficiency & TMT

43

Performance

Time

Should

Actual 10

20 (TMT)

• What are your thoughts on this as a method for measuring efficiency?

• How might people react when you present this to them?

Operational Efficiency

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Activity: Operational Efficiency 1Case Study: Simpsons Juice –Part 2 - TMT andOE CS3/4

Responsibility and Accountability

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Question:If your job at Simpsons was to improve the performance of the juice bottling line, who would be:

Responsible?Accountable?Consulted?Informed?

Why is applying RACI important?

Case Study Examples

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Case studies illustrating the power of new technologies, common sense and organisational restructuring.

Your improvement challenges?

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12 Drivers of Performance Improvement1. Leadership Capability2. Teamwork3. Employee Engagement4. Employee Capability

Organisation

Processes

People

Technology

External Relationships10. Customer Relationships11. Supplier Relationships12. External Partnerships

8. Process optimisation (Time, Cost, Quality) 9. Planning, goal setting and measurement

7. Organisation and Team Structure

5. Automation6. Access to information

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ContentsDAY 2 - Measuring Performance to Enhance Engagement, Accountability and Ownership• The importance of having a modern measurement system

• Aligning matrix and the mission

• Setting SMART objectives

• Knowing how and when to benchmark performance

• The search for best practices

• Planning for improvement

• Linking rewards to performance

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The Importance of Having a Modern Measurement SystemComplete ‘Evaluate your Measurement System’ Questionnaire

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A modern measurement system is one that��Is developed with the input of staff��Measures the interests of all stakeholders��Measures a variety of performance indicators together��Is an excellent diagnostic tool��Can be used to communicate change��Promotes continuous improvement��Can measure the future as well as the past��Is aligned with the mission

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Aligning to the Mission and Vision- The Balance Scorecard

51

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Example: Operational Excellence

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Build a Strategy Map for a Russian Real Estate Business

**Post-it Exercise**

Exercise: Build Strategy Map

Invest in Business

Financial:

Customer:

Make a Profit

Grow Sales Revenue Control Costs

Delight Customers Attract Customers

Grow Reputation / Brand Grow Market Share

Highly Effective Leadership Excellent Training Programme &Consulting Support

Recruit the right people – testing system, interviews, CV sift

Strategy Map:Real Estate Agent

InternalProcess:

Learning& Growth

Positive Culture Highly Competent Workforce

Top Performing Agents in the Industry

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Great Customer Service,(Honest, Knowledgeable,

Fast, Professional)

Well Designed & Best Optimized Website

Strong Auxiliary Services ((legal,

mortgages & Insurance)

Effective Sales Processes

Well Managed Admin &Accounting processes

Strategic Objective Measure Target Deadline

FINANCIALF1 Invest in Business % Profit Re-invested 40% of profit

F2 Make a Profit Profit 40% of revenue (net to gross) 31/03/2013

F3 Grow Sales Revenue Revenue 19 440 000 roubles 31/03/2013

F4 Control Costs Costs as a percentage of revenue 20% of revenue (net to gross) 31/03/2013

CUSTOMER C1 Grow Reputation / Brand Amount of positive online reviews by customers 1 review per unit sold 31/05/2012C2 Grow Market Share No. of properties Sold 3 units per agent per month 31/10/2012

No. of Exclusive customer contracts per Triad 15 per month per triada 31/10/2012C3 Delight Customers Customer Satisfaction Score (“Recommend you") 95% 31/10/2012

C4 Attract Customers No. of New Listings Per Month 75 per triada per month 31/10/2012

PROCESSP1 Great Customer Service Customer Surveys >90% positive survey answers 31/10/2012

P2 Strong Auxiliary Services No. of successful referrals to providers 1 per agent per month 31/05/2012

P3 Best Optimised Website Google and Yandex Page Ranking #1 - #6 (top 6) 31/05/2012

P4 Effective Sales Processes Average time from listing to closing 30 day rule 31/10/2012

P5 Well managed admin &accounting processes

N/A

LEARNING & GROWTHLG1 Top salesmen in the industry Closing Ratio per salesman (% of customers who

want to buy who buy from us)30% 30/11/2012

LG2 Positive Culture Employee Satisfaction Survey 100% 31/04/2012

LG3 Highly Competent Workforce Average salesman score in training examinations 85% 31/04/2012

LG4 Highly Effective Leadership Performance rating of Director by shareholders Outstanding Ongoing

LG5 Recruit the Right People Average % scores in Candidate Assessment Test by new recruits

<C30, >T33, <P40 31/04/2012

LG6 Excellent Training & Support Skype consulting hours from USA per week 4 hours 31/04/2012

Russian Real Estate Agency

Measurement System

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Why is a good measurement system important to you when improving operational performance and productivity?

What difficulties might you have in measuring ‘Actual’ performance? (establishing a baseline for performance)

Performance

Time

Should

Actual

SMART Objectives

57

SpecificMeasurableAchievableRelevantTime-boundPerformance improvement requires:

• SMART objectives to drive action• Accurate measurement of the ‘As-is’ and ‘To-be’ states

Prime Mover

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Who or what is the Prime Mover in the case of servicing and repairing cars?What could you do to maximise the throughput of this Prime Mover?Who / what are the Prime Movers in your organisation?

Car mechanic- services/repairscar

Receptionistchecks car inFor service/repair

Driver – drives car into/out of garage

Stores – provide tools & parts to the mechanic

Receptionist- Checks car out and take paymentPrime Mover: The person or machine that,

above all else, drives the process that delivers the product or service to customer. It is vital that you maximise the throughput of the Prime Mover to create maximum efficiency.

Prime Mover

59

Car mechanic- services/repairscar

Receptionistchecks car inFor service/repair

Driver – drives car into/out of garage

Stores – provide tools & parts to the mechanic

Receptionist- Checks car out and take payment

Efficiency = Productivity x Utilisation

Utilisation = % of time being productiveProductivity = output per hour when utilised 100%

Bottlenecks

60

A Bottleneck is a delay caused when one part of a process or activity is slower than the others and so hinders overall progress.

Some common bottlenecks:

• Financial approval processes• Excessive queuing in a supermarket (where not enough tills open)• Delays to the ‘Prime Mover’

Bottlenecks

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The Primary Bottleneck in a process is the rate determining step- think of people climbing up a mountain & tied together at the waist

Take care not to confuse problems and bottlenecks

Bottlenecks are when parts of the process are slowed when a process is running normally, not when there are breakdowns.

