Lean Six Sigma For The Office - Integrating Customer Experience For Enhanced Productivity

Lean Six Sigma for
the Office
Lean Six Sigma for
the Office
Integrating Customer Experience for
Enhanced Productivity
James William Martin
2nd Edition Published 2021
by Routledge
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© 2021 James William Martin
The right of James W. Martin to be identified as author of this work has been asserted by him in
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1st Edition published 2015
Library of Congress Cataloging-in-Publication Data
Names: Martin, James W. (James William), 1952– author.
Title: Lean six sigma for the office : integrating customer experience
for enhanced productivity / James W. Martin.
Description: 2nd edition. | Boca Raton, FL : Routledge, 2021. |
Includes bibliographical references and index. |
Identifiers: LCCN 2020043688 | ISBN 9780367503277 (hardback) |
ISBN 9780367722227 (paperback) | ISBN 9781003049494 (ebook)
Subjects: LCSH: Total quality management. | Six sigma (Quality control standard) |
Office management. | Service industries–Quality control.
Classification: LCC HD62.15 .M3744 2021 | DDC 658.4/013–dc23
LC record available at https://lccn.loc.gov/2020043688
ISBN: 9780367503277 (hbk)
ISBN: 9780367722227 (pbk)
ISBN: 9781003049494 (ebk)
Typeset in Minion
by Newgen Publishing UK
Contents
About the Author..................................................................................xiii
Introduction........................................................................................... xv
STEP 1 Align Improvement Opportunities
Chapter 1 Strategy Alignment.............................................................. 3

Overview.............................................................................. 3
Strategy Alignment.............................................................. 6
Operating Model................................................................. 8
Comparing Lean, Six Sigma, and Rapid
Improvement.............................................................. 9
Agile Project Management................................................ 14
Comparing Deployment Strategies.................................. 16
Voice of the Customer (VOC).......................................... 23
Design Thinking................................................................ 25
Lean .................................................................................. 29
Step 1 –Align Improvement Opportunities.......... 29
Step 2 –Plan and Conduct the Rapid
Improvement Event....................................... 30
Step 3 –Implement Solutions to Change
Behaviors....................................................... 32
Elements of a Lean System................................................ 32
Understand the Customer....................................... 32
Reduce Complexity.................................................. 33
Deploy Teams........................................................... 38
Performance Measurements.................................... 39
Map the Process....................................................... 39
Eliminate NVA Operations..................................... 40
Just in Time (JIT) Production................................. 42
Integrate Suppliers................................................... 43
Visual Controls and Pull Systems........................... 43
v
vi • Contents
Digitization and Automation.................................. 44

Summary............................................................................ 46
Chapter 2 Project Identification........................................................ 51

Overview............................................................................ 51
Lean Supply Chain............................................................ 52
CT Flow Down.................................................................. 59
Operational Analysis......................................................... 61
Project Examples............................................................... 64
Metric Categories.............................................................. 65
Scoping Projects................................................................ 67
A3 Form............................................................................. 69
Project Charters................................................................. 71
Project Prioritization......................................................... 73
Information Technology Ecosystems............................... 76
Summary............................................................................ 79
Chapter 3 Lean Six Sigma Basics....................................................... 83

Overview............................................................................ 83
Understand the Voice of the Customer............................ 88
Create Robust Product and Process Designs –
Reduce Complexity.................................................. 91
Deploy Lean Six Sigma Teams.......................................... 93
Performance Measurements............................................. 95
Create Value Stream Maps (VSM).................................. 102
Eliminate Unnecessary Operations................................ 104
Implement Just-in-Time Systems................................... 106
Reorganize Physical Configurations.................... 108
5S and Standardized Work.................................... 109
Link Operations..................................................... 112
Balance Material Flow........................................... 113
Bottleneck Management............................. 113
Transfer Batches......................................... 115
Mistake-Proofing................................................... 115
High Quality.......................................................... 117
Reduce Set-Up Time (SMED)............................... 118
Contents • vii
Total Preventive Maintenance............................... 119

Level Demand........................................................ 120
Reduce Lot Sizes.................................................... 122
Mixed Model Scheduling............................. 123
Supplier Networks and Support..................................... 125
Implement Visual Control and Pull
Systems – Kanban.................................................. 125
Continually Update Process Technologies..................... 127
Summary.......................................................................... 130
STEP 2 Plan and Conduct the Rapid Improvement Event
Chapter 4 Rapid Improvement Events............................................. 135

Overview.......................................................................... 135
Prepare for the Rapid Improvement Event.................... 136
Create a Project Charter........................................ 142
Assign a Project Leader and Team
Members...................................................... 142
Reserve a Conference Room................................. 143
Obtain Supplies and Equipment........................... 145
Ensure Facilities Are Available Including
Breakout Rooms.......................................... 146
Ensure Support Personnel Are Available to
Assist the Team........................................... 146
Collect Process Information of Floor Layouts,
Process, and Procedures............................. 146
Collect Information of Operational
Cycle Times................................................. 148
Taking Pictures of the Area to be Improved
Showing Issues............................................ 149
Obtaining Examples of Process Issues.................. 149
Obtaining Examples of Best-in-Class Process
Conditions................................................... 150
Developing a Schedule for the Rapid
Improvement Event..................................... 151
viii • Contents
Communicating the Event.................................... 151

Marking Areas for the Event................................. 152
Setting up Flip Charts and Organizing Other
Materials...................................................... 152
Rapid Improvement Event Communication
Email............................................................ 153
Rapid Improvement Event Kick-Off Agenda....... 154
Conducting the Event..................................................... 154
Bring Team Together to Discuss Roles and
Responsibilities........................................... 154
Discuss Event Deliverables.................................... 155
Conduct Team Training as Required.................... 156
Create Detailed Value Flow Maps and Layouts
of the Process.............................................. 157
Facilitate to Ensure Full Participation of Team
Members...................................................... 158
Collect Data at Every Operation........................... 158
Analyze Data and Develop Prioritized
Improvements............................................. 163
Change the Process................................................ 163
Apply 5S and Mistake-Proofing Methods............ 165
Evaluate the Rapid Improvement Event............... 165
Summary.......................................................................... 165
Chapter 5 Data Collection and Analysis......................................... 167

Overview.......................................................................... 167
Big Data Collection and Analytics................................. 168
Metadata Definition and Lineage................................... 169
Information Quality Governance................................... 171
Value Stream Mapping.................................................... 172
Brown Paper Exercise............................................ 174
Process Characterization................................................ 176
Simple Analysis of Process Data..................................... 188
Process Mapping –Suppliers, Inputs, Process,
Outputs, and Customers (SIPOC)............. 191
Cause and Effect Diagrams................................... 193
Contents • ix
5-Why Analysis...................................................... 194

Histogram............................................................... 196
Pareto Chart........................................................... 197
Box Plot.................................................................. 198
Scatter Plot............................................................. 199
Time Series Graph................................................. 199
Control Charts....................................................... 201
Example –Analyzing Job Shadowing Data........... 205
Example –Inventory Analysis and
Reduction.................................................... 206
Mapping High-Volume Transactions............................. 209
Data Collection for Services........................................... 214
Measuring Process Complexity...................................... 214
Customer Experience Mapping...................................... 217
Summary.......................................................................... 221
Chapter 6 Process Improvement...................................................... 225

Overview.......................................................................... 225
Common Process Changes............................................. 227
Control Tool Effectiveness and Sustainability............... 230
Root Cause Analysis and Improvement
Strategies................................................................ 232
Robotic Process Automation.......................................... 234
Automating for Solution Sustainability......................... 237
Examples.......................................................................... 239
Example 1: Financial Forecasting......................... 240
Example 2: Accounts Receivables......................... 242
Example 3: New Product Market Research.......... 244
Example 4: New Product Development................ 246
Example 5: Hiring Employees............................... 248
Example 6: Supplier Performance
Management................................................ 248
Identifying and Prioritizing Improvements................... 251
Summary.......................................................................... 254
x • Contents
STEP 3 Implementing Solutions
Chapter 7 Building a Case for Change............................................ 259

Overview.......................................................................... 259
Psychology of Groups...................................................... 261
Change Readiness............................................................ 263
Project Transition............................................................ 265
Building a Case for Change............................................ 266
Cost Benefit Analysis............................................ 267
Key Stakeholder Analysis...................................... 269
Infrastructure Analysis.......................................... 271
Scheduling Process Change Activities.................. 271
Communication..................................................... 273
Accelerating Change....................................................... 273
Summary.......................................................................... 275
Chapter 8 Implementing Solutions.................................................. 277

Overview.......................................................................... 277
Key Questions.................................................................. 278
Control Strategy.............................................................. 279
Control Tools................................................................... 279
Statistical Process Control.................................... 281
Measurement System Improvements.................... 288
Failure Mode and Effects Analysis....................... 290
Quality Control Plan....................................................... 293
Communicating the Proposed Changes........................ 295
Follow-Up Activities....................................................... 297
Creating Metric Dashboards........................................... 297
Summary.......................................................................... 299
Chapter 9 Organizational Change................................................... 303

Overview.......................................................................... 303
Sustaining Process Improvements.................................. 305
Governing Organizations................................................ 309
Security............................................................................ 316
General Data Protection Regulation.............................. 316
Contents • xi
Changing an Organization.............................................. 318

Summary.......................................................................... 320
Conclusion........................................................................................... 323
Index..................................................................................................... 339
About the Author
James William Martin is a Lean Six Sigma consultant and Master Black
Belt for 25 years and has trained and mentored several thousand executives,
champions, Black Belts, and Green Belts in process improvement methods
including manufacturing, services, and supply chain applications. He
led successful Lean Six Sigma assessments across Japan, China, Korea,
Singapore, Malaysia, Thailand, Australia, North America, and Europe. This
work included organizations in hardware, software, computer security,
retail sales, banking, insurance, financial services, measurement systems,
automotive, electronics, aerospace component manufacturing, electronic
manufacturing, controls, building products, industrial equipment, and
consumer products. He served as an instructor at the Providence College
Graduate School of Business for 20 years. He holds an MS in Mechanical
Engineering, Northeastern University; an MBA, Providence College; a BS,
Industrial Engineering, University of Rhode Island; several patents; and he
has written numerous articles on process improvement.
xiii
Introduction
We brought together Lean Six Sigma for the Office Second Edition, a practical
reference of tools, methods, and concepts, developed specifically for ser-
vice applications. These will enable a reader to understand the Lean and Six
Sigma methodologies, to plan and conduct rapid improvement or Kaizen
events, and to also apply the concepts to process improvement projects.
These events span several days and consist of analyzing and improving
processes. They are well prepared in advance through data collection within
a process and socialization with its stakeholders. In addition to Lean, Six
Sigma, and rapid improvements, we also introduce the operational model
shown in Figure 1.1. It has been expanded in this second edition to also
include Agile Project Management (APM) for the rapid development of
design features and functions. APM is also a good project management
methodology that integrates well with both rapid improvement events as
well as projects. Big data analytics is also integral for process analysis of
services and supporting systems. Most processes are now virtualized and
consist of several major information technology (IT) platforms, software
applications, and globally dispersed teams. The data flows that need to be
accessed require big data analytics.
The compilation of the key tools, methods, and concepts contained in
this book is summarized from Lean Six Sigma consulting assignments
in diverse service industries such as banking, insurance, procurement,
research and development, accounting, sales and marketing, finance,
food, hardware, software, data security, hospitals, and retail distribution
and logistics. Extensive research has been done to develop new ways to
collect and analyze information from these diverse processes. The new and
expanded process improvement methodologies discussed in this second
edition will help your team identify and deploy projects to increase oper-
ational efficiency, competitiveness, and customer satisfaction.
Process improvement has evolved over the past several decades. There
was a time when defects were planned and expected, and correction actions
were sporadic. In the 1980s, there was debate regarding how to expand
manufacturing-focused quality initiatives, tools, and methods to services.
Most people did not think it was possible to do so, given the variable nature
xv
xvi • Introduction
of service operations when compared to the standardization of manufac-

turing. But as economies moved to service-focused processes enabled by
technology, the focus also shifted to not only customer-facing processes
but also to virtualized end-to-end global teams. This operational transition
created a demand for more advanced quality systems to translate customer
requirements into robust process design. Several operational initiatives
updated tools and methods for services, offices, and supporting processes.
These were Lean, Six Sigma, and continuous initiatives of various types.
Now process includes big data analytics and several new methods that help
identify and solve process issues. Most manufacturing applications also
have service analogs. Another reason process improvement has expanded
into services is that productivity, financial, and operational benefits
are significant. This is because improvements are globally deployed
across end-to-end processes that often include several hundred people.
Even if a process is automated, there will be manual support at some
operations. Also, to automate a process it must first be studied, then
simplified and standardized so that the automation is applied to a less
complex process.
Today’s service systems are in high volume and dispersed globally
across many software applications, i.e., the IT ecosystem. Accounting,
human resource, engineering, supply chain, and other processes often
have several core functions in geographically dispersed locations. In com-
plex service systems, simple and standardized processes are needed to
reduce cycle time and cost while improving quality and customer satis-
faction. The goal of this second edition is to build from the first edition.
The focus shifts toward integrating IT ecosystems to enhance process
knowledge and performance in high transaction volume processes.
Several leading-edge topics are integrated into this second edition. These
include “Voice of ” e.g. customers, suppliers, employees, and partners,
Design Thinking Alignment, Ecosystems in IT, Metadata Definition
and Lineage, Information Quality Governance, Big Data Collection
and Analytics, Mapping High-Volume Transactions through Systems,
Robotic Process Automation Applications, Automating for Solution
Sustainability, Governing Organizations, and Data Privacy (General Data
Protection Regulation). These are discussed in the context of service pro-
cess improvements. The first edition’s checklists, road maps and data
collection, and analysis forms were refreshed.
Introduction • xvii
Service operations have changed. Digitalization, automation, and other

disruptive technologies changed organizations and the processes and
systems that comprise them. Automation increases the value content of
process by reducing the relative proportion of manual work. Processes
are more aligned with customers’ perceptions of value. The methods for
obtaining the Voice of the Customer (VOC) have increased in sophistica-
tion and the richness of the information provided for improving operations.
Customer-facing parts of service processes are also being designed for self-
service by customers. The goal is to provide a seamless customer experi-
ence. In fact, customer experience is at the center of operational design and
execution with higher operational efficiencies.
As part of this second edition, automation, big data analytics, customer
journey mapping, and many other topics that are improving service oper-
ational performance have been included. There also many classic tools
and methods discussed from Lean and Six Sigma perspectives. The goal
was to bring together in one place the tools, methods, and information a
team needs to quickly improve their process. The application of Lean Six
Sigma methodologies to improve service processes has historically been
an efficient strategy to simplify, standardize, and mistake-proof processes.
But there are significant limitations for improving high-volume global
processes within complex IT ecosystems. This second edition provides
an insight into the new tools and methods that Lean Six Sigma process
improvement professionals need to enhance customer experience and
increase productivity within high transaction processes across complex IT
ecosystems. It is a reference for the application of Lean Six Sigma methods
enhanced by powerful approaches for process improvement in highly com-
plex service processes.
Competitors are also rapidly adopting disruptive technologies. This
creates a strong motivation for an organization to change its operational
strategy. These trends have accelerated new process improvement meth-
odologies over the past several years. As an example, the original Kaizen
methodology has evolved into a generalized rapid improvement method-
ology focused across global teams that are often remote as opposed to dis-
crete and localized work areas. New methodologies have been added to the
improvement operating model. These include APM and big data analytics
used for improving processes and especially virtual ones that move infor-
mation as opposed to materials.
xviii • Introduction
Big data analytics projects need process mapping and analysis too
if they support manual work and a team approach for identifying pro-
cess waste. Lean is still useful for these types of project. But for 100%
virtualized processes, the velocity of data growth, the types of data, and
the many systems used to create, review, update, and delete (CRUD) the
big databases require algorithms to access, collect, and analyze data. These
types of improvement project are quantitative and require specialized
analytical tools and methods. If the data is easily accessible with a few
hundred to several thousand records, the analysis is normally done
with classical statistical methods, and Six Sigma analytics are useful. If
a database is large with millions of records, then big data analytics and
automated data extraction and analytical methods are needed. Regardless
of tools, all projects require change management for the people associated
with manual supporting processes. These people or personas include
employees, customers, suppliers, and other stakeholders internal and
external to the organization.
A rapid improvement event uses the VOC and other data sources with
simple process analysis tools to first identify and eliminate non-value-
adding operations and then apply a root cause analysis to the remaining
process. The analysis uses a combination of tools and methods increas-
ingly related to digitization, automation, and virtualization. The classical
Lean methods include work standardization, mistake-proofing operations,
Single-Minute Exchange of Dies (SMED), and total preventive mainten-
ance (TPM). Digitization refers to extracting metadata from an IT eco-
system and its many data sources and consuming systems for analytics.
Automation refers to the substitution of manual work by machines and
algorithms. The application of algorithms for automation of routine work
tasks is called Robotic Process Automation (RPA). Virtualization exists
when teams are geographically dispersed and work remotely through
online systems and their applications. These interactions are virtual. The
second edition has been updated to also focus on remote teams and the
work they do.
Although Lean Six Sigma rapid improvement methods were the focus of
the first edition, all the elements of the operating model shown in Figure 1.1
now need to be considered for effective process improvement. First,
improvement projects need to have clear objectives for the types of work
that needs to be done and how work activities should be organized and
assigned to team members. We will discuss different types of improvement
Introduction • xix
project in upcoming chapters. They are classified according to intended

outcomes, tools, and methods to be applied and the types of resource
required to execute them.
This book is even more relevant today than when first published. Service
systems have unique operational attributes as well as common ones like
those from manufacturing, supply chain, and other systems. Most oper-
ational systems have service process components and some customer-
facing components. But a virtual process that is analogous to historical
manufacturing applications needs to be conceptualized from a different
perspective. Although the flow of data through service process is virtual
and in differing formats, the process transforms inputs into outputs using
business rules. This is analogous to physical objects flowing through a
manufacturing or supply chain process. But physical objects can be seen
and touched. In a manufacturing system, operational metrics measure
physical things such as work-in-process (WIP) inventory, scrap, rework,
machine availability, lead time, and others. These measurements are done
by counting materials or walking out to a machine to gather data and cal-
culate metrics. This same approach is used for services that are physical
e.g. face-to-face customer interactions. It also applies to virtual processes
as transactions are counted as they move between operations and metrics
calculated using business rules. In manufacturing, supply chain, ser-
vices, and supporting processes objects either physical or virtual queue
in front of operations and move through them governed by rules. They
are transformed by adding or subtracting physical materials or changing
their informational content. The information is represented as features
and functions added to the work object.
The process improvement methodology applied to project definition,
i.e., the charter, data collection, root cause analysis, and solution is similar
between different types of process. Also, the analytical tools and methods
have much in common. In addition to differences in volume and velocity,
the data format varies. In addition to highly structured data, e.g., formatted
numbers such as that found in Excel files, different unstructured types such
as text, pictures, videos, and voice data files, need specialized analytics to
access, gather, and condition data for analyzing and building predictive
models. In contrast to manufacturing operations, although there is increas-
ingly a virtualization of tools, templates, and other supporting systems,
data collection in addition to online is also available in physical form.
This is represented as paper reports, data collection forms, exception lists,
xx • Introduction
requests for information, orders, invoices, and other summarized informa-

tion that is manually processed by people or machines.
The tools, methods, and concepts of Lean and Six Sigma that were
proven in manufacturing have been increasingly applied to the improve-
ment of service processes, but data collection and analysis are more
difficult. In manufacturing, a Lean assessment team obtains quantifi-
able information such as lead time, uptime, yield, inventory and set-up
time, and similar metrics. In this assessment work, teams are deployed
across several manufacturing processes to physically count materials
and collect operational information. Data collection is challenging but
straightforward. Machines are accessible and can be seen and touched,
providing additional context for analysis. Auditors can also return to the
manufacturing process to obtain confirmatory data to support process
improvement work. They are repeatable hour-to-hour and day-to-day
but at a slower rate when compared to high-velocity virtual transactions.
This helps improvement teams understand their process faster than if
large amounts of data were extracted for analysis from several systems.
It is more difficult to understand high-velocity virtual systems without
algorithms to obtain the data and analyze it. Data collection for the
manual interfaces, e.g., customer facing in services systems, relies on
data collection like manufacturing, and large amounts of data may
not need to be accessed for analysis. Process improvements in service
processes also rely to a great extent on implementation of IT solutions to
eliminate the root causes of long lead times, poor performance, and high
transaction costs.
Big data is easily stored in IT systems. So it can be analyzed over time
if needed for analysis. Another advantage of data storage is the popu-
lation is usually 100% of the transactions as opposed to manufacturing
where samples are taken. Increasingly manufacturing, supply chain, and
supporting process in the age of the Internet of Things (IoT) automate
data collection. In fact, some applications have numerous sensors that
create large databases, which are analyzed using big data analytics for
building predictive models. Some service processes also have algorithms
with business rules or artificial intelligence to map and track the work
transactions. This is especially true in IT systems with business process
modeling and analyses (BMA), business intelligence (BI), business activity
monitoring (BAM), and workflow management (WM) capabilities. These
software applications actively collect data at key points in a process. Process
Introduction • xxi
workflow models are built to estimate the impact of different operational

scenarios related to throughputs, lead times, and performance. As an
example, in call centers, statistics are collected and models are built to cal-
culate customer waiting time, escalations, and the types of incoming call.
Other information includes the transaction volumes of different types
of customer and different types of transaction where a customer left the
queue because of long waits and queries of different types. This informa-
tion is used for management and control but also to analyze how the call
center network responds to changing operational conditions. Simulations
enable these processes to adjust their system-wide capacity by location
and shift within a call center to meet expected demand on the network or
system.
In this book we use data collection and analysis methods to show,
through practical examples of different service processes, the methodolo-
gies needed to implement process improvements using Lean Six Sigma
through rapid improvement events or longer duration projects. The goal is
to provide readers with examples to help the discussion of process improve-
ment tools and methods by adding the practical context to them. These
examples also demonstrate how to create performance baselines, identify
improvement opportunities, and execute projects. All chapters present
practical examples, but Chapter 6 discusses several in detail. These include
finance, accounting, marketing, design engineering, human resources, and
procurement examples.
Process improvement work such as Lean Six Sigma activities and rapid
improvement events need to be strategically aligned to ensure benefits
are documented and resources are available based on operational pri-
oritization. This prevents them from being disconnected from strategic
operational goals. We discuss reducing organizational complexity and
how initiatives are integrated into operational strategy. All information is
presented with an easy-to-follow roadmap using Excel templates for most
chapter examples. This helps successfully plan and execute rapid improve-
ment events or projects in services, offices, supply chains, and supporting
processes. Some of the tools and methods are automatic transaction cap-
ture by software applications, “shadowing” of office workers in relation to
their work tasks; interfacing systems, reports, and other supporting activ-
ities; and conducting audits of email systems. These operational assessment
methods are used to collect information from processes. We will discuss
these and other topics in the upcoming chapters.
xxii • Introduction
Process assessments are discussed starting with the creation of a Value

Flow Map (VFM), used to help organize the collection and analysis of
information from a customer perspective. This approach encourages a
team to eliminate internal work tasks not valued by customers, i.e., non-
value adding activities (NVA) and improving those activities customers
value, i.e., value adding activities (VA). Non-value adding work activities
have little relationship to what customers consider important. Examples
include inspections, testing, rework, employee training, and other intern-
ally facing activities. In a “hands-on” operational assessment using a VFM,
a team is brought together to create the map with sticky notes. Additional
information is added to the map to enhance the visual representation.
Additional information includes operational metrics such as production
rates, rework, scrap, inventory, machine uptime, and other metrics for the
operations of the process. Improvement teams also walk-the-process to
verify that the VFM and metrics are correct. In service processes, the quan-
tification of a virtual process is done using algorithms to time stamp and
map the flow of lineage of transactions from source to consuming systems.
In parallel, physical audits are conducted to verify information accuracy
for manual interfaces to the systems. As an example, manual audits can
be used to analyze a process by classifying and counting types of work
request. Associates’ work activities can also be analyzed to identify NVA
time such as unnecessary meetings. Equipment can be audited to estimate
the throughput of materials or information. Or sensors placed on them to
automatically measure the material flow and transactions. Expenses such as
material, direct labor, premium freight, overtime, and similar expenditures
can be compared to financial and operational reports also analyzed and
tied to work tasks. Interviews are used to gather the remaining process
information.
This book has been written in a modular manner to enable a rapid
improvement event or project team to immediately begin planning and
executing its work. To do this, it is organized into three sections. These
are the alignment of process improvement opportunities, the planning
and execution of a rapid improvement event or projects, and the imple-
mentation of solutions. The first section of this book is divided into three
chapters. These cover strategy alignment, project identification, and a dis-
cussion of several important elements of a Lean system. Strategy alignment
implies rapid improvement events and projects are linked to higher level
strategic goals. This reinforces the concept that the deployment of projects
Introduction • xxiii
should improve high-priority work areas to obtain leadership support, pri-

ority, and resources. It also forces an evaluation of the correct tool set to
identify and eliminate the underlying root causes of a problem.
Chapter 1 discusses strategy alignment and the process improvement
operating model shown in Figure 1.1. Strategy alignment is critical to ensure
resources are efficiently utilized to achieve business goals. Organizations
employ different initiatives to execute their strategies. Strategic goals are
translated into the organization and successively communicated down
through it with improvement targets for each metric. A linkage between
strategy and operational execution is made through initiatives. The oper-
ating model’s components consist of Lean, Six Sigma, APM, and big data
analytics. The deployment of these methods and tool sets can be very fast
using a rapid improvement event or of longer duration through a project if
they are more complex relative to scope or root cause analysis and solutions.
We compare the best ways to use them individually or in an integrated
manner in the context of deployment strategies. Agile Project Management
is new to the second edition as are VOC, Design Thinking, and several
other topics such as digitization and automation. Design Thinking takes
the VOC concept one step further. Using this method, organizations use
VOC information from an empathetic perspective to design products and
services in ways that enable seamless customer experience. The balance
of Chapter 1 discusses the elements of a Lean system, including applying
methods to better understand customer requirements, reducing system
complexity, deploying teams, performance measurements, mapping the
process, eliminating NVA operations, Just in Time (JIT) production, sup-
plier integration and visual controls, and pull scheduling systems.
Chapter 2 discusses deployment of higher level organizational goals.
It starts with a discussion of project charters. The chapter topics include
the Lean Supply Chain and critical-to (CT) metrics to identify projects
from higher level goals. Projects can be classified according to intended
outcomes and the types of resource required to execute them. In this book
we will focus our discussion primarily on the application of Lean tools and
methods to rapidly improve a process. Other improvement projects require
in-depth statistical analysis and may be more effectively executed using Six
Sigma methods. Projects need clear objectives of the types of work that
needs to be done and how work activities should be organized and assigned
to team members. They are classified according to intended outcomes and
the types of resource required to execute them. Operational assessments
xxiv • Introduction
help identify beneficial projects to improve productivity. These will be of

various types including Lean, Six Sigma, BI (highly analytical), capital
investment (purchase new equipment), just do it (known solutions), and
others. Then referencing the operating model in Chapter 1, some projects
may also be good candidates for rapid execution. Other topics are oper-
ational analysis, project examples, metric categories, scoping projects, the
A3 project form, project charters, and prioritization. New to the second
edition is the topic “Information Technology Ecosystems.”
Chapter 3 discusses the basic tools, methods, and concepts of Lean. Later
we will apply these methods to show how to improve processes. The dis-
cussion follows the method and sequence shown in Table 3.1. The basis of
Lean methods requires understanding the attributes of a product or service
that are important to customers and then designing and producing them in
ways that meet VOC needs and value expectations. It also discusses Lean
tools, methods, and concepts. Specific topics include reducing product
and process complexity, deploying Lean Six Sigma teams, performance
measurements, creating a Value Stream Map (VSM), and eliminating
unnecessary operations. Then more advanced topics are discussed such as
implementing JIT systems, reorganizing physical configurations, 5S and
standardized work, linking operations, balancing material flow, bottleneck
management, transfer batches, mistake-proofing, and reducing set- up
time (SMED). The discussion of the VSM and maps of lower level sub-
processes, i.e., VFM, are used to document, analyze, and improve oper-
ational performance. Creating a VSM requires bringing people together to
create a graphical representation of their process. These people understand
how the process operates.
The second section of this book discusses how to plan and conduct rapid
improvement events and deploy projects. The three chapters comprising
this section provide a logical roadmap to implement rapid improvement
events and projects. These are planning and conducting the rapid improve-
ment event, data collection and analysis, and process rapid improvement.
Each chapter discusses tools and methods shown in the Figure 1.1 oper-
ating model. Most of these are common to Lean and Six Sigma and are
routinely applied to service processes.
Chapter 4 topics include preparing for the rapid improvement event.
This involves creating a project charter, assigning the project leader and
team members, the logistics for setting up the room or virtual meeting
e.g. communicating the event, and collecting information. It also discusses
Introduction • xxv
the importance of gathering examples of the issues, collecting other data,

and integrating this information into a visual view of the process. The
activities required to prepare for a rapid improvement event are listed in
Table 4.1. Event preparation is the first major section of activities shown
in Figure 4.1. The preparation of an event begins several weeks prior to
bringing a team together. These activities include creating an actionable
project charter, assigning team members, and securing facilities if the team
is collocated or reserving virtual conferencing if some team members are
remote. Chapter 4 also continues the discussion of operational metrics
from Chapters 2 and 3 including estimating production rates, scrap and
rework percentages, downtime percentages, capacity levels, and set-up
times.
Chapter 5 discusses how to collect and analyze data. The second edition
introduces several new topics. These include big data collection and
analytics, metadata definition and lineage, and information quality gov-
ernance. The chapter also provides simple and easy-to-use data collection
and analysis tools and methods. These include various types of process
map, metric summarization templates, shadowing templates, a spaghetti
diagram, checklists, a Cause & Effect diagram, a 5-Why analysis, a histo-
gram, a Pareto chart, a box plot, scatter plots, time series graphs, and con-
trol charts. Examples using some of the tools are presented at the end of
the chapter. In addition, the chapter shows how teams collect management
reports with financial and operational data, process maps, floor layouts,
and similar sources of information to conduct an analysis of the root causes
for process issues. Once identified, root causes can be eliminated, as the
improvement team develops solutions or countermeasures using the Lean
Six Sigma methods. This chapter also presents several useful templates to
aid data collection and analysis. These can be modified as needed.
Chapter 6 concludes the second section of this book. Its topics include
the effectiveness and sustainability of control tools. Effectiveness varies by
tool, so they are used in combination to ensure successful and sustainable
outcomes. Table 6.1 lists common control tools and compares their effect-
iveness and sustainability. Another very effective control method is the
elimination of portions of a process or a redesign of operational work tasks.
Robotic Process Automation and automation for solution sustainability
are new topics for process control. Robotic Process Automation applies
algorithms to eliminate repetitive and manual work tasks that are based on
logical business rules and have a high transaction volume or are batched
xxvi • Introduction
in volume. Properly done over many work tasks the productivity increases
are significant. Six service examples are discussed in this chapter to show
how to apply process improvement tools and methods. These are: financial
forecasting, accounts receivables, new product marketing, product devel-
opment, employee hiring, and measuring supplier performance.
The third section of this book discusses solutions. It is divided into three
chapters. These are: building a case for change, implementing project
solutions, and organizational change to sustain many projects. Building a
case for change discusses the psychology of groups, which is a new topic
for the second edition. Other topics include change readiness, project tran-
sition, and building the case for change. Studies have shown that successful
change initiatives have attributes for success. First a large percentage of
associates must use an initiative’s tools and methods. This occurs when
people see benefits, and the tools and methods make work easier. This is
called practicing new behaviors. To practice new behaviors, work must
be changed through beneficial projects that align with value, are sim-
pler, more standardized, mistake-proofed, and even automated. Changing
a process requires ensuring the correct things are changed in a process,
and improvements are sustained. These implementation topics show how
to build a business case, manage process changes, implement the project
solutions, and reinforce new organizational behaviors. In these discussions,
the goal is to develop long-term and sustainable process improvements
that are aligned with an organization’s strategic operational goals.
In Chapter 7, change management tools are introduced to finish the
improvement discussion. These include stakeholder analysis, infrastruc-
ture analysis, and communication. The last topic is accelerating process
change activities. Change occurs when a future state can be envisioned and
then compared to the current state to identify where changes are needed
to close gaps. These are closed through projects that teach associates new
skills to eliminate chronic problems that erode productivity and com-
petitiveness. The case for change is reinforced by an improvement team’s
project work when it is consolidated with the work of other teams. The
cumulative benefits for an organization can be significant. The Lean Six
Sigma methodology helps identify and close projects. It is visual, hands-
on, and fact based. It appeals to different people at different organizational
levels. It is also practical because problems are clearly documented and
systematically eliminated from a process. These success attributes help
promote change.
Introduction • xxvii
Chapter 8 discusses solution implementation. Topics include pro-

cess control strategy, Statistical Process Control (SPC), measurement
system improvements, the quality control plan, and metric dashboards.
The chapter emphasizes that controls on solutions should be based on
a thorough analysis of a process and the recommended solutions based
on the root cause analysis. Second controls should be placed upfront in
the process to control errors that may impact customers. Although there
are quality systems that track and correct errors when they reach the cus-
tomer, these are costly and time-consuming to correct. Customer sat-
isfaction is also negatively impacted. Control tools and methods vary,
and several are used in combination to sustain improvements. Typical
controls are training, procedures, standards, SPC, preventive maintenance,
audits, application of 5S methods, mistake-proofing, and the elimination
of operations and work tasks. There are also supporting systems such as
formal organizational frameworks, control plans, failure mode and effects
analysis (FMEA), metric dashboards, and automation to ensure effective
project implementation and transition to the process owner.
The last chapter discusses organizational change in the context of integra-
tion with governing organizations and data privacy. This is because most
process improvement work in virtual service systems needs to be secure and
protect customer as well as organizational data. Effective change depends
on governance for sustainability. First, there is an internal governance that
is enabled by a framework representing cross-functional stakeholders that
periodically meet to create a strategy for continuous improvement and
investment. This is done by creating and approving policies, setting pri-
orities and projects for closing gaps, and approving roles and responsibil-
ities. In the second edition, a new topic is introduced. This is the General
Data Protection Regulation (GDPR). The GDPR governance framework
uses several oversight levels with each level having predefined activities
based on scope. This is a format most governance models use for large
programs impacting cross-functional teams. Examples include governance
for strategy, marketing, sales, finance, and operations. External governance
is associated with the many third-party industry oversight organizations
with which an organization interacts. There are also governmental regula-
tory agencies that influence organizations and their internal governance.
In summary, the second edition updates the classical approaches for pro-
cess improvement in service systems to integrate newer analytical methods
and strategies for process improvement. These include topics such as
newgenprepdf
xxviii • Introduction
Design Thinking, APM, Voice of, e.g., customers, suppliers, employees,

and partners, IT Ecosystems, Information Quality Governance, Big Data
Collection and Analytics, mapping high- volume transactions through
systems, RPA applications, automation for solution sustainability, data
privacy, and security, as well as reporting dashboards. This information is
integrated into an operational model for process improvement. I want to
thank Michael Sinocchi, my Publisher at Taylor & Francis, for providing
me an opportunity to update the original first edition topics to include
newer tools and methods impacting the service processes. I also want to
thank Ishwarya Mathavan, who coordinated the production of the book.
Step 1
Align Improvement
Opportunities
1
Strategy Alignment
OVERVIEW
Today’s office environments consist of employees, consultants, and tech-
nologies that are integral parts of global supply chains. Digitalization,
automation, and other disruptive technologies integrate these systems.
Their value content has been rapidly increasing because of this auto-
mation. As an example, in a modern end-to-end quote to order to cash
process, an accounts receivable team may reside in one country, but sev-
eral of its core functions are performed in different locations, and many
of these are global. There will be different laws, regulations, and taxing
jurisdictions. Sales and marketing teams are likely to be geographically
dispersed with each performing different parts of a quote to order pro-
cess. There will also be differentiated markets with products and services
sold to customers located in different countries. The invoicing process
will be designed for customers based on language and other consider-
ations. Process improvement strategies have adapted to focus on these
virtual systems.
In global supply chains, simple and standardized operational systems
have lower lead times and cost as well as higher quality than those of more
complex ones. Lean tools and methods are the most direct way to simplify,
standardize, and mistake-proof processes. They also focus on understanding
what is important to customers, i.e., what they value. The focus is also on
the voice of the customer (VOC) and customer experience when using
products and services. Although the application of Lean tools and methods
is straightforward, Lean deployments require hard work, patience, effective
3
4 • Align Improvement Opportunities
resource allocation, and significant personal involvement of employees and

managers. Some organizations may have difficulty consistently applying
Lean methods. Reasons include non-alignment with operational strategy
and no formal deployment framework to identify and prioritize improve-
ment projects and train team members in Lean concepts to execute them.
Reporting systems must be in place to measure progress to continuously
improve operations. Employee training is important because they need to
use the right approach for analyzing and improving work areas. There are
also several disciplines in a Lean culture. To master these, employees need
extensive on-the-job training from experienced facilitators as well as prac-
tical projects. Maintenance, job set-ups, and conducting rapid improve-
ment events require knowledge and practical experience. Lean methods are
hands-on and practical and must be learned through practice.
Organizational non-alignment contributes to most Lean deployment
failures. Non-alignment occurs if leadership is not engaged. There are sev-
eral reasons for this situation. There may be competing priorities from
other initiatives or projects. Or benefits may not be estimated or clearly
communicated. Non-alignment is also exacerbated by poor project iden-
tification and prioritization, competing priorities that cause resource scar-
city, reward and incentive systems that are not properly aligned to the Lean
initiative, and mismanagement of performance and success measures. Poor
project identification is preventable through effective research and pro-
ject scoping. The goal is to create a backlog list of prioritized projects with
benefits. These are represented as project charters. These can be integrated
into the deployment plan considering resource requirements to make a
good case for Lean, Six Sigma, or any other initiative.
The projects will vary by industry. Manufacturing organizations have a
long history with Lean. There are an extensive number of manufacturing
case studies that show the types of project that were done and how the
tools and methods were employed for root cause analysis and solutions.
Service industries also have extensive case studies available for review.
Given the extensive digitization and Robotic Process Automation (RPA)
being employed in every organization, there are questions of Lean’s
effectiveness in highly automated environments and those in which soft-
ware controls operations. There are people who believe the Agile Project
Management (APM) methodology replaces Lean in these environments.
But we disagree. It is synergistic to other initiatives such as Lean as shown
in Figure 1.1 operating model.
newgenrtpdf
Strategy Alignment • 5
Operating Model
FIGURE 1.1
If projects are not properly selected and aligned within an organization,

it is difficult to make a case for implementing Lean. In this chapter we will
show how to identify and organize projects for Lean deployments for ser-
vice and supporting processes in highly automated work environments,
then build these projects into strategic planning and execution. If projects
provide benefits, resource requirements are easier to obtain when com-
peting with other important initiatives and projects. In contrast, projects
not strategically aligned will have a low priority, and resources will not
be assigned to them. Rewards and incentive systems are also easier to
align to beneficial work. Performance and success measures are needed
to ensure accountability and support for a Lean deployment. It is difficult
to plan and execute Lean and other improvement work such as operational
assessments, rapid change events, or others if management and employees
are not supportive.
STRATEGY ALIGNMENT
Strategy alignment is critical to ensure resources are efficiently utilized to
achieve business goals. Organizations employ different initiatives to exe-
cute strategies. Lean and Six Sigma are two operational initiatives under
the Operational Excellence (OPEX) umbrella. To realize benefits, projects
must be successfully executed by associates trained to use the initiative’s
tools and methods. Normally an operational assessment is conducted
to create a portfolio of prioritized projects, which will move an initia-
tive forward to increase productivity and to meet commitments to key
stakeholders and increase shareholder value.
A productivity measure is the ratio of outputs and inputs. Outputs are
sales or other sources of income that are adjusted based on exchange rates
and inflation. Inputs are operating expenses such as direct labor, materials,
and other expenses needed to support sales. Productivity = (Previous year’s
sales/previous year’s operating costs). Organizations in the same industry
with well-managed operations will have higher productivity ratios than
those that are poorly managed. Stakeholders include employees, govern-
mental regulatory agencies, suppliers, and other constituents associated
with an organization.
A strategic metric flow down method is used to identify projects and

starts with a return-on-equity target. This is delayered down to sales, oper-
ating income, and cash flow targets. Return-on-equity (ROE) is the rate of
return earned on the book value of the owner’s equity. It is compared to the
return from a safe investment such as a fixed interest asset. These high-level
financial metrics are influenced by projects. The projects are evaluated,
baselined, and executed to improve metrics related to expense reductions,
e.g., warranty, scrap, rework, excess material, direct labor, and others; or to
increase sales by reducing the lead time to market, more effective adver-
tising, and moving the many other sales influencing projects with their
metrics. The third category is asset utilization. These are activity ratios that
measure the efficiency with which an organization uses its assets. Examples
include inventory turns = cost of goods sold/average inventory or days’
sales outstanding = accounts receivables/(daily sales), and there are sev-
eral others such as machine utilization. The concept is that projects need
to be aligned to organizational strategy represented by financial metrics as
well as strategic measures focused on customer experience, sustainability,
diversity, and others.
Strategic goals are translated into the organization and successively
communicated down through it with improvement targets for each metric.
A linkage between strategy and operational execution is made through
initiatives. These are aligned to financial and operational metrics based
on the root cause analysis and solutions likely to close the project’s per-
formance gaps. Initiatives have unique tools and methods that are used
to identify, analyze, and eliminate specific types of root cause and align to
solutions. As an example, if a process’s lead time is long, then Lean methods
can be used to analyze the process and find ways to simply standardize and
mistake-proof it. But if the problem is low process yields, then building a
model to understand the causes for low yields would be more effective. The
goal would be to build a model of yield versus several input variables (Xs).
In manufacturing these may be machine settings, environmental factors,
material characterization, or others. Six Sigma methods may be required
to analyze the root causes for the problem and build a regression model.
Another example is reducing the average waiting time in a call center for
a certain customer demographic such as service type, region, or other
factors. Average waiting time depends on incoming call volume, asso-
ciate experience and skill level, access to reference information, number
of available associates, and other variables that can be statistically modeled

using regression, queuing, or other models. Or if the project is focused on
improving equipment uptime and availability, then total productive main-
tenance (TPM) tools and methods would be useful. There are thousands
of project applications that can be associated with different initiatives to
increase productivity and customer experience, and achieve strategic goals.
OPERATING MODEL
Figure 1.1 shows the operational model for service and office process
improvement. It integrates the classical methodologies of Lean and Six
Sigma and newer methods of APM, big data analytics, and business intel-
ligence. The methodology for accelerating process improvement has been
expanded in recent years from the original Kaizen to a generalized rapid
improvement methodology focused across teams and global as opposed
to discrete work areas. Agile project management is focused on bringing a
work team together to create discrete features and functions, i.e., solutions
for stakeholders using Scrum Sprints. This method is usually applied to
software development but is applicable to project management applica-
tion with deliverables. In addition to speed for delivering functionality and
features, other advantages of APM are high team collaboration with sub-
ject matter experts and stakeholders who provide feedback at the end of
each sprint.
The operating model starts with defining the work to be done represented
as a project charter. In fact, all process improvement work starts from a
project charter. A charter provides focus for a project including the reason
for doing the work, i.e., the business case with costs, benefits, and customer
impact; the scope of the work, i.e., which teams will be included as well as
the problem to be solved; the goals; schedule; stakeholders; the team; and
the available resources. Once the project charter is created the project team
will know the general approach for root cause identification and the types
of solution likely to be implemented. A project requiring process charac-
terization will need process mapping and other Lean tools and methods.
Other projects may be heavily quantitative and require analytics. If the data
is easily acceptable and reasonable, small with a few hundred or thousands
of records, then the analysis can be done using classical statistical methods,
and Six Sigma analytics would be useful. But if the database is large with
millions of records, then big data analytics, automated data extraction, and
analytical methods will be needed.
If the scope of the work is moderate, then the root cause analysis and
solutions can be accelerated through rapid improvement or APM methods
augmented with Lean, Six Sigma, and big data tools and methods. As a
team approaches the improve phase of the project and solutions need
to be aligned with major root causes, digitization methods for updating
applications within the IT ecosystem and RPA may need to elim-
inate manual work. The implementations of solutions use algorithms to
mimic repetitive work tasks to lower cost and improve quality. Examples
include service, production, and supporting processes. Process improve-
ment in service systems, offices, supply chain, and supporting processes
now requires most of these automation methods depending on the spe-
cific project application. This is because most processes even in manufac-
turing rely on access to numerous and very large databases. Projects also
require effective change management methods to communicate changes
and coordinate the people or personas associated with the manual parts
of the automated processes. These personas include employees, customers,
suppliers, and other stakeholders internal and external to the organiza-
tion. Although Lean Six Sigma and rapid improvement methods are the
focus of this book, all the elements of the operating model now need to
be considered for effective process improvement in service, office, supply
chain, and supporting processes.
COMPARING LEAN, SIX SIGMA, AND

RAPID IMPROVEMENT
When Six Sigma is incorporated into a Lean deployment, it is called a Lean
Six Sigma deployment. More recently, Lean Six Sigma deployments have
been augmented to also include digitalization, automation, and virtual-
ization. To the extent a root cause analysis is data intensive, a Six Sigma
or equivalent problem-solving methodology is deployed. Problem-solving
methodologies have a common phased approach to work from root cause
analysis to solutions. Although the tools may be different and the phases
have different names the deliverables are similar. In a first phase, there
is usually a definition of the problem, approvals, resource allocations
and team formation. The next phase is gathering data to understand the
problem definition or statement. This data may be heavily quantitative

for process-focused, i.e., mapping and process, observation. After data is
collected to verify a problem statement and identify its root causes, there is
an analysis phase that maps cause to countermeasures or solutions. In the
next phase, solutions are piloted and scaled to solve the original problem.
Then they are integrated into the organization’s daily work. The Six Sigma
method has specific Define, Measure, Analyze, Improve, and Control
phases. Lean problem solving uses similar logic, i.e. problem definition,
analysis, and solutions.
There are differing opinions for the duration of projects. One criticism
of Six Sigma is that it takes several months to close a project. This is incor-
rect. The project duration depends on the duration of the data gathering
and solution implementation regardless of the methodology employed.
Opinions also differ on which initiative to use. Problem statements will
require a certain tool set to be applied, and using a different one will result
in not properly doing a root cause analysis. As an example, if the problem
is a cluttered work environment where tools cannot be found, applying Six
Sigma with its analytical tools will not yield a solution. The correct approach
would be a 5S (explained later in this chapter) to clean up the work area. In
contrast, if a machine has a yield problem caused by interactions between
several machine settings, then a Lean approach cannot provide the solution
because a statistical model is needed. It is important that people be cross-
trained in several operational improvement methods so that they know
which one to apply in practice. It is also important that projects be properly
selected, prioritized, and executed using the correct operational tools and
methods. From our perspective, these are provided by Lean, Six Sigma,
rapid improvement, TPM, and ergonomics with an overlay of digitization,
automation, virtualization, big data analytics, and other new methods to
supplement the original initiatives. The umbrella initiative for this type of
integration is Operational Excellence (OPEX).
Table 1.1 compares the major characteristics of the Lean, Six Sigma,
and rapid improvement methodologies. There are similarities between the
methodologies relative to project identification and improvement goals,
and some of the tools are common. The three methodologies start with
identifying or confirming operational gaps using financial, operational, or
process analyses. Gaps are opportunities to improve process performance.
The goal of this definition phase is to create actionable project charters to
eliminate or close performance gaps. Different problem statements require
TABLE 1.1
Comparing Lean, Six Sigma, and Rapid Improvement
Lean Six Sigma Rapid Improvement
Identify performance Identify performance Identify performance gaps
gaps and create project gaps and create project and create project charters
charters to close the gaps. charters to close the gaps. to close the gaps.
Projects requiring process Projects requiring statistical Projects requiring process
analysis tools and several analysis tools and several analysis tools and only
weeks or months for weeks or months for several days for execution
execution are selected for execution are selected are selected as Kaizen
a full Lean evaluation. for a full Six Sigma projects.
evaluation.
Train and deploy Train and deploy Train and deploy
improvement teams improvement teams improvement team around
around project charters. around project charters. a single project charter.
Align process analysis and Align process analysis and Align process analysis and
improvement with the improvement with the improvement with the
voice-of-the-customer voice-of-the-customer voice-of-the-customer
(VOC) using value (VOC) using value (VOC) using a value
stream maps (VSM). stream maps (VSM) or stream map (VSM) of the
quantitative customer process workflow or a floor
information related to layout of the work area
complaints, warranty, associated with the project
lost sales, and similar charter.
information.
Use VOC and simple Use VOC and simple or Use VOC and simple
process analysis tools complex data analysis process analysis tools
to eliminate non-value tools to eliminate the to eliminate non-value
adding operations and root causes for poor adding operations and
the root causes for poor process performance. the root causes for poor
performance from a performance from a
process. process.
Standardize and mistake- Build models relating Standardize and mistake-
proof remaining the poor performance proof-remaining
operations using several represented by output operations using several
Lean tools including metrics (Y) to the root Lean tools including 5S,
5S, SMED, and TPM to causes or key inputs (Xs). SMED, and TPM to
increase VA content. increase VA content.
Optimize the process Optimize the process Optimize the process
workflow to ensure its relative to Y by changing workflow to ensure its
operations meet its takt the levels of the Xs. operations meet its takt
time with a high adding time with a high adding
value content. value content.
different tool sets to identify, analyze, and eliminate the root causes for
poor performance. As an example, projects requiring process simplifica-
tion, standardization as well as similar improvements benefit from a Lean
approach. But projects requiring advanced statistical analysis tools may be
good candidates for a Six Sigma or other analytical approach.
Rapid improvement is differentiated primarily by its focus and speed
of improvement. It is executed using Lean tools and methods in a local
work area. But depending on the project’s problem statement it can also be
highly analytical if applied to office or service processes. Another project
management approach is found in APM methods using Scrum Sprints.
Sprints are designed to produce workable features and functions for
software products. They bring people together to quickly solve a highly
complicated analytical problem. Analogous to APM, Lean project man-
agement employs a series of integrated rapid improvement events using
Lean methods. The approaches are similar because the work is focused,
and solutions are rapidly created using a focused cross-functional team.
Lean, Six Sigma, and rapid improvement events use common methods
for identifying the VOC, building process maps, analyzing a work area,
applying simple quality tools for data analysis, and making process
improvements. Data analysis starts with customer complaints, warranty
expenses, internal quality, and operational issues, lost time incidents, lost
sales, and other performance gaps. These form a basis for creating a project
charter’s problem statement and goals. If projects are identified from cus-
tomer issues, i.e., the VOC, the team evaluates the gaps from a customer
experience perspective. Customers expect seamless and intuitive product
and service interactions at touch points. A good way to understand how
to scope these types of project is to analyze a customer journey map. This
map describes the customer interactions or touch points through the pro-
cess of researching, purchasing, using, and disposing of products and
services. In later chapters we will provide examples. The point is that add-
itional tools and expertise are needed if projects incorporate external cus-
tomer information.
Unless a deployment framework is being built to use Lean or Six
Sigma to execute future projects, a rapid improvement event is preferred
because it is focused. In manufacturing, these events use simple tools such
as process mapping, work standardization, 5S, mistake-proofing, and
similar methods to eliminate non-value adding (NVA) operations from
processes or work areas. 5S is a methodology that organizes a work area
for standardization and is applied to enhance process standardization. It

will be discussed in more detail later but essentially it is used to organize
a work area and standardize the use of machines, tools, and supporting
processes. An analogy would be to clean out a garage or clean up files on
a computer so that searching time is reduced. In combination using the
right tools and methods increases the value content of a process. In vir-
tual systems the tools may be more complicated because the process being
improved is usually end to end. But the concepts are similar, and many of
the original Lean tools and methods have been modified for virtual and
remote process improvement.
Value is a key concept for process improvement. It helps sort out
operations and work tasks that are beneficial from those that are not. It
has three attributes. These are: transformation of materials or informa-
tion, i.e., it adds something; the work is needed by a customer, and it is
done right the first time. Non-value Adding (NVA) operations can be
immediately eliminated from a process. In contrast value adding (VA)
operations are integral to a process because they are needed to meet
external customer requirements and have the three value attributes. Value
adding operations cannot be eliminated from a process without customer
permission or a redesign of one or more operations. A third classifica-
tion is business VA (BVA) operations. These operations are not valued by
an external customer but must remain part of a process because of tech-
nology or regulatory constraints.
The goal of a rapid improvement event is to use the VOC and simple pro-
cess analysis tools to identify and eliminate NVA operations and the root
causes for poor performance. Most rapid improvement events use a com-
bination of Lean methods and increasingly methods related to digitiza-
tion, automation, and virtualization. The classical Lean methods include
work process simplification, standardization, mistake-proofing operations,
and many others to be discussed in upcoming chapters. Digitization is
extracting metadata from IT ecosystems for analytics. Automation refers
to the substitution of manual work by machines including algorithms. The
use of algorithms for automation is also called RPA. Virtualization is a con-
cept to describe the fact that teams are often geographically dispersed and
work together virtually. In other words, their work area and interactions
are virtual.
An important goal of Lean is to simplify, standardize, and mistake-proof
a process or work area to ensure it can keep pace with the work requests
flowing through it. The rate of work required from a process to satisfy
external customer demand is its takt time. Takt time is the time needed to
produce one unit to ensure all required work is complete by the end of a
work shift. As an example, if there are 100 available minutes-per-day in a
process and 10 units need to be produced each day, then the takt time will
be calculated as 100 minutes-per-day/10 units = 10 minutes-per-day-per-
unit. This implies that every 10 minutes a unit of work, e.g., invoice, widget,
report, or other work object, must be produced defect-free. The goal of a
Lean deployment is to reduce the process waste over time while always
meeting the required takt time. Periodically rapid improvement events and
improvement projects will be used to remove waste at different parts of the
process.
Six Sigma will be used to improve process yields. Its analytical tools
are used to eliminate the root causes for poor performance. These ana-
lyses often build on simpler analytical tools to create more advanced stat-
istical models. Models show relationships between a dependent variable
(Y), i.e., the key process output variable (KPOV), and the independent
variables (Xs), i.e., the key process inputs (KPIVs). The KPOV is the metric
described by the project charter’s problem statement. The KPIVs are the
major causes for variation of the KPOV. Six Sigma projects optimize the
KPOV by changing the levels of the KPIVs based on the optimized model.
Six Sigma projects also use several Lean methods, especially for sustaining
improvements. These include work standardization, mistake-proofing for
higher quality, 5S, and others to increase the value-adding content of a pro-
cess and sustain improvements.
AGILE PROJECT MANAGEMENT

Agile Project Management is used to create new products and services. It
is applied to the design of new features and functions delivered as sprints
every few weeks. At the end of a sprint, features and functions are reviewed
with the customer and stakeholders. The goal is rapid development that
builds on previous sprints. Success is measured by workable solutions or
prototypes and approval by the customer and stakeholders of features and
functions. The APM concept can also be applied in rapid improvement
events to project manage work tasks for measurable outcomes.
Agile Project Management has several success attributes. One is a focus

on customer requirements that are organized into user stories. The advan-
tage of user stories is the team is not constrained by a known solution.
The stories are standardized and have a format. An example is, as a pur-
chasing agent I want to be able to see a list of current suppliers to see if
they increased prices in the past three years. Stories follow a format using
a role or persona with the statement, I want to be able to do this task
with this outcome. User stories must be compelling and have value both
from customer and business perspectives. They are broken into groups of
requirements associated with discrete features and functions that in total
satisfy the user stories for the various personas. The outcome is designed to
create prototypes for test, evaluation, and approval.
The second APM attribute is the activity backlog. This is a mapping
of the user stories that describe how features and functions will be used
by the customer. These are further broken into discrete work tasks that
in combination satisfy the user story. The advantage for using an activity
backlog is that it is visual, and the work to be done is clearly seen. This
visual view provides team members with the information needed to col-
laborate, schedule, and complete their work. Each sprint executes portions
of the backlog work. The goal of sprints is frequent communication to pre-
vent adding NVA features and functions to the design. The product owner
prioritizes this backlog work and organizes it into sprints each day.
A third attribute is that teams pull user stories and requirements from
the activity backlog based on their skills and availability. They take own-
ership for creating workable solutions that can be tested at the end of
the sprint when the team demonstrates the solutions and gets feedback
from the customer and stakeholders. Work not completed in a sprint is
incorporated into the next sprint. Agile Project Management and Lean
have a common perspective in that only VA work is produced and only if
needed. This work is self-balanced because team members pull it from the
activity backlog based on their capacity.
Agile Project Management also has roles and responsibilities that enable
clear and unambiguous action. First there is the product owner responsible
for gathering the user stories and needed features and functions from the
customer, stakeholders, and business owners whose requirements form the
basis for the activity backlog. The product owner updates the backlog and
ensures it is complete. Other roles include the Scrum Master who facilitates
the APM project and trains team members as needed to use APM tools
and methods. The goal is to ensure the agile team is self-managing and col-
laborative. This implies that within a sprint, only the team can reprioritize
its work and not the product owner. But the product owner prioritizes the
sprint and work on the activity backlog. During a sprint, the team holds
daily standup meetings to discuss what was completed the prior day as well
as what needs to be completed this day. The work assignments are agreed
by the team, and the work proceeds for the day. The working solutions
created during the sprint should complete one or more user stories by
delivering workable features and functions.
How does APM help Lean, Six Sigma, and rapid improvement events? It
is a flexible project management method that ensures communication on
a frequent basis at the end of each sprint as a team pulls activities from the
backlog to quickly execute them. The team’s workload is balanced, visual,
and hands-on. Lean applications use APM to execute various types of work
that have a standard sequence for phases and actions including 5S events
which Six Sigma could organize into activities within its Define, Measure,
Analyze, Improve, and Control phases (DMAIC) as an activity backlog and
execute them using sprints. The same approach can be used by big data
analytics project teams.
COMPARING DEPLOYMENT STRATEGIES

An important characteristic of a Lean Six Sigma initiative is the deploy-
ment model, which determines how it is positioned relative to project
prioritization and resource allocation. This concept is shown in Table 1.2.
Top-down deployments have a hierarchal structure that enables strategic
alignment of resources to projects based on benefits and priority. There
is also accountability for project identification, closure, and realization
of benefits. Bottom-up deployments use an informal deployment model
that is resourced based on availability and local prioritization. A problem
with this latter approach is that projects are not aligned to an organization’s
goals. Project prioritization is difficult in these situations. Informal or
isolated deployments are not sustainable. Often, they are promoted by
strong personalities and the deployment fades when their role changes or
organizational priorities intervene.
TABLE 1.2
Comparing Deployment Strategies
Attributes Driven Top-Down Driven Bottom-Up Isolated
Organizational Hierarchal and formal Informal and No organizational

Structure allocating resources allocating structure and
based on business resources personality
priorities. based on local dependent.
priorities.
Roles and Formalized based Informal and based No identified roles or
Responsibilities on benchmarked on project types. responsibilities.
deployments.
Benefit Formalized through Benefits are realized Benefits are isolated
Identification operational and financial informally and and may be
assessments and seldom exceed negative if capital
integrated into annual planned goals is required or root
strategic plans. and objectives. cause analyses are
incorrect.
Resource Resources can be optimally Resources are No resource
Prioritization prioritized and allocated prioritized at a prioritization and
and Allocation on identified projects local level or not allocation may
relative to other at all. Projects be non-existent
productivity drivers. are usually resulting in project
incremental to execution if there
current goals and are non-utilized
objectives. resources.
Communication Formalized communication Informal No communication
at all levels throughout communication at all unless there
an organization using at local levels. is a breakthrough.
multiple channels.
Execution Project execution is time Project execution Project execution
phased and based on is dependent on is dependent on
resource availability other business available time
and business benefits priorities and of the people
to achieve productivity typically lags participating in
goals and objectives. schedules. the initiative.
Organizational Complete and sustainable At a local level, but None.
Integration long term. not sustainable
over time.
Continuous Visibility enables continued Depending Not sustainable.
Improvement improvement over time on business
to achieve strategic goals priorities,
and objectives. continuous
improvement is
sustainable only
short term for a
few years.
Roles and responsibilities also depend on the deployment model.

Hierarchal or top-down deployments have formal roles and responsibil-
ities for all participants. In contrast, bottom-up deployments have informal
roles and responsibilities. Informal or isolated deployments also have
no formally identified roles and responsibilities. Bottom-up and isolated
deployments should be avoided because execution is difficult; business
benefits are usually minor; and process improvements are not likely to be
sustained.
A Lean Six Sigma deployment will also have other characteristics. If
it is top-down there will be a strategic alignment to projects; it will have
leadership support and sufficient resources. Employees will also be prop-
erly trained to use the new tools, methods, and concepts. For this reason,
it is important to produce tangible benefits starting with a well-defined
portfolio of projects. But, even if a deployment is top-down, there may
be differing strategies on where to focus resources. Some organizations
deploy it in localized areas as opposed to across the entire organization.
This approach is usually a pilot that is designed to provide proof of con-
cept to the larger organization. Or its key roles are assigned part time as
opposed to full time.
The business benefits gained from top-down deployments are higher and
accrue at a faster rate than those from bottom-up or isolated deployments.
The reason is that business benefit identification and project execution in
top-down deployments are formalized through operational and financial
assessments and integrated into an organization’s annual strategic plan.
In contrast, the business benefits associated with bottom-up or isolated
deployments seldom exceed an organization’s planned goals. In fact,
they may be negative if capital is required to execute a project’s solutions
without sufficient payback or return on investment (ROI). Top-down
deployments efficiently prioritize and allocate resources to a project’s work
activities because they are selected for productivity impact. But in bottom-
up or isolated deployments, resources are prioritized at a local level or not
at all. This causes a conflict with other competing priorities. Also, bottom-
up and isolated projects may not be incremental to current goals. This
causes either double counting of business benefits against other projects
or non-recognition of their benefits by finance. Bottom-up or isolated
deployments usually have long completion lead times. These issues are
avoided using top-down deployments. In a hierarchically structured, top-
down deployment, process improvements will usually be initially targeted
at just a few areas within an organization. It is very important in these situ-

ations that the Lean Six Sigma deployment business benefits be shared with
the larger organization to enable expansion of a Lean Six Sigma deploy-
ment based on stakeholders’ buy-in from the rest of the organization.
The project identification and execution strategies may differ between
deployments. These decisions need to be carefully considered based on
the specific organization. As an example, part-time roles will have other
responsibilities that may be a higher priority than deployment activities.
This tends to slow a deployment. But the advantage is that a temporary
deployment team is not created separately from operations. This avoids the
situation when people need to be assimilated back into the organization
at a future date or are idle if improvement projects are scarce. To accel-
erate the creation of business benefits, other organizations create full-time
roles and integrate them with their Lean Six Sigma initiative. The deciding
factor between full-versus part-time roles and responsibilities is dependent
on the available projects and how fast an organization needs to deploy its
program. The net business benefit from projects must be multiples of an
employee’s annual salary for full-time assignment. The initial level of tech-
nical expertise is another differentiating attribute. Some organizations
temporarily retain consultants to plan and execute the initiative. Others
deploy it using internal employees trained on basic principles, tools, and
methods. In these latter situations, a Lean Six Sigma deployment’s success
depends on internal capability.
The basis for a successful deployment is creating a project portfolio that
is rigorously vetted using a cost benefit analysis. Project balance is also
important. The portfolio should span several types of project to avoid
creating resource scarcity. A balanced approach ensures projects are
selected based on their strategic alignment. Some projects can be created
to improve customer experience, others to increase sales, and still others
to reduce operational expenses. There are proven methods for selecting
projects. The first is a financial analysis of an organization’s reporting and
operations to identify gaps. If expenses are higher than budgeted or are
increasing it may make sense to create projects to reduce them. An oper-
ational analysis can also be performed to focus on operational gaps. These
are identified using reports, interviews, and process reviews. If there are
complaints of long lead times, invoicing errors, high concession costs, and
other issues, then projects can be created to investigate the root causes with
recommendations to eliminate them.
Digitization has significantly changed data collection. Most office and

service work is now digitized and spans multiple information technology
(IT) systems and their applications. Data collection for building pro-
ject charters, doing a root cause analysis, and implementing solutions is
now often time-consuming and expensive unless an organization has the
right software tool to extract data and identify the source and consuming
systems. The extractions are often done automatically using RPA methods.
Teams are also increasingly virtualized. They use collaboration tools to plan
and execute the data collection to create a project portfolio. The proven
advice of becoming familiar with how data is defined, where it resides, and
the transformations done on it is still good practice. A danger with highly
automated data collection is that users do not always understand how it
was created, i.e., the business rules used, the data quality, or the resultant
models.
A third method is to walk the process with the team doing the work. This
is called a Gemba walk. Gemba is going to where the truth can be found.
It is a hands-on review of a process to see how it works. By understanding
how work is done, insights are gained to identify where issues reside in a
process and their solutions. Examples include rework and process waste
such as over production, wasted motion, delays, and other issues. These
types of issue do not appear on management reports. A common name
for them is the hidden factory. It consists of non-standard work and other
NVA activities created as workarounds to keep a process moving. The con-
cept of a Gemba walk also applies to the IT ecosystem. Before accepting
reports as accurate the underlying data and algorithms need to be verified
for accuracy.
Effective projects enhance customer experience, increase product-
ivity, or provide other strategically aligned benefits. If they are training
projects, they should also provide an opportunity to use Lean, Six Sigma,
or rapid improvement tools and methods for their execution. Projects with
known solutions or that can be executed using capital expenditure should
be assigned for execution. Organizations often combine several of these
methods into an operational assessment to create a project portfolio.
Lean Six Sigma or any initiative has special roles and responsi-
bilities. Deployment leaders coordinate operational assessments to
create project charters that document the problem statement, scope,
business benefits, costs, and associated information for subsequent pro-
ject prioritization. Project charters are important. If they are not fully
vetted to contain the required information, e.g., problem statement,

key stakeholders, benefits, resources, a schedule, and other attributes,
they will return only minor benefits to the organization. This creates a
drag on an initiative if scarce resources are expended, but the project’s
benefits are low. The deployment leader’s role is important to Lean Six
Sigma deployments or any work that requires resources because they
align the resources to beneficial work aligned with operational strategy.
Project champions are another critical role. Champions help teams
obtain resources from stakeholders and monitor projects to ensure they
stay on schedule. Another important deployment role is the process
owner. Data collection and implementation activities need to be made
with the process owner’s team. The process owner will be responsible for
maintaining the eventual project solutions.
Lean, Six Sigma, and rapid improvement event roles include team
members, Green and Black Belts, Lean Masters, rapid improvement event
sponsor, facilitator, and support personnel such as maintenance, finance,
IT, and other professionals. A sponsor is a process owner, an executive,
or other key stakeholder. Sponsors provide needed resources and help
gain stakeholder support for an event. Resources include training rooms,
materials, trainers, access to communications, and other equipment. An
event facilitator coordinates the event planning, execution, and follow-up
activities. Team members are selected based on the project charter’s scope,
problem statement, and goals. Support personnel include maintenance,
finance, IT, and other professionals.
The required technical expertise for a project varies. If the project is
expected to be heavily Lean focused and applied across several organ-
izational teams, then a Lean expert should join the team. If the project’s
root cause analysis is expected to be heavily analytical, then a Black Belt
expert may be added to a team. Or an RPA expert familiar with automated
methods for data mapping, extraction, and analysis may be required. In
summary, a team’s members reflect a project charter’s scope, problem
statement, and goals.
Rapid improvement events were originally deployed in manufac-
turing as Kaizen events or workshops. One definition of “kai”+“zen” is
“to take apart” and “to make good.” The disruptive advantage of the ori-
ginal Kaizen methodology is that continuous improvement teams could
implement change using Lean methods to analyze or “take apart” a pro-
cess using Lean’s simple analytical tools such as process mapping, looking
for value in the process, and eliminating process waste. The improvement
work was done with a view toward understanding what was important
to customers and with the team doing the work, i.e., the people that
really understand how the process works. The Kaizen team simplified,
standardized and mistake-proofed the work operations “to make good”
the process.
Rapid process improvements are executed though a workshop where a
process is analyzed, and changes are quickly made by the people doing
the work. Although they originated within manufacturing through Kaizen
workshops, they are now frequently used to improve many different types
of process across global supply chains and especially for services and
supporting processes. Many are now remote or virtual. They use select Lean
Six Sigma tools and methods depending on the process problem needing
a solution. The goal is rapid root cause analysis and solution execution.
They are more successful if team members are cross-trained to use Lean,
Six Sigma, Business Analytics, and other methods to solve service process
issues. Not every process problem can be solved using a rapid improve-
ment approach because the problem statement and subsequent root cause
analysis and solutions may be complicated or require investment. The dur-
ation of many improvement projects typically ranges between a few to sev-
eral months for most applications.
Root cause analyses are also becoming more complicated. Now for end-
to-end process analysis organizations use advanced analytics to access large
databases resident in IT ecosystems to understand relationships between
metadata and the applications transforming it through algorithms and
models. The resources and technology now required to gather and analyze
data are extensive. But although digitalization is creating disruptive change,
a Lean Six Sigma process perspective still provides significant benefits. The
deployment approach has been modified from the original manufacturing
focus. Process improvement opportunities for services, offices, and their
supporting processes naturally align with Lean methods when process and
people are integrated within an end-to-end system. In summary, although
a significant part of process improvement work is now virtual, it still lends
itself to Lean Six Sigma and rapid improvement methods.
Communications are also important for initiatives and programs. These
are sent through different channels depending on the message content
and intended audience. Properly communicated messages help secure
resources for projects to increase deployment momentum. It is important
to send simple and consistent messages to reinforce an initiative’s goals.

