applying transactional lean at medical imaging firm web viewaugust 2006 article entitled,...

Kickstarting Process Improvement Initiatives in a DoD Contracting Environment

The Lean Six Sigma (LSS) approach to Process Improvement

by

Kevin Lehigh

Lehigh Technical Solutions

30 October 2012

Abstract

Mr. Lehigh has refined two techniques that can be used to kick start the correction of process issues in short order. These methods have proven to be highly effective in finding the right opportunities to work, in a variety of client environments such as DoD agencies, DoD contractors and Healthcare organizations. The efficiency of application and the focusing power of these methods deliver returns quickly.

The basic methods can be found in the literature under the headings of Strategic Multi-generation Project Plan (MGPP)1 and Kaizen Blast2,3. In this paper these methods are compared to determine under which circumstances each method applies best. Two real-world examples of application of each method are provided.

Introduction

One example of each of the two methods is discussed in this paper.

Example 1 draws from my previous work with a DoD contractor that provides services for military commands such as the Army’s TACOM and CECOM and various Navy contract vehicles that use DoD contractors such as SPAWAR. The work that was done with this particular government contractor was performed shortly after three different companies were merged to form a larger DoD contractor.

Example 2 stems from work done at various J-codes and PLFAs (primary level field activities) at the Defense Logistics Agency (DLA) headquartered near Fort Belvoir, VA pursuant to creating better projects that align to either HQ or PLFA objectives.

Example 1:

DoD contractor XYZ had many ad hoc and ineffective accounting, HR, contracts, and project execution processes and procedures left over from previous mergers and acquisitions. It was difficult to get invoices paid to their suppliers, to receive payment from customers, and to execute programs without customer complaints. A Kaizen Blast approach was used to identify, prioritize and flush out festering systemic problems and poor practices. The method we used to organize, prioritize and create projects to resolve problems we call Kaizen Blast.

1 John McDonough, isixsigma.com Feb 2010 article, “Multigenerational Project Planning Fit with Six Sigma” (http://www.isixsigma.com/implementation/project-selection-tracking/multi-generation-project-plannings-fit-six-sigma/_2 From page 39 AMERICAN SHIPPER: AUGUST 2006 article entitled, “Follow the Leader—Automakers and their 3PLs similarly strive for lean, JIT operations, but differing cultures prevent industry-wide efficiency” by Eric Johnson.3 From “Applying Transactional Lean at Medical Imaging Firm” by Benjamin Hahlen and Susan Mahoney February 26, 2010

To guarantee results there should be clear quantitative measures of success, the importance of the project to the organization should be clear, and the project should have the full support and approval of executive management. These three characteristics are needed so that the organization’s leadership sees the importance of the project, provides the needed support and resources, and removes barriers to the success of the project. People are more likely to support a project that they can see is clearly important to the organization.

Project ideas can come from any source such as process assessments, customer and employee surveys and suggestions, benchmarking studies, extensions of existing projects, and so on. Significant productivity improvements result from high impact projects that feature one or more of the following:

Reduce Effort to do the same amount of work Reduce Complexity of the work being done Minimize Rework Identify Products with major backlogs—need for more capacity Improve Quality of volume products (small improvements can have huge impact)

If all projects would positively affect at least one of these areas, you will have significant tangible results when they are completed. In the case of service or transactional processes, the key process metrics will typically be accuracy or cycle time control measures. Accuracy includes control of defects in information such as account numbers or financial figures, and directly relates to both customer satisfaction and rework costs.

Reduction of cycle time in business processes is a productivity measure, so it also relates directly to costs and, of course, to customer satisfaction (e.g., time to complete and deliver reports).

Our method starts with the one-on-one interview as a means to capture preliminary issues/symptoms.

In the initial phase we interviewed CXO functional leaders and each LoB VP/GM and his director level reports for about an hour; capturing via pencil and paper everything he/she came up with when asked to answer simple open ended questions such as ‘what is the problem?’ or ‘what keeps you awake at night?’. During the next day or two we scribbled comments on paper that were then categorized according to various functional subheadings such as Accounting, Business Development, HR, contracts, PM, etc. (see table 1 below and refer to the designator column and the key above the table). These functional subheadings represent the area where the ‘gap’ in process performance (such as the delta in the organization’s goal to achieve the stated metric for days-sales-outstanding, days to create a bill, order fulfillment, etc.). In addition to metrics gaps, issues mapped to functional subheadings should address process and customer requirements gaps as well (again refer to table 1).

