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© Copyright IBM Corporation 2010
ISC
Dan Lofaro, Senior Manager of Process Innovation - Integrated Supply Chain - IBM Corporation Matt Raymond, IBM Corporation Colin Marshallsea, IBM Corporation
Seven years of Lean, Six Sigma
© Copyright IBM Corporation 2010
Process Innovation | ISC 2 2
Agenda
Who we are • Mission & Vision • Global Team & Global Reach • ROI
How we work • Engagement Model • Project Types • Training and Education
Some of what we do − Project Stories
• Global Process Services • Transformation and Lean, Six Sigma • Paper Reduction
Growing Pains and Lessons Learned Success Factors
Q&A’s + Discussion
© Copyright IBM Corporation 2010
Process Innovation | ISC 3 3
Who we are • Mission & Vision • Global Team & Reach • ROI
© Copyright IBM Corporation 2010
Process Innovation | ISC 4
IBM ISC Process Innovation Team
4
IBM has a long tradition of process improvement and innovation In 2012, the IBM’s Integrated Supply Chain, (ISC) Engineering Design and Operational eXcellence (DOX) Team celebrates 10 Years of Excellence In 2005, the IBM ISC Leadership Team initiated and sponsored a lean, six sigma pilot. The goal was to use analytical tools and methods to deliver measurable improvements to transactional processes performed by supply chain operations
© Copyright IBM Corporation 2010
Process Innovation | ISC 5
5
Team Vision, Mission and Values
To deploy Lean Six
Sigma across ISC/STG,
providing incremental
business value through
the application of a
“structured” process
evaluation to specific
business problems
Lean Six Sigma will be
integrated into the fabric of
ISC/STG, resulting in a
standardized approach for
problem-solving, fact-based
decision making, and a
process driven culture.
MISSION VISION
Expected Business Values
Improve Critical to Customer Processes
Drive Cost / Workload Savings
Drive the use of process metrics to monitor and develop continuous improvement
Drive Lean Six Sigma into the DNA of the operation to employ a structured methodology to enable
a culture change toward fact based and process-driven decision making
Provide an independent E2E view of process and problems
© Copyright IBM Corporation 2010
Process Innovation | ISC 6
Management, Mentorship and Delivery Model
6
Manager
Customer
Fulfillment
USA
Manager
ISC Global
Operation
Ireland
Manager
ISC Global
Operation
Singapore
Senior Manager
ISC Process
Innovation
Master
Black Belt
Master
Black Belt
Master
Black Belt
Master
Black Belt
Australia
1 BB
Malaysia
1 BB Singapore
7 BB’s
China (Sth)
1 BB
China (Nth)
1 BB’s
Brazil
3 BB’s
Hungary
2 BB’s
Slovakia
1 BB
Ireland
11 BB’s
Mexico
2 BB’s
USA
8 BB’s
India
2 BB
Resource Allocation / Workload Management / HR Functions
Project
Guidance
Mentor
Expertise
• Global reach
• Mix
Experience
Skill
Capabilities
SC Knowledge
Language
Resource
Flexibility and Adaptability
© Copyright IBM Corporation 2010
Process Innovation | ISC 7
Return On Investment
7
2007 14HC WW
Start Up 2006 7 HC
US Projects ROI = x3
2011
53 HC
WW Projects
ROI = x3
2010
63 HC
WW Projects
ROI = x4
2009
58 HC
WW Projects
ROI = x5
2008
55 HC
WW Projects
ROI = x5
© Copyright IBM Corporation 2010
Process Innovation | ISC 8 8
How we work • Engagement Model • Project Types • Training and Education
© Copyright IBM Corporation 2010
Process Innovation | ISC 9 9
Process Innovation LSS Engagement Model
Project Requests
• Improve Critical Customer Processes • Reduce cost and improve efficiency • LSS Education & Deployment
Communications Focal Process Innovation Resource Managers
and Master Black Belts Process Innovation Senior
Manager
PI Website Integrated Supply Chain Other Enterprise
• Audience:
Any IBM resource can submit project ideas to the team for consideration
• Audience:
Organization and Functional Managers -- New and follow-on engagements
• Audience:
IBM Organization and Functional Executives
1. Work with Executive/Sponsor to understand • Strategic goals • Business problem & scope • Objectives of the project/initiative and linkage to strategy
2. Evaluate LSS compatibility - process related, data driven, unknown solutions
• Need for LSS education/deployment (GB/YB) vs. pin pointed problem resolution (BB)
• Productivity Challenges
• Specific Business Problems
• Establish Metric Systems
© Copyright IBM Corporation 2010
Process Innovation | ISC 10 10
Project Type 1: Small Projects, low on complexity, typically should take 3-4 months to complete. Expected benefits > $50k
Project Type 2: Medium sized project complexity, typically should take 5-8 months to complete
Project Type 3: Large Project, WW impact, multiple functional areas or geos, typically should take 9-12 months to complete. Expected benefits > $200k Transformation Type 4: Large Project, WW impact, multiple functions across value-chain 12+ months to complete. Expected benefits long-term tied to Initiative Business Case
Financial Impact:
How many Full Time Equivalents does the process touch?