Effective communications are essential for Lean Six Sigma deployment,
rapid improvement events, and other work. In contrast, bottom-up or
isolated deployments will have ineffective communications because other
work has higher prioritization and is aligned to existing communication
channels.
Projects created through bottom- up or isolated actions that need
resources, cannot compete with strategically aligned projects. Top-
down and aligned projects will also be executed several times faster than
non-aligned projects, and the business benefits are higher. Therefore,
organizations should insist that all projects, regardless of the initiative, be
formally chartered and prioritized prior to execution. There is no reason
to expend scarce resources for short-term and limited business benefits.
Project execution is also aided by upfront identification and vetting with
stakeholders. When financial and operational baselines are estimated at the
start of a project, it is easier for a team to complete the problem statement,
goals, and to establish initial baselines for the key metrics. Operational
assessments will help organize this planning work. In summary, it is dif-
ficult to sustain process improvements unless all work is aligned to the
organization’s goals.
VOICE OF THE CUSTOMER (VOC)

When rapid improvement events were first created for manufacturing,
the VOC was clear. If the event was internal, then the process owner
communicated where the team would work and the desired outcomes. If
the event focused on a customer issue such as late deliveries or poor per-
formance of services or products, then the requirements were also known
and well defined. This enabled the team to internally focus its project
charter and work on the correct issues. In this section we expand the con-
cept of external VOC to the newer ways of obtaining it through listening
posts. These are in addition to historical ways to passively gather the VOC
through concession, warranty and similar reports, or actively by engaging
with customers.
The methods for obtaining customer information are diverse, and each
has advantages and disadvantages. Some provide rich information but are
costly, whereas others are inexpensive but provide less useful information.
The format and strategies for obtaining VOC also vary by the method used
to gather it. Face-to-face interviews, focus groups, and visiting a customer
site to see how products and services are used provide an enormous amount
of information useful for process improvement. But the number of these
interviews is few because of cost and time. In contrast, surveys by email or
phone are less costly, but the gathered information must be analyzed, and
inferences must be made. Questions need to be carefully designed to avoid
bias. These are active data-gathering strategies. Passive data-gathering
strategies are also common. These include reviewing reports for returns,
warranty, and other types of concession such as complaints. Passive infor-
mation is useful, but it lacks customer sentiment and must be organized
and analyzed to add value and provide an insight for improvement. A
passive listening post when poorly designed will tend to focus an organiza-
tion on improving the wrong things.
Audiences also vary. A survey might focus on customers, suppliers, part-
ners, or employees to gather ideas for process improvement. Field sales
surveys are particularly useful for identifying what should be improved
from a sales perspective. There are several approaches for gathering cus-
tomer information. Transactional surveys request feedback at the time of
service. This information is useful for operational improvements to quality
of service from the customer’s perspective. Loyalty surveys measure gen-
eral impressions customers have of an organization based on interactions
with several organizational levels such as sales representatives, support
personnel, executives, and other personas. There might also be alerts if
a major issue occurs when a customer complaint becomes an escalation
requiring specialized expertise or approvals for resolution. Proactive
organizations also have advocacy representatives that reside in corporate
quality or more recently a chief customer office (CCO). These advocates
meet with customer leadership to understand the improvements needed
to create a seamless customer experience. Other listening posts include
industry panels and benchmarking.
The goal for understanding the VOC from a process improvement
perspective is to learn how products and services including supporting
processes are used by customer personas in use cases. The gathered infor-
mation is used to then understand what works well or not. For things not
working well, projects are created to enhance the customer’s experience.
This approach is also used for improving stakeholder, supplier, employee or
associate, and partner experience. The goal is a summarization of the issues

that need to be improved and key customer contacts that can be consulted
or join improvement teams. Ideally, this feedback is tied to current oper-
ating reports such as returns, warranty, and other concessions to provide
benefit information for project charters. Voice of the customer and the
other voice of data-gathering work is crucial for improving quality and
increasing productivity. This information is not found in existing reports
or internally known. The advantage is that entirely new types of improve-
ment project will be found that enhance customer experience.
Understanding the VOC ensures project charters have externally facing
outcomes. This increases competitiveness because projects are created to
enhance the customer experience. Voice of the customer projects vary. Some
can be relatively simple to measure and execute. These are good candidates
for rapid improvement events. Whereas others might be larger projects with
a longer duration and require investment. The common thread for VOC or
other voice of projects is that they are balanced both internally and externally,
and team members represent the full scope of the work. If a project touches
an external customer, the customer representative needs to be on the project.
The same logic applies for suppliers and partners. Projects at the organiza-
tional interfaces have defied a solution because internal projects are easier
to create and execute. An advantage of projects designed to resolve inter-
organizational issues is that when solved both organizations realize benefits.
Issues occur for several reasons. If organizations assume certain customer
requirements are required but in fact they are not needed then NVA work
is created. Eliminating NVA work reduces lead time and costs and improves
quality when process complexity is reduced. Other examples include testing
requirements that are not useful; misconceptions regarding the meaning of
metrics, e.g., lead times in business or calendar days; different acceptance cri-
teria for products and services that cause returns, rework, and concessions.
DESIGN THINKING
Design thinking takes the VOC concept one step further. Using this
method, organizations gather VOC information from an empathetic per-
spective to design products and services in ways that enable seamless
customer experiences. This is done by creating personas and use cases
that describe different customer roles and the processes with which
they interact. Perhaps these personas reside in purchasing, are customer
executives or field operations persona that use products. The goals are to
design products and services in ways that personas have requirements met
for each use case as they interact with the supplying organization.
Organizational design teams follow logical methodologies to design
and test products and services to ensure they can be efficiently produced
and used by customers. Examples include classical design approaches as
well as the Design for Six Sigma (DFSS) methodology, which adds add-
itional modeling tools and a VOC focus that overlays classical design
approaches. Design thinking is a recently developed method that designs
from the outside into an organization. The difference is the way that VOC
is delayered from overall requirements into specific ones to satisfy per-
sonas and meet use case requirements. Rather than broad-brushing the
VOC information it is matched with different user expectations. Design
Thinking uses the five phases shown in Figure 1.2 to discover customer
issues, define them, and develop solutions. These include the Emphasize
Phase to discover the problem, the Define Phase to structure the problem
for solution, the Idealate Phase to develop solutions and eliminate the
problem, the Prototype Phase to build the solutions, and the Test Phase
to pilot them.
The first phase is empathizing with the customer to discover problems
and needs from their perspective. Whereas classical design methods rely to
a large extent on customer correspondence, conference calls and meetings
to develop requirements, Design Thinking requires a customer visit to
observe firsthand how the supplier organization’s products and services are
used by the direct customer and its employees either within their facility or
in the field. These are called Gemba walks. Gemba Walks require observing
work activities in person that are critical for root cause analysis. These
walks are usually done in Lean applications. Gemba is loosely translated in
Japanese as to go where the truth can be found. There may also be Gemba
Walks at a customer’s customers, i.e., indirect customers or to suppliers
depending on where the supplier’s products and services are consumed.
Another useful tool for understanding customer and supplier interactions
is to map the persona and use cases using a Customer Experience Map (CEM).
The CEM is like Value Stream Mapping (VSM) but instead customers par-
ticipate in building it, and the process is based on use cases. An example
would be a supplier providing software. The customer would have its
1.Empathize 2.Define 3.Ideate 4.Prototype 5.Test

(Discover the (Structure the (Develop (Build the (Pilot
Problem) Problem for a Solution) Solution) the Solution)
Solution)
• Look at design • Define the problem(s) • Consider • Design prototype (A • Begin the test (pilot)
problems from a from the persona/ alternative prototype is a physical (The “product pilot”
customer perspective use case perspective design concepts or conceptual evaluation tests a
(create personas and e.g. create problem based on representation of the prototype design
use cases) statement i.e. “A persona/ use best design alternative under limited real-
• Take a Gemba walk problem well defined case and is enough to allow world conditions to
with customer to is half solved” • Prioritize the evaluation on which to verify its
observe the problems • Create a design best design base the Test (pilot)) performance meets
firsthand thinking charter with alternative • Evaluate the prototype original design
• Map the customer scope and expected using tools such through testing, requirements)
experience by outcomes i.e. what is as a Pugh experimentation, and • Confirm
persona and use case success? Matrix simulation to specifications, CTCs
• Consider stakeholder • Translate CTCs confirm specifications, and acceptance
impact into preliminary CTCs and acceptance criteria by persona/
• Translate expected specifications criteria by persona/ use use and solution of
outcomes into case customer’s problem
“critical-to-customer” statement
(CTC) attributes e.g. • Create final design
cost to target; documents and
functional and feature control plan
performance are met;
structural form and
aesthetics are
considered
FIGURE 1.2
Design Thinking Roadmap
purchasing team (a persona) call suppliers for information on features and

functions as well as cost. Then the purchasing team would evaluate com-
petitive solutions. One solution and supplier would be chosen, and then
other customer persona would use the purchased software. Each persona
would have separate use cases. Periodically over its useful life the software
would be updated or refreshed and eventually become obsolete. Newer
software would be purchased to repeat the use case cycle. The persona use
case approach is critical for Design Thinking to provide the information
needed to modify the existing designs or to create new ones having rele-
vant features and functions to satisfy use cases. At the end of the Empathize
Phase, i.e., discover the problem, there is a review. Then the design team
begins its Define Phase, which has the goal to restructure the problem for
solution.
In the second phase the goal is to define the problems in ways that can
be structured for solution. The first step is to focus on the persona and
use cases to create a focused problem statement for each one. A project
charter is then created for each problem statement, or similar ones can
be grouped together into one charter. The normal tools for finalizing
characters are employed. These include a stakeholder analysis, a scoping
analysis, communication planning, and benefit estimation. The appro-

priate team members are identified with a team lead and schedule. Then
the desired outcomes for the problem statement are translated into critical-
to attributes related to cost and quality. These are tied to the features and
functions as well as other attributes needed to satisfy persona use cases.
The gathered information is added to a roadmap or if APM is used are
added to an activity backlog and scheduled as sprints. An initial design
review is held once all the project information is organized for a design
solution.
Solutions are developed in the Idealate Phase. The team brainstorms
alternative solutions for each persona use case. Ideally a single solution
will satisfy more than one use case. The best solutions are prioritized using
ranking methods to evaluate alternatives by features and functions. These
critical-to metrics are then further detailed by creating specifications to
align with the persona use cases. The information is used to build the
prototype that demonstrates the solution. An Idealate review is held at the
end of this phase, or if APM is used, reviews are held at the end of each
sprint when proposed features and functions, i.e., solutions, are available
for review by the customer and stakeholders.
In the Prototype Phase the solution is built for testing and evaluation.
This is a physical representation of the solution as either a physical or a
virtual object. An example of a virtual object is a working software code
that represents an end-to-end process. The prototype is evaluated for its
use cases and conditions such as changing incoming volumes or different
customers to verify that it works. Once the prototype is accepted by the cus-
tomer and stakeholders as meeting the design criteria, a pilot is designed to
test the prototype under actual use conditions by the customer.
In the Pilot Phase the solution is tested under limited but real-world
conditions. If performance meets the original problem statement for the
persona use case requirements, the final design documentation is created
for the formal handoff to operations. The solution is scaled by operations
with periodic reviews with the customer and stakeholders to verify
continued performance.
In summary, Design Thinking breaks down the original VOC into spe-
cific persona use cases having differing requirements. This guarantees a
seamless customer experience for all customer persona use cases. It also
guarantees a total service or product solution as opposed to satisfying
portions of the customer’s organization. This approach aligns with classical
design methods in that the VOC needs to be accurately translated into a

design, but Design Thinking is at a deeper level for requirements gathering
than classical methods.
LEAN
A goal of this book is to show how to use Lean Six Sigma and rapid improve-
ment methods to enhance customer experience and organizational prod-
uctivity for services and supporting processes. The discussion is divided
into three sections, which cover the alignment of improvement opportun-
ities, the planning and execution of rapid improvement events, and the
implementation of solutions and changing behaviors. The first section
discusses how to ensure projects are aligned to operational strategy. The
second section discusses how to apply Lean Six Sigma tools and methods
to support rapid improvement event planning in a virtual team and
remote environment. It also discusses data collection and analysis for IT
ecosystems, using digitization, RPA, and other methods to collect informa-
tion either in person or through algorithms. These are integrated into a dis-
cussion of process improvement. The third section discusses implementing
solutions, documenting business benefits, and reinforcing new behaviors
and organizational change.
Step 1 –Align Improvement Opportunities

Earlier in this chapter we began the discussion of Lean Six Sigma from an
organizational rather than a process perspective. If products, services, and
supporting the processes can be simplified, standardized, or eliminated prior
to starting the process, improvement teams and resources will be focused
on impactful projects and work. In this context, all planned Lean Six Sigma
and rapid improvement activities should be aligned with operational goals
and cascade to the right initiative and projects. Alignment is achieved in
part by identifying operational gaps in the strategic plan. This helps create
business cases and projects with net positive benefits. Higher priority is
given to projects that provide higher benefits. Benefits are associated with
the elimination of low VA operational work. Some of these include low pro-
duction rates, high scrap and rework, excessive process downtime or setup
time, and other process wastes. Benefits also include enhanced customer
experience seen as reductions in concessions and complaints or reductions
in operational expenses and high asset utilization. Higher revenue is also
a benefit. Useful information for identifying beneficial projects is found in
an organization’s profit and loss (P/L) and balance sheet statements. The
P/L shows expense categories as well as revenue and adjustments to rev-
enue. The balance sheet analysis shows the amounts invested in various
assets such as accounts receivables, inventory, plant, and equipment. The
conversion of assets increases available cash and reduces interest expense.
Extra cash can be invested in productive operations, deposited to earn
interest, or used for other purposes. Cost avoidance projects also provide
benefits. These improve a process to prevent higher future expenses. An
example would be adding a process audit to meet regulatory requirements
to avoid a fine. Still other projects could be created to enhance product
and service designs that increase market share and sales. Other benefi-
cial projects with a significant business impact include improving the sat-
isfaction and retention of customers, employees, and other stakeholders.
Higher retention rates reduce acquisition and termination expenses. Once
benefits are identified using financial and operational assessments, project
charters are created.
When building the business case for process improvement, not all pro-
ject opportunities will require the use of Lean or Six Sigma tools and
methods. Some projects may be better executed by capital expenditures
or, if a solution is known, should just be done as routine work. There will
also be a subset of Lean projects that can be executed over several days
using a rapid improvement event. Rapid improvement events analyze a
process though data collection and the applications of Lean and simple
data analysis tools to identify and eliminate the root causes for poor pro-
cess performance.
Step 2 –Plan and Conduct the Rapid Improvement Event

Once projects are identified they are classified by the toolsets that will
be used to identify root causes and provide solutions for them. Those
requiring extensive data analysis may be classified as Six Sigma or big data
analytics projects. Those requiring major process investigation require an
integrated Lean approach. Projects with a limited scope and those that
can be rapidly executed such as days or weeks can be deployed as a rapid
improvement workshop. These use a structured approach to focus a team

on a valid business problem, obtain the necessary resources to schedule
the workshop, and then aggregate projects with common causes or likely
solutions. In these workshops, teams meet and complete work activities in
a matter of days if the projects are simple, e.g., focused on a single work area
with follow-ups for uncompleted work tasks. More complex workshops
involving several different teams and locations may not be able to discuss
all the problems identified though workshop prework. But these can be
prioritized and assigned to a post-workshop team for follow-up.
At the beginning of a rapid improvement workshop, the improve-
ment team should have been trained to understand the basic tools and
templates for data collection and analysis as well as how to evaluate a pro-
cess to look for process simplification and standardization opportunities.
Training is needed for creating a project charter or updating an existing
one by refining the problem statement and goals, using data collection
forms, and being able to do simple analyses of the data. Other needed skills
are building and analyzing a Value Flow Map (VFM), estimating benefits,
and implementing solutions. These topics will be discussed in upcoming
chapters including Chapters 4 and 5 in which several Excel templates are
provided to help collect and analyze process data. Once data is collected
and analyzed a list of recommendations is created and approved by the
workshop sponsor for implementation.
Rapid improvement workshops have changed from their initial focus on
localized manufacturing work locations. These are also relevant applications
for end-to-end process improvements, but cross-functional stakeholders
need to be added to the team. Also, in these workshops, participants are
usually virtual and located remotely. The information needed to prepare
for end-to-end workshops is gathered from different IT systems. This is
in addition to the normal prework of conducting interviews, analyzing
performance reporting, and planning. Typical examples of end-to-end
or enterprise workshops include employee onboarding, new product
introductions, product or service renewals, resolving customer satisfaction
issues, and efficient asset management, e.g., inventory investment through
escalations of complaints from sales to engineering or manufacturing. The
common theme is that several teams need to be included to understand
and agree on the problem statement, its extent, how to measure it, and
the approach for developing common solutions that can be supported by
stakeholders as their processes are updated.
Step 3 –Implement Solutions to Change Behaviors

Organizational change is complex. Most of an organization must be convinced
that new behaviors are advantageous to sustain them. The basis for effective
and sustainable process change both at a project and organization level is
sustainable solutions that eliminate process issues. Solutions must also be
easy to maintain by the process owner. Irrelevant or complicated solutions
will fall into disuse. Solutions should also create measurable benefits for the
organization and process owner. Benefits accrue when the root cause ana-
lysis and solution were properly done. Other important change activities
include training employees to follow new procedures and planning for an
effective project transition to the process owner.
Over an extended period, organizational behaviors will be positively
influenced by an initiative when projects are successfully completed. This is
especially true for operational initiatives such as Lean and Six Sigma because
their tools and methods are useful for creating and executing projects that
change organizational behaviors. It has been shown that organizational
change can take several years if it is strategically aligned and prioritized
with proper rewards, recognition, and communication systems.
ELEMENTS OF A LEAN SYSTEM
In this section we will discuss the ten key elements of a Lean system to
provide some context around our upcoming discussion in Chapters 2 and
3. We will expand our Lean discussion relative to these elements and also
introduce additional Lean and Six Sigma topics for collecting and ana-
lyzing process information. In addition, because of the high virtualization
of service processes we will also discuss IT ecosystems, digitization, and
automation relative to their impact on classic Lean and Six Sigma tools and
methods. The focus will be integrating these new methods for rapid pro-
cess improvement using rapid improvement workshops.
Understand the Customer

Understanding the VOC is a powerful way to identify and eliminate
process waste. There are many ways to gather customer information.
One is through face-to-face interviews or loyalty surveys. These are

called listening posts. There are many others such as social media,
conferences, benchmarking, customer experience mapping, and visiting
customers onsite to observe how products and services are used in
practice. Obtaining the VOC requires a formal organizational strategy.
And the VOC is gathered at different organizational levels for different
purposes. As an example, design engineering needs the VOC to design
new features and functions into products and services or to upgrade
current ones. Process improvement teams need to know which parts of a
product or service are valued by customers so that supporting processes
can be properly designed. Also, if there are process gaps the VOC can
help identify NVA work to reduce operational complexity. The VOC is a
powerful way to focus process improvement efforts.
In the absence of a formal VOC program and governance, the term
VOC is sometimes loosely interpreted. A common situation is when sales,
marketing, or other groups substitute their voice for customers. The pro-
cess of identifying and analyzing the VOC for process improvement is a
rigorous set of activities firmly based on new survey methodologies. The
CEM is another useful method for capturing customer feedback through
an end-to-end process. In our discussion, it is assumed a rapid improve-
ment team has a quantifiable listing of current requirements that have been
verified as correct by actual customers as opposed to substitutes and then
correctly translated into internal requirements and specifications that can
be used by process improvement teams. This information is available as
performance metrics with targets and is used when creating VFMs and
looking for VA operations. The metrics fall into common classifications
such as time, cost, and performance.
Reduce Complexity
Process improvement invariably reduces complexity and by inference
creates simpler and more standardized processes. Complexity occurs
when additional operations, approvals, and other activities are added to
a process but without being requested by customers. Evidence of process
complexity are a high proliferation of products and components, long
lead times, low percentages of VA work, a high process variation, costs
exceeding industry benchmarks, poor operational performance, and
other issues.
Lean Six Sigma projects and rapid improvement events are used to reduce
process complexity. A process even if at first well-designed to be simple,
standard, and aligned with customer value changes over time. Non-value
adding operations are added as workarounds for process issues. Examples
are adding inspections and approvals that cause longer lead times, rework
loops, and adding operations that do not transform work. These types of
process become increasingly more complicated. Over time it becomes
necessary to deploy improvement projects.
To improve a process, a team needs to understand how it works. If the
improvements are focused on a localized work area, then a static floor
layout marked up with locations of people, machines, inventory, and over-
laid with metrics such as floor space, inventory, direct labor, throughput,
scrap, rework, machine uptime, and other measures is useful. If the process
has several operations through which work moves, then a process map is
useful. In either situation, a visual and quantified representation of a pro-
cess is used to guide the team to understand the current process to start
data collection and begin to conceptualize moving from the current state
to an improved and simplified process, i.e., to reduce complexity.
Major productivity gains are achieved by reducing complexity at an
organizational level. Examples are policy changes to start actions that will
benefit the organization or to stop those without benefit; or internal work
can be outsourced or insourced; the number of suppliers can be reduced; or
designs can be simplified by combining features and functions to reduce the
number components and the supporting processes needed to produce and
manage them. Complexity should be reduced before deploying projects.
As an example, a supply chain rationalization analysis may show existing
redundant facilities or other excess capacity that can be easily eliminated.
Improvement projects should not be deployed in work areas that will be
eliminated soon.
Organizations rely on remote teams to do critical work from sales and
design to supporting processes. In many instances an organization is
replicated in other countries with the same functions. In this era of digit-
ization and virtualization, work is disaggregated and done by systems
and teams across the world. A product may be sold in one location but
designed in another. Quotes and orders may be logged into an online
application that shares information with other locations to manage and
report transactions. The shipment and logistics may be coordinated by still
other locations. While offshored work was once only back-office, it is now
customer facing too. It increasingly touches external customers. There are

also centers of excellence where certain types of work are offshored. As
an example, in Egypt and Morocco, people speak several languages. This
is useful for regional companies that have diverse customers speaking
different languages. A similar situation exists in China, Singapore, India,
and other Asian countries. It is important to consider the impact of lan-
guage and cultural differences when work is offshored. The more product,
service and supporting process designs, procedures, job aids, and other
information can be simplified, standardized, color-coded, and mistake-
proofed, fewer errors will be made in translation.
To reduce internal complexity, organizations offshore processes to other
countries or outsource to locations within a country for a variety of reasons.
These include expanding operational capacity without high risk or cost. As
an example, a call center that has high direct labor costs could create a sub-
sidiary in a low wage location and transfer incoming calls to that location. In
other situations, organizations may need to be near new customers or crit-
ical suppliers. Work is also offshored because of technology constraints. In
these situations, a partner may have unique patent positions or specialized
technical knowledge that would be costly or impossible to independently
develop. In other situations, a process may be heavily regulated inside one
country, and regulations differ in another country. It is also common to
move sources of supply and production closer to consuming markets.
A retail store would locate new stores close to customers and modify store
appearance and products to satisfy local preferences. There may be local
country or regional regulations requiring an organization to locate subsid-
iaries in a country or develop partnerships. An organization may also need
to quickly obtain expertise through partnerships with local organizations.
Another reason for offshoring or outsourcing work is that an organiza-
tion may want to focus without distractions on core processes. Finally,
some locations may be better suited for certain types of production. As an
example, circuit board production is best done in dry and arid environ-
ments versus wet and moist environments.
There are a variety of factors that should be considered to minimize
the risk when an organization considers offshoring its work. Depending
on the specific product or service, demographic considerations include
population size and density, its age distribution, and education levels
and skills as well as language proficiencies. From an economic risk per-
spective, major considerations include a country’s economic stability, its
available infrastructure, and capital as well as the types and availability of

equipment, labor, suppliers, and customers. Legal and regulatory factors
are also a consideration as well as local governments’ taxation policies and
internal stability.
Once these factors have been considered, then the specific activ-
ities related to the efficient transfer of processes and work tasks become
important. From an operational perspective, these include productivity
impacts as well as customer service and supplier relationships. Offshoring
seeks to increase information sharing across global supply chains as well
as the percentage of intangible to real assets and service augmentation
through market segmentation. Digitalization, automation, and virtualiza-
tion are used to create flexible systems that increase supply chain value
content. The goal is to move simplified and standardized work where it will
have the highest value content.
How is offshoring and outsourcing work done at an operational level?
What may, at first, appear as extremely well-documented work and inspec-
tion instructions in one cultural context may be confusing in a second.
Language conveys context and implied meanings. When designs and
supporting processes are transferred, they need to be in a format that
is intuitive, e.g., simple, color-coded, in the form of visualizations, can
only be assembled one way, and other mistake-proofing strategies can be
applied to lessen the risk of misinterpretation. Local customs, values, and
preferences will also have a direct impact on the design of products and
services that are different from those offered in a different country. Chain
restaurants vary their facility designs and menus are customized for local
consumer preferences, laws, and regulations. Accounting processes, tools,
and templates are also modified to meet local accounting standards as well
as those of a parent organization. Lean tools and methods are effective
approaches for simplifying, standardizing, and mistake-proofing processes
to meet local requirements. Documentation should not rely on a specific
language format to ensure employees unambiguously understand how to
do the work.
A few additional strategies are useful for reducing complexity. Process
operations not aligned with the VOC can be considered for elimination
unless required for regulatory or technical reasons. Technical reasons
include required inspections and manual work that cannot be eliminated
or automated. Products, services, processes, and operations with no value
content can be eliminated to reduce complexity. Another strategy is to ana-

lyze profitability of products and services based on margin, volume, and
strategic relevance to rationalize them. Non-profitable products with low
volumes are candidates for outsourcing or elimination unless they need to
be produced internally because they are proprietary. Products and services
can also be redesigned to simplify, standardize, and optimize relationships
between remaining components and supporting processes. Service ration-
alization to reduce complexity is analogous to product rationalization.
Service packages can be evaluated for their relevance to customer experi-
ence and organizational profitability. A review can be done to determine
where and how services should be performed.
It is also important to look for ways to reduce process complexity at a pro-
ject level. Complexity reduction at a project level starts with the identifica-
tion and elimination of NVA work. As an example, if a problem statement
were reducing travel expenses, employees booking unnecessary trips or
not following corporate travel policies regarding time of day and carrier
or hotel would be candidates for process improvement. As reducing the
number of business trips will directly reduce several different types of travel
expense, it should be analyzed prior to deploying an improvement team to
reduce other types of travel expense. Another example is incoming cus-
tomer calls not picked up by call center agents in the expected time defined
by a service level agreement (SLA). There are different SLAs depending on
the customer segment, e.g., 1 minute, 5 minutes, etc. There are also priority
rules for answering calls, e.g., first in first served, or if waiting time exceeds
the SLA, then answer the call ahead of other customers. If a customer’s call
is not answered, they will call back. Callbacks increase the incoming trans-
action volume into the call center. In some situations, the increase exceeds
25% to 50% of the initial incoming volume. Unplanned volume increases
are the root causes for certain process issues such as longer waiting time
for all customers and errors caused by agents. These increase the system’s
complexity because of the rework. Prior to starting improvement projects,
it may make sense to eliminate the reasons for the incremental call volume
as a first project.
Sometimes an important activity driver such as incoming volume
can be significantly reduced by changing the supporting process. As an
example, retail organizations have differing supporting processes for
customers to request rebates. Some have customers log into a website
portal to submit supporting documentation and receive a credit, whereas

others are required to mail in rebates. These must be manually processed
before a check is sent. Others require a call center agent be contacted to
credit the customer. The incoming volume to the call center can be sig-
nificantly reduced if customers self-serve themselves. The manual pro-
cess in which customers tear off Universal Product Codes (UPC) from
products, add information to rebate forms, and send this information
to a center location to receive a check is a very complicated process.
A policy change with simple process design could improve this customer
experience and reduce transaction volumes. An improvement team
could work on this manual process. Changing the process design solves
many other process issues such as returned mail, customer complaints,
receiving written rebate requests, manually processing the request, and
mailing the rebate checks. Rapid improvement teams are more effect-
ively utilized once a process has been simplified at a higher level and by
considering new capabilities provided by digitalization and automation.
Deploy Teams
Problem-solving teams are an integral part of a Lean Six Sigma system.
Teams are deployed to resolve different types of issue. The type of issue
and its expected root cause analysis and potential solutions determine the
required skills of the team members based on the anticipated methods that
will be used to investigate and provide solutions. The team’s work must also
be aligned. Aligned teams are part of an initiative’s governance strategy
that ensures projects are vetted for benefits, resourced, and prioritized with
a schedule and goals. An organization relies on its improvement teams to
provide benefits on schedule.
To ensure operational alignment, organizations create steering
committees to govern an initiative such as Lean Six Sigma. Governance
includes periodic leadership reviews of project progress relative to
anticipated benefits and resource usage and any needed support. The focus
is building and executing a prioritized project portfolio to achieve prod-
uctivity goals. Reward and recognition systems are integrated throughout
the initiative to reinforce deployment goals. The steering committee also
creates consistent messaging to ensure organizational engagement. After a
deployment’s infrastructure is created and projects selected, team members
are selected based on the project charter’s problem statement and goals.
The projects will differ. Some will be focused on Lean methods, others on
Six Sigma methods, and still other on advanced big data analytics. In some
functions such as software development, APM teams may be assigned to
develop software features and functions to build operational capability. The
speed of project execution also varies. Rapid improvement has historically
been executed using workshops for manufacturing and service operations
or APM for software development or design projects. Agile project man-
agement can also be used to manage a rapid improvement event with its
activities pulled from an activity backlog by team members for solution.
Performance Measurements
Operational initiatives are controlled with performance metrics. Lean has
several. These include lead times, production rates, and percentages for
scrap, rework, process yield, process downtime, and capacity utilization.
Other metrics include takt time, setup time, inventory, floor area, cus-
tomer satisfaction, supplier on-time delivery, sustainability, lost time from
accidents, and many others. These are augmented by financial metrics. Six
Sigma has additional quality metrics such a first-pass yield, i.e., doing work
correctly without scrap or rework as well as capability indices comparing
ratios of process performance to customer requirements. The deployment
project management for Six Sigma or Lean has additional metrics regarding
different types of benefit, schedule attainment, and resource costs. Benefits
include reducing operational expense and increasing revenue and asset
conversions, contributing to improved cash flow. This information is
incorporated into reporting dashboards that provide a 360-degree view of
a deployment’s status. There are differing dashboard formats for audiences
based on the information they need to know.
Map the Process

When Lean is deployed at a location such as an office or manufacturing
plant, an operational assessment is first done to create baselines of key
process metrics and identify gaps that help identify improvement projects
to build a project portfolio. Building a VSM for the facility is also part
of an assessment. This map will be broken into processes or workstreams
called VFMs. Normally these are visual and placed on a wall in a confer-
ence room called a war room. They are built by the people doing the work
and quantified with metrics. Then the maps are analyzed. In an end-to-end
virtual process, the assessment is done by remote teams, and the mapping
is virtual using software. But the principle of the people doing the work
building the map must be followed to ensure accuracy.
The simplification of a process and its operational work tasks is one
of the key strengths of Lean Six Sigma. A VSM is a quantified descrip-
tion that shows operational relationships and helps differentiate VA
from NVA operational work tasks. There is also a third category called
BVA work tasks. Business value adding work tasks are needed to satisfy
technology or regulatory constraints and are eliminated when possible
from the process. The first analysis of a VFM is reviewing each oper-
ation to classify it as VA, BVA, or NVA. Value is defined as an oper-
ation that is needed by an external customer, done right the first time,
and transforms an incoming work object by adding features, functions,
information, and other VA content. An operation may be VA but some
of its underlying work tasks may not be. The purpose of this initial ana-
lysis is to identify ways to simply a process before creating improvement
projects. A second analysis estimates process takt time and the lead time
on the critical path. Takt time was defined earlier in this chapter as a
ratio or available time divided by required production to calculate the
time each unit needed to be produced. As an example if there are 100
minutes available per day and 100 units need to be produced, then the
takt time is a unit each minute. A major goal of process improvement is
to maintain the takt time while reducing process lead time on the crit-
ical path. This is done by making process improvements over time. As
lead time is reduced, process issues become evident and are systematic-
ally eliminated from the process. If deep dives into parts of a process are
needed, other maps such as cross-functional ones may also be used to
better understand the hand-offs between teams as materials or informa-
tion are transformed through a process.
Eliminate NVA Operations

Another analysis focuses on process waste identification and elimination.
Process waste includes unnecessary transportation, high inventory or
capacity, unnecessary motion, waiting, overproduction, over processing,
and defects, and some organizations add others such as safety and
sustainability waste. Transportation waste is moving material or infor-

mation when it does not need to be moved. Examples include moving
a tote filled with parts several times before processing it or walking an
invoice around an office for signatures. Inventory waste is unused cap-
acity. Examples include excess or obsolete stock, or people, equipment,
or facilities left idle. Motion waste occurs if people do not follow
standard work, i.e., use the minimum motions to complete a work task.
Unnecessary waiting for proceeding is a time waste. Overproduction is
making more than what is needed. This contributes to inventory waste
but also impacts other scheduled products or services because their pro-
duction time may be impacted or materials they need are consumed by
other jobs. Overprocessing waste is adding NVA features or functions to
a design or process. This adds complexity that increases lead time and
cost and creates conditions for errors. Defects are waste because the work
must be redone. In some organizations, safety issues such as accidents
are considered process waste of time. These and other analyses continue
over days and weeks as a process is analyzed, and the desired future state
becomes clear. Project charters are created from these analyses and added
to the portfolio for prioritization. Process simplification is achieved by
first eliminating the seven process wastes. This reduces lead time, cost,
and error conditions.
There are other ways to further reduce NVA adding operations. One is
to focus on process layouts. Some processes designs are more efficient than
others for certain applications. As an example, operations laid out in a “U”
shape may be more efficient than other process layouts. A “U” shape work
cell integrates all operations in the work cell to enable it to be easily staffed
because workers can switch within the work cell to different operations.
In contrast, although a linear layout is optimum for high-volume flows
of materials and information, for low-volume flows a linear layout makes
it difficult to reallocate workers from operation to operation as demand
fluctuates. Therefore a “U” shape layout is more efficient for low-to
medium-volume production with different types of job.
Once a process is simplified and its operations are efficiently organized,
work operations can be standardized and mistake-proofed to lower pro-
cess variation. Standardization ensures work is performed the same way
every time by any worker. It reduces operational cycle times and process
lead time.
Just in Time (JIT) Production

A full implementation of a Lean system (excluding Six Sigma activities)
requires level demand and low variation before a pull production system
is implemented. A pull production control system is useful for matching
production schedules to external customer demand so only what is needed
is produced and excess inventory is not created. Estimates of maximum
daily demand variation needed to deploy a pull system for medium volume
production is approximately +/-10% of average demand. Because not all
systems have low demand variation it is difficult to deploy pull sched-
uling systems in them. In a pull system, operational capacity is linked to
external customer demand. Sequential operations are also linked together
using either manual or electronic signaling systems that control the flow
of materials from upstream operations as they are needed by downstream
operations. In a manual system, Kanban cards are used to authorize the
movement of materials. A pull system helps to minimize work-in-process
(WIP) inventory by ensuring capacity is efficiently utilized to meet actual
demand.
There are several actions that can help reduce demand variation if a
pull system cannot be fully implemented. First, from a sales or marketing
perspective special incentives for purchasing products and services can
be eliminated. Some major retailers offer everyday low pricing to lower
demand variation. Second, product and service designs can be simplified,
so there are fewer components and operations to schedule. Other actions
include using standardized containers to move known quantities through
a process or using a pull system in some areas where it will work to gain
partial advantages. Digitalization and automation also help by showing
the status of actual demand and capacity as they change. These and other
improvements can help match capacity to demand period by period, so
production schedules are stable and products and services are available
when customers need them. This also helps lower the incident rate of cus-
tomer complaints and the many types of rework associated with them.
Manufacturing has used pull production systems for several decades.
But how are they used for services? Whenever people working in a pro-
cess pass work from one person to another, the flow of work needs to be
balanced to eliminate waiting between operations. The goal is not to build
interim work, i.e., WIP or inventory creating excess capacity. Examples are
filling out forms in advance, but then the policy for some fields changes
requiring they be thrown out. Or hiring several engineers in anticipation

of new projects rather than hiring them as projects need to be activated.
Integrate Suppliers
Lean supply chains consist of suppliers, IT applications, resources, and
supporting systems. In these systems, suppliers and customers, i.e.,
participants, work to simplify and standardize operations to efficiently
match operational capacity to demand across the supply chain. A goal of all
participants is to increase the value content of the supply chain. This is done
using investment models to ensure assets and resources are integrated in
ways that reduce lead times on the supply chain’s critical path by expanding
the capacity of system bottlenecks. This requires that material and infor-
mation flows be balanced to demand and capacity and at the right places
in the supply chain.
Partnerships are critical for supply chain success because information
needs to be shared by all participants by accessing common online portals
where transactions occur. But access to online systems requires govern-
ance and security. Governance in large organizations needs to be applied
to thousands of metadata fields resident in hundreds of applications. The
operational systems of the participants must also be integrated to avoid
redundant work that lowers value and increases lead times. To ensure com-
patibility the participants use common metrics such as inventory turns,
lead time, on-time delivery service levels, and similar metrics. Operational
improvement initiatives such as Lean, Six Sigma, TPM, and others help
create a common improvement language for participants that enable cross-
company teams to collaborate for improving common processes.
Visual Controls and Pull Systems

Controlling the flow of information and materials through processes is
increasingly complicated and prone to error unless automation is used.
A key philosophy for Lean is that information and materials flow uninter-
rupted between the operations within a process. This is continuous flow.
In process industries such as oil and gas, a pipeline provides uninterrupted
flow of oil unless it is stored for later use. In discrete parts manufacturing
or service systems where work is moved from operation to operation visual
controls and pull systems based on actual demand can help ensure smooth
and balanced flow. Depending on the application, the flow can be controlled
using physical or virtual signal cards, i.e., Kanban cards of various types.
The assumption is that an uninterrupted flow of materials or information
is on the critical path with no slack time. This requires that the status of
work be known based on simple rules that move work from one operation
to another using a pull signal. In a process, there are several work statuses.
Work could be waiting to be processed, being processed, available for the
next operation, or in an other status such as on hold for quality issues or
inspections. The work as an object has attributes such as a description,
serial number, quantity, and other metadata that identify it as a unique
material or information object. A few decades ago, work status was con-
trolled manually or in parts using bar code scanning. There was no end-to-
end view of a localized process and certainly not a global service process
or supply chain. Digitization changed this, and now for most processes we
know the object status across different systems anywhere. Online tracking
of packages is an example.
Visual controls have historically been used in Lean manufacturing
processes to show the status of work, performance measurements, and
other information needed to control a process. Examples are a metric dis-
play board showing current production status, color-coded lines on floors
to show where machines, inventory, and finished products should be
placed. This keeps work areas clean and organized. It quickly and visually
shows the status of assets, e.g., how much inventory is present. Other visual
controls alert employees to potentially hazardous conditions or where to
walk or not. There are other applications.
Digitization and Automation

Information technology and automation drive the efficiency of service
operations by eliminating manual operations from processes. These systems
are increasingly more complicated and are now called IT ecosystems. In
large organizations they consist of hundreds or thousands of software
applications with many integrated to support end-to-end processes. There
are also thousands of metadata fields in these systems that are owned by
different teams. As an example, marketing owns customer data such as data
customer names, addresses, contact, and similar data. Only marketing can
change the definitions and business rules for the metadata they own. This
ensures that when other teams use the customer metadata the definitions
and rules do not change between end-to-end applications. Similarly, design

engineering controls data describing product or service structure, e.g., the
bill of materials and testing requirements. Production controls data for
routing to build supporting processes and internal validations. Access and
control to metadata need to be governed, so each piece of data, i.e., meta-
data, has one owner that controls the field definition, its business rules and
how its actual data is used. The goal is to avoid situations in which different
teams can change the data values or business rules. This would disrupt
reporting and controls because different teams would be using differing
definitions and rules for the same metadata. Security issues must also be
solved.
Although data collection for process improvement is still done manu-
ally for data extraction, analyses, and solutions, manual extraction is less
than before. IT ecosystems contain very large databases with millions of
records scattered across different applications; these are accessed using
algorithms or bots. The analytics have also changed because of database
size; they are in different global locations and systems and data format
or structure. Manual pulling of millions of records is not practically
feasible. When analyzing large databases, applying classical statistical
methods fails because of the large sample size and data types such as
non-numeric data. As an example, some classical statistical tests require
sample size in the denominator of test statistics to decrease the size of a
parameter’s confidence interval. In a regression equation, some variables
will be shown to be important predictors of a dependent variable, but
others are not. Using these formulas as the sample size in the denomin-
ator increases, the confidence interval becomes small. If the sample size
is very large, then all predictors will be shown to be statistically signifi-
cant. This is not likely to be true. Newer analytical methods overcome
some of these limitations for structured data such as numbers. But the
types of data have also changed. Classically, process improvement teams
only worked with structured data such as numbers in Excel tables. But
newer data is semi-structured or unstructured. Examples include text,
sound, and videos. These different data types also need to be integrated
into a root cause analysis and solution. New tools and methods have
been developed to do this. Analyses are now commonly completed
using unstructured customer feedback from surveys. Comments are in
text format. Data mining algorithms now extract common words and
phrases from the text to build a root cause analysis to measure customer
sentiment.
Also, whereas data files used to be downloaded for a root cause analysis,
new software applications trace personas such as customers or sales people
as they access an online portal and complete specific work tasks needed
to execute a use case such as placing an order. These work tasks include
signing into the portal, adding data to the metadata fields and other tasks.
Analytical algorithms can be used to create lineage maps to show the
sequence in which systems and metadata fields are accessed to do the work
as well as who is doing the work, when, and the time required to access and
compete work tasks, if mistakes were made, redundant sequences of work,
and other relevant information. These analyses can be applied to millions
of transactions to provide reporting of process issues. From a solutions per-
spective, RPA is routinely applied to eliminate repetitive manual work. The
algorithm or bot becomes a virtual persona that executes repetitive work
tasks without error or cost. Virtualization and automation are integral to
service process improvement work and in fact all modern production
systems including manufacturing. Although there has been widespread
and deep deployment of technology to process analysis, measurement,
control, and improvement, the classical approaches for process improve-
ment remain relevant but with updated tools and methods.
SUMMARY
Today’s office environments consist of employees, consultants, and tech-
nologies that are integral parts of global supply chains. Digitalization,
automation, and other disruptive technologies integrate these systems.
Their value content has been rapidly increasing because of this automa-
tion. As an example, in a modern end-to-end quote to order to cash pro-
cess, an accounts receivable team may reside in one country, but several of
its core functions are performed in different locations, and many of these
are global. Customer experience is at the center of operational improve-
ment but with higher efficiencies. The methodology for accelerating pro-
cess improvement has also been expanded in recent years from the original
localized Kaizen to generalized rapid improvement events that are increas-
ingly global and virtual.
Strategy alignment was shown to be critical to ensure resources are effi-

ciently utilized to achieve business goals. Organizations employ different
initiatives to execute strategies. Lean and Six Sigma are two OPEX
initiatives under this umbrella. To realize benefits, projects must be suc-
cessfully executed by employees trained to use the initiative’s tools and
methods. Normally an operational assessment is conducted to create a
portfolio of prioritized projects, which will move an initiative forward to
increase productivity and to meet commitments to key stakeholders and
increase shareholder value.
Figure 1.1 shows the operational model for service and office process
improvement. It integrates the classical methodologies of Lean and Six
Sigma and newer methods of APM, big data analytics, and business intel-
ligence. The methodology for accelerating process improvement has been
improvement methodology focused across teams and global as opposed
to discrete work areas. Agile Project Management is focused on bringing a
work team together to create discrete features and functions, i.e., solutions
for stakeholders using Scrum Sprints. This method is usually applied to
software development but is applicable to project management applica-
tion with deliverables. In addition to speed for delivering functionality and
features, other advantages of APM are high collaboration within the team
and with subject matter experts and stakeholders who provide feedback at
the end of each sprint.
Table 1.1 also compared the major characteristics of the Lean, Six Sigma,
The goal of this definition phase is to create actionable project charters to
eliminate or close performance gaps. Different problem statements require
different tool sets to identify, analyze, and eliminate the root causes for
poor performance. As an example, projects requiring process simplifica-
tion and standardization and similar improvements benefit from a Lean
The goal for understanding the VOC from a process improvement
perspective is to learn how products and services including supporting
processes are used by customer personas in use cases. The gathered infor-
mation is used to understand what works well or not. For things not
working well, projects are created to enhance the customer’s experience.
This approach is also used for improving stakeholder, supplier, employee
or associate, and partner experience. The goal is a prioritization of the
issues that need to be improved and key customer contacts that can be
consulted or join improvement teams.
A rapid improvement event uses the VOC and simple process analysis
tools to identify and eliminate NVA operations and the root causes for
poor performance. Most rapid improvement events use a combination of
Lean methods and increasingly methods related to digitization, automa-
tion, and virtualization. The classical Lean methods include work stand-
ardization, mistake-proofing operations, Single-Minute Exchange of Dies
(SMED), and TPM. Digitization refers to extracting metadata from IT
ecosystems for analytics. Automation refers to the substitution of manual
work by machines including algorithms. The use of algorithms for automa-
tion is called RPA. Although Lean Six Sigma rapid improvement methods
are the focus of this book, all the elements of the operating model now
need to be considered for effective process improvement.
Design teams follow logical methodologies to design and test products
and services to ensure they can be efficiently produced and used by
customers. Examples include classical design approaches as well as the
DFSS methodology, which adds additional modeling tools and a VOC
focus that overlays classical design approaches. Design thinking is a recently
developed method that designs from the outside into an organization. The
difference is the way that VOC is delayered from overall requirements into
specific ones to satisfy personas and meet use case requirements. Rather
than broad-brushing the VOC information, it is matched to different user
expectations. Design Thinking uses the five phases shown in Figure 1.2 to
discover customer issues, define them, and develop solutions. These com-
prise the Emphasize Phase to discover the problem, the Define Phase to
structure the problem for solution, the Idealate phase to develop solutions
and eliminate the problem, the Prototype Phase to build the solutions, and
the Test Phase to pilot them.
In upcoming chapters, we will show how to use Lean Six Sigma and rapid
improvement methods to enhance customer experience and organizational
productivity for services, offices and supporting processes. The discussion
is divided into three sections that include an alignment of improvement
opportunities, the planning and execution of rapid improvement events,

and the implementation of solutions and changing behaviors. The current
section discuss how to ensure projects are aligned to operational strategy.
The second section discusses how to apply Lean Six Sigma tools and
methods to support rapid improvement event planning in a virtual team
and remote environment. It also discusses data collection and analysis for
IT ecosystems, using digitization, RPA, and other methods to collect infor-
mation either in person or through algorithms. The are integrated into a
discussion of process improvement. The third section discusses solution
implementation, documenting business benefits, and reinforcing new
behaviors and organizational change.
2
Project Identification
OVERVIEW
In business, improving financial and operational metrics requires bringing
people and resources together to identify and execute projects. These
projects should have clear objectives of the types of work that need to be
done and how work activities should be organized and assigned to team
members. The organization of work is done by identifying the list of
sequenced activities and creating a project plan that describes these activ-
ities in terms of resource requirements and schedule. They have a time
duration and resource requirements, as well as an expected outcome when
an activity is complete. Work activities that are also called operations are
broken down into lower level work tasks that reside within operations.
Activities are aggregated into milestones that represent major parts of the
project’s work and are used to track progress.
Projects are classified according to intended outcomes and the types of
resource required to execute them. In this book we will focus our discus
sion primarily on the application of Lean tools and methods to rapidly
improve a process. Other improvement projects require in-depth stat-
istical analysis and may be more effectively executed using Six Sigma
methods. These types of project usually require experimentation or testing
of solutions within a process using a model. Initial testing for any solu-
tion either Lean or Six Sigma requires an initial evaluation using a process
pilot. Other types of project may require extensive analysis using big data
analytics, the deployment of capital investment, e.g., new machines, and
others may have known solutions requiring minimum project deployment,
i.e., just do it projects. All projects requiring team members and other
resources should be formally documented using a formal project charter.
51
Lean projects and rapid improvement events are our focus. The goals
of rapid improvement events are higher financial and operational metric
performance as well as other benefits that may be in the project charter.
Execution of these events is measured in days or weeks. The term finan-
cial implies that improvements focus on reductions of operational expense,
increases in cash flow through asset conversion, or higher revenue.
Operational implies there is a linkage with financial metrics. Lean methods
are used to improve operational metrics that are correlated to a project’s
financial metrics. Service metrics include process complaints and failures
of various types in offices, supply chains, services and supporting systems,
lead time reductions, yield improvements, and other operational metrics
integrated with an organization’s strategic goals. Manufacturing metrics
include scrap and rework reduction, capacity utilization, inventory turns, job
set-up time, and equipment uptime. Service and manufacturing operations
have both sets of metrics. Different project metrics need to be aligned to each
other. An example is correlating high inventory investment to lower inven-
tory turns and long lead time and then to the specific reasons for the long
lead time, e.g., quality issues, large batch sizes, and poor on-time delivery
performance. It should be possible to create a simple model that relates lead
time reduction in days to the reductions in inventory investment and higher
inventory turns as well as to the target customer service level.
Projects should be formally documented using project charters that
describe where the project will be deployed, its objectives, and the required
resources and benefits. In addition to this information, a project charter
should document the extent of a problem, the project’s desired outcomes
or goals, the team, stakeholders, and schedule. Project benefits should also
be time phased and evaluated against their implementation costs to cal-
culate the net business benefits from the project by period. Later in this
chapter we will discuss the major characteristics of project charters, how to
create them, and provide an example using an Excel template.
LEAN SUPPLY CHAIN
Lean supply chains are characterized by having a high end-to-end value
added (VA) content across the participating organizations. This implies the
Project Identification • 53
end-to-end work operations are aligned and balanced across the supply
chain in ways that optimize value creation through efficient asset allo-
cation. This is possible because the participants have visibility to assets
using business intelligence applications and rules based on artificial intelli-
gence (AI) that recommend the allocations. The information to build and
operate these models comes from thousands of incoming data sources that
are based on the Internet of Things (IoT). Big Data is managed through
numerous IT platforms and applications and is stored virtually in pri-
vate clouds accessed through online portals by participants having secure
privileges.
High-value content supply chains develop competitive capabilities such
as reduced lead times, high asset utilization, and lower transactions costs
that increase productivity and competitiveness. Assets are activated to
meet actual demand based on a takt time. The lead time reductions are
gained by progressively eliminating end-to-end process waste. The supply
chain goals are to align every participant and their operations with cus-
tomer value so that work is done efficiently, without waste, and meets
external customer demand. High asset utilization is also supported by
pull scheduling systems in which work is pulled through a process using
a time-based external customer demand or the takt time. The flow of
materials and information from one operation to another is controlled
using Kanban systems. The effective deployment of Lean in service
processes, offices, supply chains, and supporting processes depends on
key operational elements such as those that build on each other to increase
operational capability. Some of the more important ones are a pull-based
demand scheduling system discussed above, operational stability gained
by work standardization, and mistakeproofing. In these applications, cus-
tomer demand is stabilized with low variation. The supply chain, including
customers, suppliers, and production operations is synchronized using
common financial and operational metrics. These attributes promote
efficient production operations to efficiently utilize available capacity to
satisfy customer demand. Alignment is achieved by elimination of func-
tional silos in favor of highly connected operations that pull materials and
information through a system’s processes to produce products and ser-
vices for customers.
A system’s “leanness” is measured by constructing a Value Stream Map
(VSM) and analyzing its value adding (VA) content, i.e., the time and
resources consumed by all VA operations. The percentage value adding

time is calculated as the total VA time divided by the total process time, i.e.,
value adding + non-value adding + business value adding time. Leanness
can also be considered from other perspectives. One is asset end-to-end
utilization efficiency. A Lean supply chain should have higher asset util-
ization efficiencies over time when compared to competitors. As an
example, the inventory turns ratio measures inventory asset utilization. It
is calculated by dividing the total cost of goods sold (COGS) by the average
monthly inventory investment needed to maintain the COGS level. The
COGS is a measure of revenue without pricing margin. It is an output of a
process. If the COGS is $1,200 and the average monthly inventory invest-
ment is $100, then the inventory turns ratio is calculated as 12. In a service
system, it can be calculated as the total cost center budget divided by the
average investment, e.g., people and other resources needed to maintain
available capacity. Using this definition, the assets are people, equipment,
facility, and other costs kept as capacity to do work. If a call center has a
COGS of $12,000,000 per year and a capacity or an asset base providing
service of $1,000,000, then its asset utilization efficiency would be 12. In
any similar scenario, the goal is to continuously reduce the denominator
or to increase the numerator, in other words, to increase asset utilization
by becoming leaner.
Increasing end-to-end value content makes an organization more com-
petitive. Because 50% to 80% of all organizational costs are associated
with the materials, people, and equipment in a system, reducing them at
a constant sales level provides more cash to fund improvements, design
new products and services, or provide investment for other projects. This
increases organizational flexibility and capability. Enhancing internal
operational capabilities is not easily emulated by competitors. The finan-
cial benefits from higher productivity can also be used to invest in more
efficient processes and equipment or to increase market share. Gaining
higher productivity through increased revenue and reduced operating
expenses is especially important for low margin service industries such
as airline operations, other transportation industries, and transactional
industries such as finance or retail, as well as the back office supporting
processes.
The development of differentiated products and services is important
for increasing sales. Organizations that create simpler and repeatable
processes enhance customer experience and create higher customer
satisfaction and retention. Simple and standardized systems are more flex-
ible than complicated ones and can be easily modified to match changing
customer preferences and also rapidly change capacity, i.e., the resource
levels and allocations, to easily adapt to demand variations. The ability to
quickly respond to variations of demand is a competitive advantage. The
selection of projects in these applications requires new approaches for data
extraction, for analysis, and for deploying solutions. The goal is to increase
cost effectiveness and global capacity to enable more operational flexibility
to meet external customer demand wherever and whenever it occurs. As
an example, international call center networks manage demand on their
system by transferring waiting calls anywhere in the world depending on
available local capacity and demand. In contrast, dysfunctional supply
chains exhibit friction at their organizational or functional interfaces
because they are not flexible.
Lean assessments help identify beneficial projects to improve product-
ivity. These will be of various types including Lean, Six Sigma, Business
Intelligence (highly analytical), capital investment (purchasing new
equipment), just do it (known solutions), and others. Referencing the
operating model shown in Figure 1.1, some projects may be candidates
for rapid execution. These are identified by an assessment and are
prioritized and scheduled on an operational roadmap for execution. This
avoids creating situations where projects compete for scarce resources.
Lean Six Sigma improvement projects are focused on improvements to
processes that provide the greatest operational and organizational benefits.
Assessments focus on the analysis of existing financial and operational
reports, interviews with key stakeholders, analysis of customer and sup-
plier complaints, and the VSM or Value Flow Mapping (VFM) of major
processes. An operational assessment evaluates productivity opportunities
in an organization’s major processes such as finance, accounting, sales and
marketing, procurement, engineering, operations, and customer service.
These activities are deployed top to bottom as shown in Figure 2.1 to ensure
alignment of financial to operational metrics.
The assessment starts with an analysis of financial and operational reports
to identify performance gaps that serve as a basis for projects. Stakeholder
interviews are also conducted to identify additional project opportunities
and confirm the projects identified from reports. Value Flow Mapping
of major processes is used to identify process issues that do not appear
on reports. This situation is also called the hidden factory. The hidden
Facility XYZ Reduce Operating

Expense $1,000,000 (100%)
Reduce Operating Reduce Operating Reduce Operating Reduce Operating

Expense for Work Expense for Work Expense for Work Expense for Work
=100%
Area A Area B Area C Area D
(50%) (30%) (15%) (5%)
Reduce Overtime Reduce Scrap Reduce Rework

Expense Expense Expense =50%
(30%) (15%) (5%)
Increase Machine
Other Issues …
Up-time% =30%
(10%)
(20%)
Reduce Set-up A rapid

Time improvement
event for Work =10%
(10%)
Area A
CT Flow Down Analysis: Operating expenses for facility XYZ are $1,000,000 for fiscal year ending
December 31st. Facility overtime expense for work area A represented 50% of the total facility
operating expense across all four work areas ($500,000). Problems with machine available in work
area A represented 20% of the total XYZ facility expense or $200,000. Set-up time issues represented
50% of the machine availability incidents or 10% of the total XYZ facility operating expense.
Project Goal: Reduce set-up time by 50% within one week using a rapid improvement event focused
within work area A to save $50,000.
FIGURE 2.1
Project Identification and Alignment
factory consists of operations not generally known to most people in an

organization. Examples include rework, scrap, and operations added for
workarounds. Value flow mapping activities start when an assessment team
meets with local management to identify processes needing to be mapped.
Operations in the process are mapped with the help of the people doing
the work. The common approach if people are meeting in person is to use
sticky notes on a wall to build the current state process operation by oper-
ation. This is also commonly done virtually by teams that are not collocated
by using collaborative tools where notes are virtual. The operations are
quantified by applying measurements such as those discussed in Chapter 1
and include lead time, production rate, and percentages for scrap, rework,
process yield, process downtime, and capacity utilization. Other metrics
include takt time attainment, set-up time, inventory, and floor area. The
accuracy of the VSM is verified by walking the process with the people that
do the work operation by operation either in person or virtually.
An important assessment outcome is a portfolio of project charters with
problem statements and goals aligned to business benefits. They should
be actionable and form a basis from which project teams can begin their
work. The charters should not be subjective or anecdotal. In addition to
project charters the assessment provides extensive process maps and
recommendations to improve productivity. An effective assessment will
shorten a project’s execution time. Periodic operational assessments are
also important to refresh an organization’s project pipeline and optimally
allocate resources for initiatives such as Lean Six Sigma. They also help
create the infrastructure for rapid improvement workshops and projects
that can be executed with strategic alignment. Alignment ensures projects
receive leadership support and needed resources, and that benefits accrue
upward in the organization. Assessments also provide local management
and teams with a list of beneficial projects that can be integrated into their
facility’s improvement planning roadmap.
The operational assessment starts with a leadership meeting to plan how
activities will be deployed at local sites. At the corporate planning meeting
the objective will be to bring together the core leadership team including
the sponsors of the assessment. There may be some limited training and
demonstrations for how the assessment is expected to work and expected
benefits. The outcomes from this planning meeting are the assessment
schedule, areas to be assessed, the teams, site leadership contact infor-
mation, communications for different audiences, and the daily activities
needed to assess the potential for process improvement. The planning
ensures strategic alignment.
The teams travel to the local sites and meet with management to explain the
objectives of the assessment, ask for feedback, and to make adjustment to the
plan for that location. Financial and operational analyses continue at the
site level as well as focused stakeholder interviews, work studies, process
mapping, and similar activities. The assessment team would arrive with
a list of areas to investigate for project opportunities, and these would be
updated based on information provided by site leadership. The objective
is to align strategic goals with those of the site using the flow down con-
cept shown in Figure 2.1. In the example, operating expense is classified
by work area, and then the contributors to the expense are investigated.
The investigations are prioritized based on agreed criteria. The cat-
egories shown in Figure 2.1 are overtime, scrap, and rework expense.
There are usually other categories that would be listed on cost center
reports or at an organizational level on the profit and loss statement.
Examples include total expense, year-over-year expenses, over budget
expenses, and others. There would also be other types of project related
to customer experience, new product capability, lost time to accidents,
sustainability, and others. The analyses are designed to create a portfolio
of prioritized projects. The flow down concept is useful for identifying
project opportunities, and additional supporting information can be
added to complete the analyses. As an example, expected project dur-
ation could be noted. Projects with a short cycle time and significant
benefits are usually a higher priority for execution. Projects can also be
flagged based on anticipated resource commitments. Those requiring a
heavy investment but having moderate benefits are likely to be a lower
priority than other projects. Projects expected to have similar root
causes and solutions can be grouped together.
In Chapter 1, a top-down deployment model was recommended as a
good foundation from which to deploy a change initiative because of lead-
ership support and alignment to operational strategy. This avoids isolated
and poorly selected projects that cannot be supported or improvements
that cannot be sustained. Top-down deployments ensure clear roles and
responsibilities. The assessment outcomes promote these deployment
success characteristics. After the initial deployment, and during and after
operational assessment activities, workshops are held not only to teach
improvement tools and methods and to brainstorm new projects but also
to rapidly execute projects. These activities are part of the operating model
shown in Figure 1.1.
A training workshop is used to train leadership, middle manage-
ment, and improvement experts on deployment strategies and tactics.
These workshops have a common set of core topics, with additional
topics focused on differing desired outcomes. The leadership workshops
socialize deployment concepts in the context of the operating model.

Examples are discussed that show the anticipated benefits for the organ-
ization. Sponsors are identified as one outcome from this workshop. The
sponsors will help identify the middle managers or project champions
that will identify and coordinate project teams. The next level of work-
shop is designed to socialize the deployment operating model with pro-
ject champions but at a more detailed level to select projects, identify
good candidates for process improvement work, and assist in operational
assessments. Project champions also help guide improvement teams
through project execution. Finalization of the deployment model at site
level and integration with the strategic operating plan is another out-
come from champion workshops.
After the project selection work, i.e., the operational assessments are
completed, training starts for process improvement experts depending
on the types of project identified in the assessment. The operating model
identifies Lean, Six Sigma, Agile Project Management (APM), Business
Intelligence (BI), and rapid deployment events as common execution
engines. Core process improvement tools and methods align across these
methodologies, but each has unique tools and methods that are needed to
produce desired outcomes.
CT FLOW DOWN
Figure 2.1 shows how an organization’s high-level goals can be classified
into actionable projects. In some organizations this project identifica-
tion method is called a “critical-to (CT) flow down.” It enables a team to
work from the higher level strategic goals of the leadership team down
to operational levels to identify projects. Different classes of metrics can
be broken down. Examples include time-related metrics such as produc-
tion lead time, time to deliver, and time to answer a customer’s call. Cost-
related metrics include any profit and loss (P/L) statement categories such
as labor and material expense, interest expense, warranty, other concession
expenses, and many other types either as monetary units or percentage
of totals tied to monetary units. Quality metrics are associated with scrap
(throwing things away) or rework and similar types of waste. A good way
to think of quality or rework issues is to reframe your operational metrics
but with the term “re.” Examples include rework, reinspect, retest, reinstall,
recalculate, etc.
An advantage of using the CT flow down method is as projects are iden-
tified they will already be aligned. Figure 2.1 shows how facility “XYZ”
would use this method to reduce operating expenses. The total oper-
ating expense is shown to be $1,000,000 (100%). Using the CT flow down
method, this $1,000,000 operating expense is successively broken down
to identify actionable projects. At the first level of the analysis, operating
expenses are broken down by work area within the facility. In this analysis,
work area “A” is shown to represent 50% of the total operating expenses
or $500,000. Drilling down to the next lower level shows the overtime
expenses of work area “A” to represent 30% of the total operating expense
of facility “A” or $300,000. Continuing this analysis to lower levels of the
facility within work area “A,” it can be seen that machine uptime represents
approximately 67% of the overtime expense within work area “A” or 20%
of the total facility expense. Finally, the set-up expense due to overtime
in work area “A” is shown to represent 10% of the total expense of facility
“XYZ” and is identified as a project opportunity. This project opportunity
may be a good candidate for a rapid improvement event because it is
focused on a single work area and local team. In other words, it has limited
scope, and the root cause analysis will be simple. Also, the general solution
strategy that is based on Lean concepts is known, e.g., 5S, Single-Minute
Exchange of Dies (SMED), and others. The improvements can be realized
in days. The CT flow down approach can be used for any process including
manufacturing, service, office, and supporting processes.
A summary from the analysis that would be included in the pro-
ject charter’s business case, problem statement, and goals is operating
expenses for facility “XYZ” are $1,000,000 for the fiscal year ending
December 31st. Facility overtime expense for work area “A” represents 50%
of the total facility operating expense across all four work areas ($500,000).
Problems with machine availability in work area “A” represented 20% of
the total annualized facility “XYZ” operating expense or $200,000. Set-up
time issues represented 50% of the machine availability incidents or 10% of
the total facility “XYZ” operating expense. This project’s goal is to reduce
set-up time within work area “A” by 50% within one week using a rapid
improvement event to save $50,000.
The CT flow down methodology is not only a good way to ensure that
identified projects are aligned with strategic operating goals but to also
show how projects are related and the logic behind their prioritization. It
provides a roadmap for reducing operating expenses over time in a logical
and fact-based manner. Other projects can be aligned with the opportun-
ities shown in Figure 2.1. But it should be noted that a large operating
expense does not imply large process waste. Areas with a smaller total
expense may have a higher percentage of actual process waste and as a
result may be better candidates for project selection because the poten-
tial for improvement is higher. This implies potential projects should be
evaluated from different perspectives of magnitude, percentage of total, the
availability of project resources, and gaps around strategic priorities.
OPERATIONAL ANALYSIS
In addition to using a CT flow down to identify projects, a direct oper-
ational analysis of processes can be conducted at the several levels shown
in Table 2.1. These include the system level where several organizational
or major processes comprising a supply chain or organization can be
analyzed end to end. Examples include hand-offs between customers and
suppliers or organizational teams such as marketing to design engineering
and then to production. Common internal workflows include functional
entities such as sales, marketing, finance, design engineering, procurement,
operations, logistics, suppliers, and customers. An analysis at a system level
includes mapping inter-relationships between several process workflows.
In Chapter 3, we will discuss the application of VSM at a system level.
The improvement focus could also be on a single process and its internal
operations. A process consists of a discrete set of operations and work tasks
that provide products or services. In this analysis, each operation receives
inputs of information, materials, and other resources; transforms them
if value adding; and sends them to the next operation for work, i.e., for
transformation. Examples include accounting processes such as credit and
collections or account payables, engineering design or testing, production
of different product families, and others. These projects are usually identi-
fied at a process level to keep their scope manageable; but if they are cross-
functional, then scope can be increased to include more teams. A process
analysis using a VFM is especially useful for identifying process waste and
beneficial projects at a process or workstream level.
TABLE 2.1
Levels of Process Analysis
Analytical Level Definition Example
I. System Several processes comprising an Sales & Marketing, Finance,
organization or a larger supply Design Engineering,
chain. Procurement, Production,
Logistics, Supplier, and
Customers.
II. Process A discrete set of operations Credit and collections,
designed to produce a product or product or service design,
service. design testing, production
of a product or service
III. Operation A set of work tasks within a process A bottleneck machine or a
workflow, which is used to single account payables
execute a well-defined function. clerk checking a few major
An operation has inputs of customers.
information or materials. These
are transformed into outputs for
the next operation.
IV. Work Task A combination of work elements An accounts payables clerk
used to execute part of an completing one of several
operation. forms.
V. Work Element The most basic motion associated The motions required to
with a work task including execute a work task such
manual and equipment as filling out fields on an
operations used in combination accounts payables form.
to execute a single work task.
Analyses can also be made within a single operation to identify improve-

ment opportunities. This is especially useful for an operation that is a bottle-
neck constraining the flow of information or materials to other operations.
Examples include a machine that has limited capacity. Or people that are in
a credit and collection process making mistakes that slow the flow of work.
Once improvements are made at a single operation, they may be trans-
ferable to similar ones across an organization. An operation itself is a set
of integrated work tasks. These work tasks can be broken down one next
level into work elements or micromotions. Work elements are the smallest
breakdown of work. These are the most basic motions associated with com-
pletion of a work task including motions related to manual operations used
in combination with equipment and tools to execute a single work task. At
this level of analysis, industrial engineers study micromotions to look for

opportunities to reduce the time for repetitive motions to increase worker
productivity and to also prevent work injuries from repetitive motions.
In summary, an organization is an interconnected system composed
of processes such as sales, marketing, engineering, production, logistics
accounting, human resources, and others. Each of these can be analyzed
for process improvement opportunities at different levels depending
on potential benefits and root causes. As an example, an accounts pay-
able process can be described as several operations such as setting up
invoices to be paid, paying them, and conducting audits when there
are issues. In human resources (HR), the operations or process steps
needed to hire people include gathering internal job requisitions from
hiring managers, advertising for candidates, comparing requisitions and
candidate profiles, setting up interviews between candidates and hiring
managers, and then coordinating the onboarding of new hires. These
operations have lower level work tasks. As an example, the HR oper-
ation for comparing job requisitions with available candidates has sev-
eral work tasks that are considered a sequential checklist. Setting up
an interview between a hiring manager and candidate would also have
several sequential work tasks. An example of an associated work task is
the various motions necessary to complete an accounts payables form.
Quantification of key process metrics is also needed to understand
process performance. Figure 2.2 shows quantification of a VFM using
operational metrics. These metrics are calculated at each operation and
then for the process. The first metric is the percentage of value adding to
process total time. It is a critical measure of a system’s “leanness.” One
goal of process improvement, i.e., a Lean deployment, is eliminating pro-
cess waste to increase the percentage of value adding work. The second
metric is a system’s production rate. At an operational level this is the
output of a single operation per unit of time. Or if considering the entire
process, the production rate is also the throughput measured as the time
for a work object starting at the first operation to exit the last operation in
the process. The process throughout is controlled by the process’s bottle-
neck operation on the critical path. In addition to the metrics shown
in Figure 2.2, there are others that vary by industry as well as functions
within an organization.
Process Output
Process Input Boundary
Boundary D1
A B C E F G
Person 2
Receiving
D2
Suppliers Packaging
Person 3 Shipping
Person 1
Metric
Value Adding Time (% and Actual)
Production Rate (Units per Minute)