In the 'pre-blast' phase the executive leadership team collected all of the issues from the various Lines of Business (LoB). During the 4 hour blast session, we prioritized the issues using a common voting technique according to business impact and difficulty to achieve and assigned each issue to one of four functional problem resolution sub-teams. The idea was to resolve the easy issues within a few days and the more complex ones within 3 to 6 months at the most.

Each of the sub-teams, Finance and Accounting, Contracts, Program Management, and Business Development, consisted of key personnel and line managers. Issue resolution work began in the afternoon after the four hour blast event. The sub-teams started on the easiest just-do-it projects and were required to have resolution recommendations for the just-do-its back to the executive leadership team in one week or less. Projects requiring more analysis and solution selection effort were assigned project teams within that same one week period. Each of the four primary teams presented their action plans to the executive leadership team at the end of the afternoon. More complex projects became lean initiatives or six sigma (phased DMAIC) projects.

Key steps in the process are:

1. Issue affinitization and prioritization2. Root Cause Analysis to find salient causes followed by opportunity analysis to solve

problems3. Team building4. Project Chartering5. Financial Benefit Analysis used to sum up costs saved and avoided.

Substantial benefits were ultimately obtained with this method. Application of this method resulted in more than forty issues ranked by complexity and potential benefits that were distilled from more than 165 initial seemingly random complaints. Twelve issues were resolved immediately in the meeting, sixteen were assigned to just-do-it teams and handled within two weeks or less and the five became six sigma projects with charters prepared in the second half of the meeting.

Determining Kaizen Blast Objectives

The issues were collected from the internal customers representing the various LoBs and outside suppliers and customers. This pre blast activity took us a couple of months to gather the necessary data; each interview took an hour; planning and prep took 3½ hours.

Key—Resolution subteams assigned:A—accountingBD—business developmentC—contractsPM—project managementHR—human resourcesS—CXO level and above managementIssues processed:

Designator LoB Issues / ConcernsIm-pact

Diffi-culty

Rank Status

A1Unavailability and lack of standardization of procedures on cost point processing, approval and signature level approval causes confusion and wasted time. We need processes and we need training on the available tools.

2

A2 A/P Invoices from vendors are not getting paid 2

A3 Expense Reports are not getting paid to employees 2

A4 Customers are not paying us quickly due to AR issues: A/R Measured by DSO (not invoicing, improper DD250s, etc. that keep us from getting paid) 2

A5We lack an Integrated Electronic Time/Travel/Expense system with electronic signature. Currently we have to submit everything via fax or mail. This process seems unnecessarily time consuming …

2 2

A9 We lack an adequate number of cost codes for trade shows. If there were a better structure for the coding then reporting would be much less time consuming.

BD1We lack advanced notice when an opportunity is coming down for a bid. When forced to seek new business, we lack the processes to do so. Segment has provided some services that portend to help do that, but we have not learned how to leverage these effectively.

3 2 2

BD4 Our lack of ability to grow new business organically with new customers causes a lack of customer diversity. [Firefinder at Raytheon] 3 3

BD5 Currently proposals are written at the expense of my other duties. We need to plan better for future growth. We need a long range vision. 3 2.5

BD6The release of old or un-vetted images leaves XYZ open to legal action. Also, by releasing documents with the old branding we can appear unsure of our own brand identity. This can give our customers the impression that we do not know who we are.

2 1 Q4

BD7 XYZ is limited by corporate tradeshow guidelines. If the planning and budget were organized earlier TSI would be better able to leverage tradeshow activity. 1 3

PMI Lack the capability to determine resources needed and how to deploy them effectively 2 2 2

PM2

No access to Timely and Accurate Financial Information: Visual does not provide any access to financial management information. I can’t access any actual vs. budget data. The only information I can get is extracted via a query then dumped into a spreadsheet, manipulated by someone, and then sent to me possibly weeks later..When I am able to beg/borrow financial data it is often out of date. (Polson and other remote sites)

2??

