Selected Operational Excellence Frameworks and Tools
Available within the Capital District Transportation Authority (CDTA)
General Process Improvement
Kaizen
The primary project management tool for continuous improvement projects is the Kaizen methodology. Typically, Kaizen projects last about five days, accomplishing as much improvement as is possible in that time frame. They generally follow a five step system:
Scope Development – The project leader determines the goals of the project, the process boundaries, the restrictions, and the team members involved.
Process/Value Stream Mapping – The team observes the process and develops a data driven “current state” model of how the process is actually practiced.
Future State Development – Using collaborative frameworks, the team creates a vision for how an improved process could work and an outline of the changes that would need to be made to achieve that vision.
Improvement Implementation – The team implements the changes it identified. This may be via an informal “blitz” exercise or by using one of the specific tools described later.
Sustainability – After verifying the success of improvements and adjusting as necessary, a new standard work procedure for the improved process is created and affected employees are trained on the new procedure.
A process area will often have several Kaizen-based events in sequence, incrementally reducing waste and variability within that section of the organization.
Tools to Improve Time or Cost
5-S
A highly targeted methodology for making the physical layout of a work area as safe and efficient as possible, with the side effect of standardizing the work that occurs within that area. 5-S is a five step process:
Sort – Review each item in the work area. How is it used? Is it really necessary?
Set in Order – After removing the clutter, arrange what is left in the most efficient way identified.
Shine – Repair, clean, and paint the equipment and structure in the work area.
Standardize – Develop and post standard procedures for the work that occurs within the physical space.
Sustain – Develop a control mechanism to ensure standards are followed and clutter does not return.
Quick Changeover
One of the biggest wastes in a typical process is the activities related to changeover, or switching from one work process or product to another. The desire to perform as few changeovers as possible leads to large batch sizes. For example, because it may take a half hour to arrange the equipment, supplies, and manpower to perform a brake repair, several may be scheduled in a batch together to spread that changeover time over several repairs.
Using the techniques in Quick Changeover, reductions of as much as 90% in changeover time are routinely identified. By having short changeovers, a high degree of flexibility can be introduced into any work area, because little time is wasted within each short changeover.
Kanban
Inventory is frequently an indicator of deeper underlying process inefficiencies. The Kanban methodology takes a structured approach to safely lowering inventory levels, either of the physical materials used in the organization or of “virtual inventory” – such as waiting queues of buses for transport or maintenance operations.
The power of the Kanban method is that as inventory levels are lowered, process improvement project ideas are revealed, much as lowering water levels might display rocks below the surface of a lake. In this sense, Kanban can be an effective tool in both tactical and strategic applications.
Tools to Determine How Well a Process Is Working
Statistical Process Control
There are several data driven methods for determining how well a process is performing. One of the most powerful is Statistical Process Control. SPC gives a quick, visual status report of process data, compared to expectations and requirements.
In its simplest form, SPC compares each measureable output value of a process to whatever requirement a customer has imposed. It also compares each value to the “control limits” of the process – a visual indication if the output is not as expected. Trends can also be identified that point to particular types of quality defects in the process.
Value Stream Mapping
Most Kaizen events include the development of a Value Stream Map, or a pictorial view of the current state of a process. The VSM includes detailed data related to waste in each operation in the process. Typical examples include:
Cycle Time – How quickly the step can be completed.
Takt Time – How often the step needs to be completed to keep up with demand.
Changeover Time – How quickly the step can change from one type of work to another.
Scrap Rate – How often the output of the step is unacceptable and must be “reworked”.
Each of these data points can indicate waste in the process – and an opportunity for improvement using the Operational Excellence tools.
Tools to Design a New Service
Quality Function Deployment (QFD)
One of the most challenging questions in business operations is how to develop a service that meets both the “needs” and the “wants” of the target customer. QFD uses the “house of quality” visual grid to balance competing pressures in the design of a product or service. A summary of the method:
Determine customer requirements, using Voice of the Customer techniques (surveys, focus groups, interviews, etc.)
Create service attribute ideas to satisfy those requirements.
Match each attribute with each requirement and compare to the organization’s own capabilities and those of its competitors, to determine the best mix of service features for the identified customer requirements.
Potentially “cascade” the results to determine lower level requirements and features.
Failure Mode and Effects Analysis (FMEA)
A key element in improvement planning is the management of risk. FMEA offers a relatively objective method for assessing and prioritizing risks that could cause a process to fail, so that improvement concepts can address those risks.
At its heart are assessments of three key attributes of risk: severity, occurrence, and detectability. By brainstorming a solid profile of risks and analyzing the effect of each, a project planner can choose to focus on the more critical risks in the design of improvement ideas.