M25 Motorway: Dartford Tunnel is a bottleneck i.e. permanent……but a traffic accident is a problem i.e. temporary stoppage

Bottlenecks

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Primary

Secondary Tertiary

T

P

Sub-ProcessesA B C D

200

0

100

50

150

RateQ: What is the rate determining step of this process?

Q: To improve this whole process, where’s the best place to start?

Q: If B is improve to 140, what would be the next bottleneck?

BWhat are your bottlenecks?

120

Motivation a Work

63

*George Mayo carried out experiments onhuman behaviour at Hawthorne Works of the GEC in Chicago between 1924 and 1927.

Collect Data includes collecting data on people attitudes, relationship and motivation levels.

What data would you collect to do this?

� The Hawthorne Effect: People who feel respected, trusted, empowered and cared for at work are more productive*

success

recognition

nature of work

responsibility

advancement

growth

company policy & administration

relationship with manager

work conditions

reward

personal life

relationship with colleagues/customers

status

securityHygiene Factors Motivators

Herzberg’s Motivational (Two Factor) Theory

Operational Efficiency

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Activity: Operational Efficiency 21. Simpsons Bottlenecks (500ml and 1 litre lines) CS5

2. Muck Shifting CS6/7

Brief Overview: Six Sigma (6σ)

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6σ seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.

It uses a set of quality management methods, including statistical methods. The maturity of a manufacturing process can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates. A 6σ process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects - 3.4 defective parts/million.

6σ creates a special infrastructure of people within the organization ("Champions", "Black Belts", "Green Belts", "Yellow Belts", etc.) who are experts in these methods.

Each 6σ project has quantified value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.

Discovery

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1.Discovery

Observe

Collect Data

Analyse


Identify, quantify and illustrate performance improvement opportunities

Analyse

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To analyse and distil data to identify, quantify and illustrate performance improvement opportunities- Should v Actual- Illustrate the opportunity/need for change

Principles:• Accuracy, quality and detail of information

• Balance positive and negative messages

• A picture paints 1000 words

• Know your audience

• Use the language people understand

Analyse

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69

Transport Ingredients Labour Overheads Duty Packaging Profit

82% 18%

SavingAnalyse – Fresh Tuna

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Analyse

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ZAMBIA BOTSWANA KENYA GHANA

Recruitment Requirements

Local Change Manager 0 Change Manager 7 Senior Change Manager 6 Local PDL 3 Regional PDL 0 PSO Analyst 0 Senior PSO Analyst 0 Regional PSO Team Leader 1

Total 17

Displacements 5

PDL

PDL

Analyse

Analyse

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Sale

s ve

rsus

For

ecas

t (%

)

Reinvigorated stores Control stores

2.0

1.0

0

3.0

Store Sales Data

-1.01st Quarter 2nd Quarter

£152mp.a. more sales

Verbatim QuotesWhat People say about Planner Competence:

“I don’t feel confident as a Planner to lead people through change, and I have a degree in psychology” – Planner

“I’d never set foot in a Delivery Office before. At my first unit we did Phases 1 to 3 and then I got pulled and they stopped the revision. I was then put into a bigger office. I call up the more experienced Planners for advice. They’re very helpful” -Planner

“The Planner’s job is very frustrating. I’ve worked at it for a year and seen no benefits” – Planner

“The next Planner they sent us is an ex-postman from this office. He’s only been a Planner for a couple of months and he thinks he knows it all, so he doesn’t listen to the others. I think it’s because he knows this office” – CW Rep

“We had a great Planner – thank goodness. Our success was down to their experience” – Delivery Manager

What Planners say about Planner Training:

“They should have paired us with someone more experienced to help us”

“What I think we are lacking is an understanding of the overall concept of how it all links together. DOMs could do with that as well”

“The Planner Training was laptop based, but our laptops didn’t arrive until 2-3 months after the job started, so there was no chance to do the training in the way intended”

“GeoRoute training was cancelled so many times I could not use it by the time of my first revision so someone else had to do it”

“How have I learned? By getting it wrong!”

“The guy at Rugby read the training out from the file - pretty appalling. The classroom environment didn't really work for me, so I didn't really understand what I was supposed to do once the training finished.”

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CUSTOMER EXPERIENCE

Willingness to recommend PH

GeneralConcept

Confidence,Experience

MatchBenefits

Knowledge ofServicing

Initial Quote

Tailored Pitch

GuideEmployer

to Decision

Ability to beinvolved &

helpful

ClaimsTransition

ExplainVitality

Post-saleVitality

engagement(broker view)

Corporate MI

InitiateRenewal

FacilitateRenewal

Requote

Moment of Truth

FacilitateTransfer of

Demographics

Affiliation & Relationship to PruHealth

Education & Training Tender Sales

PresentationImplementation/

ActivationPost-SaleService Renewal

RelationshipDepth

Great

Poor

Pricing Knowledge No-sale

feedback loop

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Corporate Broker Customer Journey Map

Multiple Intelligences e.g. buying a camera

Complete Questionnaire

Multiple Intelligences

76

Analyse

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Activity: Quantify opportunity and communicate effectively

Think about:- Audience- Balancing Pain and Positive messages- Visual and emotional impact- Multiple Intelligences- Little Red Riding Hood

Create a ‘storyboard’ for Simpsons analysis

5S is used to improve the physical workplace* to improve:• performance and productivity

• customer satisfaction (quality)

• employee satisfaction

• safety

* Includes: work areas, equipment and materials storage spaces, light, heat and air

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IOPP – Using 5S

78

• An efficient layout will save time

• A tidy workplace will make things easier to find

• A clean workplace will reduce accidents

• A pleasant workplace encourages productivity

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Some Benefits of 5S

Japanese English Meaning Example

Seiri 1. Sort Clearing up Throw away all rubbish

Seiton 2. Straighten Organising A place for everything

Seiso 3. Scrub Cleaning Keep workplace clean and tidy

Seiketsu 4. Standardise Standardisetasks

Work to a set of rules

Shitsuke 5. Self-Discipline Maintain goodworking habits

Training & Discipline

Elements of 5S

79

• Separate those things which are necessary to do the job from those that are not

• Keep the number of necessary items to a minimum and in a convenient location

• Throw out what is not needed

• Prevent accumulation

1. Sort (clearing up)

80

Benefits

• More space

• Movement / transport easier

• Reduced search time for necessary

items

• Greater safety

• Aids more systematic maintenance

81

Usage Frequency of use Action

LowThings that you have used once in the last 6-12months

Throw out or store at a distance

MediumThings you have used once In the last 2-6 months

Store in a central location

High Things used weekly,daily, hourly

Store near the work-place or carried by the person

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How to Sort

82

Red tagging is used where there is any doubt about whether an item:

• is needed at all

• is needed in that quantity

• is located in the right place

Name: Date:

Item Found ………………………………….

