Friday, 4 December 2020

QC Tools - part 2

 QC tools revolutionized the process analysis and leading to process improvement.


In this vlog the following tools are covered.
1. Histogram: The most commonly used graph for showing frequency distributions, or how often each different value in a set of data occurs.
2. Pareto chart: A bar graph that shows which factors are more significant.

3. Cause-and-effect diagram (also called Ishikawa or fishbone diagrams): Identifies many possible causes for an effect or problem and sorts ideas into useful categories. 4. Control chart: Graph used to study how a process changes over time. Comparing current data to historical control limits leads to conclusions about whether the process variation is consistent (in control) or is unpredictable (out of control, affected by special causes of variation).




QC Tools

QC tools revolutionized the process analysis and leading to process improvement.


In this vlog the following tools are covered.
1. Histogram: The most commonly used graph for showing frequency distributions, or how often each different value in a set of data occurs.
2. Pareto chart: A bar graph that shows which factors are more significant.

3. Cause-and-effect diagram (also called Ishikawa or fishbone diagrams): Identifies many possible causes for an effect or problem and sorts ideas into useful categories. 4. Control chart: Graph used to study how a process changes over time. Comparing current data to historical control limits leads to conclusions about whether the process variation is consistent (in control) or is unpredictable (out of control, affected by special causes of variation).















Sunday, 17 May 2020

Knowledge Nuggets – Part 5 - Data Collection – Measure Phase

I have covered Project Charter - in my previous post Knowledge Nuggets - part 3.

The next step during the Measure phase is the data collection. I want to share some of the interesting and critical points during data collection.
Data filtering or screening:
  • Important step before you work on the data analysis is to do the data screening to check the validity of the data. May be data entry error, intentional data tweaking, lack of understanding of data definition. Hence start with operational definition of the data.
  • If the data is not accurate and you will draw wrong / erroneous conclusions about the process behavior.
Data needs to representative of the process. what is representative? Sample data set need to capture all the factors contributing to variations in the process. This is important to study the process behavior accurately.
  • For example, if you collect data to study the height of Indian population you can’t select data only from south or north. Since the height of the population varies significantly from North to Southern part of India.
Data segmentation:
  • Segmentation is important to study the process behavior. You can’t mix two different things in one data set. This will hide the process behavior.
    • For example,
      • Shift operations
      • Regions
      • Machines
      • Raw material
      • Vendors and so on.
Practical aspects of Measure Phase data collection to consider:
  • Few challenges one may face during the Measure Phase especially in the case of Service Industry:
    • Existing measures may not be available
    • No data capturing system in place
    • People don’t want to capture as in the case of “error” between the maker and checker. They rectify the error and never track to find out why and what kind of errors are occurring.
This will delay the project progress to proceed further within the time plan if above things are not addressed.
  • The end in mind for Measure phase is to establish Baseline Process Capability.
    • For service industry the best method for establishing process capability is to adopt simple DPMO method according to me.
    • As service processes, in many cases, not fitting in any of the known Statistical Distribution properly.
    •  No need to get stuck to find what distribution your process fits in, which is unnecessary according to me. More specifically it will never fit in the principles of normal distribution.
    • Aim is to improve the process not to get stuck Statistics.

  • When there is no reasonable data available?
    • Worst case you will not have enough data to establish process capability. The team should not get stuck at this stage and invest time to establish base line. Since you have enough sense of the problem please move on to the next phase. Nothing wrong.
    • Simple saying, we have no data we can’t use DMAIC is not an excuse. This way you will get away with not resolving the problem.
    • Also, as part of the measure phase, it is a good chance to define, test, validate and establish the new data collection system.
Let me conclude the post with the following comments given by Mr. Mikel Harry on my blog " DMAIC" some time back. Well-articulated about the data collection.

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I will cover in my next post on the following topics Normal distribution, Process Capability and 6 & Sigma explanation.

Performance Management System

Would you drive a car without a dashboard? Absolutely not right? 

Before I get in to the details of Performance Management System. Let me take an example of  a car to drive home the point.