PM3 We lack management enforced guidelines that clearly define who is a subcontractor, vendor, or supplier - and when to use which. 2 1 Q3 2

PM4

We lack a unifying project management system, currently we use several different programs and it takes time and a lot of effort to use them effectively. We need an integrated system that schedules and tracks actual labor, materials, equipment, and dollars against the schedule – something that would tie CostPoint, Deltek, and Microsoft project together – or replace them all

3 2 T1

C2

Contract mods take too long so we can’t invoice $25M of my program. If I can’t get the invoice to them in time I have to pay the government back $10K. Per contracts - the review and approval process needs to be analyzed; Review of a contract can go from VP and legal then to the vendor and around and around with small changes before it ever goes to approval. Then approval process takes a long time because it requires too many people.

2 3

C3The present contracting process is too time consuming, cumbersome, and ineffective in order to support the LoBs (NDAs, TAs, etc. with vendors and suppliers and negotiating contracts with customers)

3 2 2

C4 Right now too many people have access to make changes in CostPoint. We need less people/right people to have access to alter data. 3 1 T1

C5We lack a database tool with a tickler to alert on at risk contracts, and track contract value, funding, period of performance, Status of Forces Agreement (SOFA), Technical Expert Status Accreditation (TESA), TAs, and NDAs.

3 2 T1

C6 We don't have a formal cost management structure for XYZ. Who has the final say? The current process leaves the PM in charge, and this is costing the company money. 3 1 T2 2

HR1 The on-boarding process is incomplete; i.e. coordinating office, computers, and new employee orientation for new hires—we need a better one 2 2

HR2No comprehensive process for exiting employees, a “term alert” process is needed to make upcoming terminations known to a defined set of folks. We need a better exit interview system with analytics.

2 1

HR3Repatriation of expats; XYZ employees coming off of international assignments currently don't have priority in the recruiting process. These employees should be placed first over new hires from outside of the company.

2.5 1 Q1

HR4 Employee Change in Status (CIS) approvals/routing process requires HR approval, but there is no apparent reason for this requirement. 2 1 3

HR5Managers and employees are becoming increasingly disgruntled with the quality of management. Management Training for employees being promoted into management positions as well as new hires should be provided during work hours to promote/elevate overall company morale.

3 2 T2

HR6

Job classification and categories – We have two people doing very similar work (if not the same) with very different pay and in some cases one is exempt and the other is non-exempt. Our bill rates are not consistent between programs or within programs. We do not have a solid handle or profitability of rates unless I list specific people with actual pay and then that is a document I have to control very closely and cannot push down authority and responsibility.

3 2 T1

HR8 We lack HR raise rules, or if they exist they have not been thoroughly communicated to managers. 2 1.5

HR9 The Appraisal Evaluation system (DTN) is very time consuming for off-site employees w/o a 3 3

XYZ server or VPN to use.

S1 Lack of funding rules (or big rules) that allow segment to purchase an improvement solution 2 1

S2When we are a pass-through for another Segment, we should be able to share the profit instead of one Segment taking all profit and the other taking a loss. This would increase cooperation between Segments resulting in more revenue, profit and bookings in the years ahead.

3 3

S3There is a lack of understanding of our segment's capabilities and core competencies within the LoBs. There is no system in place to ensure everyone understands our present efforts, or what effort will be required to accomplish our goals and objectives for the future.

2 1

S4 Segment Support Matrix doesn't support the LOB's needs effectively or responsively. We lack processes within the support matrix i.e. finance, subcontracting, human resources, and legal. 2 2

S5 Lack of Program/Segment Asset Management System 2

S6

Expedite data processing by better preparing for PMR submissions. This process takes time and is more painful that seems necessary. It would be helpful if segment processes were published on a website with glossary of terms and perhaps a frequently asked questions (FAQ) section. In several instances e.g., for PMR preparation I have created guides for those who contribute to the LOB inputs.

2 2

S7

Information required for recurrent forecasting in support of FOP, scorecard, and PMR reports is drawn from various sources that are independently maintained, and the information drawn must be manually combined each time. To ensure the information that is gathered is accurate I must reconcile differences and attempt to update the sources for synchronization manually.

