Daily Work
Management
Fundamentals of Process Management
Rev 00.0 (Jun 03)
and How They Can Be Applied in Daily
Work
Kiran Deshmukh
Sona Koyo Steering Systems Ltd.
The TQM Model
TQM Means
TQM means ...
Thorough
Customer
Oriented
Good fruits come
from good factors
and processes.
Think much of
Factors and
Processes
Customer
Society
Next Process
TQM
scientific & quality
oriented management for
customer satisfaction by
participation of all
members in the company
Retention
Improvement
Based on Facts
Humanized
Operations
The TQM Model
Customer
Focus
Unique
Organizational
Capability
Continuous
Improvement
Total
Participation
Societal Networking
Improvement As a Process
Management by Process
Analyze reasons for
poor adherence to
implementation plan
or poor results
Develop plan
for measuring
whether
implementation
plan is being
followed
D
Execute
Implementation and
Measurement plans
Monitor results
and adherence to
implementation plan
OUTPUT
Set new or
revised goal
Develop
implementation
plan for
accomplishing
the goal
Meaning of Management by Process
Implicit in this concept is the idea that any activity
can be improved if you:
Systematically plan the improvement,
Understand the current practice,
Plan solutions and implement them,
Analyze the result and its causes, and
Cycle through these steps again.
This scientific approach can be applied to
Improving a companys process for anticipating its
customers needs.
Improving the capabilities of the employees.
The Model for Improvement Activities
Choose specific
improvement
activity
Sense
problem
Plan
solution
Standardize
solution
Level of
thought
data
Level of
experienc
e
data
data
Process Control
An effective standard process
exists to perform some business or
manufacturing function.
The process is being monitored to
make sure it is working as
intended.
If the process gets out of control,
one takes corrective action as
predetermined as described in the
maintenance manual.
This is the SDCA (have standards,
do, check and act) cycle.
The SDCA Cycle
Act to return to
standard (A)
Have standard (S)
Check / evaluate
effects (C)
Level of
thought
Do / use
standard (D)
data
Level of
experienc
e
Control
Reactive Improvement
When the process control is weak,
the process results go out of
control often.
Even if one takes corrective
actions according to the SDCA
cycle, still the process goes out of
control.
One has to collect data, analyze it,
find the root cause of the problem,
and implement appropriate
countermeasures.
The specific problem is solved
through the 7 steps of problem
solving.
The 7 Steps for Reactive Improvement
7. Reflect on process
and next problem
1. Select
theme
6. Standardize
solution
4. Plan
and
2. Collect
3. Analyze
and analyze
causes
data
Implement
solution
5. Evaluate
effects
Level of
thought
data
Level of
experienc
e
data
Reactive
Proactive Improvement
In many cases one does not start with a clear idea
of a specific needed improvement.
One may have to decide a direction for the
company before starting an improvement activity.
At first, one is generally aware that there is a
problem.
One senses a problem.
The situation is explored broadly.
Having explored the situation broadly, the problem is
formulated.
This is the proactive improvement.
Proactive Improvement Steps
7. Reflect on process
and next problem
Sense
problem
Explore
situation
1. Select
theme
Formulate
problem
6. Standardize
solution
4. Plan
and
2. Collect
3. Analyze
and analyze
causes
data
Implement
solution
5. Evaluate
effects
Level of
thought
data
Level of
experienc
e
data
Proactive
data
Three Types of Improvement
7. Reflect on process
and next problem
Sense
problem
Explore
situation
1. Select
theme
Formulate
problem
6. Standardize
solution
4. Plan
and
2. Collect
3. Analyze
and analyze
causes
data
Implement
solution
5. Evaluate
effects
Level of
thought
Level of
experienc
e
Control
Reactive
Proactive
Focus on the Vital Few
Many opportunities exist for making
improvements, but the resources for doing so are
limited.
Experience has shown that only a few of the
actions taken have significant effect.
Current and future customer satisfaction should
be guidelines in making key decisions about
company products, practices, and systems,
highlighting the few activities that will have the
greatest impact on business success.
