Rapid Transformation - Making Change Happen Fast

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<ul><li> 1. May 2010 Rapid Transformation Making Change Happen Fast Larry W Dyer Director, Process Improvement Master Black Belt Coventry Health Care</li></ul> <p> 2. Agenda </p> <ul><li>Lean and Six Sigma Overview </li></ul> <ul><li>What is Kaizen? </li></ul> <ul><li>How to execute a Kaizen </li></ul> <ul><li>Kaizen examples </li></ul> <ul><li>Where to start with Kaizen </li></ul> <ul><li>Top 10 reasons projects fail </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 3. Assumptions </p> <ul><li>You have some exposure to Six Sigma and Lean </li></ul> <ul><li>You understand what the project charter is </li></ul> <ul><li>You understand that projects with a high return on investment and moderate to low effort are executed first </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 4. Every Firm Is Driven to Improve Quality, and Reduce Cost and Lead Time </p> <ul><li>Customer loyalty and retention </li></ul> <ul><li>Shorter customer lead time demands </li></ul> <ul><li>Downward price pressure: lower costs </li></ul> <ul><li>Lower invested capital </li></ul> <ul><li>Capacity expansion </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 5. Why Do These Goals RequireBoth Lean and Six Sigma?</p> <ul><li>In a value stream, thework often spends up to 95% of its time waiting</li></ul> <ul><li>Poor quality increases the lead time to customer </li></ul> <ul><li><ul><li>10% defect rate can increase lead time by 40% and reduces available capacity </li></ul></li></ul> <ul><li>Capacity problems can be masked by slow cycle times </li></ul> <ul><li>Lean tools accelerate lead time reduction </li></ul> <ul><li>Six sigma brings a process under control </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 6. 95% of Time Waiting, For What? Customer Value Added Time Business Value Added Time Non-Value Added Time Wait Time </p> <ul><li>Findings indicate: </li></ul> <ul><li><ul><li>Long process time </li></ul></li></ul> <ul><li><ul><li>Process Cycle Efficiency Poor - 0.069%(World Class Standard = 50%) </li></ul></li></ul> <ul><li><ul><li>Wait times are extremely long </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 7. What is Lean Six Sigma? </p> <ul><li>Lean Six Sigmais a combination of two process improvement methodologies Lean and Six Sigma </li></ul> <ul><li>Leanis all about speed. </li></ul> <ul><li><ul><li>Pioneered by Ford and perfected by Toyota</li></ul></li></ul> <ul><li><ul><li>Focuses on eliminating waste and finding better ways to do things </li></ul></li></ul> <ul><li><ul><li>Helps eliminate steps that add no value </li></ul></li></ul> <ul><li>Six Sigmais all about quality and repeatability. </li></ul> <ul><li><ul><li>Started by Motorola in the 80s; improved by GE </li></ul></li></ul> <ul><li><ul><li>Focuses on reducing defects and variation and incorporates powerful statistical tools to control a process </li></ul></li></ul> <ul><li><ul><li> Six Sigma Quality literally means 3.4 defects per 1 million parts </li></ul></li></ul> <ul><li><ul><li>It is the origin of the DMAIC process </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 8. Greatest Challenges to Successful Deployment From ASQ, Quality Progress, August 2009 Why? Why? Rapid Transformation WC Process &amp; Strategy 77 of 5,000 hospitals Confidence level 95% Confidence interval +-11% 9. Why Lean Six Sigma? </p> <ul><li>Why use them together? </li></ul> <ul><li><ul><li>Because Lean cannot bring a process under statistical control, and Six Sigma alone cannot dramatically improve process speed. </li></ul></li></ul> <ul><li>Six Sigma is the Unifying Framework </li></ul> <ul><li><ul><li>It provides the improvement infrastructure (role definitions, deployment model, etc.) and the overriding methodology (DMAIC). </li></ul></li></ul> <ul><li>Lean provides additional improvement tools to turbo