instilling a continuous improvement mindset in ap and p2p · slide 2 learning objectives instilling...

May 20 – 22, 2018 | Orlando, FL

Instilling a Continuous Improvement Mindset in AP and P2P

Penny S. Weller, PhD, CMA, ADGBS

Learning ObjectivesInstilling a Continuous Improvement Mindset in AP and P2P

May 20 – 22, 2018 | Orlando, FL

Whether you are considering—or already have—a continuous improvement program, this session is for you. You will learn a variety of quick tips to engage your staff and encourage them to submit creative ideas, appreciate the power of measurement; and implement commonly used and easy-to-understand continuous improvement tools.

This session will provide you: • Insights on the value of continuous improvement• Strategies for getting started by measuring something• Secrets behind eliciting great suggestions and other tools• A “mustang attitude” for promoting your AP and P2P achievements

Agenda

• About The Hackett Group• Insights on the value of

continuous improvement• Strategies for getting started by

measuring something• Secrets behind eliciting great

suggestions and other tools• A “mustang attitude” for

promoting your AP and P2P achievements

• Hackett has Empirically Defined World-Class• Hackett’s intellectual property explains how to close the gaps

97% 89%of Dow Jones Industrials

of Fortune 100

90%of Dow Jones Global Titans

Performance metrics30,000

Benchmarking studies15,000

Best practices2,000

Process maps700+

Implementation andconfiguration guides

330

Best practices scorecards30+

Hackett Value GridTM

The Hackett Group

Effectiveness• Better decision

support• Better align to

business needs• Optimized

working capital• Quality focus

Efficiency• Lower total costs• Faster cycle times• Higher productivity

Operations & Compliance Supply Data Management Requisition and PO Processing Supplier Scheduling Receipt Processing Compliance Management

Sourcing & Supply Base Management Customer Management Sourcing Execution Supplier Management and Development

Planning & Strategy Sourcing and Supply Base Strategy

Management & Administration Function Strategy and Performance Management Procurement Function Management

Plan* Demand Planning Supply Planning Inventory Management Integrated Business Processes (S&OP)

Make Manufacturing Strategy Production and Resource Management Production Management Maintenance Management Quality Management

Deliver Define Logistics Strategy* Manage Inbound Transportation* Warehouse Management* Manage Outbound Transportation* Reverse Logistics*

Marketing Operations Marketing Communications/Demand and Lead Development

Marketing Brand Management Brand and Product Management

Marketing Planning & Strategy Planning and Strategy Market Research and Analytics

Management & Administration Marketing Function Management

Transaction Management Order and Contract Management

Service Operations & Management Service Execution Service Operations Service Planning and Strategy Service Function Management

Transactional Total Rewards Administration Payroll Services Data Mgmt., Reporting, & Compliance

Employee Life Cycle Staffing Services Workforce Development Services Organizational Effectiveness Services

Planning & Strategy Total Rewards Planning Strategic Workforce Planning

Management & Administration Human Resources Function Management

Human Resources Executive and Corporate Services

Information Technology Sales

General Administration & Management Administrative Services Travel and Transportation Services Real Estate & Facilities Management

Control & Risk Management Government Affairs Legal Quality Management

Risk & Security Management Executive Corporate Communications Planning and Strategy Executive Office

Design IT Business Planning Enterprise Architecture & Emerging Technologies

Build Infrastructure Development & Deployment Application Development & Deployment Quality Assurance

Run Infrastructure Management End User Support Application Maintenance Risk Management

Manage IT Function Management

Selling Sales Execution Sales Operations

Sales Operations & Management Sales Planning and Strategy Sales Function Management

Transactional Cash Disbursements Revenue Cycle Accounting and External Reporting

Control & Risk Management Tax Management Treasury Management Compliance Management

Planning & Analysis Planning and Performance Management Business Analysis

Management & Administration Finance Function Management

Finance Procurement Supply Chain Marketing Service

The Hackett Group Taxonomy

Our advisors focus on helping to realize world class .. a sample of recent inquiries from our membership where Advisors leverage assets and infuse deep experiences to expedite your progress

Hackett Intellectual Capital

Best Practices

Research

Webcasts

In-Person Events

Value Accelerators

Metrics

Peer-to-Leader Interaction

Implementable Constructs

Dedicated Advisor

Client Needs & Initiatives

High Impact Client ROI

Membership-based advice to

Executives

to solve the issues they face

in transforming their function

and improving performance

by leveraging our unmatched

intellectual capital

and our extensive experience

in successfully driving change

Hackett Advisory Services

Agenda






Continuous improvement is something for executives

Continuous improvement is for everyone!

Reality:Myth:

Continuous Improvement – Myth #1

Continuous improvement takes statistics and in-depth training to be effective

Continuous improvement is something intuitive to many of us – and –something that we can be trained on to be effective

Reality:Myth:

Continuous Improvement – Myth #2

Continuous Improvement | 11© 2018 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Continuous Improvement: What’s possible

19%Cost Savings

7%

16%Working Capital

6%

16%Productivity

7%

For companies who dedicate resources to continuous improvement in 12 months:

World Class

Peer Group

Source: 2016 Quality Study; The Hackett Group, Inc.


