E
B X
B U C
A S E
X I L
T N L
E E E
R S N
S C
E
Baxter Business
Excellence Model
Michael R. Whisman
Director, Quality
Baxter Healthcare Corporation
Michael (Mike) R. Whisman

Ex-Army Captain (Viet Nam Era)

Over 33 Years – Healthcare
Industry (Manufacturing & QA)




20 Years at Baxter
Baldrige Examiner (1997 – 2009)
Shingo Examiner (2005 – 2009)
ASQ ITEA Judge (2002 – 2009)
2

Chairman, ASQ Team &
Workplace Excellence Forum
(2008 – 2009)

BS – Management (Texas A&M)

MBA – Pepperdine Univ.

6-Sigma Black Belt

Baxter Master Black Belt

40 Years - Married – 2 Grown
Kids, 1 New Grandson & Puppy
© Copyright 2006, Baxter International, All Rights Reserved
Questions

How many are implementing models?

What kind of issues do you face?

How many believe you have to have support from the top to
successfully implement?
Let’s take a look at the model we use at Baxter
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MODEL - OVERVIEW
Baxter Business
Excellence Model
4
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Baxter Business Excellence Model
Complete View
Strategic Challenges
Strategic Objectives
Value Streams & Key Metrics
A
S
S
E
S
S
Improvement Opportunity
Identification and Prioritization
Lean Six Sigma
DFSS / DMAIC Methodology
Tool Set
Total Employee Involvement
A
L
I
G
N
I
N
T
E
G
R
A
T
E
Tangible, Verifiable Results
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© Copyright 2006, Baxter International, All Rights Reserved
Baxter Business Excellence Model
With Pictures
Strategic Challenges
Strategic Objectives
Value Streams & Key Metrics
Improvement Opportunity
Identification and Prioritization
Lean Six Sigma
DFSS / DMAIC Methodology
6s *
Kaizen **
Lean ***
Total Employee Involvement
Provides focus,
ensures alignment of
all employees towards
common goals, timetables and targets.
TOOLS
* Six Sigma – Variation
** Kaizen – Quick Change
*** Lean – Waste
Tangible, Verifiable Results
6
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Strategic Challenges and Objectives
Strategic
Challenges
Internal Strategic Challenges
External Strategic Challenges
Operational
Customer
1.
2.
Organizational
3.
Business
4.
5.
Competitor/Market
6.
7.
8.
Supplier
9.
10.
Key Strategic
Challenges
Key Strategic
Objectives
Strategic
Objectives
1.
2.
3.
4.
5.
Note: Strategic Objectives can cover multiple Strategic Challenges
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Baxter Business Excellence Model
Strategic Challenges
Strategic Objectives
Value Streams & Key Metrics
Improvement Opportunity
Identification and Prioritization
Lean Six Sigma
DFSS / DMAIC Methodology
6s
Kaizen
Lean
Map processes that
support key strategic
objectives and create
customer value.
Include baseline on
key measures and
targets for
improvement; lead
time, cost, quality,
yield, etc.
Total Employee Involvement
Tangible, Verifiable Results
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Value Streams and Key
Internal Strategic Challenges
Strategic
Challenges
Operational
1.
Business
Organizational
2.
3.
4.
5.
Metrics
External Strategic Challenges
Customer
6.
Competitor/Market
7.
8.
Supplier
9.
10.
Key Strategic
Challenges
Key Strategic
Objectives
Key Metrics:
1, 2
1
1, 2
Targets:
A, B
A
A, B
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Value Streams and Key Metrics
Move from departmental thinking…
Sales &
Marketing
Product
Development
Manufacturing
Information
Technology
Environment,
Health,
&Safety
Quality &
Regulatory
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Supply
Chain
Finance
Human
Resources
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Value Streams and Key Metrics
….To process thinking driven by key metrics with
customer and business excellence line-of-sight
EH&S
Quality &
Regulatory
Supplier
Sales &
Marketing
Customer
Value Creation
Product
Development
Product
Manufacturing
Human
Resources
Supply
Chain
Information
Technology
Finance
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© Copyright 2006, Baxter International, All Rights Reserved
Example Value Stream Map
PRODUCTION
CONTROL
Supplier
Market
Changes
MRP
Market
Intelligence
Sales
Data
Weekly Schedule
Distributors
Weekly
Material
Shipment
Process Step #1
I
300 units
Process Step #2
Process Step #4
Process Step #3
I
I
I
50 units
50 units
150 units
C/T = 10 sec
C/O = 1 hr
C/T = 30 sec
C/O = 1 hr
Uptime = 85%
Yield = 70%
Uptime = 75%
Yield = 60%
C/T = 30 sec
C/O = 2 hr
Uptime = 95%
Yield = 80%
C/T = 20 sec
C/O = 2 hr
Uptime = 80%
Yield = 70%
Non-Value Add 50 min.
25 Min.
25 min.
50 min PCT = 151.5 mins
Value Add
10 sec.
30 sec
30 sec.
20 sec.
VAT = 1.5 mins
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Opportunity Identification
Strategic Challenges
Strategic Objectives
Value Streams & Key Metrics
Improvement Opportunity
Identification and Prioritization
Lean Six Sigma
DFSS / DMAIC Methodology
6s
Kaizen
Lean
Total Employee Involvement
Tangible, Verifiable Results
13
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Value Stream Map: Three Primary Purposes
Value Stream 1
Value Stream 2
Value Stream 3
1.
To engage the organization in
process thinking and
continuous improvement
2.
To identify improvement
opportunities through
process understanding
3.
To manage all improvement
efforts toward meeting all key
metric targets
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Opportunity Identification, Prioritization and
Project Selection
Value Stream 1
0-6 months 12 months 24 months 36 months
future state future state future state ideal state
Quick Hit Quick Hit
Kaizen
Kaizen
Project 6-Sigma
6-Sigma Kaizen
6-Sigma Project
Kaizen 6-Sigma
Project Project
Project 6-Sigma
Measure Improvements Against Key
Metrics and Strategic Objective
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© Copyright 2006, Baxter International, All Rights Reserved
Baxter Business Excellence Model
Strategic Challenges
Strategic Objectives
Value Streams & Key Metrics
Improvement Opportunity
Identification and Prioritization
Lean Six Sigma
DFSS / DMAIC Methodology
6s
Kaizen
Lean
Total Employee Involvement
Mechanism to drive
improvement.
Standardized
methodology and
language:
Define, Measure,
Analyze, Improve,
Control.
Lean Six Sigma
Toolkit.
Tangible, Verifiable Results
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Value Analysis