………………………………………………...

…………………………………………………

Category (circle one)1) Raw material2) Work-in-Progress3) Finished Goods4) Tools or Fixtures5) Surplus Equipment6) Maintenance or Supplies7) Office Equipment or Supplies8) Unknown9) Other …………………………………..

………………………………………………

5S RED TAG

Tag No:

Area: Qty

Disposition (circle one):1) Scrap (with paperwork)2) Scrap (no paperwork)3) Return to supplier4) Move to Red Tag area5) Move to:………………………………..…Storage Area6) Store in Work Area7) Other………………………………

5S RED TAGReason Tagged (circle as appropriate):1) Not needed in next 30 days2) Not needed in known future3) Defective4) Surplus5) No needed now (service only)6) Need identification 7) Other …………………………………….

………………………………………………….

Disposition by: (Date)

Disposed by:

Disposal Date:Decisions are then taken by people who use the items.

Red Tagging and Stickers

83

• Analyse the present situation• Develop a standard storage policy• Develop fixed locations• Keep to storage rules

2. Straighten (organising)

84

• Reduces time spent on searching for items

• Anyone should be able to find equipment / material

• Improves safety

• Makes the job easier

• Starts the process ofstandardisation

Why Straighten?

Can we all make a Cup of Tea? (with milk and sugar)

85

FRIDGE

SIN

K

BIN

CUPS

TEA BAGS

MILK

KETTLE

SUGARSPOON

Before and After Work Layout

87

• Bring up to an ideal standard

• Allocate roles and responsibilities

• Be systematic

• Deal with problems before they become serious

3. Scrub (clean)

Before After

88

• Has a direct impact on quality

• Has a direct impact on efficiency

• Has a direct impact on health and safety

Creates a more pleasant environment – improving morale and productivity

Why Scrub ?

89

• Develop an agreed way of doing things

• Use visual management for continuous improvement

• Consider exceptions and emergencies

• Use labels for tasks and responsibilities

Use: SOPs, check sheets, labels etc.

4. Standardise (tasks)

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4. Standardise- SOP Template

Xxxxxx DepartmentXxxxxx Division/Function

SOP #

Revision #

Implementation Date

Page # 1 of xx Last Reviewed/Update Date

SOP Owner Approval

Standard Operating Procedure

1. Purpose

Describe the process for <official name of SOP>. Describe relevant background information.

2. Scope

Identify the intended audience and /or activities where the SOP may be relevant.

3. Prerequisites

Outline information required before proceeding with the listed procedure; for example, worksheets, documents, IFAS reports, etc.

4. Responsibilities

Identify the personnel that have a primary role in the SOP and describe how their responsibilities relate to this SOP. If necessary, include contact information.

5. Procedure

Provide the steps required to perform this procedure (who, what, when, where, why, how). Include a process flowchart.

6. References

List resources that may be useful when performing the procedure; for example, Admin policies, Municipal Code, government standards and other SOPs.

7. Definitions

Identify and define frequently used terms or acronyms. Provide additional and/or relevant information needed to understand this SOP.

91

4. Standardise

92

4. Standardise

Activity: SOPUse mainly picture to create a Stand Operating Procedure (SOP) on a flipchart for one of the following:

1. Changing a light bulb2. Taking a bath3. Crossing a road4. Writing and sending a letter

93

94

• Everyone will know what has to be done

• Everyone will know when and how things should be done

• Changes of role or task are made easier

• New personnel will know what is expected

Why Standardise?

95

• Involve those actually carrying out the tasks

• Train people in 5S and other improvement methods

• Recognise performance

• Coach and support

• Carry out regular audits

Ensuring that the benefits are sustained and improved upon.- It is as much a state of mind as it is a process

5. Self-Discipline (Sustain)

96

• There is always room for improvement

• People can easily slide back into old habit

• Engaging people increases morale and improves performance

• Training and discipline contribute to overall success

Why Self-Discipline?

97

Item Occurrence Tally Chart Criteria Demerits

There is rubbish, dirt or small items on the floor

No rubbish is presentThere are between 1-5 instancesThere are more than 5 instances

05

10

Desks are overcrowded and paper is everywhere

All desks are clean and leak free1desk is messy>2 desks are messy

01015

The locations for files are not defined and not easy to find (either physically or on the computer)

All folders are clearly labeled 1-5 locations not defined or clear>5 locations are unclear

01015

General area information eg noticeboards is untidy or out of date

All information is up to date and tidy<50% of information is out of date>50% of information is out of date

05

10Safety procedures not followed;PPE not worn where required

100% adherence1 or more non-conformances

015

Equipment left running during break times or when not being used

No occurrencesUp to 3 pieces of equipmentMore than 3 pieces of equipment

05

10Unused equipment, old files or material parts stored in the workplace

All equipment in area is necessary1-5 pieces of unused equipment>5 pieces of unused equipment

05

10Returns due to defective materials and parts not clearly identified

All defects clearly marked and located1 or more cases of non-conformance

015

Scope for Improvement

5S Audit SheetArea: _______________________ Audit Team: _____________________________ Date: ____

Tiny Office Just room for 2 managers Not fit for interviews/meetings

Room used to store stationary and Postman uniforms

Only one LAN pointOnly 1 RM computer for 2 managers (other uses first line fix mgr. but can’t access network2 printers

Mess stored under tables

Cabinets are disorganised and don’t open

Receipts and documents poorly filed

Boards unmaintained

98

5S Audit

5S

Activity: 5S

5S factory floor example: KCTS

How can you apply each element of 5S to yourcomputer/laptop filing system?1. Sort2. Straighten3. Scrub4. Standardise5. Self-DisciplineWhere in your organisation would you use 5S and what would be the benefits?

99

1. Visual DisplayLabel to make it clear where things are. Labels are not generally for people who work in an area but for others who are new to the area or might need to know things about the area

100

Sustaining 5S through Visual Management

2. Visual Documents Effective communication of instructions, directions and standardised work in the form of documentation. Up to 60% of problems that occur in the work environment are created by poor communication.

