Working in the business

odt-graphLook, I know you have heard this many times over: if you want to improve the results of the business you should not only work IN it (meaning: completing your day-to-day tasks), but also ON it (meaning: improving the quality and profitability by re-designing your processes).

But how can you work ON the business?

You might say: “I have no time for this.”  You’re right, you probably already have a long to-do list. But, if you do not make time to work on your processes, you will keep having a long to-do list and the results will still not completely satisfy you.

The Lean Six Sigma process improvement method is an outstanding way to work ON the business. This method becomes much easier when making use of a facilitating tool, like HerkuLess®. Either way, I’ll explain to you in a few steps how to use this to work ON the business.

Follow these steps:

  1.      Identify your biggest, most important goal

It could be anything, increased sales, reduced material cost, shortened lead times, drastic reduction of scrap or even faster employee on-boarding.

It should be important enough for you to invest 1 or 2 hours per week to work on it together with your team. I know you have very little time as it is, but it could save you a lot of time in the long run.

Recommended reading: http://peterherku.com/2016/08/30/5-ways-to-identify-your-best-lean-six-sigma-project/

  1.      Get your team together

Choose people for your team who are most familiar with the challenge or those who encounter your chosen problem daily and are therefore motivated to work on it and spend some extra time to find a solution.

The more diverse your team, the better, because the problem will be viewed from different perspectives.

My approach is to have everybody who is part of the process to be represented in the team. For example, if you want to improve on-time delivery, you should have team members from the production department, from the inventory handling group, from logistics and from quality control. I would make the Production Planner the leader of this team, because it is his most important performance indicator to deliver on time.

  1.      Define the problem and the goal

Setting SMART goals is not always easy because we tend to mention solutions, wishes and ways we would like to improve the situation.

Instead, describe the problem first as if it were a time-series chart (run-chart or individual chart) stating: average value of what you want to improve, the time period that you have measured, the high and low values in the data indicating the variation and finally the goal or the required level.

Continuing from our previous example, we take a problem statement for improving on-time-delivery performance. It should look something like this (the values might be different of course):

“Our average on-time-delivery performance (OTD) is 42%, measured in the period of January though September, ranging between 20% to 65%. Our long term goal is to achieve 90%.” This statement is reflected in the following chart:

odt-graph-before

From this problem statement it is quite easy to derive a SMART objective for this stage:

“Increase our on-time-delivery from average 42% to at least 60% by 31st of December this year.”

In my Lean Six Sigma career I have wasted lots of meetings on discussing problem statement and objectives. This is now solved and automated in HerkuLess®.

  1.      Find the most important reasons for the current performance

Using the cumulated knowledge of your team, a whiteboard and the findings of a  Ishikawa brainstorm session you can select the most important causes of why you are not performing at the required level.

In our case you brainstorm about “Why current OTD is 42% instead of 60%?”

There will be many, many causes but only 20% of those will be important to help you and your team to improve OTD by 80% (called Pareto-law or 80/20 rule).

  1.      Action!

Based on the main causes found in the prior step, discuss with your team what counter measures you can take to remove the causes.

For example, one of the main reasons that cause low OTD is that the planner does not take packaging and shipping time into account in his planning.

What can we do to change this? Your team would come up with actions like:

         The planner should investigate the time it requires to arrange packing and shipping

         The planner includes 2 days extra in the planning for packaging and shipping

Do not forget to include the name of the person that needs to take action and also the deadline for taking the action.

  1.      Measure and Control

You will not know if your countermeasures are effective until you see it in your results. Like that, the OTD should be increasing as a result of the Planner taking Packaging and Shipping activities into account. Also, other actions are usually taken as well; therefore it is often not one single activity that is responsible for the improvement but a combination of activities. The chart below shows the increased OTD in the improve phase:

odt-graph

As soon as your data show significant improvement, administrate what you and your team has done to achieve the result and what needs to be done in the future to ensure this new way of working.

You can start on working ON the business processes free for 14 days. Click here and start your free trial.

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