Scrap (% and Cost)
Rework (% and Cost)
Downtime (% and Minutes)
Capacity (% and Units)
Set-up Time (Minutes)
Inventory (Units and Cost)
Floor Area (Square Feet)
FIGURE 2.2
Process Analysis
PROJECT EXAMPLES
The specific types of project vary by industry and function. But they can
also be classified. Manufacturing, financial institutions, retail organizations,
governments, hospitals, and even educational institutions have several
common processes. Examples include accounting, HR, customer services,
finance, marketing, sales, product design, and procurement. The approaches
for root cause analysis and creating solutions used for one industry and
function can usually be translated with modifications to others.
Finance projects improve an organization’s operating income and
asset utilization such as reducing inventory investment and plant and
equipment. Projects specific to marketing include increasing market

penetration rates, improving brand awareness, improving customer satis-
faction, optimizing pricing levels, and improving channel gross margin.
Specific projects within a sales function are increasing the number of new
customers, their profitability, increasing sales into new markets, improving
sales force effectiveness, improving sales force productivity, increasing the
sales success rate per salesperson, or improving the gross margin of a product
or service. Improvement projects within product design are reducing
design cycle time, increasing the number of new products, reducing design
errors, and reducing the standard costs controlled by design. Projects that
improve procurement operations are higher forecasting accuracy, redu-
cing the data error rates of procurement systems, improving supplier on-
time delivery, increasing inventory turns, and reducing the standard cost
controlled by procurement. Projects within HR are increasing employee
retention rates, simplifying the new employee hiring process, improving
employee satisfaction, reducing lost time accident rates, and improving the
effectiveness and efficiency of employee training. Back-office operational
projects include increasing process yields, reducing lead time, reducing
standard costs associated with operations, reducing warranty expense,
reducing the incident rate of returned goods, reducing scrap and rework,
improving schedule attainment, reducing job set-up times, improving on-
time delivery, increasing system availability, and reducing the floor area
required by operations.
METRIC CATEGORIES
There are four high-level metrics from which we define lower level metrics
such as lead time, yield, and others. These are business, financial, pro-
ject, and compensating metrics. Business metrics are aggregated across
an organization and are usually described as percentages. A common
business metric is a percentage of cost such as comparing warranty
costs as a percentage of standard COGS for several locations. Metricity
enables an organization to compare, on a volume-adjusted basis, the rela-
tive financial and operational performance between the locations. Two
common volume adjustments are by sales revenue or volume if linearly
proportional to the COGS, which is a total of the labor, material and other
expenses used to produce products or services. Other examples are asset

utilization efficiencies, inventory turns, and percentage of lost time. The
second metric category is financial. Absolute numbers are important. If
there is a high warranty percentage relative to GOGS but a very small war-
ranty expense, then these projects might have a lower priority. Monetary
percentages and amounts can also be linearly allocated down through an
organization and aggregated upward. They are useful for comparing the
difference between organizations as well as their internal processes and
useful for measuring overall organizational performance, i.e., product-
ivity. Useful projects that are initially defined from a financial perspective
include expense reductions such as warranty expense, operating expense
or COGS, interest, customer concessions, and general administrative
expenses. Others include increases in revenue and cash flow.
Once an improvement team begins its root cause analysis, the business
and financial metrics are used to focus on the lower level operational
metrics, and the project’s problem statement is periodically updated
to include additional metrics identified by the root causes analysis. The
alignment between business, financial metrics, and project metrics must
be maintained for communications to different audiences including lead-
ership. In this way, as the root causes for poor operational performance
are eliminated from a process, business benefits can be documented and
used to cost-justify the team’s work and gain needed resources to make
improvements. As an example, inventory investment is a financial metric
directly correlated to the inventory turn ratio. Recall from Chapter 1 that
an inventory turns ratio is a business metric calculated as a ratio of COGS
divided by the average inventory investment needed to maintain the level
of the COGS. Its volume adjusts investment. It is also known the inventory
turns ratio is directly correlated to lead time, demand variation, and ser-
vice level. At an operational level, a project’s goal would be reducing lead
time to increase inventory turns and investment. As the root cause analysis
proceeds, it might be found that longer lead times are caused by large lot
sizes, quality problems, or supplier issues. These lower level root causes will
update the project’s operational metric, its problem statement, and goal
to perhaps reducing lot size, improving process yields, or achieving on-
time supplier deliveries to decrease lead time and increase inventory turns.
In summary, clear alignment needs to be maintained across the project
metrics as the root cause analysis proceeds to ensure process improvements
are properly translated at different organizational levels.
A fourth metric category is compensating metrics. Compensating

metrics are used to ensure a project’s improvements remain balanced rela-
tive to stakeholders and customers. We would not want to increase sales by
offering concessions at the expense of lower profit margins unless this was
a strategic decision. Also, we would not want to increase sales for one cus-
tomer, by cutting into production schedules for expedited orders and create
customer dissatisfaction because of missed deliveries for other customers.
Other examples are maintaining customer satisfaction and retention levels,
employee satisfaction, and retention levels while decreasing operating
expenses.
SCOPING PROJECTS
Once an assessment is complete, project charters are created, but these may
need refinement. As an example, there may be several potential projects
identified from an initial project charter whose problem statement is more
of a generalized business case rather than focused on a single issue. To
gain focus for a team charter and move through the Define Phase, it will
need to visit the work area where the project is currently scoped and dis-
cuss it with the area manager and team to gather information to refine the
scope. The final project charter will need a clear business case, scope, a
focused problem statement, an improvement target, and goal. Several pro-
ject charters may be created through refinement of the initial one.
A business case has three components. These are the problem descrip-
tion, its impact on the process, and a desired outcome from the project but
without a solution. Using the example shown in Figure 2.2, the problem
description is: “The average lead time from providing services and the receipt
of payment averages 60 days with a range between 30 and 90 days (30 days is
the payment term).” We know the problem is late payment compared with
the 30-day payment terms. The impact is: “The result is lost interest expense
from money that should be collected in less than 30 days from invoicing.
The average accounts receivable (A/R) balance is $15 million between
31 and 60 days: $10 million between 61 and 90 days and $5 million over
90 days.” The desired outcome is: “We would like to reduce the A/R days late
for accounts paid in 31–60 days and 61–90 days to reduce interest expense.
We would like to reduce A/R associated interest expense.”
To provide scope for a project, the team will have a scoping discussion
using a supplier- input-process-
output-customer (SIPOC) diagram to
understand where it will work and the boundaries of that work, i.e., the
scope. As an example, the accounts receivable process might be scoped to
focus on a type of customer, e.g., retail versus commercial. Once a scoping
decision is made, it is easier to select team members and ask stakeholders
for their support. The problem statement can then be created. A problem
statement describes the problem with scope, e.g., commercial services, the
magnitude of the problem, and the metric(s) being measured. The problem
statement for this example is: “The A/R days late for commercial services for
accounts between 31–60 (15 days late on average) and 61–90 (45 days late
on average) results in annualized lost interest of $92K.” The next statement
will describe the project’s goal. The goal has a verb, noun with scope, quanti-
tative goal, and a time frame. The goal could be a 50% reduction or “Reduce
the commercial services A/R days late by 50% for accounts between 31 and
60 (15 days late on average); 61-90 (45 days late on average) to save $46K
annualized interest expense by December.” We next place this as our goal
and begin data collection for the root cause analysis.
Another example for structuring a problem for solution is an employee
onboarding process. A hypothetical example would be creating a pro-
ject to simultaneously increase hiring yield and reduce onboarding costs.
The team may have been provided a baseline described as out of 100
applicants, just five are eventually onboarded, i.e., a 5% hiring yield. The
cost for hiring per applicant might be $2,000. The time to onboard may
be 90 days. The desired outcomes would be to increase the hiring yield
while lowering per applicant costs. This is the general business case. The
scope might be focused on a Northeast Region for certain roles, e.g., engin-
eers or accountants. Relevant metrics would be the lead time to onboard
employees, cost per employee, and the onboarding rate. The assumption
will be the onboarded employees are qualified with the requisite skills. The
resultant problem statement would be the hiring rate for new engineers
in the Northeast Region is 5%, the cost per applicant is $2,000, and the
onboarding lead time is 90 days. There could also be a comparison to other
regions where the metrics may be better. Project goals might be to increase
the onboarding percentage from 5% to 50%, reduce onboarding lead time
from 90 days to 30 days, and reduce cost by 25%. At this point the team
has a good idea of the project deliverables and can start to verify the metric
baselines and begin the investigation of the onboarding process.
A call center improvement project might be scoped as only 90% of

incoming calls in the Northeast Region are answered the first time.
Additional information might be the other 10% of calls are second or
third attempts for service, and they increase incoming call volume by
20% per day. The result is a reduced customer Net Promoter Score (NPS)
of 50% versus the potential of 80% based on surveys and additional staff
costing $500,000 per year. The desired outcome is to answer all calls
the first time to increase customer NPS and decrease staffing costs. The
metrics are the percentage of calls answered the first time, the time to
answer a call, the duration of the call, and customer NPS. The project
goals could be to increase calls answered the first time from 90% to
95% while maintaining or improving the NPS currently at 50%, and the
average call duration.
A3 FORM
The A3 is a single page and easy-to-use form that enables teams to track
their projects. A3 refers to the size of the paper, which is about 11 inches
by 17 inches. It is large enough that information can be manually added to
it. Additional supporting documentation can be attached to the A3 docu-
ment to keep it one page. As an example, work and inspection instructions
can be referenced by a number on the A3. A single page makes it easy
for team members to make updates at their workstations and involves
them in data collection activities supporting their project. There are also
versions of the A3 that are updated online. The number of panels in the
A3 can also be adjusted, but the usual eight panels will adequately cap-
ture project information and have been integrated into a Six Sigma Define,
Measure, Analyze, Improve, and Control (DMAIC) format. Define Phase
deliverables are captured in the first panel. It contains the business case, a
simple input-process-output (IPO) diagram to define the project’s scope,
the problem statement, the defect type, its measurement unit, and a tenta-
tive goal. The second panel starts the Measure Phase. Information related
to the current state process is added, and the process map or floor layout if
appropriate is attached to the A3 form. It is important to walk the process
to verify the process information. The data collection plan is also created
to collect data to analyze the process, e.g., a process map, historical data on
FIGURE 2.3
Project Charter Example
the defects, procedures, forms, and other relevant information. Once data
is collected, the metric baseline and improvement goal can be verified. The
baseline is a graph showing variation of the metric over time with target.
Metrics include lead time, process yield, number of complaints, and other
operational metrics.
The Analyze Phase starts in the fourth panel. The data collection is
expanded to also include root causes that impact the project metric.
Different analyses are applied to identify process waste. These will be
discussed in Chapter 5. But as an example, the process map or floor layout
can be reviewed for obvious breakdowns such as a messy work environ-
ment, waiting, and other issues, or simple quality tools can be applied to
the analysis to identify relationships between the project metric (output)
and the root causes (inputs). Once the root causes are identified, additional
tools can be applied to prioritize them and start identifying solutions. These
are added to the fifth panel, which starts the Improve Phase. The solutions
or countermeasures are reviewed to confirm they work, help meet the
project’s goal, and are sustainable. The sixth panel captures implementa-
tion information to verify workable solutions. In this step the solutions
are tested under controlled conditions for short periods. These are called
process pilots. Once confirmation they work is obtained, the solutions are
scaled. Refinements to the solutions based on pilot findings are used to
update the solutions. Mistake-proofing is applied to ensure they continue
to work. The Control Phase starts in the seventh panel. Standard work is
applied to the process and the solutions are periodically charted. Audits
are used to verify sustainability and the process baseline charts are updated
to reflect better performance. This phase ends with creation of the control
plan. The last panel captures lessons learnt and ideas to share and leverage
the information with other teams.
PROJECT CHARTERS
Project charters describe a project including its goals, benefits, costs,
schedule, and other information, as shown in Figure 2.3. These are more
complicated than the A3 approach because they are not used in a single
work area but communicate a project across several organizational teams
and different stakeholders. The most useful charters contain a rigorous
financial analysis including return on investment (ROI), payback, and cash

flow calculations. The financial analysis is also aligned with the operational
plan needed to achieve them. The charter is one place where everything
needed to understand the project and how its goals will be achieved are
explained. It is an important communication vehicle to gain stakeholder
support.
A charter allows a team to review and update the project’s business case,
scope, problem statement, and goals to create a clear vision for how a pro-
ject should be executed. Additional information in the charter is built as
the project team moves through its root cause analysis toward solutions.
All work is periodically verified, and there are reviews and signoffs called
phase gates with finance, key stakeholders, and the process owner before
the team proceeds to the next phase. This detailed supporting information
needs to be verified in sufficient detail to close the project on schedule.
Charters are also important if several projects are needed to be coordinated
to eliminate an operational problem from a process. Each charter helps
explain how they all fit together.
Project charters place an improvement initiative on a firm basis from
which to show benefits for the resources that were used to create them.
The operating model shown in Figure 1.1 starts with the definition of
the project’s charter to specify the improvement approach, e.g., Lean,
Six Sigma, APM BI as well as the speed of execution, i.e., rapid or clas-
sical. These depend on both the scope and expected complexity of the
root cause analysis and solutions. Significant reductions in project dur-
ation and resource requirements are also possible if a team is provided
with a well-written project charter. This is especially important for rapid
improvement projects that must be executed in a matter of just days or
weeks, and a false start will delay the work. They also communicate to
key stakeholders the business benefits expected from the execution of a
project. It describes the extent and frequency of a process problem as well
as its historical impact, on an organization, from both financial and oper-
ational viewpoints.
Figure 2.3 also has administrative information such as the project name,
the chartering organization, the project champion, the start date, and the
expected duration. The five-day duration indicates this is a rapid improve-
ment event requiring planning. The problem statement describes the extent
of the problem. The project goal is to reduce the lead time for receipt of
paid invoices. For a rapid improvement event, the team must have the right
team members that can quickly access online collection reports and use
analytics to understand which customers and types of invoices are involved
in the late payment problem. They will drill down deeper to identify root
causes that can be eliminated. The charter helps guide the project team and
is the basis for planning the event. When the average collection days of
accounts receivables are reduced, the interest expense, required to borrow
against the receivable, is reduced by the amount of the receivable and days
to payment. A separate project could also be created to reduce write-offs
after 90 days, which are full standard costs. The charter also shows the pro-
ject cost subtracted from the benefits to provide the net benefits.
PROJECT PRIORITIZATION
Classification and prioritization of projects are important to ensure the
right projects are selected for execution and the right solution approach
is applied. Figure 2.4 shows projects are prioritized using different criteria.
Project ideas come from several sources. One is strategic performance gaps.
Gaps occur if the current project portfolio is not sufficient to meet strategic
financial or operational goals. Identifying projects to close the gaps is done
using leadership interviews and workshops. In these workshops, leaders
discuss the strategic goals that must be met. Then initiatives are reviewed
to determine where additional projects can be found to close the remaining
gaps. These projects are incremental to initial strategic planning. Financial
analysis of P/L, asset balance sheet, cash flow, and other reports is also
used for identifying projects. An example is shown in Figure 2.5. The P/L
statement describes revenues and expenses over a set period. At lower
organizational levels, cost center reports are analyzed for opportunities
to reduce operating expenses. In these analyses, large differences between
similar accounts will help identify projects, or any revenue or expense cat-
egory that is trending in the wrong direction, may be a good candidate for
beneficial projects.
A financial analysis also includes a review of the balance sheet. Figure 2.6
shows that a balance sheet is a snapshot of an organization’s assets, liabil-
ities, and shareholder’s equity. Assets include short-term and long-term
assets. Short-term assets include cash, accounts receivables, loans due to
the organization, and similar assets. Long-term assets include fixed assets
1. Strategic Gaps •Just-Do-It Projects

2. Financial Analysis •Kaizen Events
3. Operational Analysis •Lean Projects
4. Benchmarking •Six Sigma Projects
5. Health & Safety •Design Projects
6. Regulatory Issues •Capital Projects
• Scope
• Operating Model
• Resource Requirements
• Risk
FIGURE 2.4
Prioritizing Projects
such as facilities, equipment, and real estate. These projects are identified
by analyzing asset utilization ratios relative to benchmarks and internal
targets. Typical projects that will improve asset utilization ratios include
reducing accounts receivable lead time and the sale of assets such as
buildings to free up invested capital. The liability category on a balance
sheet includes accounts payables, loans payable, and similar accounts that
an organization is obligated to pay in the future.
An operational analysis is also useful for comparing similar operations
with differences in performance to identify improvement projects. The
goal is to improve the performance of one operation to that of a similar and
better performing operation. Process mapping is another useful method
to identify projects. A VFM is particularly useful for project identification
across major processes. The advantage of constructing a VFM is that it
provides information not found in current financial or operational reports.
It is constructed by the people doing the work to ensure accuracy for iden-
tifying process issues and causes. These can be prioritized as improvement
projects of different types. Benchmarking is another useful method used
to compare the current performance of an organization’s systems and
(Millions) Current Year Previous Year
Revenues
Net Sales $100.0 $90.0
Other Income (Net) $20.0 $10.0
Total Revenues $120.0 $100.0
Expenses
Cost of Sales $5.0 $5.0
Selling, General and Administrative $20.0 $18.0
Operating Expenses $70.0 $60.0
Depreciation $10.0 $8.0
Interest $5.0 $4.0
Total Expenses $110.0 $95.0
Income Before Taxes (30%) $10.0 $5.0
Taxes $3.0 $1.5
Net Income $7.0 $3.5
Shareholder Return on Equity $0.1 $0.0

FIGURE 2.5
Modify Balance Sheet (Millions)
processes to those of similar organizations. Finally, issues related to health,

safety, sustainability, or adherence to laws and regulations also serve as a
good source for improvement projects.
Different projects will require different root cause analyses and solutions.
As an example, process simplification and standardization projects greatly
benefit from Lean methods. Projects requiring complicated data collection
and analysis benefit from business analytics or the use of Six Sigma methods.
If the root causes have known solutions a team could immediately imple-
ment these solutions, i.e., just-do-it projects. Finally, more extensive pro-
cess problems require product or service redesign or capital expenditures.
Figure 2.4 also shows that projects can be viewed relative to scope, resource
requirements, and risk levels against the operating model. Other consider-
ations include projects that improve several processes at once, anticipated
resource requirements, and how fast they can be deployed. Some projects
can be deployed sooner than others and lower risk projects may also be
preferred to those with higher risk.
FIGURE 2.6
Modify Balance Sheet (Millions)
INFORMATION TECHNOLOGY ECOSYSTEMS

Identifying projects spanning several teams in large organizations requires
understanding the information technology ecosystem; it is an ecosystem
because of the hundreds of IT platforms and software applications used by the
different end-to-end teams. The IT ecosystem also contains thousands of dis-
crete data fields called metadata. These will be discussed in Chapter 5. While
in a manufacturing process, identifying projects can be done by reviewing

reports of known issues or by holding brainstorming or process mapping
workshops, or walking the process, in complicated IT ecosystems the question
is where to start? There are integrations between these complicated systems
where a change in one system impacts another. The changes could be modi-
fying business rules or making major updates to features and functions. The
cost of updates to features and functions, i.e., solutions, is also high. Third,
the solution roadmap for system updates or replacement is often measured in
years. This means projects must be carefully selected for rapid improvement
events to ensure that the root cause analysis and improvements can be made
in a reasonable period. There will always be some improvements or solutions
that will need to move to an IT roadmap, but the team does not want to have
all their recommendations delayed until there is funding or other higher pri-
ority projects are first completed.
The first step for identifying beneficial projects in an IT ecosystem is
analyzing process issues from reporting and then constructing a visualiza-
tion of the process in scope to show inter-relationships between systems.
These are cross-referenced to persona and use cases that engage the pro-
cess at various process steps. Metric performance is overlaid on the pro-
cess visualization to identify performance issues by step or operation. Like
manufacturing, not all the issues will be in current reports, but will be in
the hidden factory where some work is ad hoc and not reported. Accessing
the metadata to confirm reported issues requires automation extraction,
conditioning, and analysis by specialized software and algorithms. Some
of these algorithms are sophisticated and show where to make process
changes to reduce lead time, improve quality, and lower cost. There is a
range of capabilities for process analytics. These range from manual extrac-
tion using customized tools and macros to advanced adaptive systems
that can dynamically reconfigure optimized virtual processes. These later
systems use optimization and AI algorithms to reconfigure, add, modify,
and delete process components. In between these are software applications
with differing capabilities. These include process monitoring tools that
report on process performance for a limited number of metrics and virtual
representation of a process including roles and responsibilities, operational
rules, and other information.
Figure 2.7 shows a quote to cash process that spans several teams.
Improvement projects can be done at each of the process steps and work
tasks within them. The upfront quoting transaction relies on accurate
FIGURE 2.7
Project Section in Quote to Cash Process
customer and product data. Typical data includes account and com-
pany names, customer first and last name, email address, billing address,
shipping address, city, state, zip code, the product and services, and initial
pricing. There is also data related to the salesperson, sales territory, and
financial information such as credit limits and risk. One or more of these
metadata fields could be in error causing quote or order rework, returned
shipments, customer concessions, and returns. Matching report and con-
cession information as well as interviewing sales representatives and
customers will provide ideas for beneficial projects. Errors in the ordering
process step impacts operations, shipping, special instructions, and other
information.
Operations bring in a completely different set of data within its data

domain. This data describes product and service designs such as the bill
of material that reflects the hierarchy for producing it. There are also pro-
duction routing rules and specific instructions for testing. Performance
issues in this part of the process impact downstream operations such
as concessions, returns, warranty, and similar expenses. Projects can be
identified in these processes based on a review of the metadata quality
issues. The same project identification strategy applies to fulfillment, logis-
tics, invoicing, and credit as well as after point of sales for licensing and
renewals. In summary the approach for project identification in services is
like most manufacturing projects except they are most likely to be cross-
functional; the data will need to be extracted using algorithms; and the
improvements will likely impact other teams and systems.
SUMMARY
Projects are classified according to intended outcomes and the types of
resource required to execute them. Some projects rely on the application of
Lean tools and methods to improve processes. Other improvement projects
require in-depth statistical analysis and may be more effectively executed
using Six Sigma methods. These projects usually require experimenta-
tion or testing of solutions using a process model. Testing for any solu-
tion either Lean or Six Sigma requires an evaluation using a process pilot.
Other types of project require extensive analysis using big data analytics
or the deployment of capital investment, e.g., new machines, and others
may have known solutions requiring minimum project deployment, i.e.,
just-do-it projects. All projects requiring team members and other resources
should be documented using a formal project charter. Projects need clear
goals and deliverables for the work that needs to be done. They can also
be classified according to intended outcomes and the types of resource
required to execute them. Rapid improvement execution is measured in
days or weeks.
Lean supply chains are characterized by having a high end-to-end VA
content across the participating organizations. This implies the end-to-end
work operations are aligned across the supply chain in ways that optimize
value creation through efficient asset allocation. Increasing end-to-end
value adding content is important for operational flexibility as well as higher

productivity and competitiveness. Reducing the costs associated with the
materials, people, and equipment in a system provides more cash to fund
improvements. This also increases organizational flexibility. When supply
chain participants have visibility of assets and their utilization based on BI
applications and rules using AI asset allocations are optimal. The informa-
tion to build and operate these models comes from thousands of incoming
data sources that are based on the IoT. Big Data in global supply chains or
large end-to-end processes is managed through numerous IT platforms
and applications and is stored virtually in private clouds accessed through
online portals by participants having secure privileges.
The CT flow down methodology was shown to be not only a good way to
ensure that identified projects are aligned with strategic operating goals but
also to show project relationships and the logic behind their prioritization.
There are four high-level metrics used to define lower level metrics such as
lead time and yield. These include business, financial, project, and com-
pensating metrics. Business metrics can be aggregated across an organ-
ization and are usually described in percentages. Once an improvement
team begins its root cause analysis, the business and financial metrics are
translated into operational metrics, and the project’s problem statement is
periodically updated to include these additional metrics identified by the
root causes analysis. It is important that the alignment between business,
financial, and project metrics be maintained for communications to
different audiences including leadership.
The final project charter needs a clear business case, scope, a focused
problem statement, and a target or goal. The business case has three
components. These are the problem description, its impact on the process,
and a desired outcome from the project but without a solution. To provide
scope for the project, a team has a scoping discussion using a SIPOC dia-
gram to understand where to work and the boundaries of the work, i.e., the
scope. A problem statement describes the problem with in the scope, i.e.,
commercial as opposed to retail services, the magnitude of the problem,
and the metric(s) being measured. The goal has a verb, noun with scope
and a quantitative goal, with a time frame for completion.
ivity. These will be of various types including Lean, Six Sigma, BI (highly
analytical), capital investment (purchasing new equipment), just do it
(known solutions), and others. Then referencing the operating model
in Chapter 1, projects may also be good candidates for rapid execution.

Periodic assessments are important for creating a project pipeline to ensure
an optimum allocation of resources to a Lean Six Sigma initiative. They also
help create the infrastructure in which rapid improvement workshops and
projects can be executed at lower organizational levels but be strategically
aligned. This ensures they receive leadership support, needed resources,
and that benefits accrue upward to the organization.
Once an assessment is complete, project charters will have been created,
but these will need refinement. These project charters identify “areas of
opportunity” that a team reviews and refines to provide a focus. There
may be several projects identified from an initial project charter. To move
through the Define Phase the work area associated with the project needs
to be visited. This could be a virtual conference call if the team is remote.
In this review, the project is discussed with the area manager and team
to gather additional data from the process to refine the project’s scope.
The data collection could be manual, such as in manufacturing, or elec-
tronic if the process is virtualized. The final project charter will have a clear
business case, scope, a focused problem statement, and a goal. These will
be prioritized with other projects from the operational assessment based
on a cost benefit analysis, resource availability, and priority.
3
Lean Six Sigma Basics
OVERVIEW
In this chapter we discuss the basic tools, methods, and concepts of
Lean Six Sigma. This information will be applied later in the book to six
common processes. These are financial forecasting, accounts receivables,
new product marketing research, new product development, and sup-
plier performance management. We will use these processes to dem-
onstrate how to implement Lean Six Sigma within service and office
operations. In this chapter’s discussion we will use Lean concepts that
have been successfully applied to manufacturing and develop analogs
to service and office operations. The discussion will follow the sequence
shown in Table 3.1.
But, prior to beginning our discussion of Table 3.1, we will introduce and
discuss the seven classic forms of process waste from a Lean perspective.
In addition to these process wastes, other operational conditions exacer-
bate process breakdowns. These include a lack of procedures, poor training
methods, lack of process standardization, poor process design as well as
variable demand that strains a system’s available capacity. Available cap-
acity is calculated as design capacity minus normal allowances for things
such as employee breaks and other expected losses in system capacity.
The first process waste is overproduction. Overproduction occurs if an
operation is utilized at a higher level than the demand placed on it. As
an example, if the actual demand on a procurement process is 100 pur-
chase orders per day, but it processes 200 purchase orders per day, it over
produced purchase orders. To a casual observer, this does not seem like a
bad situation, but, if external demand changes, we may find the original
purchase orders that were created in advance require rework and perhaps
overtime expense is needed to produce the extra 100 purchase orders.
83
TABLE 3.1
Implementing a Lean System
Steps
1. Understand the Voice of the Customer (VOC).
2. Create robust product and process designs–reduce complexity.
3. Deploy Lean Six Sigma teams.
4. Establish performance measurements.
5. Create value stream maps (VSM) of major workflows.
6. Eliminate unnecessary operations within workflows.
7. Implement Just-in-Time (JIT) systems–Eliminate Waste.
7.a. Reorganize physical configuration.
7.b. 5S and standardized work.
7.c. Link operations.
7.d. Balance material flow.
7.d.1 Bottleneck management.
7.d.2 Transfer batches.
7.e. Mistake-proofing.
7.f. High quality.
7.g. Reduce set-up time (SMED).
7.h. Total preventive maintenance.
7.i. Level demand.
7.j. Reduce lot sizes.
7.j.1. Mixed model scheduling.
8. Supplier networks and support.
9. Implement visual control and pull systems –Kanban.
10. Continually update process technologies.
When a process is utilized at full available capacity because of overpro-

duction, mistakes are made by people and machines pushed to their limits.
An effective way to prevent overproduction is by linking operations with
a system’s bottleneck and external customer demand using a pull system.
This is a rate-based takt time production system. A bottleneck controls the
flow of materials or information through a process. Resources supporting
a bottleneck should only be “activated” based on pull demand signals
from the bottleneck. Overproduction decreases available capacity because
products or services produced in excess take away production time from
other customer orders. This often causes excess inventory.
A second form of process waste is waiting. Waiting for a job to be
processed reduces available capacity because people, equipment, and work
are idle for a period at cannot be recovered. If a bottleneck resource is left
Lean Six Sigma Basics • 85
waiting for or starved to work, then the entire system loses capacity in
proportion to the bottleneck’s production rate. As an example, if the pro-
duction rate at a bottleneck is 100 units per hour and it is idle for 2 hours,
then the system has lost 200 units of production that must be made up. If
a bottleneck resource does not match external demand, overtime may be
required to make up the lost production. The bottleneck is on the system’s
critical path, which is the longest lead time through a network or process.
When materials or information wait on a critical path, overall lead time is
increased. Longer lead times require more buffer inventory or safety stock.
Inventory can be considered as stored capacity in the form of materials,
information, machiney, people, and other assets. In summary, waiting has
a direct impact on a system’s throughput, lead time, inventory, and as a
result its productivity.
The unnecessary transport of materials and information is a third form
of process waste. Unnecessary movements consume time and resources.
In an office environment, the unnecessary transport of information occurs
when people repeatedly send information to a SharePoint or other deposi-
tories. If materials rather than information are moved, then one solution is
to collocate people, materials, or information either physically or virtually
in a well-organized work area. For manufacturing the unnecessary trans-
port of materials takes on a different form, but the concept is the same, i.e.,
materials are costly to move from one location to another and they may
become damaged or lost. In this and later chapters, we will show how to
map the movements of people, information, and materials to identify this
type of process waste.
A fourth type of process waste is excess inventory. Inventory waste is
created when an operation overproduces relative to demand or if down-
stream operations disrupt the flow of work causing high levels of work-in-
process (WIP) inventory upstream. Inventory waste also occurs if safety
stock levels are set too high based on lead time and demand calculations.
A problem with excess inventory is that materials and labor are used in
advance, but, if demand changes, the inventory may not be needed by
customers. Inventory is stored capacity and created because of demand
uncertainty and long lead times. Stored capacity is also seen in other forms
including people, machines, buildings, and raw materials. As an example,
when a project is planned engineering and support personal are usually
hired in advance. This requires an initial investment. If demand, i.e., the
project does not occur, then the people hired were not utilized, i.e., excess
capacity exists, which causes an operating loss until they can be repurposed.
When excess or obsolete inventory builds up in parts of an organiza-
tion, process issues are also exacerbated because inventory hides them
for a while. They become visible only as the inventory is used. Depending
on the amount of excess inventory, complete consumption may be
months or years. In an office environment, excess inventory is seen as
promotional and marketing literature that is printed months and years
in advance, or people hired in advance of expected work that does not
materialize, having too many computers or copiers, deploying service
teams not aligned to demand and others. Unlike excess inventory, obso-
lete inventory cannot be used at all because there is no longer demand
for it. Obsolescence occurs when previous versions of a product or ser-
vice are no longer salable. Some of the reasons for obsolescence are poor
demand management, disruptive technology, and changes in customer
preferences. Operational problems are also created because inventory
requires storage and must be protected.
The fifth waste is unnecessary or over processing. Over processing
occurs if a process does unnecessary work. This is different from over-
production. Examples include non-value adding (NVA) operations or
features and functions added to products and services not needed to
meet customer requirements. Non-value adding operations also include
unnecessary inspections and audits. Over processing increases com-
plexity but without a benefit. Lead time and costs increase while quality
deteriorates. Waste of motion, the sixth process waste, occurs if work
is performed without a standard method that requires using specific
procedures, materials, and tools. A standard method is defined by time
and motion studies that specify the best way to perform work tasks rela-
tive to current technology, procedures, materials, and tools. Deviations
from a work standard method result in motion waste. As an example, if
materials, tools, fixtures, templates, and materials are not located near the
people doing the work as required by standard work procedure, they may
handle components several times. This is motion waste. If an employee
needs to search for work components, tools, and other equipment, extra
physical motions occur. These NVA motions increase operational cycle
time, which reduces available capacity and causes worker fatigue. Mis
takes are also easily made when extra work is done. Unnecessary motion
occurs in offices, when looking for information that should be readily

accessible or handling reports several times either physically or vir-
tually, or providing information to the customer but without using a
standardized script or having to move through many applications and
pages of information to access information. These increase the time to
process incoming calls and lower customer satisfaction.
Creating defects is the seventh process waste. Defects require defective
work be thrown away, i.e., scrapped or reworked to bring it up to the
standard. This increases cost and lead time. There is a myriad of pos-
sible defects in office and service processes. Some of the most common
defects include calculating mistakes, sending incorrect information, and
doing redundant work tasks. Defects exist when your team uses words like
rework, reanalyze, resend, reship, call again, set up, when people need to
be reminded to respond to emails and similar situations where work must
be redone.
Some organizations have added waste types to their operational ana-
lysis. These include waste caused by accidents, i.e., safety waste and sus-
tainability waste where energy and materials are not properly processed or
repurposed. Examples of safety waste include employee accidents, sickness,
and death in the workplace. Specific safety projects would be reducing
people falling in a supermarket, allowing employees to work remotely to
lower the risk of accidents, color coding materials and information, pla-
cing visual warning signs and sirens in the workplace to prevent accidents.
Sustainability projects include the proper disposal of waste, recycling, and
repurposing waste for other uses.
Lean and Six Sigma are the two major process improvement initiatives
used to reduce and eliminate process wastes. Lean uses the voice of the cus-
tomer (VOC) to evaluate the value context of a process from a customer’s
perspective. Then NVA operations are eliminated. Value adding (VA)
operations that remain are standardized and mistake-proofed to ensure
a stable production system. Six Sigma uses many of the Lean tools and
methods throughout its five phases but is focused on the analysis of process
data using statistical as well as process characterization methods to iden-
tify and eliminate root causes of process waste and other issues. Process
improvement programs rely on combinations of these and other oper-
ational initiatives such as Agile Project Management (APM) and business
analytics as described in the operating model shown in Figure 1.1.
UNDERSTAND THE VOICE OF THE CUSTOMER

Referring now to Table 3.1, process improvement activities should be
aligned with organizational goals and the VOC. The basis of Lean methods
requires understanding the features and functions of a product or service
important to customers and designing and producing them in ways that
meet VOC needs and value expectations. Understanding VOC provides
a methodical way to identify, analyze, and incorporate the customer
requirements into products and services effectively and efficiently. The pro-
cess begins when external customers are classified by market segment and
interviewed to identify Kano needs and value executions. In other words,
an organization has many different types of customer with differing needs.
Kano needs are identified using an interview process developed by
Dr. Kano and include basic performance and excitement needs. Basic
needs are product or service attributes expected by a customer as the basis
for using a product or service. If a person goes to a market, their expect-
ation is that most common foods, e.g., milk, bread, water, and so on, will
be available. A customer does not get excited if milk and bread are avail-
able. It is expected and classified as a basic need. In contrast, performance
needs differentiate one competitor from another along dimensions of cost,
time, and quality. Referring again to the market example, some markets
may offer special foods or beverages or perhaps lower cost on some items
using coupons. Customers who value these performance attributes differ-
entiate one competitor from another. Excitement needs are product and
service characteristics that customers do not expect but when seen meet
a need not known before encountering the new product or service. An
example would be free home delivery, free merchandise, in-store cooking
classes, international foods, or customized services not typically found.
Using the Kano concept, projects can be created that improve the customer
experience.
Using an example, when reserving an automobile, a customer at a basic
level expects it to be available when arriving at the rental counter. If told
there are no automobiles available, the customer would be upset because
this is a basic function of an auto rental service. The natural response of
a customer would be disappointment if not hing was available or indif-
ference if one is available. Performance needs to differentiate competitors
based on speed, cost, and features and functions. Some customers are
sensitive to cost, while others want speed of service or enhanced features.

If a customer received a rental discount or an upgrade, then they
would naturally consider one auto rental company superior to another.
Excitement needs are met if a new product or service has disruptive
features and functions. Examples include the iPhone and Tesla when
first introduced. Kano needs help identify projects to improve customer
experience and productivity.
In addition to Kano needs, customers can be interviewed to identify
value expectations. These are analyzed using the five dimensions of time,
price, utility, functionality, and relative importance. Value equates to con-
venience and price. Convenience equates to time or speed and perceived
benefits. Perceived benefits equate to functionality, utility to a customer,
and relative importance. Different customers have different expectations
of how long they should wait for a product or service, what a fair price
should be to purchase it, and how it should function. Value expectations
vary by market segment and the perceptions of customers. Considering
the three Kano needs with the five value elements provides a 15-cell or
three-by-five matrix to filter the VOC. Classifying by market segment and
considering Kano needs and value expectations provides a good starting
point for understanding customer requirements.
Voice of the customer information, properly gathered, enables an
improvement team to analyze products and services relative to their design
and supporting production processes. This ensures alignment. Internal
customers also have a voice aligned with the voice of the business (VOB).
The focus of VOB is improvements in sales, cash flow, operating income,
and other internal benefits. Understanding both the VOC and VOB helps
to create a holistic approach for process improvement.
The VOC data gathering process requires planning. There are different
questions that need to be answered to gain a holistic perspective. Some
customers are direct sales and others indirect. Selling to a building product
company is a direct sale. Then when that company sells to a contractor,
that entity becomes an indirect sale to the original supplier. In addition to
customers, there are stakeholders. When products and services are sold,
they need to meet laws and regulations because the VOC is influenced by
them. Another way to think of the VOC is from a customer’s perspective
relative to how a product or service is used, where it is used, who uses it,
when they use it, and why. The best approach for answering these questions
is to observe firsthand through an onsite Gemba walk.
In any business process including manufacturing, services and

supporting processes, large amounts of data, i.e., big data, is generated by
many interconnected information technology (IT) platform applications.
Even relatively small organizations have hundreds or thousands of meta-
data fields that need to be defined using business rules and governed, i.e.,
have ownership. Data integrity has never been more important or diffi-
cult to ensure. There are processes where manual data collection is still
useful, but these are becoming fewer. The accelerator is globalization and
the virtualization of the workplace. Remote teams work in global end-to-
end processes using applications. The result is that in addition to classical
methods using process observation and manual data collection, automated
extraction algorithms, i.e., Robotic Process Automation (RPA), is employed
to automatically access and analyze data for process improvement oppor-
tunities. This means that for improvement projects and especially rapid
improvement events, data will need to be extracted in advance of an event
by data scientists because of the complexity of data access, conditioning,
and analysis
Once data is extracted, the process improvement opportunities are seen
in areas like customer concessions, e.g., returns, warranty and internal
operating reports, customer complaints from surveys and interviews,
customer dashboards, and benchmarking. These classical approaches for
obtaining the VOC are called customer listening posts. There are sev-
eral additional ways to listen for the VOC. Examples include face-to-face
and phone interviews, emails, and online surveys that gauge transaction
quality as well as the loyalty surveys that measure the strength of customer
relationships. Still others are industry benchmarking reports, trade associ-
ation events, and social media.
As the world becomes digitized the usefulness of these emerging listening
posts are increasingly important for gathering and influencing the VOC.
Now customers and organizations can immediately create, evaluate, and
action issues using online applications. Organizational filtering layers are
being eliminated to reduce VOC-gathering complexity and increase the
speed of information transfer. Text mining, descriptive analytics, and pre-
dictive analytics are also enabling access to big data to create statistical
models of business performance that correlate customer sentiment and
retention, revenue, and complaints to demographic variables.
Voice of the customer information is also used to identify common
Critical-to (CT) themes based on measures such as Critical-to-Time
(CTT), Critical-to-Quality (CTQ), and Critical-to-Safety (CTS). These

metrics are progressively broken down depending on the application into
projects. As an example, CTT might be related to end-to-end lead time
reduction or the lead time of a single process, CTC might be related to
high warranty, returns, or standard cost. The usefulness of this approach is
shown in Figure 2.1 using an operating expense example. The alignment
approach is similar regardless of the CT measure. The goal is to cascade
down from the VOC into one or several internal customer requirements
represented as outputs or “Ys.” Projects are created to close performance
gaps between the “Ys” and their targets. Using the operating model shown
in Figure 1.1, improvement toolsets are aligned to each project, based on
the anticipated root causes and solutions.
CREATE ROBUST PRODUCT AND PROCESS

DESIGNS –REDUCE COMPLEXITY
What is complexity? There are several definitions that include the number
of components in a product or operations in a service offering and the work
tasks needed to complete them. Another view is the skills, equipment, and
technology needed to build and assemble components or provide services.
To the extent services and supporting processes have manual operations at
IT interfaces, complexity should be reduced. If the work can be automated
through digitization and in some applications customer self-service the
impact of complexity from manual operations may be negligible.
It is important that an organization “Lean” itself out at a higher level
prior to the deployment of Lean Six Sigma teams. This is because a system’s
complexity impacts its lead time, cost, and quality as well as project dur-
ation and required resources to execute it. It makes no sense to improve a
process if it is going to be eliminated in the future. It also makes no sense
to improve processes with very low or negative profit margins if they are
non-core to an organization’s operational strategy. The reason is that, after
process improvements, non-core processes are not likely to be continued
in the future. Often these non-core processes supporting services and
products are discontinued or outsourced to other organizations.
Services are improved by eliminating operations, with their work tasks,
physical parts, and other design components if they are not increasing
value. Over time, these incremental features and functions are added
without increasing value content for a service or product. In addition to
elimination of nonessential features and functions associated with service
offerings, those that remain part of a service can often be combined for
customers in unique ways. An example could be the use of self-service
when accessing online portals that eliminate manual work tasks from a
process or forms that self-populate and only ask for needed information
from customers. In summary, simpler product and service designs and
supporting processes fail at a lower rate, all other things equal, and their
cost and lead time will be lower because they can be easily assembled or
configured for use.
The first strategy to reduce complexity is not producing products and
services that do not add value, are unprofitable, or are not strategically
aligned. Because NVA features and functions creep into products, ser-
vices, and supporting processes at any time, some of them may not be in
demand or direct labor, and materials costs are increased causing oper-
ational inefficiencies. An effective way to see this is to create an analysis
that prioritizes them by their volume, profitability or gross margin, and
strategic alignment. It is often a surprise to see which products and services
have a negative margin. A major goal should be identification and removal
of products and services that are not part of an organization’s core product
and service portfolio, and improvement of the efficient production of those
that are. This helps to focus on more impactful project areas. A second
goal should be to apply simplification, consolidation, modularization, and
standardization methods to remaining products and services. An example
is the proven methodology of Design for Manufacturing (DFM) used to
simplify product design, eliminating and aggregating features, functions,
materials, components, and work tasks.
A third method to reduce complexity is applying mistake-proofing to the
simplified product or service, so it can only be assembled or used one way
to avoid error. Mistake-proofing is a sequential evaluation to eliminate
error conditions and errors. First an evaluation is made of “red flag”
conditions that contribute to errors. Examples include poorly lighted and
noisy work environments that increase the likelihood of errors. Other red
flag conditions include frequent changes to jobs, poor training, lack of
measurements, and no written procedures or standards. The strategy is to
eliminate red flag conditions and then the cause of error conditions, so
they do not occur. Complexity increases if errors exist because supporting
processes are needed to manage the resultant mistakes. Although process

improvement projects are routinely created to eliminate errors, it is better
to focus resources on impactful areas such as red flag conditions that cause
many different types of error and use best practice where possible. In other
words, avoid having to deploy several improvement projects.
A fourth key concept for effective design and simplification is ensuring
products and services can be assembled or configured very easily without
the use of complex tools or procedures. A common example is designing a
product in a way in which its components snap-fit together or for filling in
online forms, there are dropdowns in templates, so customers are only able
to use defined fields when entering data. Another example is designing an
airport self-check-in kiosk, so anyone can easily check themselves in for a
flight, e.g., by selecting seats and using baggage check-in options without
making a mistake.
A fifth simplification concept is to effectively test new products or ser-
vices, under actual conditions of customer use, to identify failure points,
and to optimize performance prior to production and sale. This is done
by building prototypes, running pilot evaluations, analyzing models,
conducting simulations, and using similar methods to evaluate perform-
ance. Testing helps identify weaknesses when they are easier to fix. Robust
designs enable improvement teams to focus on different areas. In other
words, it is more effective to ensure something is properly designed than
to fix a part of a process or redesign a product or service once it is in pro-
duction to the customer.
The final concept is the application of continual improvement using
effective measures to guide where to deploy projects. The performance
measures need to be relevant to monitor, manage, and improve pro-
cess performance and to also enable drill downs to lower level metrics
components to take appropriate corrective actions. There also needs to be
an infrastructure for managing project portfolios and execution projects as
well as coordinating change management activities.
DEPLOY LEAN SIX SIGMA TEAMS

Improvement teams should have operational alignment with customer and
business goals to ensure correct project prioritization, resource availability,
support for solutions, and sustainability. Improvement teams are increas-

ingly globally dispersed and work remotely. The team members often
speak different native languages and are culturally different. This means all
team members need to be culturally aware. Remote meetings may occur
at inconvenient times for some team members. This requires them to be
planned to consider different time zones. But with digitization, video, con-
ferencing and communications are highly standardized, secure, and easy
to use, and meeting times can be periodically moved to different time
zones. Although some teams still focus on a single project, the trend is for
teams to work through a portfolio of aligned projects to create business
integrated solutions. This is because different IT systems and stakeholders
are included in a team’s scope. Team members also represent parts of end-
to-end services and their supporting processes. This is also true for product
design teams where work is dispersed.
It has been shown that developing high-performance work teams have
common success characteristics and move through a maturation process.
The team maturation process has four stages. These are forming, storming,
norming, and performing. Forming occurs when team members first meet.
In this initial meeting, there are few differences of opinion, and people
interact without issues. In the storming stage, there are often disagreements
on how best to achieve the team’s goals. The time a team spends in the
storming stage varies, but it is known that some teams move through the four
stages very quickly and others do not. There are reasons for the differences.
Storming teams are often poorly facilitated or have other characteristics
that limit their success. Some of these are a lack of diversity, both culturally
and psychologically, or the skills of the members and behaviors do not
promote teamwork. Examples of the latter include not attending meetings,
not completing assigned actions, and not following the facilitation rules.
Diversity provides different perspectives that help with data collection,
analysis, or improvements. But voicing different perspectives requires
patience and respect through these discussions. Facilitation is how this
is done. It ensures there is a team charter, an agenda is published before
meetings, actions are recorded and sent after the meeting, people complete
their actions, one person speaks at a time, and roles and responsibilities
exist, e.g., a sponsor, team lead, the meeting facilitator, note-taker, team
members, subject matter experts, and resources are adequate to complete
actions. The team maturation process has evolved to support rapid project
execution and to reflect the global diversity of its teams.
A team is formed using a project charter that formalizes its goals,

business benefits, available resources, and other information discussed in
Chapter 2. The charter in this sense is also an agreement of how a team
will work together. The facilitation methods discussed above are par-
ticularly relevant for ensuring an agreement is achievable in practice.
Virtualization and digitization of work through many IT platforms and
applications makes it especially important that a team’s work products be
completed as promised and efficiently shared among the team. Facilitators
will help move a team through its maturation cycle. A common situation
is that team members will need Just-in-Time (JIT) training to complete
data collection, root cause analysis, and for developing solutions and other
topics depending on the project’s scope and goals. If the team is a natural
work group that is organized around a process rather than just one project,
it should be trained to apply continuous improvement methods to increase
and sustain performance.
PERFORMANCE MEASUREMENTS
Performance measurements are useful for monitoring and managing pro-
cess performance. They are also useful in identifying performance issues
within a process to help create charters that enable Lean Six Sigma teams
to make needed improvements. Although there are hundreds of different
performance measurements across diverse industries and functions,
organizations will usually use a few depending on focus on specific aud
iences. Reporting dashboards display these measurements, and there are
different formats. Some dashboards are designed for leadership to provide
a 360-degree holistic view of operations. Others are focused at a process
level. Leadership dashboards are designed to provide actionable insights
to aid decision-making. Operational dashboards help control and improve
processes. There also analytical dashboards built for analyzing trends and
patterns using business models. Regardless of the type of dashboard, they
are designed to answer questions for the relevant audience. These questions
are mapped to underlying metrics that are clearly defined and governed
using business rules. Some of these metrics may be transformed using
models. As a result, dashboard performance indicators or measures are
often composed of several metrics. As an example, end-to-end lead time is
a sum of the operational lead times through a process. Forecasting models

used in dashboards are also created using a combination of historical data and
smoothing parameters to predict future sales or other dependent variables.
The dashboard goal is to provide relevant information to answer stakeholder
questions and to provide actionable information. Now most dashboard
applications are virtual and created from algorithms as opposed to being
physical and created manually. This keeps them refreshed and easily access-
ible for anywhere. From a process improvement perspective, dashboards
help identify improvement opportunities and if properly designed they can
pinpoint the underlying root causes and monitor a process.
Service organizations create an enormous amount of data that needs to be
accessed and then transformed into meaningful information for decision-
making. It is common that metadata is pulled from several different IT
applications to build either a 360-degree view or a model depending on the
audience. Robotic Process Automation uses algorithms or “bots” to gather
and prepare the reports because of the size and complexity of the databases.
Rapid improvement events are often virtual and there are differing lead
times for report accessibility. This means reporting information should be
requested in advance of an event. Requests for information made several
weeks in advance are not uncommon.
Operational dashboards evolved from being manually created and placed
at a work team level to being fed online data by machine sensors and to
still more advanced versions. These early dashboards provided informa-
tion on metric status but without intelligence. As dashboards became
more sophisticated, they used models to aid decision-making and recom-
mend actions. The current dashboards can be accessed from anywhere and
incorporate sensors from many sources, i.e., the Internet of Things (IoT),
or pull large amounts of data from databases. These use big data analytics
to create models of various types.
Table 3.2 provides an extensive list of metrics in a dashboard format.
Actual dashboards would be simplified, made visually appealing and be
virtualized with drill-down capability. Lean operational metrics include
(1) percentage VA content or time; (2) a system’s production or throughput
rate (units-per-minute); (3) scrap percentages; (4) rework percentages;
(5) the downtime percentages of equipment and people; (6) the available
production capacities of operations in units-per-time; (7) set-up time and
cost of jobs at various operations in a process workflow; (8) inventory
newgenrtpdf
TABLE 3.2
Create Performance Measurements
Work Area: Average Job Cost $22.75 Date: July
Accounting
Operation: Units Per Shift 50 Auditor: Joe

Accounts Payable
Process Shift Cost $1,137.50 Takt Time: 8.4 Minutes/Unit (5D units in 420 Minutes)
Inner: Mary
Operation Available Time (Minutes) 420

Number: 4TD
Operation “Accounts Payable”
Key Metrics
Improvement %

Week 10
Week 11
Week 12
Week 13
Week 14
Week 15
Week 16
Baseline
Average
Week 1
Week 2
Week 3
Week 4
Week 5
Week 6
Week 7
Week 8
Week 9
1. Value 15.0 15.0 15.0 16.0 16.0 16.0 16.0 17.0 17.0 18.0 18.0 18.0 19.0 20.0 21.0 22.0 13.0 17.3 15%
Adding %
2. Production 50.0 52.0 55.0 55.0 60.0 63.0 55.0 63.0 62.0 63.0 64.0 66.0 65.0 69.0 70.0 73.0 74.0r 63.1 26%
Rate (Units/
Time) or
Operation
Cycle Time
(Continued)
newgenrtpdf
TABLE 3.2

Cont.
3. Scrap% 2.0 2.0 2.0 2.0 1.9 1.8 1.7 1.5 1.4 1.3 1.2 1.1 1.2 1.2 1.1 1.0 1.0 1.5 -27%
4. Rework% 30.0 30.0 30.0 28.0 25.0 31.0 33.0 27.0 25.0 28.0 24.0 22.0 21.0 19.0 17.0 19.0 20.0r 24.9 -17%
5. Downtime% 20.0 21.0 23.0 19.0 18.0 20.0 17.0 16.0 18.0 19.0 15.0 16.0 14.0 16.0 13.0 14.0 15.0 17.1 -14%
6. Capacity 54.9 56.4 58.1 62.9 72.4 68.3 60.1 76.1 75.2 72.5 81.7 85.5 87.3 92.8 100.0 100.7 99.6 78.1 42%
(Units/Time)
7. Set-Up Time 30.0 29.0 29.0 28.0 27.0 26.0 25.0 26.0 24.0 27.0 25.0 24.0 24.0 21.0 23.0 21.0 20.0 24.9 -17%
(Minutes)
8. Inventory 20.0 19.0 16.0 18.0 15.0 16.0 14.0 17.0 13.0 18.0 14.0 13.0 12.0 11.0 12.0 9.0 8.0 14.1 -30%
(Units in
Queue)
9. Floor Area 10,000 10,000 10,000 10,000 10,000 10,000 10,000 5,000 5,000 5,000 5,000 5,000 5,000 3,800 3,800 3,800 3,800 6,575 -34%
10. Lead time 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 22 -28%

(Days)
Additional Metrics (Depending on Industry or Function)
a. Total Process
Workflow
Cycle Time
b. Number of
Problem-
Solving Teams
c. Number of
Customer
Complaints
newgenrtpdf
TABLE 3.2
Cont.
d. Number of
Employee
Suggestions
e. Warranty
Expense/
Incidents
f. Returned
Goods
Expense/
Incidents
g. Annualized
Savings
h. Percentage
Scheduled Jobs
Missed
i. First-Pass

Yield (Rolled
Throughput
Yield-RTY)
j. Profit/Loss
k. Inventory
Efficiency
(Turns)
l. On-Time
Supplier
Delivery
(Continued)
newgenrtpdf
TABLE 3.2

Cont.
m. Forecast
Accuracy
n. Lead Time
o. Unplanned
Orders
p. Schedule
Changes
q. Overdue
Backlogs
r. Data
Accuracy
s. Material
Availability
t. Excess &
Inventory
Generic Process Workflow–Current State
D1
8,3
VA
E F
A B C G6,2
24,12 48,24
60,5 30,10 24,6 NVA
BVA BVA
VA VA NVA
D2
16,4
NVA
Generic Process Workflow–Ideal State
A B D1
60,5 30,10 8,3
VA VA VA
Standard Standard
Operation Expected Deviation Variance Operation Expected Deviation Variance
A 60 5 25 A 60 5 25
B 30 10 100 B 30 10 100
C 24 6 36 D1 8 3 9
D2 16 4 16
E 24 12 144 Total: 98 134
F 48 24 576
G 6 2 4 95% CI of Lead Time: 120.69
Lead Time: 208 901 % Lead Time on Critical Path: –53%
95% CI of Lead Time: 266.83

FIGURE 3.1
Value Flow Mapping
investment operation by operation; (9) the allocated floor space required for

production of products and services; and (10) process lead time. Financial
measurements such as revenue, operating expenses, cash flow, financial
adjustments, and ratios are also tracked. There are others depending on
the application and the types of decision that need to be made. These Lean
metrics are relevant for manufacturing and services across diverse indus-
tries. In addition to Lean and financial metrics, there are also Six Sigma
quality metrics as well as those used to manage projects. It is important to
identify and define the correct metrics, measure their performance, and
close gaps using projects.
All analyses are in seconds:
Standard
Operation Expected Time Deviation Variance
A 60 5 25.0
B 30 10 100.0
C 24 6 36.0
D2 16 4 16.0
E 24 12 144.0
F 48 24 576.0
G 6 2 4.0
Total 208.0 901.0
Demand per shift: 800.0

Allowed time (breaks): 3,600.0
Available time: 25,200.0
Takt time = 31.5
(seconds per unit)
Theoretical minimum operations or stations:
Time to produce one unit: 208.0

Takt time 31.5
Number of people: 6.6
FIGURE 3.2
Takt Time Calculation–Original Process
CREATE VALUE STREAM MAPS (VSM)

A VSM and other maps of lower level sub-processes, i.e., Value Flow Maps
(VFM), are used to document, analyze, and improve operational perform-
ance. Creating it requires bringing people together that are part of the
process to create a graphical representation of their process. These people
understand how the process operates. End-to-end supply chain VSMs
include different functional teams and supply chain participants. Scope is
very important when creating a VSM to ensure operational alignment to
the projects that are identified from the VSM analysis. The goal of the VSM
analysis is to understand handoffs and redundant operations and to look
for simplification and standardization opportunities. Chapter 5 is focused
on data collection and analysis, and we will provide an example of a VSM
to show how it is used to collect data. After an initial VSM is created, its
major processes are analyzed. This is where most improvement projects
originate.
At a process level a VFM is used to describe the process. The Lean metrics
are also applied at this lower analytical level. The top of Figure 3.1 shows a
generic version of a VSM. The first step is classifying operations as VA, NVA,
and business value adding (BVA) operations. Value-adding operations
that are required to meet customer needs have three attributes, e.g., they
are required by customers; they are transformed either by adding features,
functions, information, or other attributes, and they are done right the first
time. Non-value adding operations are not needed and can be eliminated.
Business value adding operations do not have customer value but are
needed because of technology or regulatory constraints. Over time the goal
is to eliminate the BVA operations or to modify them to reduce their NVA
content. The VSM shown in Figure 3.1 has several pieces of useful infor-
mation. It shows how operations are spatially related and adding a value
analysis provides an insight as to which ones should be eliminated first. The
time to complete each operation is also shown. As an example, Operation
A takes 60 seconds to complete on average and has a standard deviation of
5 seconds. This information in combination with other operations can be
used to calculate the critical path of the process, i.e., the overall process lead
time. The critical path in Figure 3.1 is identified by operations A,B,C,D2,E,F
and G. If reducing overall lead time of the process is the goal, a VSM helps
focus projects on critical path operations. In the example, all operational
lead times are assumed to be normally distributed.
A simple assumption made in Figure 3.1 is that the improvement team
first eliminates the NVA operations to simplify the process leaving the
remaining operations A, B, and D1. At the bottom of Figure 3.1 an ana-
lysis is shown of the benefits. The average lead time on the critical path
was reduced from 208 to 121 seconds for a 53% reduction. The process
improvements continue within these remaining operations through
data gathering, root cause analysis, and elimination of process waste.
As part of this subsequent investigation the team gathers management
reports, data entry forms, and other information that is used to enter,
analyze, and report on the information flowing through the process. The
various forms, reports, and data entry forms for these sub-processes are
also placed with notes for process gaps and improvement ideas as well
as a metric summary for each operation including the critical path and
bottleneck resource. These gaps are not usually identified in management

reports and are part of the hidden factory, i.e., work being done but not
recorded. The advantage of a quantified process maps is that they visu-
ally show process complexity and are built hands-on by the people doing
the work.
One of the first steps in process analysis is to ensure customer demand
is being met on schedule. If a process is poorly designed or not well con-
trolled, it will be inefficient. It may initially require more than the optimum
numbers of people, machines, or materials. The process takt time needs
to be calculated to form a baseline for improvement. As Lean, Six Sigma
and other methods are successfully applied to the process, the takt time
is maintained but the required resources are decreased, i.e., the process is
“Leaned” out. Figure 3.2 shows a takt calculation for the original process
that includes all operations. In the current process the total average time to
produce one unit is 208 seconds. The demand per work shift is 800 units,
and the available time for each work shift is calculated as 25,200 seconds.
This is 8 hours or 28,800 seconds minus an hour for breaks. The takt time
calculation shows the process needs to produce one unit every 31.5 seconds.
No operations can exceed this takt time unless it has redundant capacity,
i.e., two or more machines or people. The total time needed to produce one
unit is 208 seconds across all operations. Dividing the total time to produce
one unit by the takt time shows that the number of workstations needed
to produce 800 units per work shift is 6.6 or 7 workstations. The next step
is to allocate the workstations or people in a way that the total operational
lead time at any operation remains below the 31.5 seconds takt time. If the
process can be initially “Leaned” out by eliminating NVA operations, then
the number of workstations or people can be immediately decreased, and
the process baseline adjusted down to require fewer workstations. But the
takt time remains the same because it is based in part on external demand.
In the example shown in Figure 3.3 the final requirement would be three
workstations or people.
ELIMINATE UNNECESSARY OPERATIONS

Once the takt time is calculated and quick hits are made by elim-
inating most NVA operations, the Lean Six Sigma team can begin
All analyses are in seconds:
Standard
Operation Expected Time Deviation Variance
A 60 5 25.0
B 30 10 100.0
D1 8 3 9.0
0.0
Total 98.0 134.0
Demand per shift: 800.0

Allowed time (breaks): 3,600.0
Available time: 25,200.0
Takt time = 31.5
(seconds per unit)
Theoretical minimum operations or stations:
Time to produce one unit: 98.0

Takt time 31.5
Number of people: 3.1
FIGURE 3.3
Takt Time Calculation–Future State
simplifying the process by optimizing its VA and BVA operations.

Even if an operation is VA a percentage of its work tasks may be NVA.
The BVA operations include inspections, testing, audits, controls,
reporting, and other needed work. A good way to think about pro-
cess simplification is that a process should have higher value con-
tent relative to processing time as it becomes “Leaner.” It is useful to
break down operational lead time into its time components. These
are waiting, set- up, processing, unloading, inspection, and move
ment times. This is true regardless of the work unit being information
or materials. Only processing time adds value because it is transforming
the work object. The other time components are time waste because they
do not have all three VA attributes, i.e., they are needed by a customer,
physically transform a work object and are done right the first time.
There are also specialized Lean methods such as single-minute exchange
of dies (SMED) used to reduce NVA time within an operation. In
summary, elimination of NVA operations focuses attention on VA and

BVA operations. These are analyzed for internal work task value content.
IMPLEMENT JUST-IN-TIME SYSTEMS

A successful JIT implementation depends on the building blocks of
stable external demand, operational stability, and continuous operational
improvement. These are shown in Figure 3.4. Stable demand implies the
operations and their work tasks can be synchronized to external demand
using a takt time. The assumption is a reasonably predictable demand
pattern with low variation. The original JIT concept was created as part of
the Toyota Production System (TPS). The TPS is characterized by relatively
constant external product demand of plus or minus 10% of the average
daily demand. If external demand variation exceeds 10%, it may be diffi-
cult to establish a stable takt time. This has forced some organizations to
3 Key Building Blocks of JIT
Stable Continuous
Demand Operational Stability Improvement
1. Continuous 3. Robust Designs 8. High Performance

Flow and Processes Work Teams
2. Pull System/ 4. Standardized 9. Basic Problem-
Kanbans Work Solving Tools
5. Mistake- 10. Advanced
Proofing Problem-Solving
6. Single-Minute Tools (Six Sigma)
Exchange of
Die (SMED)
7. Total Productive
Maintenance
8. Supplier Support
Right Component… at the Right Time … in the Right Quantity

FIGURE 3.4
Implement Just in Time (JIT) Systems
modify the original TPS to suit their applications. Stable demand enables
level load on a process and line balancing to the takt time. The goal is to
pull work through a process based on its takt time and meet daily demand.
Operational stability is a second key building block for an effective JIT
system. It is achieved by creating robust product and service designs to
make them easier to produce by operations. Complicated designs require
more components regardless if they are products or services. The produc-
tion and supporting processes are also directly impacted by complexity.
After simplification, the next step is standardizing the remaining work.
Once work tasks are standardized they are mistake-proofed to prevent
errors. These actions decrease operational variation and lead time. There
are several other methods that also help stabilize operations. As an example,
SMED is used to reduce work set-up time. Total Preventive Maintenance
(TPM) is used to increase system availability by effective design of main-
tenance systems consisting of equipment, people, and process. Supplier
support systems are also important because they directly impact internal
takt times through on-time deliveries and material availability and quality.
As a result, it is important to build long-term relationships with suppliers
through a variety of methods including formalized written contracts and
the application of Lean, Six Sigma, and other initiatives at supplier facil-
ities. If done well, a supply chain will optimize its asset investments by
positioning them at the correct locations across the supply chain. In fact,
a “Lean” supply chain should have higher asset utilization efficiencies than
its competitors as well as higher value content and productivity based on
optimum allocation of assets.
The third building block is the continuous improvement of work by high-
performance work teams trained to use problem-solving skills such as Lean,
Six Sigma, APM, and Business Analytics. These teams are trained to create
project charters and execute the resultant projects. There is significant syn-
ergy between the three building blocks. As an example, high-performance
work teams, through the application of basic and advanced problem-solving
tools, facilitate creation of systems with a high degree of operational stability to
maintain takt times for the uninterrupted flow of materials and information.
Although the deployment of JIT methods developed by Toyota was focused
on manufacturing, over time, Toyota modified its systems for use in its
own service and supporting processes. Other industries and organizations
also made modifications to the original TPS to varying degrees. The

results are sometimes mixed. Building a “Lean” organization that reflects
the TPS and JIT philosophies requires a long-term strategy, execution,
and investment. Just in time is done in phases. During these multiyear
phases, metric performance is carefully evaluated to enhance operational
capabilities. Metrics are important for a successful Lean implementation.
As an example, Kobayashi developed 20 key performance measurements
that require establishing an initial baseline to measure improvements to
baselines. They are like the ones shown in Table 3.2 but there are sev-
eral additional ones. The 20 keys are: (1) clean and tidy, (2) participative
management style, (3) teamwork on improvement, (4) reduced inventory
and lead time, (5) changeover reduction, (6) continuous improvement in
the workplace, (7) zero monitoring, (8) process, cellular manufacturing,
(9) maintenance, (10) disciplined, rhythmic working, synchronized, (11)
management of defects, (12) supplier partnerships, (13) constant identifi-
cation and elimination of waste, (14) worker empowerment and training,
(15) cross-functional working, (16) scheduling, (17) efficiency, (18) tech-
nology, (19) conserving energy and materials, and (20) using the most effi-
cient design methods. As an organization matures its Lean deployment,
the value content of its supply chain increases.
Reorganize Physical Configurations

Physical and even virtual layouts or configurations have a real impact on
process lead times, quality, and cost. In a continuous process, a straight
line will often be the most efficient physical layout. However, in discrete
parts production, “U”-shaped work cells are more efficient than straight
line layouts. This is because cross-trained workers can move more easily
between machines as demand on the work cell, i.e., the equipment and
people, change. This concept is true for similar production systems even
virtual ones used in services and supporting processes. Cross-training
and accessibility to work (not having to move to the work) dramatically
increase process efficiency. “U”-shaped work cells enable employees to
perform several work tasks at low demand, or workers can be added to the
cell if demand increases with each handling fewer work tasks but higher
volumes. A “U”-shaped work cell also facilitates the balancing of materials
and information to meet the takt time. Figure 3.5 shows several different
Straight LIne “L” Shape
“Council” Shape “Cube” Shape
“Modified L” Shape “U” Shape

FIGURE 3.5
Reorganize Physical Configurations
process layouts using an office as an example. There are variations of these

common layouts depending on the application.
5S and Standardized Work
Once a process is simplified and physically reconfigured to help balance
the flow of work to the takt time, “5S” is applied to the process. 5S is
usually designed upfront into a new process or after the fact through
rapid improvement events. “5S” is an acronym for sorting, set-in-order,
shining, standardizing work tasks, and sustaining improvements. The

“sorting” of work materials and information requires separating essential
from nonessential materials, equipment, and objects. The concept is also
applied to any workspace that has clutter. An example is a SharePoint
containing files that are not well organized or large databases that prevent
easy access to data. Disorganized SharePoints waste time if employees
cannot find folders or files. A process that is clean and orderly is more
productive. To start, all materials not required for production or related
uses are removed from the work area to reduce its clutter. Only materials
and equipment necessary to do the required work should remain within
the work area. This sorting process is analogous to cleaning your desk
or garage of all nonessential items so the remaining objects are easier to
find. This helps people to focus on VA work rather than being distracted
by extraneous materials and objects. A manufacturing example would
be separating materials and tools that are needed in the work area from
those that are not needed. The “red tag” method is used to do the sorting.
Materials and equipment that are red tagged should be removed from a
work area after a review period. This enables the people who are part of
the work area to verify the red-tagged items are not required for current
or future use.
“Setting-in-order” requires all materials and information to be in their
proper place, so they are easily found when needed for use. The location
where materials and equipment are stored is labeled or marked off, so
there are just one or a few places to store it. This practice facilitates inven-
tory and control of materials because they are easily seen, i.e., the system
is visual. A glance across a busy production area also shows the status,
i.e., is it available and staged for use or at its storage location. Operational
efficiency is increased directly in proportion to the ease in which workers
can find work materials and tools. As an example, if a SharePoint’s infor-
mation storage and retrieval rules are standardized the efficiency of
accessing, creating, reviewing, updating, and deleting (CRUD) data is
increased. A manufacturing example would be ensuring there is one loca-
tion to place materials, equipment, and tools in a work area. A service
example would be ensuring files, templates, applications including online
portals and user interfaces have easy access. A personal example would
be creating a predefined location for tools in a garage. Setting-in-order
ensures each tool is always placed at one location, so it is always easy to
locate for use.
“Shinning” requires that everything within a work area be clean. This is

important to help identify abnormal conditions associated with equipment
maintenance. A manufacturing example is ensuring tools and equipment
are clean. Abnormal conditions such as oil leaks and rework are easier to
see under these circumstances. A classic example is used to describe the
cleaning of machines by placing white floor mats under them to identify if
oil is leaking. This visual check is simple and effective for identifying needed
equipment maintenance. This contributes to higher equipment availability
and process stability. In an office environment, examples include keeping
the office clean and well organized, so work is done without disruptions.
And if there are disruptions they are easy to detect.
In some organizations a monthly cleanup of unwanted materials is
done, and employees discard obsolete reports and miscellaneous items
no longer needed to complete current work tasks, but that clutter their
work areas.
Standardization is the fourth “S” in the 5S system. Standardization
implies that the work will be done the same way every time. Consistency
reduces process variation and contributes to a stable takt time. It has
been shown that if work tasks are done differently from one employee
to another, then operational lead time and cost increase and quality
decreases. But work tasks should be standardized only after a careful study
is done under production conditions. There are analytical methods, such
as time and motion studies, available to help analyze how operational
work tasks should be best done. In time and motion studies, process
analysts decompose process operations into work tasks. These are further
decomposed into elemental motions. The best way to do these elemental
motions is determined by consulting standardized time and motion tables
or using a micromotion camera to record how people do work tasks. The
motions are also set to avoid worker fatigue and injury. The initial ana-
lysis is confirmed in producing with the people doing the work. In sum-
mary, analytical studies are used to find the best way to standardize work
including the work task sequence, tools, and inspection instructions and
their organization.
The fifth “S” is maintaining the self-discipline to sustain the improvements.
Sustaining improvements is facilitated by continuous improvement
teams using problem-solving tools and methods. An integral part of
sustaining process improvement is measuring process performance. Some
key methods for sustainability are control plans, audits, control charts,
5S, and re-engineering of different types. Sustaining improvements also

requires leadership commitment. This is the reason that all operational
improvements need to be aligned to operational strategy.
Link Operations
Operational layouts have an important impact on process efficiency.
Collocation of assets enhances collaboration, reduces handoffs and the
movements of materials and information. As an example, the longer the
distance work must travel or the number of handoffs during the travel,
i.e., the more complexity the longer the process lead time. Travel distance,
movements, and the flexibility to meet changing demand also change based
on how operations are linked either physically or virtually. As an example,
a packaging center had several packaging lines. These packaged different
kits. The initial line layout had people on one side, and these people were
idle if volume decreased. In contrast, other kitting lines might have been
very busy requiring extra help. It was also difficult to stage materials at the
packaging lines. The lines were isolated, and people had to walk around
conveyors to adjust or load machines on different kitting lines. A solution
was found by placing packaging machines so one person could adjust and
load both machines. Employees could work either or both packaging lines
as volume changed by simply turning around to face the other line.
This solution was a modification of a U-shaped work cell. The flexi-
bility to assign employees to adjacent packaging lines was increased, and
the physical modifications contributed to the smooth flow of packed kits
through the process. The direct labor cost savings were significant. This
concept can also be applied to office or service work. In this scenario, work
represented as materials or information enters a work cell or office area,
moves around the cell to be transformed, and exits. The advantage of using
a “U”-shaped work cell is that workers can collaborate and move to help
each other. The throughput of material and information entering a work
cell is equivalent to that which exits the same cell. A “U”-shaped phys-
ical configuration and operational linkage also prevents a buildup of WIP
inventory or unfinished work tasks within the cell.
The first step to analyze an office area is to create a floor layout to identify
operations and their work tasks relative to the flow of materials or infor-
mation. The goal is to reduce the complexity of the process and increase
its VA content. After improvements are made, work tasks are balanced to
use a minimum number of workstations to meet the required takt time.