101

Visual Management

3. Visual controls – how to control what we have put in place:

1. share information2. share standards3. build the standards into the

workplace4. use alarms5. stop defects6. eliminate defects

Machine stopped

Machine being set / waiting

Machine producing

102

Visual Management

103

• Visual management provides real-time information regarding status

• It is a company-wide“nervous system”

• It allows employees to understand how they affect overall performance

• It keeps focus on goals and key measures

Visual Management

103

True visual management goes beyond having a clean and well organised area:

It provides the same unbiased information to all personnel

104

Historical trend data (weekly /

monthly)

Current real time data (hourly /

shift by cause)

Improvement Activity

Actions / Status

Visual Management

104

105

• Indicators of normal conditions all pointing in the same direction

• Storage and location footprints

• Shadow boards and demarcation of work areas

• Simple charts, historical data, action records etc.

Visual ManagementThe principle is that control or normality should be able to be seen at a glance:

105

106

Visual Management

107

Visual Management

Benchmarking Performance

108

You should…• Try not to think of your

organization as ‘unique’• Not think defensively• Keep an open mind• Keep the process ongoing

Benchmarking is the process by which an organisation, team or individual, compares their product, service and/or practices against the best.

Benchmarking Performance

109

• Benchmark surveys (external / internal)

• Literature search• Conferences• Competitors

• Staff / internal best practice• Customers• Suppliers• The Internet

Sources of Benchmarking data

The Search for Best Practices

110

How can you capture and use best practice?

Advantages?

Pitfalls?

Planning for Improvement

111

� Identify the right problem� Analyse – assess

performance opportunity� Identify solution� Plan solution

� Implement solution� Manage change

� Evaluate results

� Plan next steps

orrrrrrrrrrrrrrrttttttttttttttttttttttuuuuuuuuuuuuuuuuuuuuuuuuuuuuuunnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnniiiiiiiiiiiiiiiiiiiiitttttttttttttttttttttttttttyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyStart

P-D-C-A is known as the Deming Cycle

Used in business for the control & continuous improvement of processes & products.

Linking Rewards to Performance

112

Question: What are the benefits of linking rewards to performance?


113

Question: What are the benefits of linking rewards to performance?


114

Two common approaches:

1. Annual bonuses and salary increases — based on a typical review cycle with performance ratings linked to organisational goals

2. Goal-driven incentive plans —which fall outside the annual review process and are tied to the achievement of specific, time-based objectives.

ContentsDAY 3 - A Team Approach to Performance Improvement

• Facilitating team meetings

• The role of the manager in building ownership and commitment

• Knowing how to facilitate information, problem solving, decision

making and planning meetings

• Pareto and the 80:20 rules

• Tools for root cause analysis: the Fishbone

• Collecting accurate and representative data

• Encouraging creativity through brainstorming

116

Facilitating Team MeetingsYour positive and negative experiences of meetings:

117

Positive:

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Negative:

The Default Meeting AgendaPleasantries / introductions

Specific agenda items- presentations, discussion, brainstorming- decisions

Summary- Agreed actions (assigned to individuals- Next steps e.g. date of next meeting

1

3

3

Meeting Overview (background, purpose, process, people)

2

118

Meeting RolesChair – opens and closed meeting, final arbiter of decisions

Facilitator – manages certain meeting process e.g. runs a brainstorming session

Expert / Specialist – Provides expert input to one or more agenda items

Meeting Member – participates in discussions offering insights and opinions

Recorder – records meeting information, especially agreed actions

Time Keeper

119

Facilitating information, problem solving, decision making and planning meetings

120

Questions to ask yourself:

1. Who should attend?2. Process and techniques?3. Timing?4. Location?5. Input?6. Outputs?

Action MinutesMeeting: Operations Team Date: 14/06/XXNo. Action Item (what) Who Deadline

(when)Notes

1 Investigate cause of yesterday’s under-production

AG 16/06/XX AG will speak to Sarah Parker to getproduction problem report.

2

3

4

5

121

Visual Management

122

Activity: Visual Management

Simpson’s deliveries & despatchesCS10

The Role of the Manager in Building Ownership and Commitment

123

Questions:

When leading performance improvement how to you get ownership and commitment from:

1. Key stakeholders?2. Your team?3. People who will be affected by the changes you make?

124

In 1850, the Italian economist Alfredo Pareto analysed the distribution of wealth in Italy and discovered that 80% of the wealth was in the hands of 20% of the population. This 80/20 rule applies to many relationships found in businesses and elsewhere.

Pareto Analysis

20%

80%

20 % of causes … create 80% of the problemsIdentify the “critical few (causes) from the trivial many”

80%

20 %

124

125

80% of car accidents are caused by20% of drivers.

80% of goals in football are scored by20% of players.

125

Pareto Analysis

126

A bar chart with columns in descending order from left to right - based on the “Pareto Principle”

126

e.g. types of complaint or defect or breakage etc.

frequency

Pareto Diagram

127

• Consider data to be collected (faults, scrap, time, costs etc.)

• Define categories• Gather data• Order data in order of occurrence

(highest first)

Failure Mode Frequency

dirty 34

leaking 23

screw defect 8

diameter 5

assy. failure 3

others 9

Step 1 – Collect the Data

127

Pareto Analysis

128

• Label left hand axis• Label horizontal axis• Make bars the same width• Order categories from biggest to smallest

34

23

85 3

9

0

10

20

30

40

50

60

70

80

90

dirty leaking defectivescrew

diameter assy.failure

others

# of

Def

ects

Step 2 – Draw the Axes

• The height of each column corresponds tothe frequency

• Define describing names for all columns the same width

Step 3 – Draw and Name Columns

128

Pareto Analysis

129

0

5

10

15

20

25

30

35



others

Category

# of

Def

ects

(abs

olut

e)

34

23

8

53

9

0%

20%

40%

60%

80%

100%

# of

Def

ects

(rel

ativ

e)70%

79%85%

89%

100%

41%

• Scale right axis from 0% to 100%• Calculate cumulative result• Enter a point per category• Connect points with straight lines

Step 4 – Draw Cumulative Line

129

Pareto Analysis

130

Step 5 – Further AnalysisBreak down main cause into sub groups

0

5

10

15

20

25

30

35



others

Categories

# of

Fai

lure

s (a

bsol

ute)

34

23

8

53

9

0%

20%

40%

60%

80%

100%

# of

Fai

lure

s (r

elat

ive)

41%

70%

79%85%

89%

35%

65%

85%91%

94%

0

2

4

6

8

10

12

frontcover

leftcover

steeringconsole

chimney rightcover

others

Location of Failure

# of

Fai

lure

s (a

bsol

ute)

0%

20%

40%

60%

80%

100%#

of F

ailu

res

(rel

ativ

e)

12

10

7

2 2

1

130

Pareto Analysis

131

Step 6 –AnalysisLook for the breakpoint on the cumulative curve.

