project and the process flow OIS class

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OIS5000ClassSession5-A3VOCVSM_ONLINE.pdf

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©Jon SoldanOperations Management

Process & Project Management

A3 and Voice of Customer

Value Stream Mapping

©Jon SoldanOperations Management

YOU ARE

HERE

OVERVIEW OF PROCESS IMPROVEMENT JOURNEY…SO FAR

1. Creation of a process hierarchy from list of processes

2. Prioritization of processes to identify biggest improvement opportunity

3. Process mapping/modeling using BPMN 4. Leveraging a Process Improvement

Methodology (Lean, Six Sigma, Theory of Constraints)

5. Value Stream Analysis to identify value- added (VA) and non-value-added (NVA) tasks

©Jon SoldanOperations Management

A3 INTRODUCTION

Letter

A3 What

Why When

Who A Toyota-

pioneered practice of getting

the problem, the analysis, the

corrective actions, and the action

plan down on a single sheet of

paper

Standardizes a methodology for planning and problem- solving. Gives structure to

process improvement projects.

From launch to completion…a living document that changes as the project progresses

Prepared by individuals, teams, or any leader. A benefit to executives and managers at all levels. Used wherever there is a need for people to work together to get clarity on a problem or proposal and then to create a set of realistic and effective countermeasures.

©Jon SoldanOperations Management

Stakeholders/Team •Who has a vested interest in this project? Who cares if the process improves? •Who has to “buy-in”? Individuals? Teams? Managers? Customers? •Who uses this process?

Scope •Team consensus on the start and end point •Keep the team focused on the goals and objectives •Used to prevent scope creep

Background •What are the elements/history behind the current condition. •Why would this project be important? •What is happening within the process?

©Jon SoldanOperations Management

Problem Statement •A simple statement of the core issue/problem. •Be careful not to include solutions or conclusions. •Be careful not to ascribe blame and not to identify potential root cause

Good problem statements include: • What is the problem or opportunity for improvement (what)? • Where is the problem. Is it in your workplace or someone else's (where)? • How long has it been happening (when)? • What is the extent of the problem (extent)? • How large is the impact of the problem (impact)?

©Jon SoldanOperations Management

It takes too long to process a new account and mistakes are common.

The new account set up process for ZFNB takes in excess of 30 days. The problem has existed for the past year. 85% of the new account paperwork require rework due to missing information. This has resulted in the cancellation of 15% of the contracts over the last 6 months.

WHAT

WHERE

WHEN

EXTENT

IMPACT

Example of a better opportunity or problem statement.

Example of a bad opportunity or problem statement.

EXAMPLES OF PROBLEM STATEMENTS

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Goals & Objectives •What good looks like. The purpose for which this project exists (be specific) •How will we know when the project is complete? •SMART: Specific, Measurable, Achievable, Relevant, Time bound

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Analysis can include any discovery data: VSM Fishbone Time Studies Financial Analysis 5 Whys Spaghetti chart

Productivity calculations Waste Risk Volume

Project Cost/Savings (Hard, Soft, Intangible)

Analysis •Contains analysis to substantiate both the reality of the issue and the validity of possible countermeasures. •Inclusion of visual analysis is encouraged

©Jon SoldanOperations Management

Plan •A mini project plan; or a short description of how the project will be handled. •Who does what and when.

Countermeasures •Activities put into place to mitigate the effects of the problem. •Some countermeasures will be more effective than others. For iterations during Do/Check, this can include a “history” of countermeasures that have been implemented.

©Jon SoldanOperations Management

My Voice

VOICE OF THE CUSTOMER (VOC)

• What is VOC?

• Why is VOC critical?

• How is VOC data gathered?

• How is VOC data analyzed?

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WHO ARE YOUR CUSTOMERS?

I’m a Customer

External Customers Those persons or organizations which purchase your products

or services

Internal Customer Anyone who receives

an output of your process

©Jon SoldanOperations Management

HOW WELL DO YOU KNOW YOUR

CUSTOMERS?

When a customer is not satisfied:  1%-5% complain to management or

headquarters  45% complain to agent or company

representative  50% do not complain at all

Reference: Young, John. “Lost in Translation,” ASQ Six Sigma Conference, Palm Springs, 2005.

