equable lean six sigma boe english presentation
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This is a presentation of the Equable company which offers services in Lean Six Sigma field and which promotes its own model of Lean Six Sigma Deployment within an Organization, which is service marked called "Business Operations Excellence"TRANSCRIPT
Copyright © 2009 Equable All rights reserved
Business Operations Excellence®
Business Operations Excellence®
Lean Six Sigma Transformation
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Business Operations Excellence®
Reaching operational excellence with Lean Six Sigma transformation
Franck Strub January 2009
Business Operations Excellence® Copyright © 2009 Equable All rights reserved
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Who are we?
Business Operations Excellence® Copyright © 2009 Equable All rights reserved
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Who are we?
> Equable is a global provider of Lean Six Sigma deployment and training services to diverse Clients in US and in Europe.
> Equable was founded in 2004 by Franck Strub, a former GE Lean Six Sigma certified Master Black Belt & expert in business process re-engineering
> With the best Lean Six Sigma talents in Europe, we offer all the services to plan, execute and manage your strategy in Lean Six Sigma transformation
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Our Clients
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Our talent network
> Our consultants are passionate by excellence > Our consultants are experienced & certified:
> they worked in significant high positions in prestigious companies > they coached hundreds of Lean Six Sigma completed projects,
resulting in several $M productivity and savings > they taught hundreds of Lean Six Sigma classes > they certified hundreds of Master Black Belts, Black Belts and Green
Belts > Our consultants are pragmatic and “hands-on” oriented > They are expert in change management > They have a solid background in finance > They share common values: intellectual growth, people respect,
challenging mind, culture of result, quest of excellence
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Our partners
www.crystalball.com
Minitab Inc. is the US editor of a six sigma statistical software called MINITAB®. Equable is a reference partner of Minitab Inc. and promotes its usage
Crystal Ball® is a Six Sigma Statistical Simulation software tool that Equable selected. It is published by Oracle, a US Company with whom EQUABLE has a partner agreement
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Our services
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Our services From strategy alignment to project governance, our know-how includes: > Efficiency program definition, deployment and management > Project selection, definition, execution and management > People selection and development > Lean Six Sigma coaching > Lean Six Sigma training > Design For Lean Six Sigma > Lean Six Sigma certification of Master Black Belts, Black Belts and
Green Belts > Talent recruitment > Change management
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Our end to end process approach
Select, train & coach people
Lean 6 Sigma program
Select Lean 6 Sigma projects
Execute Lean 6 Sigma projects $$
Market /Customer
expectations Company strategy
Performance indicators
Delay
Customer
Quality
Cost
Processes
Voice of Customer
Continuous Improvement Loop
Business response
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PEOPLE PROJECTS
• Select – Who ? – For which project ? – When ?
METHODS/TOOLS
• Choose the relevant projects
• Estimate the ROIs
• Train • Certify
• Implement the projects
• Guarantee acceptance and alignment
• Review the projects
• Review of skills • Project Ranking • Planification
• Lean Six Sigma (DMAIC & DFSS)
• Change Management
• Promote Talents • Report the output of the projects
• Communication • Performance review
• Change Management • Milestone Reviews
Business Operations Excellence® our method for Lean Six Sigma deployment
BOE®
Report
BOE®
Manage
BOE®
Execute
BOE® Plan
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3
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Business Operations Excellence® Copyright © 2009 Equable All rights reserved
Team selection
Estimate each project against a benefits/cost matrix
Define the adequate methodology for each project
Retain crucial projects
Define a flight plan
Define project charter draft including the business case
Identification of all the potential pojects
b
Initial sort of the potential project
list
c
Project definition
d
Define teams and roles and responsibilities