Iterative Improvement
7. Reflect on process
and next problem
Sense
problem
Explore
situation
1. Select
theme
Formulate
problem
2. Collect
and analyze
data
6. Standardize
solution
4. Plan
and
3. Analyze
causes
Implement
solution
5. Evaluate
effects
Level
of
though
t
Control
Level of
experienc
e
Implicit in our model of
improvements is the
idea of iterative
improvementthe
cycling back to work
on the next problem or
the continual
improvement of an
already improved
process.
Reactive
Proactive
This is the famous
PDCA (plan, do,
check, act) cycle.
Higher Quality
The PDCA Cycle
Plan
Do
Act
Check
Plan
Determine analytically and
quantitatively what the key
problems are with the
existing activities and how
they might be solved.
Do
Implement the plan
Check
Confirm quantitatively and
analytically that the plan
works and that it results in
improved performance.
Act
Modify the previous process
appropriately, document the
revised process, and use it.
PDCA symbolizes the principle of iteration in problem solving
making improvements in a step-by-step fashion and
repeating the improvement cycle many timesdoing the best
job you can within relatively short improvement cycles.
Stepwise Improvement versus Tackling a Large Problem
with a Single Effort
Rotation 3
P
Plan
Do
Act
Check
Rotation 2
P
Plan
Do
Act
Check
Plan
Do
Rotation 1
P
Plan
Do
Act
Check
Act
Check
Compared with one big
step, repeated PDCA
cycles are a more
efficient path to the
current target and yet
let you keep adapting as
the targetin real life
PDCA for Incremental and Breakthrough Improvements
Incremental
Improvement
Normal Problem
Standard Work
Process
Plan
Do
Act
Check
Type of
problem
Breakthrough
Improvement
SDCA
Profound Problem
PDCA2
Plan
Do
Act
Check
PDCA1
Continuous Improvement and the Scientific Method
Continuous improvement means: apply the scientific
method.
In a scientific method, we:
Try something,
Digest what this tells us about how the world works,
Try it again to confirm whether or not our presumption was right.
Without theories that can be tested, measured, repeated,
etc., we are left with the uncertainty of folklore and being
wrong.
Managers need to run experiments and find out what
genuinely works in their situation.
Process Discovery and Management
Every Process Has Measurable Output(s) and
Controllable Input(s)
Process Parameters
Mechanical Properties
Temperature
Size growth
Carbon potential
Bend
Time
Others
Quench agitation
Inputs
HEAT TREATMENT
PROCESS
(Carburizing
Furnace)
Output
(Heat Treated Parts)
Others
Metallurgical
Properties
Furnace Consistency
Case depth
Raw material properties
Surface hardness
Core hardness
Microstructure
We Use the Feedback From the Output to Modify or
Improve the Inputs
Process Parameters
Mechanical Properties
Feedback
Temperature
Size growth
Carbon potential
Bend
Time
Others
Quench agitation
Inputs
HEAT TREATMENT
PROCESS
(Carburizing
Furnace)
Output
(Heat Treated Parts)
Others
Metallurgical
Properties
Furnace Consistency
Case depth
Raw material properties
Feedback
Surface hardness
Core hardness
Microstructure
All Work Is a Process
Requirements
Supplier
Inputs
Feedback
PROCESS
Participants
Value-added tasks
Requirements
Output
Customer
Feedback
Our work can be managed well if we manage
our process well!
Components of Process Management
PROCESS DISCOVERY
Understand the customer
and the process
PROCESS CONTROL
Assessing conformance to
customer requirements
REACTIVE
IMPROVEMENT
The 7 Steps method
Process Management I
Process Discovery:
What are my products / services?
Who owns the process?
Who are my customers?
What do my customers need?
What are my needs?
What is my standard work process?
PROCESS DISCOVERY
Understand the customer
and the process
Process Management II
PROCESS CONTROL
Process Control:
Assessing conformance to
customer requirements
What are my customers quantitative specifications?
Do my products / services satisfy or exceed customer
specifications?
Identify and remove non-standard sources of variation.
Determine if the standard process is capable of meeting quality
specifications.
Reactive Improvement:
What activities are needed to improve my process?
