How To…

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.

5 tips to make a better annual plan

game of chess

5 tips to make a better annual plan

When coming back from your summer vacation, the next big task that is often waiting for you is drafting up the annual plan for the coming year.

Drafting new plans already? The plans for this year haven’t even been executed yet and the expectation is that they won’t before the end of this year. So, even more plans and projects will be added then and the pile will just keep getting bigger.

How do you prevent your projects and plans to keep just piling up endlessly instead of being able to finish them timely?

In this blog I’ll explain in a few steps a planning process to you, that could provide focus and efficiency for the coming year.

Tip 1: Take a helicopter view – Long term goals

Begin high and descend afterwards. First, take the mission and vision from your organisation and ask yourself: what are the long term goals?

If you’re working in a health institution, then you might already have a strategic paper for the coming year wherein the most important directions are expounded by the management.

Afterwards, determine with this information what the long term goals are of your department. Where do you want to be in 4-5 years? Make it tangible and measurable.

Example: 10% higher client satisfaction compared to 2016

Is this formulated in a SMART way? Yes, because it’s specific, measurable, challenging but still achievable, it’s relevant as long as you have customers and it’s time-bound (before 2020).

Keep this list short. I advise a maximum of 6 goals – that’s 2 per theme: customers, employees, organisation/finances.

Tip 2: Take a baby step – Short term goals

What do you want to achieve in the coming year? You can approach it in several different ways and they’re all equally correct:

  • Linearly: divide 10% by 4 years, so 2,5% per year
  • Exponentially: increasing satisfaction will become easier
  • Logarithmically: decreasing growth -it will become more difficult to improve

whatever you choose, it will be your plan for the coming year.

Example: 2,5% higher client satisfaction in 2017 as compared to 2016

Tip 3: Be honest – your challenge

List all your obstacles, difficulties and challenges that are momentarily standing in your way to achieving 2,5% growth for the coming year.

Out of my experience I often hear challenges like:

“Our last measurement was in 2014. I don’t know where we’re standing at this moment”

“We lack a measurement tool of our own for continuous measurements.”

“Our measurements don’t show us clearly where we can improve ourselves”

Tip 4: Determine your SMART projects/actions

They are more likely to be projects than actions, as you  can’t usually settle matters on your own with simple actions.

So, make a list here with the strategically important projects to deal with the challenges mentioned earlier. Make them specific, with a measurable objective and a clear deadline.

Staying with our example to increase client satisfaction and considering the listed challenges at the previous point, you can imagine the following Lean Six Sigma projects:

  • Researching an available and/or setting up an own measuring instrument for client satisfaction before March 31st.
  • Measuring and improving client satisfaction on pilot location X before June 30th.
  • Introducing our own measuring instrument for client satisfaction, including working method, for all teams before December 31st.

Tip 5: Focus, focus, focus

You now know what your plans are for the coming year. Note the deadlines in your agenda in advance. In addition, plan the monthly evaluations as well: What’s the status of the project, who is doing what, is there extra support needed, are there urgent, but not important matters that are taking up time from these strategic (important but not urgent) projects?

When following these steps you will have the strategically important projects  in your annual plan. With these you take on the challenges so that you can meet the objectives for the next year, on the way to the long term breakthrough goals!

5 ways to identify your best Lean Six Sigma project

5 wa

5 wa

Choosing the right project is the main influencing factor in achieving success with Lean Six Sigma. In my career as Lean Six Sigma coach I have made many mistakes in choosing the right project using time pressure or learning as a fake excuse.

Starting with the wrong project will have several negative consequences. I am sure you’ll recognize some of them:

  • Low or insufficient project results
  • Project does not solve a major issue
  • Insufficient attention for the project from the management
  • Project team members having difficulties to stay motivated
  • Project lead time is 2 or 3 times longer than expected (and the costs higher!)
  • Project gets cancelled (if you are lucky)

It is better to spend more time on identifying your next best Lean Six Sigma project before you get started with the wrong one.

Here are 5 different ways to identify Lean Six Sigma projects. They are presented in the order of increasing difficulty as well as effectiveness for long-term process improvement efforts.

  1. Ask the people

This is the way I use most often when starting with a Lean Six Sigma program for the first time. It is handy to ask operators, employees of the work floor about their biggest problems, bottlenecks or irritations in their daily work and take those as the first improvement projects. It helps to strengthen employee involvement in the continuous improvement program.

Disadvantage is the lower level of project alignment resulting in a scattered effort of improvements. Local improvements will be achieved but the overall effect is low due to lack of focus.

Using this method for project identification, it is difficult to estimate the size of the problem: is it only a few employees having this problem or is it a major issue that needs to be solved.

You also need to be experienced in order to translate the problems people talk about into a SMART problem definition.

Lean Six Sigma project examples: Reducing workload, Improving accuracy and timeliness of time-registration, Reduction of administrative tasks of direct employees.

  1. Operational Performance Indicators

This is more of a structured, process driven approach to analyze indicators like lead times (too long), mistakes (too many), claims and irritations, incidents (injury, medical faults).

