How to build internal Operations Excellence capability at all levels of your organisation?
A one-page report that is used to document necessary information for progress reporting and decision-making.
A3 Reports simplify reporting as they summarise from numerous detailed progress reports and extensive background analyses. A3s capture the succinct information onto a single page and visually communicate using graphs, charts, and simple bullet points.
These reports are often called “one-pagers”, the A3 Report got its name from Toyota Motor Company. “A3” refers to the metric paper size that the report is produced on.
A signal, light, bell, music alarm, triggered by an operator confronted with a non-standard condition. System freeze, system failure, cannot answer customer query, bad data, missing data or document, cannot keep up, error needs correction, etc. The signal for immediate help to prevent the process from stopping.
A visual control device in a process area, typically a lighted overhead display or wall board, giving the current status of the process against target and alerting team members of emerging problems. In contact centres this can be reproduced on the individual operator screens.
A never-ending effort to expose and eliminate root causes of problems; small-bite sized improvements as opposed to big-breakthrough or radical improvements. Syn: kaizen.
Teams of employees representing different functional disciplines and/or different process areas who come together to work on a specific problem or perform a specific task, frequently on an ad hoc basis.
Customer Reject Rate (PPM)
A quality measure reflecting the number of completed items of work rejected or returned by external customers, expressed in parts per million but in Service can be expressed as calls per million or documents per million. Calculation should include any rework by customers. Applies to all completed calls, completed processes and completed documentation both electronic and manual.
Defects Per Million Opportunities (DPMO)
The ratio of defects found per unit (DPU) multiplied by 1,000,000 to the average opportunities for error in one unit. DPMO can be used in benchmarking because it is normalized to provide an equivalent comparison to products or services of varying complexity.
Empowered Natural Work Teams
Teams that share a common workspace and/or responsibility for a particular process or process segment. Typically such teams have clearly defined goals and objectives related to day-to-day process activities, such as, quality assurance and meeting schedules, as well as, authority to plan and implement process improvements. Unlike self-directed teams (see definition), empowered work teams typically do not assume traditional “supervisory” roles.
Enterprise Resource Planning (ERP)
An extension of MRP II software designed to operate on enterprise-wide client/server computing platforms. ERP systems typically claim the ability to achieve tighter (or “seamless”) integration between a greater variety of functional areas including materials management, supply chain management, production, sales and marketing, distribution, finance, field service, and human resources. They also provide information linkages to help companies monitor and control activities in geographically dispersed operations.
FMEA (Failure Modes and Effects Analysis)
A procedure used to identify and assess risks associated with potential product or process failure modes. Finite Capacity Scheduling – Software-based systems that enable simulation of production scheduling (and determination of delivery dates) based on actual unit/hour capacity at each step in the process routing. Finite scheduling systems, running on desktop computers, often compensate for the “infinite capacity” assumptions built into capacity-planning modules in traditional MRP II systems.
Five (5) Ss: (5 C’s)
Often referred to as Workplace Organisation. The principle of having an organised and efficient work space. Everything has its place and is in its place. Supports a reduction in Motion, Transportation and Waiting.
These words are shorthand expressions for principles of maintaining an effective, efficient workplace
Five (5) Whys
Root Cause Analysis – Taiichi Ohno’s practice of asking “why” five times whenever a problem was encountered, in order to identify the root cause of the problem so that effective countermeasures could be developed and implemented. Used along with other problem solving tools, enables you to derive the proper corrective action.
The progressive achievement of tasks along the value stream so that a process proceeds from design to launch, order to delivery, and call to resolution for the customer, with no stoppages, errors, or duplication.
Shop floor, in the contact centre, in the office – The real place / the place where the actual task/operation is conducted. “Go to Gemba”
or Production Smoothing is a technique used to adapt production to naturally fluctuating customer demand. The Japanese word HEIJUNKA (pronounced hey June kah), means literally “make flat and level.” Customer demand must be met with the customer’s preferred delivery times, but customer demand is “bumpy,” while we prefer “level,” or stable production. So, a business needs to try and smooth out these bumps through clever resourcing or modelling.