Car is a good example of having indicators / warnings both lead and lag indicators. Rather car has lot of lead indicators.
  • Visual and audible warnings when fuel is low
  • Warning indicators covering all directions
  • Service due indicator
  • Speed limit indicator and lot more..  
All the above said and unsaid indicators are critical for driving car safely.
When we have so many indicators for a car, can anyone imagine running an organization without any indicator. Disaster isn’t it?
As a Six Sigma practitioner I can’t think of any process where you don’t have a measure.  Afterall what gets measured gets improved.
Performance management using Key Performance Indicators is critical for any organization not only to move forward but also in the right direction.
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The following are the reasons for the above scenario:
  • Poorly understood kpis
  • Isolated / islands of departments and their priorities
  • No strategic direction
  • Improper drill down of organizational strategy
  • Lack of communication of organizational strategy
  • Lack of top management involvement in setting the organizational strategy and drill down
I will cover the following in my next post:
  • What is meant by KPI
  • Lead and Lag indicators
  • Pitfalls of Goal / KPIs setting
  • Few industries specific example of Goal deployment – a case study

Knowledge Nuggets - Part 4 - Product Development in Service Sector

Product development is generally a weak area for Service Sector in the whole value chain with exception of few businesses value chain unlike in manufacturing sector. Service sectors give lot of importance in execution / delivery than focusing on the Product Development.
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The following are some of the Challenges / Weaknesses in Product Development in Service / Transactional Sector:
  1. Lack of product development structure
  2. Lack of Product development life cycle process
  3. Lack of skill sets within the organization
  4. Little or no information about the Customer touch points, pain areas and linkage with internal processes/ systems
  5. Service product designer not having enough visibility or clarity of processes which deliver the product / service to the customer post product launch.
  6. Lack of product innovation in delivering value to the customer
  7. Lack of digitization in the customer offerings (except few sectors like banking, insurance etc.,)
  8.  No or little clarity on the stages of product development
  9. Lack of engagement with internal stake holders (especially the internal stake holders) and their requirements affecting the product
  10. Finally, Lack of clarity between What is a Process?  and What is a Product?  Itself.  
There can be many and finer list of challenges / weaknesses in service sector one may wish to add. I have listed the above challenges based on my experience and exposure to process design both in Service and Manufacturing Sectors. Certainly, the challenges are very different in the service sector.
In my next post I wish to share the best practice in product development process.

Please leave your comment and experience in the comments section for the benefit of readers and learning from your experience

Friday, 17 April 2020

Power of Value Stream Mapping and Improvement Opportunities.


Power of Value Stream Mapping and Improvement Opportunities.

Importance of value stream mapping can never be underestimated in any scenario or any business value chain, be it service or manufacturing. Service sector is still evolving to gain the benefits of value stream map and associated concepts. Value stream mapping is a best approach to understand the business and customer centric improvement opportunities and reap the benefit to stay ahead of competition and customer satisfaction in delivering value.  

In this post I wanted to share my experience with a banking company. 

 Background:
 I met the Senior Management Team of one of the largest banks to hear what is bothering their business and its sustenance currently. Usual challenges like customer retention, competition and so on are the issues highlighted by the Management. They were contemplating an expensive ERP to streamline the processes.
As a Lean professional I always see Process first and then IT enabled process. Not the other way round. Not putting the kart before the horse.


Banking industry is primarily a transactional processing sector by nature and always there is a possibility to find lot of hidden wastes despite all the systems and software etc.,

I shared some of the success stories from different industries in terms of adopting Lean as a culture and driving Waste reduction. As usual the typical question “whether Lean is applicable in Banking Industry? and whether it is applicable to my bank”? if yes, please demonstrate. This is a typical hurdle I face with every industry.

 I agreed to do a simple study in one of their processes and apply lean principle to show the power of Lean.

I picked up the savings account opening process to apply lean concepts and find improvement opportunities. Branch Management was quite surprised that I have chosen a simple process and that too account opening gets done in 20 to 30 minutes with a welcome kit issue to the customer. When I investigated further, I could sense the process doesn’t end with welcome kit.

The unanswered area is “what happens to the document collected and back end process for complete account creation”? Surprisingly branch management could perceive the value chain till the welcome kit only.


The following are the steps I applied to unearth the inefficiencies in the value chain.

Step 1: Scope of the study:Customer walk-in to Customer account with welcome kit”.
Step 2: Voice of Customer: Had a chat with the walk-in customers and captured the following broadly.


·       No information on transactions via SMS due to Account Incomplete
·       Customer not able to withdraw money
·       Signature not updated
·       Incomplete Data Entry Even After Complaint
·       Customer Visiting the branch and comes to know Account Incomplete
·       Accounts Still Under Welcome Kit
·       Account Frozen

After completing the Voice of Customer step, I could sense very strongly that the value stream must be having:

a.       Lot of wasteful activities
b.       Inefficiencies hidden in the processes
c.       Front end resources / processes not having clear sense of connectivity with the back-end processes or resources and inefficiencies.
d.       Perception of Branch Management, Employees and customer about the value stream not at all aligned neither their requirements 



Step 3:

I divided the value stream in to two as follows:
  • Customer walk into welcome kit handover.
  • Complete set of documents verification, data entry and full account creation at the back end.