Define training plan Define support plan Define PMO
Voice of customers Voice of employees
Voice of enterprise Voice of competition
Voice of shareholders
Organization assessment
Operational program deployment strategy
a
BOE® Plan services:
BOE®
Report
BOE®
Manage
BOE®
Execute
BOE® Plan
1
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BOE® Execute services: Implementation of Lean Six Sigma Projects in the perspective of training and rolling out the organization
Training programs • Master Black Belt : 5 weeks
• Black Belt : 4 weeks
• Green Belt : 2 weeks
• Yellow Belt : 2,5 days
• Champion & Steering Committee members : 1 day
Coaching : support of Black Belts and Green Belts while implementing the projects, PMO, support of Management Certification:
• Define the Lean Six Sigma certification criteria of the client
• Assess and Validate the projects carried out by the Master Black Belts, Black Belts and Green Belts
• Set up the Lean Six Sigma tests and test the Master Black Belts, the Black Belts and the Green Belts
BOE®
Report
BOE®
Manage
BOE® Execute
BOE® Plan
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Control (3 weeks +)
Define (3 weeks)
• Identify the issues and the scope of the project, the objectives and the business plan • Set up the macro-planning and the project team • Map the macro-process (SIPOC) • Voice of the Customer • Formalize and validate the Project Chart
Measure (5 weeks)
• Define the data collection program • Collect the data for each indicator for all the end to end processes • Analyze and validate the proposed measurement system • Measure the “as is” process performance
Analyze (6 weeks)
• Analyze the statistic data • Analyze the detailed process mapping • Analyze the process added value • Identify the inefficiency root causes
• Identify improvement solutions addressing the root causes • Plan, develop and implement pilot solutions • Roll out the solutions
• Monitoring of the output • Control and audit the
sustainability of the output • Standardize and transfer the
output to the process owner • Close the project
Month 3 Month 1 Month 2 Month 5 Month 4
BOE® Execute - Each individual Lean Six Sigma project respects a common framework & timeframe
1
2
3
Improve (5 weeks) 1 2 3
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BOE® Manage and Report
Manage • Customization of the Lean Six Sigma referential • Change Management – People acceptance • Lean Six Sigma project review by their sponsors
Report • Performance review of the Master Black Belts, the
Black Belts and the Green Belts • Promotion of the Master Black Belts, the Black Belts
and the Green Belts • Communication of the plan and the vision • Communication of the output & benefits
Support of the individual Lean Six Sigma projects and monitoring of the global flight plan
BOE® Report
BOE® Manage
BOE® Execute
BOE® Plan
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2
3
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BOE® - typical timeframe & approach
• 12 Black Belts • 12 Pilot projects (proof of concept) + 12 projects in first year
2010-2011 2009 2012
Pilot Phase
Roll Out
• 60 additional Black Belts • 120 projects per year with 60 Black Belts (acceleration pace) • Executive training • Sponsor & stakeholders trainings • Green Belt trainings Knowledge Transfer
• 60 additional Black Belts • 240 projects per year with 120 Black Belts (cruise pace) • Training of Client’s Master Black Belt • Lean Six Sigma License transfer
In a decentralized environment a regional entity can volunteer for the Pilot Phase and provide a positive background of internal competition
To be adapted according to the resource availability and the change management culture
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Lean Six Sigma benefits > Revenue growth through:
– increased customer satisfaction – introduction of quality products & services
> Margin increase through: – less non quality costs (reduction of defects, wastes and manual
rework) – more productivity and capacity (reduced cycle times)
> Potential Gains per project*: – Cycle time : 30%-70% – Defects : 70% – Costs : 30%-50% – Capacity : 20% – Productivity : 20% – Project ROI : 4 in one year – Project benefits : 400 K€
*non contractual values depending on projects
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Who is doing what in Lean Six Sigma?
Top Management
Quality Manager/ Champion Master Black Belt/Expert
Black Belt/Project Leader
Green Belt/Team member
Engage and promote Lean 6 sigma
Select processes, projects & people. Make plan. Change Agent
Lean Six Sigma expert. Train and coach Black Belts and Green Belts
Deliver Lean 6 Sigma projects. Full time project leader.