Identify largest source of variation in standard process.
Find and eliminate root cause of variation.
Define new standard process.
REACTIVE
IMPROVEMENT
The 7 Steps method
Steps for Process Discovery
1. Who are our customers?
2. What products and services do we provide?
3. What are the customers requirements?
4. What measures and targets apply to their requirements?
5. What is our process?
6. What do we require to deliver the product or service
successfully?
7. Do our products and services meet or exceed their
requirements?
1. Our Customers
People doing tasks do not think about having
customers. They just do their assigned task as
they are told to do it.
Why do the task, if someone does not use it
eventually?
We call this user the customer.
The first step in discovering ones process is
understanding who his or her customers are.
2. Products and Services That We Provide
Think in terms of what products and services are
provided to each customer identified in step one.
Each product and service should have a
customer.
If a product or service does not have a clear customer,
then the function is probably not needed.
Focus improvement efforts first on the products
and services that are most important to key
customers.
3. Customers Requirements
People think that they know the best what the customer
wants.
Without asking the customer about customers requirements, one
cannot be sure the products and services one is providing are the
right ones.
Think in terms of Quality-Cost-Delivery (QCD).
Q: functionality provided to the customer.
C: total cost to the customerboth tangible and intangible.
D: the place, the time, and the method of delivery.
The different customer requirements should be easily
described in a few well-chosen words that capture the
essence of the need.
4. Measures and Targets As Applied to the Customers
Requirements
By determining the measures and targets relating
to the customer requirements, one is likely to
learn more about what the requirements really
mean.
For each customer requirement under
consideration, discover how the customers
measure whether their need is being met.
We also need to determine how we are going to
take the relevant measurements of the outputs of
our process.
5. Our Process
Is our process clearly related to the customer and
the product or service under consideration?
We need to explicitly understand everything we are
doing.
We need to make explicit the order we are doing it in.
We need to write it down so we can look at it and
analyze it.
We need to draw the process flow chart.
Once documented, many opportunities for eliminating
inefficiency and ineffectiveness will be visible.
We cannot change a process unless we understand it
fully.
6. Our Requirements
Think of ourselves as customers of others and
how we specify our needs, measures, and targets
to our suppliers.
The suppliers whom we give explicit purchase orders.
The suppliers whom we depend upon but may seldom
think of in terms of purchasing services.
7. Meeting or Exceeding Customers Requirements
We may be able to directly compare quantitative
versions of customer requirements (metrics and
specifications) with quantitative measures of our
products and services.
We may have to ask our customers if they are
satisfied with our products and services.
Benefits of Process Discovery
It will prevent working on problems unimportant to
our customers.
It will deter us from tampering with our process.
It will enable us to identify non-value-added
activities.
It will help provide focus on the few vital
improvements we must do and for which there are
resources.
Sample Process Discovery Worksheet
Customers
An
Products /
Services
Requirements
Metrics /
Targets
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F
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D
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Pa
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Meet /
Exceed?
Customers of the Payroll Department
The employees who get paid.
Various government tax agencies that must be
notified of amounts paid to each employee.
Payroll service bureau that takes a pay list from
the payroll department and prints the cheques.
Banks to which the payroll department sends
direct deposits to employee accounts.
The subset of employees who are paid in cash.
Continued
Customers of the Payroll Department
Insurance companies to which a portion of an employees
pay along with an employer contribution are sent.
Retirement trusts to which a portion of an employees pay
along with an employer contribution are sent.
Unions to which a portion of some employees pay is sent
for union dues.
Company cash management department which must be
kept up to date on the companys cash needs.
The human resource department which needs payroll
information to do its job.
The controllers office which needs various reports to
monitor the function of the payroll department.
Payroll Departments Products and Services for
Employees
Customers
Employees
Products / Services
Pay in hand or at bank
Employee tax forms
Distributions to insurance, etc.