Reactive Proactive •Customer complaints •Warranty issues

•Surveys •Direct contact •Focus groups •Competitors •SIPOC Process Flow

©Jon SoldanOperations Management

CAPTURING VOICE OF THE CUSTOMER (VOC)

•Complaints •Customer Service representatives •Focus groups •Surveys •Competitors •SIPOC

Customer Voice Translate Customer

Requirements •Measurable •Needs vs. Wants

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TRANSLATING VOC INTO REQUIREMENTS

Good customer requirements: – Are specific and measurable (and the

method of measurement is specific)

– Are related directly to an attribute of the product or service

– Don’t have alternatives and don’t bias the design toward a particular approach or technology

– Are complete and unambiguous

– Describe what, not how

“I hate filling out this

form!”

The form takes too

long to fill out

The form takes less

than five minutes to

complete

Voice of the Customer

After Clarifying, the Key Issue(s) Is...

Customer(s) Requirements

TOPS - Powered By People

©Jon SoldanOperations Management

Actual Customer Statements

and Comments

The Real Customer

Concerns, Values or

Expectations

The Specific, Precise and

Measurable Characteristic

• “I want to talk to the right

person and don’t want to wait

on hold too long”

• Wants to talk to the right

person quickly

• No additional menu items on

voice system

• Customer reaches correct

person the first time within 30

seconds

• “This software package

doesn’t do squat”

• The software does not do

what the vendor said it would

• Every design feature needed

is built into the package

• The software is fully

operational on the customer’s

existing system

Customer RequirementKey Customer IssueVoice of Customer Input

TRANSLATING VOC INTO

CUSTOMER REQUIREMENTS

©Jon SoldanOperations Management

Table management is a key job in a restaurant. The Country Spoon has suffered recently from problems

in serving food to the table and from timely setting and clearing of dishes. Customers have complained

more frequently recently that their food takes “too long” to arrive at their table. More and more

customers are requesting that their drinks be refilled, instead of the food server anticipating that need.

After customers finish their meal and leave, tables are taking too long to be “broken down” (dishes

removed, table cloth replaced, floor swept, and new dishes set). This delay in table management means

that customers are waiting longer and longer during peak times for a table.

The food servers complain that they just don’t have enough people to manage tables effectively. While

the restaurant does have a legitimate resource shortage among servers during the busiest peak hours,

the number of servers is aligned with industry best practices.

Interviews with the servers suggest the following problems in their ability to manage tables:

 Food dishes for a single table are not ready all at once. Rather than serving just one or two food

orders for a table, servers feel like they need to wait until the entire order is complete.

 Several food servers complain that they should not be expected to both serve food and break-down

the table.

 Glasses and utensils are often not available as needed. Delays in the dishwashing process make it

difficult to keep the dishes ready and available.

VOICE OF CUSTOMER FOR THE COUNTRY SPOON

©Jon SoldanOperations Management

PROCESS IMPROVEMENT TECHNIQUE WHEEL

Page, Susan, The Power of Business Process Improvement (10 Simple Steps to Increase Effectiveness, Efficiency, and Adaptability), 2010, AMACOM

©Jon SoldanOperations Management

OVERVIEW OF LEAN AND VALUE

Ron Crabtree

Villanova, Lean Six Sigma Black Belt, Lecture 39, Slides 5-7

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VALUE STREAM

The entire set of activities running from raw material to finished product or service seeking to optimize the whole from the standpoint of the final customer

©Jon SoldanOperations Management

WHAT & WHY OF VALUE STREAM MAPPING

 A visual tool of flow of Material and Information

 Physically observing the process area in question

 A map of all actions currently required to deliver a product/service

 Includes all Process Owners

 Three phases of VSM:

1. Current State

2. Ideal State

3. Future State

WHAT WHY •Focus on improving the whole process and not optimizing silo’d pieces of the process

•To help understand how your business actually works (you don’t understand the current process if you can’t draw it).