35%

65%

85%91% 94%

0

2

4

6

8

10

12

frontcover

leftcover

steeringconsole

chimney rightcover

others

# of

Fai

lure

s(ab

solu

te)

0%

20%

40%

60%

80%

100%

# of

Fai

lure

s (r

elat

ive)

12

10

7

2 21

BreakPoint

131

Focus your effort on fixing the top 3 causes accounting for 80% of your failures.

Pareto Analysis

132

No of customers by annual spend

050

100150200250300350400

<100 100-500

500-1000

1000-5000

5000-10000

>£10K

annual spend

No of

custo

mers

Without these

customers your turnover would halve

Pareto in action : In the period August 2006 to August 2007 a total of 146 customers were supplied, generating an income of £0. 477m

Pareto allows you to focus on what’s important – to get the biggest bang for your buck.

Pareto Analysis

133

• The top 18 customers i.e. 2.3% generated 52% of the sales– can you penetrate further into these markets e.g. exploit

the excellent systems you have in place for Luddites

• The bottom 128 customers i.e. 16.5% all spent less than £100, they generated 0.65 % of sales– these clients are costing you money, you are currently

ignoring them, action needs to be taken to either convert them or loose them

Sales analysis shows that Company Ab follows the Pareto rule. Last year 83% of the sales were generated from 155 customers; 20 % of the total customer base

Currently the focus is on customers with a spend of > £10 K, effort needs to be expended converting the 142 spending between £1 and £5K into major clients.

133

Pareto Analysis

Tool for Root Cause Analysis

134

• Used for Root Cause Analysis & groupproblem solving

Problem

Method Machine Man

Material Environment Measurement

Fishbone(Ishikawa) Diagram

Fishbone (Ishikawa) Diagram

135

Root Cause Analysis

136

Activity: Root Cause AnalysisIshikawa / Fishbone

OE at Simpson’s is low

Collecting accurate and representative data

137

Interviews Group interviews / Workshops

Observation Desk ResearchQuestionnaires


138

Method Advantages Disadvantages1-to-1 Interviews •Personal contact

•Flexible agenda•Clear contribution•Provides unspecified information

•Time consuming•Who to interview?•Allow time to co-prepare•Difficult to analyse

Group Interviews / Workshops / Focus Groups

•Meet more people more efficiently•Can surface conflicting views•Can observe group dynamics•Higher profile

•Harder work•Less air time for individuals •May be inhibited•Requires good facilitation skills

Questionnaires / surveys / studies

•Large number of views•Mechanical analysis•Easier for respondents•Deliverable in its own right

•Close ended

•Reservations about viewsin writing

•Low response rates

•Difficult to assess strength of feeling or relevance


139

Method Advantages DisadvantagesObservation / Field Research

•First hand•Good chance of getting unspecified data•Visibility of project

•Your presence can affect system•Time consuming•Difficult to analyse

Desk Research • Works with available data• Good chance of unspecified data• Can go at your own rate

• Document availability• Time consuming• Difficult to find data• Raises expectation you will have

assimilated all the data

140

1.Discovery

2.Consensus

3.Mobilisation

IOP&P

141

2. Consensus

ConsensusConsensus = ‘General agreement’ to

move forward with an improvement / change

Need to build consensus with key stakeholders:• Executives• Managers• Employees• Suppliers • Customers

142

2. Consensus

Consensus

143

1.Discovery

2.Consensus

3.Mobilisation

IOP&P

Mobilisation

144

3.Mobilisation

Determine Action

Take Action

Measure Results

• Implement Action Plan• Manage change

• Measure performance improvement

• Identify actions required• Create Action Plan

Encouraging Creativity Through Brainstorming

145

QUANTITY Get as many ideas as possible. Go for quantity, not

NO DISCUSSION Discussing issues will reduce the number of ideas. Leavediscussion and comment until afterwards.

NO CRITICISM Don't allow criticism. Criticism will prevent creative ideas and unusual ideas from being provided.

RECORD Record all ideas, preferably on a flip chart where the ideas are visible to all.

PIGGYBACK Build on one another's ideas.

INCUBATION If you run out of ideas, leave your list for a while and thencome back to it. You will probably find that participants have many new ideas to add to the list.

RAPP - Rapid Action Planning and Prioritisation

146

Problem-Solving Meeting

147

Activity: Run a Meeting with a RAPP

Prioritising Opportunities

148

Work-breakdown Structure

149

Planning

150

Activity: Planning

• WBS• Gantt (Critical Path)• GDPP

Create a Work-Breakdown Structure for moving an office to a new location- A new building has been found and agreement has been reached. Focus on the physical move from once office to another. The new building has caballing and is empty.

Gantt Chart

151

Mobilisation

152

3.Mobilisation

Determine Action

Take Action

Measure Results




Action Teams

153

• Cross-functional team

• Temporary

• Analyse performance improvement opportunities

• Devise solutions

• Build consensus

• Take action

• Measure results

What are the benefits of Action Teams?

Steering

154

Terms of reference

Overall Status

Current Risks

Current Opportunitie

Issues Log

155

Programme Steering Pack

Programme Steering Pack

0

20

40

60

80

100

120

140

Cumulative Time Lost (mins)

0102030405060

Boxing Area Labelling Filling

No Work Supplied

156

Delay Data

Mobilisation

157

3.Mobilisation

Determine Action

Take Action

Measure Results




Measure Results

158

• See oil drilling case study

Spectrum of Change

159� Discuss

Automation – computerising processes to speed up tasks, improve efficiency and effectiveness

Rationalisation – streamlining of processes, eliminating obvious bottlenecks

Business Process Reengineering – radical redesign of business processes:• eliminate repetitive, paper intensive,

bureaucratic tasks• Reduce cost significantly• Improve product / service quality

Paradigm Shift - radical change to the nature of the business the organisation

Managing the ‘White Space’

160

Process Mapping

161

A process is a series of activities, which produce a product or service for a client

Process Mapping is the pictorial representation of the steps it takes to provide a product or service to a client.

