Integrated Operations
American Society for Quality – April Six Sigma Meeting
April 27th, 2010
E2E Sourcing Model:
Project Champion - Heather Busch
Master Black Belts - L. Erik Anderson, Kyle Kovac
Black Belt - Jason Mudd
deeper
© Copyright IBM Corporation 2010
Agenda
Process Innovation Team
 Process Innovation Team Engagement Model
 IBM Transformation Principles
 Case Study: E2e Sourcing Model Black Belt Project Lessons
Learned
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© Copyright IBM Corporation 2010
Process Innovation Team
Business Values
(Gained From Process Innovation Projects)
• Improve Critical to Customer Processes
• Drive Cost / Workload savings
• Drive the use of ongoing Process Metrics
- to monitor & develop continuous improvement
• Drive Lean Six Sigma into the DNA of the operations
- Employ a structured methodology to enable a culture change toward factbased and process driven decision making
• Provide an Independent E2E view
Vision:
LSS will be integrated into the fabric of ISC/STG, resulting in
a standardized approach for problem-solving, fact-based
decision making, and a process driven culture.
2005
• Established in 3Q
as a pilot team
• Sponsored by Bob
Moffat
CONCEPT
3
3
Mission:
To deploy LSS across ISC/STG, providing incremental
business value through the application of a “structured”
process evaluation to specific business problems
2006
2007
• PI Pilot expansion
• Education established
• Management System
established
• Proof-of-concept
• 1st year of “Production”
• Team expanded to 14
members globally
• Expanded work in ISC
•Savings = $13.5M
DEVELOPMENT
2008
• Team expanded to
54 members WW
• Production
expanded
• Savings= $84.4M
IMPLEMENTATION
2009
• Expanded into
STG support
• Steady production
•
Savings =$333.6M
GROWTH
E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010
Agenda
 Process Innovation Team
Process Innovation Team Engagement Model
 IBM Transformation Principles
 Case Study: E2e Sourcing Model Black Belt Project Highlights
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© Copyright IBM Corporation 2010
PI Team Engagement Model
Project Request
PI Website
CF/ITD
Focal Point
Proc/BTO/Mfg
Focal Point
Focal Point
• Productivity Challenges
• Specific Business Problems
• Establish Metric Systems
GOPS
Other Enterprise
Focal Point
Focal Point
• Improve Critical Customer Processes
• Reduce cost and improve efficiency
• LSS Education & Deployment
Project Evaluation
1.
RECOGNIZE
PHASE
2.
Work with Executive/Sponsor to understand
•
Strategic goals
•
Business problem & Scope
•
Objectives of the project/initiative and linkage to strategy
Evaluate LSS compatibility - process related, data driven, unknown solutions
•
MBB
Need for LSS education/deployment (GB/YB) vs. pin pointed problem resolution (BB)
Project Prioritization
Importance
to
Customer
Strategic
Value
Impact on
other
Processes
Investme
nt
Savings
Strategy
Feasibility/C
omplexity of
Project
Financials
Project Pipeline
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© Copyright IBM Corporation 2010
PI Team Engagement Model - Education
Team Structure
GB
GB
BB
GB
YB
GB
YB SME
Yellow Belt Education
Green Belt Education
Black Belt Education
Course
Characteristics
•
•
•
•
•
•
• 50-60hrs online course work (self learning)
• 16 hours of supplemental instructor-led
education delivered virtually via Centra
• Detailed exposure to DMAIC
• Exposure to statistical tools and techniques
• Learn to understand and apply tools and
techniques
• Statistically Intensive
• Exam required
• 140 hours of online course work or 4
weeks of classroom education
• In-depth exposure to statistical tools and
techniques
• Very statistically oriented
• In-depth exposure to DMAIC process
• Exam required
Targeted Group
• Lean Six Sigma Project team members
• Possess Analytical Thinking
st
• 1 Line Mgrs with a project running in
their area (not limited to)
• High Potential / Top Talent / Team Leads
• Possess Analytical Thinking
• Experienced Employees
• Process Innovation Team
Project
Requirements
• Must participate in a Lean Six Sigma
Project
• Must lead on a Lean Six Sigma Project.
• Expected to devote 30% of time to leading a
project
• Projects 4-6 month in duration
• Benefits > $50k
• Broader scope: Cross-Geo, Cross-Org,
Impacts large # of people
• Projects 9 - 12 months in duration
• Larger benefits (> $200k)
6
15hrs online course work
100% self-learning
Exposure to DMAIC methodology
Brief exposure to tools
Not statistically intensive
Exam required
E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010
PI Team Engagement Model - Projects
IBM Lean Six Sigma
2-Pronged Approach
Green Belt Projects
Black Belt Projects
Specific Scope
Broader Scope
Faster Results
Slower Results
Smaller Benefits
Larger Benefits
 Specific Scope
7
 Broad Scope
►
Single Process or Geo
►
Cross-Geo
►
Drives Lean Six Sigma into
the DNA of the Org.
