Latest research shows that the trick for organisations is to combine speed with stability to achieve Agility !
Agile, Kaizen, Lean Six Sigma and TOC methodologies are well proven and considered globally the best way of achieving “World Class” E2E Enterprisewide digital business performance and customer service outcomes in manufacturing and services based organisations.
The greatest challenge for many organisations is the rollout and deployment of the initial program to achieve the required factors of engagement in skills, knowledge transfer and cultural maturity; thus ensuring that the initial deployment rollout does not fail or flounder.
Historical evidence shows that if those methodologies are rolled out unstructured a failure rate of 70% plus have occurred during the early years of program deployments.
Critical to achieving these factors of engagement is the commitment and sponsorship of the senior leadership team to change the way people think, act and collaborate together without fear or trepidation to make and achieve major change within the organization, more reading/learning @ “The Benefits of Thought Leadership”
(Graphic 1) shows the benefits of the structured gradual step deployment of these continuous improvement methodologies and the best practice outcomes, helping organisations to evolve and mature.
In addition to a structured gradual step approach, it is also critical to ensure that the organisations corporate strategic and operational plans are realigned and embedded with the business critical key performance metric drivers and having a baseline capability position that includes a full (VOC) Voice of the customer/CX /SIPOC position that includes a quantified COPQ/CTQ/CTC/NPS position, more reading/learning @ “Know your Customer” that often identifies and justifies the initial funding stream/business case opportunities with the core “business critical” prioritised project themes identified and scoped with potential benefits quantified (R.O.I) and aligned to the organisations corporate and vision and values propositions are embedded prior to commencing any (C.I/T.Q.M) transformation deployment rollout. I have found that by utilising additional (B.S.C) Balance Scorecard Card and (B.R.M) Benefits Realisation Management techniques to flush out the critical business drivers, visual performance metric and being able to quantify the baseline position (current state) and the projected/potential (R.O.I) hard/soft cultural maturity/engagement benefits (future state) allows a structured budgeted and tasking of achievement by all involved internal and external stakeholders to deliver the potential ongoing results.
I have found with great senior executive leadership commitment and sponsorship with transparent and open communication and closely listening to all employee ideas/grievances, suggestions and observations will result in maximum transformational engagement with greatly improved long-term cultural maturity being achieved = transformational change programs that will deliver benefits of greater than >10+ fold plus (R.O.I) improvement from the initial investment stream outlay !
There are many examples where organisations have failed by adopting single method strategies and deploying Agile, Kaizen, Lean Six Sigma and TOC Best Practice without having the required back up of skilled team members and the expert leadership, qualified in these methodologies, more reading/learning @ “The Application of Structured Problem-Solving Techniques to achieve Best Practice Outcomes”
Usual good practice is to commence utilising Kaizen PDCA/PDSA and Lean techniques to flush out the low hanging fruit, namely company generated waste. This gets team members to learn and work utilising these best practice methods and also achieving some great results and outcomes that will project and be observed by other teams within the organisation and serves as a living template and adds momentum for them to follow.
Once the teams have achieved the yellow and green belt competency level and have successfully delivered great outcomes, then target further DMAIC/ DFSS projects that can be undertaken to resolve the larger issues identified and proceed with the remaining critical improvement opportunities, allowing the organisation to move forward, more reading/learning @ “Our Training Programs”
Cultural maturity is required to achieve a high level of engagement and deployment. This takes time to establish, mainly due to a resistance to changes being introduced. Once the capability position is established and the level of participation and engagement increases, the system reaches higher levels of process and product sigma capability = six sigma
The maturity of the overall quality management system and trying to implement well above the organisation's current baseline capability state which can result in “deployment and employee engagement failures” of which can be “unrecoverable”.