Process Mapping - Example

162

Example Processes

163

• Registration of a claim

• Repair/maintenance

• Payment of a cheque

• Recruitment to fill a vacancy

• Administer first aid

• Completing expense accounts

• Purchasing

• Health and Safety inspection

• Changing a job description

• Design a product/service

Benefits

Process Mapping is:• Objective • Cross-functional • Involving of all stakeholders • Improvement focused • A team approach • Holistic – it focuses on the whole not one part

164

Moving to a Process View

165

Management by Section or Process

Process Mapping - Principles

167

• Simplify• Test using metrics• Minimise handoffs• Integrate tasks / activities• Look at IT as an enabler• Focus on the logical workflow first• Work backwards from output to input• Have a single point of contact – ownership• Place decision making close to the customer• ‘Whats’ first, then, who, where, when and how• See the business through the customers eyes

Process Mapping

168

1. Choose a suitable method of documentation. Hand Drawn - Messy. Inflexible. Using Post-it™ notes - Flexible. Fast. Software such as Visio™ - Flexible. Little involvement. Easy to update and to share.

2. Prepare the room. Choose a large room with lots of wall space. Make sure you have adequate brown paper or white boards, Post-it notes etc. Arrange the chairs in a semi-circle so that all people are facing the map.

3. Create ‘swim lanes’. The client should be in the first row and time should be on the bottom.

4. Decide where to start mapping. If the process is of a significant size and complexity, break it down to its major component parts.

7. Ensure that the sequence of the map is from left to right

8. If there is uncertainty about a particular step, or sequence, leave a space. Have someone investigate. It may be necessary to get first hand evidence of the true sequence and time taken at each step.

9. If more than one area is involved in the process it should be depicted across bands – Swimlanes

Review

169

5. Walk through the process as if you were actually doing it. Copies of forms or screen prints of system steps make this easier. Paste them on your map.

6. Draw symbols on the map to depict each step of the process. Be consistent in the use of these symbols.

170

11. Record reality. Do not document the process as it should be. You will redesign later. Put new ideas for change into a “parking lot” (record them on a separate flip chart).

12. Join each step using lines and arrows to show direction. Do this at the conclusion.

13. Determine the time for each step. Record it in the bottom column.

14. Review the map on completion to confirm that it is accurate.

10. To avoid confusion when two lines intersect, draw one line at an angle, and not a straight line.

Process Mapping – Symbols

171

No

Yes

Start

End

Action

Direction of Flow

Decision

Document

Start or End

On Page Connector

System Action

Off Page Connector

Process Mapping

172

Activity: Process Mapping

1. Paying for goods at supermarket checkout

Business Process Framework

173

Improvement

Process Mapping – Do / Do Not

174

Process Mapping – Metrics

175

Selecting a Team

176

• Know the process• Want to improve the process• Represent all aspects of the process• Have credibility with their peers• Will make the time• Have the power to make the changes

A typical team will comprise of 4-8 people who represent all aspects of the process. It will include a sponsor and someone with the power to authorize change.

Process Mapping Deliverables• Process documented, highlighting problem areas• Problems identified using root cause analysis• Implementation Plan highlighting identified & prioritised

suggestions for improvement• Documented differences between existing and new process

using “Best Practices”

177

Each map will show• Each step in the process

• The sequence of each step

• The time from start to finish

• The client contact

• Who performs each step

• The interrelationship between the stakeholders

178

Process Mapping – Example

179

180

ContentsDAY 4 - Process Mapping and Flowcharting

• Process and the challenge of variation• Defining the opportunity: the 80:20 rule and the 95:5 rule• Three alternative strategies to developing a process map• The 12 steps to create a process map• The power of benchmarking• Identifying and removing waste, duplication and non-value

added activities• Redesigning the process to make it “seamless”• Outsourcing decisions: the 10 best guidelines to ensure

success

181

Process and the Challenge of Variation

182

Processes are never consistent in time or effectiveness. This is known as a Variation. Brainstorm for examples of variation in the following categories1. Manpower (employees)

2. Methods

3. Materials

4. Machinery (equipment)

5. Mother Nature (environment)

� Deming’s 95:5 Rule

� Ideas for minimising variations?

Process Mapping

183

Activity: Process Mapping

1. Insurance application

Process Re-engineering

184

1. Organise around objectives (reduce silos)

2. Cost effective, leading edge technology

3. Time Compression

4. Eliminate Non-Value Adding Steps

5. End to End Solutions

X X


185

6. Quality at Source

7. Empower People

8. Set Stretch Goals

9. Aligning to customers

10. Reduce handovers / increase co-location


186

Activity: Process Re-engineering

1. Insurance application2. Company process mapping and re-engineering

� Time� Cost� Quality

3 Alternative Strategies to Creating a Process Map

187

1. Expert Approach• Work with managers / expert to sketch draft process• Cross-check process ma with other experts and refine

2. Workshop Approach• Cross-functional team representing all parts of the process

work together to create the process map• Others review and refine the process map

3. Observational / Experiential Approach• Walk through the process as is happens questioning people

and noting down steps e.g. follow a customer order• Additionally, be a customer and experience the process

yourself

80:20 and 95:5 Rules

188

20%

80%

80%

20 %

ProcessTechnologyWork DesignRegulations

Deming: Performance

The Power of Benchmarking

189

Question: What are the advantages and pitfalls of benchmarking?

Identifying and Removing Waste, Duplication and Non Value-Added ActivitiesWhatever activity you or your business undertakes, a large proportion of your business processes will create waste.

Waste definitions:

1. The use of resources over and above what is actually required to produce the product as defined by the customer.

2. Anything that does not add value to your product as it proceeds through your business.

3. If the customer does not need it or will not pay for it then it is waste, this includes material, machines and labour – known as Non Value added

190

4

Eliminating Waste

The Japanese word for waste is “muda”

• Value Added

• Non Value Added BUT necessary

• Waste

191

Objective – Eliminate Waste

Improvements NVA

Order processing Time

Reduce

More time available for other activities

WASTEEg getting the printer to work

Non Value AddedE.g. entering the order

Value Added

VA

6

Eliminate

192

Waste

193

Activity: Identify waste

What is the potential waste associated with preparing and sending an invoice by post?(list on flipchart)

1. Transport 2. Inventory3. Motion4. Waiting5. Overproduction6. Over-processing7. Defects8. Non-Utilisation of employees

194

The 7 Wastes

1. Transportatione.g. distances travels by paperwork in an office or the goods on a shop floor

- Resolved through reviewing layout, process design and handling methods

2. Unnecessary InventoryToo little inventory can lose sales, too much inventory can hide problems.

Aim for a Just In Time (JIT) stock by applying lean techniques to report sales levels and base stock re-order levels on correct up to date info. E.g. don’t order 100 every month if you only sold 50 last month !