1.        Value Stream Mapping: from Customer walk-in to Welcome Kit. 




       Time taken by each process is captured and classified as value add (27 minutes) and Lead time 55 minutes
       Process cycle efficiency is 49% (27 minutes / 55 minutes) * 100
       Insight to the bank is to know the efficiency is only 49% Which means 51% of the time being spent on non-value adding activities.


2.   Value Stream Map - from Back end process to complete the verification and complete account creation and data entry etc.,   







       The above map shows processes from Branch sends the applications and back office does the data entry and account creation

       Process cycle efficiency is 7% which means 93% of the time being spent on non-value adding activities and managing the inefficiencies of the upstream value chain.

·       Resources spend lot of time to get the right documents from the customer
·       Data entry error done by the front office
·       Follow up with the customer or branch to get the documents
·       Maintaining reports to track the pending issues/tasks


This is an important insight to the bank that their resources spending time or working on inefficient processes, defective applications, lot of wasteful activities and unproductive tasks etc.,

 For branch management, their concern and visibility is only with respect to first value stream only (Exhibit 3.1).
·       Process cycle efficiency of value chain (Exhibit 3.1) is 49%
·       Process cycle efficiency of (Exhibit 3.2) is 7%.
·       Overall cycle efficiency for this process has been reduced from 49% to 7% in the downstream value chain.

VSM analysis was a good eye opener to the branch management since his perception of “only 20 to 30 minutes “was challenged. It gave an opportunity for him to understand the value chain doesn’t end after 30th minutes but when the documents are processed / data entry done without any error in completing the account creation.

I am not here sharing the root cause and the solutions offered to fix the problem since I chose to demonstrate the power of Value Stream Mapping in finding improvement opportunities.
 

Key areas to focus: 

Summary:

  •       Value stream mapping helps to identify the customer value creation and efficiency of the process which creates value
  •        The paradigm and assumption of “process seems to be working” is challenged
  •        Brings lot of insights into customer perception and customer touch point issues
  •        Helps to identify the high-level improvement areas
  •        Helps to identify the weak links in the value chain 


End of Blog










Sunday, 12 April 2020

Product Development – Service Sector – Challenges


 Product Development – Service Sector – Challenges


Product development is generally a weak area for Service Sector with exception of few businesses value chain unlike in manufacturing sector. Service sectors give lot of importance in execution / delivery than focussing on the Product Development.

The following are some of the Challenges / Weaknesses in Product Development in Service / Transactional Sector:

1.       Lack of product development structure
2.       Lack of Product development life cycle process
3.       Lack of skill sets within the organization
4.       Little or no information about the Customer touchpoints, pain areas and linkage with internal processes/ systems
5.       Service product designer not having enough visibility or clarity of processes which deliver the product / service to the customer post product launch.
6.       Lack of product innovation in delivering value to the customer
7.       Lack of digitization in the customer offerings (except few sectors like banking, insurance etc.,)
8.        No or little clarity on the stages of product development
9.       Lack of engagement with internal stake holders (especially the internal stake holders) and their requirements affecting the product
10.   Finally, Lack of clarity between What is a Process?  and What is a Product? 

There can be many and finer list of challenges / weaknesses in service sector one may wish to add. I have listed the above challenges based on my experience and exposure to process design both in Service and Manufacturing Sectors. Certainly, the challenges are very different in the service sector.  


In my next post I wish to share the best practice in product development process.

Please leave your comments and experience in the comments section below for the benefit of readers and learning from your experience.

Saturday, 11 April 2020

Knowledge Nuggets – Part 3 – Project Charter


Project Charter: 


Once project is selected the team needs to document the project in order to engage the stakeholders. In Six Sigma journey Project Charter is an important task the team must focus.

The following are the typical project charter content:
  •       Business Case
  •       Problem Statement
  •       Goal Statement
  •       Scope of the project
  •       Team Members
  •       Timelines

 I want to share my experience in terms of guidance for charter preparation and common mistakes people commit while preparing project charter to avoid. 

Points to consider:
  • Project charter should not contain root cause of the problem
  • Solutions are not part of the project charter
  • If you know the root cause and the solution, then there is no DMAIC project
  • Charter need to be shared with the stake holder, preferably with a round of discussion on the document
  • Charter is a live document need to be referred throughout the journey of the project.
  • Charter can be revised during the Define and Measure phases but not after the Measure phase in the journey of DMAIC
o   Define Phase: Charter will always go through modifications based on stake holders buy in, problem prioritization by function and the management etc.,
o   Measure Phase: Perception of a problem and high-level data presented or understood at the define phase will be challenged based on process capability studies during the Measure Phase .
o   If you revise the charter at the analyse phase, then its a clear signal that you have not understood the problem well and the team would have spent by now atleast two 40 to 50 days. If you keep changing the direction, scope of the project you lose the interest of the team and it will derail the project completely.