►
Cross-Org
►
Impact large number of people
 4 – 6 Months Duration
 9-12 Month Duration
 Benefits > $50K
 Benefits > $200K
E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010
Agenda
 Process Innovation Team
 Process Innovation Team Engagement Model
IBM Transformation Principles
 Case Study: E2e Sourcing Model Black Belt Project Lessons
Learned
8
E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010
IBM Initiative Deployment Success Factors
Achieving scalable results requires a well thought out and proven framework
The transformation architecture is key to providing an enduring flow of benefits
Integrating Data
Systems & Strategy
Supporting
Infrastructure
Project
Methods
Strategic
focus
1. Committed Leadership
2. Customer Focus
& Requirements
Define
6. Integrated
Approach to Change
3. Strategic Alignment
& Project Selection
Measure
7. Benefits &
Tracking Rigour
4. Full Time Resourcing
& Organization
Analyze /
Explore
8. Performance
Management
Improve /
Develop
9. Capabilities,
Learning
& Knowledge
5. Business Process
Framework
Control /
Implement
10. Deployment
Management
Factors based upon IBM’s Lean Sigma research and experience 1996 – 2005
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© Copyright IBM Corporation 2010
LSS Enterprise Management Program
“Must Haves” For A Successful LSS Enterprise Management Program
Strategy
Integration
 To be successful all factors:
− Must be aligned and
fully-integrated
− Must be tailored to
uniqueness of each
organization
 “Committed Leadership” is
THE central factor in
implementation for any
successful program
Rewards &
Recognition
Training &
Staffing
Committed
Leadership
Measurements
& Metrics
Governance &
Communicatio
n
R
E
S
U
L
T
S
Process
Management
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© Copyright IBM Corporation 2010
LSS Maturity Model Assessment
Pilot
Early Success
Adoption
Optimization
World Class LSS Culture in DNA
Program Results
 Case by Case Success
 ROI = -25 – 25%
 Positive ROI on Op and
Financial Benefits
 ROI = 25 – 50%
 Op/Financial Benefits consistently
captured
 ROI realized
 ROI = 50 – 100%
 Best practice standards met
 ROI = 100 - 150%
 ROI influences budget Build
 ROI > 150%
Committed Leadership
 Few Visionaries
 Burning Platform at all
organizations
 Sr leaders involved in project
selection & execution
 All project sponsors trained and
engaged
 LSS integrated into personnel system
Strategy Integration
 Transactional projects
 Specific scope
 Isolated projects
 Transformational projects
 Large/broader scope
 Systematic selection with
leadership priorities as part of FP
 Projects focused on E2E
processes
 LSS program aligned with strategic
plan
 Projects focused on E2E processes
and may cross functional areas
 LSS program integral part of strategic
planning
 Projects focused on E2E processes
and may cross functional areas and
organizations
Training and Staffing
 Initial training of Sr leaders, key
focals
 Full scale BB education
(external)
 Best practices used to create bestof-breed training program
 BB Training External
 ~1% of organization LSS trained
 Pilot GB internal education
 ~5% of organization LSS
trained
 Full scale MBB training (external)
 Standardized GB education
deployment
 ~10% of organization LSS trained
 Continuous demand for LSS Classes
 Continuous execution of LSS classes
 ~25% of organization LSS trained
Governance and
Communication
 Establish governance structure
 Create strategic plan
 Refine governance and
communication plan
 Centrally manage LSS projects
 Process Owners own utilization of
YBs/GBs for CPI
 All organizations leverage LSS
methods/resources for continuous
improvement governance
 CPI governance part of decision
making DNA
Process Management
 Ad hoc selection of low hanging
fruit and key pain points
 Build process management
system
 Process Owners manage by
process management system
 Projects align to Enterprise-wide
processes (EPF)
 Process management influences future
state
Measurements and
Metrics
 Ad hoc reporting
 Project tracking system and
LSS Scorecard
 Initial integration with Business
Intelligence System
 Full integration with Business
Intelligence System
 Fully integrated balanced scorecard
Rewards and
Recognition
 Driven few
 Volunteer Belt Candidates
 100% of candidates selected from
top 25%
 LSS Certification seen as career
enhancing
 LSS aligned to Promotions &
assignments
Level 1
11
Level 2
Level 3
 Core LSS Trainers
 ~20% of organization LSS trained
Level 4
Level 5
E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010
Agenda
 Process Innovation Team
 Process Innovation Team Engagement Model
 IBM Transformation Principles
Case Study: E2e Sourcing Model Black Belt Project Lessons
Learned
12
E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010
E2e Sourcing Model Project Lessons Learned
1.
2.
3.
4.
5.
Manage Time Zones
Manage SMEs
Manage Implementation Owners
Establish Interview processes & protocol
Data Collection & Analysis can be time consuming…It is important to identify
key measures up front & begin measurement as soon as possible
6. Measure & Improve Phases were the most challenging phase due to time,
details, and coordination required
7. Decided on process mapping software up front
8. Understand the limitations of the mapping software
9. Establish agreed upon definitions of value, non-value, and waste prior to
analyze
10. Scope management e.g. break up E2E process mapping projects into smaller
components
11. Involve the IT team often and early i.e. if you know that there will be IT impacts
on the project
12. Review and re-review the model often as a team b/c the model will reveal
additional improvement opportunities over time
13
E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010
Questions?
Jason Mudd
Jasonmud@us.ibm.com
(919) 486-2884
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E2E Sourcing Model | Integrated Operations
© Copyright IBM Corporation 2010