charge improvement efforts. </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 10. When to Use LSS for Process Improvement </p> <ul><li>When to Use: </li></ul> <ul><li><ul><li>You have a challenging goal to reach or issue to solve </li></ul></li></ul> <ul><li><ul><li><ul><li>Driven by the business strategy </li></ul></li></ul></li></ul> <ul><li><ul><li><ul><li>Issues that are valuable for the business to resolve</li></ul></li></ul></li></ul> <ul><li><ul><li><ul><li>Problems that have stood the test of time </li></ul></li></ul></li></ul> <ul><li><ul><li><ul><li>Solution is not known </li></ul></li></ul></li></ul> <ul><li><ul><li>You are willing to commit people to identify and resolve the issue </li></ul></li></ul> <ul><li><ul><li>You want a more robust solution than traditional methods can provide </li></ul></li></ul> <ul><li><ul><li>You want group ownership of a course of action </li></ul></li></ul> <ul><li>When NOT to Use: </li></ul> <ul><li><ul><li>You dont have a specific challenge or clear issue to solve </li></ul></li></ul> <ul><li><ul><li>You already have a solution and course of action </li></ul></li></ul> <ul><li><ul><li>You dont have a process to improve </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 11. Rapid Transformation </p> <ul><li>Relies heavily on: </li></ul> <ul><li><ul><li>Lean techniques </li></ul></li></ul> <ul><li><ul><li>Statistical Process Control </li></ul></li></ul> <ul><li>Uses Kaizen Format </li></ul> <ul><li>Focuses on a subset of Six Sigma Tools </li></ul> <ul><li><ul><li>Stakeholder Analysis </li></ul></li></ul> <ul><li><ul><li>FMEA </li></ul></li></ul> <ul><li><ul><li>Value Stream Mapping </li></ul></li></ul> <ul><li><ul><li>Non-Value Added Analysis </li></ul></li></ul> <ul><li><ul><li>Root Cause Analysis </li></ul></li></ul> <ul><li><ul><li>Quick Improvement Techniques</li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy Lean Is Cool! 12. What is Kaizen? </p> <ul><li>Kai = to take apart </li></ul> <ul><li>Zen = to make good </li></ul> <ul><li>Kai + zen = taking something apart to make it better </li></ul> <ul><li>Team activity </li></ul> <ul><li>Rapid improvement within a short time </li></ul> <ul><li>Well planned and highly structured </li></ul> <ul><li>Essentially an accelerated DMAIC project </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 13. When to Kaizen </p> <ul><li>When obvious waste sources have been identified </li></ul> <ul><li>When the scope and boundaries ofa problem are clearly defined and understood </li></ul> <ul><li>When implementation risk is minimal </li></ul> <ul><li>When results are needed immediately - i.e., capacity constraints, setup reduction, acute quality problems, safety/ergonomic issues </li></ul> <ul><li>In the early stages of a project to gain momentum and build credibility </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 14. When to Use Kaizen Project Idea Incremental Improvement? Re-engineer Project Small Project? Large Project Process Speed? Process Quality Project Kaizen Perform Value Stream Mapping Break into Small Projects Yes No Yes Yes No No Use Inter-Ocular analysis Rapid Transformation WC Process &amp; Strategy 15. Kaizen Goal </p> <ul><li>Focus on each step in the process </li></ul> <ul><li>Reduce the Non-Value Added Steps </li></ul> <ul><li>Minimize the Business Value Added Steps </li></ul> <ul><li>Streamline the Customer Value Added Steps </li></ul> <ul><li>Eliminate All Waste </li></ul> <p>Product Lead Time Customer Value Added Non-Value Added Start Finish Business Value Added Rapid Transformation WC Process &amp; Strategy 16. Kaizen Benefits </p> <ul><li>Provides momentum for the project </li></ul> <ul><li>Drives value ($) early, thus improving ROI </li></ul> <ul><li>Helps the Company </li></ul> <ul><li><ul><li>Eliminate hidden costs of waste </li></ul></li></ul> <ul><li><ul><li>Ensure work provides value </li></ul></li></ul> <ul><li><ul><li>Allows