“Kaizen” the Japanese term to “Change…to make…better” word for continuous improvement. Usually used to describe a focused, short-term “Kaizen Event” conducted to reorganise a process or customer service function. Kaizen utilises the (P.D.C.A) Plan – Do – Check – Act or/and (P.D.S.A) Plan - Do - Study - Act improvement cycle methods that have been utilised over the last 80 years with great success, this method is the best way to commence your journey towards best practice outcomes. Kaizen In Lean Six-Sigma terms, it refers to a highly focused, short-term rapid improvement event performed by cross-functional teams at the work-group level that identifies and removes waste from a process or customer service function. Also, Good Kaizen events can also follow the 6 Sigma (D.M.A.I.C) (Define-Measure-Analysis-Improve-Control problem-solving methodology and involve the use of basic Agile Lean Six-Sigma tools to implement process improvement solutions. Kaizen is focused on rapid daily generated improvement activities. The following graphic highlights the historical evolution of the Deming/Shewhart PDCA/PDSA cycles
More detailed knowledge and learning @ Deming Shewhart PDCA PDSA Kaizen Technical Overview 23 4 18.pdf
“Lean” Initiatives focus on eliminating all waste in manufacturing processes, customer service, asset and facilities capability functions; commonly known as the (T.P.S) Toyota Production System. The Production System Design Laboratory (P.S.D), Massachusetts Institute of Technology (M.I.T) ‘Lean production is aimed at the elimination of waste in every area of production including customer service and labour relations, product design, facility and maintenance uptime utilising (T.P.M/R.C.M) (T.P.M – Total Preventive maintenance & R.C.M – Reliability Centered Maintenance) techniques, supplier networks and factory management. Its goal is to incorporate less human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.
“Six Sigma” (D.M.A.I.C) (Define-Measure-Analysis-Improve-Control) the problem solving method that is utilised to solve complex problems is a rigorous and a systematic methodology that utilises information (management by facts) and statistical analysis to measure and improve a company’s financial and operational performance, practices and systems by identifying and preventing ‘defects’ in manufacturing and service-related processes in order to anticipate and exceed expectations of all stakeholders to accomplish effectiveness and achieve customer service best practice outcomes.
“Design For Six Sigma” (D.M.A.D.V) Define-Measure-Analysis-Design-Verify or (D.M.E.D.I) Define-Measure-Explore-Develop-Implement methodologies, should be used when a product or process is in existence at your company but is not meeting customer specification or is not performing adequately. Many mature global best practice organisations are increasingly utilising these additional Design & Verify tools and methods for the conceptualisation, design and launch of new products and technology from conception to full marketing/launch rollout, this is referred to as Design for Lean Six Sigma (D.F.S.S) or (I.D.O.V) Identify, Design, Optimize, Validate
Most organisations implement Six Sigma DMAIC as a fix for internal organizational issues and problems. However, the true benefit of Six Sigma is felt when the organisation moves from fixing broken processes and customer service issues to the Design for Six Sigma (DFSS) methodology which is aimed at building processes properly from the design inception. (Of the several similar DFSS roadmaps, DMEDI is used here.) The methodology for designing or redesigning processes normally comes into use after a Six Sigma program has matured in an organisation. Meanwhile, Six Sigma professionals are faced with the task of reviewing project charters and deciding how best to resolve problems.
"Agile / SAFe4 / Scaled Agility Methods / Daily Scrum / Sprints for Software / Product Developers / Owners and Product Managers
Agile Approach to Software Development Scaled SAFe 4.0 / Product/Developer Owner / Scaled Agile Digital/Software change frameworks are more recent and primarily a mindset change and a set of adoptable and adaptable frameworks, that aligns well with existing digital E2E Enterprise roll-outs of Kaizen Lean Six Sigma (CI /TQM) business improvement deployment programs. The pre-critical strategic assessment and current state capability position of the organisation's process, customer service, Leadership, Maturity, Culture and internal skills/competencies will determine what methodologies are required to launch the first successful strategic deployment roll-out. The main reason why organisations are using Agile is due to the various advantages it offers, one being the high degree of collaboration between the client and project team. This will lead to the development of a project which will be of high efficiency and effectiveness due to the clear understanding of the client’s vision by the development team
Agile approach is distinctive and unique when compared to traditional Waterfall Methods, as agile focus is to work in shorter iterations giving importance to the recurring needs of the clients following an incremental approach whereas waterfall methods follow a predetermined sequential model where once a process has been completed, developers won’t be able to go back to the previous stage and make changes.