Value Added Activities


Activities essential to deliver product or service
according to customer requirements. Three criteria:

Transforms the item or service toward completion

Customer cares (would be willing to pay for it)

Done right the first time
Non-Value Added Activities

All other activities. These activities are considered
waste.
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Baxter’s 11 Wastes
Definition of Waste
• Overproduction
Waste is anything other than the minimum
• Waiting
amount of equipment, materials, parts,
space, and worker’s time which are
• Transportation
absolutely essential to add value to the
• Excess Motion
product.
Shoichiro Toyoda - President, Toyota
• Injuries
• Inadequate procedures/methods (processing waste)
• Unplanned Activities (processing waste)
• Inventory
• Poor Communication
• Defects (not meeting customer requirements)
• Variation
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Lean Six Sigma
Strategic Challenges
Strategic Objectives
Value Streams & Key Metrics
Improvement Opportunity
Identification and Prioritization
Lean Six Sigma
DFSS / DMAIC Methodology
6s
Kaizen
Lean
Total Employee Involvement
Tangible, Verifiable Results
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Tools
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What is Lean Six Sigma (LSS)?
Lean
Six Sigma
A focus on waste
elimination, standardization,
cycle time reduction,
smooth process flow etc.
A focus on variation
reduction that impedes
optimized performance.
Lean Six Sigma is a robust, data-driven approach to
improve and manage key business processes.
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The Methodology: DMAIC
IMPROVEMENT
CYCLE
DEFINE
MANAGE
... define the problem, clearly
and related to customer...
MEASURE
...measure what you care about;
know your measure is good...
ANALYZE
… look for root causes;
generate a prioritized list
IMPROVE
... determine and confirm
the optimal solution ...
…be sure the problem
doesn’t come back...
CONTROL
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The Tools: LSS Toolkit
DEFINE
Is/Is Not
Diagram
MEASURE
ANALYZE
IMPROVE
Boxplot
Brainstorm
DOE
Dotplot
Fishbone
SIPOC
Charts
FMEA
MistakeProofing
Process
Flow Chart
Pareto Chart
Affinity
Value
Stream Map
CTQ
Multi-Voting
Project Y
Scatter
Kaizen
MSA
Pareto Chart
Visual Mgt.
6S
Gage R&R
Fault Tree
TPM
NPV
Surveys
Drilldown
5 Whys
VOC/CTQ
Kano Model
Process
Capability
Study
CONTROL
Control Plan
Standard
Work
Flexible
Workforce
Operating
Procedures
Revised
Process F
low
Project
Decommissioning
Level
6-Sigma Tests Loading
Takt Time
Pull/Kanban
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© Copyright 2006, Baxter International, All Rights Reserved
Baxter Business Excellence Model
Strategic Challenges
Strategic Objectives
Value Streams & Key Metrics
Allocation of the
appropriate resources
and engagement of
the entire
organization.
Improvement Opportunity
Identification and Prioritization
Lean Six Sigma
DFSS / DMAIC Methodology
6s
Kaizen
Lean
Total Employee Involvement
Achievement of
results directly
supporting the
organization’s
strategic objectives.
Tangible, Verifiable Results
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© Copyright 2006, Baxter International, All Rights Reserved
Business Excellence Model
Align - Integrate - Assess
Strategic Challenges
A
L
I
G
N
Assess progress
Strategic
towardObjectives
goals.
Value Streams & Key Metrics
A
S
S
E
S
S
Opportunity Identification,
Refineand
based
uponSelection
Prioritization,
Project
results and changes
to strategic
Lean
Six Sigma
challenges and
DFSS / DMAIC Methodology
strategic objectives.
6s
Kaizen
Lean
Total Employee Involvement
I
N
T
E
G
R
A
T
E
Tangible, Verifiable Results
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MODEL - DEPLOYMENT
Baxter Efforts
25+ Years
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© Copyright 2006, Baxter International, All Rights Reserved
Questions