•Discover 8 Types of waste : • Defects/Rework • Overproduction • Waiting • Non-utilized Creativity • Transportation • Inventory • Motion • Extra Processing

©Jon SoldanOperations Management

VALUE STREAM MAPPING (VSM)

1. Create current state value stream map 2. Identify opportunities for improvement

(Kaizen stars) 3. Prioritize opportunities using priority

matrix 4. Create ideal state map 5. Create future state map 6. Create plan to get to future state

How

©Jon SoldanOperations Management

VSM EXAMPLE

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WALK THE PROCESS

• Visualize yourself in the place of the product / information

• Walk the entire process

• Interview personnel who touch the process (look for problems that may be occurring)

• Measure people and/or product travel distances

• Look for constraints in the system (shared resources)

• Look for 8 types of wastes

©Jon SoldanOperations Management

Value Added

GOALS OF VALUE-ADDED ANALYSIS

The objective is to:

 Eliminate the hidden costs that do not add value to the customer

 Reduce unnecessary process complexity, and thus errors

 Reduce the process cycle time

 Increase capacity by better utilizing resources

 Focus efforts in the right waste- removal places

Value Added

Waste

Value Added

Waste Waste Value Added

Value AddedValue

AddedValue Added

Lean: Value Stream and Non Value Example

http://www.youtube.com/watch?v=oA_YSyBkhiM

Any step or activity in a process is considered VALUE ADDED (VA) if it meets ALL of the following:

WHAT IS VALUE ADDED (VA)?

Value Added

The Customer is willing to pay for the activity/step.

If the Activity/step actually changes the form, fit, or function of a product or service

If it is done right the first time (does not create rework)

VALUE ANALYSIS

Value Added

Non- Value Added

NVA (but

necessary)

Value Added (VA) •Activities that change form, fit, or function of a product or service •Activities the customer wants to pay for •Activities done right the first time

Non-Value Added (NVA) •Activities that do not change form, fit, or function •Activities that fall under any of the eight forms of waste •Activities not performed right the first time

Non-Value Added, but necessary (NNVA) •Activities causing no value to be created but which cannot be eliminated based on Regulation, Compliance, & Law. •Be stingy with “NNVA” designations! Require proof that a step is required

EXAMPLES OF NON-VALUE-ADDED Long set-up time

Incapable process

Poor work methods

Lack of training

Lack of organization

Layout

Irrelevant performance measures

Redundant systems

Incomplete information

Functional handoffs

Batch processing

Unnecessary data

Transportation

Approvals

TOPS - Powered By People

• NVA activities account for 50%-90% of product cost

• People are not NVA, tasks are • NVA does not mean unimportant • Don’t take it personally!

A MORE TRADITIONAL LEAN VSM

PHASES OF THE VALUE STREAM MAP

How the process works today. No optimization or improvement.

Significantly Improved process that solves many current problems and waste

How could the process work ideally without any limitations or restrictions?

Current State1

Ideal State2

Future State3

R e

le n

tle ss P

u rsu

it o f P

e rfe

ctio n

Picture your value stream with no waste

Create flowchart using only the Value-Added steps

No stops, piles, backups, wait time, parallel paths…

Assume that anything is possible

IDEAL STATE VSM

Visual of improved material and information flow

Unites Process Improvement concepts and techniques

Used to drive detailed implementation plans

What type of improvements are needed and why?

WHAT IS A FUTURE STATE MAP?

CREATING A FUTURE STATE PROCESS

Taking into account the current organizational readiness, create a future-state recommendation that:

•Proposes specific process improvements •Documents what the new state will look like •Identifies additional process controls and measures •Outlines a roadmap to move the process to the proposed state.

Roadmap to Future State – 3 Phases of Changes 1. Short-term changes - Changes that can be done in 30

days. 2. Mid-term changes - Changes that can be done in 90

days. 3. Long-term changes - Changes that require more than

90 days to implement.

ADDITIONAL THOUGHTS ON THE FUTURE STATE

To streamline the current-state business process, use analysis from improvement tools and consider these areas:

• Value-Added Assessment • Duplication Elimination • Simplification • Cycle Time Reduction • Error Proofing • Standardization

• Reducing process lead time • Reducing inventory • Cost reduction • Increasing available capacity • Decreasing the area footprint • Bureaucracy Elimination • Supplier Partnership • Automation, Mechanization, and

Information Technology.

CLASS EXERCISE:

1. Review the A3 and process map for the Country Spoon Table Management Process.

2. Categorize each step in the process as either: Value Add (VA), Non Value Add (NVA) or Necessary Non Value Add (NNVA)