Identifying projects where indicators show bad performance helps creating alignment between Lean Six Sigma projects and gives them also their proper place in the company’s priority list.

Disadvantage of this approach is that employees feel unheard and not sufficiently involved in identifying improvement projects. Also the indicators are not always available and/or reliable due to unclear measurement processes and organizational inability to take countermeasures in the past when indicators show underperformance.

Project examples based on my experience: Reduction of fall incidents, Reduction of lead times of client onboarding, Improving claim handling.

  1. Performance to Plan

In this way you look at the monthly financial and operational reports to find areas with the biggest deviation from the plan or budget. Areas such as personnel costs, maintenance or IT investments are often higher than the budgeted.

This has the advantage that resulting projects are focused directly on measurable improvement of the results: when the project has success, you can see the result in the monthly reports.

The disadvantage of such an approach to find new projects is that you still have to analyze the root cause of the deviations: is it due to bad budgeting practices, is it underperformance of the management or wrong accounting; is it a temporary or a permanent excess of budgets?

Lean Six Sigma project examples: Lowering transportation costs, Improving resource planning, Reducing energy consumption.

  1. Benchmarking

You can compare your performance – operational and financial – to given industry norms – if they are available. In areas where you underperform you should start your next Lean Six Sigma project.

Think about projects like Reducing sickness rate, Increasing customer satisfaction rate or Reducing employee turnover rate.

The difficulty with this approach is that you don’t always know the benchmark and if you do, you can easily find several reasons (or excuses) why they do not apply in your specific situation. Besides, psychologists say you should not compare yourself with others but only with yourself 😉

  1. Strategic flow down

Finally, here is the 5th, most effective but most difficult way to find your best Lean Six Sigma projects.

In this case, you look at the vision, mission and the long-term (5 years) goals of the company. If you are responsible for a part (division, business unit, product group or department), you translate those to your area of responsibility.

You determine how those long-term goals are going to be measured and you express those goals in a measurable way.

For example: Increase customer satisfaction from 7.6 to 8.4

After that you determine what the short-term goals should be (for next year) to achieve those long-term goals.

Based on the short-term goals, you identify the obstacles and challenges you have to face to achieve those short-term goals.

For example: if you want to increase customer satisfaction with 10% in 5 years, you would like to achieve the first 4% increase already next year going from 7.6 to 7.9 on scale from 1 to 10.

You identify that the major challenge is that you want to have your own, continuous measurement of customer satisfaction instead of hiring an external company for 40.000 EUR once in 2 years, leaving a big pile of paper with nice colored graphs behind and a lot of questions from your managers not knowing where to start.

Shortly your challenge for next year is 1) to develop an own measurement system 2) to improve customer satisfaction at each department.

From these challenges (gaps between where you are now and where you want to be in the near future) you identify SMARTly defined (Lean Six Sigma or Just Do It) projects.

To provide insight in the strategic projects and their relationship to the strategic goals I use the X-matrix from the Hoshin-Kanri planning process.

You can download my example here.

The disadvantage of this process of project identification is that it can take several meetings with your colleagues to arrive at a smart definition of long-term goals based on the vision, mission and plans of the company.

Summary

There are several ways to identify opportunities for a Lean Six Sigma project. In many cases it is the combination of the above-mentioned 5 ways that will provide the best project. If employees are having daily problems with a process/step (#1), the operational indicator should also indicate poor performance (#2), that would lead to deviation from the plan (#3). The magnitude of this would impact the customer or employee satisfaction, causing deviation from the industry benchmark (#4). The company should have a strategic approach for this problem to improve the situation on the short- and long-term (#5).

Bonus

To combine the 5 above-mentioned ways when identifying Lean Six Sigma Green or Black Belt projects, I have developed a questionnaire. Click here if you want to get a copy.

NO EXCUSE: Responsibility is not a characteristic

personal responsibility in delivering excellence

Sense of responsibility: one has it, or one doesn’t. There is not a word of truth in this statement. Of course some people have more compassion with their fellows than others do, but there sure are techniques for sharpening your sense of responsibility. So no more excuses!

But what exactly is this sense of responsibility?

Some jobs and the belonging tasks demand for a lot of responsibility. Most of the times, those come together with a lot of money, or sometimes even human lives are at stake. People that own a sense of responsibility are characterized by their alertness. They constantly question themselves: Why is this going wrong? Can I do this, better, faster, or more efficiently? Also, they own the capacity of making decisions on their own, and being independent. Responsible people see it as their duty to watch over the well being of others in their surroundings, and will recognize alarm signals or stress factors in the blink of an eye.  It’s not about reflecting responsibility, but taking responsibility!

Developing your sense of responsibility

In case you would like to develop your sense of responsibility, you will have to learn to shut down your automatically generated thoughts. Irritation is a familiar emotion for you? Do you ever think: “Why is this happening now, again? I even told them so; just let it figure them out by themselves!” ? Then, I would strongly advise you to let go of this frustration and to take the following steps in developing your sense of responsibility.

