Tools to Achieve Performance Excellence
Presenter Biography- Sathish Selvaraju
 Lean, Lean Six Sigma and Business Transformation
 5+ years experience in applied process improvement methodologies
 M.S. in Industrial and Systems Engineering
 Research interests:
– Organizational culture transformation
– Lean and Six Sigma methodology
– Leadership and Change Management
– Supply chain management
 1 Patent, 2 publications and invited industry talks
 Member of IIE, SEMS and PEN
 Office – Rochester, MN, Lives – Rochester, MN
 Personal – Married with 1 kid (1 YR)
Email: selvaraj@us.ibm.com
Lean–8 Step Problem Solving
Methodology
Learning Objective
• At the end of this module, the participants will be able to:
• Describe the 8-Step Structured Problem Solving methodology
• Define an effective Problem and Goal Statement
• Integrate quality and process improvement techniques into the 8-step problem
solving structure
• Explain how the 8-Step methodology allows for Corrective and Preventive
Actions During Problem Solving
• Discuss the benefits of Root Cause Analysis
• Describe techniques for Measuring and Sustaining your process improvements
• Discuss how to apply the 8-Step Methodology on a business challenge or
process improvement project
Benefits of Problem Solving
•
•
•
•
•
•
Eliminate time lost in debate
Identify weak points in the processes
Discover systematic causes
Explain why an incident occurred
Gives factual representation of the incident
Compare what actually happened against what
should have happened
The 8-Step Structured Problem Solving process
is based on the Plan-Do-Check-Act process
When to Use Plan–Do–Check–Act
As a model for continuous
improvement
Plan
Act / Adjust
When starting a new improvement
project
Do
Check
When developing a new or improved
design of a process, product or service
When defining a repetitive work
process
When planning data collection and
analysis in order to verify and prioritize
problems or root causes
When implementing any change or
transformation effort
Reference: W. Edwards Deming’s Continuous Improvement Cycle (“The Deming Cycle”)
The number one reason why projects fail is
ineffective and insufficient planning…
1. Ineffective and insufficient planning
2. Lack of customer focus and participation
3. Lack of Senior Management support
4. Badly defined requirements or objectives
5. Ineffective change control process
6. Lack of necessary resources
7. Poor monitoring and evaluation
8. Little or no risk analysis
9. Poorly trained project manager
10.Ineffective communications planning
Source: Gallup Management Institute
8-Step Structured Problem Solving Process aligns
to the PDCA process.
1. Describe the problem
a)
b)
c)
d)
Plan
Do
Check
Act
2.
3.
4.
5.
6.
7.
8.
Identify the team
Define problem statement
Understand the process (and point of cause)
Define Goal statement
Implement containment actions
Perform Cause/Effect analysis; select root causes to fix
Develop & select countermeasures
Implement countermeasures
Measure results (Evaluate)
Plan
Steps 1, 2, 3, 4
Standardize the Process
Recognize the team
Act / Adjust
Steps 7, 8
Do
Step 5
Check
Step 6
Source: Gallup Management Institute
1.
Understanding the Process
A3 Report
a. Team and Sponsor:
4, 5. Countermeasures, Project Plan
Countermeasure
Who
When
Benefits
b. Problem Statement:
c. Understanding the Process:
<Enter key findings from VOC, VSM, SIPOC, Process Map>
6. Measure Success
Internal Process Excellence
Financial Excellence
Customer Satisfaction
People/Employee Empowerment
d. Goal Statement:
2. Containment Actions
7. Standardize Process
3. Root Cause Analysis
8. Celebrate Success
Step 1: Define the problem has four sub-steps with
Step 1a being Form the team
Plan
Act
Do
Check
Teams
• Are limited in size, typically 4 to 8 people
• Identify a sponsor for the team
• Contains members from the areas where the problem or improvement opportunity
exists
• Should have 80% of responsibility and authority to implement the required change
There are several key roles on an 8-Step team
Sponsor