Changes in distribution amounts
Pay slip with summary information
Answers to employee questions
Answers to others to help employees
Pay advance in emergencies
Payroll service bureau
Employee Requirements for Pay Cheque and Pay Slip
Quality
Accurate amount
Accurate
distributions
To the right bank
Easy to understand
pay slip
Vacation day total on
pay slip
Cost
Local currency
Delivery
On time
To right address
To special location
Measures and Targets As Applied to the Requirements
Quality
Accurate amount
Cost
Local currency
Accurate
distributions
Delivery
On time
To right address
To the right bank
Easy to understand
pay slip
Vacation day total on
pay slip
Minutes after midnight
at the end of payday by
which the pay is
available in the
employees bank
account
To special location
Process Control
The SDCA Cycle of Process Control
Act to return to
standard (A)
Have standard (S)
Check / evaluate
effects (C)
Level of
thought
Do / use
standard (D)
data
Level of
experienc
e
Control
Process Control Can Be Applied to Any Repetitive
Process
Many senior managers are not familiar with the basic
concepts of process control.
If they knew process control exists, they cannot imagine
that it could apply outside the manufacturing area.
In fact, process control can be applied to processes as
varied as:
Order entry.
Training course delivery.
Billing.
Recruiting.
Daily cash forecasting.
Developing products.
Corporate budgeting.
Process control can be
applied to any repetitive
and measurable process!
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
Assume that we are in the
marketing department and are
responsible for generating leads
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K)
PR ($K)
Leads ('00) 15
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
14
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
13
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
14
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
15
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
16
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
13
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
14
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
13
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20
4
13 14.5
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20 20
4
4
13 14.5 16
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20 20 20
4
4
6
13 14.5 16
13
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20 20 20
4
4
6
13 14.5 16
20
2
13
14
Typical Struggle with Variation
18
17
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
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16
20
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18
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Target =
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13 12.5
Rules About Output of a Process
Customer needs determine the desired output.
The process actually used determines the actual
output.
The actual process output inevitably has variance.
Not inspection, but reduction in variation will result
in output that will satisfy customers requirements.
Customer Needs Determine the Desired Output
The goal of business processes should be to
satisfy an external or internal customer.
Customer needs must determine the desired
outputs of the processes of companies.
One needs to know what customers care about.
One needs valid quantitative measures to track what
the customers care about.
Lower
Specification
Limit (LSL)
Customer desired
specifications
Upper
Specification
Limit (USL)
The Process Actually Used Determines the Actual Output
The actual results produced come from the
process and its inputs and not from what the
customer has specified.
If you have a process that produces outputs within
certain range, the outputs will be within that range
regardless of the outputs customers desire.
Men
Materials
Methods
PROCESS
OUTPUT
The Actual Process Output Inevitably Has Variance
Any process has some variability in its results.
For example:
In the cash management system, the cash balance at the end of
each day will vary from the target for the day. Some of these
variations will be acceptable (results fall within specifications), and
some results will vary so widely that they fall outside of
specifications.
This variability of response is typically described in terms
of two characteristics that can be learned from the
statistics of the output:
A central tendency (mean).
Natural variability (distribution of responses over the range of
responses).
Process Output Varies According to Normal Distribution
Normal Frequency Distribution
Bank Utilization at the End of Every Day
9
12
10
8
F
re
q
u
e
n
c
y
,%
6
4
Upper Natural
Limit = 1513
Lower Natural
Limit = 942
6
5
4
3
Rs. lac
(August 1, 02 ~ September 30,
02)
Rs. lac
Central tendency: 1228
Natural variability: 942 ~ 1513
1
5
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F
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Mean = 1228
Specifications Come From Customers; Results Come
From the Process
Lower
Specification
Limit (LSL)
Customer desired
specifications
Lower Natural
Process Limit
(LNPL)
Upper
Specification
Limit (USL)
Upper Natural
Process Limit
(UNPL)
Actual process performance
Not Inspection, but Reduction in Process Variation Will
Result in Meeting Customer Requirements
Inspectio
Reducing the
n
Variance
Rejection
!
Customer desired
specifications
Customer desired
specifications
Actual process
performance
Actual
process
performanc
e
Stable Pattern of Variation
Routine variation (due to what Dr. Deming
called common causes) is the variation
inherent in the processnatural variation
imposed by the physical limits of the process.