Tools for Solving a Difficult Problem
Six Hats
One of the most difficult aspects of developing a process improvement project is understanding how to focus the effort. What problem needs to be solved? Why does it occur? What are novel new ideas that can be explored?
The Six Hats methodology is a framework to apply toward solving complex problems, especially in situations where previous solutions have been ineffective. Six Hats focuses on the separation of idea generation from idea evaluation – while simultaneously balancing the facts of an issue with its emotional impact and the risks involved. Overall, it delivers a fair, thorough assessment of the improvement ideas identified, leading to better project concepts. The Six Thinking Hats are:
o White Hat – Facts and Information
o Red Hat – Feelings and Emotions
o Black Hat – Risks, Problems, Negatives
o Yellow Hat – Benefits, Positives
o Green Hat – New Ideas
o Blue Hat – The Big Picture
Five Whys
There are also several “quick action” tools that can be used to jumpstart problem diagnosis. For example, Five Whys is a simple methodology for determining a possible root cause for a difficult problem. It involves repeatedly asking why a particular failure occurs, digging deeper into the core issue and encouraging more clear-headed analysis of a situation. In combination with a variety of charting tools (Ishikawa Diagrams, Pareto Charts, etc.) the Five Whys can be a valuable tool in developing more sophisticated analytical capabilities.
Strategy Deployment
True North – The overall yearly goal of a continuous improvement program or initiative. It is the combination of a Hoshin with a set of Targets, as defined below.
1. Hoshin – Roughly translated from Japanese as “compass point”, the Hoshin reflects the overall direction of the organization or department. It is meant to give the theme for the year. It could identify the underlying values of the group (“affordable service with easy access”) or the yearly goal (“geographic expansion”).
2. Targets – Specific, measureable goals set at the highest level for the initiative, with a one year time frame. These should answer the question: “If I accomplish this set of targets, and only this set, I will consider the continuous improvement program or initiative a success for the year.” Typically, True North will include 3-5 targets. Less is better.
3. Master or Mother Strategies – The work areas that will be leveraged to achieve the targets. They answer the question: “If I successfully complete projects in these areas, and only these areas, it will be enough to achieve the targets outlined.” There are usually 3-5 Master Strategies that encompass a relatively broad area of work, such as “profitability” or “raw materials”.
4. Deployment Leader – An individual who oversees the selection, launch, and ongoing checking of projects within a particular Master Strategy. Although this role includes some project management responsibilities, it is more focused on the political “soft skills” necessary to assist project leaders with cross-departmental coordination and motivation.
5. Metrics – A set of measurable variables within a master strategy area that allow the direct measurement of progress within that area. Examples include “% of Buses Late” in a “Customer Satisfaction” strategy or “Absentee Rate” within an “Employee Motivation” strategy. They answer the question: “If I achieve sufficient improvement on all metrics across all Master Strategies, will that be enough to achieve the improvement needed on the True North targets.”
6. Projects – A minimized set of improvement projects, each lasting no more than one year, which implements the desired metric improvements within a Master Strategy. They answer the question: “If I successfully complete all projects within this Master Strategy, that will be enough to achieve the metrics improvements I have outlined.”
7. Project Leader – An individual directly responsible for the success of a continuous improvement project. This role is similar to a traditional Project Manager role, with the possible exception that knowledge of, or education in, particular Operational Excellence tools may be necessary. Additionally, because of the unique nature of OpEx content, the individual may need to exhibit somewhat higher than average soft skills related to motivation and cross-functional influence.
8. A3’s – The primary method of project management within Strategy Deployment. Rather than encouraging lengthy reports, Strategy Deployment requires that each project be managed using a single 11”x17” A3 page. The A3 should include exactly enough detail so that someone familiar with the organization and its processes could read through the A3 and immediately understand the motivation and progress of the project.
9. Visibility Plan – The overall action plan associated with conveying the goals and timeliness of the annual Strategy Deployment initiative. It should be tailored to meet the communication needs of each stakeholder constituency of the organization, while using a tone that encourages overall buy-in and participation in the projects within the initiative. Some examples include a scorecard posting, email blast or newsletter.
10. Incentive Plan – The method by which the individual goals and motivations of each employee tie into the success of the initiative. Incentives can fall into two overall categories, colloquially labeled “carrots” and “sticks”. A carrot is something that encourages an employee’s internal motivation to succeed, such as a bonus plan or award ceremony. A stick is a structural motivation, typically consisting of a disciplinary process. The Incentive Plan attempts to develop and implement an efficient mix of these elements to encourage initiative success.
/ Toolkit Quick Reference SheetXONITEK Consulting Group Int’l / Page 6
August 5, 2010