As an example, in global and virtual office environments, information
is moved through IT systems anywhere in the world almost immedi-
ately. In linking these types of operation, the key concept is to keep the
materials or information flowing without interruption from one oper-
ation to another. To do this, functional interfaces are removed by elimin-
ating set-ups, inspections, waiting, and similar NVA operations. Also, the
methods found in operations research and queuing theory are very helpful
for designing, analyzing, and improving processes. Software portals are an
example where these methods are useful. It can be mathematically proven
that some server layouts or configurations are more efficient than others
depending on the application. Examples include a single server versus
multiple servers, single versus multi-phases, and service rules, e.g., first in
first out of the system or last in first out and other prioritization rules.
Balance Material Flow
Once a process is standardized and its operations are linked, the flow of
materials or information can be balanced across the workstations using
the takt time. Each operation is balanced to the takt time and not allowed
to exceed it even if additional capacity must be added. As an example, if
available time per day is 480 minutes (8 hours multiplied by 60 minutes
per hour) and the required production is 80 units per day, then the takt
time is 6 minutes per unit. This means in every 6 minutes, one unit of pro-
duction must be completed by every workstation in the process. A work-
station is overloaded if the cycle time needed to complete its work exceeds
the system’s takt time. For this situation, a second workstation needs to be
added in parallel to the one that is overloaded to ensure that the flow of
work is balanced. This results in excess capacity that needs to be eventually
reduced. It may also be possible to combine workstations to gain sufficient
capacity to remain below the takt time.
Bottleneck Management
In any system, a certain operation will constrain the flow of work on the
process’s critical path. A critical path is the sequence of operations that in
total is the longest lead time of the project. A bottleneck operation must
be able to meet the takt time because it controls the flow of materials
and information through a process. This means that other operations or
resources will be periodically idle or not utilized. They are activated as
needed to support the bottleneck to meet the takt time. As a result of this
fact, organizations develop strategies to maintain an uninterrupted flow of
work through the bottleneck operation and managing capacity as needed.
Figure 3.6 shows how the bottleneck concept applies in an office. In the
first scenario, a bottleneck feeds a non-bottleneck. In the second scen-
ario the sequence is reversed. In either scenario, the production rate of all
resources or operations must be subordinated to the bottleneck’s demand
and is 10 units per day. Another important concept is that a bottle-
neck must be activated and utilized to meet the takt time. In situations
where a bottleneck cannot meet its demand, then process improvements
should first focus on increasing the bottleneck’s capacity as opposed to
other operations. Increasing capacity elsewhere does increase the process
Bottleneck Feeding a Non-Bottleneck

Non-Bottleneck Feeding a Bottleneck
Capacity: Capacity:
10 Units 50 Units
Per Day Per day
Capacity:
Capacity:
50 Units
10 Units
Per day
Per Day
Production rate = 10 units per day

FIGURE 3.6
Bottleneck Management
throughput rate. If process improvements cannot provide sufficient cap-

acity for the bottleneck to meet the takt time, then it could be utilized over
multiple shifts or additional workers, and equipment could be added to
support it. If a bottleneck gains capacity than another operation called a
capacity-constrained resource may become the new bottleneck. A VFM is
very useful to help understand operational capacity and locate the bottle
neck and capacity-constrained operations.
Transfer Batches
Using transfer rather than production batches is another key concept for
maintaining the flow of work. Transfer batches move material and infor-
mation from one operation to the next as soon as the work is complete. In
contrast, a production batch sends completed work to a downstream oper-
ation only after all units in the batch are complete and can travel together
as a batch. Transfer batches significantly reduce lead time. Figure 3.7
compares the lead time through a process with three operations A, B, and
C using either a transfer or production batch. Ten units are moved through
the process. The total lead time to produce these 10 units is 60 minutes
when using a process batch versus only 24 minutes using a transfer batch.
This is a lead time reduction of 60%. It was obtained by simply changing
the rule used to release completed production from one operation to the
subsequent operation. The concept of transfer batching is directly applic-
able to office operations. As an example, the cycle time will be less when
expense reports are immediately reviewed by a supervisor and sent on to
the accounting department rather than batching them with other expense
reports.
Mistake-Proofing
Mistake-proofing was briefly discussed earlier in this chapter as a method
to reduce complexity. It helps balance the flow of work through a system
because unexpected interruptions to work are prevented from occurring
and their frequency is reduced. Mistake-proofing helps prevent or quickly
detect defects if they occur. There are common strategies used to mistake-
proof operations. The first is to design a product or service so it will not fail
when used by customers. As an example, in manufacturing, components
are designed to be assembled one way using asymmetrical features such as
FIGURE 3.7
Transfer Batches
a lock and key or snap-fitted together. In service processes, data can only
be entered one way and is cross-checked to ensure its accuracy. Another
example is ordering a computer online and being presented with a limited
number of configurations.
Mistake-proofing strategies also have several protection levels. At a first
level, “red flag” conditions are identified and then eliminated from a pro-
cess. Red flag conditions include a lack of training or procedures, a lack of
effective measurement systems, frequent changes to jobs, long cycle times
to complete a task, work which is produced infrequently, and poor envir-
onmental conditions such as noisy, dirty, and poorly lighted work areas.
They contribute to the creation of error conditions. These then contribute
to the creation of errors and finally defects. Because red flag conditions are
easy to see and eliminate, it is advisable that process improvement teams
immediately eliminate them before process improvement work. A next
lower level of mistake-proofing, assuming that products and services are
effectively designed, and red flag conditions are eliminated from a process,
is to detect error conditions. These conditions contribute to defect creation.
An example is monitoring the status of copying machine settings to pre-
vent paper jams or other issues. The control might be shutting the machine
down and requesting maintenance prior to additional copying. The lowest
level of a mistake-proofing strategy is to detect the occurrence of a defect
as soon as it occurs to prevent additional defects. This is typically done
by activating an alarm to warn operators or automatically shutting down
equipment.
High Quality
Several activities help contribute to higher quality levels. These have a
cumulative impact to prevent or correct process issues and include
the proper design of products and services using the correct design of
the production and supporting processes, and the reduction of com-
plexity through simplification and standardization. Standardization uses
common materials, common design tolerances, and off-the-shelf rather
than customized components. It is also important to ensure that work and
inspection procedures are easy to follow and people are trained in their
use. Mistake-proofing and effective root cause analysis of process issues
also contribute to higher quality as they are identified and eliminated.
Design for Six Sigma (DFSS) is a methodology that helps ensure products,
services, and supporting processes meet customer expectation and
requirements. It is a structured set of tools and methods that systematically
identifies, prioritizes, and translates the VOC into an organization through
its product and service designs. Effectively translating the VOC ensures cus-
tomer requirements form the basis for designs that will contain a higher
value content. Design for Manufacturing is another methodology utilized by
DFSS, originally developed as a standalone methodology to simplify com-
plex designs to enable manufacturing and now services to simplify them. In
summary, high-quality processes rely on designs based on the VOC, simpli-
fication, standardization, mistake-proofing, and effective root cause analysis.
Reduce Set-Up Time (SMED)

The single-minute exchange of dies. (SMED) is a set of tools, methods, and
concepts designed to reduce the time required to set up a job. Although
its origin was in manufacturing, its tools and methods are applicable to all
processes. There are several key attributes of an effective SMED program.
The first is the identification of individual work tasks for setting up a job.
This requires mapping the sequence of work tasks required to set up a job
and then classifying them as VA, NVA, and BVA work tasks. The goal of a
SMED analysis, like other Lean activities, is to immediately eliminate NVA
work tasks from the process, i.e., set-ups. In office operations, a SMED
implementation would create a process map of the work tasks needed to
set up a job, such as setting up the template and gathering information
to invoice a customer. In this analysis, work tasks are analyzed for value
content, efficiency, and their relative relationships to each other to identify
ways to reduce time, improve quality, and reduce the cost of the invoi-
cing transaction. Ways to eliminate or automate portions of the process
are very helpful. A second SMED activity is the separation of internal from
external set-up work tasks. External set-up work tasks can be done off-
line, at convenient times, and do not directly impact the time for setting
up a job. In an office, collecting information prior to meetings to reduce
the time necessary to bring a team up to speed relative to the discussion at
hand is an off-line set-up for the meeting. Another example would be pre-
screening job candidates using the internet by asking job specific questions
before including them in interviews. This decreases the lead time for can-
didate evaluation.
A third SMED activity is the conversion of internal to external work

tasks through design modifications. In manufacturing this requires a
modification to tooling or product designs. In an office environment,
examples are reducing the number of required signoffs for a job or enab-
ling RPA, i.e., a “bot” to extract information from disparate databases and
insert this information into an invoice. The information to be inserted
would include names, addresses, amounts to be paid, or the customer’s
credit history. The fourth SMED activity is simplification, standardization,
and mistake-proofing of the remaining internal and external work tasks.
These improvements reduce set-up mistakes and set-up time. In manufac-
turing environments, tooling is designed asymmetrically, so mating dies fit
together only one way to avoid mistakes and make die and tool insertion
easier. In other applications, dies and tooling may have design features that
enable them to be assembled or adjusted without using special tools. This
also reduces cycle time.
Total Preventive Maintenance

Total preventive maintenance is a set of tools, methods, and philoso-
phies developed to ensure that equipment and people are available for use
when needed with a predetermined probability or reliability level. There
are three key strategies that ensure a system’s availability. The first starts
with an analysis of equipment by classifying it into categories. In manu-
facturing environments, common examples include categories such as
pumps, vehicles, compressors, and others. The reason for the classification
into categories is that common maintenance policies can be applied to a
category that has a common design basis and similar replacement parts
and service technologies. As part of this classification, an ongoing analysis
of maintenance failures is used to identify projects to eliminate root causes
of failure. As incident rates of equipment breakdowns are reduced, then
production capacity is increased. In an office or service, system availability
depends on several components. These include people and their skills,
facility safety, software platforms and applications, special algorithms, pol-
icies, processes, procedures, and other resources used to ensure service
systems are available when needed for use. These all must be operative for
system availability.
A second key TPM strategy is using equipment at its designed or standard
production rate. Equipment should not be operated beyond recommended
rates to avoid unnecessary wear or damage that causes unexpected

breakdowns. Equipment should also not be operated, or people worked
beyond their available capacity for extended periods of time. Available
capacity is defined, for our purposes, as a system’s design capacity minus
adjustments due to expected losses of capacity. A third capacity term is
the actual capacity, which is the capacity available to do work. It is less
than a system’s available capacity due to unexpected process problems.
These problems include rework, scrap, and schedule disruptions, which
degrade a system’s available capacity. In offices, these may include worker
sickness, employee lateness, terminations, and resignations. Ergonomic
considerations are also important to ensure people remain healthy and
efficient. If additional capacity is needed to maintain a takt time, then
more equipment should be deployed to meet production requirements.
Or current equipment could be operated for longer periods, e.g., a second
work shift to meet production requirements.
The third strategy is to reduce yield loss at job start-up to increase
actual capacity. This requires an operational analysis. Any system has
issues related to wasted time and resources. Recall the seven basic pro-
cess wastes discussed earlier in this chapter. These seven wastes directly
impact a system’s maintenance efforts as they relate to the maintenance of
equipment, IT systems, and employee capacities. In offices, it is important
to use Lean methods as well as the others described in the Figure 1.1 oper-
ating model to identify, analyze, and eliminate process waste that con-
tribute to long lead times, lower quality, and higher cost.
Level Demand
JIT systems also require level external demand in addition to process stand-
ardization to maintain a stable takt time. Figure 3.8 shows five different
demand patterns. These are level, normal, erratic, seasonal, and sales
promotions. There are other patterns, but these will illustrate the relevant
concept. Level implies average unit demand variations in a range of ± 10%,
normal implies unit demand fluctuations of ± 25% and erratic could mean
more than ± 100% of average unit demand. Demand patterns could also
exhibit seasonal fluctuations, promotional spikes, and other patterns spe-
cific to certain industries. Just in time systems achieve level demand through
strategies such as design commonality, process improvements, effective
scheduling strategies, and other methods described in this chapter that help
FIGURE 3.8
Level Demand
simplify, standardize, and mistake-proof processes. Incoming demand must

not exceed a system’s available capacity or disrupt its takt time.
The ability of a supply chain to stabilize the external demand placed on
its participants varies by industry and organization. Level demand is dif-
ficult in industries that engage in sales promotions or otherwise manipu-
late external demand. Promotional activities tend to increase the demand
variation and cause a deterioration in a supply chain’s ability to match its
capacity to the varying fluctuating demand. A simple example is retailers
that have everyday low prices versus those that employ promotions. The
latter will have a more difficult time meeting demand unless inventories
are increased. In summary, product or service promotions have the effect
of artificially manipulating external demand patterns, and the result is
increasingly larger demand variation patterns. Higher variation adversely
impacts capacity and inventory investment.
Incorrectly matching supply and demand across a supply chain causes
excess capacity because production schedules are underutilized or
overutilized. When overutilized, production schedules are impacted
because capacity is constrained. The result is missed schedules and poor
customer service. In service operations, people as well as their tools, i.e., IT
systems, are integral to the level of available capacity. For this reason, it is
important to ensure workers are available to service customers by matching
them to the demand placed on a system. It is common to enter a service

operation such as a bank, hospital, store, or restaurant and not wait too long
for service. This is the result of good operational planning. Overutilization
can be managed. A common example is capacity planning within a global
call center. In these highly integrated systems, calls from anywhere in the
world are automatically rerouted to other call centers within the network
if a customer’s waiting time exceeds a predetermined time. There are other
operational strategies organizations can use to match capacity to demand
to effectively level it when demand significantly varies. Some examples are
developing common designs for products and services, increasing oper-
ational flexibility through Lean Six Sigma, forming partnerships with other
organizations, and outsourcing capacity-constrained operations.
Reduce Lot Sizes
The concept of “lot size” is common in manufacturing systems. The larger a
lot or batch, the longer the lead time before the next operation will receive
the batch. Batches include groups of several invoices, expense reports,
resumes, or similar work. This concept is like our previous discussion of
transfer versus process batching. Recall for transfer batching, units of work
are immediately transferred to the next operation rather than batched.
The concept is to avoid purchasing large lots, i.e., several years of supply
of material to gain upfront lower prices with a negative consequence of
several years’ supply. The likelihood for obsolescence increases with
time. The goal is to use small lots. But this strategy requires establishing a
Lean system that can adapt to changes in external demand. Several Lean
concepts discussed in this chapter help reduce lot sizes. As an example, the
application of SMED enables more frequent job set-ups that allow smaller
lot sizes. Also, higher process yields do not require extra work to be done
to make up for lost production.
The goal of JIT and Lean system deployments is to continuously move
the production of work from larger batches toward single unit flow. The
advantage of single unit flow is dynamic matching of capacity to external
demand. In unit flow, a product or service’s lead time is reduced to that
required to produce one unit. This enables a flexible production schedule,
so commonly designed products can be more frequently produced. This
results in lower inventory and higher customer satisfaction. Figure 3.9
shows the unit flow concept.
Unit 1
Process Batch Unit 2

for Job j
Unit 3
Unit 4
Unit 5
Unit Flow for

Several Jobs
Job 1
Job 2
Job 3
Job 4
FIGURE 3.9
Reduce Lot Sizes
Mixed Model Scheduling
If designs have commonality and processes are leaned out to reduce set-
up times and lower lot sizes, then a production system can move toward
a mixed model production schedule to further reduce lead time. A simple
example is shown in Figure 3.10 in which five products labeled A, B, C, D,
and E are produced over five working days using either a batch or mixed
model production schedule. In the batched schedule system, the lead
time to produce a product is five working days because each of the five
products requires one day of the schedule. In contrast the mixed model
production schedule’s lead time is reduced to one working day or by 80%.
This is because the production sequence is hourly rather than daily and
provides smaller lot sizes of the five products. The advantage of a mixed
model production scheduling system is that because of smaller lead times
it can dynamically respond to changes in external demand by adding
FIGURE 3.10
Mixed Model Scheduling
or removing products from the production schedule. If the demand for

product “A” temporarily doubles, then its production can be increased
within an hour if components are available. Alternatively, if demand
temporarily decreases then the product “A” production schedule can be
immediately decreased.
SUPPLIER NETWORKS AND SUPPORT

Integral to a Lean enterprise is its supplier networks or supply chains.
Creation of a Lean supply chain requires its participants to work together to
enhance productivity. Lean, Six Sigma, and similar operational initiatives
need to be deployed by the participants. A Lean supply chain should also
be integrated in a way to take advantage of participant unique operational
competencies through well-designed contracts. Supply chains that pro-
mote effective asset utilization and higher value content will be more com-
petitive. A situation to avoid is having a supply chain dominated by one
or a few large participants that force others to compensate for inefficien-
cies. In this situation, a dominant participant will not have an incentive
to improve operational efficiency because higher costs are passed on to
suppliers and customers through price concessions or higher prices. This
results in deterioration of a supply chain’s ability to invest in infrastructure,
people, and equipment. In the final phases of deterioration, more efficient
competitive supply chains dominate. These have either higher productivity
or deploy disruptive technology to gain market share. Examples include
major competitive disruption in consumer electronics, automobiles, and
more recently financial services.
A key performance measure of a Lean enterprise is asset utilization effi-
ciency. High asset utilization efficiencies require that a supply chain’s assets
be positioned across its participants only where capacity is needed to sat-
isfy demand at that part of the supply chain. Other supply chain assets,
such as people, facilities, and equipment, are similarly allocated. In sum-
mary, a supply chain should be designed to increase its asset utilization
efficiencies and position work where it contributes the highest VA content.
IMPLEMENT VISUAL CONTROL AND

PULL SYSTEMS – KANBAN
A key component of a Lean system is deployment of a “pull” scheduling
system to move work through a process based on the takt time. This
approach contrasts with processes where work is scheduled in anticipation
of future customer demand using statistically based forecasts that “push”
work through a process regardless of changes in demand. This wastes cap-

acity because actual demand is higher or lower than the original forecast.
In manufacturing, pull scheduling systems use visual or electronic signals
called Kanban cards. These are used to notify upstream workstations when
work is needed by downstream workstations.
In the most effective pull systems, external customer demand varies by
approximately ± 10% and the production processes are highly simplified,
standardized, and mistake-proofed through years of process improvements.
In these processes, visual and manual controls are used to efficiently
schedule work by integrated upstream and downstream operations. The
efficiency of pull systems varies by industry and can be difficult to imple-
ment. As an example, in some industries external demand is highly sea-
sonal and fluctuates by more than ± 25% for a single product.
How does the concept of pulling demand through a process also apply
to services and offices in particular? Whereas in manufacturing it makes
sense to move baskets or containers of materials from one workstation to
another using Kanban cards, modified systems are necessary to deploy
pull systems in services and offices. In these systems, workflow software
is used to move work between operations. When an upstream operation
completes a work task the work object is automatically sent to an incoming
queue to the next downstream operation being pulled from the end of the
process. Customer facing service processes have modified manufacturing
this method with a high degree of success. In fast food restaurants that
advertise fast and standardized services (and products) buffer inventories
are utilized to increase capacity that reduces customer waiting time. In
processes that focus on customized meals, i.e., less standardized (products
are made to order), customers expect to wait longer. In these systems,
orders are “pulled” or moved through the process using a workflow man-
agement tool that alerts servers of actual order demand and order status
using electronic signals showing the order meals are to be assembled.
In newer customer facing systems, customers initiate a job or order and
do the work. This is supported by automation. Capacity is expanded by
self-service through software and only utilized when needed by a cus-
tomer. An example is customer self-ordering on the internet as opposed
to asking a person to write an order with the workflow software coordin-
ating order completion. Another example is a patient setting up a doctor’s
visit online rather than calling the office and working with a receptionist
to create the appointment. The introduction of customer self- service
operations, e.g., making an appointment, calling the office, calling to

change an appointment, and updating paperwork creates a forecast for the
patient. It is a pull system if the appointment is near term and the doctor’s
office can dynamically respond to the request. If the appointment is too
far into the future and changed without visibility to capacity, i.e., a doctor,
nurse, or testing, then it becomes a push system.
As another example, an accounts receivable process initiated when
an invoice is sent to a customer. This is the pull signal that initiates the
accounts receivable process to begin a sequence of work tasks. In contrast,
an accounts receivable process using a push scheduling system would pre-
pare customer invoices in anticipation of providing a product or service.
In this situation, if customer demand changes, then invoices will need to
be reworked or discarded. Figure 3.11 shows an office example of a pull
scheduling system. In this example, 800 invoices arrive each shift of 8
hours (assume no breaks). The takt time is 100 invoices processed each
hour. These are divided into groups of 20. Each invoice has 36 seconds to
be processed by each workstation.
CONTINUALLY UPDATE PROCESS TECHNOLOGIES

In Lean processes, and especially for service-based visual processes, tech-
nology is important to ensure higher process yields and move materials
and information through processes with efficiency. The emphasis of a Lean
system is not on technology itself but, rather, on the use of technology to
do work using simple and flexible tools and methods. In physical systems,
simple and redundant equipment is utilized, or left idle if necessary, to meet
a takt time. This is especially true when machines are simple and of low
cost. A less complex machine is more reliable and easier to maintain than
a complex one. When complex machines are utilized, they are expensive to
purchase and maintain. People are more likely to utilize them even if there
is overproduction because of high investment cost and they want high asset
utilization. They may also become bottlenecks if they are scheduled for sev-
eral jobs. Using simpler machines provides more operational flexibility.
In virtual systems, technology enables operational flexibility depending
on the tools and methods being used. The degree of work task automation
could also vary from none to extensive. There has been a global revolution
•Demand = 800 Units Per Shift

•100 Units Per Hour
•Container Size = 20 Units
Workstation A •5 Containers Per Hour

=36 Seconds
Per Work Unit
1 Container
Every 12
Minutes (20
Work Units)
Workstation B Workstation C
=36 Seconds =36 Seconds
Per Work Unit Per Work Unit
1 Container 1 Container
Every 12 Every 12
Minutes (20 Minutes (20
Work Units) Work Units)
FIGURE 3.11
Implement Pull Systems in Offices Using Visual Controls and Kanban
of IT that has transformed services, offices, and supporting processes

including those used in manufacturing and global supply chains. It may
be difficult for people not familiar with work practices prior to the wide-
spread use of email to understand that the business world was filled with
written documents and extensive bureaucracies that slowed the review and
approval of work to a trickle. Email enabled large segments of the work-
force to exchange information very rapidly. This is analogous to transfer
rather than process batching because an email could be immediately sent.
Communication lead times rapidly decreased. In parallel, the sophistica-
tion of software and hardware technologies increased resulting in more
sophisticated systems to manage information. The result has been higher
operational productivity.
Workflow management (WM) systems began to evolve from simple elec-

tronic versions of manual work tasks to advanced adaptive systems that
dynamically reconfigure a process to match capacity with demand by modi-
fying business rules and work sequences. Earlier versions included Excel
spreadsheets and customized software written for specialized applications.
A next step in the evolution of technology began when users wanted to
integrate diverse IT platforms, including software and hardware systems,
to reflect geographically dispersed workflow configurations. Initially, these
activities were at a local level but are now integrated into internet-based
applications accessed using online portals. These integration activities are
called enterprise application integration (EAI).
Business Activity Monitoring (BAM) systems were developed in par-
allel to WM and EAI systems and are based on extensive rule sets to
enable routing of information across systems and provide status infor-
mation including drill-down capability to lower level metrics and work
tasks. A common example is modern call center software that monitors
incoming and outgoing call volumes and transactions and dynamically
reports status. These systems both control and monitor the incoming trans-
action volume across a call center’s network. A natural extension of BAM
is business process modeling and analysis (BMA), which enables users to
simulate changes in system inputs to evaluate their impact on outputs. In
the call center example, depending on the sophistication of the software,
users can conduct off-line simulations to evaluate changes in employee
staffing and other variables such as incoming and outgoing call volumes
to determine optimum capacity levels across the network to ensure cus-
tomer service levels (SLAs) are met. These various applications are now
being implemented using a business process management suite (BPMS).
These systems integrate the diverse software and hardware platforms and
applications to manage the flow of materials and information across global
supply chains. This is relevant to the deployment of Lean Six Sigma in
services.
The operating model shown in Figure 1.1 extends the original process
improvement strategy to now include APM and big data analytics. Agile
Project Management is used for project management for creating new
features and functions. Big data analytics is needed for data gathering,
conditioning, and analysis. Many Lean Six Sigma tools and methods are
now also integrated into IT ecosystems. There is also a new method that
enables the automation of work tasks for making improvements. This is
called RPA. It helps standardize and mistake-proofs a process by elimin-

ating repetitive manual work tasks.
In addition to automation benefits such as lower cost and higher quality,
intermediaries are eliminated from a process and its throughput increases.
At the next level IT systems integrate information across systems and ana-
lyze it using business rules to provide insights for decision-making. The
latest generation of technology now enables workflow applications to be
easily reconfigured based on needed process changes. These topics are rele-
vant to our discussion because a Kaizen or rapid improvement team needs
to collect data from several applications to document and analyze a process
to identify root causes and propose solutions. This requires that for process
improvements for services, office, and supporting system teams’ experts
such as IT, RPA, and other skill sets may be required to join the team.
SUMMARY
We discussed the basic tools, methods, and concepts of Lean Six Sigma that
will be applied in upcoming chapters using many examples to six common
processes. These are financial forecasting, accounts receivables, new product
marketing research, and new product development, hiring employees and
supplier performance management. We will use these processes to demon-
strate how to implement Lean Six Sigma within service and office operations
by taking Lean concepts that have been successfully applied to manufac-
turing and develop analogs to non-manufacturing operations.
Process improvement activities should be aligned with organizational
goals and the VOC. The basis of Lean methods requires understanding the
features and functions of a product or service important to customers and
designing and producing them in ways that meet VOC needs and value
expectations. Understanding VOC provides a methodical way to iden-
tify, analyze, and incorporate the customer requirements into products
and services effectively and efficiently. The process begins when external
customers are classified by market segment and interviewed to identify
Kano needs and values.
It is also important that an organization “Lean” itself out at a higher level
complexity impacts its lead time, cost, and quality as well as project
duration and required resources to execute it. It makes no sense to improve

a process if it was going to be eliminated in the future. It also makes no
sense to improve processes with low profit margins if they are non-core to
an organization’s operational strategy. The reason for not focusing on these
types of process is that non-core processes are not likely to be continued in
the future or they are outsourced to other organizations.
Table 3.2 provides an extensive list of metrics using a dashboard format.
Actual dashboards would be simplified, made visually appealing, and be
(1) percentage VA content or time; (2) a system’s production or throughput
rate (units-per-minute); (3) scrap percentages; (4) rework percentages;
(5) the downtime percentages of equipment and people; (6) the available
production capacities of operations in units-per-time; (7) set-up time
and cost of jobs at various operations in a process workflow; (8) inven-
tory investment operation by operation; (9) the allocated floor space
required for production of products and services; and (10) process lead
time. Financial measurements such as revenue, operating expenses, cash
flow, financial adjustments, and ratios are also tracked. There are others
depending on the application and the types of decision that need to be
made. These nine Lean metrics are relevant for manufacturing and ser-
vices across diverse industries. In addition to these Lean metrics, there are
also Six Sigma quality metrics as well as those used to manage projects. It
is important to identify and define the correct metrics, accurately measure
performance, and close gaps.
A VFM is used to describe a process. The Lean metrics are calculated for
each operation in the VFM. The top of Figure 3.1 shows a generic version
of a VSM. The first step is classifying operations as VA, NVA, and BVA
operations. Value-adding operations are required to meet customer demand
and have three attributes, i.e., the customer them, they are transformed
either by adding features, functions, information, or other attributes, and
they are done right the first time. Non-value adding operations are not
needed and can be eliminated. Business value adding operations do not
have customer value but are needed because of technology or regulatory
constraints. Over time the goal is to eliminate these BVA operations or to
modify them to reduce their NVA content.
The operating model shown in Figure 1.1 extends the original process
improvement strategy to now include APM and big data analytics. Agile
Project Management is used to management design projects creating new
features and functions. Big data analytics is used for data gathering, con-
ditioning and analysis. Many Lean Six Sigma tools and methods are now
integrated into IT ecosystems for application with virtual systems. There is
also a new method that enables the automation of work tasks for making
process improvements. This is called RPA and standardizes and mistake-
proofs a process by eliminating repetitive manual work tasks. We will apply
these basic concepts in upcoming chapters.
Step 2
Plan and Conduct the Rapid

Improvement Event
4
Rapid Improvement Events
OVERVIEW
Rapid improvement events are workshops in which processes are analyzed
and improved in days or weeks for a larger scope. This process improve-
ment approach is applicable to services, offices, and supporting processes.
Information technology (IT) applications have become important both for
providing data and reports and to help to implement process improvements
as the methodology transitioned from manufacturing Kaizen events to ser-
vices with virtual and global processes. The root cause analyses are also now
more complex, whereas in manufacturing these events are coordinated by
local and collocated work teams. But now teams and operations within a
process are globally dispersed. The software applications accessed to do
work are also dispersed and different. As an example, a quote to order pro-
cess usually has several applications to capture the quote information from
sales and information from other systems to create and to manage quotes,
orders, and financial transactions.
Although not every process issue can be analyzed and eliminated within
a few days, the rapid improvement concept is a good approach for starting
project work if it is applicable. Although projects with a larger scope will
always be created, they may not be good candidates for rapid improve-
ment events. Instead, they should be deployed as Lean Six Sigma, business
analytics, or other types of project requiring a longer duration. If the root
cause analysis is complicated, this will likely be a good strategy. But histor-
ically the duration of these projects is measured in months as a team moves
through the five Define, Measure, Analyze, Improve, and Control (DMAIC)
phases. Rapid improvement events evolved from Lean’s Kaizen events
that emphasized using a focused problem statement and the application
of simple Lean tools and methods for root cause analysis and identifying
135
136 • Plan and Conduct the Rapid Improvement Event
solutions in a local work area. In rapid improvement events improvements

are quickly made e.g. cleaning up a work area or increasing capacity at a
bottleneck because the project has scope that can be completed in a few
days or weeks. The operating model shown in Figure 1.1 shows different
approaches for solving process issues and the speed of implementation
using rapid improvement events.
The goal of this chapter is to discuss the step-by-step activities necessary
to successfully prepare and conduct rapid improvement events. Our goal
will build on the Lean Six Sigma concepts presented in Chapters 1, 2, and
3. Chapter 4 will form a basis for continuing our discussion of Lean Six
Sigma in subsequent chapters with an emphasis on the rapid deployment
of improvement teams and project execution These improvement events
require the involvement of team members and supporting people for sev-
eral days or weeks. This work requires careful planning and coordination
because of its short duration. We will follow the sequential list of activities
shown in Figure 4.1. These are divided into four major sections containing
activities to be completed over several days.
The major sections are preparing for the event, conducting the event, and
presenting the findings and follow-up. The first two sections are discussed
in this chapter and data collection and analysis are discussed in Chapter 5.
Chapter 5 introduces additional Six Sigma tools and methods. The sections
on presenting the findings and follow-up are discussed in Chapters 6,
7, and 8 using examples of common office processes. These are finance,
accounting, sales and marketing, product design, human resources, and
procurement.
PREPARE FOR THE RAPID IMPROVEMENT EVENT

In earlier chapters, we discussed the importance of ensuring improvement
activities are aligned with an organization’s strategic goals. A project’s
charter should show this alignment in the problem statement, scope, and
goal. Deployment leaders have a responsibility to identify where to deploy
rapid improvement events to ensure the right focus on business outcomes.
They also have responsibility for ensuring the rapid improvement teams
have the resources required to execute the work. The event sponsor
coordinates these resources to achieve the business outcomes.
newgenrtpdf
Activity Days
Major Phase Code Required Activity Comment 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40
1. Prepare for the Event a Select project charter

b Assign project leader and team members
c Reserve a conference room (or SharePoint)
d Obtain supplies and equipment
e Ensure facilities are available including breakout rooms (or virtual meeting)
f Ensure support personnel are available to assist the team
g Collect process information of floor layouts, work flows and procedures
h Collect information of operational cycle times including:
Set-up time
Processing time
Inspection time
Transport
Waiting
i Take pictures of the area to be improved showing issues (or screen shots)
j Obtain example of process issues
k Obtain examples of best-in-class process conditions
l Develop schedule of rapid improvement event
m Communicate the event
n Mark area for event if practical
o Set-up flip charts and organize other materials as required
2. Conduct the Event a Bring team together to discuss roles and responsibilities Monday AM
b Discuss event deliverables Monday AM
c Conduct training as required Monday AM
d Create detailed value stream maps and layouts of the process workflow Monday PM
e Facilitate to ensure full participation of team Monday PM
f Collect data at every operation relevant to: Tuesday AM/PM
VA/NVA/BVA
Rapid Improvement Events • 137

Production rate (units/minute)
Scrap%
Rework%
Downtime%
Capacity (units/minute)
Set-up time (minutes)
Inventory (units in queue)
Floor area
g Analyze all data and develop prioritized improvement ideas Wednesday AM
h Change the process according to prioritization listing Wednesday PM
i Apply 5-S and mistake proofing methods Thursday AM
3. Present Findings a Develop a presentation of all analyses and implementation activities Thursday PM
b Develop lessons learned (what did and did not work) Thursday PM
c Develop ideas to leverage improvement ideas Thursday PM
d Present findings to management Friday AM
4. Follow-up a Complete all prioritized improvements not completed during the event ASAP
b Communicate the event results ASAP
c Celebrate with team ASAP
FIGURE 4.1
Rapid Improvement Event Checklist
Event preparation is the first major section of activities shown in

Figure 4.1. The preparation of an event begins several weeks prior to
bringing a team together to do the work. These activities are creating an
actionable project charter, assigning team members, and securing facil-
ities if the team is collocated or when reserving virtual conferencing if
team members are remote. Resources required to help with the work also
need to be planned. In manufacturing, electricians, plumbers, Lean, and
other subject matter experts need to be invited. Materials and equipment
may also be needed depending on the scope and goals. In service systems,
cross-functional team members will need to be invited. Unlike manu-
facturing where a local work team is usually impacted by recommended
improvements, cross-functional teams need to be brought together for
end-to-end service processes. Any proposed changes in one part of an end-
to-end process will likely impact other teams. As an example, if the infor-
mation in a quote is incorrect, then the order process will be impacted.
Also, for service processes if data needs to be gathered from large IT
systems, business analysts will need to do this data collection. Then when
solutions are identified, some may need IT investment or help from other
teams to implement them.
Communication of a rapid improvement event is also important.
These communications are targeted to different audiences such as lead-
ership, stakeholders, and team members. The important information to
be communicated is the project description and key information that is
documented in the charter. The charter is the basis for communicating the
event. Recall charters were discussed in Chapter 2 relative to project iden-
tification, charter creation, and prioritization. Once a project charter is
developed, the team leader, team members, and a facilitator are assigned as
core team members. The project charter describes the scope, i.e., the area
in which the team will focus its improvement efforts, the process owner,
and the local work team. Additional information includes the required
subject matter experts and the project’s anticipated benefits. This informa-
tion helps bring the right people together for the event.
An important success factor of these events is the availability of relevant
data. Table 4.1 describes common data collection strategies for key Lean
metrics. In manufacturing, the data can easily be obtained from reports
or created by Value Flow Mapping (VFM) and other process analyses. But
in virtual systems, big data analytics may need to be extracted from sev-
eral databases and systems. There may even be a cost for obtaining the
TABLE 4.1
Data Collection Strategies
Metric Data Collection Strategy How to Do It
1. VA/NVA/ Create a value stream map Bring team together and create the
BVA of a process workflow or Value Flow Map (VFM) using
a floor layout of a single sticky notes on a wall. Then “walk-
work area. the-process” to verify the VSM.
2. Production Count the transactions Ideally, the system will time stamp
rate (units/ exiting the process and all transactions within a process
minute) or divide by the hours or workflow. Alternatively, an audit
operation operation. This can be could be done on completed
cycle time done by operation, time- transactions in email by operation
of-day, job type, shift, (sent mail). Also, checking personal
employee, customer, and calendars will show meeting time,
other demographical which in many situations is non-
factors, which will enable value adding (NVA). People can also
a complete analysis. be “shadowed” for several days and
(This type of factor their time versus activities recorded
stratification strategy can at 15-minute time increments. With
be used in the analysis of respect to equipment, materials into
all eight metrics.) the equipment could be measured,
or counters designed into equipment
can be checked to calculate
production rates.
3. Scrap % Count the number of Check financial and operational reports
transactions, which could for material or direct labor waste.
not be used in production, Audit operations through interviews,
i.e., reports which were email audits, and shadowing to
not required, marketing identify scrap.
prototypes not sold, etc.
4. Rework % Count the number of Check financial and operational reports
transactions, which for material or direct labor rework.
passed through process Audit operations through interviews,
operations more than email audits, and shadowing to
once, i.e., any work task identify rework.
with a prefix of “re” such
as re-analyze, re-inspect,
redo, etc.
5. Downtime Count the time people wait Check financial and operational reports
% for work, the system is for material, direct labor, and other
idle, or equipment is not expenses related to downtime. Audit
available. operations through interviews, email
audits, and shadowing to identify
downtime.
(Continued)
TABLE 4.1
Cont.
6. Capacity Count the number of units Use a VFM with operational reports to
(units/ per time at the system’s identify the bottleneck capacity under
minute) bottleneck operation. typical production conditions. If
operational reports are not available,
conduct audits to obtain data.
7. Set-up time Measure the time to set up a Check operational reports for job
(minutes) job at every operation. set-up times. Audit operations
through interviews, email audits, and
shadowing to identify job set-up.
8. Inventory Measure the work to be Check operational reports for inventory
(units in done at every operation. levels (jobs waiting to be completed
queue) and estimate how long it will take
to complete these jobs). Audit
operations through interviews, email
audits, and shadowing to identify
inventory levels.
9. Floor area Measure the floor area Review floor layouts and calculate area.
associated with the
process including
equipment and people.
data and any reports to support the rapid improvement event. As a result,
this information should be gathered by the core team several weeks prior
to an improvement event to accelerate the team’s root cause analysis and
solutioning activities. Pre-work is the basis for a short event duration.
Identifying team members in advance also helps to communicate goals
and benefits to gain stakeholder support. In services, this approach is
particularly important because team members come from different func-
tional groups and are assigned to other projects. They are also now usually
remote. In these applications, communication is one of the most important
planning activities.
Other important preparatory activities include reserving meeting rooms,
conferencing facilities that include video and audio capability, providing
catering services if needed, and purchasing the necessary supplies and
materials for group activities if onsite. Video-and audio-conferencing are
important when a team is geographically dispersed and remote. The core
team may be working at one location but needs to work through the root
cause analyses and improvement recommendations with other teams. One

part of a process may reside in one country with the remainder in others.
Improvements might include modifying processes or their operational
sequences, adding or deleting approval authorizations, creating entirely
new workflows to replace those which currently exist. These will require
support for execution in different systems.
Relative to supporting materials and information, each situation is
different, but the concept is to have everything a team may require to
complete its work in one place either physically or virtually, so time is not
lost looking for them. It is also useful if a rapid improvement event can
be held within or near the work area being analyzed, so the team can see
firsthand the layout of operations, equipment, materials, procedures, and
other information comprising the process. In virtual applications the con-
cept is the same with the team reviewing online systems, reports, and other
information using a SharePoint and meeting tools. If possible, a confer-
ence or breakout room (also called a “war” room) should be made available
to a team both during and for a period after an improvement event. The
reason for reserving conference rooms for an extended period is that not
all improvement activities may be completed during the event, so the team
may need continual access to the information created during an event. Also,
a team’s VFM and relevant information should remain visible and available
for an extended period to enable the process owner and local work team to
use the information to make additional process improvements over time.
The service analogy would be to use a SharePoint and recurring meetings to
keep momentum. Unlike manufacturing where the analysis is built hands-
on, in services people are not usually collocated, so a physical war room is
not useful. The common theme is collaboration and sharing of information
to work through the root cause analysis and solutions.
In addition to conferencing rooms and materials necessary to support
team activities, various support personnel will usually be necessary to help
collect process information, analyze it, and help to make the required pro-
cess changes. These changes may include moving equipment and office
partitions, obtaining system information, or making small changes to
information system algorithms. In manufacturing applications, support
people may include plumbers and electricians if equipment must be
moved. In service operations the support people may include, depending
on the scope, financial analysts, IT experts, or robotics process automation
experts.
Create a Project Charter

An organization’s operations team should continuously be identifying
ways to increase its productivity and process value-adding percentage.
Recall that the financial components of productivity are a calculation that
helps create ideas for beneficial projects and project charters. Then project
charters are deployed across an organization to help achieve strategic oper-
ational goals. This discussion assumes a project charter is created and is the
basis for the improvement team’s work. The rapid improvement event is
used to quickly complete project deliveries and achieve its goals.
Event leaders or coordinators use the project charter as well as the
guidelines shown in Figure 4.1 to plan, schedule, and execute the event.
The charter provides scope and goals for the team. These goals are broken
into deliverables that can be measured. The planning for the event needs
to consider how best to achieve these deliverables. The event discussions
and activities are aligned to the deliverables. The goal is to ensure that all
major deliverables are completed on schedule during the event with only
miscellaneous ones left to be completed after the event. It should be noted
that service, office, and supply chain projects requiring a complicated root
cause analysis or whose solutions will impact several stakeholder teams
often use a rapid improvement event to frame the root cause analysis and
potential solutions into workstreams with leads and team members. The
completion of the remaining deliverables is done post-event over several
weeks. Some solutions and improvements may also require investment and
they will need to be placed on a project roadmap. In these latter situations
the advantage of using a rapid improvement event is to frame the project
for execution with the solution offset over months or even years.
The charter also identifies the team that will need to participate based on
the event scope. It is important to contact these teams and gain their support
for the work. But prior to contacting them the amount of effort and the type
of support needed from them should be estimated. It is also a good idea to
frame the project’s goals, deliverables, scope, and benefits in a simple com-
munication, e.g., an elevator speech, when discussing the needed support.
Assign a Project Leader and Team Members

A leader is assigned to ensure planning activities are properly done to keep
the event on schedule. These leaders should be experienced in leading
rapid improvement events. But if an organization is just starting its Lean

Six Sigma deployment, then consultants may be project leaders and
facilitators. Over time, an organization will be able to train internal pro-
ject leaders to lead its events. The roles of project leader and process owner
should not be the same person. A separation of roles helps to ensure team
activities are objective and based on fact and perspectives are independent.
This is especially important in the projects that impact a process owner and
local work team. As an example, a root cause analysis may show portions
of a process should be done elsewhere, or people currently associated with
a process may be shown to be redundant and be assigned elsewhere to
increase organizational productivity. In these situations, process owners
may be reluctant to lose resources and as a result will not support the pro-
cess changes recommended by the team. Another reason for a separation
of roles and responsibilities between the team leader and process owner is
that a process owner must run the day-to-day operations of the process,
whereas the team leader needs to coordinate the rapid improvement event.
Role separation is also important for the team leader and the event facili-
tator. The facilitator is a person who does not take an active role in an
event but instead observes and facilitates team member interactions. The
facilitators work with the event leaders to ensure that the proper facilita-
tion tools and methods are used in ways to involve every team member in
the discussions. A facilitator also works with the team to evaluate and pri-
oritize recommendations. When properly done, facilitation will help keep
an event on schedule and achieve its goals and deliverables.
Team members should be chosen based on the charter’s scope and from
the process that is in scope and impacted by the improvements. Team
members are selected at the input and output sides of the process as well
as within them as described by the team’s charter. Team members at the
input and output boundaries are suppliers or customers of the process.
Team members should be selected to also provide different perspectives for
data collection, analysis, and improvements, i.e., assemble a diverse team.
Chapter 3 discussed team maturation through four stages of forming,
norming, storming, and performing.
Reserve a Conference Room
As discussed earlier, a rapid improvement team needs a well-equipped
conference room that is reserved for the duration of the event. This room
is also called a “war room.” It should be adjacent to the area in which the
rapid improvement event is being held. The team uses this meeting space
to build their VFM and do root cause analysis to create solutions. The VFM
will have overlaid metrics at each operation and notes describing the gaps.
It is a graphical display of how materials and information flow through a
process and include key financial and operational metrics used to evaluate
operational performance.
It is built on one of the walls of the conference room often using
“brown paper.” In this process, “brown paper” is fastened to a wall and the
operations making up a process are identified using “sticky” notes placed
on the brown paper to match the flow of materials and information. These
sticky notes will have additional information describing the process such
as cycle time, process yields, and others, shown in Table 3.2. These help
identify pain points in the process that enable a team to focus its efforts.
Additional information includes examples of management reports, data
collection forms, and other templates used to move materials and infor-
mation through the process on which the VFM is modeled. Initially, a
VFM is built using information provided by the local work team. Then it
is validated by “walking the process” to verify its accuracy. In Chapter 3 we
discussed some of the important Lean tools and methods used to analyze a
VFM. In a virtual process, a SharePoint is used to collaboratively map the
process.
Most organizations require conference rooms to be reserved. This should
be done as soon as the event’s date and the number of participants are
known. If the participants are traveling to the event, then they will need
to contact their organization’s security office to ensure they can access the
building where the event will be held. There may also be other needed
travel assistance if the participants are coming from different countries.
The facilitators should also visit the room in advance the day before the
event to test equipment and set up the conference room seating. Once
in the conference room, audio and presentation equipment should be
retested. Figure 4.2 shows several common room layouts for an event.
The first is a team breakout mode where the teams sit together at tables
to do activities. The second is conference style, which is useful for a small
number of participants. The room should be large enough, so the team can
work on the walls to build maps and whiteboard ideas. The third layout
is U-shaped. This increases interactions between the event facilitator and
participants, but breakout tables will be needed for exercises.
Team Breakout Layout
Conference Room Layout U-Shaped Layout

FIGURE 4.2
Organizing the Room
Obtain Supplies and Equipment

The war room should also have all the necessary supplies and equipment
for use by the team because the event is fast paced, and a team does not have
time to look for incidental supplies to collect and analyze data. The obvious
items that are required include pencils, paper, tape, staplers, rulers, sticky
notes, brown paper, flip charts, and markers. There should also be refer-
ence materials and books to help the team if they have technical questions
that the leader, subject matter experts, or the facilitator cannot answer.
For virtual meetings, all information is still needed except for the physical
objects. The conference room or virtual meeting should have phone lines,
video-and audio-conferencing capability, a camera to photograph the
work operations as well as projectors, printers, and equipment as required

to execute team activities.
Ensure Facilities Are Available Including Breakout Rooms

In addition to conference rooms, additional breakout rooms may be neces-
sary depending on the size of a team and the activities. This is especially
true if a team is large and consists of several smaller work groups assigned
to groups of activities, i.e., workstreams. It is important that the work area
from which data will be collected is directly accessible by the team. In
manufacturing, conference rooms are reserved close to the process being
analyzed. In a service system, the same concept applies except there may
be several components comprising a process that spans different locations,
systems, and teams. The room should be air-conditioned and comfortable
and able to accommodate people around a conference table. Teleconference
capability is often a requirement when some participants are remote.
Ensure Support Personnel Are Available to Assist the Team

Support personnel are subject matter experts that assist a rapid improve-
ment event. In manufacturing, support people could be plumbers and
electricians who are needed to make repairs when equipment is moved
within a work area. In service industries, they include IT and subject
matter experts for the systems and applications in scope. It is important
that the event’s goals and format be socialized with all participants to gain
prior support before an event. This is especially true when team members
and support personnel are remote or have specialized skills and knowledge
that is in demand by the organization.
Collect Process Information of Floor Layouts,

Process, and Procedures
In manufacturing process information is usually available prior to
an event. As an example, if the event is focused on cleaning up a work
area, i.e., 5S, floor layouts should be available to show the location of
workstations, equipment, and people. There may also be process maps
and work procedures. For a 5S event, this information helps to evaluate
how work is done by showing the flow of materials and information
between workstations. In some processes the flow of work is inefficient as

it passes back-and-forth between workstations increasing the total travel
distance of a job. Inefficient routing increases the total lead time to com-
plete scheduled jobs. Second, there may be rework paths in the process that
can be eliminated. To the extent that process maps are quantified using
metrics, they provide an insight to existing process gaps.
Operational and financial reports are also usually available to the team.
This historical information should be gathered by the planning team prior
to the event. The exact types of information required for a rapid improve-
ment event depend on the charter. In manufacturing, information related
to process issues, root causes, floor layouts, electrical wiring and plumbing
systems, equipment maintenance history, and other information will
be especially important if a team will need to rearrange the location of
equipment and electrical, plumbing, and pneumatic lines toward the end
of the event to implement solutions. In contrast, service and office projects
usually require a different set of information although a similar approach
is taken regarding the activities necessary to identify and eliminate the
causes for process breakdowns. In service and office processes, most of the
data collection and process improvements will be focused on the flow of
information rather than materials. But even in some of these applications,
supporting teams, equipment, and materials may need to be physically
rearranged to optimally layout workstations and equipment. This requires
having the right expertise that can guide the team through data collection,
analysis and toward the solutions. The timelines for project closure may
increase depending on scope
For IT systems, pre-event data collection requires access to data
fields, files, and reports. Data extraction and conditioning algorithms
will also need to be created to extract the information. To do this, time
stamps are placed on a transaction sequence to record the transaction
lead times and sequence or lineage from one operation to another. As
an example, when quoting, salespeople may create quotes in different
ways. Software can be used to trace the sequence of work tasks used to
access and modify data by these salespeople to look for non-standard
work behaviors. If the project is focused on reducing the time to create
a quote, the fact that different salespeople create quotes differently is
important for reducing quote lead time and errors. Another example is
tracking invoices through a procurement process by time stamping them
at various points in the process. Once the data is collected, analytics
can be applied. Analytical capability includes business process mod-

eling and analyses (BMA), business intelligence (BI), business activity
monitoring (BAM), and workflow management (WM) systems. These
were discussed in Chapter 3.
Collect Information of Operational Cycle Times

Conducting a rapid improvement event in manufacturing is a straight-
forward process in which standard operational metrics are collected from
the work operations that were identified using a VFM. These metrics were
discussed in Chapter 3 and include value adding (VA), non-value adding
(NVA), and business value adding (BVA) operations as well as production
rates, scrap and rework percentages, equipment downtime percentages,
available capacity, set-up times, inventory quantities, and the total floor
area required by a process. In its data collection activities, a rapid improve-
ment team moves into the process to collect information for the metrics
for each operation on the VFM. This audit creates a snapshot of process
performance. It also helps verify the original VFM quantification to show
the team where it should focus its efforts for the remainder of the event.
In virtual IT processes that support services or manufacturing operations,
when transactions are time stamped operation-by-operation, calculating
waiting and processing times and overall lead times are easier. But if this
information is not readily available, then business analytics assistance is
required to obtain the data. It is important that analytics support be avail-
able for a rapid improvement event to enable quick access to electronic
information both as pre-work, during, and after the event. Another diffe-
rence in services is, rather than conducting a physical walkthrough, a vir-
tual walkthrough by an algorithm traces the sequence of work task, i.e., the
logic sequence associated with data manipulation as well as the calculations
used in the transformation of the data.
Another difference unique to service operations is that it is difficult to
measure work activities unless associates are in a pool. Transitions can be
measured, but it is difficult to analyze how people do them. This infor-
mation is important for understanding ways to improve a service process
because work varies if dependent on human behavior. Data collection to
measure service professional performance requires understanding how
their activities are performed and the time spent performing each activity.
This contrasts with manufacturing operations that have machines with
a constant cycle time and employees trained to follow standard work

instructions. The time elements are also well documented in manufac-
turing. These include work tasks and times for waiting, set-up, processing,
unload inspection, and movement to the next operation. Because a rapid
improvement event has a short time duration, e.g., days or weeks, it will be
difficult to quantify cycle times and defect frequencies of highly manual
work tasks without prior planning and data collection.
Taking Pictures of the Area to be Improved Showing Issues

An important pre-event activity is taking pictures of the work areas to be
improved. This is helpful in manufacturing when preparing for a 5S event
to understand where in the process clutter and inventory buildup occur. It
is also helpful to show the before and after of the improvements to demon-
strate change. These are very dramatic. In services, an analogous approach
is to show screenshots before and after to demonstrate complexity reduc-
tion. Or before and after differences between process aids such as templates
and work instructions. In manufacturing and service applications, pictures
are also useful for showing the general state of equipment, cleanliness of
work areas, excess materials, and the relative placement of machinery and
people. Other examples that a team understand the issues are management
reports, data collection forms, examples of defects, computer screenshots
as well as the physical configuration of office workstations. A picture
conveys information to help a team quickly understand these process
issues to speedily reach a consensus that there is a problem and the root
causes for the issues. Countermeasures or solutions to eliminate the root
causes of process problems will also be easier to identify once the team can
visualize them. Pictures and supporting documentation are attached to a
VFM to help document the process.
Obtaining Examples of Process Issues

It is also important that the team collects examples of the issues. In manu-
facturing, examples include defective products and components, pictures
of work areas clearly showing the process issues, management reports,
exception reports, screenshots, customer and supplier complaints, and
similar information showing how a process is performing. But this infor-
mation cannot be a substitute for actually “seeing” a problem firsthand.
A process walk-through or physical audit of the work area is required to

verify the accuracy of the information the team is provided in advance of
their event. In summary, the more information a team has in the way of
pictures, physical examples of the issues, and seeing the process problem
the easier it will be to reach consensus and deliver the solutions.
Obtaining Examples of Best-in-Class Process Conditions

Lean Six Sigma project analyses will often show examples of when a pro-
cess performs better at certain times or under certain operating conditions
than at other times. If data of the best operational performance is available,
it may be possible to analyze the specific circumstances under which better
performance occurs. This enables a team to identify the root causes of poor
process performance more quickly and to also make process improvements
more easily. This approach is called an entitlement analysis in Six Sigma.
Entitlement is based on a process design. It is the best performance a pro-
cess is designed to deliver. It also implies that there is an upper limit of
process performance based on the design of a process. The goal is to bring
the process up to its entitlement level, i.e., its best day performance.
Knowing work can be performed well under certain conditions will
enable an improvement event team to identify more quickly the root causes
for poor process performance by providing known solutions. If an analysis
shows that ten associates answer similar incoming calls but two of them
completed calls on average in one minute versus two others that took three
minutes with the remaining six employees completing calls on average in
two minutes, it is useful to ask the question why all employees do not per-
form as well as the two with lower average handling time (AHT). Associates
are also evaluated through transactional surveys for the accuracy of the
information they provide customers. These two metrics can be brought
together to create a two-dimensional graph of the AHT and quality scores.
Associates with a low AHT and high-quality rating would be the “entitle-
ment” group, it is useful to understand how this group does its work so
other teams could benefit. Then a list of best practices can be created. An
improvement project could be created to find why the AHT and quality
ratings of other employees do not match the entitlement group. This helps
start a process of root cause analysis, solutions, and process improvement.
As another example, an operational report might show the error types
and frequencies collected for three work shifts over several weeks. One
shift may have had a significantly lower error rate for certain tasks than
the other two shifts. It would make sense to investigate the discrepan-
cies between the shifts to look for reasons why one shift performs better
than the others. In summary, comparing performance differences under
similar process conditions is useful to identify projects and opportunities
for improvement.
Developing a Schedule for the Rapid Improvement Event

Using a predefined set of activities helps rapid improvement teams to plan
the required event activities. Figure 4.1 provides this activity listing, and
is divided into four sections. These include event preparation, conducting
an event, presenting the team’s findings to management, and completing
required follow-up activities. Preparation is important because gathering
data, examples of the issues, reports, and analyses takes time. Some analyt-
ical reports require several weeks to obtain depending on the event’s priori-
tization. Because the event’s duration is days or weeks, the team needs this
information in advance. Socialization is also done to ensure stakeholders
and process owners will support the work and provide resources.
A rapid improvement event team places dates on the activities listed in
Figure 4.1 to create a specific activity schedule for their event. Additional
activities may be added to the schedule and others deleted depending
on the project’s scope and deliverables. Scheduled dates for the planning
portion of a rapid improvement event will also vary with project scope
and depend on available resources related to the planned activities as well
as project prioritization goals. These can also be modified by the team. In
summary, Figure 4.1 is a useful standardized checklist for event sponsors,
leaders, facilitators, and the team.
Communicating the Event
Communication improves organizational support for rapid improvement
events. Team members, support personnel, the process owner, and local
work team must be aware of an event to clear their schedule. This is espe-
cially true for cross-functional teams with other priorities. Communications
should be targeted to the audience and message. There are several messaging
formats to do this. These include emails, organizational announcements,
newsletters, management presentations, face-to-face meetings, and other
formats. Communication formats vary depending on the emotional con-

tent of the intended messages and their complexity. Highly complicated
messages, that have a significant impact on others, need to be carefully
communicated. It is usually best to communicate this information in
person. In contrast, conference calls are useful when discussing routine
planning activities and team logistics. Emails, newsletters, and the internet
may also be useful for communicating simpler messages to the larger
organization. But these should be coordinated with an organization’s com-
munication professionals. Regardless of the format, it is important that its
message be simple and consistent.
Marking Areas for the Event

In manufacturing, the area in which an event will be held is marked off,
using tape, rope, or similar methods. This helps identify what should or
should not be in the work area for the event. After the work area is marked
off, support people can easily understand the relationships between
equipment, people, tools, other resources, and the layout of utilities such as
electrical and plumbing lines. This is important for implementations like 5S
because they require removing materials and equipment from a work area
and repositioning other materials and equipment to achieve an optimum
layout. In services or office applications a work area is seldom formally
physically marked o ff because the processes are virtual. But a SharePoint
may be closed off, and improvements tested in virtual sandboxes outside of
production environments to demonstrate proof of concept changes. To the
extent there are physical changes to be made, office areas can also be areas
be marked off. As an example, partitions may have to be moved, or old
reports and materials or equipment removed from the work area, i.e., 5S.
Work areas are also marked-off for safety reasons because physical objects
are being moved.
Setting up Flip Charts and Organizing Other Materials

Each breakout room will require materials for the sub-teams to complete
event activities. Flip charts and other supporting materials should be set up
in each work area. This will enable breakout teams to easily communicate
by drawing examples on flip charts and making visible notes as their team
moves through its discussions. The room should be stocked with examples
of the process issues, the process description, and supporting information,

sticky notes, access to copiers, and printers and tools as well as similar com-
munication aids. In a virtual environment the teams use a virtual white
board, notes, and the relevant files supporting the process description,
training aids, process instructions, reports, data files, and other supporting
information.
Rapid Improvement Event Communication Email

An invitation to the rapid improvement event is sent to the sponsor
and key stakeholders, the participants, and their managers. An example
is shown in Figure 4.3. The event should have been socialized prior to
sending the meeting invitation. This provides an opportunity to answer
questions in advance and to update the event planning based on feedback.
The e-mail also describes the problem statement the team is solving and
the deliverables expected from the event. A tentative agenda is attached to
Subject: Rapid Improvement Event to Reduce Lead Time of the

Quote to Order Process
To: Sponsor, Stakeholders, Participants and their Managers
This is a place holder for the upcoming rapid improvement event to

reduce lead time of the quote to order process to be held on this
DATE at LOCATION between TBD time and TBD time. If you can
not attend, please let us know and send an alternate team
representative.
The problem statement is TBD.
The deliverables are TBD.
The agenda is:
Day 1 Topic Presenter

8 AM Sponsor Kick-
Off
8:15 AM Introductions
8:30 AM Charter
Overview
FIGURE 4.3
Communication Email
enable participants to plan their schedules. But each organization will have
a preferred communication approach.
The event invitation and follow-up communications are sent by the lead
or facilitator. The audience is usually focused on the problem at hand, and
the message is simple. Typical elements comprising a communication letter
for a rapid improvement event include the reason for holding it, where it
will be held or the meeting link, its expected benefits, the participants, and
the specific support, if any, required from the recipients of the communica-
tion. The design of communication messaging and format are particularly
important for multicultural and remote teams. Effective communication
greatly enhances the likelihood for success.
Rapid Improvement Event Kick-Off Agenda

In the planning meeting before the event, the team reviews and updates the
event agenda prior to sending communications or inviting participants. The
agenda should be designed to focus on executing the project’s goals and the
deliverables that form the basis for each goal. This is done within the context
of project scope. The planning meeting is also used to discuss the upcoming
schedule of planned activities that will be done over the next several days.
On the first day of the rapid improvement event, a sponsor will usually
address the team and provide the context and importance for the upcoming
work. The facilitator will provide team members with training in the tools
and methods of Lean, Six Sigma, Agile Project Management, or the inputs
required for the business analytics. These will help the team collect and ana-
lyze process data in a standardized way using the tools and methods. The
team also asks questions if the upcoming activities are not clear. These may
include how the data will be collected and analyzed. The data includes pro-
cess maps, floor layouts, work and inspection procedures, operational and
financial reports, and examples of good and bad performance as applicable.
CONDUCTING THE  EVENT

Bring Team Together to Discuss Roles and Responsibilities
After the kick-off discussions, the team begins to discuss and analyze the
available data. The analysis is applied to a process, a floor layout that shows
the spatial relationships between equipment and people, or the things that
will be changed based on the event’s goals and deliverables. A floor layout
is usually needed for a 5S event. If the focus is on a process, the analysis will
be to confirm the current state Value Stream Map (VSM) or build it using
sticky notes or software if the meeting is virtual. Team members may also
be assigned to collect additional data from the process to continue with its
analysis. In this activity, team members are assigned to collect data from
specific operations on the VSM. At a minimum, data should be collected
on the key metrics listed in Table 3.2. In addition, relevant management
reports, data collection forms, and similar information should be gathered
to place on the VFM.
The key roles for a rapid improvement event were discussed in Chapter 1.
During the kick-off meeting, some people may need to be assigned a
different role than the one originally assigned. This is acceptable if they
have the prerequisite skills. If there are sub-teams involved in an event,
then roles may be duplicated across the sub-teams. Roles could also be
rotated during an event if necessary. The important concept is that a team
should establish clearly defined roles and responsibilities before an event,
but these are subject to change.
Discuss Event Deliverables

The deliverables for improvement events differ depending on the charter.
But prior to starting the event and as part of the introduction, overview
and agenda review, the team reviews and discusses the deliverables that
are needed to successfully achieve the benefits. These should describe
what is expected to change for the improvement work. Solutions are not
known at this point; but based on the project’s scope, problem statement,
and deliverables, an initial conversation can begin for the best way to work
toward them. As an example, if the team is reducing quote to order lead
time the approach will be a process analysis using Lean methods. This
could be a physical or virtual walkthrough with the cross-functional teams
to review and document the tools, work procedures, and measurements at
each operation depending on scope. Using the project charter helps build
an initial plan for action. The plan is time phased and moves sequentially
from data collection to root cause analysis, solutions, and implementation.
This information is communicated to the improvement team at the start of
the event to gather final feedback prior to beginning the work. Preliminary
conversations should also have been held before the event, so this final dis-
cussion is intended to ensure everyone agrees.
Conduct Team Training as Required

Normally a few hours are set aside to train people at the start of the
event. The amount of facilitation required depends on the team’s experi-
ence with the Lean and Six Sigma concepts. If no one has been trained
in Lean Six Sigma methods, more than one facilitator may be required
to support the team during its rapid improvement event. People receive
training at different times and formats. Unless a group has been through
the same type of training, i.e., topics and exercises a facilitator cannot be
certain that everyone on the team understands the tools and methods
needed for analysis and making the eventual process improvements. An
example is reducing lead time for a virtual process. The Lean Six Sigma
experts know their tools and methods, but big database analytical skills
will also be needed to understand how the software applications collect
and transform data. This information is needed to understand root
causes and identify solutions. There will be some grounding needed for
most service, office, or supporting process teams because of the process
complexity.
People retain information differently depending on their perception of
what is important. The right amount of refresher training is useful. The
team facilitator should review the deliverables and plan the instructional
presentation to review the appropriate tools and methods. This orienta-
tion may also require a few experts in systems or advanced analytical data
extraction and analysis tools. If the team is convinced certain topics are
not needed, they can be skipped. Team training is essential if participants
have had no formal training in Lean, Six Sigma, or other tools, methods,
or topics.
In addition to training, the facilitator will carefully explain each activity
as it comes up in the schedule and will confirm everyone understands its
purpose relative to achieving the deliverables and how to use it. A few times
during each day, feedback should be requested from the team to ensure
there is not confusion regarding the exercises, tool use, or other activities.
This provides feedback to the leader and facilitator to modify the event
relative to how best to complete the activities.
Create Detailed Value Flow Maps and Layouts of the Process

In Chapter 3, we said that a VFM is important for showing spatial
relationships between machines, people, and materials as well as the oper-
ational metrics that quantify the flow of materials and information through
a process. Attaching operational reports, data collection forms, and similar
templates to the VFM is used to understand the process. In the rapid
improvement event, the team is instructed in the basics for building a VFM
if it is needed for the analysis. As the team builds out the VFM, how the
process actually works becomes clearer. The analysis includes the system
throughput, lead time, operational cycle times, and the other metrics in
Table 3.2. Once the VFM is quantified, the team will have a good idea of
where improvements need to be made. And any improvements requiring
investment will likely need to be placed on an implementation roadmap.
In service and office applications, Voice of the Customer (VOC) and
other stakeholders will also need to be considered.
In most events, creating the VFM is the basis for all other analyses and
solutions. It is also a communication vehicle that is visual and easily updated
based on new information. People can move its sticky notes representing
operations or add additional notes onto it to visualize the current state pro-
cess. Subprocesses within the VFM can be built into separate maps for a more
detailed analysis. These are identified using stakeholder interviews e.g. issues
with customer complaints, forecasting, scheduling, or inventory manage-
ment or from analysis of the VSM, i.e., showing metrics performance depends
on subprocesses. Lead time is an example where the team may find one part
of the process takes significantly longer than another. Additional people
will need to be contacted to build out the subprocesses. For a forecasting
subprocess, forecasting experts, marketing, sales, and finance people may
need to be contacted to provide information for how their subprocess works.
These people are different than those that built the VFM.
This hands-on work is documented on the VFM taped to the wall of
the war room or virtually using process mapping software. There are
different types of process mapping software. As an example, for manufac-
turing applications, VFM software is available using VSM-specific sym-
bology. If not using specialized software, a VFM should be constructed
using standardized rules such as the BPMN (Business Process Model and
Notation) or EPC (Event-Driven Process Chain) formats. These can be
analyzed by algorithms that check for process completeness and will add
missing components to ensure the model is consistent from the starting

to ending events. Simulations can also be built to model different process
designs that will improve the current state map, i.e., what happens if we
simply or modify the process? Figure 5.21 shows an example of the EPC
process mapping components and BPMN is similar.
Facilitate to Ensure Full Participation of Team Members

The team should be facilitated to ensure full participation of all members.
First, some of the more important enablers of event facilitation occur
upfront in an event’s planning phase. As an example, the team’s project
charter should reflect a real improvement opportunity, be properly scoped
for execution over the several days of the event, and be quantified to enable
the team to measure the success toward completing deliverables to achieve
the goals. Second, it is important that team members be selected to reflect
the project charter’s scope and process boundaries. This means the team
should consist, at a minimum, of the people who do the work within the pro-
cess as well as suppliers and customers of the process. In addition, the team
should be balanced with respect to its members’ experience and work styles.
Once a team meets, it should be facilitated by people experienced with the
coordination of group activities and dynamics. The fifth facilitation action
is to use a pre-published agenda with roles, responsibilities, and scheduled
activities. An agenda communicates to an event’s participants the scope and
expectations for the event. An agenda is very important to ensure that all
event activities within the very short time duration are allocated.
Facilitation also ensures team members fully participate in the activities.
Team members should also be trained as necessary in the proper use of tools
and methods of problem identification, data collection, analysis, and chan-
ging their process operations. As mentioned previously, to keep the event
focused and on schedule, facilitators should obtain team feedback a few times
each day. This will help the event’s leader and facilitators adjust the schedule
and activities. Finally, it is important to recognize and reward the event team
because it provides quantifiable benefits to its organization in a short time.
Collect Data at Every Operation

The basis for a rapid improvement event is process measurement, ana-
lysis, and improvement. One of the most important data collection and
analysis activities a team undertakes is construction of a VFM of a pro-

cess, a floor layout of a single work area, or other current state that forms
the initial basis for analysis and improvement. Recall that a VFM is
constructed by bringing a team together and creating a VSM using sticky
notes on a wall. After the VFM map has been constructed, the team will
walk-the-process to verify its accuracy; then the team starts to quantify
the VFM.
When an improvement event team collects process data in a service pro-
cess or office, it faces challenges because the flow of information is vir-
tual, the file sizes may be very large, i.e., big data, and there may be several
IT platforms and applications. Each system’s data fields or metadata have
owners. These owners will be on different teams that control the metadata’s
business rules and the ability to update and manipulate data in the meta-
data fields. Data collection requires careful planning and coordination
with the metadata owners. Sampling, extraction, and data conditioning
also need to be made part of the event pre-work.
In some situations, there will be physical changes as well as virtual ones
if supporting people and equipment need to be moved e.g. collocated.
These service applications are usually customer-facing processes. Standard
Lean Six Sigma methods are employed to improve these parts of a pro-
cess. Improvements for customer-facing processes needs to be thoughtful
because customer interactions vary, and the goal is an excellent customer
experience as well as process efficiency.
Customer-facing operations even if initially well-designed change over
time, and process complexity and variation increase. Higher variation is a
detractor of customer experience and process efficiency. High variation is
caused by low process standardization. Low standardization makes work
sampling and data collection activities more difficult. This is especially
true when measuring professional people when they work. This is because
they do not consistently follow a standard process. In manufacturing,
relationships between materials and labor relative to the work are clearly
established by the design of a machine and supporting work tasks, which
are completed in repetitive cycles. Useful data, such as production rates
can be easily estimated by operation, time-of-day, job type, shift, and other
demographical factors. This same data collection strategy, i.e., stratifica-
tion, can be used to collect data for each of the metrics shown in Table 3.2.
Measuring performance in highly automated service systems is also easy if
software can be used to collect and analyze the many transactions between
source and consuming systems. As an example, algorithms can be used to

time stamp transactional data moving from operation to operation.
Auditing is another useful method for collecting data in services, offices,
and supporting processes. It is done by taking samples of transactions such
as the types of work routinely processed by workers and classified based
on stratification criteria. As an example, emails could be classified as VA
or NVA, the reason for being sent, the departments sending the emails,
the estimated time spent on them, and other relevant information. In add-
ition to auditing emails, an analysis of calendars will show the number of
meetings and time duration. This information can be further broken down
by classifying meetings based on their VA content, reasons, and other rele-
vant criteria. It is not unusual to find that professional employees spend
between 25% and 75% of their time in meetings. Many meetings are poorly
organized, facilitated, or managed resulting in a significant loss of associate
productive time.
Another useful method used to collect operational data from ser-
vice, office, and supporting processes is shadowing of workers. Using
this method, associates can be shadowed, and their activities recorded at
sequential time intervals. Shadowing is used in manufacturing to observe
manual operations and improve work tasks. It requires that an analyst sits
with an associate and record, at 15-minute intervals, the work activities
being performed, the systems accessed, tools and methods used to do
the work, and the length of time to do the work and process issues. This
information is analyzed to determine the percentage of VA versus NVA
work content, time duration of work activities and ideas to simplify, stand-
ardize, and mistake-proof the process. The analyst also collects examples of
reports, data entry screens, and the tools used to do the work.
Depending on the industry, office equipment may be a major part of a
process or only incidental to its functioning. If certain types of equipment
have a major impact on an office process, then their production rates, avail-
ability, ease-of-use, and similar information can be analyzed to improve
operations based on the event’s scope and deliverables. A photocopier is
an example of a piece of equipment that may constrain the flow of work,
i.e., it is a bottleneck. To improve throughput rates, it can be equipped with
sensing devices such as “counters” to measure transactions and calculate
the production rate and investigate ways to improve access to it.
Scrap and rework can also be measured and analyzed for improve-
ment opportunities. These are wasted materials, labor, or other process
inputs that represent a material or labor loss. They include paper, which
is thrown out, obsolete promotional literature, and similar materials
as well as lost time. While scrap is thrown away and replaced, rework
is done to bring the defective work up to standard, and as a result the
work object is touched more than once. Additional material and labor are
added. These are measured in absolute amounts such as pounds, dollars,
labor hours, and similar measures, or volume adjusted by converting
into percentages. Scrap and rework are also identified through audits
and shadowing workers. Percent scrap is lost material and labor. Percent
rework is estimated as the number of transactions passing through the
same operation more than once. Rework can be identified by words with
a prefix of “re” such as re-analyze, re-inspect, redo, etc. Every organiza-
tion can create a list of these words because rework is prevalent in most
processes. Another way to calculate scrap and rework is by reviewing
financial and operational reports. As an example, equipment downtime
or unavailability percentages are also calculated like scrap and rework.
Maintenance logs are analyzed to identify equipment downtime incidents
and the process impact. Operational audits are required to break these
larger components of unavailable time into root causes related to specific
pieces of equipment or people.
Collecting data on available capacity is important for simplifying, stand-
ardizing, and mistake-proofing operations and also to utilize materials
and labor more efficiently. The higher the throughput, the higher will
be the capacity to produce more work. Recall a system’s throughput is
constrained by its bottleneck resource. For manufacturing and other pro-
duction processes such as services, a clue that an operation may be a bottle-
neck will be large amounts of work waiting to be processed in front of an
operation. This is upstream inventory or excess capacity that needs to be
processed. It could be in the form of materials or information, and the con-
straint could be machines, people, lack of materials or information, and
other causes. Bottlenecks occur in all processes, both physical or virtual.
Typical bottlenecks found in services and office operations include man-
agers who fail to sign off reports in a timely manner and people who work
below standard production rates and hold up work waiting to be processed
and unavailable equipment. Measurements are placed at the bottleneck to
count the number of units leaving it per unit time. Increasing throughput
should start at the bottleneck by reviewing the root causes for poor
performance.
Other data collection strategies include deep dives into the time elements
comprising some operations. Recall work tasks within operations can be
broken down into several time components including waiting, set-up time,
processing, and transporting. Any time component other than processing
is NVA. When increasing efficiency at an operation or the throughput of
a bottleneck, these time elements need to be reviewed, and the causes for
longer times should be investigated. These may include policy, procedures,
measurements, updates to equipment, and others.
Set-up time is usually tracked separately to the other time elements
because it is a major time component that impacts available capacity.
Reducing it not only saves operational time and reduces overall process
lead time but also enables movement toward a mixed model scheduling
system. Recall this scheduling system significantly decreases process
lead time and increases operational flexibility. In manufacturing, the
job set-up time is easy to measure because the start and end points are
recorded using manual or automated systems. In services and office
processes, job set-up information is not usually available unless special
software is in place to trace transactions through source and consuming
IT applications. The quote example is a good use case. Setting u p a
quote and adding information as it transforms into an order can be time
stamped and traced using algorithms. Common methods used to esti-
mate set-up time when there are associated manual operations include
analyzing operational reports, job shadowing, time and motion studies,
and employee interviews.
Measuring inventory or other excess capacity is also useful for identi-
fying operational inefficiencies. As an example, if an operation has two
days of inventory waiting to be worked, its processing lead time is approxi-
mately two days. Its upstream operation is overproducing, and it needs to
be kept idle. Measuring inventory at each operation along the critical path
and at the bottleneck controlling the throughput helps calculate process
lead time. Inventory measurements are done during VFM activities.
Another important Lean metric is the total floor area required by the pro-
cess. Floor area is a measure of operational efficiency because it is usually
proportional to the number of people and equipment required to produce
a product or service. Services tend to require proportionally less floor area
than heavy manufacturing with its production equipment, materials, and
inventory. But, in either type of production system, the proximity and rela-
tive spatial relationships between operations directly impacts lead time,
quality, and cost. The data collection usually starts with floor layouts
provided by the facilities team.
Analyze Data and Develop Prioritized Improvements