Summary:
Six Sigma brings in lot of discipline in terms of structured thinking and challenging our paradigm we carry about our process.
Six Sigma is a journey of excellence not to be viewed as Problem Solving Tool. Hence, make use of time wisely by following the DMAIC stages religiously.   

 I end this blog by quoting Innovator Rolf Smith. Rolf identifies the 7 Levels of Change and each involves "doing" and "moving your thinking into action to drive change." Level 1 starts by "Doing the right things," ending at Level 7 by "Doing things that can't be done."







Friday, 10 April 2020

Systems Thinking - A Perspective..


What is System Thinking?  


Organization is a web of complex structure, departments and processes.  
Systems thinking is a way to study and unearth the complex organization from the higher-level perspective and the inter connectedness of various events taking place in the organization. If we don’t get the perspective of systems thinking, then you will only see / perceive an isolated event in the organization and create localized improvement or you may tend to ignore the same as unimportant and not critical.
Here, am sharing a case study to unearth the Value Chain and System Weakness by applying Systems Thinking.
Recently I did a diagnostic study of a Crane Rental Organization. It’s a simple value chain to understand and as follows:
  •        Customer Acquisition
  •        Agree on rates as per specification
  •        Deliver cranes and operate
  •        Invoice – Bill the customer
  •        Collection

The value chain seems to be so simple, but the problem is not so simple. When I met the GM of the organization, he stated “we are not able to collect money as per the due dates (Approx. 2.6Mn USD).

Reason being that customers don’t have money, fund issue at the customer end, customer delaying tactics etc., otherwise we have no other issue apparently in our organization.

If I go by GM’s conclusion then the only solution is to appoint a debt collector and increase, follow up with the customer to collect money due for collection. But I felt otherwise.

So, I applied systems thinking to unearth the sub systems issues and inefficiencies and not to attack the symptom. I took the challenge of big picture issue “not able to collect money on time (as per the terms)” and drill down the sub systems.

At the organizational level the following are the weaknesses.

  • Lack of accountability
  • Process Disconnects
  • Lack of leadership amongst process owners
  • People working in silos
  • Lack of Key Result Areas (KRA) and Key Performance Indicator (KPI)


At the subsystems level you will find lot inefficiencies as below:

Purchase order: many jobs were taken without any formal approved Purchase Orders. Due to which even if you execute you will not be able to collect money till the PO is received. Sales wanted to close the order some how and instruct Execution team to start (Sub systems failure) rolling out the equipment without any PO.

Machine delivery: Equipment not delivered as per the date and time committed to the customer. Reason, equipment still under maintenance. No coordination between execution and sales but confirmed customer order (sub systems failure).

Quality of operator: There are few equipment needed a qualified operator. But order is received without having a qualified operator in place or operator not available.

Crane availability: Availability of the crane is tracked by the Technical team. But commitment date given to the customer by Sales not considering the availability of crane by the committed date. Sales doesn’t check / coordinate with Technical team neither Technical team updates the system provided to equipment tracking (Sub system failure).

Equipment Breakdown: Often equipment breaks down at the client site. Naturally customer not happy with this and hence withhold the payment. This is purely either operator issue (untrained) or maintenance problem (again Sub System failure)

If I had acted only on the collection issue by accepting GM’s version then I would have designed process for Collection, defined role for collection and recruited only Debt Collector. But applying system thinking you will find sub systems failures and inefficiencies which will lead to fixing the root cause of the problem (it is internal process weaknesses / inefficiencies leading to collection issue) not the symptom (Money due for collection).

The reason for sharing this case study is to drive home the importance of Systems Thinking. If not, then it’s like group of blind people touching an elephant and describing the animal.


End of Document

Wednesday, 8 April 2020

CTQ Drill Down – Project Selection


In my previous Knowledge Nuggets - Part 1-
 I have covered Kano Principle. Next step is CTQ Drill Down to identify the project.

Drill down exercise is to move from generic statement of a customer  (Voice of Customer)to specific. It is to find out focused problem statement.

Following are the components in the CTQ Drill Down Exercise.

