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Presented by:

Chase Sowden

Supply Chain Architect

How to Implement a Continuous

Improvement Program

© 2016 MHI® Copyright claimed for audiovisual works and sound recordings of seminar sessions. All rights reserved.

At the epicenter of the Operational Assessment is the customer.

The customer is the primary focus – it’s not that the customer

is always right; it’s that the customer is everything. Every

organization needs to understand how their customer defines

value; the customer stimulates the demand for a

service/product; the customer defines the requirements; the

customer evaluates the results. Optimize all areas within your

supply chain to deliver customer value.

What i s Cont inuous Improvement? How Does Your Customer Def ine Va lue? Value Added vs Non -Va lue Added or Waste Value St ream Process Mapping Increased Va lue to the Customer f rom the New Process

Failure is not fatal, but

failure to change is! “

- John Wooden

What is Continuous Improvement?

Long-term process Involves your employees Improving organizat ional

effect iveness

Success is the sum of

small efforts, repeated

day in and day out!

First rule of any technology used in a business

is that automation applied to an efficient

operation will magnify the efficiency. The

second is that automation applied to an

inefficient operation will magnify the

inefficiency.

“

-B i l l Gates

Just Throw Technology at the Issue?

Bringing Order to Chaos

The key to success is focusing on people , process and technology , not one, but a l l three and how the three integrate and work together to provide superior col laborat ion, business process, and decis ion making results for an organizat ion.

How Does the Customer Define Value?

Right product/service Time promised/expected Qual ity/defect free

“I’d like to upgrade

my phone!”

Receive Order Receive Payment

Valued Added Non-Value Added

or Waste

What is Non-Value Added or Waste?

Transportation • Transportation waste in a service/product environment is unnecessary

and non-value-added movement of people, goods, and information in order to fulfill the service obligation to your customer.


Transportation Waiting

• If people, systems, materials or information are waiting, that’s waste.


Transportation Waiting Overproduction

• Are your services/products producing sooner, faster or in greater quantities than the customer is demanding or requiring?


Transportation Waiting Overproduction Defects

• Defective services/products are those that do not deliver the correct requirements to the customer, the first time.


Transportation Waiting Overproduction Defects Inventory

• Do you have service/build products no one wants?


Transportation Waiting Overproduction Defects Inventory Movement

• Are activities, paperwork, and other efforts unnecessarily juggled?


Transportation Waiting Overproduction Defects Inventory Movement Extra Processing

• How much extra paperwork of effort do people go to in order to deliver the service/product? Could any steps be eliminated?


Transportation Waiting Overproduction Defects Inventory Movement Extra Processing Safety

• Safety is the foundation of all activities. People must be able to deliver value to the customer without injury. Evaluate areas within the supply chain to ensure safety of all.

Value Stream Process Mapping

Tools of the Trade

Post It Notes

Non-Valued Added Waste

Value Added Execution

Tools of the Trade

Post It Notes White Board or Butcher Paper

Tools of the Trade

Post It Notes White Board or Butcher Paper How Does the Customer Define Value


Current State Drawing • Understanding how things currently operate. • This is the foundation for the future state.


Current State Drawing Future State Drawing

• Go to utopia and then back-off to reality


Current State Drawing Future State Drawing T Chart

• Compare advantages and disadvantages of Current vs. Utopia • Determine impact and what will work in reality

Current State Process Mapping

Get the people involved Tap into their expert ise

People don’t fight

change they fight being

changed!!