While Lean has a process analysis focus, Six Sigma has a data analysis focus.
But both initiatives use some common tools and methods for analysis and
improvement, i.e., their tools and methods are complementary. A sequen-
tial approach for process improvement is often the most effective strategy.
As an example, a process is first rationalized at a strategic operational level.
If it adds value from an organization’s strategic perspective and will exist
for the foreseeable future, then Lean tools and methods can be used to
simplify and standardize its work operations and to further increase their
VA content. Then if data analysis or experiments are required to improve
yields or reduce lead time, Six Sigma tools and methods can be overlaid
on the standardized process to further reduce variation, improve yields,
and add capacity especially at the bottleneck. In virtual systems, business
analytics are also applied for analysis and to build statistical models using
tools and methods, both similar to and different from Six Sigma. The data
collection is done using templates. Several of these will be discussed in
Chapter 5 from manufacturing and service perspectives.
Change the Process

The advantage of rapid improvement is that the scope and goals are
very crisp and focused. They should have been aligned with organiza-
tional goals, and as the operating model in Figure 1.1 shows, they are a
way to quickly execute certain types of aligned projects. As discussed
in earlier chapters if a rapid improvement event is not aligned then its
solutions will not be sustainable. Another barrier for effective change
is poor communication that inhibits leveraging solutions to similar
processes. Later chapters discuss change enablers to help avoid this situ-
ation. Examples include developing a list of lessons learned (what did
and did not work), ways to leverage solutions to other parts of the team’s
organization, and celebrating success. The basis for successful change is
demonstrated business benefits from the root cause analysis and mapped
to solutions. Solutions or countermeasures for root cause elimination
are a combination of process simplification and elimination of NVA
newgenrtpdf
Evaluation of the Improvement Event
FIGURE 4.4
work, mistake-proofing, standardized work, training, audits, and other

methods depending on the specific root cause. When integrated into a
control plan, robust countermeasures help sustain the process changes.
Toward the end of the rapid improvement event, the team will create
a simple management presentation to demonstrate the event’s success,
gain support for follow-up work, and obtain feedback for adjustments
to the improvement plan.
Apply 5S and Mistake-Proofing Methods

5S methods, standardized work, and mistake-proofing were discussed in
Chapter 3 and were shown to be important for solution implementation.
At this point in the event the assumption is that the team is experienced
in the use of the basic Lean, Six Sigma, Agile Project Management, or ana-
lytical methods as applicable to complete required analyses and make the
process changes.
Evaluate the Rapid Improvement Event

A major principle of Lean Six Sigma deployments is continuous improve-
ment of team activities. Evaluations can be made at several points in an
event. A daily debrief should then be held to check off the activities in
Figure 4.4 as they are completed. There may be other activities added specif-
ically for the event. On the last day, there will also be a management debrief
and report. A feedback survey is sent to participants and stakeholders to
confirm the event’s goals were met and that the rapid improvement team
experience was valuable. A key question to be asked is the net promoter
question, “Would you recommend this approach for process improvement
to others?”
SUMMARY
The focus of this chapter was to provide a predefined set of basic activities to
help plan for a rapid improvement event. The purpose of a rapid improve-
ment event is to efficiently collect and analyze data from a physical or vir-
tual process and to make immediate process improvements toward the end
of the event. Event activities were divided into four major sections that
comprise “preparing for the event,” “conducting the event,” “presenting the
findings,” and “follow-up” activities. The preparation for an event begins by
ensuring the team has an aligned project charter, properly scoped to serve
as its basis. Project charters capture the essential information necessary to
plan and execute the event including the business case, problem statement,
goals and deliverables, the leader, facilitators, team members, facilities,
tools, and equipment. A leader and facilitator are assigned to ensure that
all planning and pre-work are completed, the event keeps to the scheduled
activities, and produces desired outcomes. Event leaders and facilitators
should be experienced.
The activities required to prepare for a rapid improvement event are
listed in Table 4.1. The preparation of an event begins several weeks prior
to bringing a team together. Its activities include creating an action-
able project charter, assigning team members, and securing facilities if
the team is collocated or if reserving virtual conferencing if some team
members are remote. Resources required to help with the work also need
to be planned. In manufacturing electricians, plumbers, Lean experts, and
other subject matter experts need to be invited. Materials and equipment
may also be needed depending on the scope and goals. In service systems,
cross-functional team members and subject matter experts will need to be
invited. Unlike manufacturing where one group is impacted by an event
and recommended improvements, cross-functional teams are needed for
most end-to-end service processes. This is because issues begin at one part
of a process and impact other teams.
After the kick-off discussions, the team discusses and analyzes the avail-
able data. The analysis is applied to a process or a floor layout depending
on scope that shows the spatial relationships between equipment and
people, or the things that need to be changed based on the event’s goals
and deliverables. A floor layout is usually needed for a 5S event. If the focus
is on a process, the analysis will be to confirm the current state VSM or
build one using sticky notes. If the event is virtual, then process mapping
software will be used by the team. Team members will be assigned to
collect additional data from the process for the analysis. At a minimum,
data should be collected on the eight key operational key metrics listed in
Table 3.2. In addition, key management reports, data collection forms, and
similar information should be gathered to place on the VFM.
5
Data Collection and Analysis
OVERVIEW
In this chapter we will discuss the gathering of process data including man-
agement reports with financial and operational data, process maps, floor
layouts, and similar sources of information to conduct an analysis of the
root causes of process issues. Once identified, root causes can be eliminated
as an improvement team develops solutions or countermeasures using the
Lean Six Sigma methods. Several useful templates to aid data collection
and analysis will be discussed. These can be modified as needed. This
chapter begins with a discussion of the Value Flow Map (VFM).
The level of detail required for VFM depends on the project charter. If
the rapid improvement team is in a manufacturing facility, its process map
will not include the entire supply chain. But it should be created so it seam-
lessly integrates with the maps of other teams. If a team has been focused
on a single process, its VFM should be integrated into the facility higher
level VFM. In summary, the team should use the correct level of detail
to construct their Value Stream Map (VSM) or process map, and this is
determined by their project charter’s scope. The construction of a VSM in
service and office environments follows a similar logic. Service systems are
usually integrated across an organization, i.e., they are end to end. All maps
should be tied to each other to create an entire view if needed.
The analytical tools discussed in this chapter will also help a team iden-
tify relationships between input or independent variables and output or
dependent variables. The outputs are usually the performance measures we
need to understand and improve. The focus is on using simple graphical
and analytical tools. These also form the basis for more advanced analyses
if needed depending on the root cause analysis. Sometimes more advanced
167
statistical methods and especially the experimental design methods may

be needed to improve operational performance.
Experimental designs are used in analyses where several variables need to
be set at levels that optimize a system’s dependent variable. As an example,
in a service process we may want to know the level of required staffing
needed to answer a customer’s call. Agent experience and training levels,
time of day, incoming call volume, and several other independent variables
are relevant to the analysis. The goal is to build a model to show quantified
relationships between the independent variables and the time to answer a
call. In some organizations, the analytical tools and methods presented in
this chapter would be categorized as a Green Belt level. A Black Belt skill
level includes the more advanced statistical tools including experimental
design. Our focus will be to discuss tools that enable a team to quickly ana-
lyze the data they collect from their process.
BIG DATA COLLECTION AND ANALYTICS

When Lean was introduced to manufacturing decades ago, data was
collected directly from the process that was being analyzed. Data collection
activities consisted of people walking into manufacturing operations and
auditing inventory, measuring floor area, and calculating operational
throughput rates. Additional historical information such as machine
downtime, lead times, safety, and quality issues were taken from oper-
ational reports. This information representing an operational snapshot
was brought into a hands-on Kaizen workshop to create a VFM, analyze
it, and look for ways to improve the process. The analysis identified non-
value adding (NVA) operations and process waste. People did this work in
person. In contrast, over the past few decades, work is increasingly done
through information technology (IT) systems and applications. It is vir-
tual. Also, it is not unusual for large organizations to have several hundred
software applications managed by different teams and business owners.
Improvement teams now need to understand how and where data is stored
as well as how it flows from source to consuming systems to complete work.
Tracing the movement of metadata from source to consuming applications
is called data lineage or data mapping.
The types of data collected and analyzed have changed as has its size
and velocity. Databases now contain big data. These databases span
Data Collection and Analysis • 169
many systems and software applications. The size of the databases has
grown from kilobytes that represented about one half-page of text to
megabytes, gigabytes, and past terabytes to exabytes. Approximately 150
exabytes represent many times the size of all written books. New hard-
ware and software applications have also been created to create, review,
update, and delete (CRUD) this data. New algorithms create, analyze,
and model big data. Unlike the former process improvement work that
relied solely on manual data gathering, in service processes, and even
modern manufacturing supporting processes, the ability to obtain data
from virtual processes is critical for analysis and the resultant process
improvements. This often requires that business analytics professionals
are on rapid improvement teams and that they are cross-functional
because most operations are interconnected end to end across many IT
applications.
Service teams use workflow software that moves work, i.e., information,
from one team to another. It is important to govern or control the quality
of this information relative to several quality dimensions and to also time
stamp the movement of metadata by tracing its paths from source to con-
suming systems. Tracking and measuring the manual work that supports
a virtual process to understand how it is done are more difficult without
automation. Some service processes, such as customer-facing processes
have a significant percentage of manual work.
The types of data being created, analyzed, and stored have also become
diverse. In addition to structured data in the form of parsed data fields such
as Excel that are also mostly numeric, there is also unstructured data. This
data type is in the form of texts, sounds, pictures, and other unstructured
formats. Statistical modeling is now used to incorporate these diverse data
types into predictive models using new algorithms. But the data requires
conditioning to make it suitable for analysis. Examples include data mining
social media to measure customer sentiment and building predictive models
for what they may purchase in the future or any process issues in the text.
METADATA DEFINITION AND LINEAGE

Metadata are the data fields containing actual data. An example is a customer
name field that is updated with a new customer name. An organization
will have hundreds or thousands of metadata fields containing information

from marketing, sales, design, production, fulfillment, services, and other
organizational teams. Metadata should have a single owner to control its
business rules and access. Situations in which different teams can change
metadata business rules corrupts databases and the statistical models and
reporting that depend on them. If data records are not consistent, then
different conclusions will be obtained from an analysis as the metadata
varies. Also, some metadata is sensitive and needs to be secure, so access
should be controlled by a single team and owner.
Upfront in the customer-facing portion of an organization’s intake pro-
cess, i.e., sales, the metadata is controlled to standards such as Dun and
Bradstreet (D&B) using a DUNS Legal Name, a DUNS Site ID, and other
defined terms. Non-customer-facing teams also have large portions of
metadata either defined by industry standards or internally by data gov-
ernance councils through consensus. Metadata follows a hierarchy that
fixes the relationship of one field to another. As an example, the D&B Legal
Name flows down to an Organization DUNS Parent that is global and then
down to a Country Domestic Ultimate and within a country to a D&B
Site UCID. Organizations register with D&B to keep their information
accurate. This enables other organizations to transact business with them
such as shipping products or providing services at the right locations.
Metadata has data quality dimensions. First is data accuracy. If the meta-
data field for price has an amount of $5.00 but the true price is $5.25, then
this is a data accuracy issue. The metadata field should also be consistent
when it is used in different places in the database. Third, data elements
should also be refreshed to ensure they are relevant for use. The data should
also be complete, and over many records there should no null values. The
data should follow a specified format relative to data type, length, and
other rules. There should be a unique instance of the data in the meta-
data field. Finally, the metadata field should be synchronized with other
databases. This means the same definition defined by business rules should
be used for the metadata field by different software applications. Therefore,
each metadata field needs a single owner to manage the business rules and
definitions and to provide access to other owner applications as discussed
earlier in this section.
Metadata business rules ensure a metadata field is used only one way, i.e.,
it is unambiguous. As an example, for a D&B company name the rules would
be that the UCID Legal Name corresponds to a physical address, the name
is not abbreviated, the name must be present, and it cannot be all numbers
or special characters. Other organizations and internal applications rely on
this rule to consistently process information containing a company name.
Similar rules exist for the company address. Other metadata fields such as
an email require an @ symbol and a domain extension such as dot.com.
INFORMATION QUALITY GOVERNANCE

The organizational structure for information governance includes an
executive steering committee, a working governance council, business data
stewards, and subject matter experts. The executive steering committee
approves data policy changes and funds improvement projects that
improve data quality and process performance. The working govern-
ance council coordinates data quality improvement projects, approves
standards, policies, and business rules that impact data quality across sev-
eral cross-functional teams. It also makes investment recommendations to
the executive steering committee. The business data stewards review core
standards, policies, and business rules for their domain. Domain refers to
customer, product, manufacturing, or other major owner of certain types
of metadata. They also build the quality data scorecards and coordinate
data cleanup and remediation projects. Subject matter experts build ana-
lytical models showing metadata business impact and other analyses.
The quality of data is measured using business rules applied to critical
metadata elements. These are critical data elements used by several teams
or that require controls because of privacy and regulatory requirements.
The critical metadata is brought into information governance scorecards
where the quality dimensions are rated. Different teams will have
different scorecards for their critical metadata. As an example, marketing
will have critical data elements such as company name, address, email
address, shipping address, billing address, city, state, zip code, country,
and other information needed to invoice and ship products and services.
Manufacturing will have different metadata tied to product design and
manufacturing sequence.
In summary, information governance is a formal program used to
control metadata and coordinate its use among teams. It starts with an
assessment phase that creates the first information governance council
for a critical domain. The justification for the council is created by data
quality issues and the benefits of eliminating them. Part of this analysis
is defining and measuring critical metadata elements. Their business
impact is also evaluated using personas and use cases that tie metadata
quality issues to business gaps. Some rapid improvement events start
with these types of analysis. As solutions are created the metadata score-
card is updated, and the critical metadata is tracked to improve per-
formance. As the information quality governance maturity increases the
metadata lineage is also documented from source to consuming systems,
and the end-to-end impact of metadata quality is known. Improvements
are placed on a roadmap. Additional use cases are identified for other
data domains, and business problems are eliminated according to the
data quality improvement roadmap. Interestingly, in regulated industries
such as healthcare or pharmaceutical information, quality governance
is a basis for doing work across all teams. All transactions and metadata
must be defined, traceable through systems, and made secure by law or
regulation. Other industries are learning the importance of data quality
and process improvement projects increasingly touch on it. It is increas-
ingly unlikely that a team working to improve a virtual process will not
need to understand and verify the quality of its metadata through data
quality professionals.
VALUE STREAM MAPPING

Value stream maps have been used for decades. To create one, a supply
chain is mapped to include customers and participants as well the materials
and information moving from one organization to another and through
their internal processes. Then depending on the issues, teams deep dive
into major processes and into the operations and work tasks. A VSM,
while useful for showing the end-to-end supply chain relationships, will
need to be broken into lower level maps such as a Value Flow Map (VFM).
As a VSM is analyzed project charters will be created at that level. These
should also be well defined and strategically linked across the supply
chain between the relevant participants. There are three steps to creating
a VSM. The first step is to prepare for the VSM workshop. Recall that
Figure 4.1 listed the activities needed to prepare for the workshop. The
second is to construct the VSM with a cross-functional team and with the
people doing the work. Unlike a VFM where the people work in the same
process, a VSM will integrate several VFMs and, depending on the scope,
customers or suppliers. The third step is to analyze the VSM. This was also
the sequence for VFM analysis.
A VSM creates a visual model of the end-to-end process including oper-
ational metrics such as those discussed in earlier chapters. There are also
other types of metrics that organizations track depending on specific needs.
An analysis of metric performance over time versus metric targets provides
information used to identify the improvement projects that close gaps.
Obvious examples of poor performance are NVA operations and supply
chain issues related to rework, low yields, high transaction costs, and long
lead times. Once the VSM is verified by “walking” the process, it becomes
useful as documentation to support future quality and operational audits.
It is also useful as providing process documentation to help supply chain
standardization as well as process simplification. Simpler supply chains
and their processes have higher quality, lower cost, and shorter lead times
than more complicated ones.
In a manually constructed VSM that is on a wall or a virtual one that is
online, its metrics are qualified for every operation and the process critical
path and lead time are calculated. Once the VSM is quantified, a simula-
tion model can be built to analyze its performance for different scenarios
based on process changes that improve performance. Process simula-
tion also helps verify the bottleneck and capacity-constrained high level
processes or lower level internal operations. Some software applications do
these analyses automatically and also show transaction times, rework paths
and constraints. A simulation model can help a rapid improvement team
increase the flow of materials and information.
An important requirement to construct an effective VSM is to ensure that
project charters exist to focus a team. This requires that a project’s problem
statement and objective be well defined to show clearly where the work
will be done, the required resources, and the names of the process owner
and local work team. In earlier chapters we discussed other important
information contained within a project charter. A well-written project
charter will enable a team to select its members based on the project’s pro-
cess boundaries. This upfront work, by event leaders and facilitators, will
ensure sufficient resources are available to do data collection, conduct the
analyses, and make the necessary process improvements because the rapid
improvement team has a short duration and schedule. Any activities that
can be completed prior to an event improve its overall execution.
Another requirement is that the VSM be created at the right level of
detail. The VSM is an end-to-end map and includes customer and other
participants. But if a lower level detail is needed, then a VFM is constructed
around one or more major processes. The key concept is to ensure that
the level of mapping provides information sufficient to analyze the issues
and eliminate them. Once constructed the VSM is analyzed to identify
the seven process wastes, i.e., overproduction, waiting, excess travel, inef-
ficient production, excess inventory, excess movement, or defects as well
as non-value-added content. After the issues are identified the team maps
solutions or countermeasures to eliminate them. A single solution may
eliminate one or several root causes. Or several solutions may be needed to
eliminate one root cause.
These activities help create a future state process toward which the team
works by making improvements. A project plan is created to do the migra-
tion from the current to the future state including controls to sustain the
solutions. Ideally, the solutions or countermeasures will be automated or
contain a high percentage of mistake-proofing and visual controls to easily
monitor the process. Finally, any improvements that cannot be immedi-
ately implemented are prioritized for future implementation depending
on business benefits and resource requirements. If the future state cannot
be immediately obtained, then the goal becomes continuous improvement
to systematically squeeze out the remaining process waste over time and
move to the best possible interim state.
Brown Paper Exercise

A brown paper exercise is used in manufacturing to construct the VSM or
VFM. Virtual applications use an online whiteboard. This exercise is highly
interactive and hands-on. Team members facilitate the local work team to
build and quantify the VSM. Examples of reports, data collection forms,
and similar informational and control documents are also gathered and
placed on the VSM. Figure 5.1 shows an example. The people selected to
participate in the brown paper exercise are identified in the event or pro-
ject charter. The VSM should be prominently displayed on a conference
Map the Material Flow

Attach data collected from the process including operations
characterized as value adding (VA), business value adding (BVA) and
non-value adding (NVA), the production rate (units/minute), scrap %,
rework %, downtime %, capacity (units/minute), set-up time (minutes),
inventory (units), and floor area.
D1
E
A B F G
D2
Map the Information Flow
Attach data collection forms, management reports, inspection forms,

procedures and similar information below the material flow.
FIGURE 5.1
Brown Paper Mapping
room wall or SharePoint, so the team can easily see how the process is
organized and all supporting documentation. When it is quantified, oper-
ational linkages become apparent. Major processes within a VSM can be
separately analyzed. An example would be if an organization had issues
with forecasting, inventory control, or other subprocesses. These could be
separately mapped.
An advantage of using the brown paper method is it can be easily
rolled up and moved anywhere. In fact, a VSM may exist for several
months or years and serve as a source of continuous improvement ideas
for several subsequent teams. A SharePoint has similar advantages. We
want to avoid situations where process maps are used in isolation or not
visible for use. It is important that the team walks its process to validate
accuracy. In summary, the major advantage of a VSM or VFM is that
they facilitate team collaboration to identify and eliminate operational
issues.
The VSM provides an end-to-end view of a process by gathering infor-

mation describing how it works and visually displaying it. This approach
has advantages for services, offices, and manufacturing because it helps
people visualize not only the process but also the things that are consumed
and produced by a process, e.g., materials and information such as data
collection forms, reports, and other work objects. This contrasts with trying
to view different computer screens and piecing together disparate sources
of information over time. Recall that two key objectives for building a VSM
are that it be both interactive and provide a comprehensive visualization
of a process. Interactive implies that participants who do the work help
construct and interpret it. Once a VSM is constructed, the team uses it to
identify process issues. As an example, Figure 5.1 highlights process issues
using starbursts, which are placed directly on the VSM. This reinforces the
need for visualization. A starburst immediately focuses the team’s attention
on the problem areas. In addition to placing starbursts on a VSM, other
notes are added to help clarify the team’s work.
The template in Figure 5.2 shows how a team would quantify the operations
in a process based on the key operational metrics. The goal is to understand
where in the process the gaps occur, their types, and impacts. The compre-
hensive information provided by this template enables the rapid improvement
team to effectively collect data and begin to analyze the root causes for pro-
cess issues with a view toward process simplification and standardization. An
advantage of using standard data-collection and -analysis templates, such as
that shown in Figure 5.2, is that they help to quickly focus a team’s improve-
ment efforts on the most significant process issues impacting cycle time,
quality, and cost. After a rapid improvement event, a subsequent analysis of the
process information helps facilitate the creation of additional project charters
for deployment to other teams. As an example, project charters are created to
reduce set-up times, increase yields, or improve any of the other metrics oper-
ation by operation. Measuring process performance helps identify numerous
ways to improve productivity through aligned and prioritized projects.
PROCESS CHARACTERIZATION
As part of the prework and during the rapid improvement event, there
needs to be an efficient data collection strategy. Data collection will
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Product Group (Invoice Type)
Total Operations
Processing Time
Inspection Time
Transport Time
Value Adding?
Operation Cost
Storage Time
Yield (RTY)
Delay Time
Setup Time
Total Time
Total Cost
Process Step A B C D Comments
1 1 0 1 1 3 1.5 $4.50 1.8 3.0 3.0 0.8 1.5 5.3 15.3 99% Yes
2 1 1 0 1 3 1.35 $4.05 1.8 3.6 3.6 0.9 1.8 6.3 18.0 97% No Target to Eliminate
3 1 1 1 0 3 1.59 $4.77 1.8 3.6 3.6 0.9 1.8 6.3 18.0 95% No
4 1 1 0 0 2 2.35 $4.70 1.8 6.4 6.4 1.6 3.2 11.2 30.6 99% Yes
5 1 1 1 1 4 2.1 $8.40 1.8 5.4 5.4 1.4 2.7 9.5 26.1 97% No
7 1 0 1 1 3 0.05 $0.15 1.8 2.4 2.4 0.6 1.2 4.2 12.6 98% No
8 1 1 0 1 3 0.22 $0.66 1.8 2.6 2.6 0.7 1.3 4.6 13.5 95% No
9 1 1 1 0 3 0.75 $2.25 1.8 7.8 7.8 2.0 3.9 13.7 36.9 93% No
10 1 1 1 1 4 0.85 $3.40 1.8 5.8 5.8 1.5 2.9 10.2 27.9 98% No
11 1 0 1 0 2 5.24 $10.48 1.8 4.0 4.0 1.0 2.0 7.0 19.8 99% Yes

13 0 1 0 1 2 0.87 $1.74 1.8 7.0 7.0 1.8 3.5 12.3 33.3 97% Yes Target to Eliminate
14 1 0 1 1 3 1.9 $5.70 1.8 3.4 3.4 0.9 1.7 6.0 17.1 99% Yes
16 0 1 1 1 3 1.75 $5.25 1.8 2.6 2.6 0.7 1.3 4.6 13.5 99% No
17 1 0 1 1 3 1.85 $5.55 1.8 0.4 0.4 0.1 0.2 0.7 3.6 97% Yes
18 1 1 1 1 4 1.9 $7.60 1.8 4.4 4.4 1.1 2.2 7.7 21.6 98% Yes
19 0 1 1 2 0.65 $1.30 1.8 3.2 3.2 0.8 1.6 5.6 16.2 92% No
20 1 1 1 1 4 0.4 $1.60 1.8 4.2 4.2 1.1 2.1 7.4 20.7 94% Yes
Total 17 15 14 15 61 1.5 $ 91.03 36 75.2 75.2 18.8 37.6 131.6 374.4 $27.27 15
Sales Price $32.72 $23.00 $30.94 $24.95
Total Cost $27.27 $20.00 $23.80 $19.96 % Total 20% 20% 5% 10% 35% 100%
Gross Margin % 20% 15% 30% 25%
Comments
FIGURE 5.2
Operational Analysis
be divided into three topics. These include data-gathering strategies,

the analytical tools and methods, and process sampling. Several data
collection templates will be discussed to enable an efficient collection of
operational metrics. The goal is to gather information to identify the root
causes for process issues and to confirm improvements are successful.
Effective data collection enables immediate process improvements as
well as creating project charters for assignment to future rapid improve-
ment events.
Data gathering is the first decision to be made by the team. Will the focus
be at a higher organizational level by creating project ideas and charters,
doing financial and operational analysis, and other strategic activities? Or
will it be focused on one or a few processes, i.e., work sampling using job
shadowing and similar auditing methods? The answers depend on the
team’s goals and deliverables. The data gathering and analysis could be at
a business unit level or at a major process level such as accounting, or an
accounting subprocess such as accounts receivables. Depending on the
analysis, the focus could move down to lower level operations, e.g., sending
an invoice and then into work tasks such as the steps to prepare the invoice.
If time studies are needed, then a more detailed micro-motion analysis can
also be done.
After the scope is decided, the team decides on the sampling method to be
used to collect data from the process. Choices range between a 100% count
to various types of statistical sampling of the process. In highly automated
applications the count will usually be 100% because algorithms, i.e., bots,
can gather all the data, condition it, and apply various analyses designed
to model big databases. Relative to sampling, there are at least four major
types of sampling methods. These include random, stratified, systematic,
and cluster sampling. Random sampling selects observations from a pro-
cess and measures one or more attributes. An example is selecting 20 or
30 invoices and evaluating them as having a defect or not to create an
invoice defect percentage. Stratified sampling divides a population into
strata based on a stratification variable, and random samples are drawn
from each stratum. This would divide an inventory account population
into strata based on dollar value, then drawing accounts at random within
a stratum to calculate the inventory value for each stratum, then adding up
the valuation estimates across all the strata. There is sampling efficiency if
this stratification method is used. It can potentially reduce the sample size
over random sampling by more than 50%.
Systematic sampling draws samples from a process at equal intervals or

every nth unit. A common example is a time series chart that displays vari-
ation of a metric by time. In cluster sampling, a population is divided into
naturally occurring groups from which random samples are drawn. An
example is dividing customers into naturally occurring market segments,
sampling from each segment, and measuring a characteristic such as value,
time, percentage customer satisfaction, or others.
Figure 5.3 shows a simple but useful process analysis template. This tool
is used to sketch a process or a process layout to show spatial relationships
between people, equipment, materials, information, and travel dis-
tance. Additional process analysis templates are used to describe levels of
operational detail such as work tasks and micro-motions. Value adding
operations can be differentiated form NVA operations by color coding
them. Value-adding operations are colored green and NVA operations are
colored red. If there are also BVA operations, these are colored yellow. The
improvement team quantifies a process using operational metrics such as
FIGURE 5.3
Process Mapping Worksheet
those shown in Figure 5.4. These describe an accounting example where

data for several key metrics is gathered week to week. Trending charts can
also be created with this data. Negative trends or if a metric is stable but
its performance is not acceptable, then process improvement projects are
needed.
Figure 5.4 shows the type of information that can be gathered in an
accounts payable process by time. In Figure 5.4 the down time percentage
was initially 20% of the total process time but was reduced to 17.1% down-
time for a 14% improvement. Figure 5.4 lists several other metrics that
can be further improved by follow-up projects. As an example, rework and
scrap percentages could be reduced to lower levels and capacity increased
by a combination of operational improvements. An operational analysis
can be started once the Figures 5.3 and 5.4 templates are populated with
data. An advantage of using the measurement approach like that shown
in Figure 5.4 is that the improvement team can prioritize data collection
and analysis work prior to selecting a specific improvement approach.
Figure 5.4 also lists two additional metric classifications that depend on
a specific industry or function. We will use the information contained
in Figure 5.4 to demonstrate the use of basic analytical tools later in this
chapter.
Figure 5.5 shows a process audit template of the same accounts payable
process but at a lower level of analysis. The initial baseline of NVA time in
Figure 5.5 is 85% and note that the initial VA time shown in Figure 5.4 is
15%. This analysis shows how a more detailed audit can identify process
issues behind the metrics including those which are commonly called “red
flag” conditions. The list of issues shown in Figure 5.5 provides a good source
of improvement ideas and future projects. For example, frequent changes
to a job are a classic red-flag condition where an increase in the number
of order changes negatively impacts a work schedule. As the number of
order changes increases, due to a myriad of factors, the lead time required
to complete a job increases. More errors may also occur. A team could
investigate the root cause for the order changes and then work to eliminate
them. The root causes may be customer requests, material unavailability,
equipment breakdowns, or other reasons. The other issues in Figure 5.5 are
common in most processes including manufacturing and services. These
serve as excellent sources for improvement projects. As an example, lack of
training, measurement systems, and standardization are common reasons
for poor operational performance if the percentage of manual work tasks
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Operational Performance Measurements
Work Area: Accounting Average Job Cost: $22.75 Date: July

Operation: Accounts Payable Units Per Shift: 50 Auditor: Joe
Process Owner: Mary Shift Cost: $1,137.50 Takt Time: 8.4 Minutes/ Unit (50 units in 420 Minutes)
Operation Number: 4TD Available Time (Minutes): 420
Operation "Accounts Payable"
Improvement %
Week 10
Week 11
Week 12
Week 13
Week 14
Week 15
Week 16
Baseline
Average
Week 1
Week 2
Week 3
Week 4
Week 5
Week 6
Week 7
Week 8
Week 9
Key Metrics
1. Value Adding % 15.0 15.0 15.0 16.0 16.0 16.0 16.0 17.0 17.0 18.0 18.0 18.0 19.0 20.0 21.0 22.0 13.0 17.3 15%
2. Production Rate (Units/Time) or Operation
Cycle Time 50.0 52.0 55.0 55.0 60.0 63.0 55.0 63.0 62.0 63.0 64.0 66.0 65.0 69.0 70.0 73.0 74.0 63.1 26%
3. Scrap% 2.0 2.0 2.0 2.0 1.9 1.8 1.7 1.5 1.4 1.3 1.2 1.1 1.2 1.2 1.1 1.0 1.0 1.5 -27%
4. Rework% 30.0 30.0 30.0 28.0 25.0 31.0 33.0 27.0 25.0 28.0 24.0 22.0 21.0 19.0 17.0 19.0 20.0 24.9 -17%
5. Downtime% 20.0 21.0 23.0 19.0 18.0 20.0 17.0 16.0 18.0 19.0 15.0 16.0 14.0 16.0 13.0 14.0 15.0 17.1 -14%
6. Capacity (Units/Time) 54.9 56.4 58.1 62.9 72.4 68.3 60.1 76.1 75.2 72.5 81.7 85.5 87.3 92.8 100.0 100.7 99.6 78.1 42%
7. Set-Up Time (Minutes) 30.0 29.0 29.0 28.0 27.0 26.0 25.0 26.0 24.0 27.0 25.0 24.0 24.0 21.0 23.0 21.0 20.0 24.9 -17%
8. Inventory (Units in Queue) 20.0 19.0 16.0 18.0 15.0 16.0 14.0 17.0 13.0 18.0 14.0 13.0 12.0 11.0 12.0 9.0 8.0 14.1 -30%
9. Floor Area 10,000 10,000 10,000 10,000 10,000 10,000 10,000 5,000 5,000 5,000 5,000 5,000 5,000 3,800 3,800 3,800 3,800 6575 -34%
10. Lead time (Days) 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 22 -28%
Additional Metrics (Depending on Industry or

Function)
a. Total Process Workflow Cycle Time
b. Number of Problem Solving Teams
c. Number of Customer Complaints
d. Number Employee Suggestions
e. Warranty Expense/ Incidents
f. Returned Goods Expense/ Incidents
g. Annualized Savings
h. Percentage Scheduled Jobs Missed
i. First Pass Yield (Rolled Throughput Yield-RTY)

j. Profit/ Loss
k. Inventory Efficiency (Turns)
l. On-Time Supplier Delivery
m. Forecast Accuracy
n. Lead Time
o. Unplanned Orders
p. Schedule Changes
q. Overdue Backlogs
r. Data Accuracy
s. Material Availability
t. Excess & Inventory
FIGURE 5.4
Performance Measurements
Process Audit Worksheet

Operation: Accounts Payable Units Per Shift: 50 Auditor: Joe
Time (Minutes)
Occurrences
Incremental
(Per Shift)
Expense
Process Breakdowns Comments
Frequent Changes to a Job 5 17.5 $26.25 Job was interrupted.
Lack of Standards 3 10.5 $15.75
Lack of Measurement Systems 2 7 $10.50 Lack of clarity regarding start of invoice.
Lack of Training 4 14 $21.00 New employee not familiar with tasks.
Long Cycle Times 4 20 $30.00 Jobs have been pending for weeks.
Infrequent Jobs 2 10 $15.00 Jobs for these suppliers are run once per year.
High Output (Exceeding Capacity) 1 5 $7.50 Job was rushed due to poor planning.
Environmental Conditions 0 0 $0.00
Attitude (Motivation) 0 0 $0.00
Jobs could not be completed due to incomplete
Waiting 10 50 $75.00 information.
Transport 2 7 $10.50 Jobs had to be walked to another department.
Non-Value Added Activities 15 53 $79.50 Work tasks which can be eliminated form the process.
Serial Versus Parallel Processes 0 0 $0.00
Batch Work 10 50 $75.00 Jobs were released at the end of the shift.
Excessive Controls 10 35 $52.50 Jobs required three signatures.
Unnecessary Transfer of Materials 0 0 $0.00
Scrap 0 0 $0.00
Rework 10 35 $52.50 Had to call supplier several times.
Ambiguous Goals 2 6 $9.00 Employees confused as to work task.
Poorly Designed Procedures 3 9 $13.50 Work procedures can be made more efficient.
Outdated Technology 0 0 $0.00
Lack of Information 4 13 $19.50 Employees did not have information to perform job.
Poor Communication 0 0 $0.00
Limited Coordination 5 15 $22.50 Jobs required several sequential operations.
Total: 92 357 $535.50
Non-Value Adding (NVA) Percentage of Total 85% 47%
Comments:
FIGURE 5.5
Process Audit Worksheet
is high. Elimination of these process issues will increase the percentage of

VA time and reduce process lead time and cost.
As a team continues its root cause analysis of the accounts payable pro-
cess, the standard waste analysis template shown in Figure 5.6 is useful.
This template is used to analyze operations at a process level to identify
process wastes and time lost. Recall that in Figure 5.5 the total NVA time
was 357 minutes. This equated to a baseline estimate of 85% NVA time.
Figure 5.6 shows how these 357 minutes are broken down to identify one or
more of the major reasons for lost time within the process. As an example,
waiting time represents 45.9% of the total NVA time of the accounts pay-
able process. This may be a good place to focus a rapid improvement event.
Also, perhaps the focus should be at operations 1, 2, and 3 that represent
approximately 15% of the total waiting time.
Standard Waste Analysis

Operation: Accounts Units Per Shift: 50 Auditor: Joe
Excess Production
Excess Movement
Excess Inventory
Pro cessing time
Inspection time
Excess Travel
Time Due to
Inefficiency
Set-up time
Total Time
Production
Transport
Distance
Waiting
Waiting
Defects
Operation Name
(Number) Comments
1 5 10 3 0 0 4 2 24 20 Eliminate Waiting Time
4 2 8 0 0 0 0 0 10 2
5 0 3 0 0 0 0 0 3 5
6 4 2 5 0 0 3 6 20 18 Defect Reduction
7 0 1 7 0 0 0 0 8 0
8 0 6 0 0 0 0 0 6 2
9 1 6 0 0 1 2 0 10 2
10 0 8 0 1 1 2 0 12 3
11 2 4 9 0 1 0 3 19 50
12 0 2 0 0 2 0 0 4 0
13 0 4 0 1 4 0 0 9 3
14 0 2 0 0 1 0 0 3 25
15 5 3 4 1 2 4 0 19 2 Improve Work Task Efficiency
16 0 4 0 0 0 0 0 4 5
17 0 7 0 0 0 5 6 18 2 Reduce Excess Movement
18 0 8 3 1 0 0 0 12 3
21 0 4 0 0 0 0 0 4 50
Improve Work Task Efficiency/ Reduce
22 8 6 0 1 0 0 9 24 2 Defects
24 0 8 1 0 1 0 9 19 4
27 0 1 0 0 1 0 0 2 3
29 0 5 0 0 1 0 0 6 0
31 0 2 0 0 0 0 2 4 0
32 1 3 0 0 0 3 0 7 500
Total: 51 164 40 5 16 44 37 357 862

Percent of Total: 14.3% 45.9% 11.2% 1.4% 4.5% 12.3% 10.4%
FIGURE 5.6
Waste Analysis by Operation
The summary of waste template shown in Figure 5.7 represents several

jobs. It is useful to gather similar data over several jobs to ensure the rela-
tive percentages of wasted time across the categories reflect longer term
process performance. This helps ensure the team has the correct prioritiza-
tion. To summarize our discussion, we have been analyzing an accounts
payable process. In this analysis, data collection activities were linked, and
the investigation proceeded from higher to lower levels to ensure a correct
root cause analysis using several templates.
Job shadowing is like the process analysis templates shown in Figures 5.5
and 5.6 except it is more easily adapted to complex work tasks involving
newgenrtpdf
Summary of Waste Analysis for Several Jobs
FIGURE 5.7
the flow of information rather than the flow of materials. Figure 5.8
shows a job shadowing template. It is useful for data collection for non-
standard work tasks. Examples include office workers, managers, and
other professionals within manufacturing or services. It is also useful for
FIGURE 5.8
Job Shadowing Worksheet
data collection and analysis in processes characterized by many meetings,

computer use, and repetitive processes but not in repeatable sequences
such as a machine going through a work cycle at a predetermined fre-
quency. In other words, job shadowing is commonly used to track the time
components of complex work.
Using this methodology, an observer records the work tasks over several
hours or days and at 15-minute time increments. The percentages of time,
for each work task type, are calculated. Process waste and VA components
are also estimated. Often, higher percentages are associated with NVA
work. As an example, it is often found that associates spend an inordinate
amount of time attending meetings, working on NVA work and reports,
or performing work tasks not directly related to their role. This informa-
tion is useful for process improvement because only procedural changes
are required, and root causes are known. But job shadowing takes time,
so it is done as prework to an event. Sometimes it is part of an operational
assessment that extends over weeks. In virtual applications, algorithms
are applied to time stamp transactions and map their sequence or lineage
through software applications. If the prework is properly done, a team has
extensive information prior to an event for analysis. Job shadowing is also
useful for collecting examples of reports, data collection templates, com-
puter screenshots, and other tools and templates used by employees doing
their daily work.
Another useful data collection tool is used to map the paths work travels
in a process. This is called a spaghetti diagram. An office example is shown
in Figure 5.9. Information travels from one workstation to another but
not sequentially. It is apparent that work moves back-and-forth between
the workstations. A team would want to efficiently sequence the work or
rearrange the spatial relationships between the workstations to eliminate
return paths. The concept of minimizing movement between operations is
well known in manufacturing with the solution to co-locate workstations.
In virtual systems, remote teams are connected by IT systems and
applications. In these situations, the sequence of work also needs to be
linear. This is done by analyzing roles and responsibilities and minimizing
handoffs, so work moves in one direction.
Creating a spaghetti diagram is done by collecting information on
the movements of materials and information for several jobs. These
data collection activities can take different forms. In manufacturing, the
movement is documented using a process diagram. Each job is represented
FIGURE 5.9
Spaghetti Diagram
by a single line. Distances are calculated by measuring the length and

number of lines between various operations in the process. In office envir-
onments, data collection becomes more complicated if not automated
because transactions, i.e., the data in metadata fields moves virtually
through systems. It may be possible to have the transactions time stamped
and the lineage mapped as they move from one operation to another.
Once the analysis is completed, it may be found that some operations

are touched more frequently than others. Solutions to this issue vary, but
operations most frequently touching each other are collocated. A common
example is to locate rest rooms, break rooms, and office equipment in a
central location to minimize the walking distance of associates. Teams that
interact with each other often should also be collocated. An analogous
situation occurs if people need to share electronic files. A SharePoint is
created to easily access information using governance rules based on role.
A SharePoint should be designed properly in the sense that it is simple,
standardized, and mistake-proofed with the right rules. A SharePoint not
properly maintained, i.e., without rules, makes it difficult to easily find the
information people need as they review several folders and files before
finding the relevant information. There is motion waste. An application
of a spaghetti diagram to a SharePoint would trace a person’s searching
(movement) through file folders looking for information.
Cross-functional process mapping also shows handoffs but from
a different perspective. They use swim lanes by function to show the
movement of materials and information. An advantage is that handoffs
between functions are easily seen. The goal is to reduce the multiple
handoffs between the same teams. Often roles and responsibilities are
modified, or work is assigned differently. Like a spaghetti diagram in which
workstations should be visited just once, cross-functional process maps
show how work can be linear rather than move in and out of teams.
Another simple but useful tool is a checklist shown in Table 5.1. It is
used to tally or count things to show frequencies of occurrence. The data
is from Figure 5.5. In the example shown in Table 5.1 we can see that NVA
activities, batching of work, excessive controls, and rework have higher fre-
quencies compared to the other categories. This information can be used
by other tools to provide an insight.
SIMPLE ANALYSIS OF PROCESS DATA

It has been discussed in earlier chapters that each initiative has its own
toolkit for solving certain types of problem. Because different operational
initiatives, e.g., Lean, Six Sigma, business analytics, and others each have
their own tools and methods, it is sometimes confusing to know when to use
TABLE 5.1
Checklist
Category Count
Frequent Changes to a Job 5
Lack of Standards 3
Lack of Measurement Systems 2
Lack of Training 4
Long Cycle Times 4
Infrequent Jobs 2
High Output (Exceeding Capacity) 1
Environmental Conditions 0
Attitude 0
Waiting 10
Transport 2
Non-Value-Added Activities 15
Serial Versus Parallel Processes 0
Batch Work 10
Excessive Controls 10
Unnecessary Transfer of Materials 0
Scrap 0
Rework 10
Ambiguous Goals 2
Poorly Designed Procedures 3
Outdated Technology 0
Lack of Information 4
Poor Communication 0
Limited Coordination 5
a specific tool or method to identify the root causes for a problem. To help
place the two major operational initiatives, Lean and Six Sigma, into per-
spective, Table 5.2 compares Lean tools relative to the Six Sigma problem-
solving methodology defined as Define, Measure, Analyze, Improve, and
Control. For process characterization in service or office applications, Lean
methods are usually preferable for process analysis. This is especially true
for situations where a problem can be identified and eliminated in a matter
of days rather than several weeks. Rapid improvement events fall into this
latter category. In contrast, Six Sigma methods are useful for situations
that require intensive data analysis and the creation of statistical models to
explain relationships between output variables and input variables. But in
service systems, business analytics and advanced statistical methods will
usually be needed to be extract, condition, and analyze big databases. In
TABLE 5.2
How Lean and Six Sigma Tools Compare
Phase Typical Tools Common Lean Common Six
Tool? Sigma Tool?
Define Problem Statement Yes Yes
Process Map Yes Yes
Metric Analysis Yes Yes
Benefit Analysis Yes Yes
Measure Problem Statement Yes Yes
Cause & Effect (C&E) Diagram Yes Yes
FMEA Sometimes Yes
Measurement System Analysis Sometimes Yes
Basic Statistics Yes Yes
Process Capability Sometimes Yes
Benefits Analysis Yes Yes
Analyze Graphical Analysis Yes Yes
Hypothesis Testing No Yes
Contingency Tables No Yes
One-Way ANOVA No Yes
Multi-Variant Analysis No Yes
Correlation No Yes
Regression No Yes
Detailed Process Map Yes Yes
Improve Phase General Full Factorials No Yes
2k Factorials No Yes
Fractional Factorials No Yes
Response Surface Designs No Yes
Mixture Experiments No Yes
Control Phase Statistical Process Control (SPC) Yes Yes
Mistake-Proofing Yes Yes
Measurement Control Yes Yes
Training Yes Yes
Validate Capability No Yes
Control Plans Yes Yes
Final Benefits Review Yes Yes
these applications, Six Sigma analytical tools are limited. The tools listed
in Table 5.2 vary between simple to complex with both initiatives sharing
common ones. Common tools are evident for problem definition and then
at the end of a project during its Control Phases.
Although Lean tools and methods appear to be easier to understand,
they are not necessarily easy to implement without the assistance of
experienced facilitators to help train teams to use the tools and guide them
through practical implementation. Sometimes precursor systems need to
be implemented prior to advanced Lean methodologies. An example is
deploying a pull scheduling system that requires stable external demand
and balanced operations before calculating a takt time. Also, sometimes
other systems need to be deployed after an improvement to sustain it.
Examples are quality controls, associate training, and preventive mainten-
ance. In summary, a rapid improvement event focuses on making incre-
mental improvements for an existing process, and the tool focus could
be Lean, Six Sigma business analytics, or other methods. Larger scope
improvement efforts will be projects or even project portfolios for end-to-
end process improvement.
Process Mapping –Suppliers, Inputs, Process,

Outputs, and Customers (SIPOC)
Process maps are used at several levels of detail and in different formats
depending on the desired outcomes. Some projects need to drill down to
a lower level of detail than others relative to process mapping. If a team is
building a VFM to understand a process, then process details and quan-
tification are important because the map forms the basis for subsequent
analysis and solutions. In contrast, a less detailed high-level process map
is used to identify the boundaries of a process to understand a project’s
scope. An example is a SIPOC, i.e., supplier–input–process–output–
customer map. A SIPOC is shown in Figure 5.10. Its advantage is that a
process can be described at a high level, and then more detail can be added
if the team needs to deep dive into one part of the process. This avoids
unnecessary process mapping work not related to scope.
A SIPOC is constructed by working backward into a process from the
voice of the customer (VOC). The customer requirements are translated
into internal specifications, i.e., the process outputs. These internal
specifications are placed at the output boundary of the SIPOC. The outputs
are translated backward into each process step. The inputs and internal
work tasks for the process step are also documented until the supplier side
of the SIPOC is reached. Finally, the inputs on the supplier side are placed
on the input boundary side of the SIPOC. Supplier refers to materials,
information, people, energy, equipment, and other inputs that a process
uses to create value. At this point in an analysis the SIPOC is used to
identify major areas of the process that could be the basis for improvement
projects. Or if this is a project where scope is being refined, inputs, outputs,
and operations within each step are analyzed for sources of variation for
subsequent analysis. More detailed process maps could also be created
once the scope is clear. Process variables are settings that transform inputs
into outputs within the process operations. As an example, in an accounts
payable process where invoicing information comes into the process at the
supplier side, within the process, workers do the work tasks needed to set
the invoice up for payment. At the output side of the SIPOC, the invoice is
paid. At a next lower level of analysis, the team may need to construct more
detailed views of the process depending on where the root cause analysis
is to be focused.
Two more detailed maps are also shown in Figure 5.10, for example. One
is an office layout and the other a portion of the SIPOC but at a more
detailed level and from a process perspective. The strategy in process
mapping is for the team to work top-down from the higher level SIPOC
Suppliers Inputs Process Outputs Customers
A B C
2a 3a
1 4
2b 3b
Detailed Map Office Layout

FIGURE 5.10
Process Mapping – SIPOC
into the process to identify and eliminate the root causes for poor perform-
ance. If more detail is needed, then it can be added to the analysis.
Cause and Effect Diagrams

Cause and Effect (C&E) diagrams are useful for helping a team brainstorm
and organize qualitative relationships between a process output variable
and several input variables. After a subsequent analysis, one or more of
these inputs will likely have a major influence on the output variable. In
C&E diagrams the input variables are organized into categories or themes
to structure the conversation around common causes. As an example, if
several inputs are training related, then they may have a common cause,
and the solution will be appropriate for several of these. The C&E approach
is structured as opposed to open brainstorming where sticky notes are
used to identify inputs or causes and then aggregated into categories after
creation by the team.
Figure 5.11 shows a C&E diagram with the categories of environment,
machines, methods, measurements, materials, and people. These categories
can be modified based on a project’s scope and root cause analysis. In the
current example, high inventory investment is shown as the problem that
will be analyzed by the rapid improvement team. The effect or problem is
Environment Methods Machines
Poor Forecasting
Inventory
Demand Long Lead Time Investment
Variation Excess and Increased 25%
Obsolete Over the Previous
Inventory Year
Training
No Audits Large Lot Sizes
Measurement Materials People

FIGURE 5.11
Cause and Effect (C&E) Diagram
that inventory investment increased 25% over the previous year without an
increase in sales. In the C&E diagram, there are several branches. A team
would list what they thought to be the major causes of the higher inventory
investment and then drill down to lower level root causes of the problem.
As an example, two major causes shown on the C&E diagram are demand
variation and lead time. Inventory investment is known to be impacted
by these two causes. Focusing on lead time, we might find it increased for
several reasons including late deliveries, quality issues, bulk purchases, i.e.,
large lot sizes, or other reasons. We could also drill down lower. If we drill
down to still the next lower level, the late deliveries may be associated with
a few suppliers.
Using the C&E as well as more focused brainstorming with historical data
to support the discussion helps the team identify the important variables or
root causes for this inventory investment problem. Brainstorming using a
C&E diagram is not a substitute for data collection and analysis but rather
a good first step that enables a team to move forward with focused data
collection or further analysis that will either validate or disprove the team’s
opinion of what is causing the process problem.
5-Why Analysis
A 5-Why analysis is another useful tool that helps identify the root causes
of a process problem. Table 5.3 shows a 5-Why analysis applied to the
same inventory investment problem shown in Figure 5.11. In this ana-
lysis, a team will ask why at least five times to drill down into more detail
to uncover the causes of a problem. When using this methodology, it is
important that information be gathered to support the 5-why discussion
as the team drills down, acting on fact rather than opinion. There are com-
monalities between a C&E diagram and a 5-why analysis, but they also
have some important differences. A C&E diagram is useful to gather and
organize brainstorming ideas into categories. In contrast, a 5-why analysis
is useful to focus down from one major category to gain more details. But
they can be used in sequence.
In this example, the effect or problem is that inventory investment has
increased 25% faster than sales the prior year. Higher inventory investment
is caused by different root causes that need to be identified and eliminated.
Table 5.3 shows how the 5-Why analysis is applied to this example. The
first question is “Why has inventory investment increased 25% faster than
TABLE 5.3
5-Why Analysis
Level of Question Answer (Opinion) Supporting
Information
Effect (Output) Inventory investment increased Accounting report
25% over last year.
Why has inventory Inventory turns (average inventory Operation’s report
investment increased 25% investment necessary to support
over the last year? sales) decreased by 25%.
Why did inventory turns Lead time of production line Operation’s report
decrease by 25%? “XYZ” increased by 5%.
Why did lead time of Machine “A” has not been running Operation’s report
production line “XYZ” at 95% of the required target
increase by 5%? rate.
Why has machine “A” has not There has been a scrap problem Quality report
been running at 95% of the with raw material component
required target rate? “B.”
Why has there been a scrap The component’s outer Quality report
problem with raw material diameter periodically exceeds
component “B”? specification.
Why has the component’s Team must investigate the Project Charter
outer diameter periodically root causes for the diameter
exceeded specification? variation problem.
sales last year?” An increase in inventory would have been seen in finan-
cial or operational reports. Reviewing an operational report, the team may
find that inventory turns decreased by 25%. Inventory turns is a ratio of
the cost-of-goods-sold (COGS) divided by the average inventory invest-
ment necessary to produce the COGS. The COGS is the invested labor and
materials. This increase in inventory relative to sales could be due to several
factors. In answer to the question, “Why did inventory turns decrease by
25%?” the team may find that lead time of production line “XYZ” increased
by 5% which required that a higher work-in-process (WIP) inventory
level be maintained to keep materials flowing through the process. The
lead time information would also be obtained from an operational report.
Continuing through the 5-Why analysis, the team might eventually find
that the cause of the high inventory investment is that machine “A” has not
been running at 95% of the required target rate due to a scrap problem with
raw material component “B.” Finally, the scrap problem may be found to be
caused by a quality issue relative to a component “B’s” outer diameter that
periodically exceeds its specification. This information must be verified

by walking the process to directly observe the problem. But the informa-
tion gained from this methodology, when based on fact, enables a team to
quickly investigate the root causes for process issues. In summary, a 5-Why
analysis is useful to the extent it is supported by actual data.
Histogram
The histogram is another useful analysis tool. It shows the central loca-
tion and dispersion of a continuous variable. A continuous variable is one
that can be measured on a scale that can be divided into smaller intervals
as needed. As an example, a meter can be broken into centimeters, which
can be broken into millimeters, etc. Figure 5.12 shows the continuous vari-
able time in minutes, a central location of approximately 11 minutes, and
a range of between approximately 2 and 24 minutes. This information is
useful for establishing a baseline prior to analyzing and improving the
process. In this scenario, the average lead time would be reduced from its
current level of 11 minutes to a lower level. Histograms are also useful for
comparing several distributions with a common scale. In this example, two
histograms can be used to compare lead time before versus after process
improvements.
In Figure 5.12, the empirical data is shown as rectangular bars. The
original data was allocated to classes corresponding to the width of the
rectangular bars. An advantage of graphically displaying data using a
histogram is that the data pattern can be analyzed for clues as to how the
underlying process is operating. If the empirical data is symmetrical, then
areas to the right or left of the center of the histogram will be approxi-
mately equal. In contrast, a histogram may extend in one direction or
another. This is called skew. Highly skewed data contains outliers. An out-
lier is a data value far away from the center of the data. The reasons for
outliers may be that the data points are not representative of the dataset,
they were incorrectly measured, or this may be how the process normally
operates. The improvement team would analyze histograms of the various
process metrics for clues as to the root causes of the process issue. Or to
show that the improvements were successful, i.e., the before versus after.
In addition to creating a histogram, summary statistics are calculated
using the data.
Statistic Value
Mean 11.2
Median 10.0
Mode 4.0
Standard Deviation 6.6
Minimum 2.0
Maximum 24.0
Count 32
FIGURE 5.12
Histogram of Time Lost to Defects
Pareto Chart
A Pareto chart compares several discrete variables or categories to their
occurrence frequency or total count. Figure 5.13 uses the data from
Figure 5.5 to show the occurrence frequency of several process issues.
The Pareto chart shows the number of process breakdowns in decreasing
order by issue. The category NVA activities has the highest total number
of process issues, and the waiting has the second highest frequency.
Because occurrence frequency is clearly shown from the highest to lowest
levels, Pareto charts are useful for focusing a team on the most impactful
issues for subsequent root cause analysis. Pareto charts are created at this
first level and then at second and third levels. As an example, Figure 5.13
could be broken down to a next lower level by analyzing the reasons
for the NVA or waiting. In summary, Pareto charts are useful for inves-
tigating the root causes of a process problem and helping to clearly
communicate them.
16
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FIGURE 5.13
Pareto Chart of Process Issues
Box Plot
The box plot shown in Figure 5.14 provides a non-parametric graph of a
continuous variable. It shows both the central location, i.e., the median and
dispersion represented by the range of the dataset. The range is calculated
as the maximum minus the minimum values. But other statistics are also
provided. These are the 25 percentile, median, and 75 percentile levels. The
25 percentile is the data point at which 25% of the values are below. The
median is the 50% percentile data point at which 50% of the values are
below. Finally, the 75% percentile is a data point at which 75% of the values
are below. Several box plots can be displayed in a comparative manner as
shown in Figure 5.14. Discrete variables, having a common and continuous
scale relative to each other, are displayed on the same graph. In the example
shown in Figure 5.14, lost time is broken into the process waste categories
that were shown in Figure 5.6. We also can see that the waiting category
has a higher median lost time than excess inventory and a higher variation
of time relative to the other categories. An asterisk represents data points
marked as outliers. An outlier is a data point that is likely to be different
than most of the sample data, i.e., furthest from the central location of the
data. Box plots are a basis from which more advanced statistical methods
can be applied to analyze the process data.
Defects
Waiting
Minutes
Movement
Travel
Production
Inefficiency Excess X Sample means
Production Outliers
Inventory
FIGURE 5.14
Lost Time by Process Waste
Scatter Plot
A scatter plot displays two continuous variables relative to each other. This
analysis is useful to see relationships between two continuous variables and
as a precursor for building models. In the example shown in Figure 5.15 as
the production rate increases, the capacity also increases. The data used to
construct the scatter plot shown in Figure 5.15 was taken from the example
shown in Figure 5.4. A next level up from a scatter plot is developing a
quantitative relationship between two continuous variables using a simple
linear regression model. This type of model provides statistics that measure
the strength of the relationship between two continuous variables.
Time Series Graph
A time series graph compares a continuous variable against its time-ordered
sequence. In the example shown in Figure 5.16, we see that production rate
and capacity when plotted based on their data collection sequence, i.e.,
time ordered, are both increasing. The data used to construct the graph
shown in Figure 5.16 was taken from Figure 5.4. We must be careful in
the root cause analysis of increases in production rate and capacity. Their
Capacity
Production Rate
FIGURE 5.15
Scatter Plot of Capacity Versus Production Rate
Capacity
Production Rate
FIGURE 5.16
Time Series of Capacity Versus Production Rate
patterns may be influenced by a third unknown variable, i.e., a lurking

variable. A time series plot is a complementary tool to use in addition to a
histogram, which does not show time-related patterns. Sometimes for the
same dataset, one graph shows a pattern but the other one does not.
Control Charts
Control charts are special types of time series chart. These have control
limits calculated around the central location or mean of the plotted vari-
able. The sample mean is calculated by summing all the data values and
dividing by sample size. As an example, if a sample consisted of the three
values 1, 2, and 3, its mean would be (1 + 2 + 3 = 6)/3 to calculate 2. The
upper and lower control limits are calculated at ± 3 standard deviations
from the mean. Using this rule, approximately 99.73% of the samples
drawn from a normally distributed process are expected to be within the
upper and lower control limits, i.e., ± 3 standard deviations from their
mean. A stable process should not display non-random patterns within the
control limits or any outliers beyond them.
A first step in constructing a control chart is determining the distribu-
tion of the variable being plotted, the sampling plan that is used to collect
data from a process, and the number of time-ordered samples representing
a predetermined amount of time over which sampling will occur. As an
example, using the variable processing time from Figure 5.2, the mean is
3.8 minutes, and the standard deviation of individual values is 1.9 minutes.
The control chart is shown in Figure 5.17. The variable, processing time is
assumed to be continuous and symmetrical, i.e., a normal distribution. The
sample consists of individual values as opposed to subgroups. There is a
second chart for sub-grouped data. The initial control limits are calculated
at ± 3 standard deviations from the calculated mean of the combined
sample. The calculation is 3.8 minutes ± (3 x (1.9 minutes)). The lower
control limit is −2.1 minutes (set the lower limit to 0). The upper control
limit is 9.6 minutes. The sample uses 20 to 25 sequential values. This initial
control chart is used as a reference or baseline. Because the data is indi-
vidual rather than grouped, an improvement target can be added to the
graph to show how stable the data is relative to the target. After the project,
the team can also show before and after impacts of the improvements using
a split control chart.
The theory behind control charts is that as subsequent samples are taken
from the same reference distribution assuming a normal distribution, then
99.73% of them should vary randomly within the control limits. If there are
extraneous sources of variation such as outliers, trends, shifts in the mean,
or excessive variation, the control chart will show these patterns. In con-
trast, if the control chart pattern remains symmetrically distributed around
its mean and random, then no process adjustments are needed. Control
charts differentiate common cause variation (no pattern) from assignable
or special cause variation (outliers or a set of observations forming a non-
random pattern).
The control chart shown in Figure 5.17 is called an individual control
chart. It displays data as individual values without sub-grouping. There are
several other types of control charts that depend on the distribution of the
variable being charted and how data is collected. One type is used to chart
a continuous variable but where data is collected using a subgroup sample.
This is the X-bar chart and its associated R or range chart. Constructing
these charts requires that samples be taken as subgroups from the process
and at equal time intervals. The sample size is usually 4–9 data values. The
subgroup averages are plotted on the X-bar chart, and the ranges of each
subgroup are plotted on the range or R chart. The ranges are maximum
minus the minimum of each subgroup.
Analysis of the individual control chart shown in Figure 5.17 consists of
looking for non-random patterns and outliers. An outlier is a datapoint
Upper Control Limit =9.6 minutes
Mean =3.8 minutes
Target = 3 minutes
Lower Control Limit =-2.1 minutes or 0
FIGURE 5.17
Control Chart on Individual Processing Time
greater than ± 3 standard deviations from the mean of the control chart.
Specifications can usually be overlaid on an individual control chart.
In contrast, in an X-bar chart, the plotted data points are the subgroup
averages. The likelihood that a data point is beyond either the upper or
lower control limits is less than 0.27%, i.e., 100%–99.73%. The decision
would be to take corrective action if the data point is this far from the
mean. The error for taking an action would be 0.27%.
There are other types of control chart, developed for various applications.
If a variable is pass or fail, p-charts and np-charts are used to construct the
control chart based on a binomial distribution assumption. If a variable is
counted data, then c-charts or u-charts are used to analyze the data based
on a Poisson distribution assumption. There are also specialized control
charts for specific situations.
Once a team identifies the root causes for their process problem,
using these simple tools the project charter should be updated to reflect
the team’s most recent data analysis. Some questions to ask are have
the goal or questions changed? Do we know the countermeasures or
solutions based on the root cause analysis? How will these solutions be
implemented to achieve the improvement goals? Improvement ideas
identified at this point in the project are formally recorded in an improve-
ment opportunity worksheet shown in Figure 5.18. Many of these will
be completed by the rapid improvement team by the end of the event.
Those requiring more time will go on a schedule for completion after
the event. This approach is highly visual and hands-on, which resonates
with leadership, the local process owner, and the rapid improvement
event team.
If the number of identified improvements is large, then they may need
to be prioritized to manage resources. The team could vote to rank the
improvements using a simple calculation of number of votes per person
equals the number of improvement ideas divided by 3. If there are 15
improvement ideas, then each team member has five votes. Then each
person can place no more than two votes on any one idea to prevent
bias in the prioritization. Figure 5.19 shows a more formal prioritization
approach using a C&E matrix modified to prioritize improvement projects
for business benefits.
Normally, a C&E matrix is used to prioritize process input variables
or “Xs” relative to process outputs or “Ys” for project prioritization,
data collection prioritization, or root cause prioritization. In the current
Rapid Improvement Event

Opportunity Worksheet
Date: Project Number:

Process Workflow:
Process Owner:
Team Leader:
Team Members:
Opportunity:
Problem Statement: Root Causes: Required Actions:
Current Performance: Future Performance: Anticipated Benefits:
FIGURE 5.18
Improvement Opportunity Worksheet
example, the prioritization matrix rates several improvements relative to

their impact to one or more key operational output metrics. The output
metrics are ranked for relative importance to each other. A “1” is low
importance and a “10” high importance. The improvements are compared
to the output using a scale between 1 and 10. A “1” implies no correlated
impact between an improvement and metric, whereas a “10” implies that a
high degree of correlated impact exists. Other ratings are also made for the
other operational metrics, i.e., VA %, production rate, etc. In the example
shown in Figure 5.19 we see that improvement B has the highest overall
rating. Its rating is calculated as a weighted total of “7 x 10” + “8 x10” + “8
x 8” + … + “8 x 5” = 520. This implies that improvement B is the first one
to be completed by the team.
Rating of 10 10 8 8 8 7 6 7 5
Importance
1 2 3 4 5 6 7 8 9
Improvement
Set-Up Time
Downtime%
Production
Floor Area
Rework%
Inventory
Sequence
Capacity
Scrap%
VA%
Rate
Total
2 Improvement B 7 8 8 7 10 10 10 0 8 520
6 Improvement F 6 8 10 6 7 8 5 7 10 509
10 Improvement J 10 2 8 9 7 8 10 5 9 508
8 Improvement H 8 6 5 8 5 5 7 10 8 471
3 Improvement C 8 6 3 8 9 6 10 0 9 447
9 Improvement I 9 7 3 8 4 6 9 4 7 439
5 Improvement E 5 9 0 5 6 9 10 5 10 436
1 Improvement A 6 3 7 6 5 8 9 7 6 423
4 Improvement D 4 3 5 9 8 7 2 6 339
7 Improvement G 7 4 2 7 1 4 8 1 9 318
Total 700 560 408 584 496 497 468 287 410
FIGURE 5.19
Cause & Effect (C&E) Matrix –Prioritizing Improvements
Example –Analyzing Job Shadowing Data

In this chapter we have discussed data collection strategies as well as sev-
eral tools and methods for analyzing data. Because data collection is a
critical component of process analysis, we need to efficiently collect the
correct data and supporting documentation. Job shadowing was shown to
be a useful data collection method for services and offices because of the
non-standard working format and complexity of the work. It has been used
in manufacturing for decades to analyze complicated operations consisting
of people and equipment. In the example starting in Table 5.4, we see the
results of one day’s shadowing of an accounts receivable work process. The
time duration of several work tasks has been recorded and labeled as VA or
NVA. The total working time is 9.32 hours or 559 minutes.
This data takes on new meaning if simple analytical tools are used to show
relationships between the data elements. As an example, in Figure 5.20, 61%
of the total time is classified as NVA. The next step is analyzing each cat-
egory for NVA time. It can be seen that 81% of meeting time does not add
Total Minutes NVA Time VA Time Grand Total % NVA Time
Email 22 9 31 71%
Meeting 210 50 260 81%
Phone 51 97 148 34%
Report 60 60 120 50%
Grand Total 343 216 559 61%
FIGURE 5.20
Analysis of Job Shadowing Data
value. Perhaps the NVA meetings can be eliminated or reorganized to make

them more efficient. Reducing the percentage of NVA meeting time will
provide associates with time to do more useful work. The NVA time in the
other categories can also be reduced after analysis. In summary, an advan-
tage of using shadowing and simple analytical tools is that information can
be displayed in a format that provides insight into issues and root causes.
This aids communication and decision-making for rapid improvement.
Example –Inventory Analysis and Reduction

Six Sigma methods can be applied to improve inventory management.
In situations where inventory investment is high, and the analysis of its
root causes requires a statistical analysis, then Six Sigma modeling cap-
ability with standard Lean methods is a useful approach for analysis and
improvement. In the first two Define, Measure, Analyze, Improve, and
TABLE 5.4
Analyzing Data Collected from Job Shadowing
Activity Time Duration Value
Email 5 NVA
Email 4 VA
Email 3 NVA
Email 8 NVA
Email 6 NVA
Meeting 30 NVA
Report 60 NVA
Email 5 VA
Report 60 VA
Meeting 60 NVA
Phone 20 VA
Phone 10 NVA
Meeting 45 NVA
Meeting 30 NVA
Phone 24 NVA
Meeting 45 NVA
Phone 27 VA
Phone 12 NVA
Meeting 30 VA
Phone 5 NVA
Meeting 20 VA
Phone 16 VA
Phone 34 VA
Total (Minutes) 559
Total (Hours) 9.32
Control (DMAIC) phases, a team collects information related to the major

issues impacting inventory investment. Table 5.5 shows these issues, in
decreasing order of impact on inventory investment, as canceled orders,
schedule changes, late deliveries, large lot sizes, missing materials, and
quality issues. A team could investigate and improve any or all these issues
depending on priority and ease of elimination. In this analysis the issue
canceled orders represent 64% of the $1,000,000 inventory investment
associated with the issues. This is also approximately 32% of the overall
inventory investment of $2,000,000. Based on this analysis there appears
to be six improvement areas that can be investigated to reduce investment.
If the $1,000,000 associated with these problems were eliminated, then
inventory turns would increase from 5 to 10, and the investment would
decrease from $2,000,000 to $1,000,000.
TABLE 5.5
High Inventory Investment –First Level
Reason (Issue) Count Percentage Estimated Improvement
Impact** Area
Canceled Order 134 64% $638,100 A
Schedule Change 36 17% $171,400 B
Late Deliveries 14 7% $66,700 C
Large Lot Size 9 4% $42,900 D
Missing Materials 9 4% $42,900 E
Quality Issue 8 4% $38,100 F
Total 210 100% $1,000,000
Cost-of-Goods-Sold $10,000,000
(COGS)
Inventory Investment Due $1,000,000
to Issues
Total Inventory Investment $2,000,000
Inventory Turns Ratio 5
** Subject to verification
TABLE 5.6
High Inventory Investment –Second Level
Root Cause (Canceled Count Percentage Estimated Improvement
Orders) Impact** Area
Inaccurate Schedule 9 7% $42,857 A1
Late Delivery 108 81% $514,290 A2
Missed Schedule 10 7% $47,619 A3
Unknown 7 5% $33,334 A4
Total 134 100% $638,100
Inventory Investment Due to $638,100
Cancelled Orders
Table 5.6 shows the next level root cause analysis in which the canceled
orders issue is broken down into the lower level reasons that orders are
canceled. These include an inaccurate schedule, late deliveries, missed
schedules, and a category of unknown reasons. At this level of an analysis,
late deliveries represent 81% of the cost of inventory investment associated
with canceled orders. It also represents 51.8% of the entire inventory invest-
ment problem associated with the $1,000,000. This is calculated as 64% x
TABLE 5.7
High Inventory Investment –Third Level
Root Cause (Late Delivery) Count Percentage Impact** Improvement
Area
Incorrect Invoice 16 15% $77,143 A21
Carrier Issue 13 12% $61,715 A22
Customer Not Notified 73 68% $349,717 A23
Unknown 6 5% $25,715 A24
Total 108 100% $514,290
Cost-of-Goods-Sold $10,000,000
(COGS)
Inventory Investment Due $514,290
to Late Deliveries
81% = 51.8%. Table 5.7 continues the root cause analysis of late deliveries

down to a third level. The issue customer not notified is shown to be the
major contributor to late deliveries. If we could eliminate the customer not
notified issue, then the inventory investment reduction would be $349,717.
A rapid improvement team would use this type of analysis to identify the
most impactful root causes and solutions.
MAPPING HIGH-VOLUME TRANSACTIONS

