Improving Organizational Performance with Sterling and Lean Six Sigma

Transcription

1 Improving Organizational Performance with Sterling and Lean Six Sigma Florida Sterling Performance Improvement Summit February 8, 2018 Tallahassee, FL Bob Seemer, COO ets, inc. Learning Objectives: 1. Discuss the Baldrige / Sterling model and its emphasis on process, improvement, and results. 2. Discuss the principles of Lean Six Sigma and how it is used to achieve results through process improvement and innovation. 3. Link key processes to the appropriate Baldrige / Sterling category. 4. Explain how to operationalize an integrated Baldrige / Sterling Lean Six Sigma approach in an organization. 1

2 Baldrige or Six Sigma? The Baldrige relationship with Lean Six Sigma is intuitive, but not well-understood, practiced, or appreciated. Organizations that focus on either one at the expense of the other are unable to achieve their potential. For example, a focus on Baldrige alone can result in approaches in place for all areas of the criteria; however, without analytical thinking, processes will not be improved, refined or innovated. On the other hand, a single emphasis on Lean Six Sigma may result in pockets of excellence and processes with multiple improvement cycles, but which are not aligned to the needs of the organization. 2 Both models are based on process. A process converts inputs into outputs: Inputs Process Outputs 1. Good Good Good 2. Bad Good Bad 3. Good Bad Bad 4. Bad Bad Bad 3

3 Following are the key concepts of the two models and why they should be integrated: Baldrige / Sterling Baldrige 1. Leadership 2. Strategy 3. Customers 4. Measures 5. Workforce 6. Operations 7. Results Holistic View: Process Categories and Items Processes Drive the Outcomes 7.1 Product / Service 7.2 Customer 7.3 Workforce 7.4 Governance 7.5 Financial Outcomes Category and Items 4 Baldrige / Sterling places emphasis on the following: 1. Processes are well-defined. 2. Outcomes and in-process measures are used. 3. Processes are improved. 4. Processes are refined through multiple improvement cycles. 5. Processes are innovated. 6. Processes are integrated. (continued on next page) 5

4 Baldrige / Sterling places emphasis on the following: 7. Results are driven by processes. 8. Results show favorable trends. 9. Results are compared to role models. 10. Results are, among or better than, role model comparisons. 6 Lean Six Sigma places emphasis on the following: 1. Eliminate: a. Waste b. Variation c. Defects 2. Improve existing processes. 3. Design new processes. 4. Ensure processes are capable of meeting customer requirements. (continued on next page) 7

5 Lean Six Sigma places emphasis on the following: 5. Management by fact. 6. Work flow management. 7. Engage the workforce. 8. Safe and orderly workplace. 9. Visual management. 10. Systematic improvement: a. Lean Broad and shallow. b. Six Sigma Narrow and deep. 8 Relationship What How Baldrige Model Lean Six Sigma Organizational Results Why The integration of Lean Six Sigma with the Baldrige / Sterling model can help ensure systematic improvements occur in all areas proven as keys to organizational excellence. 9

6 Sterling Scoring Guidelines A = Approach D = Deployment L = Learning I = Integration I = Innovation 10 Sterling Scoring Guidelines A = Approach D = Deployment L = Learning I = Integration I = Innovation 11

7 Sterling Scoring Guidelines A = Approach D = Deployment L = Learning I = Integration I = Innovation 12 Sterling Scoring Guidelines Le = Levels T = Trend C = Comparatives I = Importance 13

8 Sterling Scoring Guidelines Le = Levels T = Trend C = Comparatives I = Importance 14 Sterling Scoring Guidelines Le = Levels T = Trend C = Comparatives I = Importance 15

9 ADLII Approach How something is done. Deployment The degree to which an approach is used. Learning Knowledge gained through observation, practice and instruction. Integration Combining or coordinating separate elements to create a harmonious, interrelated whole. Innovation An idea that is translated into a replicable product or service that creates new and significant value, often associated with breakthroughs. 16 Approach An approach is a method for accomplishing a desired outcome; also called process or procedure. Anecdotal An approach that is anecdotal is not formally described, is performed inconsistently, and does not rely on factual information to govern changes. Systematic A systematic approach is formally described, accessible to all who use it, and is changed based on factual information, thus ensuring consistency and adherence to customer requirements. 17

10 Deployment Deployment refers to the degree to which an approach is utilized throughout an organization or network. Breadth Breadth refers to how thoroughly across the organization an approach is used. Depth Depth refers to how far down or deeply an approach is used. Catch phrase: Go wide, go deep. 18 Approach and Deployment Systematic approaches should be well-deployed. Approaches are only as good as their degree of deployment. Example: Knowing an effective procedure but not using it. 19

11 Learning Learning can occur throughout a process and at all organizational levels. Learning can be used to evaluate and process performance and prevent future defects. Learning is key for process evolution from anecdotal to systematic, improved, refined, and innovative. Key Point: Knowledge sharing is key for organizational learning. 20 Integration Processes can become more effective when they leverage or complement other processes. This is called process integration. Integrated processes can evolve into high-performing systems. Systems are more effective than the individual processes comprising them. 21