10

The 7 Wastes

195

3. Unnecessary Motione.g. walking, bending, turning and reaching.

- Resolved through layout studies including spaghetti diagrams reviews

4. Waitinge.g. purchasing – does your process have excess lead times as you wait for authorisation of your PO ?

5. Overproduction & Overbuying

Overproduction – always aim to meet exactly what the customer expects, just in time, to the correct quality.Overbuying - what could you Kanban in your office / organisation? Kanban drawers.

10

196

6. Over / inappropriate processing - Unnecessary or complicated process stepse.g. think about how many times you touch a document.e.g. every foreign currency invoice – go to Finance Manager (never refused an order) – step changed to parallel process to remove bottleneck (and only of non-Euro transaction)

7. DefectsDefects – reducing the number of processing mistakes decreases customer complaints and cost of scrap. Often shows up as picking errors and customer returns.

8. Non-Utilisation of People (Hidden Waste)Failure to utilise employee creativity.- The best people to see and get rid of the waste are the people who do the job.

197

Waste Analysis SheetProcess Description: ……………………………….. Date: ………..

Step

No.

Step

Tim

e

Cum

ulat

ive

Tim

e

Process Flow Wastes

CommentsVANVA

Process Steps

Tran

spor

t

Sto

re

Del

ay

Insp

ect

Ope

ratio

n

Idle

Tim

e

Inve

ntor

y

Tran

spor

t

Qua

lity

Mot

ion

Ove

r Pro

d

198

Waste Analysis SheetProcess Description: ……Replace a light bulb….. Date: 18/11/14

Step

No.

Step

Tim

e

Cum

ulat

ive

Tim

e

Process Flow Wastes

CommentsVANVA

Process Steps

Tran

spor

t

Sto

re

Del

ay

Insp

ect

Ope

ratio

n

Idle

Tim

e

Inve

ntor

y

Tran

spor

t

Qua

lity

Mot

ion

Ove

r Pro

d

199

1

2

3

4

56

Go downstairs

Take ladder & bulb upstairs

Remove ladder and bulb from cupboard

Set up ladder inbedroom

Put bulb on table inbedroom

Daughter clears Space in her room

7

Climb up ladder

Remove old bulb &throw onto bed

8

9

Insert new bulb

Daughter switches on light to check bulb

10

11

Climb down ladder

25 25

35 60

25 85

120 205

3 208

Pick up light bulb

12

10

2

5

12

8

3

4

�

�

�

�

�

�

VA

VA

VA

VA

VA

VA

Waste

200

Activity: Identify and Eliminate Waste

Fulfil an ABC order that has landed in the in-trayCS11/12/13/14

http://www.youtube.com/watch?v=NJN-lsk_DLU

Creating a “Seamless” Process

201

1. Analyse the process and identify wastes

2. Assign each waste to one of the seven categories

3. Prioritise the waste using a matrix approach

4. Implement countermeasures

5. Create SOPs to reflect improvements

6. Trial, review and identify further improvements

7. Modify SOPs

• Eliminate (ideal situation)• Combine (reduce process steps )• Replace (with a less wasteful task)• Simplify (reduce waste)

http://www.youtube.com/watch?v=kce2L23yLcw - Toyota

Outsourcing

202

Question: Why would you outsource some of your organisations activities? What are the potential benefits?

Outsourcing Decision

203

Top 10 Reasons:

1. Reduce or control costs

2. Get Access to “world-class” capability

3. Improve your focus

4. Free internal resources for other purposes

5. Resources not available internally

6. Accelerate re-engineering process

7. Functions are difficult to manage and/or out of control

8. Share risks

9. Make capital funds available

10. Rare or single events

Outsourcing Decisions

204

When not to outsource• The area is a mess• You are looking for a quick fix• You need flexibility• You are not sure where you’re going, but you’re following the “herd”• You are not ready to let go

When to Insource:• You need to be close to the client• Can avoid high transportation costs (including warehousing)• Skilled labour is available• You’re part of a just-in-time industry

Example Change for Day 5

205

Choose a change / improvement within your organisation –current or future (or past)

1. Title of change

2. Main objectives of change

3. Benefits of change

4. Impact on People

• Post-Course Assessment• Evaluations• Certificates

ContentsDAY 5 - Implementing Change

• Selling your ideas: a method of presentation that always works

• Getting approval for radical improvements• Managing change: possible reactions from people and how

to deal with them• Forward thinking: prioritizing challenges at work• Setting up your first team• Creating an action plan• Presentations• Workshop review

207

Selling your Ideas - SCQA

208

Answer

Situation

Complication

Q uestionWhat

matters to the

audience

Situation, Complication, Question, Answer

209

Situation: Profitability fell for the first time last year; costs are rising faster than revenue

Complication: Our competitors are utilising outsourcing/offshoring strategies to reduce costs

Question: What options do we have to reduce costs to a competitive level

Answer = We have three options:

Key line

Improve processes Consolidate functions Offshore/outsource

Cross product

Cross business unit

Cross region

Current inefficiency

Exception management

W X Y ZCurrent inefficiency

Exception management

Getting Approval for Radical Improvements

Activity: Complete Change Questionnaire

How do people respond to proposals for radical improvements in your organisation?

210

Managing Change: Possible reactions from people and how to deal with them

211

How does change affect motivation at work?

212

people

People and change

213

The Leader’s role is to create an environment in which people are willing and able to change

If people don’t change there is no change

People’s key motivators are threatened by change...

...no wonder they oppose or avoid it

People going through change can choose to engage positively with it

organisationleader

The Leadership Challenge

214

Performance

TimeChange

Minimise disruptionMaximise ROI

Our response to change

215

CHANGE

The new location has much better facilities. Let’s move.

The recommendations willsave time and money. Let’s implement them.

What do they know about how we operate on theground? Do they think we’reincompetent?

Our place has character and we’re used to it. Why move?

Questions to answer today

216

• How can you u work with the grain of human How cannature to...

...minimise the disruption caused by change and maximise return on investment.

Your changes?

• Why do people struggle with change?