Hoshin kanri / Strategy deployment
A strategic decision-making tool that focuses resources on the critical initiatives necessary to accomplish the business objectives of the firm. Using visual matrix diagrams, three to five key objectives are selected while all others are clearly deselected. The selected objectives are translated into specific projects and deployed down to the implementation level in the firm – see Gemba kanri. Progress toward the key objectives is then measured on a regular basis against clear targets. “Hoshin” translates literally as ‘shining metal’ or more poetically as ‘the glint from the spear of a forward guide that leads the way’ and “Kanri” means ‘control’.
Industry 4.0 is the fourth industrial revolution that is linked to the ‘Internet of Things’ and creates what is called smart factory, smart cities, smart services etc through technology enabled processes and cloud computing.
Implementation of “just in time” techniques to reduce batch size, reduce setup times, slash work-in-process inventory, reduce waste, minimize no value-added activities, improve throughput, and reduce cycle time. JIT processing typically involves use of “pull” signals to initiate process activity, in contrast to work- order (“push”) systems in which process scheduling typically is based on forecasted demand rather than actual demand. In many “pull” systems, a customer order/shipment date triggers final process completion, which in turn forces replenishment of component WIP inventory at upstream stages of production. In Service industries “Pull” is much tougher to achieve as we typically receive “push” from the point of the Customer enquiry or call through to other areas of the business. An insurance claim cannot be “pulled” through to the claims office until the Customer “pushes” that claim into our system.
A system for producing and delivering the right items at the right time in the right amounts. Just-in-Time approaches just-on-time when upstream activities occur minutes or seconds before down-stream activities, so single-piece flow is possible.
KPI’s – Key Performance Indicators
Vital measurement tools showing how the business is performing, from Contact Centre, or Gemba level feeding right up into company targets and goals.
The philosophy of continual improvement that every process can and should be continually evaluated and improved in terms of time required, resources used, resultant quality, and other aspects relevant to the process. When applied to the workplace, Kaizen means continuing improvement involving everyone – managers and workers alike. Kaizen is not limited to business systems only. It also means continuing improvement in personal life, home life, social life as well as working life.
A concentrated effort, in which a team plans and implements a major process change or changes to quickly achieve a quantum improvement in performance. Participants generally represent various functions and perspectives, and may include non-process personnel.
T Card system of process confirmation, used throughout the levels of the business to ensure standards are adhered to.
a communication tool in the “just-in-time” production and inventory control system which authorizes production or movement. It was developed by Taiichi Ohno at Toyota. Kanban is a card or signboard (or any other authorizing device) that is attached to specific parts in the process line signifying the delivery of a given quantity. The quantity authorized per individual Kanban is minimal, ideally one. The number of circulating or available Kanban for an item is determined by the demand rate for the item and the time required to produce or acquire more. This number generally is established and remains unchanged unless demand or other circumstances are altered dramatically; in this way inventory is kept under control while processing are forced to keep pace with customer demand.
A routine exception to this rule is that managers and workers are continually exhorted to improve their processes and thereby reduce the number of Kanban required.
When fully implemented, Kanban (the plural is the same as the singular) operates according to the following rules:
A method of signalling suppliers or upstream processes when it is time to replenish limited stocks of components or consumables in a just-in-time system. Originally a card system used in Japan, Kanban signals now include empty containers, empty spaces and even electronic messages.
The total time a customer must wait to receive a product or process completion after placing an order or making the initial call to the contact centre. When a scheduling and process system are running at or below capacity, lead time and throughput time are the same. When the demand exceeds the capacity of a system, there is additional waiting time before the start of scheduling and processing, and lead time exceeds throughput time.
The sequencing of demand in a repetitive pattern and smoothing the day-to-day variations in total demand.
Life Cycle Costing
The identification, evaluation, tracking, and accumulation of actual costs for each process from its initial research and development through final customer servicing and support in the field.
Equalizing cycle times [process capacity, assuming 100% capacity utilization] for relatively short process interventions, through proper assignment of workers and equipment; ensures smooth process flow.