2 2

S9 It takes too much time to get budget approval for Capital Equipment Requests (CERs) 2 2

S10

Top level managers spend way too much time trying to search for the most current information. The lack of a standardized management system is epitomized by our “Management By E-Mail” approach. A systems approach would provide data sources (data base) where information is loaded and then kept current by managers, instead of numerous daily data calls where managers are asked to provide updates to information previously submitted.

2 2

S11

Our current (remote site) facility is constraining our growth. This is really long term as manufacturers think in terms of revenue per square foot. Significant growth can only occur if there is sufficient space available to build the products. Alternatives to manufacturing as a part of the solution has occurred in our Repair and Return jobs but might be expanded to other service type efforts.

0 0

Table 1 Issues Scorecard for a DoD COTS Solutions/Services Provider

Difficulty:1 = Push the easy button2 = Requires new configuration of the system, change in procedure3 = Barrier exists due to gov’t policy, physical constraint, et.Impact:1 = Cost avoidance/savings is not significant2 = Cost avoidance is significant due to increase in productivity, decline in rework, etc.3 = Cost savings to bottom line is significant (or perceived to be), or revenue enhancement is significantStatus:1 = Nothing done yet2 = WIP3 = Project complete

Outcomes of the Blast

From the spreadsheet shown above, projects were chosen to work on over the coming quarter; one to two easy projects and one harder project with potentially more impact in each of four functional sub-team areas.

The following high impact projects were chosen:

1. A4—Stabilize and reduce Days Sales Outstanding (DSO) by 10 days or 15%

2. PM4—Define relationships between WBS and Control Accounts for Earned Value goals

3. C4—Two part project

o Control data access

o Reconcile existing data errors (resolved over 13,000 errors resulting in $4.01M in real cost avoidance internally) that if communicated to others could result in bad decisions resulting in lost/missed opportunities; increased labor costs, inaccurate A/R invoices that get kicked back.

4. HR6—Job Classification (now in compliance with DoD guidelines for job categories and rates.

5. S10—Lack of centralized repository to capture data needed for ops reviews

Kaizen Blitz on the Chosen Projects

No belts are necessary for project execution. Projects were assigned to team leads. Two of us that held belts were used by each project team only when necessary for complex tasks in analysis or in setting up and implementing a pilot (BB skills were not really required throughout the life of the project).

Project #1 was judged the best to pursue due to its potential high rate of return. A reduction of 10 days for overall DSO would reduce cash trapped in receivables by over $17M ($16.4M in cash invested + $1.15M in annual interest on $552M projected revenues.

The next three projects (#2, #3, #4) listed above were deemed necessary to fulfill regulatory requirements. Additional benefits that we were interested in achieving were reduction of contracts database errors as already discussed above.

Project #5 stems from reporting requirements for a public company doing business commercially in the U.S. (Sarbanes-Oxley requirements) or as a company doing business with the government (DoD and various governmental agency requirements).

In addition to the high impact projects listed above there were various small quick hits or ‘low hanging fruit’ or just-do-it projects identified:

BD6—The release of old or un-vetted images leaves XYZ open to legal action.Policy changed and implemented the next week.

PM3—We lack management enforced guidelines that clearly define who is a subcontractor, vendor, or supplier – and when to use which. Policy implemented in procurement policy PN 2080

HR3—Repatriation of expats; XYZ employees coming off international assignments currently don’t have priority in the recruiting process. Policy changed the next week and implemented immediately in hiring practices

Example 2:

Using Strategic MGPP

Strategic MGPP is an alternative to the Kaizen Blast which can be used when time constraints for solution are not short. The urgency is not as high as with the Kaizen Blast. The objective is the same: identify and resolve issues. This method was applied to one primary level field activity (PLFA) of the DLA initially and was later used to tee up many other activities at HQ and other PLFAs.

The DLA suffers from many ineffective accounting, contracts, and project execution processes and procedures that have never been addressed ostensibly because of the nature of its culture. It is exceedingly difficult to get simple things done such as negotiate contracts and rates with suppliers, deliver goods to customers and when they do to receive payment from customers in a timely fashion. Strategic MGPP addressed these long standing systemic problems.

