Need Integrate TOC LSS BMTP Rev3

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The Need to Integrate TOC, Lean, Six

Sigma and Management by Processes

Eduardo C. Moura

September 2010

A Webinar by:


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Eduardo C. Moura:Founder and President of

Qualiplus Consulting (www.qualiplus.com.br).

Graduated as Electronics Engineer in 1978,USP(Sao Paulo University-Brazil). Since 1984 has

been an active instructor, consultant and author

on quality and business excellence.From 1986 till 2003 accumulated the ASQ certifications for CQE,

CRE, CQA and CQM. Quality Specialistby the UNICAMP(University of Campinas, Brazil) in 1992. Certified Taguchi Expert

by the ASI (American Supplier Institute), 1999. Author of severaltechnical papers and books published in Brazil and in the USA,

including Volume 15 of the ASQ How-To Series, How to

Determine Sample Size and Estimate Failure Rate in Life Testing,Quality Press, 1993. Certified Thinking Process Practitionerby the

TOCICO (The Theory of Constraints International Certification

Organization), 2010.

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30 years TQM/Six Sigma; 16 yr BMTP; 10 yr TOC; 9 yr Lean (studying,teaching and implementing)Preaching integration of those 4 methodologies since 2003, 7 yrs ago.Article submitted to a US Quality magazine 4 yrs ago; rejected: Nobodyever wrote about that...


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Article written in 2004, revised by Dr. Alan Barnard(Goldratt Research) late 2009.

Available from Qualiplus or TOCICO.

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The goal...

To clarify about the need and benefits of integrating: TOC (The Theory of Constraints)

Lean Production/ Lean Office Six Sigma

Business Management through Processes (BMTP)


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Prereqs...

You have some previous knowledge about TOC, Leanand Six Sigma. BMTP will be explained in a little more detail...

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That is a methodologydeveloped by EduardoMoura as of 1994, based on

the concept of Cross-Functional Management byKaoru Ishikawa, plus thecontributions of H. JamesHarrington and the use ofthe 7 New QCTools [Mizuno, Ref. 3].

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Ishikawa

Harrington

Mizuno

E. Moura

I didnt dareto place my

photo amongsuch

celebrities...

Origin of BMTP


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Some more details about BMTP

BMTP implementationsteps:

1) Identify andstructure the needsfrom every businessstakeholder. Customers

Employees

Owners/investors

Suppliers

Community

Government

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Customer satisfaction parameters (partial)


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2) Identify all business processes by grouping togetherrelated, cyclical business activities.

Desenvolvimento

eavaliaodefornecedores

Reunirfornecedores para

avaliaode desempenho

Analisardesviosnasentregasdeinsumos(quantidade+prazo)

Negociarrequisitos da

Reckittcom fornecedores

Desenvolverfornecedores

comqualidade assegurada

Controlaras entregaspor

fornecedor

Avaliarperformance dos

fornecedores

Aprovarfornecedores de

serviosde beneficiamento

Comparardiferentes fontes

desuprimento

intercompany

Desclassificarfornecedores

semqualidade

Preparardocumenta o

tcnicap/produoem

terceiros

Monitorardesempenho dos

CDAs

Visitarfornecedores de

insumosprodutivos

Buscarespecificaes

tcnicasdemateriais

Auditarprocessos de

fornecedores

Distribuio

Armazenamento

Armazenarprodutos

acabadosno C.D.s

Enderearosprodutosp/

armazenagem

Analisarcustos de

armazenagem

Desenvolverformas

alternativasde

armazenagem deinsumos/

produtos

Eliminarestoques

obsoletos

Expedio

Separarprodutos p/

expedio

Despacharprodutos

acabadospara clientes

Identificarproble masnas

entregasde produtos

Acompanharas entregas

dosprodutos

Carregarveculos para

embarque

Enviarprodutosparaos

CDAs

Cyclical business activities

Processes

Macroprocesses


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3) Identify improvements and innovations needed torealign business processes (value-creation, support andmanagement) to the satisfaction of stakeholders needs.


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4) Create the business macroflow (a systemic model of thebusiness system viewed as a process chain)


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5) Design and implement the integrated standardization of thebusiness macroflow

Business Macroflow

Macroprocess flowand interfaces

Process flow and interfaces


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Lets recognize...

No individual improvement methodology has thedefinite cure for all organizational diseases.

A solution is needed that combines the bestcontributions from each of them.

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Why those 4 methodologies?

Real improvement cannot be achieved without startingfrom a systemic point of view.

Most organizational improvements require a preciselyorchestrated intervention in the chain of work processes.

Nowadays TOC, Lean, Six Sigma and BMTP all consider: a business-wide perspective, and

orient improvement actions to business processes.

And each of those methodologies have uniquecontributions that no other have:

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Unique contribution of TOC

Goal: to increase organizationalprosperity by focusing on thebusiness systems constraint.

