Business System Build Process
- Phase 1: Management Commitment. Benefit: Executive Buy-In and Commitment – Week 1
- Start a Business Office of Operational Excellence.
- Educate the Management Team on the System Improvement Process.
- Start of Project Charter Build. This provides much-needed direction and project management guidance.
- Phase 2: Staffing. Benefit: Staffing Initiated, Project Selection, and Success Metric Agreement – Week 2 – 4
- Start the project off by bringing in 3 Black and 2 Green Belts. Start this early because this will take time and is a Critical Success Factor. Each Black Belt averages $1 million of cost savings.
- Initiate build of Continuous Improvement Program materials with 1 Green Belt.
- Select Improvement projects: (Your System is comprised of Value Streams and Overhead functions). Map Value Streams on critical business systems and poor performing business systems. Lean Six Sigma Project Selection by using ROI as the method.
- Meanwhile, start the build of your Business System Guiding Principles. This includes goals, and responsibilities designed to create an agile and robust company.
- Establish the Metrics that demonstrate System Success.
- Execute two important Lean Six Sigma tools. A “House of Quality” and a FMEA. A House of Quality aggregates information from customers, engineers, innovators, and competition to assist in product or service design. A FMEA (or Failure Modes and Effects Analysis) helps define and diminutize project risk.
- Phase 3: Final Pre-Work. Benefit: Stage Set, Ownership Established – Week 5
- Educate employees on Waste, or activities a customer would not willingly pay for. Use the Lean Six Sigma acronym DOWNTIMES. Setup an internal web page. *** 87 documented Wastes in Business ***
- Step 10: Select Value Stream Managers. It’s important to future improvement that Value Streams have ownership. A Value Stream Manager would have additional time to perform other job functions such as managing other Value Streams or operational responsibility. Initiate Monthly Reporting.
- Phase 4: Initiate Improvement Effort. Benefit: Generate and Promote Measurable Benefits – Week 6 – 10
- Above all, Map and Improve the performance of each Value Stream (VS). VS’s, as an example, include every process between customer order and customer delivery. VS performance is important, Process performance may not be. VS’s move your business to create a focal point on Value Delivery. A Value Stream gives businesses:
- – Profound Knowledge of Value Stream processes,
- – Built-in performance metrics,
- – Value Stream velocity improvement,
- – Decreased Value Stream cost, and
- – Increased Value Stream output quality.
- Investigate areas for Flow and Pull. The Toyota Production System focuses on a build unit of one.
- Document and Promote the successes of targeting Value delivered, building project inertia.
- In addition, initiate an Education and Instruction Program to increase improvement velocity.
- Phase 5: Layer the Powerful Continuous Improvement Program. Benefit: Strive for Greatness – Week 11 – 12
- Seek Perfection. 6ms is the Toyota Continuous Improvement bogey. Start a Kata Continuous Improvement Program (11 CI ideas/person/year) on each Value Stream Mapped. This is a secret of Toyota’s Production System. It is a program, not a bolt on. Toyota uses this to continue its march to perfection. Note: Toyota will not expand their business if it risks this program.
- Estimated Progress Milestone: At the end of the first quarter you will have put in place all the parts needed to optimize the implementation of your Production System. 4 Value Streams are Mapped and Improved. The next steps accelerate your march forward.
- Subsequently Phase n: Future Steps Towards Your Production System
- (Optional, based on aggressiveness) Hire additional Black and Green Belts. This will ramp up the improvement effort through your company.
- Select additional critical Value Streams to Map, and so on throughout the whole company. The company now has a focal point on the Value it creates for customers.
Estimated Progress Milestones:
At the rate of 5 Values Streams Mapped and Improved every 4 weeks you will have:
- First Quarter: 9 Value Streams
- Second Quarter: 24 Value Streams
- Third Quarter: 39 Value Streams
- Fourth Quarter: 54 Value Streams
- Second Year: 114 Value Streams (or more if you continue to staff up)
Benefits of your new Business System:
- Profound Knowledge of your Production System
- Operational Excellence (a competitive advantage)
- Increased Value Stream velocity
- Decreased costs
- Increased product/service quality
- Above all, Continued Improvement with a quest for Perfection
This is a big effort but unlike other projects, measurable benefits start within the second month. This effort will move your business to constantly change, create an improvement culture, and comes with Performance Metrics. Your business is now on its way to excellence.