Routine variation is statistically the same as
the process is run from one time to the next or
from one day to the next.
Unstable Pattern of Variation
Exceptional variation (due to what Dr. Deming
called special causes) typically results from
not following the process reliably. That is, each
time the process is run, it is run differently.
This can happen because of poor employee
training, problems with equipment, poor
process documentation, unreliable supplier
performance, or many other factors that can
change over time.
Routine Variation
Since routine variation is inherent in the process,
it cannot be reduced except through a change in
the process.
Demanding that employees do a better job will not
reduce the routine variation inherent in the process.
Demanding that the specifications be met will also have
no effect on the variation of the process.
Whether the results of a process are within
specification (or, meeting the objectives) depends on
the natural variation of the process, not the
specifications (or, the objectives set).
Exceptional Variation
Exceptional variation can be, on the other hand,
removed by controlling the inputs and following
the process accurately.
Without understanding the sources of exceptional
variation, one cannot eliminate it.
Reorganizing in response to poor performance without
understanding the causes of poor performance is a
form of frequently practiced management tampering of
the process.
Reducing Process Variation
Make the process behave in stable fashion by:
Finding the sources of exceptional variation, and
Eliminating the sources of exceptional variation.
Find the sources of routine variation.
Change the process to remove the sources of
routine variation.
Decrease the variation so that all results are well
within the specification limits.
Process Behavior Chart Is a Tool to Distinguish the Two
Types of Variation
Unstable Variation
Mean
UNPL
LNPL
Stable Variation
Mean
UNPL
LNPL
Voice of Process and Voice of Customer
Voice of Customer
Upper and lower
specification limits
(Customer Determined)
PROCESS
Men
Materials
Methods
OUTPUT
Voice of Process
Upper and lower
natural process limits
(Process Determined)
Alternation of SDCA and PDCA Cycles
Do
improvement
Plan
improvement
Act: either use
present
standard, or
improve
Check work
against
standard
D
P
C
A
Check
improvement
results
Improvemen
t activities
Act: either
standardize, or
re-plan
Use standard
Do work
Routine
work
The Struggle with Variation the Process Behavior Chart
24
22
Leads ('00)
20
18
16
ble
a
t
s
in a make
g
n
i
we
hav
e
s
b
e
er
g
n
h
n
t
e
a
o
e
. In
a s b f t h e ch
at
R
h
h
P
s
t
s
d
o
y
e
all
roc
g an in a wa
ut
e
p
n
t
i
o
i
s
e
b
p
i
t
a
s
e
r
Th
abl
han
n de of adve
t
t
o
s
i
e
ish
s
h
r
u
a
o
g
x
w
fas
i
m
n
da
ess
em
ing
c
n
h
c
t
o
a
u
r
s
d
n
p
i
he
pro r effort
t
f
,
o
d
wor capable d all ou ted.
in
as
an
w
,
s
e
d
r
was
we
lea
Target
UNPL =
0
0
7
1
1751
Mean =
1400
14
12
LNPL = 1049
10
Jan
Feb Mar
Apr May Jun
Jul
Aug Sep
Oct Nov Dec Jan Feb Mar Apr May Jun
Adds ($K)
20
22
24
24
24
26
20
20
20
20
20
20
20
20
PR ($K)
Leads ('00)
15
14
13
14
15
16
13
14
13
14.5
16
13
14
13
12.5
Importance of Process Behavior Chart
In the absence of using process behavior charts, this is
very common result.
We make changes in order to improve, but we have no
way to tell whether our process is behaving in a stable
fashion or not.
When our goal is reducing variation, we do not know if the
process variation is routine (indicating a stable process) or
exceptional (indicating process instability).
When our goal is to change the process results
significantly, we do not know if the process variation is
routine (we are having no effect) or exceptional (we
have made a difference).