12 Integration Integrated processes meet each other s requirements. Examples: Professional Development should meet the requirements defined in Performance Appraisal. Recruiting should be designed to meet the requirements of job descriptions. Compensation levels should be influenced by requirements established by Recruiting, which is affected by the job market. 22 Integration Examples of Individual Processes: 1. Performance Appraisal. 2. Job Description Review and Update. 3. Professional Development (Education and Training). 4. Recruiting and Hiring. 5. Rewards and Recognition. 6. Compensation. 7. Discipline. 23

13 Integration 24 Integration Integrated systems are key to market dominance. Examples of Systems: 1. Marketing 2. Sales 3. Finance 4. Production 5. Service Delivery 6. Inventory 7. Supply Chain 25

14 The Baldrige / Sterling Model consolidates systems into larger blocks called Work Systems. 26 Innovation Can be a response to a need: - Fast-food kiosks to address increasing wage rates. Can be a proactive initiative to seize a potential opportunity: - Netflix - Apple ipod Can be triggered through learning and improvement cycles: - Autonomous automobiles Can be spontaneous or accidental: - Stay-dry diapers Successful organizations have systematic approaches to ensure innovation is ongoing. 27

15 0-5% Scoring Range % Scoring Range 29

16 70-85% Scoring Range 30 Lean Six Sigma Lean Six Sigma is a Body of Knowledge and Practices composed of two key elements: Lean: A philosophy of reducing waste, or non value-added activities to achieve cost and quality goals. Six Sigma: A philosophy of striving for excellence, a standard of near perfection, and analytical approaches designed to reduce defects and variation to achieve cost and quality goals. 31

17 Lean 8 types of waste are targeted: Defects Over-production Waiting Non-Utilized Talent Transporting Inventory Motion Excess Processing 32 Lean Examples of Waste: Defects: Incorrect data entries, readmissions. Over-production: Overstaffing, getting ahead of schedule. Waiting: Waiting rooms, checkout lines, signatures. Non-Utilized Talent: Not listening to advice, working above or below pay grade. Transporting: Poor route design, excessive movement of people, equipment, and materials. 33

18 Lean Examples of Waste (continued): Inventory: Overstocking of materials and supplies. Motion: Awkward movement due to work station or work place design. Excess Processing: Performing activities which exceed the requirements, such as duplicate information or unnecessary signatures. 34 Six Sigma Reduce variation to reduce costs and improve consistency in achieving customer requirements. Examples of Process Variation: Number of days to fill vacant positions. Minutes waiting to see the physician. Time required to fill an order. Time to answer the phone. Employee length of service. Days to close a case. 35

19 Six Sigma By measuring the process performance, it can be analyzed, root causes verified, and fact-based solutions implemented. Average time is reduced. Variation is reduced. 36 Six Sigma Common Tools: Line Graph Pareto Chart Cause and Effect Diagram Action Plan Analytical Method to Improve a Process: Define Measure Analyze Improve Control DMAIC 37

20 Six Sigma Other techniques used: DMADV To design a process. A3 DMAIC Lite. PDCA Improvement framework. A goal of Six Sigma is that a process fails to meet requirements only 3.4 times out of a million opportunities, or six standard deviations. Examples: Calls answered within 20 seconds. Packages delivered on time. Correct prescriptions. 38 How to Operationalize an Integrated Baldrige / Sterling Lean Six Sigma (LSS) Approach 1. Conduct a Baldrige / Sterling-based Organizational Assessment. 2. Prioritize Opportunities for Improvement (OFIs). 3. Identify the key processes driving the OFIs. 4. Train involved workforce members in LSS. - Leaders - Workforce members engaged in key processes and strategic projects. 5. Develop an in-house cadre of LSS expertise. 6. Continue to go wide and deep with LSS application. 39

21 Key Points The Baldrige / Sterling System is a holistic framework for assessing and managing organizations for what should be done to achieve success. Lean Six Sigma is a philosophy focused on excellence, and a set of tools and techniques for how to achieve it. Performance Excellence can be achieved and sustained if the two approaches are integrated. 40 Exercise Purpose: To match the process with the most appropriate Sterling category. Agenda: 1. Review the lists of Sterling categories and processes. 2. Enter the number for each process under the most appropriate Sterling category. 3. Discuss with team members and reach consensus. 4. Discuss with class. Limit: 15 Minutes 41

22 Exercise: Assign the process to the category 42 Summary 1. Baldrige and Sterling systems describe what organizations should do. 2. Lean Six Sigma can help with how to design and improve processes. 3. ADLII is key to achieving and sustaining performance excellence. 43

23 Instructor Recap 1. Discuss the Baldrige / Sterling model and its emphasis on process, improvement, and results. 2. Discuss the principles of Lean Six Sigma and how it is used to achieve results through process improvement and innovation. 3. Link key processes to the appropriate Baldrige / Sterling category. 4. Explain how to operationalize an integrated Baldrige / Sterling Lean Six Sigma approach in an organization. 44 Contact Information Robert H. Seemer Electronic Training Solutions, Inc. (ets, inc.) P.O. Box 457 Cocoa, FL Phone: (321) info@etsfl.com 45