In manufacturing, data collection historically focused on taking pro-
cess snapshots. The processes varied from batch to continuous. Rapid
improvement teams would move through the process to take a metric
snapshot and add this information to either a floor layout if the focus
was to improve a work area or to build a VFM for the total process. The
metrics gathered included throughput, inventory, and others discussed
in earlier chapters. Data collection has become more complicated for any
virtual processes that collect, analyze, and report through IT systems and
applications. Data collection requires using software tools to extract data
at various parts of the process. Also, the size of databases is large, data
flow is high velocity, and data formats vary. This section discusses data
collection for high-velocity transaction processes. The focus is on the

standardization of process mapping and virtualization of these maps to
align them to analytical tools that map data flows through IT systems. This
includes rework paths and the systems and data fields touched by users
at system portals or user interfaces. Collecting data using algorithms,
i.e., bots, and manually shadowing the people doing the manual work
associated with an automated process is now the way process improve-
ment teams work and especially for service, office, supply chain, and
supporting processes. This impacts the data collection as well as the skills
needed on the team.
Process mapping has historically been done using different mapping
standards that vary with the organization and team. The most useful
mapping formats can be used by analytical software to verify the process
relationships and rules and to trace transactions through an end-to-end
process. These traces show how different personas interact with operations
within the end-to-end process to complete work tasks. Different workers
represented in aggregate as a persona, e.g., purchasing agent, salesperson,
will interact with a process differently, i.e., they take different paths to com-
plete the same work. There should be one optimum work or transaction
path for a persona and use case or job.
Correctly formatted process maps enable algorithms to detect this vari-
ation and measure the duration and sequence of work tasks in different
software applications. Analytical software transforms a process map that
is in standard format by overlaying a transaction trace with task com-
pletion times on the map. Properly constructed the outcome is a process
model that reflects the actual process and dynamically shows how work
moves through it. An advantage of this type of model is that inputs can be
changed, and the outputs measured to calculate optimum process settings
and remove variation in doing work tasks. As an example, if a call center
process was modeled this way, then changes to incoming transaction
volume, time to service, and staffing levels would be useful inputs to the
model with the output customer waiting time.
Process maps need to be refreshed and verified for accuracy. This is done
by walking the process as was done when they were initially created. This
hands-on approach is critical for building an accurate process map either
as a physical or virtual representation. Up to now we have discussed pri-
marily the VFM. A VFM is constructed hands-on by the people doing the
work. Its construction follows standardized rules with common symbols
representing work objects, operations, and other components of a pro-

cess. But a VFM or any other format needs to be translated into BPMN
(Business Process Model and Notation), EPC (Even- Driven Process
Chain), or another standardized format. Figure 5.21 shows an example
of the EPC components. The EPC method is like the BPMN method, and
they can be converted one to the other with minimal loss of information.
The BPMN model is more efficient than EPC with 30% less complexity.
The International Standards Organization (ISO) has approved BPMN in
different versions.
The BPMN format models processes using flow and connecting objects
as well as swim lanes and artifacts. Flow objects include events, activities,
and gateways. Events are starting inputs or outcomes from an activity. An
ending event would be an outcome such as a completed report, a name
added to an invoice, or an inspection complete. The activity is the work
task done to produce the outcome. It could also be a subprocess with its
own activities, or a call activity that reuses a previous activity. The gateway
varies as a single ending event to a single starting event, a single ending
event to several more starting events or several ending events to a single
starting event. There are other components, rules, and conditions used by
the BPMN method. In summary, BPMN is a structured process-mapping
methodology that can be used by software algorithms to check model
accuracy and trace and measure transaction metrics including lead time.
Simulations can also be done using the model.
The SIPOC shown in Figure 5.10 is a good basis from which to begin
mapping a service process. It follows the BPMN approach relative to a
starting event, i.e., the activity or process and the ending event or output.
Other information such as conditional routing can also be added at the
next lower detail level. A service process has customer-facing and backend-
supporting components. Service processes without high automation or
self-service functions are characterized by high degrees of customer inter-
action, higher variation, higher services cost, low efficiency, high skills,
and variable capacity and demand. The implementation of Robotic Process
Automation (RPA) to standardize routine work tasks such as gathering
information and adding data during a customer transaction can reduce
or eliminate these characteristics while still providing differentiated cus-
tomer service through manual components of the interaction. Artificial
intelligence and self-service can help bridge final service gaps to provide
the differentiated service while also gaining the efficiency of back office
Component Description
Event The state at which a function starts or ends e.g. report created,
approved, name added.
Function The work tasks
Process path Shows connections to another process with its own event and
functions.
Organization The work tasks taking the input from the previous event and
Unit transforming it into the next event i.e. the output.
XOR Branch activates one path or another depending on the
condition.
V “Or” activates one or more paths.
Ʌ “And” requires two preceding events to close before a
subsequent event starts.
FIGURE 5.21
Event-Driven Process Chain (EPC) Shapes
processes. In contrast, back-office operations are highly standardized with

low variation, low transaction cost, low skill requirements because work
tasks are routine, and demand and capacity are predicable. Another differ-
entiating attribute is that customer-facing operations are near customers,
whereas back-office operations are remote from the customer.
Data collection will be different depending on where the improvement
team is focused. The data collection work will be more standardized, and
reporting systems more accurate in back-office supporting processes,
although in- person job shadowing and process analysis will always
be needed to validate information. In contrast, data collection in the
customer-facing portion of a process will be more complicated because
there will be several personas and use cases, even if portions of the pro-
cess are automated. The process will be more variable either because
associates do the same work with variation or customers engage the ser-
vice in a non-standard way. If a team needs to create a process map in a
system with both manual and automated work tasks for modeling, then
some data documentation will be taken from systems and the rest from
walking the process. Then the BPMN process method should be used to
standardize the information.
There are several software products developed to support the BPMN
structure. It is easy to create business processes using them and the mapping
is intelligent in that if a component is left out the software adds the missing
component to ensure the model is consistent form the starting event to
ending event. There is even more sophisticated software that integrates
with enterprise platforms and can trace transactions through systems
including the persona doing the work and the paths taken to complete it.
The transactions are also time stamped. The software is enterprise level and
can record hundreds of thousands of transactions. Their dashboards are
also easily configurable.
Formal process mapping is useful for moving to the next step in process
efficiency, i.e., RPA. If it is known that a persona such as salespeople take
a certain amount of time moving through a certain path, the software may
show a shorter one. Or if a path has repetitive work tasks it may be useful
to apply RPA to have the work done automatically. This enables a rapid
improvement team to move quickly from gathering process data and docu-
mentation through the analysis to solutioning.
DATA COLLECTION FOR SERVICES

Table 5.8 summarizes data collection strategies for services and supporting
processes. The VFM has already been discussed as a major tool for
gathering process data that typically is not available in current operational
reports. Collecting data to estimate production rates is done by counting
the transactions exiting the process and dividing by the hours or oper-
ation. This can be done by operation, time of day, job type, shift, employee,
customer, and other demographical factors. Ideally, the transaction can be
automatically time stamped throughout the process. People are “shadowed”
for several days, and their activity times are recorded at 15-minute time
increments. With respect to equipment, materials put into the equipment
could be measured or counters designed into equipment can be checked to
calculate production rates.
Scrap, rework, and downtime percentages are estimated by checking
financial and operational reports for material or direct labor waste.
Operational audits are done using interviews, email audits, and shadowing,
then counting the number of transactions that could not be used in pro-
duction (scrap) or had to be reworked divided by the total number of
transactions. For downtime, the estimate would be the amount of time
waiting divided by total production time. Measurement of the other key
operational metrics is described in Table 5.8.
MEASURING PROCESS COMPLEXITY

Operational complexity is measured using the metrics shown in Table 5.9.
These include item proliferation such as components, products, services,
people and machines, a high process or product non-value content, long
lead times that mask process issues, high variation in demand or any part
of a process, low productivity that requires expediting work, high cost that
is the result of process inefficiencies, and near misses relative to schedule,
milestones, personal injury, and similar events. Data collected for these
metrics helps reduce complexity when root causes are eliminated from a
process.
TABLE 5.8
Data Collection for Services
1. VA/NVA/ Create a value flow map Bring the team together and create the
BVA (VFM) of a process VFM using sticky notes on a wall.
workflow or a floor Then “walk-the-process” to verify
layout of a single work the VFM. Or build the map virtually
area. in EPC or BPMN format. If virtual,
apply analytical algorithms to trace
transactions and measure performance.
2. Production Count the transactions Manual operations can be measured using
rate (units/ exiting the process and data collection forms. If automation is
minute) or divide by the hours available, they may be time stamped and
operation of operation. This can algorithms applied for analysis. Virtual
cycle time be done by operation, transactions should be tracked using
time of day, job type, algorithms. Alternatively, an audit could
shift, employee, be done on completed transactions in
customer, and other emails by operation (sent mail).
demographical factors, Personal calendars will show meeting
which will enable a times which in many situations is
complete analysis. non-value adding. People can also
be “shadowed” for several days and
their activity times recorded at 15-
minute time increments. With respect
to equipment, materials into the
equipment could be measured or
counters designed into equipment can
be checked to calculate production rates.
3. Scrap% Count the number of Check financial and operational reports
transactions that for material or direct labor waste. Audit
needed to be replaced, operations through interviews, e-mail
i.e., not used in audits, and shadowing to identify scrap.
production, e.g.,
reports that were not
required, marketing
prototypes not sold, etc.
4. Rework% Count the number of Check financial and operational reports
transactions that for material or direct labor rework.
passed through process Audit operations through interviews,
operations more than email audits, and shadowing to identify
once, i.e., any work task rework.
with a prefix of “re”
such as re-analyze, re-
inspect, redo, etc.
(Continued)
TABLE 5.8
Cont.
5. Downtime Count the time people Check financial and operational
% wait for work, the reports for material, direct labor, and
system is idle, or other expenses related to downtime.
equipment is not Audit operations through interviews,
available. emails, and shadowing to identify
downtime.
6. Capacity Count the number Use a VFM with operational reports to
(units/ of units per time identify the bottleneck capacity under
minute) produced at the typical production conditions. If
system’s bottleneck operational reports are not available,
operation. conduct audits to obtain data. For
virtual processes apply analytics to
measure operational capacity.
7. Set-up Measure the time to Check operational reports for job set-
time setup a job at every up times. Audit operations through
(minutes) operation and interviews, emails, and shadowing to
especially at the identify job set-up.
bottleneck.
8. Inventory Measure the work waiting Check operational reports for inventory
(units in to be done at every levels (jobs waiting to be completed)
queue) operation. and estimate how long it will take to
complete these jobs. Audit operations
through interviews, email audits, and
shadowing to identify inventory levels.
9. Floor area Measure the floor area Review floor layouts and calculate area.
used by a process
including equipment
and people.
Once complexity is measured, projects can be created to reduce it using

many of the tools and methods discussed in this or earlier chapters. These
include simplifying, standardizing, and mistake-proofing operations and
applying specific Lean Six Sigma methods if applicable. These include
process batches, mixed model production, and others. Other complexity
reduction strategies are outsourcing or insourcing to reduce the number of
internally produced product and services, combining design features and
functions, or eliminating non-essential items and part numbers to simplify
operations.
CUSTOMER EXPERIENCE MAPPING

Customer Experience Mapping (CEM) was briefly discussed in the first
chapter. In this chapter we will focus on how to use CEM to collect rele-
vant information from customers to improve their experience. In most
situations, an internal team uses historical information and experience to
substitute their voice for the customer’s voice. While this is easy to do, it is
not accurate. The analogy would be to have managers build a VFM. They
have a good idea of how the work is done but because they do not do the
work their opinions are not completely accurate, especially for work they
do not know is being performed as workarounds, i.e., the hidden factory.
This is why the people doing the work every day are asked to build the
VFM. The CEM workshop is based on the same principle and brings in
customer employees that do perform roles, i.e., personas interacting with
the supplier’s employees at different points in the product and service
experience.
Figure 5.22 shows the CEM concept. A customer interacts and experiences
different parts of the supplier’s organization as they research products
and services to determine the best one based on performance, cost, and
other factors. The customer could access a suppliers’ website or discuss the
potential purchase with salespeople. These subprocesses have operations
and touch points. It is important to understand which operations meet
customer requirements, which ones have gaps that need to be closed and
where the experience can be further enhanced for customer loyalty. In the
research phase the goal is ease of finding relevant information for products
and services under consideration for purchase. The customer’s employees
with different roles, i.e., personas such as purchasing, legal, engineering,
and others have differing experiences and expectations.
The next phase after selecting the supplier, signing contracts, and working
to onboard the product or service is ease of purchase and installation.
These are also subprocesses with operations and customer touch points. In
the CEM workshop, the team walks these in sequence with the customer
personas to identify operations exceeding expectations and those with per-
formance gaps. The gaps will be prioritized at the end of the workshop and
assigned as Lean Six Sigma Agile Project Management (APM) or big data
analytics projects. These can be executed as rapid improvement events or
longer term projects of different types.
newgenrtpdf
TABLE 5.9

Measuring Process Complexity
Complexity Definition Tools/Methods for Analysis Strategy for Reducing Complexity
Measurement
Item proliferation A high number of raw material, Analyze the types and numbers of items Outsource or insource, reduce the
work-in-process (WIP) or using graphs, e.g., histograms, Pareto number of suppliers, combine
finished goods items. charts, and statistics. features and functions, eliminate
non-essential items and part
numbers.
High percentage NVA NVA operations are not needed by Value stream and value flow mapping, Simplify, standardize, and mistake-
operations (time) a customer, must be reworked, 5S, mistake-proofing. proof operations.
or are not physically changed.
Long lead times Varies by application. Value flow analysis, process wastes, Simplify, standardize and mistake-
total preventive maintenance (TPM) proof operations, process batch,
and other methods. mixed model production, and
others.
High demand Varies by application, but demand Histograms, Pareto charts, and time Reduce drivers of demand variation
variation which exceeds the average for a series models. using a root cause analysis.
time period by more than ±10%. Solutions vary by application.
Low productivity Complicated relationship, but, Analyze reasons for low revenue or high Reduce drivers of low productivity
generally outputs/inputs or costs. using a root cause analysis.
revenue/costs adjusted for Solutions vary by application.
inflation and measured year over
year.
Low asset utilization Turns ratios: annual COGS/ Asset ratios, e.g., inventory turns = Reduce lead time (improve quality,
average investment. COGS average monthly inventory reduce lot sizes, etc.) or reduce
investment. demand variation.
newgenrtpdf
TABLE 5.9
Cont.
High unit costs Costs exceeding standard, industry Analyze the types and numbers of items Outsource or insource, reduce the
average, or entitlement e.g., what using graphs, e.g., histograms, Pareto number of suppliers, combine
is possible through changes of charts, and statistics as well as value features and functions, simplify,
design and process. analysis. standardize, and apply best-in-
class design practices.
Near misses Events that could have but did not Reporting systems including policies Reduce drivers of near misses using
result in an accident. and procedures and analysis of the a root cause analysis. Solutions
types and numbers of near misses vary by application.
using graphs, e.g., histograms, Pareto
charts, and statistics.
Known issues Safety or other issues that have Reporting systems including policies Create continuous improvement
been identified by audits, and procedures and analysis of the (CI) projects.

previous analysis, or other types and numbers of near misses
methods. using graphs, e.g., histograms, Pareto
charts and statistics.
Accidents Reportable incidents that resulted Reporting systems including policies Create CI projects.
in injury, death, or property and procedures and analysis of the
damage. types and numbers of near misses
using graphs, e.g., histograms, Pareto
charts, and statistics.
Persona A Persona B Persona C Persona D
Dispose
Customer Purchase and
Use and
Research Installation
Refresh
•Ease of finding •Ease of purchase •Ease of use for •Ease of disposal

relevant including the expected life and recycling
information for ordering, of the product and •Ease of
products and shipment, and service replacement
services installation •Ease of servicing
including
maintenance
contracts

Walk the customer experience to

determine what is important to the
customer and where gaps exist from
the customer’s perspective.
FIGURE 5.22
Customer Experience Mapping
The next major step in the customer experience is using the product
or service. This is a complicated step that may have a duration of months
to several years. An example is disposable products such as cleaning
supplies that are consumed in weeks or months versus large appliances
that are used for several years. This is the most complicated part of the
customer experience because it depends on design, supplier production,
and service capabilities including maintenance contracts. There will be
several supplier teams interacting with the customer over many years.
Each of these is a subprocess having different operations. The CEM
workshop evaluates each subprocess and its operations relative to the
customer persona experience.
Finally, at the end of the useful life, there are disposal or recycling actions
that occur. The supplier should make this experience easy. Examples
include smart product and services that alert the supplier toward the end
of their life, providing disposable packaging with the purchase, i.e., return
to the supplier or incentives and rebates to properly dispose or recycle. The
goal is to also make the customer experience seamless at the end of the
useful life to promote a refresh or the purchase of new products or services.
Customer Experience Mapping is a powerful way to align supplier oper-
ational capabilities with customer needs to improve product and ser-
vice design and improve internal processes to increase competitiveness.
Another advantage of CEM is that parts of the process will be found to be
NVA from the customer perspective. These can be eliminated to reduce
cost, lead times, and internal operational complexity.
SUMMARY
needs to be an efficient data collection strategy. Data collection includes
data-gathering strategies, analytical tools and methods, and process sam-
pling. Several data collection templates were discussed to enable an effi-
cient collection of operational metrics. The goal was to gather information
to identify the root causes for process issues and to confirm improvements
were successful. Effective data collection also enables immediate process
improvements as well as creating project charters for assignment to future
rapid improvement events or as standalone projects. Job shadowing is an
important method to collect process data. It is easily adapted to analyzing
complex work. It is especially useful in data collection for non-standard
work tasks in virtual systems with people. Examples include service and
office workers and other professionals. It is useful for data collection
and analysis in processes characterized by many meetings, computer use,
and repetitive processes. Job shadowing is commonly used to track the
time components of complex professional jobs and work tasks.
This chapter also provided simple and easy to use data collection and
analysis tools and methods. These included various types of process
map, metric summarization templates, shadowing templates, a spaghetti
diagram, checklists, a C&E diagram, a 5- Why analysis, a histogram,
a Pareto chart, a box plot, scatter plots, time series graphs, and control
charts. Examples using some of the tools were presented at the end of the
chapter. In addition, the team collects management reports with financial
and operational data, process maps, floor layouts, and similar sources of
information to conduct an analysis of the root causes for process issues.
Once identified, root causes can be eliminated, and an improvement team
develops solutions or countermeasures using the Lean Six Sigma methods.
This chapter also presented several useful templates to aid data collection
and analysis. These can be modified as needed.
An important data collection tool for supply chains is the VSM or if
mapping a process, we use a VFM. A VSM creates a visual model of the
end-to-end process, i.e., supplier to customer including key operational
metrics. The advantages of using a “brown paper” exercise were also
shown. This is a hands-on and collaborative approach for creating a VSM
or VFM. Overlaying operational metrics onto a VSM or VFM is important
to identify gaps. Additional analyses are also applied by the team. These
include value analysis and the seven process wastes. Once the map is veri-
fied by “walking” the process, it becomes useful for further analysis as well
as documentation to support future quality and operational audits.
In manufacturing data collection such as VSMs and VFMs historically
focused on taking process snapshots. The processes varied from batch to
continuous. Rapid improvement teams would use these maps to move
through the process to take an operational metric snapshot and add this
information to either a floor layout if the focus was to improve a work area
or to either the VSM or VFM. The metrics gathered included throughput,
inventory, and others discussed in earlier chapters but at a supply chain or
process level. Data collection has now become more complicated for vir-
tual processes connecting IT systems and applications. The data collection
requires using software tools that extract data at various parts of the pro-
cess. Because of the size of databases, most processes are now high volume
or velocity.
This chapter discussed data collection for high- volume transaction
processes. The focus was on standardization of process mapping and vir-
tualization of these maps to align them to analytical tools to show how data
flows through systems. This includes rework paths and the systems and
data fields touched by users at system portals or user interfaces. Collecting
data using algorithms, i.e., bots, and manually shadowing the people doing
the manual work associated with the process is now the way improvement
teams work. This impacts the upfront planning and data collection as well
as the skills needed on the team.
We also discussed operational complexity. It is measured using the
metrics shown in Table 5.9. These include item proliferation such as
components, products, services, people and machines, a high process or
product non-value content, long lead times that mask process issues, high
variation in demand or any part of a process, low productivity that requires
expediting work, high cost that is the result of process inefficiencies, near
misses relative to schedule, milestones, personal injury, and similar events.
Data collected for these metrics helps reduce complexity when root causes
are eliminated from a process.
Customer Experience Mapping was also shown to be useful for collecting
relevant information from customers to improve their experience. In most
situations, an internal team uses historical information and experience
to substitute their voice for the customer’s voice. While this is easy to do,
it is not accurate. The analogy would be to have managers build a VFM.
They have a good idea of how the work is done but because they do not
do the work, their opinions are in accurate especially for work they do not
know is being performed as workarounds, i.e., the hidden factory. This is
why the people doing the work every day are asked to build the VFM. The
CEM workshop is based on the same principle and brings in customer
employees that do perform customer roles, i.e., personas interacting with
the supplier’s employees at different points in the product and service
experience.
6
Process Improvement
OVERVIEW
Process improvement continues to evolve. It is integral to the operational
strategy of every organization that needs to increase productivity and
competitiveness. As an organization’s processes become more virtualized,
automation and digitization become increasingly crucial for operational
efficiency and enhanced customer experience. The cost of service processes
is now most of the world’s gross domestic production (GDP). The virtual-
ization being driven by the transition to services increases process com-
plexity because data moves through many software systems and across
global teams, each doing part of the end-to-end work. Complicating the
design and operation of services systems is demand varied by customer,
i.e., persona and use case. The customer experience is variable unless auto-
mation such as self-service is deployed. In lieu of automation and self-
service, operations need to be standardized to provide a seamless customer
experience. Services cannot be stored like inventory, so there is one chance
to get them right, i.e., the moment of truth. Operations need to be well
designed and managed to provide a seamless customer experience
There are proven best practices to sustain improvements. Automation is a
first choice depending on solution implementation timing and investment
costs. Automation through either information technology (IT) investment
or by smaller scope software algorithms, i.e., Robotic Process Automation
(RPA), ensures work tasks are done the same way every time by a virtual
worker or algorithm. The cost after implementation is essentially zero,
and the work is error-free. Upfront automation properly designed will
enhance the customer experience. It also provides an opportunity for
self-service, which increases operational efficiency. Self-service provides
225
differentiated experiences to meet the needs of customer personas and use

cases. Examples include interactive voice response for customer decisions
and accessing portals to review and update their personal data. End-to-end
documentation is another best practice. A process playbook is an example.
This reference document includes policies, process maps, stakeholder con-
tact information, references (embedded files) for procedures, and other
information. In other words, everything is in one place to provide an
easily accessible reference for answering customer or internal operational
questions.
Testing and piloting solutions is also a best practice. This could be walking
an order through process steps with stakeholders to verify the work tasks
are correctly done. Or if features and functions are created using Agile
Project Management (APM) then working code can be demonstrated
to customers and stakeholders. Ideally if process modifications touch
customers, a subset of customers can be brought in to work with the team.
Testing before improvement implementation reduces failures and a need
for additional improvement projects.
Another way to test solutions is to re-engage with the customer experi-
ence map (CEM). This was discussed in Chapter 5 as a method for dir-
ectly gathering Voice of the Customer (VOC) data from customers.
Recall it is like end-to-end Value Stream Mapping (VSM) but from the
customer’s perspective. It is built together by the customer and supplier
teams. Walking a proposed solution along the CEM’s touchpoints with the
customer and evaluating its impact on different personas and use cases
help identify failure points. The resultant solutions will be more robust
and more likely to be used by the customer. Other best practices are to
envision the solutions without time, cost, or other constraints. Would the
recommended solutions change? How can the ideal solutions be attained?
Effective process improvement delivers significant benefits for an organiza-
tion. First, operational cycle or process lead time is reduced through simplifica-
tion, standardization, mistake-proofing, or redesign. Sales might be increased
if projects are customer facing, or internal operating costs are reduced if a
project’s focus is internally on operations. Asset utilization will also increase
but without waste. A characteristic of a Lean supply chain is high asset util-
ization to increase throughput, i.e., the quote to cash cycle time is reduced to
increase cash flow. These benefits reduce organizational risk and increase com-
petitiveness. Customer satisfaction also increases as a process becomes pre-
dictable providing a seamless experience. This promotes customer loyalty.
Process Improvement • 227
At this point in the project, solution implementation should be

supported by key stakeholders and the process owner. The improvement
team has communicate its work, i.e., completed the project charter, base-
line analysis, root cause analysis, and created recommended solutions.
This approach avoids potential problems of working on the wrong things,
and failure to gain stakeholder and process owner buy-in. The project’s
problem statement, scope, deliverables, and other information were clear
and agreed to upfront. In other words, the focus was on soft skills, e.g.,
socialization and gaining consensus and working as a team to complete the
project. The tools and methods are important but equally important are the
people and involving them in key parts of the project.
Improving a process starts with asking questions related to the why,
where, how, and who as well as the specific methods necessary to imple-
ment the improvements. The goal is to show how to link solutions or
countermeasures to the root cause analysis. In this chapter we will dis-
cuss process improvement using six examples found in service and office
operations. These are finance, accounting, sales and marketing, product
design, human resources, and procurement. They have been simplified to
show how to collect and analyze data to make improvements to them. The
chapter ends with a discussion of how to present the rapid improvement
team’s recommendations to leadership to gain support for implementation
with the help of the event sponsor and the process owner.
COMMON PROCESS CHANGES

An improvement team should “think outside the box” prior to jumping
into a solution discussion. This requires asking several clarifying questions
such as, “Should the work be done at all or done by whom? Should the work
be outsourced? Should it be modified or augmented to increase its value
content? Where should it be performed and by which team? Which role
should do the work? Should the work tasks be automated?” These types
of question and similar ones enable a team to achieve rapid productivity
gains. The elimination of operations and work tasks is a very effective way
to eliminate root causes from a process. Balancing the flow of materials
or information through a process relative to its bottleneck resource will
minimize abrupt changes to the process and increase its capacity. Also, in
a process which is balanced, people will not be working on unimportant

work tasks that are not directly related to higher throughput rates. In
a balanced process, there will also be fewer mistakes. But it may take
time and resources for an organization to be able to achieve this oper-
ational performance. The question of whether work should be done at
all leads to ideas to simplify and standardize the process by eliminating
operations, work tasks within the operations, or doing them elsewhere.
As an example, if the work is non-value adding (NVA), it can be directly
eliminated, so solutions do not need to be developed and resources can
be allocated elsewhere. Or perhaps reporting structures, roles, or pol-
icies should change. Other ideas depending on the project would be to
manage bottlenecks more efficiently or create modified process designs
and layouts.
The next question is “Where should the work be done?” This question
motivates a team to look for ways to move work to another area in their
facility, or to another facility, or to outsource it to another organization.
As an example, outsourcing would be useful if a process is dangerous or
difficult to control at its current location. Safety may require specialized
training, equipment, and other controls to be implemented. A supplier
may have the necessary technology to do the work more efficiently. In
office situations, perhaps, one part of an organization has a tax expert or
experts in intellectual property or compensation. Work tasks like these
can be moved to the right owners with the expertise. Or the work can be
outsourced. Work should be done where it will have the highest value con-
tent, be most profitable, and be done with minimum design and process
complexity. The third question is, “When should work be done?” Different
types of work are done at different times. It may be best to do work at cer-
tain times of a day or week. As an example, perhaps the set-up time for
a certain type of job is very long. It may make sense to do the set-up off
shift. Other examples include the refreshing of computer systems, database
backups and migrations, and other maintenance that is best done when
the workforce is not online or in the office. The question of when should
work be done also creates ideas to use different scheduling systems, e.g.,
mixed model scheduling. The application of mixed model scheduling to
minimize job set-ups also reduces workflow disruptions which may con-
tribute to long cycle times. Mixed model scheduling requires an extensive
redesign of products and services and their associated processes. To the

extent these design changes can be made, mixed model scheduling may
be an effective solution to reduce cycle time and cost. It has already been
mentioned that the deployment of transfer rather than production batches
is usually a good idea.
Questions around how best to do operations lead to several types of
solution including many of the tools and methods discussed in earlier
chapters, e.g., 5S, transfer batching, value added (VA) analysis, the seven
wastes, implementing maintenance systems, purchasing newer equipment,
and many other solutions depending on the circumstance. The previous
chapters described many other tools and methods useful for eliminating
root causes. The logic for asking questions before acting is that an improve-
ment team should first carefully consider all facts.
The last question, “Who should do the work?” motivates the team to
review organizational reporting structures that create functional silos and
NVA hand-offs from one person or team to another. Ensuring correct roles
and responsibilities and simplifying team interrelationships also simplifies
a process. This ensures teamwork and a single source or accountability for
process outcomes. It is an effective way to improve processes.
Processes will be more effective and efficient when they are designed to
meet customer and business requirements. Newly designed processes will
tend to have a higher VA content than older and misaligned ones. This is
because of customer value migration and the evolution of process com-
plexity as localized modifications are made without alignment to the larger
process. This is called the hidden factory. It consists of many unapproved
work tasks done outside of normal reporting. Process breakdowns are also
caused by ineffective or non-aligned operational and financial metrics that
drive the wrong behaviors. As an example, poorly aligned sales incentives
encourage the sale of the wrong products or those with low margins. This
increases work-in-process (WIP) inventory. Another issue is lost capacity
for products in demand and higher rework caused by schedule changes.
Depending on the type of improvement project, a team may also update
reporting systems to identify the waste associated with the hidden factory.
These systems should provide information on an exception basis and in an
easy to understand format. Aligned reporting systems will increase their
operational efficiency.
CONTROL TOOL EFFECTIVENESS AND SUSTAINABILITY

The effectiveness and sustainability of control tools vary. For this reason,
they are used in combination to ensure successful and sustainable outcomes.
Table 6.1 lists common control tools and compares their effectiveness and
sustainability. If a root cause is due to communication breakdowns between
functions then a modification of organizational reporting structures may
improve operational efficiency. Changing an organizational reporting
structure eliminates redundancies and inter-functional friction. This has
the effect of reducing miscommunication, long lead times, and mistakes.
Different functions or teams will have different performance metrics as well
as reward and recognition systems. Their goals may not be fully aligned.
An example would be the classic roles and responsibilities of sales versus
operations. Sales want to sell products, but operations must efficiently
produce them. The metrics driving the behavior of a sales organization and
operations need to be aligned to ensure the right products are efficiently
produced for sale. Modifying organizational structures, especially from
TABLE 6.1
Control Tool Effectiveness and Sustainability
Specific Process Changes Effectiveness Ability to Sustain
Modify organizational reporting structures High High
Eliminate portions of a process High High
Create new or modified process designs and High High
layouts
Purchase or design new types of equipment High High
Implement 5S, mistake-proofing, and similar Lean High Medium
methods
Statistical process control Medium Medium
Process audits and monitoring such as statistical Medium Medium
process control
Create new operational and financial metrics Medium Medium
Create new information reporting systems Medium Medium
Modify work, testing, inspection, maintenance, and Low Low
other procedures
Training programs Low Low
Verbal instructions Low Low
end to end rather than in isolation, tends to smoothen the flow of materials
and information.
Another very effective control method is the elimination of portions of a
process or a redesign including its operational work tasks. The effectiveness
and sustainability of this type of solution are also high. This is because if a
portion of a process can be eliminated, then lead time, cost, and quality issues
associated with the part of the process that is eliminated will disappear with
the reduction in process complexity. In a similar manner, if part of a process
can be redesigned to be less complex and mistake-proofed, then its efficiency
is increased. Common process redesigns include changes to equipment, the
layout of the process, the work, and inspection procedures as well as others.
Changes to operational and financial metrics could also be part of the
overall improvement strategy if they were found to be misleading. This type
of change has a medium level of effectiveness and sustainability because
people may not adhere to the measuring and reporting changes over time,
and there may be problems gathering data for timely reporting. Also, an
implementation of 5S and similar Lean methods is a very effective control
tool, but requiring daily attention to ensure sustainability.
Less sustainable controls are process audits, statistical process con-
trol, modification of work, testing, inspection, maintenance and other
procedures, training programs, group meetings, and verbal instructions.
Statistical process control is effective for monitoring and controlling
processes, but in some situations where it is manual it may be difficult
to sustain unless the variables being charted are critical for operations.
Audits are also useful process controls but lag the occurrence of errors.
Training while useful must be clearly aligned with the root cause analysis
and frequently updated to ensure people have the requisite skills to do their
work. Frequent training is required because new people are onboarded,
and others forget previous training information. There are effective ways
to keep people refreshed using system prompts such as drop-downs that
provide reminders on how to do work tasks. This type of training can
be deployed at a low cost and is easily kept current. Verbal instructions
are easily misunderstood and very difficult to sustain. The summary for
Table 6.1 is the most effective way to ensure process improvement is to
directly eliminate the root causes from the process. If this cannot be
done, then several improvement methods are often blended to create an
integrated solution.
ROOT CAUSE ANALYSIS AND IMPROVEMENT

STRATEGIES
In Chapter 5 we discussed several useful tools and methods for the collection
and analysis of process data. Lean tools and methods were discussed at the
beginning of Chapter 5, and simple analytical tools were presented at the
end of the chapter. In this section we will discuss a general methodology
useful for root cause analysis of process problems. This methodology is like
many improvement initiatives that start with a well-defined business case,
problem statement, and goal that focuses on data collection and analysis to
identify solutions to eliminate the root causes of a problem.
It is very easy to get wrong this first foundational step of a project. This
occurs when a project team is not diverse, does not use effective facilitation
and methods, and does not effectively communicate. It is important an
improvement team fully discusses all aspects of the process problem prior
to moving off on the root cause analysis. This is done by gathering all avail-
able information related to the problem and assigning roles and respon-
sibilities to team members. It is important to have a facilitator at team
meetings. The root cause analysis must drive all process improvements to
ensure a project’s success. The improvement team must prove a causal rela-
tionship between the project metrics and those of the root causes so the
improvements can be measured when changes are made to the process.
Countermeasures that require a high degree of manual intervention will
also require standardization of procedures, implementation of training
programs, and process audits. In addition, the relevant part of the pro-
cess should be mistake-proofed to the highest extent possible. The result of
these activities will be an improved measurement system, enhanced metric,
and process status reporting as well as a detailed process control plan.
Chapter 5 discussed a canceled order example. As an improvement
team collects and analyzes data for the reasons for canceled orders, their
root cause analysis extends down to lower levels. This concept is shown in
Figure 6.1, which is based on Tables 5.5 through 5.7 that showed canceled
orders were the major root cause of high inventory investment. Analyzing
canceled orders to the next lower level shows that late deliveries are the
next, second level root cause of high inventory investment. At this point
in the investigation, the team could update the project’s scope to focus on
late deliveries. The root cause analysis continues to identify the reasons for
From Tables 5.5, 5.6, and 5.7
1st Level–Canceled Orders

160
140
120
100
80
60
40
20
0
Canceled Schedule Late Large Lot Missing Quality
Order Change Deliveries Size Materials Issue
2nd Level–Late Deliveries

120
100
80
60
40
20
0
Late delivery Missed schedule Inaccurate Unknown
schedule
3rd Level–Customer Not Notified

80
70
60
50
40
30
20
10
0
Customer Not Incorrect Carrier Issue Unknown
Notified Invoice
FIGURE 6.1
Root Cause Analysis: Levels 1, 2, and 3
TABLE 6.2
Countermeasures at Third Level
Root Cause Incorrect Invoice Carrier Issue Customer Not
Notified
Countermeasure System match to Assign a specific Send an automatic
customer zip load/unload time email to customer
code for each carrier. when order is
shipped.
Savings $ 76,199 $ 61,911 $347,656
Start Date January February March
Project Cost $ 10,000 $ 6,000 $ 25,000
Benefits $ 66,199 $55,911 $322,656
Team Team 1 Team 4 Team 3
late deliveries. Table 6.2 shows that countermeasures or improvements are

applied at the third level root causes of high inventory investment. This
table also shows that implementation costs for each solution are subtracted
from the savings that each countermeasure contributes. Benefits are
gained when improvements can be executed according to the schedule.
It is important that the financial numbers are linked back to the original
estimates in the project charter.
The improvement team will also need to show evidence to the process
owner and leadership that the improvements are effective and sustain-
able. Figure 6.2 shows a visual approach to demonstrate improvement.
The graphs discussed in Chapter 5 can be updated to also show the before
and after improvement results. The graphs will need to be supported with
quantification and other proof of improvement. The top graph in Figure 6.2
shows processing time from Figure 5.17 in a different perspective. The
lower graph is downtime percentage using data from Figure 5.4.
ROBOTIC PROCESS AUTOMATION

Robotic Process Automation applies algorithms to eliminate repetitive and
manual work tasks that are based on logical business rules and have a high
transaction volume or are batched in volume. Properly done over many
work tasks the productivity increases are significant. Each bot in effect is
a virtual worker that produces standardized and error-free work without
Processing Time Reduction (Minutes)
Maximum Value
Minutes
75th Percentile
Median
25th Percentile
Minimum Value
Before After
Downtime Percentage
25
Before After
20
Downtime %
15
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Time Sequence
FIGURE 6.2
Graphs to Show Improvement
cost once implemented into a process. Like any process improvement ini-
tiative, there are sequential steps to effectively implement it with and roles
and responsibilities. To start, an organization needs to invest in training to
create the needed skills set and practically apply the tools and methods on
pilot projects. This is called creating an RPA foundation.
The foundation building begins when business owners request automa-
tion help to improve operational efficiency. The RPA and business owner
develop a project charter to scope the work and agree on the business
outcomes. The charter also includes resource requirements and the
schedule. During the project, the RPA team will work with the business
owner to document and analyze the process down to a work task level
of detail that includes capturing screen shots with data fields. Then the
sequence of changes to the data fields is documented to show how the
job is created in the current process. The algorithm or bot will follow a
similar sequence. As part of the analysis, the RPA team will identify the
work tasks that can be automated, i.e., are repetitive, have a business rule,
and have a high volume. The team needs to also understand the process
inputs and outputs, the metadata transformation rules, and data size and
type. Relative to database size, big data contains millions of records, and
they could be structured or unstructured. Structured data is parsed
and numeric. An example is Excel spreadsheet data. In contrast, unstruc-
tured data is text or other free format data. Robotic Process Automation
has throughput constraints when the workload exceeds cycle time. The
potential RPA solution needs to be analyzed under different use conditions
such as variations of transaction volume.
In this first phase of discovery and analysis, the team verifies metric
historical performance, i.e., the baselines. Information that is needed to
describe the process such as job aids, work instructions, and other infor-
mation is added to the SharePoint repository for analysis. After process
discovery and analysis, the bot is created and tested first as a pilot and, if
successful, it is scaled into production. In this transformation phase, the
cost benefit analysis is confirmed, and the outcomes and targets are verified.
Updated process documentation is also created. These include screenshots,
training aids, process flows, changes to roles and responsibilities, and the
cost benefit analysis. The original project charter is verified by the pro-
cess owner, and a plan to update the bot or macro is incorporated into the
business team’s roadmap planning. This is the beginning of the sustained
performance phase. Metric performance in the process will improve
because costs are lower, lead time is reduced, and errors are eliminated
from using the bots.
Robotic Process Automation is used in diverse processes and applications.
It is also used in service systems upfront when customers initiate the
service and it can route them to agents with the correct skills. Based on
rules, waiting time and queue prioritization can be changed if customers
wait too long. Robotic Process Automation is also used to help agents by
doing routine work tasks such as looking up information, automatically
filling out data fields, and checking data for accuracy. In the back-end
supporting processes, RPA helps process transactions as they occur or
by running them in large batches. Examples include processing invoices,
payroll, sending emails for routine training, and checking for compliance.
In these automated processes a bot would access several databases, some
of these are enterprise-level applications, and other data may be in Excel
files. The bot pulls the information needed for the work using established
business rules. In effect it acts as a virtual person, but its work is completely
standardized. There is also artificial intelligence (AI) that could be placed
on top of RPA, using algorithms to learn from customer interactions and
modifying the information and services provided to them.
How is this relevant to a rapid improvement event or project? In manufac-
turing and services, the implementation of process improvements in a virtual
process is done by modifying software code. To the extent there are manual
processes with high transaction costs, long lead times, or high error rates,
automation can be used to make the process improvements. The algorithms
are relatively low cost to develop and can be quickly implemented during or
after the event. This provides a similar result for focused localized manufac-
turing teams, i.e., rapid improvement. In contrast, if improvements require
significant investment, then a large amount of new code must be written, or
new software applications must be purchased. These improvements, while
end to end and transformative, take months and years. In summary, if vir-
tual process changes are envisioned to improve a service process, an RPA
expert should be on the improvement team.
AUTOMATING FOR SOLUTION SUSTAINABILITY

Most process issues occur because of human error. Examples include errors
in perception, poor training, an inability to consistently keep a process on
target, forgetfulness, fatigue, inability to move large or heavy objects, envir-
onmental risk, and others. Automation has been implemented in diverse
applications for decades. Examples include robots welding in manu-
facturing, software scripts that execute code to create reports, manage a
process, or apply analytics to help decision-making as well as the many
sensors on machines that control and relay data for analysis and control.
The application of automation to sustain process improvements is effective
if the root cause analysis is properly done. This is important to deploy the
correct algorithms. The advantages for automation include elimination of
routine manual work, building physical or virtual objects, data collection,
control of many interacting objects, and applying learning algorithms or

AI to enhance process performance. There are other applications for auto-
mation. It is especially advantageous when process complexity cannot be
eliminated but machines can do the work. Automation is also useful for
environments in which humans cannot work. Examples include handling
hazardous radiation, chemicals, or doing work in enclosed spaces or at
great height.
Automation can be expensive. But, if properly scoped and executed
the return on investment will be high. Because of its investment costs, an
automation roadmap needs to be created and aligned to an organization’s
IT roadmap that controls IT investment. Automation solutions also
impact recommended process improvements if they are heavily weighted
toward automation that requires a duration of months or years to imple-
ment. These may have an impact on an organization’s workers if auto-
mation eliminates current jobs. As a result, change management is
important when deploying automation or in fact any improvement that
touches people. In addition to effective communications, training is
required to show workers how to interact with new automation if there
are many interfaces to it. In fact, new skills may be needed to maintain
and update the algorithms. Change management also impacts the prod-
uctivity gained from automation. Studies show that the beneficial impact
of automation is increased several times when manual operations are
eliminated, and the remaining ones are effectively integrated into the
new automation.
A potential issue with automation is copying the current state process
with its non-essential complexity and rework paths. To avoid copying
an antiquated process it should be mapped and analyzed, and NVA
operations should be removed. This makes the automated process simpler
and less expensive to implement. Recall the hidden factory is the reality
of a process. Non-sanctioned operations and workarounds are added
over time creating a more complicated current state process. Customer
needs also change and processes sometimes do not always align with them
over time. Also, as employees leave an organization, knowledge of the
workarounds and why they were needed gets lost. New employees may
have little understanding of how a process operates. Because of these situ-
ations, process business rules and structure need to be examined based on
new requirements both externally facing to customers but also internally
facing for efficiency.
From a different perspective, processes are more complex because soft-

ware integrates many applications that are sources or consumers of data.
These have hundreds of business rules and interfacing manual operations.
Customer-facing operations have a higher proportion of manual operation
unless they are self-service. Artificial Intelligence can be applied to opti-
mize these relationships because humans cannot comprehend nor coord-
inate the incoming data that is high velocity, large volume, and differing
data formats, e.g., structured versus unstructured data. These are virtual
processes. Also, algorithms if properly designed do not make errors and
can process work at once by gathering all data and business rules. Rework
paths are eliminated. This is also the result of process analysis, which feeds
into the algorithms. Humans also have limitations for doing physical work
relative to moving large and heavy objects or being in dangerous environ-
ments. In summary, sustaining solutions through automation is one of the
most effective control strategies and is like redesign or elimination of work,
i.e., very sustainable.
EXAMPLES
In this section, we present several simplified processes common to both
manufacturing and service organizations. Reviewing these will show how
to analyze common operations. Also, they will show how the approach for
using tools varies by situation. In general, a good first step for analysis is
to map the physical process or work area to understand how materials and
information flow through it from workstation to workstation. A similar
approach is applied to virtual applications as data moves through IT systems
and applications. Information is layered onto the map through value ana-
lysis, considering the seven wastes and quantifying the map using metrics.
These were discussed in Chapter 3. Gaps or failure points are documented
using communication aids such as starbursts. Examples include scrap,
rework, maintenance, and similar process issues that are measured using
the metrics. Data collection, analysis, and reporting forms and reports are
also added at the bottom of the map to describe process breakdowns. The
critical path of the process is estimated, the team identifies the bottleneck
resource, and the process takt time is estimated to create an initial work
balance between the workstations. These actions will help identify process
waste that adds cost and time while decreasing quality. In aggregate they
will also provide an improvement team with a long list of improvement
opportunities to solve or provide a basis for future teams.
Example 1: Financial Forecasting

A finance process consists of several processes focused on the creation,
control, and reporting for financial statements and budgets. In some
organizations, forecasting also resides within the finance team. But it may
also reside in other teams such as marketing, operations, and logistics
depending on the organization. The process for creating an annualized
forecast involves several groups that periodically meet to review strategic
goals related to revenue forecasts. The first step of the financial forecasting
process is for the organization’s leadership team to set its revenue goals.
These typically are set as a percentage increase over the previous year
unless there are macroeconomic or industry reasons for setting it at a
different level. Starting with the high-level goal, lower level financial targets
are allocated down to every product and service by location. The financial
and operational forecast models are adjusted as needed. As part of the rev-
enue forecasting process, this planning team or steering committee decides
which products and services need to be sold as well as where and when they
should be promoted to meet their sales targets. Teams such as operations
and logistics provide information and recommendations to develop future
capacity to meet the strategic forecast goals.
Figure 6.3 shows an example of how this type of process works and
common places where it could break down. Process issues are miscommu-
nication between finance and other teams caused by inaccurate or missing
information. As an example, sales and marketing may forecast increases
in sales and revenue, but not have the path forward to practically achieve
them. New products and services may not occur, or competitors may take
market share. Sales incentives may also be poorly aligned. These process
issues would form the basis of projects because they have differing root
causes and solutions.
Poorly aligned sales incentives contribute to issues with selling the
wrong products and services. This causes higher inventory, missed
schedules, or lost sales. Inaccurate revenue forecasts are another potential
issue. This occurs if the parameters of the forecasting model are inaccurate
and if the historical basis used to construct a model abruptly changes or
Finance-Financial Forecasting
Leadership Team
Provide Financial Target

(Increase Sales Revenue
Start
by 5% Over Previous
Year)
Adjust Forecast by
Forecast All Items
Finance
Review Forecasts With Product Group and

and Locations at
Marketing and Sales as Linearly Allocate
+5% Over Prior
Well as Operations Percentages to an Item and
Year
Location Level
Master Production
Systems
Schedule (MPS) Offset

Forecasting
Over Short-term, Stop
Modules
Intermediate and Long-
term Time Horizons
Adjust Linear
Allocation Based on
Marketing
Sales and
Expected Sales by
Product Group
(Some Groups >5%
and Others <5%)
Operations
Provide Capacity
Guidelines/
Modify Capacity
Based on Forecasts
Logistics
Provide Inventory
Information to Offset
the Forecast
Operations Typical Issues

1. Provide financial targets Miscommunication, unrealistic targets result in wasted
capacity and lost sales.
2. Forecast revenue for Inaccurate parameter estimates or incorrect forecasting model
product group results in producing the wrong types or quantities of products.
3. Adjust revenue allocation Inaccurate sales estimates, biased allocations, gain or loss of
by product group major customers.
4. Estimate required capacity Inaccurate estimate of current and future capacity.
5. Estimate beginning and Inaccurate estimates of beginning inventory result in too much
ending inventory or too little production which drags down the financial forecast.
FIGURE 6.3
Example 1: Financial Forecasting
is not representative of future demand. Other issues are the loss of major
customers or unforeseen competitive threats. These situations can cause
the wrong types of product to be produced or services offered. These poten-
tial issues can be mitigated by formally communicating them through an
organization’s Sales and Operations Planning (S&OP) Team.
Additional process issues occur when estimates of current or future

capacity as well as beginning and ending inventory estimates are
inaccurate. Inaccurate estimates of beginning inventory result in too
much or too little production that drags down the financial forecast.
Valuation errors are caused by these process issues. These result in lower
customer satisfaction because of missed schedules or incomplete orders
as well as higher cost if products must be reproduced or ordered. Process
improvement projects can be created to resolve these issues. But because
of the end-to-end process complexity the data needs to be collected in
advance of a rapid improvement event. Because the participants are
the cross-functional teams shown in Figure 6.3 communications must
also be carefully managed. Longer duration projects require the same
information.
If inventory valuation accuracy was the focus of an improvement pro-
ject, it would start by obtaining a list of products with a stated book value.
Additional information includes inventory audit reports to provide visi-
bility to the product inventory accuracy. The information is collected by
item and location and summarized upward to a product family level. The
first activity the team will need to do is audit the inventory accounts to
determine where discrepancies exist. These form the basis for the improve-
ment work and future process control will be updated to include these
known issues. Inventory valuation accuracy is tied to the processes for
receiving the product, storing it, and auditing its value. This requires the
processes to be known and the team to add members familiar with these
inventory processes. The team will walk the processes and identify the gaps
causing valuation errors. Perhaps products are received but the quantities
are incorrect, or they are received damaged and the inventory records are
not updated. The team will then work through the activities described
in earlier chapters to create a charter, conduct a root cause analysis, and
develop solutions.
Example 2: Accounts Receivables

An accounts receivables process is one of several processes within an
accounting team. Other accounting functions include auditing and
accounts payables. Figure 6.4 shows an example of the accounts receiv-
able process. It consists of several operations that under various situations
could be problematic. Any one of these issues could serve as a basis for
a rapid improvement event. In the first step, a customer places an order

for a product or service. At this step, two common errors that occur are
incorrectly choosing the product or service and quantity. Then as the order
continues to be processed, additional errors include incorrect names,
addresses, and contact and payment information. The causes for errors
vary by organization and industry. Once an order is complete and ready
for shipment to a customer, it could have missing, surplus, or damaged
items. These could occur even after a dock audit was made.
Accounting-Receivables
Accounting
Accounting
System Invoice Sent to Order is
Creates Customer Closed
Invoice
No
Distribution
Order is Yes Order is

Received in Order Closed for
Order is Accuracy is
Distribution Processed Shipment to
Call Center Checked Customer
Freight Carrier
Order Is
Shipped to
Customer
No
Customer
Customer Places an Customer Order Yes Invoice is Paid

Start Order For Several Receives Checked for
to Supplier
Product and Quantities Order Accuracy
1. Customer places order Incorrect quantity or product is ordered
2. Order processing Incorrect names, addresses, item and amounts are entered into the
system or incorrectly converted by the system.
3. Order accuracy check prior to Failure to discover missing, surplus, or damaged items prior to
shipment shipment. Failure to protect order from the environment.
4. Order sent to customer Order is lost or portions of the order are lost, or arrive damaged or late.
5. Order receipt Customer fails to properly receive an order resulting in receipt of

damaged items, failure to discover missing or surplus items and related
issues.
6. Invoice creation Invoice is not created due to missing information or is created using
inaccurate information.
7. Invoice sent to customer Invoice sent to wrong customer or delivery not verified by supplier.
8. Invoice paid by customer Wrong amount, invoice received late.
FIGURE 6.4
Example 2: Accounts Receivables
As the order is transported to the customer, it could be lost or damaged

through poor handling by a carrier or if inadvertently exposed to the envir-
onment. When an order is received by a customer, it may arrive late. At this
final step in the process, a customer could introduce other errors to the
order. Their employees may not properly receive the order. This contributes
to receipt of damaged items, a failure to discover missing or surplus items,
and related issues. Once the order has been received by a customer, an
invoice is created by the supplier. An error may also occur at this step in
the process due to missing or inaccurate information. Errors at this step
in the process could cause an invoice being sent to a wrong customer or
there could be customer payment issues. An improvement team could be
assigned to work on any of these issues after prioritization.
Improvement projects that reduce the level of accounts receivables increase
cash flow because money is received sooner and is available to run the
business. If an organization borrows against is accounts receivable, then redu-
cing these incremental costs is also a benefit with interest savings. In some
industries such as government contracts, not invoicing in a timely manner,
e.g., 90 days, prevents a supplier from invoicing at all and the full cost of
the product or service must be written off. These are substantial losses. The
improvement process for reducing accounts receivables starts by listing the
numbers and types of accounts in different classes based on collection lead
times, e.g., less than 30 days, 31–60 days, 61–90 days, and greater than
90 days. The strategy is to look for common root causes for long lead times.
Invoices exceeding 90 days are outliers and may have common causes. This
type of project if successful will create significant benefits because these
collection accounts are normally written off after 90 days. The accounts
due in less than 90 days may have different root causes. The goal is to shift
these accounts inward toward the 30-day category.
Example 3: New Product Market Research

A major process within the marketing team is new product research.
This is a critical process because inaccurate marketing research results in
products and services not having needed features and functions. Although
marketing research is a complicated process, a simplified version is shown
in Figure 6.5. The first step is to estimate customer requirements. Potential
process issues include a failure to use efficient methods to obtain the VOC.
The VOC is identified through surveys and other data gathering methods.
Sales and Marketing-New Product Market Research
Customer Needs
Customer
New Concept
and Requirements
Acceptable? Yes
No
Gather the Voice

Marketing
of the Customer
Start
(VOC) by Market
Segment
Product Design
Product Design
Develop Concepts Develop
Develop Finalize New
to Review With Alternative Design Stop
Prototypes Design
Customer and Concepts
Marketing
Review New
Operations
Designs With
Operations to
Ensure They can
be Produced
1. Estimate customer needs and Lack of quantification or methodical survey methods used to
requirements obtain the voice-of-the-customer (VOC).
2. Gather the VOC Ineffective or inefficient survey choice of methods (emails,
interviews, focus groups, site visits, and similar data collection
methods).
3. Work with product design to All VOC information is not transmitted to product design or
translate VOC into design additional requirements are added which customers do not value
specifications and prototypes or need.
4. Review concepts with customers Failure to review new concepts with customers to obtain their
feedback in a methodical manner.
5. Develop alternative designs Failure to insist product design develop alternative designs
which meet customer and business requirements and their
characteristics be evaluated using structured methods.
FIGURE 6.5
Example 3: New Product Marketing Research
These were discussed in earlier chapters. If not properly done, the wrong
information will be collected, or it may be inaccurate. Survey methods
include measuring customer experience and sentiment through listening
posts. Examples include emails, interviews, focus groups, on-site visits,
social media monitoring, and similar data collection strategies.
Once the marketing team has gathered the VOC information, it works
with the product design team to translate the VOC into design concepts,
prototypes, and specifications. If the VOC information is incorrectly

translated, a new product or service will not meet customer requirements.
This causes lost sales and production issues. A different issue occurs if add-
itional requirements are added to a design that customers do not value or
need, i.e., over-processing. This practice increases the cost and lead time
of a new product or service and because of the added complexity creating
error conditions. A failure to properly review new concepts with customers
to obtain their feedback may result in a suboptimal design that is more
costly and less reliable than alternatives. A suboptimal design negatively
impacts sales and profit margins.
Process improvements events are applied at any of these steps in a new
product marketing process. The improvement team starts a preliminary
analysis of these issues and identifies the most prevalent and impactful
ones to focus on. Issues associated with the proliferation of features and
functions require a cross-functional team of design engineering and mar
keting specialists. Governance is needed to ensure approvals are req
uired to bring additional features and functions into an ongoing project.
Once the reasons for previous changes are analyzed the team will have a
good idea for scoping the improvement work.
Example 4: New Product Development

A new product development group coordinates the creation of products
or services by working at the functional interface with sales, marketing,
external customers, and operations. Figure 6.6 shows a simple view of a
new product development process. The goal of this process is to translate
customer needs and requirements accurately and efficiently into design
specifications including aesthetic features. A failure to use proper design
practices to simplify and standardize design features will result in a longer
time to market and higher unit cost. Issues could also occur if design is not
easily manufactured or, for services, easy to use by customers. Therefore, new
products and services are developed jointly with interdisciplinary teams.
Improvement teams are also very effective at functional interfaces to
help identify the root causes of issues and solutions. Building, testing, and
evaluating alternative designs using prototypes are another function of
these teams. Common issues occur when not using statistically based ana-
lytical methods or testing scenarios that do not correlate to the conditions
of actual product use. There could also be bill of material (BOM) or ser-
vice instruction errors. Finally, once released to production and sold,
Product Design-New Product Development

Product Design
Prototype Designs Finalize Design

Modify Design
Created Including Requirements Bill of
Based on
Start Specifications, Materials (BOM) and
Evaluation
Performance and Associated
Criteria
Aesthetic Requirements Specifications
No
Test and Evaluation
Prototypes
Tested Against Performance
Performance Requirements
Requirements Met?
Yes
Procurement
Coordinate Material
or Information Flow
Including Direct
Contract Labor
New Design
Operations
Released to
Stop
Operations AND
Supply Chain
Customer Demand Component Suppliers Standard

Management System and Ordering Systems Cost and
Systems
(or Master Production (or Master Requirements Bill of

Schedule MPS in Planning (MRP) in Materials
Manufacturing) Manufacturing) Files
1. Translate customer needs and Failure to use proper design practices to simplify, and
requirements in design specification as standardize design features. Also a failure to consider
well as aesthetic characteristics production capability.
2. Build, test, and evaluate prototypes Failure to use statistically based analytical methods or design
testing which correlates to actual customer product usage.
3. Create a bill of material (BOM) and Inaccurate BOMs.
detailed specifications for production
4. Coordinate issues related to design Failure to solicit design issues such as warranty, returned
changes goods, customer complaints, and production scrap, rework
low operational efficiencies.
FIGURE 6.6
Example 4: New Product Development
additional issues can occur. These include external concessions, e.g., war-
ranty, returned goods, customer complaints, and internal issues related to
production scrap, rework, and low operational efficiencies. New product
development teams have a critical responsibility for preventing and elim-
inating design-related issues.
The design process is complicated and there are numerous ways in

which failures occur. One type of project could be focused on reducing
the time to market new products and services. A different project might
focus on optimization of several outputs using a statistical model based
on careful experimentation. Design process related improvement projects
are classified loosely as focused on process simplification, standardization,
mistake-proofing, and others requiring models and experimentation to
reduce the time to market.
Example 5: Hiring Employees

Figure 6.7 shows a new employee hiring process. Important outcomes for
this process are the translation of hiring manager requirements into a job
description, the posting of the job description, coordinating interviews
between job applicants and the hiring manager, and onboarding of a
new employee. Each of these actions is a subprocess consisting of lower
level work tasks. Common process issues are a failure to accurately cap-
ture job requirements including required skills, the start date, education,
and other relevant factors from the hiring manager. Errors start to occur
when creating the job description, advertising for it, and interviewing
job applicants not acceptable to a hiring manager causing a longer hiring
lead to on board new employees and higher cost. The coordination of
the interviewing or onboarding processes could be poorly done resulting
in applicant, new employee, or hiring manager dissatisfaction. Process
improvements can be applied to any of these process steps to identify and
eliminate the root causes of the process issues. A new hiring example was
also discussed in Chapter 2 showing strategies for reducing onboarding
lead time, improving the percentage of applicants hired, and reducing the
associated onboarded costs.
Example 6: Supplier Performance Management

A Supplier Performance Management (SPM) process is critical for pro-
viding suppliers with the information needed to improve performance.
Measured performance increases competition between suppliers which
lowers material, labor, and other procurement costs. Figure 6.8 shows a
simple SPM process. It starts by developing an approved supplier list
considering supplier capabilities evaluated by a cross-functional audit
team. Issues could occur during the vetting process. Issues could occur if a
Human Resources-Hiring Employees

Hiring Manager
Hiring
Job
Manager Job Hiring Yes
Description
Requests an Description is Manager Candidate is
Start Reviewed by Stop
Employee Accurate Interviews Acceptable
Hiring
Using a Job No Candidate
Manager Yes
Requisition
Yes No
Human Resources
Verifies Human
If no Internal
Required Job Resources Does
Job Candidate Human
Skills, Pay Retrieves Candidate No Job
Description Advertising Copy Resources
Rates and Standard Job Meet Job Requisition is
is Posted is Created for Notifies
Compares to Description or Requirements? Complete
Internally Newspaper, Web Candidate
Organization Creates a New
or Other Means
Policies Description
Advertising
Job is
Advertised
Potential Employee
Internal Yes
Candidate External
Candidate
Responds to Candidate
Accepts Job
Advertisement Responds to
Advertisement
No
1. Translate hiring manager requirements into job Inaccurate capture of job requirements such as skill
description levels, start date, education, or other relevant factors
results in wrong job applicants.
2. Post the job description to attract job applicants Ineffective communication vehicles for the type of
job or the applicant pool.
3. Coordinate job applicant interview process Poor coordination between the hiring manager
and job applicant results in a loss of applicants or
long cycle time.
4. Coordinate onboarding of new employee Ineffective onboarding results in employee or
hiring manager dissatisfaction.
FIGURE 6.7
Example 5: Hiring Employees
supplier’s capabilities or financial position are overstated. Failure to prop-

erly evaluate a supplier’s capability from a cross-functional perspective such
as design, logistics, finance, and other teams causes problems in the future.
In the second step, issues caused by poor communication to suppliers may
increase procurement costs and the lead time to receive goods or services.
Other issues occur because of poor coordination between suppliers and
internal teams. An ineffective or inefficient supplier rating system prevents
suppliers from improving performance. This decreases supply chain oper-
ational efficiency.
Procurement-Supplier Performance Management (SPM)
Supplier Receives
Supplier
Order for Information, Supplier Makes

Contract Labor or Improvements
Materials
Procurement
Coordinate Material or
Information Flow
Including Direct
Contract labor
Yes
Operations
Operations
Produces Supplier
Product Stop
Issue?
Designs
No
Product Design
Finalize Product Design or Make

Customer Changes to Current Designs and
Start Requirements Update the Requirements Bill of
Received Materials (BOM) and Associated
Specifications
Customer Demand Component Suppliers

Systems
Management System and Ordering Systems Standard Cost

(or Master Production (or Master and Bill of
Schedule MPS in Requirements Planning Materials Files
Manufacturing) (MRP) in Manufacturing)
1. Develop approved supplier Failure to develop a system to rate and approve suppliers results in
listing higher procurement cost as well as delivery issues.
2. Source suppliers Poor communication to suppliers results in inaccurate information
conveyed to suppliers or cycle times may be extended unnecessarily.
3. Coordinate suppliers across Poor coordination results in a failure to evaluate a supplier from
the organization several organizational perspectives including design, logistics, finance,
and customers.
4. Evaluate supplier performance Ineffective or inefficient supplier rating systems fail to provide
suppliers with information necessary to improve their performance.
FIGURE 6.8
Example 6: Supplier Performance Management (SPM)
Supply chains are complicated and consist of many supplying

organizations. Improvement opportunities occur at organizational
interfaces. Many chronic problems exist because organizations are intern-
ally focused. Unknown to them are the many interorganizational issues
caused by miscommunications and historical requirements that are no
longer relevant. As an example, perhaps a customer has a specific testing
requirement that causes the supplier to do internal rework. But this
requirement was based on previous products and no longer relevant.
Conversations about these types of issue and making improvements to
eliminate them can create significant efficiencies and benefits for both
organizations. In earlier chapters we discussed creating a CEM and walking

the process with the customer as a key method for identifying gaps and
reducing interorganizational friction.
IDENTIFYING AND PRIORITIZING IMPROVEMENTS

Projects need to be aligned with business goals and prioritized relative
to several factors including benefits as well as resource requirements.
Figure 6.9 shows one example of a project issue that is flagged as a potential
process improvement opportunity. It is taken from the sales and marketing
example. A rapid improvement team could expand the idea into a charter
and then quickly solve it if the right team members are available. Rapid
improvement teams create these lists of issues in parallel as they analyze
Rapid Improvement Event

Opportunity Worksheet
Date: Project Number:
Process Workflow: Sales and Marketing New Product Introduction
Process Owner:
Team Leader:
Team Members:
Opportunity: Improve the process for translating sales information to design engineering.
Problem Statement: Root Causes: Required Actions:

All VOC information is not transmitted to
product design or additional requirements
are added which customers do not value or
need.
Current Performance: Future Performance: Anticipated Benefits:

Insert metrics, charts, and graphs to show If historical information is
current performance baselines of known this can be taken form
operational, financial, and other metrics. the project's charter.
FIGURE 6.9
Improvement Worksheet –Sales and Marketing/VOC Translation
a process. This provides a strong incentive for an organization to provide

resources to deploy to future events. Eventually the root causes, required
actions, and future performance of the example shown in Figure 6.9 will
be vetted by another team if there is no time to complete them in the
current event.
If there are several issues these can be prioritized for action either by the
current team or a future one. Figure 6.10 shows a prioritization matrix of
the issues that might be found for the sales and marketing example. Recall
we used a similar version in Chapter 5 to prioritize improvements. The
issues shown in Figure 6.10 are a lack of VOC quantification, reviewing
design concepts with customers, accurate VOC information not given to
product design, a failure to identify alternative designs, deploying non-
optimum survey methods, and adding specifications not essential to
10 9 7 9 9 10 9 9 9
Rating of Importance to Customer
1 2 3 4 5 6 7 8 9
Customer Satisfaction
Customer Complaints
Original Sequence
Design Labor Cost

Returned Goods
Warranty Cost
Rework Costs
Standard Cost
Cycle Time
Scrap Cost
Issue Total
6 Lack of VOC quantification 6 7 8 7 6 7 8 6 9 573