Taking Appropriate Actions for Improvement
24
22
Leads ('00)
20
18
th e
f
o
a
May
y
d
b
n
a
s
pril R effort were
A
,
h
d P results
arc
e
M
s
ed
f
a
t
o
e
c
r
e
e
d
c
m
p
ex
e en r, we in last so
e
h
s
t
we
o
t
a
h
t
t
A
t
e
a
a
y
h
d
nd
nd
on
gt
seco of four, a ere bey ndicatin
r
,i
tw
e.
facto ced tha ariation ifferenc
v
u
d
prod routine made a
had
from
Target
UNPL =
1751
16
Mean =
1400
14
12
LNPL = 1049
10
Jan
Feb Mar
Apr May Jun
Jul
Aug Sep
Oct Nov Dec Jan Feb Mar Apr May Jun
Adds ($K)
20
22
24
24
24
26
20
20
20
20
20
20
20
20
PR ($K)
15
15
15
Leads ('00)
15
14
13
14
15
16
13
14
13
14.5
16
13
14
13
12.5
20
22
24
Process Control Conclusions
Process control can be applied to a wide range of
business processes.
Customer needs determine the desired output.
The process actually used determines the actual
output.
Inspection is a poor primary control method.
To meet the desired output specifications, reduce
the variance of the actual output by finding and
removing the sources of variation in the process.
Continued
Process Control Conclusions
The actual process output inevitably has variance.
To reduce successfully the variation, the variation
and its general stability (or lack of it) needs to be
understood.
The process behavior chart provides a tool to
distinguish stable and unstable variation.
Process outputs and a process behavior chart
indicate the proper course of action.
Much of the efforts and anxiety we put into making
things better is wasted when we do not use the
methods of process control.
Continued
Process Control Conclusions
Pay attention to standardization.
Standardize the best working methods.
Teach the standards.
See that these are observed.
Look beyond the results.
Reflect on the process that produced the results.
Improve working methods, and raise the quality of work.
Carry out the gap-analysis and control the cause-and-effect
system.
Use the 4G principle (go to the place, see and touch the
actual object, find the principles governing the
phenomenon, and check what should be in accordance
with the principle) for all the improvement activities.
What and How of Management
15
Five Steps in Management
A. Plan Think future and plan.
B. Do organize all resources to realize goal of
the plan.
C. Check . Check the results comparing goal of
plan and actual.
D. Act .. Take countermeasure and prevention.
E. Next Plan.
Countermeasure: corrective action to reduce difference
between plan and actualities.
Prevention: action to fix good results for future,
prevent repeat of bad result in future.
Effect of Prevention
Customer
Complaint
Customer
Complaint
In-house
Rejection
In-house
Rejection
Fix
position
by
preventio
n
Improvement
PREVENTION: Improvement in standards / procedures, installation of
pokayokes
Function of Management
Retainment: to maintain quality level of already
achieved.
Improvement: improve quality level more than that
of achieved.
Breakthrough: innovation of improvement.
PDCA for Retainment, Improvement and Breakthrough
Incremental
Improvement
Normal Problem
Standard Work
Process
Plan
Do
Act
Check
Type of
problem
Breakthrough
Improvement
SDCA
Profound Problem
PDCA2
Plan
Do
Act
Check
PDCA1
Division of Work
Executive
Breakthrough
(PDCA2)
Division Head
Deptt. Head
Supervisor
Operator
Improvement
(PDCA1)
Retainment
(SDCA)
Reforming Functional Management
30
Three Key Categories in Management
Authority: delegated right of decision
Responsibility: responsibility to act
Accountability: range of responsibility
that he feel as the result
of his action
An Example of the Three Categories for Manager of
Production Engineering
Authority:
Decide specifications of production equipment,
methods of preventive maintenance, etc.
Responsibility:
Build up production method, provide capacity of
production, implement preventive maintenance, etc.
Accountability:
Method availability for production, cost of maintenance,
quality of products, etc.