Thus customisation is possible in agile methodology. Popular agile software development frameworks include Adaptive Software Development, Agile Modeling, Agile Unified Process, Crystal Clear Methods, Disciplined Agile Delivery, Dynamic Systems Development Method, Extreme Programming, Feature Driven Development, Lean Software Development, Kanban, Scrum and Scrumban.
Agile development is supported by a number of concrete practices which covers different areas of requirement like design, modelling, coding, testing, planning and risk management. Some essential agile practices include Agile testing, Timeboxing, Backlogs, Domain driven design and Scrum events like daily sprint planning, daily scrum, sprint review and retrospective
TOC - Theory of Constraints
The Theory of Constraints (TOC) is a philosophy of management and continuous improvement originally developed by Dr. Eliyahu M. Goldratt and introduced in a book called The Goal. The book, a novel, is often used in business classes. The story, which is told in first person narrative, is about a new plant manager who is given ninety days to turn things around and make the plant run successfully or the plant will close. The plant manager finds a mentor who asks questions that guide the manager -- and the reader -- to realize that every complex system has at least one constraint (bottleneck) and it's the constraint that determines the ability of the system to be successful.
TOC is based on the concept that a chain always has one weakest link. Similarly, in any complex system, at any point in time, there is most often only one aspect of that system that limits its ability to achieve its goal. The same is true for an organization. Thus, for any organization to attain significant improvement, the constraint must be identified and the whole system must be managed to keep that constraint in mind.
The five-step TOC process is :
1. Identify the constraint – Anything that delays or stops a process from achieving its goal.
2. Exploit the constraint – Get the most out of the constraint resource.
3. Subordinate the complete system to the constraint – Let the resources that have excess capacity remain idle, or spend capacity to help the constraint. Avoid unnecessary inventory.
4. Elevate the constraint – Raise the throughput rate of the constraint.
5. Do not let inertia become the constraint – If Belts keep improving the same link of the chain, there will come a time when this link becomes stronger than some other link. To ensure that Belts are always working on the current constraint, the TOC process should be repeated.
An integrated approach to process improvement can be:
1. Define the problem and business objective.
2. Measure the current position. Ask relevant questions and collect the data.
3. Analyze the problems: Use a cause-and-effect diagram to determine undesirable effects. Create a current reality tree, which illustrates the interrelationship of undesirable effects and identify the constraint. Identify assumptions and challenge them.
4. Improve the system performance by: a) exploiting the constraint, b) subordinating the system to the constraint and c) elevating the constraint. Execute Lean and Six Sigma projects as a part of the Improve phase.
5. Control current performance and repeat the process.
At Step 4, Belts use the Lean Six Sigma methodology. Other steps integrate TOC with Lean Six Sigma to ensure that the correct focus is on business objectives.
Example: Work Distribution and Resource Management
The following case study shows how TOC can be integrated with Lean Six Sigma. The objective of the project is maximum output with zero defects. The project has four associates: three programmers and one tester. The tester can test two modules per day, and each programmer produces one module per day. The tester is available for half a day, while the programmers are available full time. The workload distribution is even, and each resource works on its own task.
Step 1 – Define the problem and business objective
Problem: Low productivity of the team, low bottom-line and top-line performance
Business objective: 100 percent productivity and higher profit and revenue
Step 2 – Measure current position
Work is piling up for the tester:
Output = 1 module/day = 1.5 person-days of work/day
Input = 3.5 person-days of work/day
Productivity = 42.85 percent
WIP inventory growth = 2 person-days of work/day
Step 3 – Analyze the problems – Identify the constraints
It is easy to see that the constraint is the tester. The inventory problem and restricted throughput stem from low tester effort/efficiency.