Reviewing design concepts with
4 9 7 7 8 8 9 4 5 5 562
customers
VOC information not given to
1 6 6 7 8 7 6 7 7 8 556
design
5 Lack of alternative designs 8 6 5 4 4 7 4 3 6 428
2 Incorrect survey methods 4 3 5 5 6 5 5 3 5 368
3 Non-essential information added 3 7 6 3 4 3 3 2 7 336
Total 360 324 266 315 315 370 279 234 360
FIGURE 6.10
Prioritizing Sales and Marketing Issues
meeting customer requirements. The prioritization produces a weighted

total that is used to identify issues having the highest impact relative to
customer and business requirements.
Table 6.3 summarizes the improvement strategy. The team continu-
ously forms questions as new information is gathered and analyzed. The
questions in Table 6.3 were discussed earlier in this chapter for the solution
phase of the project. Many other questions were asked throughout the pro-
ject. The list of solutions while not complete shows how they are applied
to eliminate root causes across projects. Some projects apply one solution
and others several. These span different teams. As an example, managing
a bottleneck is a solution used for any process in which throughput is
TABLE 6.3
Common Process Improvements
Topic Comment
General Questions Should the work be performed?
Where should an operation be performed?
When should an operation be performed?
How should an operation be best performed?
Who should do the work?
Example Solutions Eliminate operations and work tasks.
Manage bottlenecks to maximize materials and information
throughput rates.
Apply mixed model scheduling to minimize job set-ups.
Deploy transfer rather than production batches.
Implement 5S, mistake-proofing, and similar Lean methods as well
as Six Sigma methods. Audits Control Charts.
Modify work, testing, inspection, maintenance, and other
procedures.
Modify training programs.
Provide verbal instructions.
Modify organizational reporting structures, modify roles and
responsibilities.
Create new or modify process designs and layouts.
Create new operational and financial metrics.
Create new information reporting systems.
Purchase or design new types of equipment.
constrained. The same concept applies to mix model scheduling if several

jobs need to be processed. This method was shown in earlier chapters to
reduce lead time by scheduling products more frequently. Transfer batch
applications can also be applied to processes building orders, using several
operations to reduce lead times by more than 50%. Work standardization,
5S, audits, control charting, and other solutions are also applied for process
improvement.
The next set of improvement examples includes modifications to
reporting structures. Some process issues are caused by friction between
teams or poor alignment between stakeholders. The result is work does
not get done or it is completed in ways that do not solve a problem.
This is also true for changes to roles and responsibilities. These can be
effective across several teams to improve communications and work
effectiveness. Another effective solution type is redesigning a product,
service, or supporting process. The advantage of redesign is that with a
fresh perspective, the NVA features and functions of a product or pro-
cess can be eliminated. The seven process wastes are also a good solution
for most process issues. These solutions create a simpler process with the
associated advantages of lower cost and higher quality. Supporting these
process changes would be new or updated reporting that provides visi-
bility to what is important for further improving and managing the pro-
cess. Finally, replacing equipment that is old and cannot produce work
at the required quality level or production rates will greatly improve pro-
cess performance. This equipment could be a machine or IT platform
and software applications.
SUMMARY
Improving a process starts by asking questions related to the why, where,
how, and who as well as the specific methods necessary to implement
the improvements. The goal is to link solutions or countermeasures to
the root cause analysis. An improvement team should “think outside the
box” prior to jumping into a solution discussion. This requires asking
several clarifying questions such as, “Should the work be done at all or
done by whom? Should the work be outsourced? Should it be modified or
augmented to increase its value content? Where should it be performed
and by which team? Which role should do the work? Should the work tasks
be automated?” These types of question and similar ones enable a team to
achieve rapid productivity gains. The elimination of operations and work
tasks is a very effective way to eliminate root causes from a process.
The effectiveness and sustainability of control tools vary. For this
reason, they are used in combination to ensure successful and sus-
tainable outcomes. Table 6.1 lists common control tools and compares
their effectiveness and sustainability. One very effective control method
is the elimination of portions of a process or a redesign to eliminate
operations. The effectiveness and sustainability of this solution are also
high. If a portion of a process can be eliminated then lead time, cost,
and quality issues associated with it will also be eliminated, reducing
process complexity. In a similar manner, if part of a process can be
redesigned to be less complex and mistake-proofed then its efficiency
is increased. Common redesigns are updates to product and process,
changes to equipment, the layout of the process, the work and inspec-
tion procedures as well as others.
We also discussed RPA. Robotic Process Automation applies algorithms
to eliminate repetitive and manual work tasks that are based on logical
business rules and have a high transaction volume or are batched in volume.
Properly done over many work tasks the productivity increases are sig-
nificant. Each bot is in effect a virtual worker that produces standardized
and error-free work without cost once implemented into a process. Like
any process improvement initiative, there are sequential steps to effectively
implement it. To start, an organization needs to invest in training to create
the needed skills set and practically apply the tools and methods on pilot
projects. This is called creating an RPA foundation.
Several simplified processes were discussed to show how to analyze
operations. The solutions differed because although each application used
common tools there were differences in root causes. It is also important
an improvement team fully discuss all aspects of the process issue prior to
moving off on the root cause analysis. This is done by gathering all avail-
able information related to the issue and assigning roles and responsi-
bilities to team members. The root cause analysis must drive all process
improvements to ensure a project’s success. The improvement team must
prove a causal relationship between the project metrics and those of the
root causes so the improvements can be measured when changes are made
to the process. Newly designed processes will tend to have a higher value
adding content then older and misaligned ones. This is because of cus-
tomer value migration and the evolution of process complexity as localized
modifications are made without alignment with the larger process. This is
called the hidden factory. It consists of many unapproved work tasks done
outside of normal reporting.
Step 3
Implementing Solutions
7
Building a Case for Change
OVERVIEW
Lean Six Sigma encourages teams to think differently, work differently,
ask questions to challenge the status quo, make decisions with facts and
data, and use new tools and methodologies to achieve business benefits.
Rapid improvement events and Agile Project Management (APM) make
these happen faster. Success helps transform an organization to prac-
tice new behaviors. It is not easy to transform. Many organizations fail to
sustain the initiative they start. There are success factors that will enable
effective change within an organization. In earlier chapters, we discussed
the importance of operational alignment to strategy. This is necessary to
ensure there is an urgency for the projects selected for deployment using
Lean Six Sigma or related initiatives such as big data analytics. Leadership
must want to deploy an initiative to meet annual goals. This is how it
becomes prioritized and provided with resources. If the projects are
aligned and properly selected more people will believe in the initiative and
join it. This is the start for forming a critical mass of users of the new tools
and methods. It is called a coalition as opposed to isolated improvements
made by a few people. This ensures an initiative is part of an overall oper-
ational strategy. There should also be a vision tied to strategy. Initiatives
should not exist for a few quarters or years. There needs to be visibility to
what will happen in the future to help an organization plan for continuous
change. This chapter discusses building a case for change by producing
real benefits from initiatives such as Lean and Six Sigma. This requires that
proper change management, communications, and control elements be put
in place prior to the end of a rapid improvement event or project as well
as presentations to leadership, the process owner, and other stakeholders.
259
260 • Implementing Solutions
This helps effectively transition the improved process back to its owner.
Our discussion will focus on these topics.
How do we effect change? People need to have a reason to do things dif-
ferently if the current system has worked reasonably well. In fact, people
change for two reasons. First, when there is a burning platform forcing
the need to change the way things are being done or the business will
fail, major customers will be lost, the supply chain will be disrupted, and
other significant disruptive events are eminent. The second reason people
change is through logical thought and engagement using facts to convince
them that although there is no burning platform today, it will arrive in the
future, and the most effective strategy is solving for it today. This requires
building a case for change by setting competitive performance targets that
will be relevant to the foreseeable future, in other words, to lead and not
follow.
In previous chapters we also discussed a proven method to effect change.
Change occurs when a future state can be envisioned and then compared to
the current state to identify where changes are needed. The gaps are closed
through projects that teach associates new skills and eliminate chronic
problems that erode productivity and competitiveness. The methodology
is fact-based and aligned to operational strategy. The case for change is
reinforced by an improvement team’s work as also when it is consolidated
with the work of other teams. The cumulative benefits for an organization
can be significant. This builds credibility by aligning to the right solutions.
The argument for change should be rational, and the benefits easily seen by
envisioning the future state and then executing a practical project to move
toward it.
Studies have shown that successful change initiatives have success
attributes. First, employees need to use an initiative’s tools and methods.
This occurs when people see benefits and the tools and methods make
work easier for them. This is called practicing new behaviors. To prac-
tice new behaviors work must be changed through beneficial projects
that align with value, create a process that is simpler, more standardized,
mistake-proofed, and even automated than the previous one. Sustaining
improvements requires ensuring the correct things are changed in a pro-
cess. Effective change is a combination of factors called the change effect-
iveness relationship. It begins with a project’s alignment with leadership’s
strategic goals to ensure a project is important to stakeholders and receives
the support including resources. Different projects, having different root
Building a Case for Change • 261
causes, require diverse analytical tools. A data-intensive root cause ana-

lysis requires the use of Six Sigma tools or big data analytics. In contrast,
a process that needs to be simplified, standardized, and mistake-proofed
requires Lean tools and methods. Once the root causes of a process issue
are identified, then solutions for specific process improvements tied to the
root cause analysis can be deployed to eliminate the issue. Solutions are
eventually incorporated into a control plan to ensure sustained project
benefits. Change occurs as projects are implemented and the teams learn
to work more effectively.
Communication is an important success factor for effective change.
Messages need to be crafted for the audience at each level of an organ-
ization. Complicated and politically sensitive information should
be communicated through one- on- one meetings while simple and
straightforward changes that have a high degree of consensus can be
communicated using emails. Implicit in a culture that promotes change is
an assumption that improvement teams are empowered within the scope
of their project charter to investigate and eliminate process issues. This
assumption is strengthened when teams are aware of the importance of
change management and actively use methods that promote it. An organ-
ization should also ensure effective reward and recognition systems that
promote teamwork and the specific changes that create benefits for it.
PSYCHOLOGY OF GROUPS
Organizations consist of formal and informal groups that promote or
inhibit change initiatives. These groups must be convinced the change ini-
tiative is beneficial to the organization as well as their groups and individu-
ally to them. Groups have biases that influence the types of work activity
they support, the priority of these activities, and ways they should be done.
In other words, they express approval or disapproval for changes to the
status quo. Effective change programs know groups have cultures. This
is why tools and methods are used to understand their perspectives and
make modifications to the planned approach for deploying an initiative,
its projects, and for recommending process changes. Communications,
stakeholder analysis, resistance analysis, and similar methods are facilita-
tive and designed to obtain a broad-based consensus for change to ensure
goals are achieved according to plan. These are persuasive methods used to
influence adoption of new ideas and attitudes.
Changes are also influenced by social cognition. Groups within an
organization filter out unfamiliar patterns. These patterns include the way
work is organized, managed, and done, i.e., this is how we do things. Prior
success convinces people that change is not needed and creates compla-
cency. It is exacerbated when groups or teams are not diverse and do not
use facilitative methods. The wrong questions will be asked, and solutions
will be implemented. This type of dysfunctionality impacts almost every-
thing a team will do starting with its scope, deliverables, and the root cause
analysis and solutions.
Within a team, there are also individual barriers to change. These are
related to self-concept or self-esteem when people compare themselves to
others. This influences individual behavior and team dynamics. The prac-
tical result is individuals may embrace or refuse to participate in change
activities. Full participation from all team members is required when
considering decisions for scope, deliverables, root cause analysis, and
solutions. Facilitation to ensure everyone has a role and contributes equally
can mitigate this potential barrier to change.
Cognitive dissonance is another individual attribute. Dissonance occurs
if there are inconsistencies between personal actions and beliefs or if people
are asked to do things they do not believe in. The best strategy is to be
transparent with all information for the initiative or project. Showing how
they worked in other applications and the potential benefits from adopting
them in the current organization may help overcome individual resistance
to change. Dysfunctional behaviors are apparent when team members
leave a group, leak information, fail to do assigned work tasks, and do not
support other team activities.
In summary, interpersonal interactions and beliefs will need to be
managed for effective change. Team performance depends on acceptance
of the team’s norms, i.e., the rule for how the team will work with each
other and stakeholders. These norms differentiate one team from another.
Team members have differing reasons for joining an improvement team
based on perceived value of rewards and recognition. People need to see
benefits from associating together as a team, or they will work on other
priorities.
CHANGE READINESS
The effectiveness of a change initiative also depends on the technology that
is deployed to make changes as well as diffusion into an organization’s cul-
ture. Technology is the basis for the tools and methods associated with
an initiative. When properly implemented, they should produce results,
i.e., projects producing benefits and employees whose skills are enhanced
from education and practical application of them. Cultural diffusion
starts upfront when the initiative is communicated, and the first projects
are selected to test its concepts. Several topics form the basis for cultural
diffusion and change. These are correct project scope, communicating the
current state, and identifying the actions needed to move from the current
state to an interim state and then on to the future state. Important ana-
lyses include stakeholder analysis, resistance analysis, understanding roles
and responsibilities, system analysis, and communication planning to
help move a process to its future state by gaining organizational support.
Using change readiness tools ensures a smooth project transition from the
improvement team to the process owner with a final benefit verification.
This helps accelerate cultural diffusion.
An advantage of a well- structured improvement method is that it
begins with a well-defined business case and logically works through data
collection and the root cause analysis to implement solutions. This promotes
cooperation between teams, the process owner, and the local work team.
As a result, process improvements have a good chance of being successfully
implemented and sustained. But there are other important considerations
that may help or hinder process changes. The process owner and work
team may have identified ways to improve a process, but some stakeholders
may not agree with these solutions for a variety of reasons. Perhaps the
solutions require resources that are currently needed elsewhere. Or there
may be other operational priorities. It may not be possible to obtain the
resources needed to immediately deploy the solutions. Therefore, upfront
alignment with stakeholders, benefits, and a correct root cause analysis is
important, but circumstances can change.
There are several success criteria that increase the likelihood a project
will be supported by stakeholders. In earlier chapters, we made the case
that all project work in an organization must align with leadership’s goals
because resources are scarce and there are other competing projects at any
given time. It may also be true that some of these competing projects have
higher benefits than a project planned by an improvement team. Another
important consideration is the specific types of process improvement.
Some require more investment of time and resources than others. This
implies that not every solution can always be implemented. Employees
should also be working on projects integrated with their personal annual
performance plans to provide the proper incentives for the work. That is,
they should be aligned to the project and its outcomes. Incentives include
promotions, bonuses, pay increases, reward and recognition systems as
well as other perks that support projects or drive the correct supporting
behaviors.
At any given time in an organization, there are other competing pri-
orities from the numerous programs and initiatives needed to increase
competitiveness. There will always be stakeholders pursuing their team’s
interests and sometimes to the detriment of other teams or projects. People
are also very busy with day-to-day work. There will also be individuals that
do not agree with the approach for a given initiative, or its projects and
recommendations. This is especially true if improvements such as policy,
roles, and responsibilities as well as process changes negatively impact an
individual or their team. It is important to understand and develop mitiga-
tion plans for these organizational barriers to change that impede project
identification, deployment, and execution. Barriers to change are called
restraining forces. The change management goal is to decrease the impact
of restraining forces while increasing the impact of promoting forces to
ensure projects are supported. An analysis can be made to classify the
restraining forces and work in ways that negate or turn them into pro-
moting forces. Promoting forces can also be analyzed to enhance them.
The classifications that should be considered in this analysis include struc-
tural, technological, cultural, economic, and other organizational barriers
to changes. There may also be communication problems.
Communication is essential, especially in larger organizations, to pro-
vide information of the benefits an initiative’s projects provide and how
they fit into the organization and with other initiatives. Communications
need to be simple with a consistent message and targeted to each audience.
There may be an initial communication to leadership. This initial commu-
nication would be followed by information to other stakeholders. Perhaps
a monthly email would be sent, and internal websites updated. Managers
would also need to reinforce the messaging each day. As an initiative
is executed project-by-project over time, its benefits will accumulate.

Messaging should promote this success. Successes are also communicated
as they occur through reward and recognition systems aligned to support
the overall change process represented by an initiative and its projects.
Another success attribute for effective change are well-defined roles
and responsibilities that are easy to interpret. Defined roles and respon-
sibilities reduce organizational friction and promote teamwork. Some
initiatives have unique roles and responsibilities or use language that
may be new. Examples include Black Belts, Six Sigma, Lean Sensei,
champion, APM, and other terms. Process changes and benefits should
also have direct benefits from using the new tools and methods. If other
initiatives create similar solutions and perhaps more easily, then the
current initiative may not be the best fit for an organization at this time
or in its current form. Process controls are another success factor that
needs to be fully integrated into the performance management and con-
trol systems of the organization to ensure work is correctly measured
and reported in a standard way. They promote continuous improve-
ment and provide an insight as to how an initiative’s deployment can be
improved.
PROJECT TRANSITION
Implementing process controls is the first step for the transition of a pro-
ject back to the process owner and local team. Transitions proceed more
smoothly if recommendations and solutions are correctly tied to the
root cause analysis and process controls are designed to sustain them.
As the team begins to transition its work, questions need to be answered.
The first question is “Have all control systems and reaction plans been
documented?” This is important because for work to be standardized
it must be incorporated into an organization’s measurement, control,
and reporting systems. Surprisingly, there are many of these software
applications in a typical organization. In one organization we worked
with there were more than 30 separate applications that needed to be
updated based on process improvements. Examples include work center
or cost center reports, auditing systems, workflow systems, and the many
applications that control training, associates’ pay, benefits, and incentives.
There are also management reports that aggregate upward to report rev-
enue, costs, and the categories within them.
The second transition question is “Have people been trained to use
the new process controls?” Effective controls are integrated into a con-
trol strategy and plan. Training is always part of a control strategy with
robust controls such as elimination of operations that caused the original
issues, audits, and other controls shown in Table 6.1. Because the process
has changed, training needs to also reflect these changes. To the extent
training is implemented, it should be the right content, frequency, and in
the most effective format to make it seamless and easy to use. An example
is sending workers periodic emails with a link to training content. Often
these are a few slides with a quiz. Compliance is easy to monitor using an
online system and changes to the content can be easily made. But training
may be needed in person. Examples include 5S, process audits, and other
hands-on training that are best done in person.
The third question is, “Can the process controls be sustained day-to-
day?” It is important to ensure that a team has a consensus with the pro-
cess owner regarding the problem and the solutions. To ensure solutions
are sustainable, they must be easy to use and be effective. Referencing
Table 6.1, some of the solution strategies are easier to sustain than others.
Eliminating operations that caused the original problem reduces process
complexity and requires no additional work by the process owner. To the
extent different solutions require periodic auditing or additional work,
they will be more difficult to sustain.
BUILDING A CASE FOR CHANGE

Building a case for changes starts upfront when the project charter is
created and benefits are identified. The most important characteristic of
projects promoting change is operational alignment in a way that benefits
are incorporated into the annual operating plan, so resources will be made
available. The improvement team and process owner are held accountable
for benefit outcomes. The justifications for change are enhanced by a favor-
able cost benefit analysis, expected customer and non-financial benefits,
and favorable impact to key stakeholders. Impact refers to a project’s
anticipated schedule and the activities related to the process changes
and resource requirements. An important consideration for building an

effective case for change is revisiting the original stakeholder analysis when
the project was created but now with a view toward understanding the
impact of the solutions.
It is also a good idea for a team to create an elevator speech to describe their
project to stakeholders before they are engaged. Then it can be updated with
new information. These key elements are taken from the project’s charter.
An elevator speech is a short sentence that explains what the team is doing
and why it needs to be done, i.e., the benefits or risks if not done.
As the improvement team is planning to implement solutions the likeli-
hood for adoption is higher if evaluations are made of potential resistance
from stakeholders and of the available organizational infrastructure that
will be needed to support the changes. Considerations are the cultural, pol-
itical, and other organizational factors that may impede the deployment
of process changes including the roles and responsibilities of the team
members impacted by process changes. Organizational barriers to change
that prevent the implementation of a project’s solutions must be evaluated
for their ability to promote change activities and the solutions under con-
sideration. Infrastructure includes organizational factors related to tech-
nology, culture, rewards and incentives, recognition, and other factors,
which may impact the proposed process changes. These elements must be
aligned to promote change. Once a full understanding of the organizational
impact of changes is known an implementation plan can be developed to
include deployment of solutions and supporting activities. In the balance of
this chapter we will discuss the key change management activities needed
to ensure projects are well transitioned to a process owner.
Cost Benefit Analysis

Nothing promotes project implementation more than a highly favorable
cost benefit analysis. A cost benefit analysis is a financial analysis that
calculates the net benefits of solutions after implementation costs are
subtracted from them. Figure 7.1 shows that a cost benefit analysis begins
upfront when the team creates its project charter. The benefits should be
integrated into the annual operating plan for higher productivity. To do
this, project charters are created top down to ensure benefit and resource
alignment. Using the operating model shown in Figure 1.1, the project is
classified based on its expected root causes and general solutions. Some
Business Case
1. Problem Statement
2. Project Goal
3. Summarized Benefits
Financial Classifications
4. Resource Requirements
A. Revenue:
5. Financial Metrics
- Increase from Volume
6. Operational Metrics - Increase from Price
7. Project Metrics
B. Cost of Goods Sold:
8. Compensating Metrics
- Material
9. Revenue Benefits - Direct Labor
10. Cost Reduction Benefits
C. Other Cost Categories:
11. Cash Flow Benefits
- Scrap
12. Total Benefits - Rework
13. Implementation Cost - Warranty
14. Net Benefits

D. Cash Flow Benefits:
- Accounts Receivable
- Accounts Payable
- Inventory
FIGURE 7.1
Cost Benefit Analysis
will be Lean focused, others Six Sigma focused, and still others are analyt-
ical or require an APM approach.
As a project is executed, based on its root cause analysis, project metrics
and its cost benefit analysis will be updated to reflect new benefit estimates.
Project benefits differ. Some will increase revenue or reduce cost; others
will increase cash flow or improve customer satisfaction. Cost avoidance
projects are another type of beneficial project because they lower the
future cost. An example is reducing the cost of material or labor today but
receiving the productivity improvement in the future or creating a pro-
ject to eliminate a hazardous material to avoid regulatory fines. Additional
projects can be created to solve supplier and customer issues related to
quality, long delivery time, and cost. The financial analyses that are the
basis for a cost benefit analysis should always be reviewed with the finance
team prior to committing to the benefits.
Key Stakeholder Analysis

Figure 7.2 shows key elements of a stakeholder analysis. A stakeholder is a
person or team that will be impacted by a project, must provide resources
or information to it, must provide approval at milestones, or will be kept
informed of progress. A stakeholder analysis starts with identifying the
teams impacted by the project during its data collection, analysis, and solu-
tion implementation phases. The analysis will be updated as the project
FIGURE 7.2
Stakeholder Analysis
moves toward solutions or if project assumptions significantly change.

The goal is to understand each stakeholder’s position for the project. Some
may be supportive and others detractors. The project team should care-
fully consider all relevant opinions and modify the project where needed to
address stakeholder concerns. Stakeholders will be able to help a project by
offering different perspectives that the project team did not consider when
creating the charter.
The analysis is useful for identifying what the team needs from the stake-
holder. Is it resources such as people, information, approvals, or other
support? Also, what are the stakeholder’s concerns? How can the team
address these? The analysis helps identify promoters and detractors. The
team strategy should be to reinforce project attributes that are important
to its key stakeholders and to consider modifications to project attributes
identified as issues.
A Net Promoter Score (NPS) is sometimes used for this analysis and
especially at the end of the project. The NPS question asks if a person
would recommend the project or team to others. The NPS concept is that
people will often summarize their various experiences with a project,
product, or service into one final decision, i.e., to recommend it or not.
The NPS is calculated by subtracting the percentage of detractors from the
percentage of promoters without using responses classified as neutral or
passive. The NPS scale ranges between 0 and 10. A zero correlates to the
rating “extremely unlikely to recommend,” and 10 correlates to a rating of
“extremely likely to recommend.” Promoters are usually defined as ratings
between 9 and 10. Detractors are defined as ratings between 0 and 6 on the
same scale. Ratings between 7 and 9 are considered neutral and not used
to calculate the NPS statistic.
A key stakeholder analysis is also important for project management and
execution. Different stakeholders will have differing views on a project’s
risks and benefits. This requires that a team consider these viewpoints as
part of their project management process. Often this type of introspective
analysis results in more efficient project execution as well as more effective
solutions than those originally considered by the team. The team develops
mitigation plans to address stakeholder concerns based on an in-depth
analysis of the positive and negative impacts of the proposed solutions.
Figure 7.2 shows how this information is captured for each stakeholder
and the mitigation actions identified with their risk estimates. Activities
with a high-risk level require special focus by the team.
Organizational cultures promote or resist change based on the type of

change and previous experiences. Promoters of change include project
alignment; ensuring that process changes are communicated effectively;
empowerment of a broad coalition to do the work and to also train teams
to use the tools and methods. Reward and recognition systems are also
important. Resistance to change occurs when organizations fail to priori-
tize work, if there are conflicting priorities, if there is extensive bureau-
cracy, if employees are not trained properly, or if effective rewards and
recognition systems do not exist.
Infrastructure Analysis
Once a team begins to develop solutions an infrastructure analysis is done
to identify the organizational systems that will likely promote or inhibit
the process improvements. An infrastructure analysis considers project
risks for each structural element. These include cultural, technological,
scheduling, customer, supplier, economic, and political risks. Figure 7.3
cross-references these elements by key stakeholder team because different
stakeholders will be differentially impacted. The goal of this analysis is to
identify implementation risks in advance of recommending solutions. As
an example, one cultural risk would be an entrenched workforce that has
never needed to change its work behavior. In contrast, some cultures have
a history of embracing new ideas and tend to accept meaningful change.
Technological risks could impact project solutions that depend on new
technology such as machines, materials, skills, or processes that have not
been tested for an extended time. Scheduling risks are impacted by the
other risk types but may also become a separate risk category if schedules
are unrealistically set. The gain or loss of key customers and suppliers as
well as general macroeconomic conditions could also have positive or nega-
tive project impacts. Finally, organizational political risks due to personal
or team conflicts may exist. These can be mitigated to an extent by a stake-
holder analysis. The goals of an infrastructure analysis are to enable a team
to carefully consider project risks from different perspectives.
Scheduling Process Change Activities

Different projects will have different schedules for implementing solutions.
As an example, rapid improvement events are completed in days or weeks.
newgenrtpdf
FIGURE 7.3
Communication Planning–Project Level
Others take longer because of the root cause analysis or the solutions
require resources that are not currently available. Figure 4.1 described a
detailed activity schedule showing how various work activities associated
with planning and execution are deployed to achieve event goals. The gen-
eric schedule shown in Figure 4.1 is usually modified depending on the
project type. But the concept is that all implementation activities be identi-
fied, sequenced, and scheduled to ensure they are well managed.
Communication
Effective communication has been discussed earlier in this chapter. It is
a set of activities necessary to both obtain resources for a project, to keep
the organization informed of progress, and to ensure the correct commu-
nication format is used to announce the team’s proposed solutions to key
stakeholders. In Figure 7.4, each communication activity is associated with
a solution and stakeholder team with a person responsible. There are sev-
eral ways that communications are made to stakeholders. These include
emails, telephone calls, video conferencing, newsletters, and similar com-
munication vehicles. Communications should be simple and consistent
with the format matched to the message content. As a rule, complicated
messages that impact key stakeholders should be communicated in person
rather than email. But simple and routine messages can be communicated
using emails.
ACCELERATING CHANGE
Figure 7.5 summarizes our discussion of organizational change. In this
chapter we discussed ways to manage organizational change to gain
support for your projects. The operating model shown in Figure 1.1 is
based on proven operational initiatives such as Lean, Six Sigma, APM, and
big data analytics. Most organizations already have a vision for where these
initiatives fit, and the types of project best assigned to them for execution.
That is, a shared need and vision already exist. Change is also accelerated
by good project charters with correct scope and benefits. This is how teams
gain support for prioritization and resources.
newgenrtpdf
FIGURE 7.4
Infrastructure Analysis–Project Level
Shared Vision
Systems and Structures
•Leadership engagement
•Create a shared need Sustaining
•Systems and structures
•Create a vision •Stakeholders Influencing strategies
•Project charters •Resistance analysis Robust changes
•Communication •Communication Changes to systems and
•Goals, roles structures
Updated communication
Updated roles and
processes
FIGURE 7.5
Accelerating Change
Change also depends on infrastructure. Some changes such as equipment,

staffing, software applications, and others cannot be made for years because
of legacy systems or lack of funding. Earlier in this chapter we discussed
systems and structures from the perspective of stakeholder or resistance
analysis, infrastructure analysis, and communications. These analyses
are done upfront at the start of a project and again when considering the
impact of solutions on the organization. At the end of the project, the focus
is on executing and sustaining changes. Because the team followed a logical
improvement process, the changes will be sustainable if effective controls
are used as described in Table 6.1. This logical approach is an influencing
strategy. Change is accomplished by providing real benefits to an organiza-
tion and its stakeholders.
SUMMARY
People need to have a reason to do things differently if the current system
has worked reasonably well. In fact, people change for two reasons. First,
when there is a burning platform forcing the need to change the way things
are being done or the business will fail, major customers will be lost, the
supply chain will be disrupted, and other significant disruptive events are
imminent. The second reason people change is through logical thought
and engagement using facts to convince them that although there is no
burning platform today, it will arrive in the future, and the most effective
strategy is solving for it today. This requires building a case for change by
setting competitive performance targets that will be relevant to the fore-
seeable future, in other words, to lead and not follow. Change occurs when
a future state can be envisioned and then compared to the current state to
identify where changes are needed.
Successful change initiatives have success attributes. Employees must
practice new behaviors so that the way work is done is changed. This occurs
through the application of beneficial projects that align with value, are sim-
pler, more standardized, mistake-proofed and even automated. As a pro-
ject transitions to the process owner it is important to ensure agreement on
the initial goals and the final recommendations.
Organizations have formal and informal groups that promote or inhibit
change initiatives. These groups must be convinced the change initiative
is beneficial. Effective change programs employ tools and methods that
help improvement teams understand stakeholders’ perspectives and make
modifications to the project scope and charter or toward the end of a pro-
ject when considering solutions. A key stakeholder analysis helps consider
different perspectives to identify more effective solutions than those ori-
ginally considered by the team.
Finally, it is also a good idea for a team to create an elevator speech to
describe their project to stakeholders before they are engaged. Then it can
be updated with new information. These key elements are taken from the
project’s charter. An elevator speech is a short sentence that explains what
the team is doing and why it needs to be done, i.e., the benefits or risks if
not done.
8
Implementing Solutions
OVERVIEW
Process improvement information must be documented into a control
plan and integrated within an organization’s normal quality control system
once improvements are made. In addition to internal quality systems,
organizations are subject to external audits or use recommendations
developed by industry standards organizations. Some of these organizations
include the International Standards Institute (ISO) and the Automotive
Industry Action Group (AIAG). Although Lean Six Sigma and other
improvement initiatives are useful, they do not provide an ongoing quality
framework and rely on an integrated quality system to implement and sus-
tain process improvements.
There are several key principles for effective quality control systems.
These are ensuring controls are based on a thorough analysis of a pro-
cess and solutions work because of an effective root cause analysis.
Second, controls are placed upfront in the process to prevent errors that
may impact customers. Although there are quality systems that track and
correct errors when they reach the customer these are costly and time-
consuming to correct. Customer satisfaction is also negatively impacted.
Control tools and methods vary, and several are used in combination to
sustain improvements. As an example, typical controls include training,
procedures, standards, statistical process control, preventive maintenance,
audits, application of 5S methods, mistake-proofing, and the elimination of
operations and work tasks. There are also supporting tools such as formal
277
organizational frameworks, control plans, failure mode and effects analysis

(FMEA), metric dashboards, and automation, as well as other supporting
methods to brainstorm and implement their process controls.
KEY QUESTIONS
It is useful to ask questions when finalizing solutions and integrating them
into an organization’s systems to ensure sustainability. First, which process
or operations will be eliminated, modified, or controlled? These should be
evident from the scope of the project charters and then through the root
cause analysis that focused on those parts of the process where the gaps
were found. Then depending on the specific root causes, the operation and
its work tasks become candidates for elimination or modification. If not
eliminated, then its inputs and outputs need to be in the control plan.
What evidence has been gathered to show the proposed changes are the
right ones? Do these solutions link back to the root cause analysis? The
root cause analysis should be unbiased and show clearly how the solu-
tion will eliminate the issue. It should also be tested under controlled
conditions using a pilot test of the solutions under real world conditions.
The pilot verifies if the team’s analysis is correct or if adjustments need to be
made before the solution transition to the process owner. The root causes
should be mapped to solutions showing the percentage of the root causes
eliminated. This also helps estimate final benefits and ensures nothing is
missed. As an example, if some root causes cause a 10% defective rate and
solutions eliminate 50% of them, then the benefit is a 50% improvement
and the defective rate decreases to 5%. It is also strong evidence the team
was diligent in verifying the impact of its solutions.
How will the solutions be applied? Where and by whom? The pilot is crit-
ical for proving the team’s analysis. At this point in the project, the team has
built a plan for each solution and created controls around them to ensure
sustainability. The control plan is built just before the pilot testing because
controls need to be applied as part of the pilot. After the pilot, the control
plan is finalized if the solutions worked as planned or only needed minor
modifications.
How will they be measured and reported? What will be the reaction plan
if the controls fail because of unforeseen circumstances? This information
Implementing Solutions • 279
is created using the Process FMEA (PFMEA), which will be discussed later
in this chapter. Reporting begins with the controls plan and then continues
through operational meetings that discuss and report on key performance
metrics. This chapter will discuss the answers to these questions.
CONTROL STRATEGY
Control strategies separate Lean and Six Sigma initiatives from earlier ones
that were not sustainable. When a project is initiated, there is a solution
roadmap that guides the team through the root cause analysis to solutions.
It then identifies which solutions need to be controlled with a control plan.
Solutions that eliminate an issue do not need controls, whereas those that
rely on manual interventions will need to be periodically validated as still
working. Different solutions will use different control strategies, but the
goal is to keep the higher process performance at the new level.
Control strategies and systems are incorporated into a quality control
plan and used to communicate the key process variables that need to be
controlled, i.e., measured, reported, and kept within a specified range
and on target. Some are customer-facing output variables, whereas others
are input variables that impact the output variables. An example of an
output variable is a service level agreement (SLA) or the time to resolve
a customer issue. The SLA is an output variable in services systems and is
influenced by other variables such as staffing, employee skill levels, and the
types of issue. There are other variables that also impact an SLA. A control
plan integrates customer requirements and the processes that produce the
products and services customers’ needs. Supporting the control plan are
reference standards documenting work procedures, inspection procedures,
the FMEA, maintenance requirements, other job aids, and a reaction plan
with clear roles and responsibilities.
CONTROL TOOLS
Process control strategies require the application of several control tools
selected to sustain the solutions. These vary in their effectiveness as well
as their ease of use over time. Training must be periodically refreshed to

ensure people remember information. In contrast, eliminating operations
is known to directly eliminate an issue and does not require controls.
Control tools and methods were listed in Table 6.1. Some were previously
discussed but the focus now is at the end of the project or rapid improve-
ment event. At this point the team has completed its root cause analysis and
has mapped them to one or more solutions. Ideally these will be robust and
permanently eliminate the root causes. This ensures sustainability because
no ongoing controls will be needed for the root cause control. Only the
standard dashboard reporting of the high-level metrics is needed to con-
firm ongoing control.
Eliminating parts of a process is an effective way to ensure that root
causes are eliminated, and no controls are needed. When a process step
is eliminated, the time required to complete it, associated defects, and
costs are also removed from the process. This is the advantage of process
simplification. The control plan is also simplified. Recall simplification is
achieved by considering value and the seven process wastes at each process
step or operation. Redesigning a process is also a robust control because the
resultant updated process is realigned to customer value and process wastes
are eliminated. Purchasing new equipment is also very effective if previous
equipment could not produce at the desired production rate or quality. In
addition to eliminating operations and process redesign, modifications to
organizational reporting structures if the root causes were associated with
unclear roles and responsibilities or policy issues are also robust. Unclear
roles and responsibilities cause organizational friction when teams com-
pete or when no team is responsible for an outcome.
Mistake-proofing is also a highly effective control. Some manufacturing
organizations have several hundred mistake- proofing devices in their
manufacturing operations to prevent errors. The application of mistake-
proofing is all around us in the products and services we use. Applications
as simple as retyping a password when resetting it reduce the likelihood
of error. Applying Robotic Process Automation (RPA) helps with checking
data using algorithms based on business rules to avoid the need for manual
intervention and additional errors. The improvement team should look for
mistake-proofing opportunities to ensure control. These are effective when
maintained using policies and procedures but can slip if not kept up to date.
Organizations place audits on the medium-term effective controls and
set up compliance audits. In manufacturing these are process walks done
daily, weekly, or monthly. People are formally assigned to this audit role.
If an audit shows that controls have deteriorated or the control plan is not
followed, the process owner will make modifications to meet the original
control plan requirements. An audit also gathers information to ensure
process controls are effective for maintaining the key output and input
variables at predetermined levels. Audits take different forms but are most
effective when process information is referenced to known and auditable
standards. New metrics and reporting formats will need to be maintained,
and their effectiveness depends on the controls. They alert if metric per-
formance deteriorates.
Training is required when there is a process change that impacts manual
operations such as machine set-ups or setting up quotes and orders. It
should be designed to be light and focus on the topics needed to control
the process and sustain the improvements. In other words, training is usu-
ally a part of the solution package. Its format, frequency, and other relevant
attributes should be documented in the control plan. In addition to training,
procedures will be created or updated to sustain a process at expected per-
formance levels. Procedures include work, inspection, maintenance, and
similar types of instruction documents. They should also be standardized
and referenced in the control plan. Audits are another integral part of pro-
cess control documentation. This is especially true if a process contains
manual operations or if solutions rely on manual work that depends on
personal judgment and skill because people forget work instructions or
become distracted and fatigued. Work and testing instructions as well
as training need constant reinforcement but are a necessary part of any
improvement plan.
There are other control tools that are effective for maintaining process
performance. An example is Statistical Process Control (SPC), which uses
different types of control chart to detect excess process variation of key
variables documented in the control plan. Statistical Process Control will
now be discussed in detail becomes it has several important attributes rele-
vant for effective control.
Statistical Process Control

Statistical Process Control is used to monitor the performance key process
variables to identify random and non-random patterns. Statistical tests are
performed on these patterns to determine if there are assignable causes
for variation, i.e., a non-random pattern exists. Control charts are used to
detect outliers, trends in the data, and sustained shifts in the mean level of
the variable being charted, excess variation, or unusual reductions of vari-
ation. There are other non-random patterns that vary by industry.
There are rules for using control charts. A control chart is constructed
based on the probability distribution of the variable being charted. If the
variable is continuous and symmetrical its distribution is likely normal.
A control chart would be constructed using the mean of this reference dis-
tribution with upper and lower limits set at +/-3 standard deviations from
the mean to include 99.97% of the data. The likelihood of being outside
the limits is only 0.23%. At 95% for a normal distribution the limits are
± 1.65 standard deviations from the mean. The likelihood of being out-
side these limits is 5%. When this control chart is used to chart a vari-
able, the expectation would be the data points randomly vary around the
process mean without a pattern. This indicates the process did not change
and is stable. Variables with different probability distributions have control
charts constructed using those distributions. As an example, if the variable
being created is the cycle time to review invoices, and a control chart was
constructed based on this cycle time, the assumption is the distribution
of future cycle times is equivalent to the current distribution if nothing
changes in the process. In other words, future cycle times should reflect the
control chart reference distribution.
The second rule is that common cause variation is difficult to eliminate
from a process because there are no obvious patterns in a stable process.
This is because the variation is caused by several sources. In contrast,
assignable sources of variation caused by a few variation sources can be
detected and eliminated through investigation of the root causes. Because
control charts differentiate between common and special cause variation,
statistically based decisions can be made to adjust the process to eliminate
a non-random pattern. The net result is that process adjustments occur less
frequently. This promotes process stability and lower variation by elimin-
ating unnecessary manual intervention.
The third rule is there is a difference between the control of a process and
its capability to meet customer requirements. These are two different but
complimentary performance metrics. A process can be stable, but its per-
formance may not meet customer requirements. Or a process may not be in
control, but if the specification range of a variable is wide and not exceeded
then it is capable of meeting the specification range. But not likely
economical if its mean cannot be set lower or high depending on the most
economical scenario. There are also specialized control charts created for
unique process control applications, e.g., very short time periods or spe-
cific probability distributions.
Table 8.1 describes the four most common control charts. These are the
individual-moving range chart (I-MR), X-Bar and R-chart, p-chart, and
the C-chart. Different assumed probability distributions require the use of
these control charts. As an example, because cycle time is a variable that is
measured on a continuous scale that can be broken into smaller intervals,
the control chart that is used to monitor cycle time variation is either an I-
MR or, if the data is subgrouped, the X-Bar and its R-Chart. The I-MR con-
trol charts are based on a normality assumption and monitor the patterns
of a continuous variable individually over time. In contrast, X-Bar and R-
charts monitor averages of sub-grouped individual values over time as well
as the subgroup ranges, respectively. For the range chart, the ranges are
calculated as the maximum minus the minimum value of each subgroup.
Data is sometimes subgrouped to normalize it to use a specific control
chart. An advantage of using X-Bar and Range charts is that even if the
original distribution of individual values is slightly skewed, i.e., not sym-
metrical, the distribution of subgrouped means often will be symmetrical
or be normally distributed. It should be noted that the control limits of the
individual control chart are wider than the X-Bar chart. This is because the
standard deviation is smaller in the X-Bar chart because it is calculated as
the pooled standard deviation of the subgroups, which is smaller than the
overall standard deviation calculated by the I-MR charts using the total
sample and divided by the square root of the sub-group sample size.
Figure 8.1 describes how an I-MR control chart is used to monitor
invoicing cycle time. The upper control limit of the chart is 135 hours.
The lower limit is 105 hours, and the mean is 120 hours. The variation
in cycle time is random without a noticeable pattern. Because individual
values of cycle time are being charted rather than subgroups, a second ana-
lysis could be overlaid on this control chart by dropping on a specifica-
tion line. As an example, if the upper cycle time specification is 125 hours,
although in control and stable, the process periodically does not meet the
customer’s requirement.
A variable could also be charted based on pass or fail criteria. The
assumption is the fraction or proportion success is binomially distributed.
Practical examples found in office work environments are the fraction of
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TABLE 8.1
Control Chart Control Overview
Characteristic Individual-Moving X-Bar and Range P-Chart/NP-Chart C-Chart/U-Chart
Range Charts Charts
Data format Continuous Continuous Percentage or proportion Counts
Basic application in cycle time, hours, cycle time, hours, Number of units failing a Number of defects per sampling
office environments incident rates, incident rates, standard, i.e., percentage unit, i.e., number of errors per
costs, etc. costs, etc. defective invoices, invoice, number of accidents
percentage days late, etc. per building, etc.
Sample size >25 to 125 4–6 observations 50 or more observations per Convenient sampling unit which
observations in per subgroup and subgroup. P-charts are is constant from one sample to
total sample with 20–25 subgroups in constructed using subgroups another. U-charts are used in
subgroup size = 1. the initial baseline of equal or unequal size. Np- situations where the size of the
sample charts are used in situations sampling unit changes.
where subgroup sizes vary.
Assumed distribution Normal Normal Binomial Poisson
Mean sum values and divide sum subgroup Proportion of successes Number of defects per unit (may
by sample size means and divide divided by sample size be 1 or more different types of
by number of defects)
subgroups
Upper Control Limit Mean + (3 x Standard Subgroup mean + Proportion + (3 x Standard Average number of defects + (3
(UCL) Deviation) (3 x Standard Error for Binomial x standard error for Poisson
Error) Distribution) Distribution)
Lower Control Limit Mean –(3 x Standard Subgroup mean –(3x Proportion –(3 * Standard Average number of defects –(3
(LCL) Deviation) Standard Error) Error for Binomial x standard error for Poisson
Distribution) Distribution)
Cycle Time
140
Upper Control Limit = 135
135
130
Upper Cycle Time Specification =125 hours
Hours
125
Mean= 120
120
115
Lower Control Limit= 105
110
0 5 10 15 20 25 30 35
Sample Sequence
FIGURE 8.1
Individual Control Chart
Upper Control Limit = 0.39 =39%

0.35
Invoice Errors
0.3
0.25
Mean Proportion = 0.18 =18%
Error Proportion
0.2
0.15
0.1
0.05

0
0 5 10 15 20 25 30 35
Sample Sequence
FIGURE 8.2
p-Chart
invoices without errors, the fraction of on-time deliveries, and the fraction
of hours lost due to illness. Figure 8.2 shows the proportion of invoice
errors using a proportion or p-chart. An error is defined as one or more
missing pieces of data classifies the invoice as a fail. The mean propor-
tion is 18%. The percent of invoices with errors is between 0% and 39%
around the mean proportion. It is not unusual to calculate a negative lower
Employees Late Per Week

50
45 Upper Control Limit = 48
40
Mean Late per Week = 31
Number Late
35
30
25
20
15
10
5
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Sample Sequence
FIGURE 8.3
C-Chart
limit. If the lower limit is negative set it to zero. This implies that 99 out
100 samples are expected to have a percentage error within this range. The
sample size is constant for the p-chart shown but if it varies the limits will
be wider for smaller samples and narrower for larger ones. A specification
line can also be dropped on this chart to evaluate if the process meets the
customer’s requirement.
The third control chart is the c-chart. It is used to chart data measured as
counts falling into a predetermined category. We could count the number
of errors per 100 invoices or the number of late employees per shift. In
these applications, the variable being charted follows a Poisson distribu-
tion. The c-chart uses a constant sample size. It is created using the same
number of invoices for daily samples, e.g., 100. We would take 100 invoices
and count the number of data fields in error. If we found 200 fields in error
for the 100 invoices, the average invoice has two defects. In Figure 8.3 the
number of defects ranges between 0 and 10. In the current example, the
number of days late is being charted per shift of 20 associates. The process
appears stable. Because the values being plotted are not subgrouped, a spe-
cification line can also be placed on this chart to evaluate process perform-
ance relative to a customer specification.
Earlier we discussed that control limits are calculated as ± 3 standard
deviations from the mean. The calculations used to set control limits can
be complicated. It is recommended that one or more team members under-
stand how to create and interpret these charts. If a point is outside a control
limit, we assume with high statistical confidence it is different from its ref-
erence distribution. In addition to setting the control limits, the rational
subgroup size and its frequency of collection must be determined by the
team. Rational implies a subgroup contains the smallest level of variation
of interest to the analysis. If cycle times are collected daily, then the sub-
group size could be one week containing five cycle times. Or if cycle times
are collected on an hourly basis then a subgroup would be one shift with
eight cycle times each shift.
Our next discussion will focus on the interpretation of control chart
patterns. An example is shown in Figure 8.4 for the cycle time example
except it has been modified to show non-random patterns. The control
Cycle Time
140
135 Upper Control Limit = 138
130
125
Hours
120
115
Mean Late per
110 Week = 120
105
100
95 Lower Control Limit= 102
90
0 5 10 15 20 25 30 35
Sample Sequence
Error Code Interpretation
1 1 point > 3 standard deviation from mean

2 9 points in a row on same side of mean
3 6 points in a row all decreasing or increasing
5 2 out of 3 points > 2 standard deviations from mean
6 4 out of 5 points > 1 standard deviation from mean
FIGURE 8.4
Control Chart Interpretation
limits changed because the underlying data was modified. If the chart were
stable, we would expect there would be 50% of the data over the mean of
120 hours and 50% below 120 hours. Also, 99.73% of the data would be
expected to be within the upper and lower control limits. An outlier that
exceeds the control limits is expected to occur with a probability of only
0.23%, i.e., 100% − 99.73% = 0.23%. In this example, we see that a non-
random pattern exists and is flagged by error codes 2 and 3. The team would
investigate the causes for the non-random pattern and once eliminated, the
control limits would be recalculated and the new pattern analyzed.
Control chart patterns provide insight into the underlying sources of
process variation. An outlier may indicate a sudden process change caused
by a different material, work procedures, machine adjustment, or other
cause. The underlying root cause will be easily detected and resolved
because it is a notable change and the time of occurrence is known from
the control chart. Another non-random pattern is nine sequential points
are one side of process mean. This indicates a sustained shift in the process
mean. Figure 8.4 has this pattern. A third non-random pattern is a trend.
It indicates that there are six sequential points all decreasing or increasing.
When trends are found action can be taken to adjust the process to prevent
the variable from going out of control or exceeding a specification.
Other non-random patterns such as cycles or clustering of data may also
indicate process issues. There are two additional out of control patterns.
These are two out of three points greater than two standard deviations from
the process mean or four out of five points greater than one standard devi-
ation from the process mean, respectively. These patterns indicate there is
higher variation in the process.
Measurement System Improvements

Measurement systems need to be verified for accuracy and repeat-
ability i.e. consistency and several other measures. These systems con-
sist of environmental influences, measurement procedures, the types of
measuring equipment, the types of manual intervention, and materials.
Depending on what is being measured, there are six components of meas-
urement error if people are making measurements using tools. The six
measurement components are resolution, stability, linearity, accuracy,
reproducibility, and repeatability. Automated systems do not have all
six components. The resolution of a measurement system is its ability to
detect changes in the variable being measured. As an example, to detect

changes in distance of a meter with adequate resolution, distance needs to
be measured in centimeters or millimeters. Or if a team needs to detect
hourly changes in cycle time, then a time-stamp-based day would not have
adequate resolution. The team would need to increase the measurement
resolution by moving it to minutes. Resolution issues once recognized
are the easiest measurement error to eliminate. Stability errors occur if
a variable’s measured average value changes with respect to its true value
over time. An example would be employee performance reviews or skills
acquired through training that deteriorate if not periodically reinforced
through subsequent training activities. Linearity is the ability of a meas-
urement system to measure a variable with the same variation around its
true value over the range of measurement. An example is when rating
scales are skewed toward one end or another in customer satisfaction
surveys.
The last three measurement error components are accuracy, reproduci-
bility, and repeatability. Accuracy is also called system bias or off-set. If the
average measured value of a variable differs greatly from the true value at
a point in time, then the system has an accuracy problem. An example is
when a computer system rounds up or down or when a “fudge factor” is
added to a measured quantity. Reproducibility error is a measurement in
which two or more people or machines differ on average from each when
measuring the same variable under identical conditions. This situation
includes managers who rate employees on average higher or lower than an
established standard. Or perhaps, several call center agents escalate calls
on average based on misinterpretations of standard escalation evaluation
criteria. The sixth measurement component, repeatability, occurs when the
same person measures the same thing the same way several times but there
are small variations between the successive measurements. In other words,
they are inconsistent.
If process improvements are effective, a team should see a notable diffe-
rence in their project metrics. Figure 8.5 shows examples of the way to
demonstrate improvements are successful. The first example is a control
chart that shows cycle time before improvements, i.e., the project baseline
and after improvements, i.e., the new baseline. The boxplot shows the same
cycle time data from a different perspective. The customer upper speci-
fication of 125 hours can also be overlaid on either graph. Other ways to
Cycle Time
160
140
UCL= 137
120 Mean=120
100
LCL=102
Hours
80
UCL= 72
60
Mean=45
40
20 LCL=18
0
0 5 10 15 20 25 30 35
Sample Sequence
Upper Cycle Time Specification =125 hours

Hours
Improvement
FIGURE 8.5
Measuring Process Improvement
demonstrate improvements are using other charts such as bar charts and
Pareto charts.
Failure Mode and Effects Analysis

The FMEA template shown in Figure 8.6 is used to evaluate how a process
could fail. The evaluation can be done for different reasons. Prior to the
project, an FMEA may have been used to identify where in the process
improvement should be made to reduce risk or the team could have created
an FMEA to analyze the process for the cause of failure, then select one or
more failure causes of a failure mode to work on. Toward the end of the
project, the team would also use an FMEA to conduct a risk assessment
on proposed improvements to analyze how they might fail. This ana-
lysis provides an insight for developing more robust countermeasures or
solutions to eliminate causes for process failures. These are called failure
modes and are defined from a customer’s perspective.
In the travel example shown in Figure 8.6, a potential failure mode
associated with the step “customer calls in to make a reservation” is the
“customer call is not answered within the standard cycle time or SLA”.
A customer may have been promised their call would be answered within
60 seconds. If the call is not answered within 60 seconds, this is a failure
mode from the customer’s perspective. The next column of Figure 8.6 is
the potential failure effect on the customer if the failure mode occurs.
Customers may be frustrated and leave the queue if the waiting time exceeds
the promised SLA. The severity of a failure effect is rated between 1 and 10
in the severity column of the FMEA template. A 10 is very serious, and a 1
is a minor impact on the customer. The next column is the potential cause
of the failure mode (skip the potential failure effect column). In the travel
example, there are three causes for the failure to answer a customer call in
a timely manner, i.e., missing the SLA. These are staffing levels were not
adequate, agents were not properly trained, and agents were not provided
with standard tools and information. These potential causes of failure are
variables that an improvement team can eliminate to reduce process risk
and improve quality. Each failure cause has an occurrence probability
between 1 and 10. A 10 is a high occurrence, and a 1 is infrequent.
Once a team lists failure causes and occurrence probabilities, current
controls are evaluated for their effectiveness to detect the causes of failure.
Some controls are more effective in detecting failure causes than others.
Table 6.1 showed that verbal or written instructions tend to be weaker
controls than the application of Lean methods such as 5S and mistake-
proofing. The detection column is an inverse rating scale in which 1 implies
controls are very effective for detecting failure causes, whereas 10 implies
current controls are ineffective. The rating scales are multiplied in the risk
priority rating (RPN) column. The RPN number ranges between 1 and
1,000. Each failure cause is prioritized for improvement based on its RPN
number. Higher RPN numbers have a higher prioritization. The balance
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FIGURE 8.6
Failure Mode and Effects Analysis (FMEA)
of the FMEA template columns capture information related to corrective

actions developed to reduce the impact of a failure cause or improving the
detection effectiveness. The severity rating does not change because if the
failure mode occurs the impact on the customer is the same regardless of
cause or its likelihood.
QUALITY CONTROL PLAN
The improvement team’s final recommendations should be incorporated
into a quality control plan. This is a communication document that
describes the important output and input variables that will need to be
controlled and at which level, i.e., their specifications. Also described are
the measurement methods used to evaluate these variables as well as the
actions needed to bring them back within specification. Control plans inte-
grate all control elements to focus on requirements from customers and
stakeholders. The goal is to ensure key process outputs (and key inputs) are
in control throughout the process life cycle. The control plan is updated as
process conditions and requirements change.
Table 8.2 shows an example of the major pieces of information which are
included in a control plan used for non-manufacturing applications. It is
easy to create and intuitive to use for most applications. The plan focuses
on charting important metrics and placing controls on improvements
that could fail. These include methods discussed in earlier chapters such
as 5S, training, procedures, audits, and other improvements containing
manual work. Clear roles and responsibilities also need to be documented
in a control plan. The metrics can be charted using control charts or other
reporting methods as appropriate. The improvements are controlled
using various methods such as periodic audits using checklists, manage-
ment reviews, periodic training with compliance testing, and others as
appropriate. Finally, if the metrics being measured deteriorate, a reac-
tion plan should be available. The reaction plan includes procedures
and recommendations as part of normal management control systems
and describes what to do if the process goes out of control. At this point
in the project or rapid improvement event the team has all the infor-
mation needed to complete the quality control plan and report out to
management.
TABLE 8.2
Simple Control Plan
What Why Who How Reaction Plan
1. The project To ensure The process Control chart Procedures and
metrics performance owner unless root recommendations
to target is and work causes were should be part
met over team eliminated of management
time control systems
and describe
what to do if the
process goes out
of control.
2. Controls on To ensure The process Periodic Procedures and
improvements performance owner audits using recommendations
that could to target is and work checklists, should be part
fail, e.g., 5S, met over team, management of management
training, time third reviews control systems
procedures, parties using and describe
manual (internal agenda, what to do if the
operations, or periodic process goes out
etc. external) training with of control.
compliance
testing, etc.
Table 8.3 shows a more complicated control plan used by operations

to control components and assemblies as well as the measurements and
testing needed to build a product or a complicated service. The process
steps are identified using the bill of materials (BOM), which was translated
into a manufacturing sequence for building the product. The list of process
steps with specifications aligns with design requirements but with add-
itional requirements based on machine and process attributes. Some steps
are output features and functions, i.e., key outputs “Ys,” whereas others
are components, assemblies, testing or other requirements, i.e., key input
“Xs.” These are also clearly defined using specifications. They are either
unilateral (upper or lower levels) or bilateral (minimum and maximum).
The measurement method needed to evaluate the specification is added
as a reference for each work procedure. There will be a reference work,
measurement, or test procedure for each requirement listed in the control
plan. Additional controls are placed on critical requirements called spe-
cial characteristics. The process FMEA describes how the component or
TABLE 8.3
Operations Control Plan
Operation Product Date
Team: Production Line Revision
Specification Metric Testing/ Special FMEA
Step Key Key Lower Upper Method Evaluation Characteristic Reference
Outputs Inputs Reference Reference
(Y) (X) Number Number
assembly could fail to meet a specification and the reaction plan to bring it
back into control. This more complicated control plan is useful when many
attributes need to be controlled or they need to be carefully measured to a
specification.
COMMUNICATING THE PROPOSED CHANGES

Presenting the team’s project findings is very important in securing
resources for future improvement projects. Also, now that the team and
process owner understand the root causes and the solutions used to elim-
inate them, other teams are naturally interested in how to leverage this
information for other projects. The improvement story must be structured
in a coherent and linear manner with supporting documentation to make
it easy to understand and communicate. One part of the presentation
includes the business case and the intended benefits. This information is
obtained from the project charter. The next part of the story is providing
a simple example of the process analysis including lessons learned and the
improvements that were made to gain the benefits. The team should prac-
tice its presentation in advance to ensure its success. Figure 8.7 shows basic
questions the team should be able to answer using the information from its
Root Cause Analysis: Level 1, 2 and 3

Team Presentation Summary
From Tables 5.5, 5.6 and 5.7
1st Level – Cancelled Orders

160
140
Slide 1 Slide 2 120
100
80
•What are the •Who are the 60
new process stakeholders and 40
changes? what do they have 20
•Are they to do to support the 0

Cancelled Schedule Late Large Lot Missing Quality
implemented? changes? Order Change Deliveries Size Materials Issue
•What are the •Do the stakeholders 2nd Level – Late Deliveries
benefits? agree on the 120
changes and 100
benefits? 80
60
40
Slide 3 Slide 4 20
0
Late delivery Missed schedule Inaccurate Unknown
schedule
•How will these •Will there be future
changes be process changes? 3rd Level – Customer Not Notified
supported by the •What additional 80
team? support does the 70
60
•What else needs team need? 50
40
to be done? 30
20
10
0
Customer Not Incorrect Carrier Issue Unknown
Notified Invoice
FIGURE 8.7
Communicating the Changes to Management
charter, root cause analysis, and improvement work to communicate the

process changes, their impact on stakeholders, and what needs to be done
to support them.
After this review of recommendations and next steps with leadership
and stakeholders, the improvement team will continue the transition of the
project to the local teams impacted by the process changes. The local team
should already have been part of the work but this meeting is intended to
review the project from a holistic view bringing in all relevant information
for a formal hand-off or transition to the process owner. This communica-
tion is done in person by attending process owner meetings. If the team is
global the meeting will be remote by conference call. The meeting format
will vary but the guiding principle is to use the information created by
the improvement team, i.e., the charter, root cause analysis, improvements,
and control plan to guide the local team on how best to sustain the
improvements, as part of their daily work. Some adjustments to the con-
trol plan may be needed based on final feedback from the local team for
the updated process.
FOLLOW-UP ACTIVITIES
Although a rapid improvement team will normally complete most of their
work tasks during the rapid improvement event some may be complicated
or require more time to complete. As a result, there may be follow-up activ-
ities to formally track and close. The first type is immediate improvements
not completed in the rapid improvement event. These should be
documented and assigned a lead to coordinate them and associated actions
to closure. These remaining actions should have a close date and next steps
identified before the rapid improvement event ends. A reporting frequency
should also be agreed upon. Normally the participants include relevant
team members and key stakeholders to help guide the remaining actions
to closure.
The second type of post-event actions is longer term. These require
investment or consultation and coordination with other teams. If
investment is required, they will need to be reviewed by a coordinating
committee for review. If approved they will be prioritized for execution.
This places them on a roadmap in a prioritized sequence with competing
projects. Depending on funding availability they may be eventually closed
or remain open. If other teams need to be consulted, they will be brought
together to review the improvement recommendations according to a cost
benefit analysis and available resources to execute them.
CREATING METRIC DASHBOARDS

Dashboards are needed to measure performance and aid decision-making
for corrective actions. An improvement team will have improved one
or several operational metrics during the project. This higher perform-
ance needs to be maintained. Dashboards may have already been used to
identify the operational gaps that formed the basis of the team’s charter.
In this situation the improvement team needs to periodically review the
report to confirm the improvements are sustained. The team responsible
for maintaining the dashboard needs to be kept informed of the team’s
progress throughout the project to provide updates for the periods before
and after improvements. As these are finalized and transitioned to the pro-
cess owner, measurement tracking should be incorporated into the control
plan. The process owner will need to know what should be measured, how,
when, by whom, and what to do if the process goes out of control. Ideally
measurements and reporting will be automated using RPA to gather data
from various source systems to create reporting.
There are different dashboard designs depending on the audience and
the types of information conveyed to them. In fact, there is a reporting
hierarchy starting with leadership and the key stakeholders. The leader-
ship dashboards provide decision-making capability by gathering data
from different sources to build models and to show trends, patterns, and
analytical summaries. These are strategic dashboards that focus on long-
term trends and key metrics of performance indicators (KPIs). Leadership
dashboards are designed to answer specific questions for leadership. They
should be constructed only after interviewing leadership to understand
the information they need from the reporting. Because the higher level
metrics such as customer satisfaction, productivity, lead time, and others
are defined and built using several metadata fields, there must be an
ability to drill down to lower levels to see relationships between the lower
level variables. This helps decision-making and shows where adjustments
need to be made to close performance gaps. Leadership dashboards are
usually 360 degrees and provide a holistic view of information like a cus-
tomer account, i.e., the purchase products and services, financial infor-
mation like revenue, margin, returns and concessions, complaints and
other information that in total represents all interactions with that cus-
tomer. Operations would be similar in that for a team like fulfillment all
the processes impacting fulfillment would be visible on their dashboard as
well as the associated metrics.
At the next level, dashboards provide information for those doing the
work. These dashboards pull data from systems or a variety of sensors,
i.e., the Internet of Things (IoT). There could be hundreds of data fields
evaluated and several brought into operational models. Some dashboards
simply provide metric status without intelligence, whereas others add
intelligence for decision-making. Ideally, a dashboard will be designed

to provide multiple views of a process using consistent data across the
accessed systems. This enables drill-down capability from the model into
single data fields for decision-making and control.
When the improvement team begins to engage with their business
intelligence experts to update or create a new dashboard to measure key
metrics and sustain the improvements, several key attributes for effective
dashboard design are relevant. First, the metrics or KPIs must be rele-
vant and in combination answer the questions of the people using them.
The dashboard should be simple and have a layout of tables, graphs, and
verbiage that is consistent with respect to labeling and color choice. Most
important, the tables and charts should be carefully selected for the data
being used and the information that needs to be transmitted. In earlier
chapters we discussed several types of chart. Each provided different views
of the data. Some were time-ordered trend charts, others were histograms
showing frequency of the data by category, and other charts and graphs
presented other data views.
An important dashboard function is an ability to drill down to lower level
metrics to view the underlying data from different perspectives and to see
the variables driving the high-level charts. Dashboards should be dynamic
and ideally intuitive and interactive. There should be an ability to filter
on graphs, filter on certain numbers, and other information such as text.
Dashboards sitting on extensive amounts of data should be hyperlinked to
the underlying or referenced data. A properly designed dashboard helps
sustain improvements and enables fast responses to unexpected changes
in a process. Figure 8.8 provides an operational dashboard example with
the key metric as total cycle time. This metric is broken into its operational
components by process step. There are many formats and those for leader-
ship would be simplified and more visually appealing.
SUMMARY
In this chapter several themes have emerged. These are ensuring controls
are based on a thorough analysis of a process and solutions work because of
an effective root cause analysis. Second controls are placed upfront in the
process to control errors that may impact customers. Although there are
FIGURE 8.8
Cycle Time Dashboard
quality systems that track and correct errors when they reach the customer,
these are costly and time-consuming to correct. Customer satisfaction is
also negatively impacted. Control tools and methods vary, and several are
used in combination to sustain improvements. Typical controls include
training, procedures, standards, SPC, preventive maintenance, audits,
application of 5S methods, mistake-proofing, and the elimination of
operations and work tasks. There are also supporting tools such as formal
organizational frameworks, control plans, FMEA, metric dashboards, and
automation as well as other supporting methods to brainstorm and imple-
ment their process controls.
When building the control plan, it is useful to ask questions before final-
izing solutions and integrating them into systems to ensure sustainability.
First, which processes or operations will be eliminated, modified, or con-
trolled? What evidence has been gathered to show the proposed changes
are the right ones? Do these map back to the root cause analysis? Have
the changes been tested through a pilot to verify they work? How will the
solutions be applied? Where and by whom? How will they be measured
and reported? What will be the reaction plan if the controls fail because of
unforeseen circumstances? This chapter has discussed the answers to these
questions.
Statistical Process Control was a central topic of this chapter. It is used
to monitor the key process performance variables to identify non-random
patterns. Statistical tests are performed on the patterns to determine if
there are assignable causes for variation, i.e., a non-random pattern exists.
Control charts are used to detect outliers, trends in the data, sustained
shifts in the mean level of the variable being charted, excess variation, or
unusual reductions of variation. There are other non-random patterns
that vary by industry. There are also rules for using control charts. First,
they are constructed based on the probability distribution of the variable
being charted. The second rule is that common cause variation is difficult
to eliminate because there are no obvious patterns in a stable process. This
is because the variation is caused by several variation sources. In contrast,
assignable sources of variation caused by a few variation sources can be
eliminated from a process because they are detected, and through investi-
gation the root causes of the variation can be identified and eliminated. The
third rule is the difference between the control of a process and its capability
to meet customer requirements. These are two different but complimentary
metrics. Table 8.1 described the four most common control charts. These
are I-MR chart, X-Bar and R-chart, p-chart, and the C-chart. Different
assumed probability distributions require the use of different control charts.
We also discussed dashboard designs. These are created and for-
matted for specific audiences and the types of information that need to be
conveyed to them. There is a reporting hierarchy starting with leadership
and then the key stakeholders and employees doing the work and who take
action to keep the process metrics on target and in control. The leadership
dashboards provide decision-making capability by gathering data from
different sources to build models to show trends, patterns, and analytical
summaries. These strategic dashboards focus on long-term trends and
KPIs. Lower level operational dashboards help manage and report process
performance.
into a quality control plan. This is a communication document that
controlled and at which level, i.e., their specifications. Control plans inte-
stakeholders. The goal is to ensure key process outputs and key inputs are
in control throughout the process life cycle.
Presenting the team’s project findings is important in securing resources
for future improvement activities. At the end of the project the improve-
ment team has deep knowledge of the recently improved process, the root
causes for poor performance, and the solutions that were created to elim-
inate them. The team’s presentation should be structured to provide the
project information in a coherent and linear manner with supporting
documentation. This ensures it is easy to understand and communicate to
different audiences.
9
Organizational Change
OVERVIEW
Organizations will only change for good reasons that are proven to
add benefits for customer, employee, and other stakeholders. Different
organizations change for different reasons related to technology, process,
people, organizational, and competitive gaps –gaps being a proliferation
of manual work operations, long lead times, unclear roles, and responsi-
bilities, shortages of skilled employees, poorly documented processes, and
other issues. Some of these are easier to solve than others. If they span
several end-to-end teams then an integrating framework, i.e., an initiative,
is needed to provide a vision, and the path to efficiently close the gaps
with prioritized resources and a firm deployment schedule. The process
improvement methods discussed in this book focused on issues that cause
high cost, long lead time and rework for customers and stakeholders.
The customer experience becomes fragmented when these issues occur.
Contributing factors are poor controls and reporting. Organizations have
an incentive to change when poor operational performance becomes a
“burning platform” demanding bold action for competitive survival.
Many of the tools and methods discussed in earlier chapters help build
a process improvement framework that can help change an organiza-
tion and even transform it. Lean and Six Sigma are operational initiatives
with a proven deployment strategy supported by numerous use cases.
Initiatives also help move organizations toward higher operational cap-
ability by training employees to identify and solve complex process issues
that align with strategic goals. Effective organizational change transforms
how work is done by showing there are better ways to do it. Work is simpli-
fied and standardized to enable workers to do it well. Issues are routinely
303
investigated and solved by using appropriate tools and methods. The

organization becomes less siloed and dependent on tribal knowledge as
process improvements accumulate and an organization builds its own use
cases, case studies, and lessons learned. Change is important for making
organizations more productive and competitive.
What is organizational change? How can it be implemented and
sustained? These are important questions for an improvement team.
Operational change is accelerated by strategically aligned projects. Much
work is required to create a project, do the root cause analysis, and imple-
ment solutions. Many of the elements needed for effective change have
already been put in place as the improvement team worked from the
project charter to implement solutions. Key success factors for effective
change are leadership support, having a vision for shared needs to do the
project, and bringing together the teams needed to execute the required
change. These are documented in an initiative’s project charters. They are
prioritized and approved by leadership in advance of their deployment.
Another success factor is measuring performance to competitive targets.
Gaps create a sense of urgency for improvement. Changing organizational
structures also greatly impacts performance. These include changes to
product and process design, policies, roles and responsibilities, processes,
procedures, and other structures. Structural changes were discussed in
Chapter 7 relative to building the case for change as teams transition the
improved processes and solutions to process owners. In this chapter we
discuss the larger goal of integrating the initiative’s changes into organiza-
tional structures to increase productivity, customer experience, and com-
petitiveness. We want to understand how the rapid improvement events,
projects, and other improvement work integrate across an organization for
sustainability.
As initiatives such as Lean or Six sigma mature, questions such as, “Are
the vision statement, mission statement, and goals still the right ones based
on lessons learned for the first wave of improvement projects?” “Are organ-
izational structures ready for the changes being created by the initiative’s
projects? Are the roles and responsibilities clear? Are the communications
effective? Are there rewards, recognition, and incentive set up to reinforce
the changes? Are the required changes documented, properly trained to
work in them?” Infrastructure was already in place as the initiative was
kicked off. Now as the initial first wave of projects begins to close, the ori-
ginal initiative planning likely needs to be updated. These questions are a
Organizational Change • 305
basis for the initiative’s change management planning. Each project also
has change management planning, but fit is focused on a project’s stake-
holder group. Figure 7.3 describes an infrastructure analysis at a project
level, but the same format is used at an initiative level for many projects.
Communications strategy is focused on targeting the right message
to the right audience in the most effective format. In Chapter 7 we
discussed communication planning using Figure 7.4 at a project level
to make recommendations for implementing solutions. At an organiza-
tional level, effective communication strategy is even more important
because the initiative touches many employees and consumes resources.
The communications are focused on broader audiences and different
stakeholders will see an initiative from varying perspectives. This requires
a fact-based approach to communications relative to visualization of
benefits, status, and upcoming priorities. The basis for the communication
is that the initiative is working as planned, this is the proof it is working,
this is its status, and these are our plans going forward. The goal for pro-
viding this information is to gain support to continue and expand the
work. Ideally, best practices will be demonstrated, and completed projects
can be used to show benefits.
Organizational rewards, recognition, and incentives are also put in place
to promote the needed changes and discourage the organization from
moving back to previous practices. Like other activities driven by initiatives,
planning is important for success. The goal is to identify behaviors that
promote or detract from an initiative’s success. The initiative’s team
considers the types of reward, e.g., bonus payments, promotions, and
other incentives and how they impact the ability of an initiative to move
forward. Measures are important to not only track a project’s metrics but
also for ensuring rewards and recognition are aligned. Measures should be
reviewed to ensure they can measure performance and reward the right
behaviors that align with strategic goals.
SUSTAINING PROCESS IMPROVEMENTS