Activities and results to be eliminated; within both Manufacturing and Service industries, categories of waste include:
Classic Wastes: (TIMWOOD)
Service Wastes: (IOUDUDE)
The original meaning of the word is to smooth around roots before planting. This system was developed to avoid discrepancies, and gain agreement from everyone in advance, when making a decision in formal meeting. It is also to keep the relationship harmonious.
Activities which are essential tasks that have to be done under present working conditions but don’t add value to the process (referred to as NVA). The desire is to either minimize these activities or introduce process improvements that would eliminate them entirely.
“OEE is a total measure of a total measure of performance that relates the availability of a process to the productivity and quality.”
PDCA Cycle (plan, do, check, act)
An adaptation of the Deming wheel. While the Deming wheel stresses the need for constant interaction among research, design, production, and sales, the PDCA Cycle asserts that every managerial action can be improved by careful application of the sequence: plan, do, check, act.
The complete elimination of muda (Waste) so that all activities along a value stream create value.
(Error or Fool Proofing) a technique for preventing mistakes by designing the process, equipment, and systems so that an operation literally cannot be performed incorrectly; an attempt to perform incorrectly, as well as being prevented, is usually met with a warning signal or flag of some sort. Poka-yoke is designed to stop the movement of data, information or product to the next station by using “fail-safing” techniques to eliminate errors or quality-related defects as far upstream in the process as possible. A major objective is to minimize the need for rework.
Unifies and aligns resources and establishes clearly measurable targets against which progress toward the key objectives is measured on a regular basis.
Problem Solving Methodologies
A variety of approaches to problem solving, including the Deming Circle (Plan-Do-Check-Act), used by all persons working in the same team or organization. Considered fundamental to teamwork.
A series of individual operations required to create a design, completed order, or product.
The time a process is actually started to the time an order is actually completed. Typically, processing time is a small fraction of throughput time and lead time.
The primary definition here is “the site wide increase in annual value-added per employee, based on total employment in the office, not just direct labour”. Value-added should be calculated by subtracting cost of processed orders and services from the value of shipments or service provided.
A system of cascading processes and delivery instructions from downstream to upstream activities in which nothing is produced by the upstream supplier until the downstream customer signals a need.
A system for controlling work flow and priorities whereby the processes needing materials (or attention) draw them from the feeding processes or storage areas as needed, typically using “kanban” signals – in contrast to “push” systems in which material is processed, then pushed to the next stage whether or not it is really needed. In service the material is most likely data/information.
QFD (Quality Function Deployment)
A customer-focused approach to quality improvement in which customer needs (desired product or service characteristics) are analysed at the design stage and translated into specific product-and process- design requirements for the supplier organization. Targeted customer needs may include product features, cost, durability, and other product characteristics. QFD involves carefully listening to the customer’s true unvarnished expression of their needs. Then those needs must be translated into the process characteristics, competitive assessment, selection of critical/key characteristics, the product/process design, and follow-up. Through this technique, product performance features and the characteristics that deliver them are determined by the customer and paid heed to by the producer (by listening and acting). The quality responsibility is then deployed throughout the organization by tying compliance activities directly to the fulfilment of these customer requirements.
Strategic planning tool used to translate the goals and vision of an organization into a long term workable strategic plan.
Self-Directed Natural Work Teams
Nearly autonomous teams of empowered employees, including hourly workers that share a common workspace and/or responsibility for a particular process or process segment. Typically such teams have authority for day-to-day process activities and many supervisory responsibilities, such as job assignments, scheduling, maintenance, materials purchasing, training, quality assurance, performance appraisals, and customer service. Often called “self-managed” work teams.
One who provides information; a teacher, instructor, or rabbi.
7 Quality Tools
Flowcharts, Cause-and-effect diagrams, Check sheets, Histograms, Scatter diagrams, Pareto charts, Control charts.
Single Piece Flow
A situation in which products proceed, one complete product at a time, through various operations in design, order taking, and production, without interruptions, backflows, or scrap.
Six Sigma is a term used to describe a measure of quality control that is higher than “normal”. The manufacturer generally associated with starting Six Sigma programs is General Electric. Six Sigma is a methodology that is intended to reduce process variation to within a limit that will result in 3.4 defects per million samples or less.