Contributes to Lean 6 Sigma projects
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Our Lean Six Sigma Trainings
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Lean 6 σ for Executives training agenda
Lean Six Sigma for Executives: 1 day Introduction to Lean Six Sigma Change Management of Lean Six Sigma Process Optimization with Lean Six Sigma Lean Process Analysis and Improvement tools Methodology DMAIC 6 Sigma Methodology DMADV 6 Sigma (DFSS) Project Governance Roles in Lean Six Sigma:
• Champion • Black Belt • Green Belt • Sponsor • Stakeholders
Lean Six Sigma deployment (theory) Lean Six Sigma deployment (exercise)
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Lean 6 σ Black Belt training agenda Week 1: Introduction to Lean 6 σ with focus on Lean Introduction to Lean Six Sigma Process Optimization with Lean Six sigma Lean Process Analysis and Improvement tools:
• Process Mapping • 8 wastes identification • Value Stream mapping • Notions of 5S • Setup time reduction • Total Productive Maintenance • Standard operations & Continuous flow • Kaizen event
VOC, CTQ selection, measurement and monitoring Customer Business Process Review + Projects Selection and Project definition and plan for Week 2
Week 3: Lean Six Sigma DMAIC Recap of week 2 Measure Six sigma tools
• MSA (Gage R&R) • Performance measurement
Analyze (Statistical Analysis) Improve Six Sigma tools (Regression, ANOVA, DOE introduction) Control (SPC) Project Leader Guide Follow up on all the real projects : Review of trainee projects, interactive coaching, Plan to close projects
Week 2: Lean Six Sigma DMAIC Recapitulation of week 1 Define Measure Introduction to Minitab™ Analyze (Process Analysis & Data Analysis) Improve Control Use of DMAIC template & Storyboard Work on real projects: Review of trainee projects, Interactive coaching, plan
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Week 1*: Introduction to Lean 6 σ with focus on Lean Introduction to Lean Six Sigma Process Optimization with Lean Six sigma Lean Process Analysis and Improvement tools:
• Process Mapping • 8 wastes identification • Value Stream mapping • Notions of 5S • Setup time reduction • Total Productive Maintenance • Standard operations & Continuous flow • Kaizen event
VOC, CTQ selection, measurement and monitoring Customer Business Process Review + Projects Selection Project definition and plan for Week 2
Week 2*: Lean Six Sigma DMAIC Recapitulation of week 1 Define Measure Introduction to Minitab™ Analyze (Process Analysis & Data Analysis) Improve Control Use of DMAIC template & Storyboard Work on real projects: Review, Interactive coaching, plan
Lean 6 σ Green Belt training agenda
*Note : week 1 and week 2 of green Belts are similar to week 1 and week 2 of Black Belts. This allows trained Green Belts to become Black Belts by taking only a Black Belt Week 3 incremental training
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Lean 6 σ Yellow Belt training agenda
Day 2: MEASURE Phase :
• Measurement system validation • Data sampling and data collection • Graphical display of data • Performance measurement
ANALYZE Phase : • Process analysis and mapping • 7 types of wastes (Mudas) • Value Stream Mapping
Day 1: Introduction to Lean Six Sigma Process Optimisation with Lean Six Sigma DMAIC project framework DEFINE phase
• Project charter • Business Case • Project plan • Voice of Customer
Day 3 (half day): ANALYZE Phase (cont.):
• Cause analysis • Data analysis
Kaizen events IIMPROVE phase CONTROL Phase Lean Six Sigma project closure
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Change management training agenda
Change Management Objective: be able to implement and to manage efficiently a fast change by working on its acceptance
Introduction to efficient change process Change profile Prepare teams for success Define change project The need for change Setup a vision and communicate Motivate and engage people on change Lead the change Follow up the change Changing Systems and Structures Questions and answers
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Meeting facilitation skills training agenda
Meeting facilitation skills Objective : be able to facilitate efficiently a productive working meeting/workshop by following a timely process
