Alan Culler

6 years ago · 5 min. reading time · 0 ·

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There are only 7 CI projects?

There are only 7 CI projects?

7d42e194.jpgContinuous Improvement Project Management tools


Metrics and measurement, root causes not symptoms, design of experiments, analysis systems . . . it is all so complex and overwhelming how do you pick what to improve?

My friend and Results-Alliance colleague, Dr. Richard Taylor is fond of saying “There are a limited number of continuous improvement projects. It’s less than 10. Once you’ve done those, it’s all about translation – doing the same project in slightly different circumstances or with different inputs.”

Recently I challenged Ric –“So what are the <10 projects?” It was a fascinating discussion. We agreed to talk about projects not in terms of solutions, but in terms of the problem being solved, which is appropriate because problem definition is the beginning of any improvement effort. Here is what he (and I) came up with:

1. Projects not meeting an external quality standard. The external standard could be a customer specification, for example, a specific micrometer-measured, two-sided, tolerance of a physical part (2.1mm- 2.8mm), or guaranteed ‘not-to-exceed’ one-sided ppm of harmful chemicals in a solution. The standard could be a regulatory requirement like average lending as percentage of capital on hand or the immediate shutdown of a cyber security breach. It could be a competitive benchmark like Amazon Prime’s “free” delivery (average delivery cost times average number of annual deliveries divided by $99 annual Prime membership fee).

The project originates from the data that show a short fall in meeting the external quality standard; the analysis determines why it is failing to be met. Is it meeting the standard on average but failing because of a wide distribution of performance – lack of precision? Or is it failing because the mean performance is outside of the standard? The solution may require shifting the mean or reducing the variability, or both. It will also depend on the particular inputs that drive that performance and how we can control them, but the problem is the same. We are not meeting the standard. Regardless of this solution strategy, it still involves manipulating process inputs, whether they are electrons, paper, or nails, in a more advantageous and controllable manner.

2. The process is not fast enough – cycle times that are too long. We are all become accustomed to thinking about delivery cycle time in the instant-gratification-internet-age, but cycle times have life or death consequences in healthcare and disaster recovery. Time to market drives success in any innovation driven industry, like software development or Fintech.

The Lean methodology aids analysis for this project category. Removal of the seven wastes, elimination of rework, moving non-value-added but required work out of the customer line and optimizing value-added steps are standard solutions to increase speed. This group may well have more continuous improvement projects than any of the other six categories.

3. Service/Products are not cheap enough or not meeting an internal cost requirement. Recall that external standards like customer specs and regulatory requirement were discussed in Group 1, but there are many internal standards driven by the business. The most obvious internal standard is profit, which is product price minus fully-loaded product cost. Neither the customer nor the regulator care if a product makes an internal profit hurdle rate, but executives and ultimately shareholders certainly do. There are also other internal standards including many human resource standards like diversity and pay equity, which can be ultimately rolled up to a cost. Additional examples are employee satisfaction and attrition rate, which also affect internal costs. Even community involvement of the business will ultimately result in an internal cost/reward.

Remember that cost and profit are always a function of something else: labor hours, supplier order lead time, scrap and rework, degree of automation, etc. The analysis of cost is dependent on how it is tracked across inputs and process activities, how indirect costs are allocated, and what items are included. A useful guide for analysis is the concept of value – what does the customer actually pay for? What does the customer not care about but regulators deem essential? What must the business do despite a lack of interest on the part of either customers or regulators?

4. Projects that prevent bad stuff from happening. Safety (preventing incidents) Risk (avoiding process safety, financial, marketplace, political and other types of risk), Attrition (retaining the people we have invested in) are the most rewarding continuous improvement projects. They are often the most difficult projects in which to ensure sustainability because new risks emerge all the time. People will find new ways to get around a safe procedure; competitors will adopt a new disrupting technology and governments will find new ways make it difficult to compete.

Note: For companies that like to track results metrics like dollars saved or revenue generated, risk avoidance projects are problematic because you can’t track what doesn’t happen. Even if you could, how can you be sure it is enough; you never totally eliminate residual risk. On the other hand, the delta, e.g. days away from work this year vs last, is a good indicator of safety improvement and represents fewer people getting hurt.

Tools like Failure Modes Effects Analysis (FMEA), Quality Function Deployment (QFD or Houses of Quality), and Kano Analysis will help us anticipate future risks. Scenario planning helps anticipate marketplace risk and the Blue Ocean strategy methods, (combine, eliminate, increase, decrease,) prescribe action to mitigate marketplace risk. Mistake proofing methodology or poke yoke makes it impossible to do the operational “bad stuff” we want to avoid.

5. Baseline – where are we now? If there is a place where the readers would like to jump in and disagree, here comes your chance. This is not really a fair group in itself as establishing current performance should be part of any CI project, otherwise how would you know you have improved. In many situations, establishing the current state is not easy. Sometime people say “we have no process for that.” What that means usually is that there are as many processes as there are process users. Then the project is about documenting and measuring what is being done, perhaps agreeing on the “one best way” and standardizing.

Sometimes standardizing is complicated by local regulation or cultural norms. Sometimes there is no value to standardizing because different process users never interact and don’t report performance data to the same place, but documentation and shared learning can improve still overall performance. One might say “a baseline project are not true CI project – it’s just a first step.” Maybe, but establishing baseline performance can involve creating a metric and gaining organizational agreement. Baselining is critical and often such a difficult first step that it may be a project on its own, which may spawn not one but many additional projects.

6. Measurement projects – would we even know if we improved? Measurement projects, like a baseline project, could be considered as just a part or phase of a complete CI project. However, the measurement project proffered here goes to a new or modified way of applying a measurement system to multiple outputs, and hence across multiple projects. Consider as an example, Net Promoter Score (NPS), which was first derived as an indicator of loyalty in the rental car industry. The refinement of NPS has made it a valuable tool for use by multiple industries today. Often technology provides new measurement tools, but they must be vetted and validated. In other cases, researchers look for better leading metrics to foretell conditions – these too are appropriate as measurement projects. This category is too often overlooked – it is a critical group.

7. Design projects – we can’t get there from here. For a brand new product or service we may not have a process. Or we may discover that our existing process cannot reach the customer requirement or internal goal or may cause other unintended consequences. In these cases we may have to design a process. I have written elsewhere that many people think that process design is innovation and therefore fundamentally different from improvement. However, innovation and improvement utilize many of the same tools – divergent thinking tools like brainstorming and evaluative convergent thinking tools like filtering matrices. Both use structured methodologies to produce measured results and both use teams and focus on sustained change.

What is different is that process design often has a longer planning time horizon – new products are often planned for five years and improvements are often measured quarter by quarter. Design projects often require a greater investment and therefore are expected to have a greater pay-off. For me the similarities outweigh the differences and so I include them here.

These are the seven types of projects that Ric and I came up with. We believe that they cover the CI landscape and that a team discussion at the beginning of a CI project as to which category your team is working on might simplify things enough to be worth the time. We’re not sure if these categories are MECE (mutually exclusive and collectively exhaustive.)

But what do you think? Have we missed a category? Is there too much overlap between two or more of these categories to justify separation? We welcome your comments.


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453b0cd6.jpgAlan Culler

Thanks for reading my ideas.

I'm a change consultant and I've been working in continuous improvement for quite a while now. Please check out some of my other posts or if you'd like more information go to my profile or my web sites:

http://www.reslts-alliance.com 

http://www.alan@alanculler.com 


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