·       Voice of Customer - VOC
o   Statement as made by the customer. For example, 'I consistently wait too long to speak to a representative’.
·       CTQ – Critical to Quality
o   A feature which is critical / important to the customer.
o   Specific, Measurable and Actionable / controllable – for example, bank account opening process time in days.
·       Define what is a Unit?
o   Unit can be measurable, output from a process
o   Example: An invoice is a unit, a cheque is a unit, a cell phone is a unit, a car is a unit.
·       Defect-  is 
o   A failure to meet the customer demand is a defect.
o   Doesn’t meet the functional requirements
§  For example,
·       a car doesn’t start at the first crank
·       Cheque, not signed by the authority or amount error
·       Defect Opportunity: Number of ways the product or service can fail to meet the customer need.

Example - 'I consistently wait too long to speak to a representative’.  

·       CTQ Name: Representative Responsiveness
·       CTQ Measure: Time on hold (seconds)
·       Defect: Calls with hold time equal and greater than 60 seconds
·       Unit: Call
·       Opportunity: 1 per call


Some more common examples for CTQ as below:

  •  For a car: Good acceleration, spacious, affordable, easy to steer etc.,
  •  For Tea: Temperature, Timeliness, Politeness of executive and taste etc.,
  • For a call centre executive: Knowledge of the representative, time taken to resolve the compliant etc.,
Customer may say " it is good" it is your task to make it measurable requirements that can be tracked. 

Drill Down Example as below:


End of Document

Friday, 3 April 2020

Knowledge Nuggets- Part 1- KANO Principle



KANO PRINCIPLE - USEFUL FOR CUSTOMER NEEDS PRIORITIZATION AND PROJECT AREA SELECTION
The significance of Kano principle in the Six Sigma Journey wrt in understanding and prioritizing Customer Needs and expectations is immense. It gives clarity and perspective into customer needs.
For example: typically, if I take / collect customer needs for a Car. The following can be the laundry list of Needs.


  • Fuel efficiency
  • Comfortable car
  • Low noise – quite
  • Car to start at the first crank
  • Good leg space
  • Safe to speed the car
  • Excellent breaking mechanism
  • Good entertainment features
  • Wonderful design
  • Excellent upholsteries
  • Good speakers
and so on ……
Now the team need to know which one to focus. That’s where the Kano Principle can be applied.
Let’s look at what Kano says - Needs can be classified in to three categories
  1. Must haves
    • A feature needs to be there in the product. Presence of which will not satisfy but absence or failure will irritate the customer or use
  2. Exciters
    • Customer himself / herself cannot image / think such a feature is possible
    • Inherent for the product / service to have
    • When provided customer will be delighted to have such a feature
    • Also once provided, over a period (depends on the product what duration this excite will last for ...) exciters will become must haves.
  3. Performance
    • Its linear by nature
    • Can also be termed as one dimensional
    • More and more you provide or improve a feature it is considered as better and better performance
    • This will evoke more and more satisfaction
Let me share my personal random experience for the second category Exciters since other two categories are straight forward for a supplier to provide:
  • I was having a workshop in one of the resort couple of months back. I didn’t do the check in earlier in the morning and went straight to the workshop.
  • After the day’s work I entered into the room and started observing the room to familiarize myself in terms things available, observe how neatly the bed is done etc.,
  • One important item which many of us use immediately is TV, at least in my case. But to my surprise the TV first showed a welcome message with my name in the screen.
  • Though it was just a simple thing, but it created an excitement feeling for sure.
  • In case of hospitality industry unlike in a tangible product it is a challenge and difficult to excite a customer.
 In the car example above ( listed customer expectations )  if the team need to select a project out of so many customer needs from the list, lets apply Kano Principle. According to me the classification as follows:
  1. Must haves
    • Low noise – quite
    • Car to start at the first crank 
    • Safe to speed the car
    • Excellent breaking mechanism
  2. Exciters
    • Good leg space
    • Good speakers
    • Wonderful design
    • Good entertainment features
    • Excellent upholsteries
  3. Performance
    1. Fuel efficiency
When a six-sigma project is chosen the following are the important rules after completing the Kano categories
  1.  Primary focus on the Must Haves and Performance categories.
  2. If Must haves are not yet defect free and having lot of issues, then organization should not focus on Must Haves. Reason being if must haves are having defects and customer returns, customer dissatisfaction and so on … it is futile to bring in Exciter in the product or service.
  3. Second priority can be the performance category.
  4. Third priority to be given to Exciters
    • One caution: Exciters are usually a surprise element to the customer. If the feature provided bothers the customer then it will turn in to irritable element / feature.
Will come back with my next Knowledge Nuggets 2 on CTQ ( Critical to Quality) Drill Down


Please Leave Your Comments in the Comment Section