Introduction Principles of facilitation
• Content versus Process • Diversity in teams • Exercise • Basic facilitation principles (diagnostic and reaction) • “Bloody meeting” video • Preventions and interventions • Conflict management
Tools and Process • Tools for idea generation • Tools for problem cause analysis • Tools for solutions (generation and selection)
Real case study: • Idea generation • Problem cause analysis • Solution generation and selection
Questions and Answers
= Video recorded exercise
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Business Operations Excellence® Lean Six Sigma Transformation
www.equable.fr www.equable-us.com
email: [email protected] cell phone: +33 (0)6 89 06 13 98
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Appendixes
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Lean Six Sigma
Lean Six Sigma is the integration of Lean and Six Sigma
Increase speed of processes
Eliminate the Wastes
Improve quality
Reduce defects and variation
An operational excellence methodology centered on Customers
A pragmatic, disciplined and results oriented approach
Lean Six Sigma
Resulting into
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Lean origins
1900-1940 1945-1990 1996 2002-Present
“Mass production of inexpensive cars using
the assembly line”
“Toyota Production
System”
“Lean Thinking Five
Principles”
“Lean and Six Sigma
Integration”
Womack & Jones Michael George
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Toyota Production System House
JIDOKA: Hilighting/
Visualization of problems
Quality must be built in during the manufacturing
process!
JIT: Just In Time
Productivity Improvement
Making only "what is needed, when t is needed,
and in the amount needed!"
Superior Quality Reduce Costs & Delays
Improve Safety & Morale
+
Heijunka (Sequence plan) Standard Work Kaizen Operational Stability
The TPS House was developed by Taiichi Ohno and Eiji Toyoda to make it easy to explain Toyota's continuous improvement system to employees and suppliers. The aim of TPS is to eliminate all muri, mura, muda
(overburden, unevenness, waste) from the operations.
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Lean five principles
Specify Value… from the customer’s point of view Identify Value Stream… map process & see wastes Flow… move one piece at a time continuously Pull… let the customer pull your product Perfection… always improve the process
From Lean Thinking by James P. Womack and Daniel T. Jones, Free Press
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Lean tools Lean designates a set of tools which has been first used in Manufacturing in the 60’s (coming mainly from the Toyota Production System) and now used in the service industry (business transactional processes). The Lean tools allow the optimization of production and transactional processes flow. The Lean tools are : > 7 forms of wastes (Mudas) > 5 S (Clean, order and optimize its workplace) > Kaizen (Change to become good) > Jidoka (Highlighting/Visualization of problems) > Value Stream Mapping (Process value analysis) > Just in Time, Pulling systems & Kanban refurbishing systems > Quick Changeover (Setup time optimization) > TPM (Total Productive Maintenance) > Process Standardization: alignment of production with demand (Takt time,
Heijunka), Standard Work
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Six Sigma origins
1989- 1990- 1994- 1995-Present
“Premise of Six Sigma”
“Adopters of 6
sigma”
“1st Six Sigma Consulting company”
“Six Sigma expanded to non manufacturing
functions”
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Assumptions: • Long term observed data
• Normal distribution Probability of defects = 0.00034%
or 3.4 defects per million of opportunities
Z Long Term = 4.5 (I can place 4.5 sigma between my specification limit
and my mean µ) Z Short Term =Z Long Term + 1.5
Z Short Term = 6
Expected performance=6 Sigma
6 sigma
Characteristic
frequency
0 defects
3
10
1 2
50
σ
µ
Histogram
Contractual specification
limit
> Sigma is a Greek letter which represents the standard deviation in statistics.
> Having a six sigma performance (or process capability) means that we are producing only 3.4 defects per million of operations!!