How many have tried to implement a business model in
your company and were successful right out of the gate?

How many have tried to implement a business model and
slammed full on into cultural issues:


We’re different

Tried it before and failed

That stuff won’t work here
How many have actually made some inroads with
employees, only to see stubborn leaders kill the motivation?
27
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Deployment Resources & Brief History


Initiated QLP in mid-80’s – World-wide Deployment

QLP Sr. VP reporting to CEO – Millions in Funding

64 Full time Director/Coaches to deploy program

All Leaders sent to Crosby School in Florida
Issues

Deployment to manufacturing world-wide. Division Leaders
made an effort.

Merger of Baxter and American Hospital

Did not include Technical Areas (i.e. R&D, IT, Finance, etc.)
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© Copyright 2006, Baxter International, All Rights Reserved
Model History


Initiated QLP (Total Quality) in mid-80’s – World-wide
Deployment

QLP Sr. VP reporting to CEO – Millions in Funding

64 Full time Director/Coaches to deploy program

All Leaders sent to Crosby School in Florida
Initiated Baldrige Approach (1989) – Global intent

Deployment to manufacturing world-wide. Some Division
Leaders were successful.

Four Full-time VP’s, an award office of staff & 200+ Examiners

Leaders asked “QLP or Baldrige, which one?
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Model History


Some Key Plants Initiated Shingo (2000)

Success - Manufacturing Plant Level

Not much interest elsewhere
Merged Shingo with Baldrige Approach (2005 – Present)

Builds on everything we learned thus far

Leaders at Many Levels of the Organization Interested

Lost enough, we are starting over in many areas

Manufacturing Plants – still generally the best examples

Great efforts being made in Quality Organizations
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© Copyright 2006, Baxter International, All Rights Reserved
Model History


Lean (2002)

Success in Some Manufacturing Plants

One Key Leader
Business Excellence (2002)

One Sr. VP reporting to Corp. Quality VP

Eleven Person Corporate Group – Five Guru’s with five
coaches in training.

Strongest Support in Manufacturing & Quality

IT, Finance, Supply Chain, & a Division are Developing
31
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Pitfalls We Experienced

QLP - Not Training Everyone at Once
Baldrige Model – Placing it in competition with QLP
 Seeing LEAN, Six Sigma, Kaizen, etc. as Models
 Succession Planning – Failure to consider culture/style
 Reduction in Organizational Resources



Decentralization
Program not reporting to the top
32
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What We Did Right


Stuck With IT – Saved Millions, Developed & Maintained
a Core Competence in Manufacturing
Merged it all Together



QLP – Culture
Baldrige/Shingo Model – Fits Partial & Complete Organizations
6-Sigma/Lean/Kaizen/Etc. as Tools

Implementation Anywhere There is Interest
 Using Examples of Success to Tempt Leaders
 Practicing What We Preach

Baxter is Charging for Success
33
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