Three Models about Coverage of the Key Categories
CEO
Middle
Manager
Common
People
Authority
Responsibility
Accountability
Authority and Responsibility
are matter of Job description
but
Accountability is matter of commitment
The First Step:
Ask Managers to choose
Managing Points and Checking Points
Managing Points:
Numerical indicators of success or un-success
in his responsibility
Checking Points:
Indicators of soundness of his business process
Process
Result
Checking point
Managing Points
Checking Point
An example in production engineering
Lost hours by accidental breakdown
Maintenance cost
Quality cost of defective and scrap
Production cost
Selected Assembly of Managing Point Shows Under
Which Model the Manager is Working
Many managers want to prefer Common
Peoples Model for his work
- insufficient ownership
A few managers want too wide accountability
to compare his range of authority and
responsibility
- a dreamer, overconfidence, symptom of
paranoia
Selected assembly of Checking Points
shows
- How he is recognizing his business process
and,
- How he is controlling his process.
The Second Step:
Promote extension of Accountability
and
Re-build process for high quality with
method of control
through interview with manager
- Improve Managing Points
and,
- Improve Checking Points
The Chosen Managing- and Checking-Points Build
Hierarchical Structure
Managing Points - Checking points
Division Head:
Managing Points - Checking points
Dept. Manager:
CEO:
Managing Point -
That is System of Management
The Third Step:
Interpret company goals to
the goals of Managing Points
in each hierarchy
Corporate Goals
Division Goals
Department Goals
Individual Goals
Attention in daily
work
The Fourth Step:
Promote implementation of cycle of
management
1. Defining cycle interval of PDCA according to
each hierarchical level
2. Promote challenging commitment for goals
3. Coach resource plan and plan of
implementation
4. Coach countermeasure and prevention
Management for Objectives (MfO)
70
Power of Alignment
People
and jobs
Key
company
goals
Strong force aimed toward company
goals
=
People and tasks realign
quickly to the changed
company goals due to
environmental change
Environmental change
An Example of MfO
Statement of desired
outcome for next year
Daily practice of market-in concept
Focused means (Guidelines)
Create attractive product by
improving market research
Increase customer satisfaction of
our product by using quality tables
Assume on-time delivery by
improving processes
Improve quality of production
process by using SPC
Metric to measure progress
On-time delivery rate
Target value for metric
100 percent
Deadline date
March 2003
Components of MfO
Long-term
vision and
plan
Environmental
changes
Diagnosis by
president
Companys
mid-term
plan
PLA
N
Policy and
measuremen
t plan
deployment
Annual
policy
Act
Check
DO
Control by
measuremen
t
Level of customer
satisfaction
Strategic Planning and Setting the Policy
Improvement
required
Difference
Forecast
improvement
from daily
management
Present
Target date
Deployment of
solution
Improvement
of current
job or task
New job
or task
Daily job and work
Analyze to achieve
required
improvement
Solution
Deploying MfO to the Functional Divisions
Production
Presidents MfO
Engineering
Reduce costs by
decreasing
length of
business cycles;
percent
decrease: 20%
Sales
Marketing
Administration
Analyzing Facts About Key Goals and Stratifying to
Select Problems for the Next Level MfO
Engineers have product-out
orientation
Defects are not
detected until final
inspection
Why are
cycle
times
long?
Fully qualified prospects dont buy
Next level MfO
Function-level Analysis of Barriers to Achieve
Presidents MfO
Production
Unresponsive
procurement and
inventory system
Engineering
Products which meet
product specs arent
accepted by beta-test
customers
Sales
Qualified prospects
unexpectedly decline
to purchase at last
minute
Marketing
Each new product
requires a new effort
to line up distributors
Presidents MfO
Reduce costs by
decreasing
length of
business cycles;
percent
decrease: 20%
What prevents
achievement of
presidents
MfO?
Unnecessary approval
Administration loops
Development of Functional Division MfO
Function
What prevents achievement of
presidents MfO
Functional division MfO
Production
Unresponsive
procurement and
inventory system
Decrease manufacturing cycle
time by implementing JIT;
percent decrease: 50%.
Engineering
Products which meet
product specs arent
accepted by beta-test
customers
Decrease average time to
successful product release by
understanding of customer
context; percent decrease:
30%.
Sales
Qualified prospects
unexpectedly decline to
purchase at last minute
Decrease average sales cycle
by decreasing qualified
prospects who do not buy;
percent decrease: 30%.