4.5xσ
6 sigma
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Continuous improvement
CTQ*
ZST DPMO** Methodology Lean 6 σ
*CTQ Critical To Quality **DPMO Defect per Million of opportunities, long term data
***DFSS Design For Six Sigma
Process Lean
DMAIC
DFSS***
Simplify/clean up
Improve Design for 6 σ
3 σ
4 σ
5 σ
6 σ
66807
6210
233
3.4
1
2 3
1
2
3
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Lean 6 Sigma example
Distribution Cycle Time example: > The cycle time of a distribution company, from customer order to
customer delivery should not exceed 3 days (our contractual terms & conditions)
> The Customers complain. > The competitors are better than us. They never exceed 3 days > The Management says “we are loosing money” > The team in place says “we dispatch in average the same day we
receive the order and we always use a 24 hours delivery carrier”
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Lean 6 Sigma DMAIC five phases
• Define
• Measure
• Analyze
• Improve
• Control
• Define your Business problem
• Measure your actual process performance (Y)
• Find the main root causes (Xs) of your defects
• Improve & implement solutions
• Control that your new performance is sustained
• Standardize & close the project
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process as felt by the customer
CUSTOMER Order Unit delivery
Definition Specification Performance limit Targets/goal
CTQ* Lead time 3 days 99.99% < 3 days
Procurement Collect Order &
Forward to delivery deptmnt
Ship to Customer & Bill CUSTOMER
Lead time is the measurement
*Critical To Quality
Problem statement: we miss our contractual obligations of delivering in less than 3 days Process in which we have a business problem:
?
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Measure
Measure your problem and your defects Lead time distribution
Time from order to delivery
in days
nb of occurences
0
defects
Contractual/Customer Specification
Limit
3 days
10
1 day 2 days
50
Histogram
Observed probability of defects=12.03%
26/216
Variation
Trend
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Measure conclusion I observed a probability of defect of 12.03%! My performance is 2.67 σST*. We have a problem! 6 sigma goal is to reach 0.00034% of probability of defect!
ZST value*
2 σ
3 σ
4 σ
5 σ
6 σ
Defects per million of opportunities
308537
66807
6210
233
3.4
% defects
30.8537%
6.6807%
0.6210%
0.0233%
0.00034%
12.03% 2.67 σ
* For short term data with ZST=ZLT+1.5
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Analyze Analysis – finding the root causes (Xs)!
> Pareto chart of the 26 defects
Miss 3 pm carrier for
outside Paris region
20 77%
Incomplete shipping address
4 15%
Other
2 8%
> 2 causes represent 92% of my defects
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Improve
Time from order to delivery
in days
nb of occurences
0 defects
Contractual/Customer Specification
Limit
3 days
10
1 day 2 days
50
Histogram
Short term data Observed probability
of defects=0% Expected performance: 6 σ
I can place 6 σ between µ and the spec. limit and the
distribution is normal!
σ
µ
6xσ
New Cycle time from order to delivery distribution
KAIZEN
2 actions taken: > Speed cycle by processing “Outside Paris region” orders first & organize an earlier transfer to shipping department by removing some non value added tasks (unnecessary sign offs) > Change address format and control it at order time (avoid quality issues)
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Control 2003 Delivery time performance
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Lean 6 Sigma financial impact Cost of Failure
(% Sales) 40%
35%
30%
20%
15%
10%
5%
DPMO 3.4 233 6210 66807 308537 500000 Sigma 6 5 4 3 2 1
Budget : • I sell 10 € every unit • Operational margin = 25% (2.50 €) • every defect costs me 24 €! • at 2,67 σ (12,08% defects) I lost 40 cents every unit I sold!!
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Take orders offline (laptop)
Submit order to Manufacturing
Sales Repr.
Update orders on Intranet
Synchronize orders by email connection
Coordinator
orders
eBook
Production orders
Nb of Manual Human Interactions* Before
4
6
After
1
1
Web
Ord
er B
ook
proj
ect
* averages
st dev 1.6 st dev 1
What could Lean 6 Sigma do for you?
520 K€ of saving
TOTAL 10 2
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% of time spent by 8 persons doing financial manual entries before and after FPA project implementation
27% reduction of time spent by 8 financial analysts …gives 1.75 Full Time Employee proven benefit!