Is there a Productivity Target?
Is the operational metric easily defined?
Project complexity?
How many Geographies/Locations impacted?
Number of Functional Groups?
Questions to ask:
Several Functional Groups
Ge
og
rap
hie
s / L
oc
ati
on
s
•Data Availability
•Complexity Factors
Limited
Several
3 months
12 months...
Project Categorization and Selection
Project Selection Scorecard
Project Complexity Rubic
© Copyright IBM Corporation 2010
Process Innovation | ISC 11 11
Project Engagement, Management and Training
Data: PTD – Nov 2011
Value Statement: “Drive Lean Six Sigma into the DNA of the operation to employ a structured methodology to enable a culture change toward fact based and process-driven decision making”
© Copyright IBM Corporation 2010
Process Innovation | ISC 12 12
Community vitality, communication and listening post
© Copyright IBM Corporation 2010
Process Innovation | ISC 13
13
Lean Six Sigma Training, Certification & Development
Design for Six Sigma:
Completed DFSS deliverables by phased and education to extended PI Team
New D*MAIC Approach:
Develop methodology to meet needs of PI customers requesting method to identify short term actions
Theory of Constraints
Determine applicability of Theory of Constraints, completed training module and expand skills throughout Process Innovation Team
Industrial Engineering
Investigated various IE tools, including: Queuing Theory, Simulation Mathematical modeling.
Trained team on introduction to simulation using WBM
Kaizen
Delivered education on Kaizen Events
How & when to Kaizen, Tools used
Agile
Determine applicability of Agile technique and researched application of agile including development of agile metric
•Investigate opportunities to expand the technical skills and tools of the PI team
•Create comprehensive set of materials to educate and assist the PI Black Belts and Green Belts in process improvement tools and methods
•Research Industry best practices to ensure PI BBs are abreast with latest skills/toolset
Ongoing Team Skill Development
•Online 140+hrs •Mentor / Review 36hrs •Group Project 36+hrs • Exam • 2 x Projects $250 ea. Within
2 years from exam date • Certification Review Board
MBB
BB Team Lead
BB Team Peers
BB Candidate
Deliverables by phase
• Standardized work product templates
• Work products examples
• Work product owners (experts)
• On-line References
Skill Building and Knowledge Development
BB Candidate
© Copyright IBM Corporation 2010
Process Innovation | ISC 14 14
Some of what we do • Project Stories
• Global Process Services • Transformation and Lean, Six Sigma • Paper Reduction
© Copyright IBM Corporation 2010
Process Innovation | ISC 15 15
Global Process Services
Global Process Services IBM Global Process Services (GPS) partners innovative
companies to manage business processes which deliver
strategic value that contributes to their growth and operational
efficiency. Our business process innovation, advanced
analytical capabilities, human talent and technology give GPS
a practical business expertise help clients identify measurable
growth opportunities and calibrate their business processes to
capitalize on them for immediate gain and sustained long-term
performance.
Lean Experience Value: “Improve Critical to Customer Processes”
• Call Center TAT (Turnaround Time)
• Order Management Cycle time
• Invoice Management
• Sourcing
Value: “Drive Cost / Workload Savings”
• Reduce wait time / re-work
• Checkers / Checking Checkers
• Hand-offs between functions
• Customer hand-offs
Value: “Drive the use of process metrics to monitor and
develop continuous improvement”
• Workload balancing
• Transparency to Management System and
Cadence
Value: “Drive Lean Six Sigma into the DNA of the
operation to employ a structured methodology to
enable a culture change toward fact based and
process-driven decision making”
• Externalization (difference based on facts not
‘culture’)
• Standardization
• 15% of resources to be YB / GB certified
Value: “Provide an independent E2E view of process
and problems”
• Common, simplified, best practice
Philippines
China (Nth)
Brazil
Hungary
India
IBM Delivery Centers with Active LSS Projects
© Copyright IBM Corporation 2010
Process Innovation | ISC 16
Value Chain Transformation
16
Order to Cash Value Chain
Opportunity to Order
Manage Client Contracts
Manage Orders
Plan Demand Supply
Manufacture products
Distribute & manage global logistics
Deliver solutions & services
Manage invoicing
Manage post-sales Admin support
ISC Process Innovation Team
Business Problem / Voice of the Customer: The end-to-end Solutions process
and management system are complicated requiring coordinated integration of
deliverables from multiple stakeholders. The result is a significant amount of resource
time spent executing an order as well as delays in meeting customer expectations.
Challenges:
• Value Chain extends horizontally across multiple processes under multiple functional groups or verticals.