Doctor ’s Off ice Vis it • Get’s you out of your environment • You have lived this process


Doctor ’s Off ice Vis it • Need to account for every minute within the process


1. Automated attendant 2. Wait for call back 3. Gather info 4. Make appointment 5. Wait for appointment 6. Transport to doctor 7. Wait at doctor office


7 wasted steps


Examination by the doctor

1. Wait at check-out 2. Obtain referral 3. Pay co-pay 4. Drive home 5. Make appointment 6. Gather info 7. Make appointment 8. Wait for appointment 9. Transport to specialist 10. Wait at specialist office


Exam by doctor

7 wasted steps

10 wasted steps


Examination by the specialist

1. Wait at check-out 2. Obtain script 3. Pay co-pay 4. Drive to pharmacy 5. Drop-off script 6. Wait to be filled 7. Check-out 8. Drive home 9. Take the medicine


Exam by specialist

Exam by doctor

7 wasted steps

10 wasted steps

9 wasted steps


The healing has begun!!!!!!!!


Healing has begun!!!!!

Exam by specialist

Exam by doctor

7 wasted steps

10 wasted steps

9 wasted steps

Total Lead Time • Seven-days

Value Added Time • Ten-minutes

Non-Valued Added Time or Waste • Anything the customer is not willing to pay for • All the areas for improvement

Value Ratio • Value Added Time / Total Time • 0.000001%


Future State Drawing • Go to utopia and then back-off to reality

Utopia State Process Mapping

Start with c lean s late Design in utopia Customer ’s perspect ive


1. Ear is hurting 2. Get dressed 3. Make sure doctor as

nearby as possible 4. Walk to office


4 wasted steps


Examination by doctor

1. Referral for specialist 2. Travel to specialist


Exam by doctor

4 wasted steps

2 wasted steps


Examination by the specialist 1. Send script to

pharmacy 2. Travel to pharmacy


Exam by specialist

Exam by doctor

4 wasted steps

2 wasted steps

2 wasted steps


Let the healing begin!!!!



Exam by specialist

Exam by doctor

4 wasted steps

2 wasted steps

2wasted steps

Total Lead Time • 30-minutes


“Lead time is equal to

costs!”

- Henry Ford



Exam by specialist

Exam by doctor

4 wasted steps

2 wasted steps

2wasted steps

Total Lead Time • 30-minutes


Value Ratio • 33.3%

Compare Current & Utopia State

Pros and cons Use a T-Chart

Compare Current & Utopia State

Pros and cons Use a T-Chart Inc lude the entire team

Compare Current & Utopia State Advantages/Pros Disadvantages/Cons

Compare Current & Utopia State Advantages/Pros

Cu stomer sat i s fac t ion

Disadvantages/Cons


Cu stomer sat i s fac t ion Ch arge h ig h er p r i c e

Disadvantages/Cons



Disadvantages/Cons

B i l l rate goes d own • Wo r k 1 0 & b i l l 1 0 • Wo r k 1 0 & b i l l 7



Disadvantages/Cons

B i l l rate goes d own


Cu stomer sat i s fac t ion Ch arge h ig h er p r i c e Red u c e overh ead

• Re c e p t i o n ro o m • C o m p u te r s c h e d u l i n g

sy s te m • B u sy w o r ke rs

Disadvantages/Cons



Cu stomer sat i s fac t ion Ch arge h ig h er p r i c e Red u c e overh ead

Disadvantages/Cons


Let’s Review the Steps

Current State Process • Identify all of the steps • Value added and non-value added from the customer’s perspective


Current State Drawing Future State Drawing

• Go to utopia and then back-off to reality


Current State Drawing Future State Drawing Breakdown the Init iatives

• Identify sequential major initiatives • The roll-out is living and breathing

Now what do I do?

Change faster and more effectively than your

competition, or go out of business!

Where do I start?

Comment in the # SupplyChainGeek Network

www.supplychaingeek.com

Supply Chain Self Opportunity Assessment

http://bit.ly/supplychainassessment

Continuous improvement is better than

delayed perfect ion! “ -Mark Twain

http://www.supplychaingeek.com/

http://bit.ly/supplychainassessment

For More Information:

Speaker email: [email protected]

Website: www.barcoding.com

#SupplyChainGeek

Or visit MODEX 2015 Booth 4973

mailto:[email protected]

http://www.barcoding.com/

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