Defines ‘high level’ team
Links team mission to organizational objectives
Addresses cross-organizational issues
Sets expectations for project status readouts & updates
Facilitator






Provides guidance through the problem solving process
Guides the team discussions; stays objective and neutral
Ensures everyone participates
Requests reviews with Leader/Sponsor for effectiveness
Adjusts direction when necessary
Coaches & teaches sponsor, leader and members in the 8-Step process
Team Leader







Creates an environment of trust, open communication and creative thinking
Provides the team with a vision of the project objectives
Coaches & helps develop team members; help resolve dysfunctional behavior
Maintains all pertinent data
Intervenes when necessary to aid the group in resolving issues
Communicates progress to Management, Status Meetings
Plans team recognition/rewards
Scribe


Captures meeting minutes
Sends progress report as agreed; highlights any open actions
Team member


Provides ideas, discussion, data, direct observation
Have decision-making power
Coach



Problem solving process Subject Matter Expert (SME)
Provides guidance on the 8 Step process
Checks in with Team, Facilitator, Leader
After the team is formed, the project team begins
Step 1b: Defining the Problem
Plan
Act
Do
Check
A problem is an observable, measureable deviation
from a known standard
• In business, a problem is a difference between the actual conditions of
our current state and those conditions that are required or desired.
• Problem statement needs relevant information to be effective!
• Current state, Target state and Business Impact
• It has to be clear, concise and complete
An effective problem statement is key to solving
the problem
An effective problem statement states both the current and the desired
situation. An effective problem statement implies or states explicitly both:
The current situation
The desired situation
The impact statement
Simple Example:
Our order entry cycle time is 4 days per order,
1 day per order longer than is acceptable
resulting in a 10% loss of market share
Current situation
• Cycle time = 4 days/order
Desired situation
• Cycle time = 3 days/order
Impact Statement
• 10% loss of market share
Quick Quiz???
Listed below are several examples of problem statements, some of which are effective and
some are ineffective.
1. Loan application approval cycle time is taking 3 weeks, which is above the acceptable
rate of 2 weeks and is resulting in a 15% applicant defection rate.
2. Clerks take ten days to check billing errors.
3. Our IT systems do not provide the required functions we need!!!
4. In October of 2012, we had 25 customer complaints compared to our standard of 10
per month and is causing a $10M drop in new orders
After the problem is defined, the project team begins Step
1c: Understand the process and identify the ‘point of
cause’
Plan
Act
Do
Check
1. Draw a process map to create a picture of the flow of information
– Capture what’s happening in the process
– Look for waste
2. Search for the “Point of Cause” (POC) – the area where the problem originates
– Ask 5 W’s and 1 H : Why, What, Where, When, Who, How much
– POC validates problem and narrows the scope
The 5Ws and 1H questions are Why?, What?, Who?, Where?,
When?, and How often?
•
To understand the process and drive to points of cause ask why, what, who, where, when,
and how often.
•
Ask Why…
–
–
–
–
•
Ask When…
–
–
–
–
•
Why this problem?
Why might it happen?
Why did it occur?
Why…
When was it found?
When did it happen?
When might it happen again?
When…
Ask What…
–
–
–
–
–
What product?
What equipment?
What size?
What is it made of?
What…
 Ask Where…
–
–
–
–
Where did it come from?
Where did we find it?
Where might we find more?
Where…
 Ask Who…
–
–
–
–
Who found it?
Who made it?
When checked it?
Who…
 Ask How…
–
–
–
–
–
How many?
How often?
How big
How far?
How…
TQM Tools for Identifying the Point of Cause
Control Chart
Pareto Chart
Process Map
Ishikawa Diagram
Trend Chart
Check
Sheet
Scatter Plot
After the process is understood, the project team begins
Step 1d: Develop goal statements
Plan
Act
Do
Check
Goals should be SMART
S – Specific
M – Measurable
A – Achievable
R – Relevant
T – Time-based
Here are guidelines for creating a goal statement
• Goal statements are written in the format <action verb> + <object>
