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Hawk’s Eyeview of Operational Excellence

Posted on June 10, 2010 in Articles

Understanding the Linkage of Quality Best Practice Models and How to bring it towards Enterprise-wide Deployment

Being on today’s Wall Street where we are now the successors of time-tested quality models such as Six Sigma from Motorola and Lean from Toyota creates an irony of clarity and confusion; more like ebony and ivory, or yin and yang. The delight is manifested on the thought that holistic approaches are already available to respond to business’ strategic needs across varying concerns, local or cross-functional. However, the ebony side may not be disregarded.   Where there is variety of best practices to use comes the complexity of where to begin or what to choose. Is it a battle between Lean and Six Sigma? Is there a proper timing towards their deployment? How can they be linked towards other rising models such as TRIZ1 and DFSS2? Building EXCELLENCE should start somewhere.

Where do we take off?
Operations Excellence models should be realized as a subset and not a sole basis for organizational undertakings. It is not a magic wand. Hence, it is imperative to build inter-linkage of all these models in realizing the intended change to the bottom line. First and foremost would be to identify a company’s strategic objectives as evidenced by results of developed KPI’s3, KRA’s4, or objectives that are aligned with the Quality Policy. Straight and simple: KNOW WHERE YOU PLAN TO GO. If the intention is to seek for cost-control initiatives then it is best to eliminate Lean’s identified wastes or, if the plan is to pioneer the creation of innovative products then TRIZ should be pursued. Operations Excellence models should complement each other. However, these initiatives should not be confined on achieving monetary benefits alone. Following the concept of Balanced Scorecard from Kaplan and Norton, financial goals should be coupled with objectives that will drive them: Customer Concern, Internal Process Optimization and even, Human Relations. Simply put, Operations Excellence responds to ‘voices’ coming from the Customer, the Process and the People. Now, the basis for approving an initiative is not constrained on the estimated tangible benefit it can create, but rather, on the impact it can build in sustaining the business in continuum.

What road will I take?
The strategic map has been laid and we are now on the middle of the crossroad. Finding your route is finding where you are now. Different organization may trudge different paths depending on each quality management system’s maturity. Highlighted below is the hierarchy we can use to diagnose.

1. Do we know the value we are providing?
Determining the value happens by knowing what product we give or what service we offer. This includes knowing our customer base and their requirement, may it be explicitly stated through Service Level Agreements or implicitly gathered through Customer Perception surveys.

2. Have we made our processes repeatable?
Doing one thing is a replica of doing another; this conveys the message of transitioning from craft-type of production to a routine. Actions may include calibration of people, equipments and gauge devices; set-up of Quality Controls; testing of prototypes; and, simulation of service transactions.

3. Has the repeatable process been standardized?
Making a process repeatable is a task that should ideally be followed by its’ standardization. This is where we take our processes as part of the double-helix of our organization’s DNA. This transpires as we comply towards statutory and regulatory requirements and gives birth towards diligence to management system practices such as ISO 9001:2008 Quality Management System to name one. It is not a requirement to obtain formal certification for such systems before going on Operations Excellence, only that, these requirements already hand the must-be’s that needed before going on to either Six Sigma or Lean.

4. Is your process measurable?
Embedding the right metrics is like building your dashboard that will tell you when to slow down or when to fuel up. NO DATA, NO PROBLEM TO SOLVE; hence, the measures will speak up if there is a need to apply Operations Excellence or the problem is mere common sense.  A relevant note, building metrics is not tantamount to gathering so much trivial data which in turn, becomes information waste; rather, it is collection only of data that is used to convey performance needed to be gauged as a reflection of customer satisfaction and its probable drivers.

5. Are you ready for Operations Excellence?
Having been equipped with all the preliminary phases, the right metrics will act like a compass telling you where to go in the arena of Operations Excellence. Any signal of being out-of-control5 or being incapable would alarm the need for problem solving techniques. Now, it is pertinent to discern what model to apply in diverse conditions.

Common Sense Projects: Just Do it!
An initial kick-off would be in case that the issue identified has a known root cause. For instance, a former employee has been hired again because of the absence of a recruitment process. Since the root cause is already known, this does not merit any best practice model and would just undergo the logical solution, hence the term, common sense projects.

