LeanSigma® Fundamentals

Module 7 – Performance Measurement & Sustainment

1

Lean Sigma has six steps to optimize processes.

2

Why do we need to measure process performance?

• Assess / validate the impact of changes to the process:– Process improvement efforts– Organizational changes– Changes to upstream or downstream

processes– Changes to supporting systems

• Ensure that expected process performance levels are sustained over time

3

Cycle time is commonly used to measure process improvement.• Cycle time is the time devoted to performing process

tasks without delays or wait time

• A reduction in process cycle time due to process improvements is often used to increase capacity for work performed in other processes.

4

KPIs are critical in sustaining process performance over time

• Examples of KPIs include:– Production and delivery timeliness– Query responsiveness– Defect rates – Productivity

• Thresholds distinguish “good” process results from results indicating the need for improvement

• The process owner is accountable for taking action when results fall below corresponding thresholds

• KPI results may reflect process improvements, if available before and after process changes are incorporated

5

We can assess whether we can expect the process to yield consistently acceptable results.• A process capability assessment measures the inherent ability of a

process to meet established thresholds or “specifications”

6

• LSL = Lower Spec Limit• USL = Upper Spec Limit• Target is usually the midpoint between the specs

The process owner is key to sustaining process improvements over time.

Single point end-to-end process

ownership

More effective and efficient

cross-functional decision-making

Improved sustainment of efficient, well-

defined processes

On-going process improvement

7

Program metrics help us monitor the health and benefits of the LeanSigma

program.• Are we achieving our mission to deliver more value to our

customers and stakeholders by identifying and implementing measureable process improvements?

• Regular Lean governance meetings help us: – Align on priorities and targets– Validate results meet expectations– Ensure support– Mitigate risks

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Costs• Lean facilitator & SME

time• Travel $• Implementation costs

Benefits• Enable IMS to deliver

on strategic priorities• Transform the culture

Lean program reporting summarizes results across all Lean events.• Cadence

– Pace of events by month, department & geography• Benefits

– Net EBIDTA savings– Annualized hours saved (capacity redeployed, FTE s)– % improvement cycle / lead time, delays, etc.– Highlights of exceptional events, case studies

• Implementation Progress– Percent of identified savings removed from budget– Percent of kaizen action items completed

• Cultural entrenchment– Number of employees trained / certified– Number of employees participating in kaizens– Communications

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95% of reporting is enabled by web queries against the Lean PMO

Sample DashboardU.S. Events by Month

n= 110completed

events

Process Focus to Date

Annualized Labor Hours Saved= 31,086

IMS FTE Re-duction 8,040

hrs; 26%

Outsourced FTE Reduction

7,236 hrs; 23%

Capacity re-de-

ployed15,810 hrs; 51%

2012 U.S. EBIDTA Contribution: $817K*100% of savings realized

10

Production & Data Coll.

26%

Del ivery & Support

29%

PD / Stat Svcs3%

US BU6%

HR26%

Finance6%

GPS2%

Legal1%

Feb

AorJun

AugOct Dec Fe

bApr

JunAug

Oct0123456789

pla

nn

ed

2011 2012

Training grants23%

Delivery & support

46%

Producton & Data Coll

31%

80.23% of all U.S. kaizen action items completed

Case Study: U.S. Market Research Client Support

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Sponsor: Manny TriggianoProcess Owner: Brenda CapobiancoLean Process Lead: Carissa WaltenbaughTeam: Kevin Downing, Chris Davies, Cathy Pileggi-Jefferson, Katrina Kulp, Kyle Burke, Michele Agnoli, Joy Cross, Gerard Avillo, Lisa Cooney, Jeff Northern

Key Kaizen Findings Issues Noted Process Changes

Some CSAs less able to handle complex questions.

CSAs sometimes call multiple times to refine the client question.

CSAs sometimes do unnecessary research.

Triage client questions and assign CSA resources to a Level 1 pool (simple) or Level 2 pool (complex).

Create a checklist to guide CSAs when refining details of a client’s question.

Create a decision tree to identify what research is required for a particular question. Improve how info is organized on ARC.

90 Days After the Kaizen

Clients are assigned a CSA even if they call only a few times a year.

Pool CSA resources so questions are answered by the first available CSA.

A pilot was completed to test the central support pool for smaller clients.

The centralized model went live June 13, 2011.

QMS was enforced as a central information system.

Tier 1 (simple) and 2 (complex) resource pools were created.

Checklists and decision trees were created to clarify info needs.

Case Study: U.S. Market Research SupportFindings 15 months after implementation

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Results:• The central service center remains in place successfully.• Clients talk to CSAs directly more often.• Very few clients have questioned the change.• Three positions were eliminated.• In addition, the team took on additional work without adding headcount. (SMART

roll-out). • Cycle time savings were estimated at 65% initially. The savings observed are about

50%.

Critical factors made the change possible: Pilot to test client feedback Excellent communication to the team and clients about changes Extreme organization and focus

Process Priorities – Sample from Operations

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Gather / enter customer-specific order requirements

Collect dataPerform

statistical data transformation

Manage offering

production

Plan / QC the order

Perform delivery supportStandardize / cleanse data

Schedule / run customer-specific

production

Create output / deliver order

Track and update order

Define & communicate order

management procedures

Perform customer-specific

QC on requirements

Perform quality control on final

output

Build / Deliver the order

Test & certify supplier

Receive, cleanse & bridge/code

transaction inputs

Create / maintain statistical

methodology

Define & communicate

product creation procedures /

methodologies

Add new supplier to database

Perform transaction quality

assurance

Define / perform global quality management

Schedule production

Establish ongoing data collection

process

Build transaction database

Project / impute transaction data

Execute production jobs

Maintain reference database

Validate projected data

Manage rerun / rework

Perform change management

Maintain product related data

Maintain historical data

Perform in-process

production quality control

Provide customer training

Define & communicate

customer service & support procedures

Close loop to Marketing & Sales

Receive / escalate customer inquiry Service Center

Receive / escalate customer inquiry

Call Center

Analyze & resolve inquiries / complaints

Provide field services and

support

Manage credits & invoices

Process changes & maintain customer order information

Maintain customer support systems

and data

Measure & report customer delivery

performance

Manage customer delivery vendors /

subcontractors

Manage customer delivery information

systems

Data Collection Production Delivery

High Priority Process