• Do not use verbs that represent relative progress, for example, improve or
Increase, since we cannot measure these relative improvements
• Do not use imprecise words, such as leverage, enable, partner, optimize, or
focus on.
An actual quote: "My goal is to ensure our employees are enabled to leverage IBM's
investment in our IT environment by providing information on the latest software,
tools, and techniques.“
• Goal statements should not be checkpoints, for example, “Check with...” or
“Make sure that....” or “Investigate…”
• Goal statements are new, high-impact targets to move the business forward,
not business as usual, for example, “Continue to ....”
Example: Communicate to employees in a Direct, Open and Sensitive (DOS)
manner to create a culture of mutual respect and trust.
Here are guidelines for defining the success
measures for a goal
Success Measures
• Are the critical few things that tell us we are making progress in achieving our
goal
• Are unique, observable, measurable, direct proof that our actions are
producing tangible, sustainable results
• Show the desired trend or direction
– Increase in …by % or number
– Decrease in …by % or number
• Are not simply the implementation of the goal
• Define a balanced view of success using the Balanced Scorecard components
–
–
–
–
People - Learning and Growth
Internal Business Processes
Customer Value
Financial (ROI)
In the Balanced Scorecard, all the components are equally
important…
Lagging Indicators
Financial
Customer Value
Internal Business
Processes
People – Learning
and Growth
Leading Indicators
Process and People measures are great ‘predictors’ of Financial and Customer Value measures
Let’s consider an example of a goal statement with success
measures
Problem Statement: The Zoom Car Company is not meeting its daily
quota of producing 100 of their popular Easy Drive cars per day
causing a drop in Sales and Profits.
Goal Statement: Produce 100 quality-built cars that meet or exceed
customer requirements and that create a net profit of 18% per car by
the end of the year.
Success Measures:
• People: All employees are cross-trained in at least two manufacturing
operations
• Internal Processes: Defective cars produced per day = zero
• Customer Value: The Easy Drive car is voted Car of the Year by
Motor Trend Magazine
• Financial: 18% net profit per car
Quick Quiz???
The elements of the balanced scorecard are:
A) Customer Value, Financial Excellence, Process Excellence and
Employee Growth
B) Quality Metrics, Process Mapping and TAKT Time
C) Histogram, Scatter Plot, Correlation Analysis and Check Sheet
D) Plan, Check, Act, Do
After defining goal statements and success measures, the
project team moves to Step 2: Implement containment actions
Plan
Act
Check
What are containment actions?
• A short-term / temporary corrective action
• Some problems must be confined until the root cause has been
identified
Examples of containment :
• Stop production, Add inspection
• Install a concrete containment cap over a ruptured deep sea oil
well.
• Apply a tourniquet on a bleeding arm
Do
Let’s discuss the criteria for selecting containment actions
Business Impact: The extent to which this action helps contain the problem.
Easy to Implement: Making the change does not require a great deal of coordination
and planning; Making the change does not require a great deal of time and does not
require a large investment of capital, of human resource or of equipment or technology. It
is within the teams control
Reversible: The action, when implemented, may not achieve the results expected. It’s
better if the team is able to change things back to the original way of doing things if the
containment doesn’t pan out.
In your Team, rate each of the above criteria using the following rating scale:
High= 9, Medium = 3 and Low = 1, then multiply the 3 criteria to get a product for each
potential containment actions. Select those actions with the highest ratings AND rate HIGH
in Reversibility
Quick Quiz???
 Which of the following is an important attribute of a Containment Action?
A) It is fun
B) It is reversible
C) It can takes a long time to implement them
D) It is supported by a majority vote
After implementing containment actions, the project team
begins Step 3: Root Cause Analysis
Plan
Act
Do
Check
What is Cause and Effect Analysis?
A method to identify all possible causes of a problem
What is the 5-Why Method?