Do organizations need that?

No other approach does that with such a laser-precision focus and effectiveness.

Thats why TOC should serve as the guidingmethodology for Lean, Six Sigma and BMTPimplementations.

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Unique contribution of Lean

Goal: To reduce time-to-cash by focusing on wasteelimination in the process flow.

Do organizations

need that? Lean contributes with

powerful concepts andproven tools for visualcontrol, quick feedbackand constantimprovement of thevalue-creation chain.

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A Value Stream Map


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Unique contribution of Six Sigma

Goal: to increase customer satisfaction by focusing onthe variability reduction of key product/process

parameters. Do organizations

need that?

No other methodology inherits so much of the corevalues, concepts and tools developed along 80 years ofthe worldwide Total Quality movement.

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Unique contribution of BMTP

Goal: to increase all stakeholderssatisfaction by focusing on theintegrated standardization of thebusiness processes flow.

BMTP identifies a major policyconstraint: the Management byDepartments paradigm that sub-optimizes the entire

business system...

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MANAGEMENT BY DEPARTMENTS

PARADIGM

AMBIGUOUS INTERFACES

BETWEEN AREAS (UNCLEAR,MISMATCHED AUTHORITIES AND

RESPONSIBILITIES)

DEFICIENT COMMUNICATION/INFORMATION FLOW

That root cause has shown up in morethan 50 CRTs the author has built inseveral different companies along thepast 10 years!


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The high levels of rework and firefighting (typically 70%!)immediately drive managers into the focusing dilemma:


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So far, the Management by Departments paradigm (aroot cause of the focusing dilemma) has been taken forgranted by TOC, Lean and Six Sigma!


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By establishing a new business structure and management model,BMTP is a win-win solution to the managerial focusing conflict.

different groups of people will be effecitively focused on bothsides of the conflict...


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Current gaps in each methodology(my point of view; no offense intended...)

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Integration trends

Lean Six Sigma (Rubrich 2001; George 2002) is astandard approach nowadays.

Quite recently, the integration of TOC+Lean+Six Sigmais gaining voice: The Ultimate ImprovementCycle (Sproull 2009); Velocity (AGI 2010).

E. Moura (2002, 2006) introduced (humbly...) the 360Excellence model (E360), integrating TOC, Lean, SixSigma and BMTP.

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TOC

LEAN

SS

BMTP

TP: prioritize projects

CCPM: better project mangt


TA: bettereval. financial impact

CCPM: prioritize projects

CRT: problem analysis

Cloud: innovativesolutions

TA:better financ. indic./decisions


TOC Sol. incorp. into processes

Main syenergistic interactions


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LEAN

TOC

SS

BMTP

Lean tools:more visual control

Widerpeople involvement

Lean tools: more stable processes

Waste elim.: better Q, faster L/T

Visual process standardization

Kaizenteam maintain standard.


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SS

TOC

LEAN

BMTP

Balances customer focusx T

Stat. tools: better data analysis

Less variab.: more stable flow

GBs/BBs: high impact proj.


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BMTP

TOC

LEAN

SS

Integr. chain: betterexploit/subord.

Overall integrated chain: flow

Kaizen efforts are incorp. to proc.

Leadership is standardized

Systematic projects id./drive

Breaks silo mentality


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But watch out!

All such integration of methods and tools is just know-how...

And know-how is not sufficient for sustainable, long-termorganizational improvement As a matter some 70% of the organizational improvement

initiatives fail because of the narrow-minded, tool-orientedapproach...

Two other elements are necessary: know-what: what key business aspects should we drive know-

how to, in order to improve overall performance? know-why: why improve? (core values)


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Know-How

Know-What

Know-Why

The 360 Excellence Model

Successful know-how application requires precise know-what

identification and know-why realization.


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A simplified implementation roadmap

Identify

High-impact themesVOC Study

BMP Lean SixSigma

TOC Other


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References

[1] E. C. Moura, A. Barnard (2006, 2010): The Need to Integrate TOC,Lean, Six Sigma and Process Management, Qualiplus Consulting.

[2] Strategos website: http://www.strategosinc.com/just_in_time.htm [3] Shigueru Mizuno, editor (1988): Management for Quality

Improvement - The Seven New QC Tools, Productivity Press. [4] L. Rubrich, M. Watson, A. Larson (2001): Blending Lean and Six Sigma

Workbooks, WCM Associates. [5] M. L. George (2002): Lean Six Sigma - Combining Six Sigma Quality

with Lean Speed. [6] E. C. Moura (2002): Business Management by Processes - An

Executive Briefing, Qualiplus Consulting. [7] E. C. Moura (2006): Integrated Business Process Standardization -

Training Manual, Qualiplus Consulting.

Documents

Need Integrate TOC LSS BMTP Rev3