A map of the path taken by a specific product or document as it travels down the value stream in a mass-production organization, so-called because the product’s route typically looks like a plate of spaghetti.
A tool used during the diagnostic phase of implementation showing the relationships and relative spheres of individuals and groups within an organization.
A precise description of each work activity specifying cycle time, takt time, the work sequence of specific tasks, and the minimum inventory of parts on hand needed to conduct the activity. Standard Work details the motion of the operator and the process sequence in completing a task. It is the proclamation of the most waste-free production method, through the best combination of people and equipment, the least amount of work in process possible, showing where to check for quality, and where there are safety issues. It provides a routine for consistency of an operation and a basis for improvement.
Statistical Process Control (SPC)
The use of basic graphical and statistical methods for measuring, analysing, and controlling the variation of a process for the purpose of continuously improving the process.
Agreements with suppliers whereby operations are linked together, information is openly shared, problems and issues are commonly solved, and joint performance is mutually approved. These are usually multiyear agreements.
The available process time divided by the rate of customer demand. Takt time sets the pace of the process to match the rate of customer demand and becomes the heartbeat of any lean system. In repetitive operations, the cycle time between completion of units calculated based upon the rate of need for those units. Used to determine how to set up, revise, or improve operations.
The time required for a product to proceed from concept to launch, order to delivery, or raw material into the hands of the customer. This includes both processing and queue time.
Tactical Implementation Plan (TIP)
Tactical Implementation Plan. Derived from the route map, a TIP is a shorter term plan, typically covering 3 – 6 months, containing actionable steps to turn strategy into actuality.
Total Cost of Quality
The aggregate cost of poor quality or product failures – including defects, rework, and compensation costs – as well as expenses incurred to prevent or resolve quality problems (including the cost of inspection).
Total Productive Maintenance (TPM)
A comprehensive program to maximize equipment availability in which production operators are trained to perform routine maintenance tasks on a regular basis, while technicians and engineers handle more specialized tasks. The scope of TPM programs includes maintenance prevention (through design or selection of easy-to-service equipment), equipment improvements, preventive maintenance, and predictive maintenance (determining when to replace components before they fail). This is as much applicable in an office/service environment as it is in a Manufacturing facility when you consider the equipment required to conduct the daily tasks.
Total Quality Management (TQM)
A multifaceted, company-wide approach to improving all aspects of quality and customer satisfaction – including fast response and service, as well as product quality. TQM begins with top management and diffuses responsibility to all employees and managers who can have an impact on quality and customer satisfaction. It uses a variety of quality tools such as QFD, Taguchi methods, SPC, corrective-action response teams, cause-and-effect analysis, problem-solving methodologies, and fail-safing.
Changed from the true form, Toyoda, meaning abundant rice field, by the Toyota marketing department. Toyoda is the family name of the founders of the Toyota Motor Company.
Toyota Production System
The system of work created by Taiichi Ohno within Toyota using the learnings of many from different industries
A capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer. The more a product or service meets a customer’s needs in terms of affordability, availability, and utility, the greater value it has. Thus, a product with true value will enable, or provide the capability for, the customer to accomplish his objective. Value – Value is a measurement of the worth of a specific product or service by a customer, and is a function of:
The specific activities required to design, order, and provide a specific product, from concept to launch, order to delivery, and raw materials into the hands of the customer.
Value Stream Mapping
Identification of all the specific activities occurring along a value stream for a product or product family.
The placement in plain view of all tools, parts, production activities, and indicators of production system performance so everyone involved can understand the status of the system at a glance. Also the use of signals, charts, measurements, diagrams, lights, and signs all too clearly define the normal.
A Visual workplace is a work area that is self-explaining, self-regulating and self-managing. Where what is supposed to happen does happen: on time, every day.
Characteristics of a Visual Workplace:
Work-in-Process Inventory (WIP)
The amount or value of all materials, documents, and data representing partially completed processes; anything between the purchased process and finished service intervention. Value should be calculated at office cost, including material, direct labour, and overheads.
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