How many of the 50 Best Practices for Process Excellence has your company implemented?

Lee Pollock and Mark Kiemele are authors of a new book, Reversing the Culture of Waste – 50 Best Practices to Achieve Process Excellence. The book provides a list of best practices that companies use to become stronger in process improvement. Not every company excels at all 50, but the companies that apply most of the suggestions are much further ahead. You can even assess your company, to see how mature your process improvement approach is today.




The book is divided into 10 chapters, and each chapter identifies a few best practices. Where you see the term "process excellence" you can replace it with your company's initiative (Lean, Lean Six Sigma, Continuous Improvement, etc). Explanations of each best practice are provided in a concise summary, usually 1-2 pages in length.

Chapter 1 - Executive Ownership and Leadership Alignment
1. Establish ownership at the executive level.
2. Develop and communicate the need, vision and plan.
3. Train leadership first.
4. Link compensation to involvement and success.
5. Continuously assess what is working and what is not and adjust.

Chapter 2 - Effective Support Infrastructure

6. Designate a well-respected Deployment Champion early.
7. Commission and use a guiding coalition.
8. Partner with a capable and reputable service provider.
9. Integrate key stakeholders into the plan.
10. Create position descriptions that mandate a pull for excellence.
11. Quickly attain a critical mass of practitioners.

Chapter 3 - Integration with Existing Business Improvement Initiatives

12. Maximize the synergy of multiple initiatives.

Chapter 4 - The Right Projects and Studies and People to Lead Them

13. Establish criteria for project selection and prioritization.
14. Use quick-hitting studies to accelerate results.
15. Select top-tier candidates for first waves of training.

Chapter 5 - Integrated Training and Software

16. Use motivational and experienced instructors and coaches.
17. Keep the software simple and easy to use.
18. Use a blended approach to learning.

Chapter 6 - Financial and Implementation Responsibility

19. Use a consistent, simple and straightforward approach.
20. Generate successes early and communicate them.
21. Plan the service provider's exit strategy.
22. Develop internal subject matter experts.
23. Manage the expectations of every practitioner.
24. Define and use a meaty certification process.
25. Train all ares of the organization.
26. Apply the training immediately.
27. Provide expert coaching on all projects and studies.
28. Scope projects carefully.
29. Establish and follow rules for assessing benefits.
30. Publicize and use savings wisely.
31. Regularly review projects and act based on the assessment.
32. Conduct refresher sessions for leaders and practitioners.
33. Connect and use Champions to upgrade the initiative.
34. Make everyone aware of what is going on.
35. Design and use standardized templates.
36. Anticipate and manage position loss resulting from projects.
37. Include team-oriented "soft" tools.
38. Develop transfer functions to predict, optimize, and assess risk.
39. Make innovation systematic.
40. Solve new problems using trained resources and trumpet successes.
41. Make process excellence part of the human resource succession plan.
42. Integrate process excellence into all mergers and acquisitions.
43. Update the implementation plan based on feedback and results.

Chapter 7 - Reward and Recognition
44. Recognize people who execute successful projects.

Chapter 8 - Enterprise-Wide Knowledge Sharing

45. Establish a project-tracking database and keep it current.
46. Schedule benchmarking sessions.

Chapter 9 - Customer and Supply Chain Involvement

47. Involve suppliers and customers early on.
48. Implement a fact-based process for assessing the Voice of the Customer.

Chapter 10 - Change Management: Leveraging Cultural Strengths and Managing Its Weaknesses

49. View process excellence as a mindset, not just a toolset.
50. Leverage cultural strengths that promote change.




To assess your company on their maturity in process excellence, determine your ranking from 0-2 for each item.

0 = No implementation of that best practice whatsoever.
1 = Some areas exist where it is done
2 = We do that very well  

You can use decimals (like 0.5 or 1.5), but they suggest using integers only. Next, sum up the total score for each chapter, and enter the results on the Air Academy website: http://www.airacad.com/bestpractices.aspx  

Your total points will give you an idea where you rank against 500+ companies involved in a 2011 study. For example, if you scored a 32 or less, you are in the 10th percentile. If you scored a 48, you are in the 33rd percentile. If you scored a 59, you are the 50th percentile. If you scored an 82, you are in the 90th percentile. There were very few companies scoring above 90 (maximum score is 100 points). Exact percentiles are provided in the book.  

After reviewing your scores, we would recommend determining which best practices could provide your company with the biggest gains, and develop an action plan to address the gaps.  

Leave us a comment if you filled out the assessment, and how your company scored.