  • Let go of your narrow-mindedness! This is rather the opposite of responsibility. You don’t want to do tasks that are not in your job description according to you? Then you will not be able to make a splendid career. It is showing lack of responsibility and it will not improve the quality of the product or service that you are delivering.
  • Try to be flexible. Has it ever occurred to you to work some overtime to finish this important order? Shake of this ‘from nine to five’ mentality and try to create some flexibility for making an extra mile. Doing slightly more than is requested for can tremendously boost the quality of your product or service.
  • Don’t forget about the details. Often, the quality of your product or service can be found in the details. To have an eye for details is of major concern for showing that you are taking responsibility for the quality delivered.
  • Be willing to do something for one another. To reach a helping hand to your colleague that is overloaded by work can be very much appreciated. Take responsibility for the organization as a whole and for the well being of your colleague. He won’t forget about it!
  • Don’t forget to share your responsibilities. In case you are afraid to do so, you will hinder yourself and your surroundings for no reason. People with too big of a sense of responsibility are excessively critical and point out to their colleagues what possibly could go wrong. This will give your colleagues a feeling of discomfort and it creates an awkward cooperation. Shake off this feeling of doing it better than others. Think of what actually could go wrong. This hardly ever is a irreparable mistake

Do you dare to take the step of developing a sense of responsibility?

I can help you in developing sense of responsibility by my online Lean Six Sigma trainings. With the help of improvement projects, internal process will be scrutinized to discover which input is of importance for your results. Then it will be determined what would be the best way to monitor this input and to optimize the process, and to deliver the quality that you stand for.

Lean Six Sigma works following a certain project sequence. Each step within the project will be gone through systematically, and according to the DMAIC principle, standing for Define, Measure, Analyze, Improve, and Control. For each phase, the project team will have to come together to brainstorm and to work out ideas.

But this only works if everybody in the team takes his or her responsibility, doesn’t it?

In case this is not happening, it is of importance for the project and the organization to stop and talk about this issue. Are YOU ready to take your responsibility?

Have a look at my training programs!

You can also contact me for some more information on the topic or for some advice.

The choice is yours.


Phone
: +31 6 54 69 40 47

Email: michelle@herku.org

 

How to Achieve Your Goals in 2013 with Lean Six Sigma

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If you are a bit like me, you sometimes wonder about what you want to achieve in life. At least you think about the things that you have not been able to realize up until now, but which you are determined about to do so pretty soon.

Perhaps you would like to have a better job? Or lose some weight and learn healthy habits? Spend more time with your family and friends?

With Lean Six Sigma, reaching one or more of those goals will become possible. 2013 Will be your year!

Just try it out and see it yourself >>> Lean Six Sigma Free Trial >>>>

One of my Lean Six Sigma Black Belt students, JY, did so. He is the perfect example of how to increase your earning ability and to get a better job.

Success Story of JY

JY joined our online Black Belt program last year to increase his earning ability. His reason would be that, although he had lots of practical experience in quality management and production supervision, he felt the need for a formal education in today’s most effective managerial problem-solving method: Lean Six Sigma.

JY being a process engineer at a Far-East Printed Circuit Board manufacturer, could easily find 2 improvement projects to work on.

With the first Lean Six Sigma project, JY reduced two major sources of part contamination by 13.8% and 33.3% in 8 months. This waste reduction saved his company an annual amount of $ 240,202. Parallel with his contamination project, JY started his second project: reduction of production time, and therefore an increase in production capacity of the bottleneck process step. The result: 300% capacity increase from producing 294 pieces per hour to 1200 pieces per hour!

How? Just by using our simplified Lean Six Sigma method: observing the current process, brainstorming with the team on possible improvements, and testing those assumptions.

This is what JY told me: these Lean Six Sigma projects – although they were not completely finished yet at that time – helped him to make a huge step in his career. He got a new position offered by a major manufacturer as General Manager.

While finishing his Black Belt program, JY increased his salary by 100%! Quite an achievement, wouldn’t you say? I can only ask you to agree with me on that one.

But is it something exceptional or strange? The answer is absolutely not. You can achieve the same results as JY did, if you only know that Lean Six Sigma is the key to open the door for your road to success.

JY is worth now gold for every company he joins. Achieving $240K savings with his first project, and then increasing production capacity by 300% with the second, JY’s doubled salary is just a tiny little expense that is worth paying for by any company.

Actually, JY is an excellent investment for any company. Like Brian Tracy said: “Good employees are free because they contribute more in dollar value than you pay them in salary and bonuses.”

Increase your own earning power

Do you want to increase your career chances and earn a better living in 2013? Feel invited to take a free trial of one of our Lean Six Sigma Certification Programs. Just scroll down this page, and sign up. No risks, no payments involved.

The choice is yours.

Warm regards,

Peter

PS: How much is it worth to you to double your income in 8 months? JY dared to invest in his future. Will you?

Click here >>>> http://www.leansixsigmabelts.com