> 140 K€ saving
> Overtime reduced
> Interim reduced
> More time for analysis (added value task)
What could Lean 6 sigma do for you?
Before After
100%
50%
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Lean 6 Sigma business case examples Cash improvement: Our customer wanted to reduce their current overdue by 80% from 10 M€ (representing more than 10% of one year revenue) down to 2 M€. Potential benefit: 5% (cost of money)*8 M€ = 400K€. Cost of Six Sigma project: 100 K€. Return on investment: 4. After analysing 4 months of receivable aged balance it was found:
> the receivable aged balance was not measuring the real overdue (revenue recognition issue) 15% deviation
> 20% of the invoices had no payment due date. > 15% of the invoices were not addressed to the right international financial and funding
organisation (special contracts funded by IMF, WB, etc…) > 33% were customer disputes > 17% were real late payments (5% because of invoice sent too late, 12% without a valid
reason but were not chased)
After fixing the main issues and changing the invoice process we reached a stable monthly overdue amount of less than 1.9 M€. Project Sourcing efficiency: Our customer wanted to increase their margin on the projects that they are selling. Due to a tough competition, it was decided to source more efficiently the services and the IT systems. After a first financial analysis, we started one project on Low Cost Country Sourcing. Potential benefits on one year: 620 K€. Cost of Six Sigma project: 120 K€. Return on Investment: >5. For this project, we have redesigned the sourcing processes, introduced a new Purchase Forecast tool and assigned Goals & Objectives to Buyers. As a result of these changes, the amount of purchases made in Low Cost Countries increased from 18% to 24% in 6 months, with a forecast of 30% in the next 6 months.
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Customer order Webification: Our customers wanted to automate and optimize their Customer order process from sales representatives taking orders to Back office logistic persons transmitting orders to manufacturing and/or suppliers: Potential benefits (productivity and capacity gains) : 55% of gains on 11 people *87K€ = 520K€. Cost of Lean Six Sigma project: 120 K€. Return on investment after one years = 4.33 After a Value Stream Analysis and a confirmation meeting with main stakeholders it was decided to:
1. Simplify the process (suppression of administrative validations (not necessary and ceating delays and errors)
2. IT « Webification » of the Customer order process (orders taken offline on sales laptops and sent/synchronized with email)
3. Automatic interface with supplier IT system and only one validation in all the process After a training of involved parties and a 3 months pilot of the new process, the measurements done confirms that only 5 employees can manage and process an identical order volume.
Financial Analysis Optimization: Our customer wanted to use the ORACLE-GL Financial analysis module instead of Excel, to realize all its analytical financial reports. Potential benefits: (productivity) : 3 interims*50 K€ = 150K€. Cost of project Lean Six Sigma : 50 K€. Return on investment after one years = 3 After an exhaustive inventory listing of all the existing analytical reports, their value and the cost to produce them, it was decided to keep 12 standard reports and to model them into Oracle-GL. After 2 months and few tunings, the measurements shows that 98% of all demanded analysis can be answered with the Oracle-GL analytical module.
Lean 6 Sigma business case examples (2)
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Team development training agenda Build and develop efficient teams Objective: become an efficient team
Introduction Individual preferences and diversity in teams
• Questionnaire Myers Briggs Type Inventory (MBTI) • Scales and types overview • Group picture (strengths and weaknesses) • Exercise and Discussion
Working together: • Team exercise (Tower building) • Debrief • GRPI tool
Team Development: steps and needs: • Introduction • Team evaluation • Discussion
Trusting in each other: • Team exercise: «Walking together» • Debrief and discussion
Teamwork: • Exercise (Survival Challenge) • Debrief and discussion
Questions and Answers
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Business Operations Excellence® Lean Six Sigma Transformation
www.equable.fr www.equable-us.com
email: [email protected] cell phone: +33 (0)6 89 06 13 98