Reducing your time might seem like lean, but you can easily anger your customers

Lean is about increasing value to your customer. Often times, this requires you to eliminate waste in the process. However, if you don't understand your customer needs, you might sub-optimize the process in an attempt to make your work easier. However, if you are not careful, you can actually ADD waste to your customers, thus decreasing the value you provide. That is the complete opposite impact you intended, even though you had the right intentions.

Here are some good examples of sub-optimization that you can share in training classes or conversations. I'm sure you have some good examples of your own. Please share them in the comments section below. 

Example #1 - Scrap Report
The Finance department provides a weekly and monthly scrap report to the production managers. The data is in a single spreadsheet file, with filters on the top of key columns (work center and manager). Each manager goes in and searches the report to filter by their name, look at the scrap items, and review them. Some of them create their own pivot table to be able to sort and filter all the data. Each month is separated into unique tabs (pretty common in finance reports), which makes it difficult to look at data over the whole year. The finance person did not want to spend an extra 10 minutes each time creating the pivot table report and combining the new data with the existing data for the entire year in one spreadsheet. However, when we look at the full impact of time for the entire company, each production manager is required to create their own pivot table (5 minutes each), or they spend extra time filtering the data (not as efficient as a pivot table), or they completely ignore the report, since they find it hard to analyze. So the finance person saves themselves ten minutes each week, but this time adds at least an hour to the entire organization, and not everyone is taking action on the data, which is an even bigger waste.

Example #2 - Procedure Updates
Each month, an email is generated from the document control group with a list of procedures that were revised recently. At least 1000 people are sent this list. They were asked to provide a quick summary of the change made in each document, so we could decide if it was something we needed to investigate or read in more detail, or if we could ignore it. He said it would add about an hour's worth of his time to do that, so he refused. However, if we assume that 10% of the distribution is actually interested in these changes, that means at least 100 people are clicking each of the procedures and scanning through to find the revision change summary. If we assume that takes 5 minutes to complete, then 500 minutes (8 hours) have been wasted in the company. So the document control group saved themselves one hour of work, but added 8 hours of work to the company, and many people did not get the updates they needed, which is a huge waste. If they did provide a summary, they might actually increase the number of people on the distribution who learn about the revisions, and therefore proceed to click the links to read the updates.

Example #3 - IT help desk ticket
I needed to have a website updated, so I contacted the information technology (IT) person responsible for the task. I have this task performed a couple times per year, so it is infrequent. The individual said they could take care of it, but I need to submit a ticket for them to work on it. I agreed, and called the help desk line to submit the ticket. After 30 minutes of discussion with the help desk support person, I finally got the ticket submitted. I was very frustrated. The company wasted 30 minutes of my time, and 30 minutes of the help desk's time to get the ticket entered correctly. This was due to the complex nature of the work being done. The person who was going to be doing the work could have probably entered the ticket themselves in about 5 minutes, since they knew exactly what was needed to be done. So they saved themselves five minutes of work, but added one hour of waste to two other individuals.

As you can see, the key message is to understand what things you do that are valuable (value added) to your customer, and what things are not valuable (non-value added). Only eliminate the non-value added, or you could make your customer's upset and frustrated.

Cost savings from process improvements can be misleading

I've been to many conferences, and have seen lots of companies claim cost savings and metric improvements that are very impressive. However, the more experienced I get, the more skeptical I get of these claims.

First off, let's define what process improvement savings should be. It should be the elimination of waste in a process (removing non-value added work), improving quality to the internal and external customers, reducing the time to complete value added tasks, or redesigning a process to provide more value to a customer.

Savings should not be the outsourcing of processes to another country to save money, or cutting heads and expecting them to "be lean" in order to make up the gap in resources. These are usually short-sighted decisions that end up costing the company more money in the long run, and risk negatively impacting the customer. But for this discussion, we will focus on one more incorrect savings: when the bottom line benefits do not actually exist.

Let's talk about one scenario that I've seen. Short term savings.

Let's say the process is tracking the Work in process (WIP) for approving charge numbers, so employees can start work on a new program or project.

Refer to the table below

Starting at Day 15, the number of charge numbers waiting for approval is 108 (red line). Each day, that total grows larger, as the amount of time available to complete these approvals is not sufficient to keep up with the new requests. This means the process will never be able to cut into the existing WIP. At some point, shown at Day 40, the management gets too many complaints about charge numbers not being available, and they work overtime, and add more resources to complete a bunch of them over the next couple days. They complete 350, 400 and 75 over the three days (blue line), compared to a typical day of around 20-30.