In the 1st phase we interview the PLFA leader for about an hour; capturing via pencil and paper everything he/she comes up with when asked to answer simple open ended questions such as ‘what is the problem?’ or ‘what keeps you awake at night?’. During the next day or two scribbled comments on paper are categorized and organized into what we call a ‘categorized symptoms list’ (see table 2 below). Each category will map to one or another focus area that are related to customer requirements, metrics or process improvement ideas/opportunities.

Intermediate objectives that can be interpreted as necessary and sufficient prerequisites can be deconstructed from the categories of the symptoms list and are written down line item by line item. Potential projects are the result of groupings of intermediate objectives that resolve a related set of particular symptoms. A description of a project can then be written that captures each of these groupings of symptoms and objectives. This is done in turn for each focus areas and then organized by phases.

Substantial benefits were obtained with this method for DLA PLFAs such as Aviation, Troop Support and Energy. We have trained Distribution personnel in this method as well and will be developing their MGPPs early in 2013.

Once you have an actionable strategy as delineated in the MGPP, process performance measures can be applied to select projects. A pitfall to be avoided is selecting each project independently. This is analogous to spending five minutes starting to clean ten different rooms in a house, versus spending 50 minutes to completely clean one room. In the first case, it is difficult to see what impact the effort has had; in the second case there is a visible, tangible success that will now be ready to be leveraged elsewhere. It is preferable to launch a Lean Six Sigma effort by focusing on a few strategic areas, rather than 10 or 20. The process performance measures determined by senior leadership help everyone focus the initial projects strategically.

Using the project selection criteria, a set of initial candidate projects is gathered. The projects are gathered and prioritized for assignment to a Black Belt or Green Belt according to criteria similar to those shown below. In later deployment phases, your organization will develop an ongoing system to identify potential projects, rank them, and place them in the project hopper, so that there is a continuously refreshed list of good projects.

Every business is different and you should ensure that your specific priorities are taken into account when evaluating and prioritizing potential projects. The characteristics of a good Lean Six Sigma project are:

Clearly linked to organization’s prioritieso Linked to strategic and annual operating plans

Problem is of major importance to the organizationo Major improvement in process performance (e.g. >50%)o Major improvement in productivity

Reasonable scope—doable in 4-6 months

o Support for project often decreases after 6 monthso Project scope too large is a common problem

Clear quantitative measures of successo Baseline, goals, and entitlement well-defined

Importance is clear to the organizationo People will support a project that they understand and see as important

Project has the support and approval of managemento Needed to get resources, remove barriers, and sustain over time

Figure 1 Example MGPP from a field operation of a government agency

Phase # Phase Description / Symptom List Type1 Milestone Review process opportunities

101 Multiple and time intensive milestone reviews for Energy Savings Performance Contract (ESPC) task order award comment

102 –ESPC task order awards must have five different milestone reviews each approximately 30-60 days requirement

103–Two additional B1 reviews (Part1 and 2) were added. Multiple briefings to multiple parties are req’d for each milestone review. Significant amount of ‘idle’ time accumulated while trying to coordinate schedules. requirement

104 –Energy Service Company (ESCO) selection process established in the basic IDIQ requirement

105–Milestone reviews are in addition to the monthly and quarterly procurement reviews being held w/ Policy, Operations Director/Deputy, and HCA (quarterly reviews only). comment

106Improved efficiency – savings of time and money by eliminating non-value added milestone reviews and/or consolidating milestone reviews (i.e. single review vice multiple iterations of the same milestone review to multiple parties) opportunity

107Improved customer satisfaction--More timely execution and award of ESPC task order allows customers to begin energy savings sooner; DLA Energy is a provider of ‘choice’ for customers in the ESPC arena. May turn to other providers if we can’t provide timely support. opportunity

108 Streamline time to do reviews (Regulatory process defines review, M1 time to do review, two-step required) opportunity

112During major milestone reviews of UP procurements, the reviewers are often not as familiar with that type and size of procurement. Unintended results can include 1) reviewer questions that do not apply to UP procurements, and 2) extended review periods. issue

113A process is needed to provide milestone reviewers sufficient familiarity with the differences (and similarities) between UP procurements and other procurements more commonly reviewed during the Milestone events. issue

