Continuous improvement…
…and all that jazz
Agenda
Performance improvement strategies
Continuous improvement and
innovation
About me…
About you…
Many ways to improve performance
Certification
BPR
TBM
TQC
5S TQM
Benchmarking
Lean
QA
TQS
6 Sigma
JIT
Kaizen
Best Value
TPM
CI
TOC
TPS
Proactive improvement
Continuous improvement
•intentional
•sustained
Conventional improvement
•ad hoc
•episodic
Excellence Frameworks
• Deming Prize, Japan
• Australian Business Excellence
Framework
• Baldrige Quality Award, USA
• EFQM, Europe
Using Excellence
Frameworks
Organisational
Self-Assessment
Your
Practices
© SAI Global
Strengths and Opportunities for Improvement
Continuous
Improvement
Lean Thinking
• Optimize value creation -- for the
customer
• Focus on product & service value
streams, not organization, assets,
technologies
• Analyse activities for value-adding,
optimize value
• Eliminate waste
Value streams cross functional
boundaries
The seven deadly wastes
1. Transport
2. Inventory
TIMWOOD
3. Motion
4. Waiting
5. Over-production
6. Over-processing
7. Defects and rework
Waste
Factory
Office
Transport
Moving things between
process stations.
Retrieving files.
Inventory
Stock - buffer or
“safety”.
Personal stocks, e.g. stationery.
Motion
People moving
excessively.
Excessive people movement e.g.
looking for files, drawings.
Waiting
Waiting time between
processes.
Waiting for a report or a
response.
Overproduction
Producing outputs
“cc:all” emails & reports.
before they are needed.
Over-processing Applying a thicker layer
of paint.
Defects
Errors – rejecting,
correcting or reworking
outputs.
Writing excessive emails or long
reports.
Reworking faulty transactions.
Continuous improvement &
lean thinking – both…
• Focus on the customer
• Improve all processes in the value
stream
• Involve everyone through
teamwork
• Measure performance
• Emphasise
– customer value
Critical success factors
• Active leadership
• Appropriate organisational
structure
• A realistic program
• Balanced implementation rate
• Adequate and timely training
• Consistent team method and
toolbox
Active leadership
• Leaders model behaviour for
others
• Leaders’ involvement, words and
actions set expectations
• Leaders must be highly visible,
through regular communication
Organisational arrangements
Steering
Committee
Co-ordinator
Facilitators
Team A
Team B
Team options
Crossfunctional
teams
Multi-level
teams
“Natural”
teams
Balanced implementation rate
• Match speed to organisational
capacity
• Maintain momentum to sustain
interest & achieve visible results
Provide adequate training
•
•
•
•
Phased
Focused
Just in time
Tailored
Support to teams
• Technical
• Management
• Facilitation
Provide a consistent
problem solving process
PDCA
DMAIC
DIAGNOSE
DIATS
PDCA
1. Identify the issue
6. Control &
sustain change
2. Analyse and
measure
3. Identify root cause
5. Measure results
4. Develop
improvement and
implement
change
Identify the issues
Analyse and measure
Identify root causes
Develop & implement improvemen
Measure results
Control and sustain change
A common toolbox
• Process Review
– process mapping / Value Stream Mapping
– value analysis
– process redesign
•
•
•
•
Pareto
Cause & Effect
Why Why
Performance Measurement
• 5S
• Force Field
What are we trying to achieve?
Match approach to
problem
The problem is…
So you want to…
Using…
Inconsistent, ad hoc or
unclear work practices
Standardise & document
work
Quality management
systems
Waste and inefficiency
Streamline processes
CI/Lean - Process analysis
and re-design – work unit
team
Cross-functional processes
not working
Focus & streamline across
organisational boundaries
CI/Lean - Process analysis
and re-design – crossfunctional team
Quality and service delivery
failing
Troubleshoot
CI/Lean – problem solving
approach and toolbox
Don’t know how we stack
up against similar
organisations
Compare performance and
processes
Benchmarking
Opportunities at all levels
Goals
Structure
Management
Organisation direction
The formal organisation
Appropriate functional goals
and strategy are
structure supports the
are set and performance is
Organisation
articulated and
strategy and helps system
measured and reported.
communicated.
efficiency.
Resources are appropriately
Strategy makes clear
All relevant functions are
allocated.
sense.
in place and all functions Interfaces between functions
are necessary.
Given the strategy, clear
are managed effectively.
goals are articulated for Flow of inputs and outputs
the organisation.
are appropriate.
Process performance is
managed.
Goals for key processes Systems and processes
Systems &
are linked to appropriate are the most efficient and
Sufficient resources are
Processes
customer and
effective available for
allocated to each process.
organisation
accomplishing the process
Appropriate methods are
requirements.
goals.
used.
Interfaces between process
steps are properly managed.
Personnel
Job outputs and
standards are properly
linked to process
requirements.
Process requirements are
reflected in appropriate
jobs & job steps which are
properly supported.
Individuals understand job
goals, have enough
resources, are skilled and
their performance is
managed.
Adapted from: Rummler & Brache Improving Performance – How to Manage the White Space on the Organization Chart.
Measuring performance
• Is about telling your performance
story
• Should lead to a search for
practical improvement
• Must be founded on a sound
knowledge of goals, customers’
needs, & your strategies
32
Measuring performance
• Supports accountability and
demonstrates contribution.
• Easy to say, hard to do.
33
Unfortunately…
• All performance
indicators are a mixed
bag.
• Trade-offs between
meaningful results and:
– controllable results
– results revealing change in
a short time
– results for which data can
be easily and cheaply
34
Targets
% On-Time Performance
100
98
96
94
92
Target
90
88
Frankston Line
86
84
Belgrave Line
82
80
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
35
Qualitative measurement
Conversation
with concerned
individuals
Community
interviews
Reviews of
official
records
Key informant
interviews
Field
visits
Direct
observation
One-time
survey
Panel
surveys
Mystery
shopper
Census
Participant
observation
Questionnaires
Focus /
group
interviews
Field
experiments
Formal & more structured
Informal & less structured
Ten Steps to a Results-Based Monitoring & Evaluation System
Kusek & Rist, The World Bank, 2004.
36
Dangers of measurement
• Perverse incentives
• Data gaming
• Waste
37
…in conclusion
Mix and match
methods
Trust your judgement
Questions?
Euan Lockie
Australian Continuous Improvement Group
[email protected]
www.acig.com.au