Step 4 – Improve
a. Exploit the constraint: The project leader works on increasing the availability of the tester. After working with other teams, the project leader succeeds in getting this tester full time. The team productivity is now:
Output = 2 modules/day = 3 person-days of work
Input = 4 person-days of work
Productivity = 75 percent
WIP inventory growth = 1 person-day of work/day
b. Subordinate to the constraint: The Project leader reduces the number of programmers to two, and utilizes the programmer somewhere else. Now:
Output = 2 modules/day = 3 person-days of work
Input = 3 person-days of work
Productivity = 100 percent
WIP inventory growth = 0 person-days of work/day
c. Elevate the constraint: The project leader purchases a testing tool, so that the tester can now test three modules per day. Because of this, the team productivity is now:
Output = 3 modules per day = 4 person-days of work
Input = 4 person-days of work
Productivity = 100 percent
WIP inventory growth = 0 person-days of work/day
By raising the throughput rate, the organization elevated top-line as well as bottom-line performance.
Step 5 – Control current performance and repeat the process
After improving the performance of the tester, the leader did not give up. There is always another bottleneck; the constraint can shift to the other resources. So, the project leader started again from the beginning and kept observing the process for new constraints. The constraint can shift to marketing and sales or even lie upstream with the policies of the company.
Thus, any organisation can adopt these generalised yet powerful frameworks to improve its performance continually via (C.I /T.Q.M) programs and reap the benefits of utilising Agile KaizenLean Six Sigma and TOC methodologies to reskill and allow your teams to resolve long-term process, customer service and digital software and supporting technology-based infrastructure variability and failures while increasing your reliability and uptime performance.
Conclusion and Summary
I would strongly recommend that a competent Master Black Belt facilitator be engaged to initially conduct your baseline maturity and capability position and identify the core projects themes and quantified potential benefits (R.O.I) and then embed/realign these business-critical findings back into the organisations corporate and operations strategy and aligned to your vision and values propositions before commencing any large scale transformational deployment programme.
The key is having great leadership in place that will sponsor and drive the changes with skilled team practitioners and nominated project champions that have the knowledge to deploy these great best practice methodologies and tools and knowing how and when to utilise which methods and tools with the prioritised quantified projects to be implemented will achieve profitable long-term sustainable win/win collaborative outcomes.
View our best practice video introduction into Agile Kaizen Lean Six Sigma Overview @ https://www.youtube.com/watch?v=3STJKzOuNFY
We are located in Australia and have highly qualified international senior Agile Kaizen Lean Six Sigma executives that cover global partnership and relationships with many global based ASX/Fortune 500 and privately owned best practice organisations.
Please feel free to make contact with us on +61 417766611 or email firstname.lastname@example.org for an obligation free discussion on your strategic vision and operational realignment programs covering your process and customer service outcomes, customer experience, statistical data analysis visualisation, project-based transformation, deployment and cultural engagement challenges… also visit our “Best Practice” websiteskaizenleansixsigma.com.au and richterconsultinggroup.com.au for our latest best practice article updates.
© Richter Consulting Group 2018 Updated 13/5/18
Agile Kaizen Lean Six Sigma / TOC Best Practice Leadership and Technical Overview
The Agile Sigma method also integrates the Scrum team approach, sprint cycles and iterative process improvement techniques of the standard Agile development frameworks (as shown) to deliver significantly improved processes more rapidly. Agile Sigma uniquely applies the iterative sprint cycle concepts to the Six Sigma project approach, to initially achieve and validate an improved process Sigma level as the first level of improvement (i.e., moving from a baseline of σ0.0 [baseline] to σ1.0 [new improved process performance level]) before transitioning to the Control phase.
After the initial improvement, when most Six Sigma projects would be going for closure, the Agile Sigma team then continues to improve and validate the process iteratively via additional sprints to deliver optimized process performance before closing the project and sustaining the results and financial benefits
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