114 Milestone reviews of UP procurements can be focused on the most pertinent areas comment

115 Milestone reviews can potentially be shortened without sacrificing quality or comprehensiveness of reviews opportunity

116 More efficient use of personnel resources in 1) preparation of the procurement review package, and 2) conducting the ensuing review of the package opportunity

117 E-procurement forces clauses that are not required issue

118 Policy review process takes too long issue

119 comments are not substantive from reviews issue120 majority of comments appear to be focused on grammar instead of regulatory compliance issue

121 Jr. policy procurement analyst w/ less experience in review process and w/ ESPC are often signed up to do reviews. issue

124 Sr, analysts get to do peer reviews (esp. when > $1M opportunity) comment

125 More oversight with increased $$ value comment

126 Government procurement process is not in line with Commercial procurement process issue or comment

127 Don't have a predictable schedule issue

128Review meetings appear to be set up just to have paperwork signed, when all comments have been worked out between the specialist and the policy procurement analyst ( waste of time). Why not just e-sign issue

129 When review meetings are set up the comments are not presented until the meeting; need comments sent ahead of time. issue

130Too often, the contracting offi cer has to get their deputy director involved to get reviews completed so the proceurement can be moved forward. This escalation is not a good use of her time. issue

131Time frames for review are unrealistic. The DEPI (a local instructions guidebook procedures) indicated reviews will be done in 5 days. If not the case, they need to know a realistic time frame so they can appropriately build in the time in the acquistion time line. issue

2 Process Dif's related to Bulk201 Competition is the key to achieving the lowest possible pricing observation

202The goal of this effort would be to identify, through direct contact and open dialogue with industry, cost drivers and barriers to program participation that could be modified or eliminated to help reduce supply costs and enhance competition suggestion

203DLA Energy Bulk solicitations and market engagement would be examined, modified and simplified where possible, to obtain potential benefits identified during the process suggestion

204 More streamlined, commercial solicitation process want

205 Increased competition and lower prices want

206 Increased focus on issues that influence product price and availability to DoD issues

207 Look at how we buy bulk product; we are less and less commercial; decreasing competition

208 We are driving people away

209 Why they are not playing?

210 M1 Decrease overhead

211 o M1 level of competition

213 Reduce procurement cost

214 Increase # of response to solicitation

215Increased oversight has had a significant impact on the way they do business. Suppliers are not willing to deal with both additional requirements associated with doing business with the government and with increased unpredictability in time to contract. observation

216 Process went from 7-8 months to 14 – 18 months issue

217 Additional review time is being caused by the PMR Review observation

218From Business POV, there is an opportunity to see if solicitation process can be streamlined and aligned with commercial procurement processes observation

219 Suppliers are apprehensive about giving prices for a contract that is going to start 18 months in the future. issue

220 Since contracts are a year, contracts must be extended issue

3 Standardize Solicitations

301

As a result of feedback from DLA/J-7 and DPAP, we should review format/structure of solicitations to standardize DLA Energy solicitation formats, ensure required required regulatory/statuatory clauses are included and comply with DLA/J-7 guidance regarding local contract clauses and provisions. comment

302Improve the quality of solicitations to achieve the best solicitation possible that includes ALL required FAR and DFARS clauses and certifications. comment

303 Direct Delivery, Bulk Fuels, Installation Energy, Acquisition Policy and Oversight Office and Office of Counsel 304 Streamline to be consistent with commercial process suggestion

305 Book is 30 – 70 pages long => 10 pages or less suggestion

306 Provide checklist for solicitations clauses suggestion

307 M1 pass fail solicitations metric

308 Why do Energy solicitations look different from other solicitations that OSD reviews question

309 Energy does not have standard contract format that is utilized by all the business units. observation

310 DLA Energy has 682 contract provisions; most of DLA Field Activities use FAR/DFRAS/DLAD Claues and not local contract provisions. observation

311 Uniform contract format (UCS) we don’t use that format which is prescribed by the FAR. observation

312 Not confident that all required clauses are in contract or that we don't have clauses that are not applicable. observation

313 eProcurement will NOT solve problem as energy was not part of the development process; ergo no rules observation

4 Everything else not touched by review process, related to bulk or solicitations

401

•The DLA Energy coordination process between CPA and Legal currently takes between 2-4 weeks, depending on the complexity of the document. An opportunity for improvement exists if the timeframe for this coordination could be shortened.

