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SEMS Says

Process improvement for the global organization

Irrespective of industry, corporations must focus on speed, efficiency and customer value to compete globally. Lean and Six Sigma are powerful methodologies for improving quality, productivity and profitability.

Six Sigma’s problem-solving approach and statistical techniques aim to minimize variation by limiting defects to 3.4 per million opportunities in product design, production and administrative processes. Lean principles focus on identifying and eliminating waste and improving flow in production, product development and service industries. Both stand-alone methodologies can yield strong improvements. However, poor project selection and inappropriate tool choices can make for suboptimal results.

An integrated approach to process improvement using lean and Six Sigma begins with a strategic approach to identify gaps between the current and future state. The final goal is to optimize organizational processes and the entire supply chain by eliminating waste and controlling variation. One technique that helps companies implement the envisioned process systematically is hoshin kanri.

Hoshin kanri ties the organization’s long-term strategy to process improvement efforts. Typically, organizations select their kaizen events and process improvement projects based on where they currently feel pain. A recent rash of external defects might lead them to initiate a Six Sigma project in response to customer complaints. These projects cost significant time and money, and they might not be the right strategy for the problem. In addition, the company’s current pain might not be the true highest priority when looking at the big picture.

Hoshin kanri encourages employees to reach the root cause of problems before searching for solutions, create sustainable plans for implementation, incorporate performance metrics and take appropriate action. This technique is based on W. Edwards Deming’s classic plan-do-check-act (PDCA) improvement cycle. Japanese Deming Prize winners credit hoshin kanri as a key contributor to their success.

Hoshin kanri cascades the overall strategic vision of the organization throughout all levels. This lets employees see how they fit into the big picture of the organization and through the supply chain. This linkage aligns everyone with the same strategy and vision. Focusing employees on a common direction yields improvements with a much larger impact in considerably less time. Think about the effectiveness of a small team whose members understand what they need to do. Imagine a company of 500 or 1,000 employees or larger all working together to achieve common goals that support global competitiveness.

— Elizabeth Cudney is an assistant professor in engineering management and systems engineering and the associate director of the Design Engineering Center at the Missouri University of Science and Technology.

Sustaining the outcomes of your kaizen event

Industrial engineers and engineering managers likely are well-versed in using kaizen events as part of their improvement strategy. Kaizens are focused and structured projects that use a dedicated cross-functional team to improve a targeted work area, with specific goals, in an accelerated timeframe. Often used in conjunction with lean production efforts, kaizen events have produced positive change in business results and human resource outcomes. However, many organizations find it hard to sustain even 50 percent of the initial improvements. And this challenge is not limited to kaizen events.

Although our understanding of the critical success factors that help sustain improvement remains limited, you can increase the odds of success. My recent study of 65 kaizen events found three key factors for sustaining outcomes.

Systematic use: I’ve heard managers and researchers alike criticize kaizen events for not being strategic or for their haphazard approach to improvement. However, this challenge can be mitigated if kaizen events are conducted within the framework of a larger improvement program. All eight manufacturing organizations included in this study conducted kaizen events regularly for at least one year as part of their larger improvement programs, such as a lean transformation. Ad-hoc kaizen events may be appropriate at times, but firefighting with any approach does not support a culture of sustained change.

People matter: Two characteristics, learning and stewardship and experimentation and continuous improvement, were found to be critical for sustained improvement after the kaizen event. Including these people-oriented factors reinforces the importance of prioritizing actions such as direct employee participation in new activities and explaining and emphasizing continuous improvement to all employees.

Check and act: While planning and implementation is important, our findings suggest that following up with sustainability actions after the event may be more significant for lasting change. Performance reviews and accepting changes also were critical for sustained improvement. As a facilitator or champion of kaizen events for your organization, you can use activities such as reviewing work area performance measures and conducting audits after a kaizen event to sustain change. Work area managers can monitor how the workforce is agreeing with, adhering to and taking responsibility for the changes after the kaizen event.

These guidelines can increase your success with kaizen event sustainability, eliminate wasted efforts and support your continued journey of organizational improvement.

— Wiljeana J. Glover is a postdoctoral associate with the Lean Advancement Initiative at the Massachusetts Institute of Technology. Her dissertation, described in the summary above, earned the 2011 American Society of Engineering Management Dissertation Award.

Making complex transformation easy

Transformation is complex and can span a wide area of issues. It is more than “just” a change. When we transform, we change our environment. We change who we are and what we are. Within our workspace, a transformation changes what our organization is and what it is all about. The Institute of Industrial Engineers is transforming itself. It is planning an Enterprise Transformation Conference.

Enterprise Transformation Conference 2012 will assemble key thought leaders to guide participants in a series of interactive discussions focusing on all key aspects of leading a successful transformation. This conference is aimed for senior level executives. It will provide them with the strategic arsenal of thought, theory and tools that they will find necessary to move their organization to the next level.

The conference will cover all key aspects of organization transformation from the time when leaders decide that transformation is necessary to its successful completion. Conference speakers will share their personal insights into the purpose, pains and processes that they encountered in their organization’s journey through its transformation.

The conference is designed to allow our keynote speakers to share their knowledge with all conference participants. The speakers are William B. Rouse, executive director of the Tennenbaum Institute at the Georgia Institute of Technology, a professor at the school and editor of Enterprise Transformation: Understanding and Enabling Fundamental Change; Michael Oliff, author of Transformation in the Age of Turbulence; Anthony J. DiMaso, vice president of corporate strategy and development for Verizon Communications; and Celeste Bottorff, who is responsible for building the strategic corporate reputation framework for Coca-Cola North America. Around the keynote presentations, we offer four tracks focused on the following key areas:

  1. Enterprise transformation: From decision to successful completion – What happens after the directors of a company decide a change is needed? This track focuses on how to use current theory, industry experience, best practices and systems to develop a roadmap to deployment for organizational transformation.
  2. Transformation thought leaders – Hear the wisdom of those who have been there before your organization spends millions on a large-scale transformation program.
  3. Enterprise transformation: Sounds great, where do I start? – These sessions will focus on how to move from ideas to actions.
  4. Green transformation: Is there a business case? – This track will focus on how organizations approach transforming themselves and their products and services from the standpoint of sustainability, energy usage/conservation and environmental impact.

The conference is scheduled for April 3-4 at the Westin Buckhead Atlanta. More details are available at www.iienet.org/ETconference.

— Russell Wooten is a longtime member of SEMS, former SEMS board member, former past president of SEMS and recent winner of the SEMS Management Award. He is on the 2012 Enterprise Transformation Conference Planning Committee.

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