If we were to capture the savings from bringing the total number of charge number requests from 772 to 71 by Day 42, you could conclude a huge reduction of 90%, or 601 requests. If we determine that each request is $1000 per day in lost productivity, then on Day 39, we have around $772,000 tied up in the process, and it is reducted to $71,000. A savings of $601,000!

However, we didn't do anything "lean" since we spent additional money on labor to get the number down. We haven't actually addressed the time available or cycle time per request. Of course, the extra labor should be subtracted out of the savings, so we'll take out $10,000 for the extra labor/resources.

Next, we assume that this is actual bottom-line savings. In order to claim this as savings or growth, we would have to assume that all employees are not using any other charge numbers, and are charging to an overhead number, and therefore the company is losing money by employing them without work to do. This is highly unlikely. Let's be conservative and assume that 10% of the employees would be in that situation, so we'll claim around $60,000 in additional sales/work, not $600,000.

The next assumption is that the 772 open requests would have stayed at that level for an extended period of time. It does appear that this number was continuing to climb, so the number of new requests would have to be reviewed, to see if that was true assumption for the future. If the requests drop off, then they might have been able to catch up on their own.

Finally, we must assume that they can maintain the savings at the low level of around 70 requests for an extended period of time. If we look at the data in the future, you can see that the requests climb back up again. Again, this shouldn't be a surprise, since we didn't do anything to address the original problem, that we cannot keep up with the request demand for charge numbers.

Let's assume that they actually "lean" out the process and are able to keep up with the demand now. One final problem with cost savings is the impact of the improvements to the bottom-line financials of the company. For example, if the process was able to keep up with demand, and a resource was able to be freed up to do some other work, then if that resource isn't actually given value-added work, the savings won't actually show up in the bottom-line. You should be able to see an increase in output or work as a result of the freeing up of the resource, which is where the true savings hit the financials. This step is critical, and should be verified after any claimed improvement.

So next time you see some cost savings presented, think about these key points:

1) Did the baseline data represent the true situation if no action was taken, or was it an unusual time period and not representative of the typical situation for that process?

2) Was waste taken out of the process to improve it, or were more resources and cost thrown at it?

3) Were the improvements maintained over a long period of time (6-12 months)?

4) Did the savings actually flow down to the bottom line?

So be careful what you read about lean or six sigma cost savings, and be diligent if you are involved in a project or event to report the correct and most accurate numbers you can.

Annoying tourist photos have wrong business model with lots of waste!

While on vacation recently, we were overwhelmed by the number of attractions with a photographer service, who make you take a photo and then try and sell it to you afterwards for a ridiculous price. It has gotten so prevalant that you get worried when you don't see anyone waiting to take your picture.

They must be getting enough people to buy these expensive photos, otherwise they wouldn't be so popular at these attractions.

I give them credit for identifying a need and taking advantage of it. Often times, I'm not in a position to have a photo of me and my wife snorkeling, or getting off a boat, or in the middle of a ride. However, when you look at the prices, it is unbelievable how much they charge. The majority of the time we decline on price alone.

My problem is customer value. I think the current model is terrible, and needs to be fixed.

Let's say that I'm in the majority, and only 10% of the customers actually purchase the photos. If they charge $20 per photo, and take 1000 photos, then they make $20x100 = $2000 per day. The other 90% walk away muttering about what a rip-off it was, and disappointed that they couldn't get the photo, and the 10% who bought it try to justify in their heads why it was worth the money to spend for one photo.

Many of these places pre-print the photos in hopes that people will feel guilty and buy them. If they don't buy it, then the photos get thrown away. What a waste! All that effort taking the photo, processing them, printing them, and even time spent trying to sell the customer on them is wasted!

Here is a better option, that could improve the experience for everyone.

What if the price was only $5 per photo, which I think is more reasonable. If this increases the chance of buying a photo to a conservative 50%, then let's look at the business model now. If we use the same numbers as before, $5X500 = $2500 per day. Now 500 people leave the attraction with a good experience, and a photo to go with it. I would also argue that it would cost no additional amount of work to process the 500, then it does currently to handle the 100 people in the prior model. The people who buy can also post or share the photo with family and friends, and provide free advertising for the attraction. Everyone leaves feeling good, since they paid a fair price for something they wanted, and more people were able to take advantage, providing customer value to many more people. I would even argue that the % would be much higher than 50%.

Even if the companies who run this service see no immediate improvement in sales with this model (doubtful), the free advertising and increased satisfaction (part of the whole experience for the customers) would provide long term growth for these companies, which would eventually give them the sales growth they are looking for.