The 5 Forces of Change

217

People’s key motivators are threatened by change...

lack of direction

helplessnessloss

failure

uncertainty

218

219

Importance

Uncertainty

Uncertainty

220

“Crazy Time”

How do great leaders create certainty?

221

Communicate, communicate, communicate

222

•Purpose•What?•Why?• HL pan

•Purpose•Details•Losses/Gains

•Purpose•Roles•Behaviours•Systems•Processes

•Early wins•Recognition of individual success

•Business benefits

Communication Campaign Plan

223

MESSAGE CHANNEL WHO WHENReasons for and benefits of initiative Z

Team Meeting Regional Managers

Week commencing 7th

February

Purpose and overview of initiative Z

Internal Magazine Operations Director

4th March

Exercise: Communication Campaign Plan

224

MESSAGE CHANNEL WHO WHEN

225

1. Passionate, visible, confident leadership – at all levels –actions as well as words

2. Communication – well planned, continuous, open and honest (bad news is better than no news)

Actions to increase Certainty:

226

Senior leadershipteam

Front lineoperationsDaryl Conner

Black Hole

A Clear and Compelling Purpose for Change

227

“One and Done”

ClearChallenging

Empowering

228

1. Help people understand:- the context for change- why the change is happening

2. Create a clear and compelling purpose for change

Actions to increase people’s sense of Purpose

229

Management style

230

Based on: Tannenbaum and Schmidt, Harvard Business Review (1958)

Management Style

231

Tell Discuss Involve Empower

232

1. Involvement – dialogue, participation, control

3. Training - new skills, behaviours and expectations

Summary:

233

You

Team

Way we

do

things

Profession

ProjectMobile

Phone

Customers

Workspace

A sense of loss

��

Lose-Keep-Gain Grid

234

Breaking connections

235

What are the biggest life changes we experience outside of work? How do we mark them?

Stakeholder Management Grid

236

Stakeholder(s) Impact of Change (H,M,L)

Current Level of Ownership (H,M,L)

Target Level of Ownership (H,M,L)

Actions Required to Achieve Target Level of Ownership

Team Leaders H L H � Run monthly briefing sessions

� Involved in design workshops

� Train on new processes

237

1. Bring issues of loss into the open

2. Use ceremony to break with the past

Summary:

How can we minimise response A and maximise response B?

Performance

Time

A

B

214

Success process

239

Ok to fail, unacceptable not to try

KPIs, attitudes, behaviours and expectations

Define Success

Communication& Training

Take action at work

Observe, coach & support

Recognise & celebrate

Success process

240

241

Summary: 1. Clearly define success - what, how and why?

2. Train and coach people through the learning curve- make it ok to fail, but unacceptable not to try- recognise and celebrate successes

Summary

242

CHANGE Choose to engage positively

Performance

TimeChange

Minimise disruptionMaximise ROI

243

www.5forcesofchange.com

Forward Thinking: Prioritising Challenges at Work

244

Activity:

1. Identify the key challenges you face when attempting to improve operational performance and productivity within your own organisation

2. Which are the top 3 challenges?

245

Learning Specific Action(s) When Measure of Success

Opportunity toremove waste from the invoicing process

• Gather a focus team to assist in performance improvement

• Measure current invoicing cycle time

• Identify and eliminate waste

Next Friday24/xx/xx

Reduction in invoice processing cycle time

Need to delegate decision-making authority

• Write draft proposal• Discuss with manager• Identify training required• Pilot new decision-making

authority

23/xx/xx

Team membersable to approve customer refunds up to a limit of $X

Meeting Management

Introduce Action Minutes toweekly operations meeting

1/xx/xx

Action Minutes produced andcirculated weekly.

Creating an Action Plan

246

Creating an Action PlanLearning Specific Action(s) When Measure of

Success

247

Appendix A

Setting up your First Team

248

• Forming• Storming• Norming• Performing• Mourning

The stages are progressive, though not strictly defined, and groups can drop back stages


249

• Polite• Impersonal• Watchful• Guarded• Concern for structure• Silence• Anxiety• Dependence on leader

• Confronting people• Opting out• Sub-grouping• Conflicts• Feeling stuck• Noisy• Rebellion

Forming Storming


250

• Clearer roles emerging• Developing skills• Establishing procedures and

norms• Giving feedback• Confronting issues• More open exchanges• More/better listening• Move to group cohesion

• Resourceful • Flexible• Openness• Actively seek feedback• Effective• Close and supportive• Settled interdependence

Norming Performing

A group reaches its full capability only in the fourth stage

Exercise: Change Management PresentationYou have worked with the Supply Chain team at International Construction Corporation to analyse and redesign their processes. There are savings of approximately 7% savings that can be made as a result of your work - $250,000 per year.

Prepare for a meeting with the Supply Chain General Manager, Bobby Crush. He very independent-minded and an expert on supply chain management. He has been with the company for 30 years and has ‘seen it all before’. Prepare for a 1 hour meeting to convince him that it the Balanced Scorecard is a good idea.

Think about each of the 5 Forces of Change. Prepare a 10 minute presentation to Bobby making the case for implementing the process improvements in Supply Chain.

Think about how to overcome any potential objections.

251

Delay Data System

252

A Delay Data System increases process throughput by capturing detailed delay information and eliminating the root causes of problems..• Capture delay data (data sheets) – cause, duration of

delay, timing, frequency,, reason code• Collate in a spreadsheet • Report on delays (to Steering Group) • Identify root causes• Eliminate delays

Delay Data Sheet

253

No. Cause of Delay Reason Code (where available)

Time of Delay xx:xx

Length of Delay (mins)

Name(of person recording delay)

Notes

1

2

3

4

5

6

7

8

Reason Codes: 1. Machine Jam2. Machine breakdown3. Staff not available

4. No work supplied5. Spillage6. Accident

Setting up a Delay Data System

254

1. Sell principles2. Identify common categories and sub-categories of delay3. Develop delay data sheets and delay data spreadsheet4. Assign individual to be responsible for capturing delay data on the delay data spreadsheet5. Develop and agree delay data procedures6. Train people on use of delay data sheets7. Launch delay data system8. Drive compliance to the system9. Amend system as required

Q: What issues might you encounter when installing a Delay Data System?discussion

Q: What are the Critical Success Factors for installing a Delay Data System? I.e. what must go right for delay data to succeed?

In pairs – Think of places where delay data could be installed in your organisation? What benefits would you expect?

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