An important success attribute for Lean and Six Sigma initiatives is that
improvements are sustained either by eliminating an issue or by controlling
solutions that could fail. No project is complete until the solution is proven
to work, and controls exist and are documented for the project owner and
local team. Sustaining improvements is critical for building a critical mass
for organizational change. Fix it once is the strategy and much thought
and effort are applied to achieve it in practice. If the improvement work
is a rapid improvement event or a longer duration project, the solution
must be tied to root causes and be sustainable. They must also be aligned
and contribute to an organization’s productivity either by increasing sales
and cash flow or by reducing costs. Customer experience and employee
satisfaction are also in scope for every project in that the project either
directly improves either of them or does not cause deterioration in current
performance.
Rapid improvement events are part of an integrated operational strategy
to change an organization’s culture and increase productivity. The reason
is that greater numbers of workers can participate as opposed to longer
duration projects. Their scope varies from within a team to across several
teams. Usually they are physical, and people interact in person. But increas-
ingly they are virtual with remote teams. Because of their focus and effi-
ciency for driving improvements and especially in a complex organization
they are preferred for projects with limited scope. Time is a competitive
advantage, and rapid improvement is a proven strategy for organizational
change. If the event is locally focused on a few teams, classical scheduling
and management methods can be employed. When there are high cross-
functional dependencies and external groups like customers and suppliers
are included, then an agile approach may be useful for managing work.
Another advantage of using rapid improvement events is that a larger per-
centage of an organization can be involved in process improvement activ-
ities. This accelerates learning through the practical use of tools. They
can be applied to any process within an organization. When a large per-
centage of an organization practices new behaviors associated with process
improvement adoption is rapid and effective. Cultural change accelerates.
They are easily integrated with other operational initiatives because tools
and methods are adaptable.
Reinforcing new behaviors occurs at team level and then at organiza-
tional level with many teams. From an organizational perspective, sev-
eral initiatives will always be active and with numerous projects. This
is why, in Chapter 1, we discussed the need for strategic alignment of
improvement projects to ensure impact and resource priority. Projects
also help reinforce and create core operational competencies. Change
maturation can be measured. As an example, one proven measure of

initiative effectiveness is the percentage of an organization adopting
the new tools and methods. Typically, this is in a range of between
30% and 50%. The adoption percentage is measured by the number
of completed projects, their cumulative benefits as well as employee,
stakeholder, and customer satisfaction as measured using surveys and
other listening posts.
In Chapter 1 we also discussed attributes of successful initiatives that
increase organizational productivity. Higher productivity is gained when
the correct tools and methods are used to execute projects and also,
when leadership engages to promote the beneficial work and to reinforce
behaviors that promote the desired behaviors, i.e., organizational change.
These behaviors are tracked using updated measurement systems and
promoted with aligned reward and recognition systems. Communication
of success is also critical for showing benefits gained through practicing
new behaviors because projects in one area may, with modifications, be
successfully applied elsewhere.
Organizational change across end-to-end global processes is challenging
because large portions of the process are virtual and globally distributed
across several teams and software applications that do work using work-
flow management systems. Team building and collaboration are essential
for cohesiveness. Collaboration is facilitated by executing cross-functional
projects that improve communication and build collaborative relationships
between participants. A culturally diverse workforce improves the ability
of an organization to embrace innovative ideas and solutions. Change is
also enabled by the design of simple and standardized products and ser-
vices, which reduces organizational complexity. Agile Project Management
(APM), Design for Six Sigma (DFSS), and Design Thinking methods are
used to build this core competency. It is easier to update simple processes
than fragmented and more complicated ones. Change is more likely to be
supported by an organization if employees are actively engaged in its activ-
ities, i.e., in process improvement.
It is known that high performing work teams evolve through stages.
Also, that diverse teams are more effective than homogeneous ones when
properly facilitated. There are several sources of team conflict that inhibit a
team’s process improvement work. Examples are differences in values, psy-
chological perception, or differences in goals and outcomes. This is espe-
cially true for cross-functional teams with participants having competing
priorities. Properly facilitated group conflict increases a team’s solution

alternatives. In contrast, dysfunctional teams do not.
The operating model shown in Figure 1.1 helps move a team through
its rapid improvement event or improvement project because the right
tools and methods are selected within a proven problem-solving frame-
work. This helps execute the team charter through the root cause analysis
and solutions. The goal of the work is sustainability by practicing new
behaviors. The project charter is the first tool used to engage stakeholders.
It ensures alignment and prioritization through focused scope, benefit
identification, and assigning clear roles and responsibilities, e.g., the
team leader, facilitator, team members, and ad hoc technical experts. This
balances the improvement team, so the work smoothly proceeds. Effective
facilitation requires an agenda for team meetings, assigning clear roles and
responsibilities to members, keeping team minutes, and ensuring all team
members keep commitments for their agreed-upon deliverables from pre-
vious meetings. These facilitation tools help ensure the full participation of
all team members at an event or a longer duration project.
Reinforcing new behaviors starts with an organization’s strategic goals.
These are measured against targets to identify gaps that become the basis
for recommending projects to close them. There are different operational
gaps that require unique tools and methods. The operating model shown
in Figure 1.1 is also useful for framing the best tools and methods for the
project execution. As an example, if a root cause analysis is expected to
be manual, the data is not extensive, and statistical models are required,
then perhaps Six Sigma may be a good choice. But if the databases are
large and virtual spanning several systems and applications then big data
analytics would be a better tool choice. Or for process focused and manual
work with limited automation a Lean initiative with its specialized pro-
cess tools such as Value Flow Mapping (VFM), value analysis, process
waste analysis, Single-Minute Exchange of Dies (SMED), preventive
maintenance programs, ergonomic applications, and other tools might
be useful. Agile Project Management can be used to manage projects
for rapid execution and especially for design projects that create new
features and functions. As projects are completed, an organization’s oper-
ational competency and the value adding (VA) content of its processes
increase because there is a match between operational design and cus-
tomer requirements. Processes become simpler and standardized, i.e.,
their VA content increases.
Rewards and recognition systems accelerate cultural adoption. As an

example, when people who support successful teams are rewarded then
others will align with the new ways to work. At the end of the process
improvement work, the team should demonstrate a strong root cause
analysis with solutions incorporated into its organization’s management,
control and reporting systems. This helps ensure sustainability. Some
final questions the team should ask are “What are the business benefits
of the team’s improvements?”, “Has the team demonstrated a strong root
cause analysis with countermeasures?”, “Has a control plan been created
to ensure the countermeasures will be sustained over time?, “What work
is left to be done?”, “Has the local process owner and local work team been
trained to use the new process?”, and “Have all process work and inspec-
tion instructions been updated?”
GOVERNING ORGANIZATIONS
Governance is important for bringing rules to how process improve-
ment is managed. It is especially important in larger organizations
that manage end-to-end teams. Through its framework of policies
and councils, it standardizes roles and responsibilities, and ownership.
This eliminates friction between internal teams and external groups;
interactions are more seamless and productive. There are two types
of governance-impacting process improvement team. First, there is
internal governance that is enabled by a framework representing cross-
functional stakeholders that periodically meet to create a strategy for
continuous improvement and investment. This is done by creating
and approving policies, setting priorities and projects for closing gaps,
and approving roles and responsibilities. A governance framework
uses several oversight levels with each level having predefined activ-
ities based on scope. This is a format most governance models use for
large programs impacting cross-functional teams. Examples include
governance for strategy, marketing, sales, finance, and operations.
External governance is managed by the many third-party industry
oversight organizations with which an organization interacts. There
are also governmental regulatory agencies that influence organizational
governance.
Internal teams such as Human Resources and Legal will also have com-
pliance policies for governance. There may be restrictions for employee
roles and responsibilities or the way they do work. Some workers may be
contractors with limitations on the information they can access or the work
they can perform, or employees may be protected by collective bargaining
contracts. Policy impacts need to be considered for some solutions and
process changes impacting roles and responsibilities. The same consider-
ation applies to Legal compliance controlling how employees interact with
each other, customers, suppliers, the public, and the organization. These
interactions include the transfer of information, the use of assets, and
behaviors.
There are also external governance organizations. The International
Standard Organization (ISO) influences the standards for most
organizations around the world. It provides audits and certifies
organizations as meeting agreed upon minimum standards. This is helpful
for companies doing business across the world. A common ISO standards
family is the Quality Management Systems. These include ISO 9000:2015
that provides the basis for a functional quality system. Certification cri-
teria include a customer focus, so quality systems are aligned to customer
requirements, a process focus aligned to measurement of capability for
meeting customer requirements, leadership and employee engagement, a
focus on continuous improvement, and fact-based decision-making. These
help document and control the management of records, quality audits,
controls, and disposal of non-conforming material as well as corrective
and preventive action systems. ISO 9001:2015 expanded quality manage-
ment past audit compliance to proactive process management and controls.
ISO 9004:18 added requirements to demonstrate the potential for process
improvement. A second ISO standards family is ISO/IEC 27001 focused
on Information Technology (IT) security. When a process is changed the
impact on ISO standards and certification needs to be considered when
updating management and control systems. This is because they need to
be ISO auditable.
Industry standards help organizations with the design, produc-
tion, and testing of products and services. Standards are co-developed
by committees consisting of industry competitors. An advantage is
competitors, customers, and government agencies jointly use them. This
helps provide a consensus for standardized designing, producing, testing,
and using products and services. It also enables customers to compare
suppliers to standardized performance testing. Suppliers exceeding min-

imum standards are preferable to those that do not, all other things being
equal. They also help regulators to create regulations aligned with industry
best practices. But a disadvantage is that without proper oversight industry
standards could become anti-competitive favoring one group over another.
Standards also differ from region to region. As an example, in Britain, an
automobile’s steering wheel is on one side, whereas in the United States it
is on the opposite side. Or certain automobile safety features may differ
by country. In summary the design of products, services, and supporting
processes will usually be governed at several levels. These are regulatory,
industry, customer, and internal.
In addition to ISO standards, there are others. Examples include the
Supply Chain Operations Reference Model® (SCOR). SCOR is a trademark
of the Supply Chain Council. It has several components or processes that
include generic processes such as make-to-stock, make-to-order, assemble-
to-order, engineer-to-order, the warehousing and delivery of products, and
the reverse logistical functions needed to process returns. This governing
framework enables diverse supply chain models to be modeled but also
allows flexibility and is useful for aligning supply chain process work to a
standardized model that can provide additional insights between supply
chain participants to help an improvement team integrate its improvements
into a standardized end-to-end process framework.
Accounting governance in the United States is through the Financial
Accounting Foundation (FAF) and its governing board of trustees.
Figure 9.1 shows the various groups supporting the Financial Accounting
Standards Board (FASB). This board is responsible for coordinating the
The FASB and the Governmental Accounting Standards Board (GASB).
These entities are supported by constituencies such as accountants, audited
organizations, governmental agencies, and other stakeholders. The FASB
develops accounting standards used for governing financial informa-
tion. Like ISO, the FASB helps define standards related to accounting and
finance. FAF ensures its standards are fair and neutral.
In addition to these governing organizations the Sarbanes-Oxley Act
of 2002 was enacted by the United States Congress to prevent a conflict
of interest between auditors and their clients. Table 9.1 describes the gov-
ernance framework for Sarbanes-Oxley. Sarbanes-Oxley has an oversight
board (Title I) that coordinates auditing and quality control and inde-
pendence standards and rules. Sarbanes provides the basis for designing
Trustees • Members made up from

constituent organizations
Financial • Select members of FASB

Accounting • FASB funding
Foundation (FAF) • Selection of Advisory Council
Governmental • Sets standards for state and

Accounting local government reporting
Standards Board • Select members like FASB
(GASB)
• Sets standards for

Financial organizations'
Accounting reporting
Standards Board
(FASB)
• Technical issues
Financial
impacting FASB board
Accounting
• Selection and
Standards Advisory
organization of task
Council (FASAC)
forces
Member Organizations
• American Accounting Association
• American Institute of Certified Public accounts
• CFA Institute
• Institute of Management Accounts
• National Association of State Auditors, Comptrollers and Treasurers
• Securities Industry Association
• Financial Executives International
FIGURE 9.1
Financial Accounting Standards Board (FASB)
accounting and financial control systems and supporting processes. An

improvement team needs to ensure process changes in accounting and
finance as well as other parts of the organization do not conflict with
Sarbanes-Oxley requirements.
The occupational safety and health (OSHA) standards apply to reporting
worker injury and death incidents. These standards cover all known
materials and conditions that could harm employees. They have relevance
TABLE 9.1
Sarbanes-Oxley Act of 2002
Section of Act Partial Description
Title I –Public Company Sets registration with board, auditing and
Accounting Oversight Board quality control, and independence standards
and rules.
Title II –Auditor Independence Services outside scope of auditor practice and
conflicts of interest.
Title III –Corporate Responsibility Corporate responsibilities, rules for professional
attorneys, and improper audit influence.
Title IV –Enhanced Financial Transaction involving management and major
Disclosure stockholders and disclosure of auditing
committee financial expert.
Title V –Analysts’ Conflict of Treatment of security analysts by registered
Interest securities associations.
Title VI –Commission Resource Authorization of appropriations and federal court
and Authority authority.
Title VII –Studies and Reports General Accounting Office (GAO) of public
accounting firms and enforcement actions.
Title VIII –Corporate and Criminal Criminal penalties for altering documents or
Fraud Accountability defrauding stockholders.
Title IX –White Collar Crime Criminal penalties for mail and wire fraud.
Penalty Enhancements
Title X –Corporate Tax Returns Signing of corporate tax returns by chief executive
officers.
Title XI –Corporate Fraud and Increased criminal penalties for tampering with
Accountability records.
for improvement projects that change a process or material storage

conditions. All changes need to be reviewed with local facility and safety
experts. There are several OSHA standards that encompass hazardous
communication such as material fact sheets. These are shown in Table 9.2.
Emergency action planning describes actions employees should take for
fire or other emergencies. Fire prevention planning and standards need
to be at all locations. There need to be exit routes. Walking and working
surfaces need to be safely maintained. Examples include the use of
stairways, ladders, and surfaces. Medical and first aid requirements need
to be met for anticipation of expected incidents. These OSHA standards
help employees understand the materials and conditions where they work.
This helps them and their employers to take actions that prevent accidents,
TABLE 9.2
Occupational Safety and Health Administration (OSHA) Standards –General
Industry
Topics Description
1. Hazard Communication Understand hazardous chemicals in the workplace
including material fact sheets, and standards.
2. Emergency Action Plan Description of actions employees must take in situations
involving fire or other emergencies.
3. Fire Safety Requires employers to have a fire prevention plan and
standards.
4. Exit Routes Requires employers to have exit routes and standards.
5. Walking/Working Surfaces Standards on the use of stairways, ladders, and other
surfaces.
6. Medical and First Aid Requirements to provide medical treatment and first aid
based on expected workplace hazards.
injuries, and deaths. Solutions to improvement projects must not conflict

with OSHA or other standards.
If process improvement is made in a Federal Drug Administration (FDA)
regulated environment, then FDA regulations need to be considered.
Example industries include medical devices and equipment used to dis-
pense pharmaceuticals. Process changes will need to be compliant with
FDA regulations. This may mean they cannot be implemented for several
months or longer. This duration may impact benefit realization.
The Automotive Industry Action Group (AIAG) is a governance body
that develops and promotes standards for the design, manufacture, and
production of automotive products. Standards, methods, and tools of the
AIAG are used in numerous other non-automotive related industries
because of their usefulness. These help gather information needed to design,
manufacture, and validate performance. This standardized approach
enables all supply chain participants to use a common approach as products
move through the AIAG concept, design, product validation phases, and
production. Many rapid improvement teams are deployed to meet the cri-
teria of one of these phases. The planning phase incorporates the Voice of
the Customer (VOC) into design requirements. The design team creates
a Design Failure Mode and Effects Analysis (DFMEA) and other docu-
mentation. The DFMEA tool is an important analysis to identify design
gaps. Any gaps found in needed features and functions require that a
team be assembled to quickly close them. In the product design phase
prototypes are built and a preliminary quality control plan is also created.
It incorporates all current knowledge of the new design and is aligned
with the original VOC. At the end of this phase specifications, prototypes,
engineering drawings, and new equipment and testing requirements are
identified and communicated to production.
In the process phase, production layouts, equipment, and tooling are
identified, packaging standards and specifications, work instructions,
internal testing, and auditing procedures are set. Also created are meas-
urement systems analyses, preliminary capability studies, and a Process
Failure Modes and Effects Analysis (PFMEA). The PFMEA shows the
process gaps that will need to be solved using improvement teams.
These will need to be closed prior to scaling up production. In the val-
idation phase, customer requirements are tested and verified using a
limited scale pilot under actual production conditions. The customer
must sign off on the control plan document including the capability
studies of pre-production parts, packaging evaluations, and validation
performance testing. The customer must approve all design or process
changes.
There are usually several governance organizations that need to be
considered when making process improvements. There are significant
advantages for conforming to standards and best practices. These are
usually created by experts across several organizations and they pro-
vide access to proven methods for root cause analysis and solutions.
Governance organizations also provide guidelines to avoid regulatory
issues including fines. Improvements also need to be integrated into an
organization’s management, control, and reporting systems. There are
many of these systems depending on the type of improvement. As an
example, making process changes requires updating information in sev-
eral systems. The control system requirements arise in part from internal
and external governance oversight. Governance organizations exist at an
industry, a country, and international level. In summary, it is important
to ensure improvements and solutions are considered from a compliance
perspective, i.e., organizational policies, industry standards, and govern-
mental regulations.
SECURITY
Depending on the types of solution created some may need to be
reviewed for data security impact. If the rapid improvement event is in
manufacturing and does not touch IT systems, there is little likelihood
of security issues. But if the work has focused on virtual processes that
touch different teams and relies on metadata being transferred across
systems, then security will be a consideration. Most organizations have a
dedicated team assigned to maintain security. In addition, the master data
governance teams will also control access to metadata. In some industries
such as medical or defense data governance and security will be a priority
because of the sensitivity of the information accessed. These and other
highly regulated industries have formal policies for how data is stored and
used. These must be followed when making process changes or accessing
the data for root cause analysis.
Security considerations apply to any system that collects and exchanges
data. This includes the Internet of Things (IoT), which has billions of on-
line devices including sensors, cameras, machines, and other equipment
collecting and analyzing data. These devices are deployed to automate
machines and processes. The automation is achieved by interconnections
through the application of Robotic Process Automation (RPA) that uses
algorithms to do sequential work tasks and the application of Artificial
Intelligence (AI) that applies machine learning models to the devices and
processes and IT upgrades. If improvements are an automation, these will
need a data security and compliance review.
GENERAL DATA PROTECTION REGULATION

The GDPR controls use of personal data stored within IT systems located
either within the European Union (EU) or EU personal data stored and
used in non-EU systems. It became effective in May 2018. There are severe
penalties for non-compliance. These range from a fine between 2% and
4% of an organization’s annual revenue for not securely handling personal
data. Personal data includes the data in metadata fields that can be pieced
together to uniquely identify an individual. Examples include financial
records, home address, phone numbers, email addresses, health history,

and similar personal data. The regulation is directed toward any organiza-
tion that collects personal data and especially social media portals that use
it either for profit or selling to third parties.
Compliance with GDPR has created a need for process documenta-
tion to show how source and consuming systems manage personal data
through software applications, subsequent analyses, and reporting. Rapid
improvement events can help update process documentation if a process
analysis finds that process changes are needed to become GDPR compliant.
The process improvement work is organized within a GDPR governance
framework. This is in addition to an operational excellence framework
that includes Lean, Six Sigma, and other initiatives. The GDPR governance
framework is usually owned by either Legal, human resources, or IT. The
initial focus is on systems and applications collecting personal data, i.e.,
the source systems. Then on the consuming systems that work with the
confidential data and report using it. Source systems include marketing
and sales portals that collect personal data for marketing research or sales
quoting and order creation for the products and services customers pur-
chase. An audit would show an organization has numerous source systems
collecting personal data.
There are several dimensions of GDPR relevant for process improvement
and other teams such as providing notices to customers and securing data.
The first dimension is notice and consent authorization by customers when
they access a portal and need to provide personal information. The consent
must be active rather than passive. As an example, a passive notification
informs a customer the information they provide will be used for certain
purposes. It does not prevent access to the portal. But an active notification
requires a customer to accept the terms and conditions and actively opt in
by clicking an accept box. But even if consumers opt in, an organization
has responsibilities for how it handles the personal data it collects. These
are related to data subject rights. The data subject is the persona opting in
and sharing personal information through the portal with the organiza-
tion. The data subject rights provision of GDPR allows consumers to access
personal information and request that it be revised or deleted. Deletion
cannot be done if the personal data is needed to satisfy the customer’s
contract or warranty, in other words, if the organization needs it to fulfill
products and services under obligation.
There are many documented incidents where organizations have

sustained serious data breaches of personal data but report it only after
months have passed. The incident response provision of GDPR requires
a 72-hour notification to GDPR regulators for a serious data breach and
that record-keeping be secure and available to regulators. The notice and
consent, data subject rights, and the 72-hour incident response of require-
ment also apply to third parties with access to customer personal data.
These could be suppliers that help fulfill orders, market research firms, or
others. A good strategy for minimizing GDPR compliance risks is to adhere
to the data minimization requirement and only collect data needed to com-
plete a transaction. The balance of GDPR requirements is that all EU citizen
data transferred outside the EU must be GDPR compliant, there must be an
internal governance framework and communications plan for notification of
compliance requirements or data breaches. Process improvement expertise
is needed to help the GDPR team and IT achieve compliance for policies,
processes, and roles and responsibilities issues. The standard Lean tools would
be applied. Robotic Process Automation would be applied to small changes
of workflow or system notification whereas IT projects would be needed for
major ones. These latter projects need to be placed on an IT roadmap.
CHANGING AN ORGANIZATION
Lean Six Sigma is a successful change initiative that has been deployed
within tens of thousands of organizations and millions of professionals use
the methodology every day. It has improved quality and productivity across
almost every industry and organizational function across the world. It has a
deployment roadmap that guides the initial launch of the initiative through
its maturity until fully integrated into the ways an organization solves pro-
cess issues. The initial launch begins with an operational assessment that
lasts two to four weeks. This was described in earlier chapters, but includes
leadership interviews and deliverables at an organizational and local level.
There are also process audits of financial and operational reports as well as
on-site workshops to analyze major processes using VFM. This helps deter-
mine the appropriate deployment model for an organization. There may
also be isolated process improvement groups that need to be integrated
into the deployment. Goals and the recommendations for achieving them
and schedules are created that will transform the way the organization
solves its operational issues. A governance model is also created to include
project selection and prioritization with leadership reviews and reporting.
The assessment information is summarized for a leadership review. This
includes a cost benefit analysis and assessment findings for approval to
launch the initiative. After the leadership review and approval to proceed,
a pilot is launched to include select projects and black belt candidates.
As the program begins to be deployed, the focus is on program govern-
ance and deployment management of projects and communications. There
is regular reporting of project status. Black belts are also mentored to help
complete the first rounds of projects. This creates early successes that can
be communicated to gain organizational support. The project pipeline is
expanded, and the deployment grows according to the plan. There are also
audits of project benefits to ensure initiative integrity. Depending on pro-
ject opportunities, additional waves of black belts are trained. Eventually
they will be moved back into the organization to use the Lean Six Sigma
tools and methods in their daily work. This is how cultural diffusion occurs
and an organization is culturally changed to have a process improvement
mindset. The project pipeline continues to expand across the organization
through the application of tools and methods to diverse functions and
teams. Financial and operational analysis, customer issues, process audits,
and similar sources feed the project pipeline. The return on investment of
the initiative is updated and provides a justification for continued support.
A deployment when properly managed through a governance frame-
work will change an organization’s culture for solving operational issues.
Cultural transformation is seen when there is a full transition to the
business leaders. This implies the business takes ownership of all its deploy-
ment, except reporting and audit, which will remain with the initiative’s
program management office. The business now coordinates the project
pipeline, black belt selection, and project assignments. The deployment is
updated, modified, and managed to achieve the business strategic oper-
ational goals. As discussed in early chapters, successful initiatives are top
down and integrated into a governance framework to execute organiza-
tional change. The topics discussed in earlier chapters are integral for a
successful Lean Six Sigma initiative. But how they are used has changed
to focus on non-manufacturing applications in offices, services, supply
chains, and supporting processes. Lean Six Sigma and supporting meth-
odologies such as big data analytics, APM, the VOC, and similar methods
greatly enhance organizational productivity and competitiveness.
SUMMARY
Organizational change is not easy to deploy or manage. It depends on
employees practicing new behaviors. This starts with an organization’s
strategic goals. These are measured against competitive targets to identify
gaps that become the basis for recommending projects to close them. The
operating model shown in Figure 1.1 is useful for framing the best tools
and methods as well as the project execution.
Effective change also depends on governance for sustainability. First,
there is internal governance that is enabled by an operational initiative
framework representing cross-functional stakeholders that periodically
meet to create a strategy for continuous improvement and investment.
This is done by creating and approving policies, setting priorities, and
identifying projects to close operational gaps, and approving roles and
responsibilities. There are also several external organizations that were
discussed in the chapter. A governance framework uses several oversight
levels with each level having predefined activities based on scope. This
is a format most governance models use for initiatives impacting cross-
functional end-to-end global teams. Examples include governance for
strategy, marketing, sales, finance, and operations. External governance is
managed by the many third-party industry oversight organizations. There
are also governmental regulatory agencies that influence organizations
and internal governance.
As part of the governance discussion we also discussed data security.
Depending on the types of solution created some may need to be reviewed
for their data security impact. If a project does not touch IT systems, there
is little likelihood of security issues. But if the work has focused on an end-
to-end global process that touches different teams and relies on metadata
being transferred across systems then security will be a consideration.
Most organizations have a dedicated team assigned to maintain security
governance.
In addition to normal data security, there are EU requirements for the

security of personal data. Compliance with GDPR has created a need
for process documentation to show how source and consuming systems
manage personal data through software applications, subsequent analyses,
and reporting. Process improvement projects are used to update process
documentation if process changes must be GDPR compliant. This process
improvement work is organized within a GDPR governance framework.
This is in addition to an operational excellence framework that includes
Lean, Six Sigma, and other operational initiatives.
Conclusion
The goal of writing this book has been to provide a simple guide to plan
and conduct Kaizen or rapid improvement events in service processes and
to place these in context with an operating model shown in Figure 1.1
and also to identify and deploy other types of improvement project. It
was written to be self-contained in that all the required information was
presented through its nine chapters. In addition, examples of templates
were discussed to enable a process improvement team to immediately begin
its work. The methodology for accelerating process improvement has been
improvement methodology focused across end-to-end functions and glo-
bally as opposed to discrete work areas.
Now many process problems are quickly analyzed and solved using rapid
improvement events through focused workshops as well as through longer
duration projects. Today’s service, office, and supporting processes con-
sist of employees and technologies that are integral parts of global supply
chains. Digitalization, automation, and other disruptive technologies inte-
grate these systems. As an example, in a modern end-to-end quote to order
to cash process, an accounts receivable team may reside in one country, but
several of its core functions are performed in different locations and many
of these are global. Customer experience is at the center of operational
improvement but with higher efficiencies. The methodology for acceler-
ating process improvement has also been expanded because of automation
and remote working teams.
Strategy alignment was shown to be critical to ensure resources are effi-
ciently utilized to achieve business goals. Organizations employ different
initiatives to execute strategies. Lean and Six Sigma are two operational
initiatives under the Operational Excellence (OPEX) umbrella. To realize
323
324 • Conclusion
benefits, projects must be successfully executed by workers trained to use

the initiative’s tools and methods. An operational assessment is conducted
to create a portfolio of prioritized projects, to accelerate an initiative to
increase productivity. This also increases competitiveness and operational
flexibility.
Figure 1.1 shows the operational model for process improvement. It
integrates the classical methodologies of Lean and Six Sigma and newer
methods of Agile Project Management (APM), big data analytics, and
business intelligence. The methodology for accelerating process improve-
ment has also been expanded in recent years from the original Kaizen to
a generalized rapid improvement methodology focused across teams and
global as opposed to discrete work areas. Agile Project Management is
usually focused on bringing a team together to create discrete features
and functions, i.e., solutions for stakeholders using Scrum Sprints. This
method is usually applied to software development but is also applicable
to project management of rapid improvement events or longer duration
improvement projects. In addition to speed for delivering functionality
and features, other advantages of APM are high collaboration within the
team and with subject matter experts and stakeholders who provide feed-
back at the end of each sprint.
Table 1.1 compared the major characteristics of the Lean, Six Sigma,
The goal of this definition phase is to create actionable project charters
to eliminate or close performance gaps. Different problem statements
require different toolsets to identify, analyze, and eliminate the root causes
for poor performance. As an example, projects requiring process simpli-
fication, standardization, and similar improvements benefit from a Lean
The goal for understanding the Voice of the Customer (VOC) from a
process improvement perspective is to learn how products and services
including supporting processes are used by customer personas in use
cases. The gathered information is used to then understand what works
well or not. For things not working well, projects are created to enhance
Conclusion • 325
the customer’s experience. This approach is also used for improving stake-
holder, supplier, employee, and partner experience. The goal is a summar-
ization of the issues that need to be improved and key customer contacts
that can be consulted or join improvement teams.
A rapid improvement event uses the VOC and simple process analysis
tools to identify and eliminate non-value-adding operations and the root
causes for poor performance. Most events use a combination of Lean
methods and increasingly methods related to digitization, automation,
and virtualization. The classical Lean methods include work standard-
ization, mistake-proofing operations, Single-Minute Exchange of Dies
(SMED), and total preventive maintenance (TPM). Digitization refers to
extracting metadata from IT ecosystems for analytics. Automation refers
to the substitution of manual work by machines including algorithms.
The use of algorithms for automation is called robotic process automa-
tion (RPA). Although Lean Six Sigma rapid improvement methods were
the original focus of the first edition of this book, all the elements of
the operating model now need to be considered for effective process
improvement.
Organizational design teams follow logical methodologies to design and
test products and services to ensure they can be efficiently produced and
used by customers. Examples include classical design approaches as well
as the Design for Six Sigma (DFSS) methodology. The DFSS adds add-
itional modeling tools and a VOC focus that overlays classical design
approaches. Design thinking is a recently developed method that designs
from the outside into an organization. The difference is the way that VOC
is delayered from overall requirements into specific ones to satisfy per-
sonas and meet use case requirements. Rather than broad-brush the VOC
information, it is matched to different user expectations. Design Thinking
uses the five phases shown in Figure 1.2 to discover customer issues, define
them, and develop solutions. These included the Emphasize Phase to dis-
cover the problem, the Define Phase to structure the problem for solu-
tion, the Idealate phase to develop solutions and eliminate the problem, the
Prototype Phase to build the solutions, and the Test Phase to pilot them.
In previous chapters, we showed how to use Lean Six Sigma and rapid
improvement methods to enhance customer experience and organiza-
tional productivity for services and supporting processes. The discussion
was divided into three sections that included an alignment of improvement
opportunities, the planning and execution of rapid improvement events,
326 • Conclusion
and implementation of solutions and changing behaviors. The first section

discussed how to ensure projects are aligned to operational strategy. The
second section discussed how to apply Lean Six Sigma tools and methods
to support rapid improvement event planning in a virtual team and
remote environment. It also discussed data collection and analysis for IT
ecosystems, using digitization, RPA, and other methods to collect informa-
tion either in person or through algorithms. These topics were integrated
into a discussion of process improvement. The third section discussed
solution implementation, documenting business benefits, reinforcing new
behaviors, and organizational change.
Projects were classified according to intended outcomes and the types of
resource required to execute them. We focused our discussion primarily
on the application of Lean tools and methods to improve processes. Other
improvement projects require in-depth statistical analysis and may be
more effectively executed using Six Sigma methods. They may also require
experimentation or testing of solutions using a process model. Initial testing
for any solution either Lean or Six Sigma requires an evaluation using a
process pilot. Other types of improvement project may require extensive
analysis using big data analytics, the deployment of capital investment, e.g.,
new machines, and others may have known solutions requiring minimum
project deployment, i.e., just do it projects. Projects need clear objectives
for the type of work that needs to be done, and how work activities should
be organized and assigned to team members. They can also be classified
according to intended outcomes and the types of resource required to
execute them.
Lean supply chains are characterized by having a high end-to-end value-
added content across the participating organizations. This implies that the
end-to-end work operations are aligned across the supply chain in ways
that optimize value creation through efficient asset allocation. Increasing
end-to-end value-adding content is important because when productivity
is increased relative to competitors, an organization becomes more com-
petitive. More than 50% to 80% of all organizational costs are associated
with the materials, people, and equipment in a system, reducing them at
constant sales provides more cash to fund improvements as well as new
products and services. This increases organizational flexibility. It is pos-
sible because the participants have visibility of assets using business intel-
ligence applications and rules based on artificial intelligence (AI) that
recommends the allocations. The information to build and operate these
Conclusion • 327
models comes from thousands of incoming data sources that are based on
the Internet of Things (IoT). Big Data is managed through numerous IT
platforms and applications and is stored virtually in private clouds accessed
through online portals by participants having secure privileges.
The critical-to (CT) flow down methodology is not only a good way to
ensure that identified projects are aligned with strategic operating goals
but to also show how projects are related and the logic behind their pri-
oritization. There were four high-level metrics from which we defined
lower level operational metrics such as lead time, yield, and similar ones.
These higher-level metrics included business, financial, project, and com-
pensating metrics. Business metrics can be aggregated across an organ-
ization and are usually described in percentages. Once an improvement
team begins its root cause analysis, the business and financial metrics are
focused on operational metrics and the projects’ problem statement is
periodically updated to include additional metrics identified by the root
cause analysis. But the alignment between business, financial, and project
metrics must be maintained for communications to different audiences
including leadership.
The project charter will need a clear business case, scope, a focused
problem statement, and a target or goal. Its business case has three
components. These are the problem description, its impact on the process,
and a desired outcome from the project but without a solution. To pro-
vide scope for the project or projects, we next have a team scoping discus-
sion using a supplier-input-process-output-customer (SIPOC) diagram to
understand where we will work and the boundaries of the work, i.e., the
scope. A problem statement describes the problem with scope, i.e., com-
mercial services, the magnitude of the problem, and the metric(s) being
measured. The goal has a verb and noun with scope and quantitative goal,
and a time frame.
ivity. These will be of various types including Lean, Six Sigma, Business
Intelligence (highly analytical), capital investment (purchasing new
equipment), just do it (known solutions), and others. Then referencing the
operating model in Chapter 1, projects may also be good candidates for
rapid execution. Periodic assessments are important for creating a project
pipeline to ensure an optimum allocation of resources to a Lean Six Sigma
initiative. They also help create the infrastructure in which rapid improve-
ment workshops and projects can be executed at lower organizational levels
328 • Conclusion
but still be strategically aligned. This ensures they receive leadership support,
needed resources, and that benefits accrue upward to the organization.
Once an assessment is complete, project charters are created to close
operational gaps. These initial project charters will need refinement.
Project charters identify “areas of opportunity” that a team reviews and
refines to provide a focus. In other words, an initial project charter may
separate into several other projects. When a project has been selected
for execution and the Define Phase starts, the work area where the pro-
ject will be deployed needs to be visited, the project discussed with the
area manager, and the team will need to gather additional data from the
process to refine the project’s scope. The final project charter will need a
clear business case, scope, a focused problem statement, and a target or
goal. These charters will then need to be prioritized with other projects
based on a cost benefit analysis.
We discussed the basic tools, methods, and concepts of Lean Six Sigma
and applied the concepts to six common service processes. These were
financial forecasting, accounts receivables, new product marketing research,
new product development, hiring employees, and supplier performance
management. In this discussion we developed analogues from manufac-
turing and applied these to service, office, and supporting processes.
The basis of Lean methods requires an understanding of the features and
functions of a product or service important to customers and designing
and producing them in ways that meet VOC needs and value expectations.
Understanding the VOC provides a methodical way to identify, analyze,
and incorporate effectively and effciently the customer requirements into
products and services. The process begins when external customers are
classified by market segment and interviewed to identify Kano needs and
values. Customers have different needs and values that impact project
selection and scope.
It is important that an organization “Lean” itself out at a higher level
complexity impacts its lead time, cost, and quality as well as project dur-
ation and required resources to execute it. It makes no sense to improve
a process if it was going to be eliminated in the future. It also makes no
sense to improve processes if they are non-core to an organization’s oper-
ational strategy and may not exist internally in the future. Often non-core
processes including their products or services are redesigned or outsourced
to other organizations.
Conclusion • 329
Table 3.2 provided an extensive list of metrics using a dashboard format.

Actual dashboards would be simplified, made visually appealing, and be
(1) percentage value-adding (VA) content or time; (2) a system’s pro-
duction or throughput rate (units-per-minute); (3) scrap percentages;
(4) rework percentages; (5) the downtime percentages of equipment and
people; (6) the available production capacities of operations in units-
per-time; (7) set-up time and cost of jobs at various operations in a pro-
cess workflow; (8) inventory investment operation by operation; (9) the
allocated floor space required for production of products and services; and
(10) process lead time. Financial measurements such as revenue, operating
expenses, cash flow, financial adjustments, and ratios are also tracked.
There are others depending on the application and the types of decision
that need to be made. These Lean metrics are relevant for manufacturing
and services across diverse industries. In addition to these Lean metrics,
there are also Six Sigma quality metrics as well as those used to manage
projects.
At a process level, a Value Flow Map (VFM) is used to describe the
process. The Lean metrics are also applied at this lower analytical level.
The top of Figure 3.1 showed a generic version of a Value Stream Map
(VSM). The first step was classifying operations as value-adding (VA),
non-value-adding (NVA), and business value-adding (BVA) operations.
Value-adding operations required by customers have three attributes,
i.e., the customer needs them, they are transformed either by adding
features, functions, information, or other attributes, and they are done
right the first time. Non-value adding operations are not needed and can
be eliminated. Business value-adding operations do not have customer
value but are needed because of technology or regulatory constraints.
Over time the goal is to eliminate these BVA operations or to modify
them to reduce their NVA content.
The operating model shown in Figure 1.1 extended the original process
improvement strategy to include APM and big data analytics. Agile Project
Management can be used for creating new features and functions. Big data
analytics is needed for data gathering, conditioning, and analysis in IT
ecosystems. Other Lean Six Sigma tools and methods are now integrated
into these IT ecosystems for process improvement of these virtual processes.
There is also a new methodology that enables the automation of work tasks
for making improvements called RPA, which simplifies, standardizes, and
330 • Conclusion
mistake-proofs a process by eliminating repetitive manual work tasks from

the process identified through root cause analysis.
The focus was to provide a predefined set of basic activities summarized
in Figure 4.1 that enabled an improvement team to plan activities for a
rapid improvement event or longer duration projects. Event activities
were divided into four major sections, which are: “preparing for the
event,” “conducting the event,” “presenting the findings,” and “follow-up”
activities. The preparation for an event begins by ensuring the team has
an aligned project charter, properly scoped to serve as its basis. Project
charters capture the essential information necessary to plan and exe-
cute the event including the business case, problem statement, goals and
deliverables, the leader, facilitators, team members, facilities, tools, and
equipment. A leader and facilitator are assigned to ensure that all planning
and prework are completed, the event keeps to the scheduled activities,
and produces desired outcomes. Event leaders and facilitators should be
experienced.
The preparation of an event begins several weeks prior to bringing a
team together. Its activities include creating an actionable project charter,
assigning team members, and securing facilities if the team is collocated
or reserving virtual conferencing if some team members are remote.
Resources required to help with the work also need to be planned. In
manufacturing electricians, plumbers, Lean experts, and other sub-
ject matter experts need to be invited. Materials and equipment may
also be needed depending on the scope and goals. In end-to-end ser-
vice processes, cross-functional team members are invited with subject
matter experts.
After the kick-off discussions, the team discusses and analyzes the avail-
able data. The analysis is applied to a process or a floor layout depending
on scope that shows the spatial relationships between equipment and
people, or the things that need to be changed based on the event’s goals and
deliverables. A floor layout is usually needed for a 5S event. If the focus is
on a process, the analysis will be to confirm the current state VSM map or
build one using sticky notes. If the event is virtual, then process mapping
software will be used by the team. Team members will be assigned to
collect additional data from the process for the analysis. At a minimum,
data should be collected on the operational key metrics listed in Table 3.2.
In addition, key management reports, data collection forms, and similar
information should be gathered for the analysis.
Conclusion • 331
also needs to be an efficient data collection strategy. Data collection includes
data-gathering strategies, analytical tools and methods, and process sam-
pling. Several data collection templates were discussed to enable an effi-
cient collection of operational metrics. The goal was to gather information
to identify the root causes for process issues and to confirm improvements
were successful. Effective data collection also enables immediate process
improvements as well as creating project charters for assignment to future
teams. Job shadowing is an important method of collecting process data.
It is easily adapted to analyzing complex work. It is especially useful in
data collection for non-standard work tasks in virtual systems with people.
Examples included processes characterized by many meetings, computer
use, and repetitive processes but not in repeatable sequences like a machine
going through a work cycle at a predetermined frequency. Job shadowing
is also used to track the time components of complex professional jobs and
work tasks.
Earlier chapters also provided simple and easy to use data collection
and analysis tools and methods. These included various types of pro-
cess map, metric summarization templates, shadowing templates, a spa-
ghetti diagram, checklists, C&E diagram, a 5-Why analysis, a histogram,
a Pareto chart, a box plot, scatter plots, time-series graphs, and control
charts. Examples using these tools were discussed. In addition, teams
collect existing reports with financial and operational data as well as pro-
cess maps, floor layouts, and similar sources of information to conduct an
analysis of the root causes for process issues. Once identified, root causes
can be eliminated though solutions or countermeasures. Several useful
templates to aid data collection and analysis were also discussed in earlier
chapters. These can be modified as needed.
An important and interactive data collection tool is the VSM for supply
chains or, if mapping a process, we use a VFM. A VSM creates a visual
model of the end-to-end process, i.e., supplier to customer including key
operational metrics. Overlaying operational metrics onto a VSM or VFM
is important to identify gaps. Additional analyses are also applied. These
include value analysis and the seven process wastes. Once the map is veri-
fied by “walking” the process, it becomes useful for further analysis as well
as documentation to support future quality and operational audits.
In manufacturing data collection such as VSMs and VFMs historically
focused on taking process snapshots. The processes varied from batch to
332 • Conclusion
continuous. Improvement teams would move through the process to take a

metric snapshot and add this information to either a floor layout if the focus
was to improve a work area or to build a VFM for the process. The metrics
gathered included throughput, inventory, and others discussed in earlier
chapters. Data collection has become more complicated for any process
that collects, analyzes, and reports data through end-to-end IT systems
and across several teams. This data collection requires using software tools
such as algorithms to extract and analyze transactions at various points in
the process. Most processes now consist of high volume transactions and
very large databases.
Data collection and analysis for high- volume transaction processes
require analytical tools to show how transactions flow through the many
IT systems. This analysis includes rework paths and the sequence of work
tasks done by users at online portals or user interfaces. Collecting data
using algorithms, i.e., bots, and manually shadowing the people doing the
manual work associated with the process is now the way improvement
teams work. This impacts the upfront planning and data collection as well
as the skills needed on an improvement team.
Operational complexity was discussed in the context of Table 5.9. This
includes item proliferation such as components, products, services, people
and machines, a high process or product non-value content, long lead times
that mask process issues, high variation in demand or any part of a pro-
cess, low productivity that requires expediting work, high cost that is the
result of process inefficiencies, near misses relative to schedule, milestones,
personal injury, and similar events. Data collected for these metrics helps a
team understand complexity relative to its root causes and ways to simplify
a process.
We also discussed using Customer Experience Mapping (CEM) to collect
relevant information from customers to improve their experience. In most
situations, an internal team uses historical information and experience to
substitute their voice for the customer’s voice. While this is easy to do, it is
not accurate. The analogy would be to have managers build a VFM. They
have a good idea for how the work is done but because they do not do the
work their opinions are not accurate. They also do not know workarounds,
i.e., the hidden factory. Therefore, the people doing the work every day are
asked to build the VFM. The CEM workshop is based on the same prin-
ciple and brings in customer employees that perform purchasing roles, i.e.,
Conclusion • 333
personas interacting with the supplier’s employees at different points in the

product and service experience.
Improving a process starts by asking questions related to the why, where,
how, and who as well as the specific methods necessary to implement the
improvements. The goal is to link solutions or countermeasures to the root
cause analysis. Table 6.1 presented a list of common process improvement
methods useful for eliminating the root causes of poor performance.
An improvement team should “think outside the box” prior to jumping
into a solution discussion. This requires asking several clarifying questions
such as “Should the work be done at all and if so, done by whom? Should
the work be outsourced? Should it be modified or augmented to increase
its value content? Where should it be performed and by which team?
Which role should do the work? Should the work tasks be automated?”
These types of question and similar ones enable a team to achieve rapid
productivity gains. The elimination of operations and work tasks is a very
effective way to eliminate root causes from a process.
Table 6.1 showed that the effectiveness and sustainability of control tools
vary. For this reason, they are used in combination to ensure successful and
sustainable outcomes. Another very effective control method is the elimin-
ation of portions of a process or a redesign to eliminate operations. The effect-
iveness and sustainability of this solution are also high. If a portion of a process
can be eliminated then lead time, cost, and quality issues associated with it
will also be eliminated reducing process complexity. In a similar manner, if
part of a process can be redesigned to be less complex and mistake-proofed
then its efficiency is increased. Common process redesigns are updates to
product designs, changes to equipment, the layout of the process, the work
and inspection procedures as well as others.
Robotic Process Automation applies algorithms to eliminate repetitive
and manual work tasks that are based on logical business rules and have
a high transaction volume or are batched in volume. Properly done over
many work tasks the productivity increases are significant. Each bot is in
effect a virtual worker that produces standardized and error-free work
without cost once implemented into a process. Like any process improve-
ment initiative, there are sequential steps to effectively implement it. To
start, an organization needs to invest in training to create the needed skills
set and practically apply the tools and methods on pilot projects. This is
called creating an RPA foundation.
334 • Conclusion
We discussed several examples to show how to analyze operations and

work tasks. The solutions differed because although each application used
common tools there were differences in root causes. It is important a team
discuss all aspects of the process issue prior to moving off on the root cause
analysis. This is done by gathering all available information related to the
issue and assigning roles and responsibilities to team members. The root
cause analysis must drive all process improvements to ensure a project’s
success. The team must prove a causal relationship between the pro-
ject metrics and the root causes so the solutions will be effective. Newly
designed processes will tend to have a higher VA content than older and
misaligned ones. This is because of customer value migration and the evo-
lution of process complexity as localized modifications are made without
alignment with the larger process.
People need to have a reason to do things differently if the current
system has worked reasonably well. In fact, people will consider change
when there is a burning platform forcing a change to the way things have
been done because of a major event such as major customers lost, supply
chain disruptions, and other significant events. Another reason people will
change is by logical thought and engagement using facts to convince them
that although there is no burning platform today, it will arrive in the future
and the most effective strategy is solving for it today. This requires building
a case for change by setting competitive performance targets that will be
relevant to the foreseeable future, in other words, to lead and not follow.
Studies have shown that successful change initiatives have success
attributes. First employees must use an initiative’s tools and methods. This
is called practicing new behaviors. To practice new behaviors work must
be changed through beneficial projects that align with value, are simpler,
more standardized, mistake-proofed, and even automated.
Organizations consist of formal and informal groups that promote or
inhibit change initiatives. These groups must be convinced the change ini-
tiative is beneficial to the organization as well as their groups and indi-
vidually to them. Groups have biases that influence the types of work
activities they support, the priority of these activities, and ways they should
be done. In other words, they express approval or disapproval for changes
to the status quo. Effective change programs know cultures have groups.
Therefore, tools and methods are used to understand their perspectives
and make modifications to the planned approach for deploying an initia-
tive, its projects, and for recommending process changes. A key stakeholder
Conclusion • 335
analysis was discussed as a good tool to help manage different stakeholder

groups. This helps consider different group perspectives. Often an intro-
spective will result in more efficient project execution and more effective
solutions than those originally considered by the team.
It is also a good idea for a team to create an elevator speech to easily
describe their project. It uses key elements from the project’s charter to
create a short sentence that explains what the team is doing and why it
needs to be done, i.e., the benefits or risks if not done.
Process controls are based on a thorough analysis of a process including
the root causes of poor performance and the solutions. Control tools and
methods vary, and several are used in combination to sustain improvements.
Typical controls include training, procedures, standards, statistical pro-
cess control, preventive maintenance, audits, application of 5S methods,
mistake-proofing, and the elimination of operations and work tasks. There
are also supporting tools such as formal organizational frameworks, con-
trol plans, failure mode and effects analysis (FMEA), metric dashboards,
and automation as well as other supporting methods to brainstorm and
implement their process controls.
When building the control plan, it is useful to ask questions before final-
izing solutions and integrating them into systems to ensure sustainability.
First, which process or operations will be eliminated, modified, or con-
trolled? What evidence has been gathered to show the proposed changes
are the right ones? Do these maps back the root cause analysis? Have the
changes been tested through a pilot to verify they work? How will the
solutions be applied? Where and by whom? How will they be measured
and reported? What will be the reaction plan if the controls fail because of
unforeseen circumstances?
Statistical process control (SPC) was a central topic of Chapter 8. It is
used to monitor the key performance process variables to identify random
and non-random patterns over time. Statistical tests are performed on the
patterns to determine if there are assignable causes for variation, i.e., a non-
random pattern exists. Control charts are used to detect outliers, trends in
the data, sustained shifts in the mean level of the variable being charted,
excess variation, or unusual reductions of variation. There are other non-
random patterns that vary by industry. There are also rules for using con-
trol charts. First, they are constructed based on the probability distribution
of the variable being charted. The second rule is that common cause vari-
ation is difficult to eliminate because there are no obvious patterns in a
336 • Conclusion
stable process. This is because the variation is caused by several variation

sources. In contrast, assignable sources of variation caused by few vari-
ation sources can be eliminated from a process because they are detected,
and through investigation the root causes of the variation can be identified
and eliminated. The third rule is the difference between the control of a
process and its capability to meet customer requirements. These are two
different but complementary metrics. Table 8.1 described the four most
common control charts. These are the individual-moving range chart, X-
Bar, and R-chart, p-chart, and the C-chart. Different assumed probability
distributions require the use of different control charts.
We also discussed dashboard designs. These are created and for-
matted for specific audiences and the types of information that need to be
conveyed to them. There is a reporting hierarchy starting with leadership
and then the key stakeholders and employees doing the work and who take
action to keep the process metrics on target and in control. The leadership
dashboards provide decision-making capability by gathering data from
different sources to build models showing trends, patterns, and analytical
summaries. These are strategic dashboards that focus on long-term trends
and key metrics of performance indicators (KPIs). Lower level dashboards
help manage and report process performance.
into the quality control plan. This is a communication document that
controlled and at which level, i.e., their specifications. Control plans inte-
stakeholders. The goal is to ensure key process outputs and key inputs are
in control throughout the process life cycle.
Presenting the team’s project findings is important in securing resources
for future improvement activities. Also, the team understands the recently
improved process relative to its root causes and the solutions created to
eliminate them. The team’s improvement story must be structured to pro-
vide information in a coherent and linear manner with supporting docu-
mentation. This ensures it is easy to understand and communicate to
different audiences.
Governance is important for sustainability. First, there is an internal
governance that is enabled by a framework representing cross-functional
stakeholders that periodically meet to create a strategy for continuous
improvement and investment. This is done by creating and approving
Conclusion • 337
policies, setting priorities and projects for closing gaps, and approving roles
and responsibilities. There are also several external organizations. A gov-
ernance framework uses several oversight levels with each level having pre-
defined activities based on scope. This is a format most governance models
use for large programs impacting cross-functional teams. Examples include
governance for strategy, marketing, sales, finance, and operations. External
governance is associated with the many third-party industry oversight
organizations with which an organization interacts. There are also gov-
ernmental regulatory agencies that influence organizations and internal
governance.
As part of the governance discussion, we also discussed data security.
Depending on the types of solution created some may need to be reviewed
for their data security impact. If the rapid improvement event does not
touch IT systems, there is little likelihood of security issues. But if the
work has focused on an end-to-end global process that touches different
teams and relies on metadata being transferred across several systems then
security will be a consideration. Most organizations have a dedicated team
assigned to maintain security governance.
In addition to normal data security, there are European Union (EU)
requirements for the security of personal data. Compliance with General
Data Protection Regulations (GDPR) has created a need for process docu-
mentation to show how source and consuming systems manage personal
data through software applications, subsequent analyses, and reporting.
The process improvement work is organized within the GDPR governance
framework. This is in addition to an operational excellence framework that
includes Lean and Six Sigma.
This second edition provides an insight into the new tools and methods
Lean Six Sigma process improvement professionals need to improve
customer experience and increase productivity within high transac-
tion processes across complex information technology ecosystems. It is
a reference for the application of Lean Six Sigma methods enhanced by
powerful approaches for process improvement in highly complex service
processes. These included topics such as Design Thinking, APM, Voice
of, e.g., customers, suppliers, employees, and partners, information tech-
nology ecosystems, Information Quality Governance, Big Data Collection
and Analytics, mapping high-volume transactions through systems, RPA
applications, automation for solution sustainability, data privacy and
security, as well as reporting dashboards. This information was integrated
338 • Conclusion
into an operational model to improve services, office, and supporting

processes.
The goal of this second edition was to bring together in one place the
tools, methods, and information a team needs to quickly improve their
process. The application of Lean Six Sigma methodologies to improve ser-
vice processes has historically been an efficient strategy to simplify, stand-
ardize, and mistake-proof processes. But it has limitations for improving
high-volume global processes within complex information technology
ecosystems. This new body of information will augment classical Lean
Sigma methods and help to sustain the pace of process improvement in
service systems.
Index
Note: Page numbers in bold refer to tables and those in italics refer to figures
5-S methodology  12–13 bottleneck management 84–85, 113–115,

227–228, 253–254; analyzing
accounts payable 63, 180–182 161–162; photocopiers and 160
accounts receivable: process improvement box plot 198, 199
242–244; push/pull scheduling 127 brown paper exercise 144, 174–175, 222
activity backlog 15–16 bureaucracies 128, 271
actual capacity 120 business activity monitoring (BAM)
Agile Project Management (APM) 4, 8, systems 129, 148
14–16, 47, 129, 131–132, 154, 165, 217, business benefits 18–19, 23
226, 259, 307, 324 business intelligence (BI) 53, 326–327
airport check-in, service workflows 93 business metrics 65, 66, 80, 327
algorithms 13 business modeling and analysis (BMA) 129
alignment see strategic alignment business process management suite
asset utilization 7, 30, 53, 54, 64–65, 74, (BPMS) 129
125, 226 business VA (BVA) operations 13
automation 13, 44–46, 48, 77, 126–127, business value-adding (BVA) operations:
225, 237–239; Robotic Process reduce setup time (SMED) 118;
Automation (RPA) 90, 129–130, unnecessary operations, eliminating
132, 211, 234–237, 280, 325, 329–330, 103, 104–105; value stream map
338 (VSM) and 40
Automotive Industry Action Group
(AIAG) 277, 314 C-charts 283, 284, 286, 301
available capacity 54, 83–84, 120–121, call centers 7–8, 35, 37–38; international
161, 162 54, 55, 69; process flow 122, 129, 210
average handling time (AHT) 150 canceled orders, reasons for 207–208, 232
capital expenditure 20, 30
back-office operations 211–213 cause-and-effect (C&E) diagrams 193–194
balance material flow 113–115; bottleneck change, building a case for 259–276;
management 113–115; transfer accelerating change 273–275; change
batches 115 readiness 263–265; communication
balance sheet 30, 73–74, 76 273; cost-benefit analysis 267–269;
basic needs 88 infrastructure analysis 271; key
behaviors, changing 32, 306–307, 308 stakeholder analysis 269–271; overview
benchmarking 74–75 259–261; project transition 265–266;
best-in-class process conditions, obtaining psychology of groups 261–262;
150–151 scheduling process change activities
big data collection 168–169; interconnected 271–273
IT 90 change, organizational barriers to 264
bill of material (BOM) 246, 247 change initiative, effective 261–262, 263,
black belt skill level 21, 168, 265 276, 334
339
340 • Index
checklists 137, 151, 188, 189 dashboard 300; measurement system

cluster sampling 179 289–290; mixed model scheduling
communication: key stakeholders and 273; 228–229; statistical process control
planning 272, 305; proposed changes (SPC) 282–288
295–297
comparison of Lean, Six Sigma and rapid data collection and analysis 167–223;
improvement 9–14 big data 168–169; box plot 198; brown
compensating metrics 67 paper exercise 174–176; cause-and-
competitors, Lean system and 54, 107, 326 effect (C&E) diagrams 193–194; control
complexity, reducing 33–38; charts 201–204; customer experience
offshoring 34–36 217–221; five-why analysis 194–196;
continuous improvement 106, 107 high-volume transactions 209–213;
control charts 201–205; binomially histogram 196, 197; information quality
distributed variables (pass/fail) 203, governance 171–172; inventory analysis
283; c-charts 283, 284, 286, 301; control and reduction 206–209; job shadowing
overview 284; individual-moving range data 205–206; metadata 169–171;
charts 283, 284; interpretation 287; methods 178; operations and 158–163;
normally distributed variables 201, overview 167; Pareto chart 197; process
283; p-charts 285; Poisson distributed characterization 176–188; process
variables 203, 284; specialized 283; types complexity 214–216; process data
of 203; X-bar chart 202 188–209; process mapping-SIPOC
control limits, calculating 201–202, 283, 191–193; scatter plot 199; in service
284, 285, 286–288 operations 214, 215; spaghetti diagram
control plan 277–281; building 301, 335; 186–187; standardized 213; time series
quality 293–295, 302, 336 graph 199; value stream map (VSM)
control tools 279–293; elimination of 172–176
portions of a process 280; failure mode defects 87, 117
and effects analysis (FMEA) 290–293; define, measure, analyze, improve, and
measurement systems 288–290; control (DMAIC) 16, 69, 135, 206–207
mistake proofing 280; process audits demand 83–86, 106–108; customer 53,
281; purchase or design of new types 104; level 42–43, 120–122; pull system
of equipment 230; statistical process 125–127; variation in 55, 194
control 281–288; training programs 281; deployment leaders 20–21, 136
written and verbal instructions 231, 291 deployment roles and
core products/services  92 responsibilities 18–21
cost avoidance 30, 268 deployment strategies compared 16–23
cost of goods sold (COGS) 54, 65–66, 195 design failure mode and effects analysis
countermeasures: changing the process and (DMEA) 314–315
163–165; root cause analysis and 227, design for manufacturing (DFM) 92, 118
232, 331, 333; third level 234 design for Six Sigma (DFSS) 26, 48, 118,
critical-to-quality (CTQ)  91 307, 325
customer demand 14, 42, 53, 55, 104 Design Thinking 25–29; define phase
customer-facing operations  126 27–28; emphasize phase 26–27; five
customers: complaints 12, 24, 90, phases 26, 27; idealate phase 28; pilot
298; interviewing 24, 33, 90; value phase 28; prototype phase 28
migration 229 digitization 13, 20, 44–46
cycle times: balance material flow 113; distributions 196, 201, 202, 203, 282, 283,
collecting information 148–149; 286, 287, 301, 335–336
Index • 341
diversity 94 information technology (IT) 20, 90, 127–130,

downtime 96, 131, 148, 161, 214, 216, 329 135, 168, 225, 337–338; digitization and
automation 44–45; ecosystems 76–79;
e-mail, impact of development of 128 GDPR 316–318; security 310
employee training 4 infrastructure analysis 271
empowerment 261, 271 initiatives 7–8, 263–265, 303–305
enterprise application integration (EAI) 129 International Standards Institute (ISO)
entitlement analysis 150 277, 310
equipment, classifying 119 Internet: communication and 152;
error conditions, prevention of 41, 92, 117 customers and 126–127; of Things (IOT)
error rates 65, 150–151 53, 96, 298, 316, 327
event facilitator 21, 143, 144 inventory: analysis and reduction
everyday low pricing 42 206–209; financial forecasting 242;
Excel 45, 169, 237; spreadsheets 129, 236; financial metric 66; investment 194–195;
templates 31, 52 just-in-time (JIT) production 42–43;
exception reports 149 Lean supply chain 54; measuring 162;
expense reduction 7, 65, 66 waste 40–41, 85–86
inventory investment, high 208, 209
facilitators 4, 21, 95, 138, 143, 144, 154, invoice payment 72–73
156, 158, 166, 232, 330 invoicing cycle times 283
failure causes 291–293
failure mode and effects analysis (FMEA) job candidates, internet and
290–293 prescreening 118
failure points 93, 226, 239 job shadowing 185–186; analysis of data
financial analysis 73–74, 75, 76 205–206, 207
financial forecasting 240–242 just-in-time (JIT) production 42–43;
Five-S (5S) methods (sorting, setting continuous improvement of work 107;
in order, shining, standardizing and level demand 120–122; operational
sustaining) 12–13, 109–112, 165 stability and 107; push/pull systems 42;
Five-why analysis 194–196 stable demand and 106–107; work-in-
follow-up activities  297 process inventory 42
just-in-time (JIT) systems 106–124;
Gemba walk 20, 26, 89 balance material flow 113–115;
general data privacy regulation (GDPR) high quality 117–118; level demand
316–318 120–122; link operations 112–113;
global supply chains 3, 36, 79–80, 323 mistake proofing 115–117; reduce
governance 309–315 lot sizes 122, 123; reduce setup time
(SMED) 118–119; reorganize physical
high quality 117–118 configurations 108–109; 5S and
hiring employees 65, 248 standardized work 109–112; total
histogram 196, 197 preventive maintenance 119–120
human resources (HR) 63; governance
310, 317 Kaizen: definition 21–22; rapid
improvement events and 135, 323, 324
implementing solutions 277–302 Kanban 53, 125–127, 128; cards 42, 44
incentives 6, 229, 240, 264, 267, 305 Kano needs 88–89, 130, 328
individual-moving range charts (I-MR key process input variables (KPIVs) 14
charts) 283, 301, 336 key process output variable (KPOVs) 14
342 • Index
key stakeholders: analysis of 269–271; new products: development of 246–248;

communication and 273 prioritizing research products 217
Kobayashi, metrics of 108 non-value-adding (NVA) operations 12–13;
analyzing job shadowing data example
language and cultural differences, 205–206; eliminating 12–13, 14, 25,
impact of 35 40–42, 104–106; operational cycle times
late deliveries 23, 194, 208–209 and 148; Pareto chart and 197; process
Lean and Six Sigma compared 9–14 changes 163–165; process characterization
Lean expert 21, 166, 330 179, 180, 182; process data analysis 168;
Lean masters 21 reduce complexity 34, 92; reduce set-up
Lean metrics 101, 103, 131, 138, 329 time 118; value stream map (VSM)
Lean Six Sigma Basics 83–132; continually 103–104, 173; voice of the customer
update process technologies 127–130; (VOC) and 33; waste and 86, 87
create robust product and process Np-charts 203, 284
designs to reduce complexity 91–93;
create Value Stream Maps (VSMs) obsolescence 86, 122
102–104; deploy Lean Six Sigma Teams offshoring 34–35
38–39, 93–95; eliminate unnecessary operating expenses 6, 58, 60–61
operations 104–106; implement Just-in- operational analysis 61–64, 74, 177
Time (JIT) systems 106–125; implement operational assessments 6, 20–21, 39, 47,
visual control and pull systems-Kanban 55, 57, 58, 59, 318
125–127; performance measurements operational cycle times, collecting
95–102; supplier networks and support information about 148–149
125; understand the VOC (Voice of Operational Excellence (OPEX) 6, 10, 317,
Customer) 88–91 321, 323, 337
Lean supply chain 43, 52–59, 79, 107, 125, operational metrics 297; cycle times
226, 326 148–149; Lean supply chain 52–59; value
Lean system, elements of 32–46; stream map (VSM) 173, 222, 331
understand customer 32–33 operational reports 195–196
link operations 112–113 operational stability 106–107
local work team 138, 141, 143, 144, 151, organizational barriers to change 264, 267
173, 174, 263, 309 organizational behaviors, new 32
lot sizes, reducing 122–123; mixed-model organizational change 303–321;
scheduling 123–124 accelerating 273–275; GDPR 316–318;
governing organizations 309–315;
maintenance 111, 117; logs 161 overview 303–305; security 316;
market research 244–246 sustaining process improvements
materials: control of 110–111; flow of 41, 305–309
42, 43–44, 53, 62, 84 organizational cultures 271
measurement system improvements outliers 196, 198, 201–203, 282, 288,
288–290 301, 335
metric dashboards, creating 297–299 outsourcing 34, 35, 36, 37, 228, 328, 333
miscommunication 230, 240, 250 overproduction 40, 41, 83–84
mistake proofing 92–93, 115–117
mitigation plans 264, 270 p-charts 283, 284
mixed-model scheduling 123–124 packaging lines 112
Pareto chart 197, 198
net promoter score (NPS) 69, 270 performance gaps 7, 11, 12, 47, 55, 73, 91,
new behaviors 32, 259, 260, 306–308 217, 298, 324
Index • 343
performance measurements 39; resistance analysis of proposed changes

creating 97–100 261, 263, 275
Poisson distribution 203, 286 return-on-equity (ROE)  7
process characterization 176–188 return on investment (ROI) 18, 72
process improvement 225–256; reward and recognition systems 38, 158,
automating for solution sustainability 230, 261, 264, 265, 271, 304, 305, 307, 309
237–239; common process changes risk priority rating (RPN) 291
227–229; control tool effectiveness role separation 143
and sustainability 230–231; examples root cause analysis 7–14, 232–234
using common process workflows
239–251; identifying and prioritizing Sarbanes-Oxley Act 311–312, 313
improvement opportunities 251–254; scatter plot 199, 200
measuring 289–290; robotic process scrap and rework 160–161
automation 234–237; root cause analysis Scrum Sprints 8, 12, 15–16, 47, 324
and improvement strategies 232–234 security 316
productivity measure 6 SharePoint 85, 110, 141, 144, 152, 175,
project champions 21, 59, 72 188, 236
project charters 71–73 single minute exchange of dies (SMED) 48,
project identification 51–81; A3 form 60, 106, 107, 118–119, 122, 308, 325
69–71; conducting a Lean assessment solutions, implementing 277–302;
55; CT flow down 59–61; Lean supply communicating proposed changes
chain 52–59; metric categories 65–67; 295–297; control strategy 279; control
operational analysis 61–64; overview tools 279–293; creating metric
51–52; prioritizing projects 73–76; dashboards 297–299; failure mode and
project charters 71–73; project examples effects analysis (FMEA) 290–293; follow-
64–65; scoping projects 67–69; up activities 297; key questions 278–279;
summary 79–81 measurement system improvements
project leaders 142–143 288–290; overview 277–278; quality
project plan 51, 174 control plan 293–295; statistical process
project prioritization 73 controls 281–288
project risks 271 spaghetti diagram 186–187, 188
project teams 59 standard waste analysis, template 182, 183
project transition 265–266 standardization 13, 14, 111, 117–118
projects, prioritizing 73–75 statistical process control (SPC) 281–288
proposed changes, communicating to statistical sampling 178–179
management 295–297 strategic performance gaps 73
pull scheduling system 42–44, 53 strategy alignment 3–49; agile project
push scheduling system 127 management 14–16; deployment
strategies 16–23; design thinking 25–29;
quality control plan 293–295 elements of Lean system 32–46; Kaizen
quality control systems 277 defined 21–22; Lean in three steps
29–32; methodologies compared 9–16;
random sampling 178–179 operating model 8–9, 11; outsourcing
range charts 202, 283, 284, 301 processes 35–37; overview 3–6; reducing
rapid improvement, comparisons 9–14 system complexity 33–37; summary
rebates, processing 37–38 46–49; voice of the customer (VOC)
reduce setup time (SMED) 118–119 23–25, 32–33
redundancies, eliminating 230 summary of waste analysis for several jobs
regulatory constraints 13, 40, 103, 131, 329 183, 184
344 • Index
supplier-input-process-output-customer example analyzing job shadowing data

(SIPOC) 68, 80, 191–193, 211, 327 205–206, 207; Lean Six Sigma basics and
supplier networks and support 125 87; Lean Supply chain 52–54, 79; process
supplier performance management (SPM) characterization 179; reduce setup time
248–251 (SMED) 118; value stream map (VSM)
supply chains: global 3, 22, 36, 46; “Lean” and 103
43, 52–59, 79–80, 107, 326; level value expectations, VOC 89, 130, 328
demand 120–122; SCOR 311; supplier value stream map (VSM) 53–54, 102–104,
performance management (SPM) 172–176; brown paper exercise 174–175;
248–251; value stream map (VSM) building 39–40; data collection and
172–173, 222, 331 analysis 167, 222, 331
virtualization 13
takt time 14, 40, 53, 104, 106, 107, 108, visual controls and pull systems 43–44
109, 111, 113, 114–115, 120, 125, 127; voice of the business (VOB) 89
calculation-future state  105; calculation- voice of the customer (VOC) 12, 23–25,
original process 102 324–325; collecting information about
testing new products or services 28, 93 89, 90, 226; critical-to (CT) themes
time and motion studies 86, 111, 162 90–91; design thinking 25–29, 48,
time series graph 199–201 88; DFSS 118; Kano needs 89; Lean
top-down deployment 16–19, 23, 58 system and 87, 328; listening posts 90;
total cost of goods sold (COGS) 54, market research 244–246, 251; reducing
65–66, 195 system complexity and 36; SIPOC 191;
total preventive maintenance (TPM) understanding 32–33, 47
119–120
total productive maintenance (TPM) 8, 107 waiting 84–85
Toyota Production System (TPS) 106–108 “walk the process” 20, 69, 139, 159, 215, 242
transfer batches 115 see also Gemba walk
travel expenses, reducing 37 war room 141, 143–144, 145
waste analysis by operation 183
u-charts  284 waste of motion 86
u-shaped work cells 41, 108–109, 112, work activities 51
144, 145 work cells, U-shaped see u-shaped
unit flow concept 122, 123 work cells
United States 202; accounting work-in-process (WIP) inventory 42, 85,
governance 311 112, 195, 229
unnecessary movement, materials and work operations, eliminating 227–228
information 85 workstations 69, 104, 126, 127, 146–147,
unnecessary operations, eliminating 149, 186, 188, 239; overloaded 113
104–105 workflow management (WM) systems
user stories 15 129, 148
value-adding (VA) operations 13; x-bar chart 202, 203, 283, 284, 301, 336
collecting data 160; eliminating
unnecessary operations and 104–106; zip codes 78, 171

Lean Six Sigma For The Office - Integrating Customer Experience For Enhanced Productivity

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Lean Six Sigma for

STEP 1 Align Improvement Opportunities

Chapter 1 Strategy Alignment.............................................................. 3

Digitization and Automation.................................. 44

Chapter 2 Project Identification........................................................ 51

Chapter 3 Lean Six Sigma Basics....................................................... 83

Total Preventive Maintenance............................... 119

STEP 2 Plan and Conduct the Rapid Improvement Event

Chapter 4 Rapid Improvement Events............................................. 135

Communicating the Event.................................... 151

Chapter 5 Data Collection and Analysis......................................... 167

5-​Why Analysis...................................................... 194

Chapter 6 Process Improvement...................................................... 225

STEP 3 Implementing Solutions

Chapter 7 Building a Case for Change............................................ 259

Chapter 8 Implementing Solutions.................................................. 277

Chapter 9 Organizational Change................................................... 303

Changing an Organization.............................................. 318

of service operations when compared to the standardization of manufac-

Service operations have changed. Digitalization, automation, and other

project in upcoming chapters. They are classified according to intended

requests for information, orders, invoices, and other summarized informa-

workflow models are built to estimate the impact of different operational

Process assessments are discussed starting with the creation of a Value

should improve high-​priority work areas to obtain leadership support, pri-

help identify beneficial projects to improve productivity. These will be of

the importance of gathering examples of the issues, collecting other data,

Chapter 8 discusses solution implementation. Topics include pro-

Design Thinking, APM, Voice of, e.g., customers, suppliers, employees,

resource allocation, and significant personal involvement of employees and

If projects are not properly selected and aligned within an organization,

A strategic metric flow down method is used to identify projects and

of available associates, and other variables that can be statistically modeled

COMPARING LEAN, SIX SIGMA, AND

problem definition or statement. This data may be heavily quantitative

for standardization and is applied to enhance process standardization. It

AGILE PROJECT MANAGEMENT

Agile Project Management has several success attributes. One is a focus

COMPARING DEPLOYMENT STRATEGIES

Organizational Hierarchal and formal Informal and No organizational

Roles and responsibilities also depend on the deployment model.

at just a few areas within an organization. It is very important in these situ-

Digitization has significantly changed data collection. Most office and

vetted to contain the required information, e.g., problem statement,

to send simple and consistent messages to reinforce an initiative’s goals.

VOICE OF THE CUSTOMER (VOC)

associate, and partner experience. The goal is a summarization of the issues

1.Empathize 2.Define 3.Ideate 4.Prototype 5.Test

purchasing team (a persona) call suppliers for information on features and

analysis, communication planning, and benefit estimation. The appro-

design methods in that the VOC needs to be accurately translated into a

Step 1 –​Align Improvement Opportunities

Step 2 –​Plan and Conduct the Rapid Improvement Event

improvement workshop. These use a structured approach to focus a team

Step 3 –​Implement Solutions to Change Behaviors

Understand the Customer

One is through face-​to-​face interviews or loyalty surveys. These are

customer facing too. It increasingly touches external customers. There are

available infrastructure, and capital as well as the types and availability of

content can be eliminated to reduce complexity. Another strategy is to ana-

portal to submit supporting documentation and receive a credit, whereas

Map the Process

Eliminate NVA Operations

5-Why Analysis...................................................... 194

should improve high-priority work areas to obtain leadership support, pri-

VOICE OF THE CUSTOMER (VOC)

Step 1 –Align Improvement Opportunities

Step 2 –Plan and Conduct the Rapid Improvement Event

Step 3 –Implement Solutions to Change Behaviors

One is through face-to-face interviews or loyalty surveys. These are

and rules do not change between end-to-end applications. Similarly, design

DEPLOY LEAN SIX SIGMA TEAMS

Lean Six Sigma Basics • 97

10. Lead time 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 22 -28%

Lean Six Sigma Basics • 99

CREATE VALUE STREAM MAPS (VSM)