LEAN: Cleaning Up Excess Baggage
Second, if the identified problem is relative to the process such as work imbalance, bottlenecks, non-value adding activities, system downtime, or inventories; then LEAN is highly recommended to be utilized. Acting like an organizational broom, LEAN provides tools and techniques to solve directly determined operational, information and leadership excesses, thus, making it a waste reduction strategy. Tools may include 5S, Poka-Yoke6 Error-Proofing Strategy, or Kanban, to name a few, making Lean an action-driven strategy.

Lean is fast, however, it cannot stand alone.
SIX SIGMA: Holistic Problem-Solving Methodology
More often, customer-related issues such as complaints or inaccuracies may be attributed to something else apart from process wastes, something that are still unknown. Hence, this case demands a more holistic approach towards identifying the right root cause; this is where SIX SIGMA will be more appropriate in giving a more macro-problem solving process which is DMAIC. Highly analytic in nature, Six Sigma puts rigor in determining source of problem through quantitative statistics.

LEAN SIGMA: Creating the Hybrid
In the course of Six Sigma discipline, Lean toolbox may be incorporated in case that Value Stream Mapping will be more apt in looking towards constraints or Lean’s techniques may alleviate the root causes identified during Analyze Phase, giving the rise to the hybrid LEAN SIGMA. This fusion takes place as a combination of the analytic nature of Six Sigma and the solution toolbox of Lean.

DESIGN FOR SIX SIGMA: Acting Before it Even Happens
Lean, Six Sigma or the hybrid Lean Sigma are retrospective in manner which may be limiting to industries which has minimal room for failure or are project-driven. For such case, DESIGN FOR SIX SIGMA or DFSS gives more emphasis on areas of design and development, may it be a product or a new service. It focuses on risk mitigation while safeguarding customer’s needs.

TRIZ: Theory of Inventive Problem Solving
All these models require out-of-the-box thinking in providing the right solution. Where problem analysis ends, creative thinking begins. However, experience wise, inventions take an unpredictable degree of time. Moving ahead of Eureka or Serendipity is the intention of the structured approach towards innovation. Theory of Inventive Problem Solving or its more known Russian acronym TRIZ provides patterns of inventive principles serving as a knowledge bank instead of inventing from zero. More like a library of benchmarking concepts giving you analogies that can be applied to any area of concern. This haven of inventive principles has been obtained from thousands of patented inventions looking into similarities on human’s thinking habits, object’s inherent attributes and available science.
Up to where will I take the LEAD?
Execution is as important as knowing what model to choose. This is where you MAKE IT HAPPEN. Beginning from the perspective of the customer, we walk our way backwards to see which process and its corresponding performance metric needs to be prioritized. True enough, we cannot solve everything in a snap! By SEEING THE WHOLE, we can determine which critical areas to take the first dive into; this includes the core operational processes, shared services, even the activities on up and downstream of the whole business cycle. It is important to note that these models have already progressed to cater to the needs beyond manufacturing, servicing areas of transactional, administrative and even supplier-customer linked activities. Everyone take the part, each one is transformed from a TACTICAL to a KNOWLEDGE workforce, contributing not within the confines of 8-hour shifts but direct to organization’s growth.

When do I stop?
In this global marketplace there is no room for finish lines, only stop-over’s. One improvement leads to the next, one step higher, and one leap farther. Operations Excellence is a never-ending cycle of finding better ways to serve all stakeholders. Each knowledge workforce will continuously be challenged to use his capacity to turn things around, drastic if need be, to provide breakthrough solutions that will evolve relentlessly even time will never know till when. A change agent doesn’t run in place.

Calling an industry as a SIX SIGMA shop or a LEAN shop is limiting, the context should shift to the point of applying all these models when they are most appropriate, getting the best of both worlds.

1 TRIZ is the Russian acronym for Theory of Inventive Problem Solving as founded by Genrich Altshuller to serve as a
    tool for structured-base out-of-the-box thinking
2  DFSS stands for Design for Six Sigma which provides a discipline towards elimination of risks and fulfilling customers’
    needs. DFSS employs the phases of DMADV which stands for: Define, Measure, Analyze, Design and Verify
3  KPI stands for Key Process Indicators
4  KRA stands for Key Result Areas
5  Out-of-Control is the term used in Statistical Process Control (SPC) to determine the state of a process where it is not   
    random in behaviour. This occurs commonly when there are sudden incidents foreign to the over-all process variation
    or there are patterns that distort the random fluctuation of the data
6  Poka-Yoke is a technique under Lean which promotes 100% Error-Proofing of Processes or as a secondary resort, 
    provides signals when a non-conformity happens

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