Marketing
Each new product
requires a new effort to
line up distributors
Decrease average time to
release a new product by
creating strategic alliance;
percent decrease: 50%
Administration
Unnecessary approval
loops
Decrease key administration
and finance cycles by
flowcharting processes and
eliminating NVA work; percent
decrease: 40%.
Analysis of Barriers to Achieving Sales MfO
What prevents?
Sales MfO
Decease
average
sales cycle
by
decreasing
qualified
prospects
who dont
buy; percent
decrease:
30%
Direct sales No system for
evaluating and
addressing
possible
objections
Sales SupportUser difficulty in
using product
results in
unsuccessful
product trials
solution
Use PDPC to
anticipate
objections and
provide
countermeasure
s
Hold users
hand during
product trials
Deploying MfO to the Next Level
Presidents MfO
Prodn
Decrease manufacturing cycle
time by implementing JIT;
percent decrease: 50%.
Engg
Decrease average time to
successful product release by
understanding of customer
context; percent decrease:
30%.
Direct sales:
Reduce costs by
decreasing
length of
business cycles;
percent
decrease: 20%
Sales
Decrease average sales cycle by
decreasing qualified prospects
who do not buy; percent
decrease: 30%.
Use PDPC to
anticipate
objections and
provide
countermeasures
Sales
Support:
MarketgDecrease average time to
release a new product by
creating strategic alliance;
percent decrease: 50%
Admin
Decrease key administration
and finance cycles by
flowcharting processes and
eliminating NVA work; percent
decrease: 40%.
Hold users
hand during
product trials
Guidelines for Selecting Targets
Targets should be challenging but persuasive.
Local issues need not be included as MfO.
Include in MfO, the few issues that will get special
attention.
The superior must provide implementation plans
(means) for key hard items.
The superior provides points to consider for a
few items.
Subordinates develop the rest of the means
themselves.
Unifying Routine Work with MfO
MfOs of an individual need to be correlated with:
The components that support his or her current daily
routine work.
New tasks that must be added as necessary to
accomplish the MfO.
From this correlation matrix,
Understand which routine job tasks have higher priority,
because they address MfO.
Understand that new routine job tasks have to be
added so that the person addresses previously unaddressed MfO.
Everyone understands what each other is doing.
Checking and Acting to Modify the Plan
Once the annual plan has been made
(Plan) and deployed over the year (Do),
it is time to check for weaknesses in the
plan or the way it was carried out
(Check) and to Act appropriately to
influence the next years plan or
possibly the long-term or mid-term
plans.
Changes to
long-term or
mid-term plan
PLA
N
Policy and
measuremen
t plan
deployment
Annual
policy
Act
Check
DO
Control by
measuremen
t
Analyzing the Difference Between Plan and Reality
The Check step entails discovering why
the planned process did not achieve the
desired results. The planned process can
be analyzed using reactive improvement
methods, and one uses the 7 steps to
analyze the difference between the plan
and reality and then determine the main
causes of the difference.
Results
Plan / goal
Reality
Differenc
e
Time
Using the data
taken as part of
the
measurement
plan, one can
discover whether
parts of the plan
were not carried
out or were
carried out but
did not produce
the planned
results.
It is important to enforce
such fact-based analysis
through use of 7 steps. For
this purpose MfO dictates
use of analysis data sheets
that the president or
division head diagnoses
to make sure they are
done.
Example of Review Table
Objective /
Strategy
(P)
1.
2.
3.
4.
Actual
Performance & Judgment
Limits
( , , )
(D)
Summary of
Analysis of
Deviations
(C)
Implications
for Future
(A)
MfO Conclusions
The top-level MfOs are deployed downward through the
organization using a common language of effective
change:
Facts: using measurable data.
Process: using Ishikawa diagrams to understand whats really
happening.
Focus: using Pareto diagrams to be sure to address the vital few.
The control by measurement is used to develop the basis
of the interleaved SDCA (maintenance) and PDCA
(incremental improvement) cycles through which the
deployed plan is implemented.
Metrics are needed to measure the results and the means.
MfO is a vehicle to integrate the entire
organization to achieve the company
goals.
Discussions
Sona Koyo Steering Systems Ltd.