402 •Delays in coordination between CPA and Legal has a direct impact on issuance of solicitations and making timely awards.

403DLA Energy’s ability to meet milestones could be achieved more efficiently if clear timeframe expectations and tracking measures were established between CPA and Legal.

404

•Improve timeframe of the joint review process between DLA Energy Procurement Oversight Branch (CPB) and DLA Energy Bulk Petroleum, Domestic Storage and Services Division (BXB) from pre-solicitation to award. Improvements should shorten the overall joint review process.

405 •Delays between Bulk and CPB have a direct impact on issuance of solicitations and making timely awards.

406The ability to issue solicitations and make timely awards is mission critical, as it impacts our success in supporting the warfighter.

407 (A) Utility privatization has established customers

408 If we continue to be slow, customers will go elsewhere for ESPC

409 DLA policy office milestone reviews hold up the process

410 Policy people are not familiar with contracts

411 Install/Energy (in general) wants new customers (as many as possible)

412 Bases want to privatize utilities but Policy Office (PO) is holding up (transfer of water, gas, e- from commercial sources)

413 · Internal resource issue?414 · Expanded to include J7415 · 2-4 weeks PLT416 · No metric for turn around417 o Litigations418 o Contingency contract419 · Contracting instruction needs to be broader420 · Combine two offices421 o Apply to Direct Delivers422 o Apply to supply423 · Have separate regulations, cuts across service contracts424 · Apply to consulting contracts, not high $ value425 · Focus area scope, enlarge scope

5 Policy501 Turn around on when we gt the documents from reviewers. Information back to policy.

501a Solutions keep the same502 Learning curve for new analysts503 Scheduling meetings because of flex schedule w/ buying unit (BU). Requires price analyst, contract specialist, outside CO, actual CO

504Have a board held with in 5 days (now 7 days). Analyst 2 days, chief 2 days, Doug Smith (assoc. DAPO) 2 days. Get comments ahead of time. Have questions to Doug up front.

505 No time to type up comments to give to the BU prior to board. The additional people don't provide comments ahead of time (price analyst & outside CO)506 Bulk : We do the same procurement and but the threshold makes the peer review required by OSD.

506a New OSD done after acquisition has been rewarded.507 Post mortum review after acquisition. Went from J7 taking 20 days to review to J7 from every milestone review needing 20 + week to give response.508 Final determination a week or two after submitted final response509 Proc letter went from 2 weeks to 20 days for peer review level only. Solution--have consolidated up to Gabby and have board meeting with Gabby.510 Level of reviews required because of work and complexity of the review.511 Possible solutions-- Certain Dollar Level approval by Doug.

512Changes in regulation( such as a change in FAR) where the BU will not take action bacuse they are waiting on a Contract Instruction (CI). Implementation of policy documents are not in accordance w/ guidance.

513 People don't understand that they should follow the guidance.514 People need to read policy, implement policty, educate themselves of policy.

Table 2 Issues or Symptoms from interview for Strategic MGPP approach

Analyzing the Issues

The initial set of issues was obtained in this process from one-on-one interviews of each director. The result was the affinitized symptoms list in Table 2 above. The affinitized categories were then used to create the issue mitigation language used in the MGPP.

Putting together a phased approach

Next focus areas and project development/selection/implementation activities are organized into workshops as follows (workshop 1 results in the capture of Undesirable Effects (UDEs) that are integrated into intermediate opportunities in the MGPP resulting in projects with charters as already shown above):

Picking the Projects

Once you have an actionable strategy as delineated in the MGPP, process performance measures can be applied to select projects.

Compare and Contrast the two Approaches

The 1st example extolls an approach suited for fast action; max buy-in of the CXO level, VP/GM level and their direct reports in a typical DoD contractor environment.