major improvements quickly </li></ul></li></ul> <ul><li>Helps You </li></ul> <ul><li><ul><li>Eliminate waste and interruptions </li></ul></li></ul> <ul><li><ul><li>Influence the work you do every day </li></ul></li></ul> <ul><li><ul><li>Be part of the solution </li></ul></li></ul> <ul><li>Reduces stress on project team to Get Something Done! </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 17. Kaizen VS Traditional DMAIC Project </p> <ul><li>Team is 5 Days Full Time vs. 4 Mo Part Time </li></ul> <ul><li><ul><li>Actual team hours may be close </li></ul></li></ul> <ul><li>Resources Dedicated</li></ul> <ul><li><ul><li>100% Dedicated for 5 days </li></ul></li></ul> <ul><li>Scope Completed/Problem Identified Going In </li></ul> <ul><li><ul><li>Team does not have time for scope assessment </li></ul></li></ul> <ul><li>Basic Data Gathered </li></ul> <ul><li>May use Tribal Knowledge vs. Detail Analysis </li></ul> <ul><li><ul><li>Solution may be known but historically not listened to </li></ul></li></ul> <ul><li>30-Day Follow Up Action Items </li></ul> <ul><li><ul><li>Items that cannot be finished that week </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 18. Kaizen Structure Team Training Rapid Transformation WC Process &amp; Strategy Issue List Area Discovery Cause &amp; Effect GoalBrainstormed Ideas Final Presentation Effort Benefit .5 1.5 1.0 2.0 2.5 .5 3.0 3.5 4.0 4.5 5.0 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1 2 3 4 5 8 9 10 7 6 Action Items What Who When Status Implementation 19. Kaizen Preparation </p> <ul><li>Begin preparation 2 weeks before start of the Kaizen event </li></ul> <ul><li><ul><li>Collect necessary data </li></ul></li></ul> <ul><li><ul><li>Notify participants of their involvement </li></ul></li></ul> <ul><li><ul><li>Create introductory training for participants </li></ul></li></ul> <ul><li><ul><li>Share the project charter </li></ul></li></ul> <ul><li><ul><li>Collect preliminary process maps </li></ul></li></ul> <ul><li><ul><li>Complete any meeting logistic issues </li></ul></li></ul> <ul><li><ul><li>Hold Kaizen </li></ul></li></ul> <ul><li><ul><li><ul><li>Meet for one week </li></ul></li></ul></li></ul> <ul><li><ul><li><ul><li>No interruptions </li></ul></li></ul></li></ul> <ul><li><ul><li><ul><li>No cell phones </li></ul></li></ul></li></ul> <p>Kaizen! Timeline(Maximum of 45 Days from Start of Event Prep, Through Event, to Final Follow-up) Pre-Event Prep (3-10 days) Kaizen! Event (3-5 days) Event Follow-up (30-35 days) Rapid Transformation WC Process &amp; Strategy Meeting Logistics Order lunch Soft drinks Ice Tea Coffee Etc. 20. Facilitation Keys </p> <ul><li>Keep Team On Track! </li></ul> <ul><li><ul><li>No emails or blackberrys </li></ul></li></ul> <ul><li>Event will be stressful </li></ul> <ul><li>Drive them to success </li></ul> <ul><li>Be a part of scope and team selection if possible </li></ul> <ul><li>Plant seeds but dont overpower the team with your ideas </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 21. Kaizen Team Rules </p> <ul><li>Throw out all of your fixed ideas about how to do things. </li></ul> <ul><li><ul><li>That is the way it has always worked! </li></ul></li></ul> <ul><li><ul><li>It has to be that way!It wont work any other way! </li></ul></li></ul> <ul><li>Maintain a positive attitude (how will it work, not how it wont). </li></ul> <ul><li>Practice mutual respect.Treat others as you want to be treated. Never leave disagreements unspoken.</li></ul> <ul><li>The only stupid questions are the ones not asked. </li></ul> <ul><li>Ask Why? at least five times until you find the ultimate cause. </li></ul> <ul><li>Were not interested in assigning blame - only in creating solutions! </li></ul> <ul><li>One person, one vote position doesnt matter. </li></ul> <ul><li>Have fun! </li></ul> <ul><li>Understand the process, and JUST DO IT! </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 22. Toolset Used During Kaizen </p> <ul><li>Any tool may be used to aid the team during a Kaizen event from a Process Map to a Designed Experiment.