A technique of asking ‘Why?’ 5 times (approx.) to get beyond
symptoms to identify actionable root causes
8 Step Formal Structured Problem Solving
Observations  Problem  Root Cause  Countermeasures
Observable
Observations
(Symptoms)
1. Water on the
living room floor
2. Water on living
room ceiling
3. Water on bath
room floor
4. Water
overflowing from
bath room sink
5. Daughter’s
hair in sink
Problem
or Point of
Cause
5. Daughter’s
hair in sink
Analysis
Root cause(s)
6. Daughter
combs hair over
sink
7. Daughter
cannot see
herself in her
room when she
combs her hair
Countermeasures
(Brainstorm actions)
 Install a mirror in
daughter’s room
 Use the mirror in the
hallway
 Don’t use a mirror –
just guess!
 Other actions ...?
Root Cause Analysis and the ‘Fishbone’ Diagram
When creating a cause and effect diagram using causal categories,
each bone represents one of the 6Ms. . .
Measurements
Mankind
(People)
Machine
(Technology)
Problem
Statement
or
Point of Cause
Mother Nature
(Environment)
Materials
Method
(Processes)
All arrows point towards the problem statement.
The Five Whys technique is useful for identifying root
causes for each top problem
A simple, effective tool for getting to the root causes of problems is the Five Whys
technique. For each top problem:
1. Ask “Why is this a problem?”
2. Keep asking "Why?" until you identify a root
cause that you cannot change or influence -then stop.
Problem
Cause
Cause
Root Cause
Can’t Change or Influence?
Activity: Conduct a 5-Why Analysis for the “Poor Training”
•
Effect: The number of shipping errors was
50% more than target.
– WHY?
• The employees have poor training
– WHY?
• There is excessive turnover in the employee
population
– WHY?
•
Employees are disgruntled
– WHY?
•
They don’t like the new policy
– WHY?
•
Their input was not solicited when setting the
policy
After completing cause and effect analysis and selecting root
causes, the team begins Step 4 : Develop and select
countermeasures
Plan
Act
Do
Check
Countermeasures are actions that need to be taken to overcome the
identified problem to reach the defined goal.
Here are guidelines for stating effective countermeasures
Countermeasures:
• Are stated as Do’s and not Don’ts
• Are in the format <action verb> plus <object>
• Avoid verbs that represent relative progress; for example, Improve or
Increase
• Do not use soft, fluffy words …
 Leverage, Enable, Ensure, Partner, Review, Optimize, Support, Focus on,
Drive
• Answers the question: “What must we do to overcome the root causes
and make significant progress in achieving our goal?
The ‘Do’s’ and ‘Don’ts’ of Effective Brainstorming
In Step 5, the project team implements countermeasures and
identifies success measures for each countermeasure
Plan
Act
Do
Check
• For each selected countermeasure, identify success measure(s)
• The success measure(s) should align to the overall success measure(s) of the
Goal Statement (step 1d)
• Success measures: The unique, observable, measurable, direct proof that
our actions are producing sustainable results
In Step 6, the project owner measures and reports results of
implementing the countermeasure
Plan
Act
Do
Check
What do I record for results?
• Compare results against the initial condition and the goal statement
• Confirm effectiveness of countermeasures with data
Use Balanced Scorecard components for reporting
• Financial (ROI)
• Customer Value / Satisfaction
• Internal Business Processes
• People: Learning and Growth
Verification:
• Can we now go back and eliminate any containment activities that were put
in place (Step 2) ?
Measuring success can also be demonstrated through the
Quality Management Tools
•
•
Trend Charts
Befor
e
After
Target
 Bar Charts
Goal /Standard
Before
After
Histogram
In Step 7, the project team standardizes the successful new
process
Plan
Act
Do
Check
Create a plan for Sustaining
How do I standardize?





Create a Control Plan to make the new way ‘the’ way to do the task.
Train all parties involved or affected by the new system.
Document the new process (SOP, DOM, Desk Procedure, etc.)
Measure, track and report results.
Institutionalize – Does this countermeasure apply in other areas?
In Step 8, the project team is recognized for its
accomplishments
Plan
Act
Do
Check
Recognize and Share Achievement
“The more you do the 8th step, the more they do the 8 Steps”
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