•More than improvement of existing processes with defined boundaries
Approach:
•Co-ordination of experienced Black Belts skilled in applying the principles of structured problem solving.
• Application of Organizational Change Mgmt in addition to the Lean Six Sigma methodology
Master Black Belt
Process Owner
Executive Sponsor
Black Belt Black Belt
© Copyright IBM Corporation 2010
Process Innovation | ISC 17
Green ISC
17
The mission of the Green ISC team is
to: Raise awareness and leverage the
skills and talents across the ISC, to
execute One Green Strategy through
the implementation of programs and
projects that advance IBM's overall
environmental objectives.
Areas of opportunity Energy Reduction (Green Sigma®)
Packaging & Logistics
Solid Waste
Supplier Initiatives
Software Operations
Employee Involvement
Packaging & Logistics
Voice of Customer “ You say you are green but I want you to see for
yourself”
Black Belt went on “Ridealong” and
observed the amount of packaging and paper waste associated to
delivering and installing product
“Green Customer” with a Customer Satisfaction
Issue Black Belt with an opportunity to reduce
waste
© Copyright IBM Corporation 2010
Process Innovation | ISC 18 18
Publication Reduction Scope/Objectives: Reduce the percentage of paper products created & shipped to clients by 10% within 12 months.
Baseline Metric/Target: Reduce costs for material and shipping by 10%.
PowerSystems (System i &
p) at Rochester plant
BASELINE
Average Monthly
Pages Shipped
Avg Monthly Pages
Per Order
Mean 2,293,727 207
Improvement Actions included:
-Work with legal council to obtain & support of recommendations hard copy
documentation elimination and strategy.
- Worked with Information Development to support to remove docs & set up
proactive meetings.
- Reduce size of Safety Manual book from 238 sheet. (Regionalization Plan)
Paper / Print Reduction
Objective: Reduce the volume of printed documents on Network Printers for Ten of the RTP building locations by 20% by end of 2010. Scope: Expand the Bldg. 205 pilot to other building/locations in RTP.
Use Global Print Application to measure distribution of image volumes by building location Use RESO information to determine organizations access to print locations within buildings Use RESO information to determine organizations access to print locations within buildings. Create pareto of volumes by org. then by team (where possible) Contact Org. Leaders develop, implement print reduction plan Making the paper consumption available and personal ….”Did you know this printer…. “ Measure / monitor image volumes and report month to month
RTP, NC
Reduce 3.65 M pages
POK, NY
Reduce 2.1 M pages
Hard savings in material & transportation costs
© Copyright IBM Corporation 2010
Process Innovation | ISC 19 19
Success Factors Growing Pains and Lessons Learned
© Copyright IBM Corporation 2010
Process Innovation | ISC 20
• Learn by doing • Meeting demand • Growth / Design (Management System,
Team Design, Mentoring /Training, Quality)
• Creating / meeting demand • Mechanics of Global Team • Adjust (Management System, Team
Design, Mentoring /Training, Quality)
• Engagement in SC ‘Initiatives’ • LSS + PM
20
2007
Start Up 2006
2011
2009
2008
Lessons Learned
• Learn by doing • Meeting demand • Every opportunity is
a LSS opportunity
• Meeting demand • Learning, Mentoring and Certification • Developing skills within team • Program balance across IBM BU and
Functions • Connecting projects upstream / down
stream • Leverage Experience and
specialization
2010 • Talent retention / market forces • Career path • Skill development DMAIC to DFSS • Continued expansion across IBM
BU’s • Low hanging to deeper / broader
scope
• Talent retention / market forces • Limited expansion across IBM
BU’s maintain and mature relationship (repeat work)
• Low hanging to deeper / broader scope to engagement with business transformation
© Copyright IBM Corporation 2010
Process Innovation | ISC 21
Success Factors
21
Establish paired and dedicated project leads Black Belt – Unbiased view with fact-based / data-driven process training Process Sponsor – Influential power that is within the organization that needs the process transformation Supported by Subject Matter Experts (SME's) – Bring process knowledge to partner with the Black Belt’s knowledge of process and data analytics
Establish a Steering Committee for Exec support and a clear escalation path Include key executives from all areas in which you will need work done & buy-in gained Ensure that the project is linked directly to the company’s top strategic priorities
Set ground rules up front Ensure management support at all levels and adequate commitment of resources Ensure roles and responsibilities are defined and understood
Communicate, communicate, communicate Clearly and frequently; communicate internally and with stakeholders Creatively look for what motivates people, use rewards, incentives, and tailor your techniques to each area
Keep the E2E project ‘optimization plan’ whole
Use a data-driven methodology to break the project into manageable sub-components Use a standard approach for each sub-team and coordinate outputs and root causes across the e2e project
Pick the right people... who will… Exhibit strong leadership, partnership, and collaboration across functions to focus on the E2E solution Hold the line despite resistance & maintain determination to institutionalize the process changes