The 2nd example uses an approach more suited to a top-down bureaucratic public agency, the DLA. Would the opposite approaches work in the other environment? Answer is of course ‘it depends’. I have used both approaches on more than one occasion and seen the benefits of each first hand, so it is reasonable to assume that either approach would work in either situation. However first consider the plusses and minuses of each:

Kaizen Blast +/-

Plusses MinusesThe event can be accomplished in 1 ½ days It takes week to plan and coordinate the

calendars of the execsBrings everyone together in an action-packed highly charged environment that promotes quick decisions

Requires a large room to perform most of the activities and multiple team rooms to complete the group activities

Compensates for a company with a weak culture with little or no real commitment to excellence (i.e. a company run by sales)

Requires follow through meetings before CEOs staff to demonstrate progress

High rate of return was realized for a rather small investment

Without doing these events on a regular basis v. an ‘as needed basis’ it is hard to foster commitment again to be able to schedule and hold such an event; again by performing a blast event regularly it would become part of a CPI culture

JDIs and RIEs can be teed up immediately after day 1 with the expectation that results will be immediately forthcoming

RCA typically only done on a per project basis for complex projects requiring DMAIC approach

Table 3 Benefits/Detractors for Kaizen Blast

Strategic MGPP +/-

Plusses MinusesNecessity and Sufficiency is guaranteed if each step of the phase is followed according to protocol (verification and validation is demonstrated).

Each phase of the process takes time and must be verified prior to going forward with the next phase

UDEs come only from the issues that are raised by ‘the big guy’ w/o input from the ‘peanut gallery’ of lesser employees so the message is not muddled

No input from the rank and file means that the ‘big guy’ better be right in his assessment of the state of affairs and the true meaning of the issues he raises

We don’t care about anyone’s input but the big guys; we only aim to solve his problems

The big guy must be in it for the long run & have the support of his board; I have seen admirals come and go

Use of Root Cause Analysis early in the game helps to frame the boundary of the solution space

Typically results in more DMAIC projects; should be used at enterprise level focusing on issues important to executives

Table 4 Benefits / Detractors for MGPP

Given the information from the table above it seems that autocratic organizations might be better served with MGPP and democratic cultures with Kaizen Blast but this is not necessarily the case. More often than not, the approach that is used is determined by access; if you have access to the executive staff and need to flush out business and customer issues at the strategic level then one should probably use Strategic MGPP. On the other hand, if you don’t have a key to the executive level floors, you most likely should use the Kaizen Blast approach and focus on issues that are associated one level down at the process performance level.

With regard to considering using the Kaizen Blast approach, it is also important to consider key variables such as time it takes on the front end to organize an event as it may be better to get the initial impression from the champion directly by interview and then fill in the blanks with his/her direct reports as this may take must less time trying to pull off a more organized Kaizen Blast event that requires coordinating people’s calendar and in addition to reserving rooms.

Conclusions:

Kaizen Blast is typically a one day event packed with activity and production. The aftermath and follow-up effort was significant and produced tangible improvement benefits at the process performance level. Like many service-oriented process improvement gambits, it has taken much time to assess the true benefit of the projects that were hatched during the blast. We summarize below:

When to use Kaizen Blast:

1. Company/agency, etc. has a weak culture or is sales-based not customer-based2. Need an energized company-wide enterprise event to publicize3. Can use either with an entity that is either product development or services based4. No standard processes as project execution processes and procedures were left

over from various mergers and acquisitions. 5. Need an efficient means to collect, coordinate and resolve festering issues in a

reasonable amount of time. 6. Company culture relies on consensus more than on the opinion of the ‘big dude’7. Engagement starts with C-level and adds VP/GM and adds their director inputs

Like the Kaizen Blast approach, MGPP starts as a give-and-take interview/clarification/re-interview process but may take a few days to gain consensus.

When to use ‘strategic’ MGPP:

1. We don’t care about anyone’s input but the big guys; we only aim to solve HIS problems: “Hey this ain’t no democracy, I run this division and I have all of the votes…”

2. Can use with company/entity that is either product or services based3. Company initiatives only move forward under the direction of the ‘big dude’4. This use of MGPP is at the ‘strategic’ level with the C-level in a company or

deputy-director level or above at a government agency

About the Author:

Kevin Lehigh is a MBB at Lehigh Technical Solutions, Inc. He has implemented Lean Six Sigma and Theory of Constraints to DoD customer’s internal processes and in industry for over 14 years. He is currently a contract Master Black Belt at DLA Headquarters where he works with managers of DLA Enterprise Continuous Process Improvement projects.

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