</li></ul> <ul><li>Bottom line is you use any tool that is needed! </li></ul> <ul><li><ul><li>Pareto </li></ul></li></ul> <ul><li><ul><li>Fishbone </li></ul></li></ul> <ul><li><ul><li>Process map </li></ul></li></ul> <ul><li><ul><li>Spaghetti Diagram </li></ul></li></ul> <ul><li><ul><li>Cycle Time/Takt Time </li></ul></li></ul> <ul><li><ul><li>NVA Analysis</li></ul></li></ul> <ul><li><ul><li>Time Studies </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 23. Kaizen Toolset: Resource Flow Layout </p> <ul><li>The Spaghetti Chart </li></ul> <p>Indicates an in-box or outbox where work (forms/information) waits to be worked on or transferred Lines indicate paper/information travel: - No set path - Lots of rework 230 yards Rapid Transformation WC Process &amp; Strategy 24. Kaizen Schedule Rapid Transformation WC Process &amp; Strategy 25. Weeks Activities </p> <ul><li>Monday </li></ul> <ul><li>Team Training </li></ul> <ul><li><ul><li>What is a Kaizen? </li></ul></li></ul> <ul><li><ul><li>Project and Goal Background </li></ul></li></ul> <ul><li><ul><li>Present Data/Burning Platform </li></ul></li></ul> <ul><li><ul><li>Specialized Training Geared Toward Project Goal </li></ul></li></ul> <ul><li>Discovery </li></ul> <ul><li><ul><li>Team Spends Afternoon in Project Area </li></ul></li></ul> <ul><li><ul><li>Map the Existing Process </li></ul></li></ul> <ul><li><ul><li>Gather Insights from Personnel </li></ul></li></ul> <ul><li><ul><li>Observe Issues/Conduct Studies </li></ul></li></ul> <ul><li><ul><li>Evaluate Risk </li></ul></li></ul> <ul><li><ul><li>Keep Detailed Notes </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 26. Failure Mode Effects Analysis </p> <ul><li>Document</li></ul> <ul><li><ul><li>What will happen if our project fails? </li></ul></li></ul> <ul><li><ul><li>What will happen if the implementation fails? </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 27. Weeks Activities (Cont.) </p> <ul><li>Tuesday</li></ul> <ul><li>Area Discovery (Cont.) </li></ul> <ul><li><ul><li>Review Monday Activities </li></ul></li></ul> <ul><li><ul><li>Process Map </li></ul></li></ul> <ul><li><ul><li>Gather Insights from Personnel </li></ul></li></ul> <ul><li><ul><li>Document Problems Found </li></ul></li></ul> <ul><li><ul><li>Analyze Problems to Determine Root Causes </li></ul></li></ul> <ul><li><ul><li>Begin to Define Future Metrics </li></ul></li></ul> <p>Our ability to assess the performance of a process we wish to improve is only as good as our ability to measure it. Rapid Transformation WC Process &amp; Strategy 28. There are usually three views of a process: Process Mapping Rapid Transformation WC Process &amp; Strategy What youTHINKit is.. 1 What itACTUALLYis.. 2 3 What itSHOULDbe.. 29. The Hidden Operation Rapid Transformation WC Process &amp; Strategy Work Arounds Op i Op i + 1 Analysis Scrap Off-Line Correction Correctable ? Verified ? No Yes Quick Fixes Inspections Scrap Rework Extra Equipment Increased Inventory Increased Cycle Time Frustration Defects Customer Dissatisfaction Cost 30. Example: High-level Swim Lane Process Map Rapid Transformation WC Process &amp; Strategy 31. Example: High-level Swim Lane Process Map Rapid Transformation WC Process &amp; Strategy 32. Identify Waste </p> <ul><li><ul><li>Each process activity can be tested for its value-add contribution </li></ul></li></ul> <ul><li><ul><li>Ask the following two questions to identify non-value added activity: </li></ul></li></ul> <ul><li><ul><li><ul><li>Is the form, fit or function of the work item changed as a result of this activity? </li></ul></li></ul></li></ul> <ul><li><ul><li><ul><li>Is the customer willing to pay for this activity? </li></ul></li></ul></li></ul> <p>NVA NVA NVA NVA NVA NVA NVA Rapid Transformation WC Process &amp; Strategy Call for an Order Answer phone Asks for more? Greetings and mention specials Calculate price Rewrite Order Order still OK? Gets address &amp; phone # Add to Order Give order to Cook Rewrite order Yes Yes No No Request order from customer Writes on scratch pad Asks cook for time estimate Inform customer of price/time No Thanks customer &amp; hangs up Completes order from from note pad Another call waiting Writes time on scratch pad Writes time on scratch pad Confirm order Yes 1 1 New order? No No Verify with notes Yes 2 2 OK Not OK 3 3 33. Get to the Root Cause </p> <ul><li>Ask Why 5 times </li></ul> <ul><li><ul><li>The follow-up time with clients is inconsistent.Why? </li></ul></li></ul> <ul><li><ul><li>Client follow-up expectations vary.Why? </li></ul></li></ul> <ul><li><ul><li>The Account Managers set unrealistic expectations with the clients.Why? </li></ul></li></ul> <ul><li><ul><li>Account Managers are not trained on what expectations to set. Why? </li></ul></li></ul> <ul><li><ul><li>No training has been developed about setting expectations.Why? </li></ul></li></ul> <ul><li><ul><li>Each client has a unique service level agreement and that information has never been published. </li></ul></li></ul> <p> 34. Weeks Activities (Cont.) </p> <ul><li>Wednesday </li></ul> <ul><li>Brainstorm Issues </li></ul> <ul><li><ul><li>Capture Ideas/Solutions </li></ul></li></ul> <ul><li><ul><li>Evaluate Studies </li></ul></li></ul> <ul><li>Reduce and Prioritize Ideas </li></ul> <ul><li><ul><li>Affinitize Ideas/Solutions </li></ul></li></ul> <ul><li><ul><li>Multivoting </li></ul></li></ul> <ul><li><ul><li>Rank using Benefit/Effort Matrix </li></ul></li></ul> <ul><li>Midweek Status Meeting </li></ul> <ul><li>Brainstorm Improvements </li></ul> <p>2. Multivoting 3.Rank by Benefit/ Effort/Cost 135 93 33 Rapid Transformation WC Process &amp; Strategy 35. Mid-Kaizen Review </p> <ul><li>Mid-Week Status Meeting:</li></ul> <ul><li>Purpose: </li></ul> <ul><li><ul><li>Review team successes with management team </li></ul></li></ul> <ul><li><ul><li>Review proposed Kaizen activities for implementation </li></ul></li></ul> <ul><li><ul><li>Address any obstacles impacting implementation </li></ul></li></ul> <ul><li><ul><li>Gain agreement from Management to proceed </li></ul></li></ul> <ul><li>Responsibility for Conducting the Meeting:Kaizen Team and Project Sponsor</li></ul> <ul><li>Frequency:End of third day </li></ul> <ul><li>Duration:30-45 Minutes </li></ul> <ul><li>Attendees:Kaizen Team, Project Sponsor ,Management </li></ul> <p>Rapid Transformation WC Process &amp; Strategy 36. Weeks Activities (Cont.) </p> <ul><li>Thursday-Friday </li></ul> <ul><li>Improve </li></ul> <ul><li><ul><li>Build the new process </li></ul></li></ul> <ul><li><ul><li>DocumentAction Items </li></ul></li></ul> <ul><li><ul><li>Develop plan to pilot the new process </li></ul></li></ul> <ul><li>Control </li></ul> <ul><li><ul><li>Train in the new process </li></ul></li></ul> <ul><li><ul><li>Pilot the process </li></ul></li></ul> <ul><li><ul><li>Create/Update Company Procedures to document and sustain improvements </li></ul></li></ul> <ul><li><ul><li>Finalize metrics to measure new process </li></ul></li></ul> <ul><li><ul><li>Present results to Management Team, complete follow-up, monitor results over time </li></ul></li></ul> <p>Rapid Transformation WC Process &amp; Strategy 37. More on Process Mapping 38. Process Mapping Hints </p> <ul><li>If your process handles or creates a work product or thing, then use this as part of your map indicating the information that is added, used, or changed. </li></ul> <ul><li><ul><li>Header sheets are a good example </li></ul></li></ul> <ul><li>Include samples of all information referenced as a part of the process .</li></ul> <ul><li><ul><li>If you use a chart, graph, report, or other information as part of your task, include a physical copy on the map. </li></ul></li></ul>