Added benefits within 12 months


Regulatory compliance

8-13%

Customer satisfaction

9-18%

Quality 7-20%


It does take time…average age of top performers is almost 5 years

2.6

4.9

Peer TopPerformer


Average AGE of Continuous Improvement program (years)

CultureProjects


Building culture of continuous improvement

Continuous Improvement is gradual, constant and incremental

While there is no shortage of good improvement ideas; capturing & implementing is a challenge

While most organizations understand the importance of continuous improvement, not all are able to blend it into the fabric of their culture

No entity can continue to evolve and improve on a continuous basis if they do not adapt and align with key stakeholders

Continuous improvement success lies in linking project objectives with organization and business unit goals


Top performers CI methodologiesLean

A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value

creation process that has zero waste

Lean Six SigmaSix Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process – from

manufacturing to transactional and from product to service

Deming (PDSA) CycleContinuous quality improvement model consisting out of a logical

sequence of four repetitive steps for continuous improvement and learning: Plan, Do, Study (Check) and Act.

Six SigmaSix Sigma is about Reducing Variation. It focuses on effectiveness.

The mean will most likely also be improved

Service DesignService design is the activity of planning and organizing people,

infrastructure, communication and material components of a service in order to improve its quality and the interaction between

the service provider and its customers.

Total Quality Managementa system of management based on the principle that every member of staff must be committed to maintaining high standards of work in every aspect of

a company's operations.

Activity Based ManagementA process to clearly identify value add and non-value added activities

and drive down the non-value added activities

Business Process Management

Systematic approach to make an organization's workflow more effective, more efficient and capable of adapting to an ever-changing environment

Top tools used

Voice of the customer 97%

Process mapping 97%

Pareto analysis 86%

Five Whys 85%

Kaizan 77%

Waste analysis 75%

Fishbone / Root cause 73%


Agenda






Foundation of Continuous Improvement

What’s stopping you from being effective?

$5 million savings opportunity in transaction processing!

Key Financial Processes Total Cost Cost per Billion Quartile 1st Quartile

Cost/Billion$ Savings

Opportunity

Transaction Processing $12,955 $ 4,093 3rd $2,431 $ 5,262

Control & Risk Mgt. 5,523 1,745 3rd 959 2,488

Decision Support 3,793 1,198 3rd 607 1,871

Finance Management 1,772 560 3rd 408 481

Systems 7,660 2,420 2nd 1,760 2,090

Overhead 6,561 2,072 2nd 1,275 2,523

Total Finance $38,264 $12,088 3rd $7,440 $14,715

Benchmark - Measurement reduces emotion

Agenda






Let’s Chat About the top tools used

Voice of the customer 97%

Process mapping 97%

Pareto analysis 86%

Five Whys 85%

Kaizan 77%

Waste analysis 75%

Fishbone / Root cause 73%


Voice of the customer #1

Employee and customer satisfaction surveys

Customer experience through journey mapping

Suggestions

Voice of the customer

• Objectives of survey• Define repeatable questions• Develop communication plan• Conduct the survey• Analyze the results• Communicate back to participants• Act on results• Net Promoter Score – Would you

recommend…

• Pointer: Ask, Communicate, Actions

• Cast a wide net – go for volume at least at first

• Ask stakeholders -- employees, users, payers

• Track and monitor suggestions• Consider % implemented as % of

total• Use multiple channels -- portal,

check stub, customer satisfaction/pulse surveys -- places close to your customers

• Pointer: If you submit an idea—you don’t have to do it

Final Close

Preliminary Close

Prepare Special Ledger

Adjusting Entries

Run Assessment Process

Entry into Hyperion

Run Consolidation jobs

Reverse Assessment Process

Run Final Assessment Process

Process mapping #2

Financial Close - Process

Pareto Analysis #3

How Often Does It Happen?

Five Whys #4

Ask, Ask, Ask, Ask, Ask

Kaizan #5

Focus On a Problem

Seven Deadly Wastes (Two Dime)

WasteAnalysis #6

Waiting Waiting for parts and paperwork Long set-up and lead times

Overproduction Producing more than customer will pay for Planning full utilization of machines and labor

Extra Processing

Damage Rework Dissatisfied downstream customers

Inventory (Excessive)

High stocks of materials, parts and WIP Clutter

Transportation Unnecessary, extra handling “Moving inventory”

Motion (Unnecessary)

Incorrect layouts of office or flow Off-line resources

Unnecessary processing steps Longer lead times

Fishbone #7

Try This For Effective Meetings

Agenda




suggestions• A “mustang attitude” for


Having a Mustang Attitude…We don’t know how to market ourselves

How and what to

measure?

Promote your effortsOffer new data / metricsAdjust metrics when needed

The Land of Month End…

The customeris waiting...

Mom says, “if no one’s in charge….you are!”

Payment terms

$326,000savings

Penny Weller, PhD, CMA, ADGBS Senior Director

Global Business Services Advisory & Certified GBS Program 269 345-7240 [email protected]

Atlanta

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mailto:[email protected]

Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and information that is sensitive, proprietary, and confidential to The Hackett Group the disclosure of which would provide a competitive advantage to others. As a result, the information contained herein, including, information relating to The Hackett Group’s data, equipment, apparatus, programs, software, security keys, specifications, drawings, business information, pricing, tools, taxonomy, questionnaires, deliverables, including without limitation any benchmark reports, and the data and calculations contained therein,

may not be duplicated or otherwise distributed without The Hackett Group Inc.’s express written approval.

www.thehackettgroup.com

Reproduction of this document or any portion thereof without prior written consent is prohibited.

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