Key Performance Indicators (KPI’s)
Key Performance Indicators (KPI’s) are the quantifiable measures that are used to evaluate the performance of a company with respect to these goals & objectives. In a broader sense KPI’s are important factors that helps us understanding that organisation is on the track.
KPI’s are used as decision making tools which help in better understanding of the organisational performance & in turn help improve the organisational performance.
KPI’s helps in:
To monitor the progress of the efforts towards achieving the target with objective evidence making better decisions by measuring only what is necessary to be measured. Measuring the performance of the organisation with respect to time. All the key metrics can be tracked & measured like quality, productivity, efficiency, utilisation & economics..etc.
To effectively measure the performance of an organisation all the metrics are to be understood and how each metric contributes to predict the performance.
KPI’s can be categorised as below:
Inputs: The attributes are measured like the resources that are required to produce the outputs.
Activity or process measures the consistency of quality or efficiency of processes to produce a specific output.
Process output measures the amount of work completed as against planned.
Outcomes are classified as intermediate and end outcomes. Ex: Brand popularity as a result of marketing as intermediate outcome. End outcome is customer retention or increase in sales percentage.
The statuses of deliverables related to project are measured by important projects.
Operational & Strategic KPI’s are important from an organisational prospective.
Strategic KPI’s track the progress towards long term goals. The following four balanced scorecard prospective are used to depict the organisations progress in achieving the strategic objectives.
- Internal process
- Organisational capacity
Operational KPI’s are the metrics focused on operation for monitoring the day to day processes or functions.
Risk measures that are hurdles or risk factors that may be a cause of concern for the success of an organisation.
Project measures which are used for measuring the progress of a project for effectiveness.
Employee measures focus on the factors like employee satisfaction, human behaviours, skills & performance.
Better Facility Design Using DMAIC
The greatest opportunity to eliminate and/or reduce waste in a very production facility is that the upfront design and planning of the ability. From a construction cost standpoint, it's about as inexpensive to construct a well-planned facility on implement a poorly planned one. Agreement made during the factory planning and style stage have a impressive effect on operational adaptability of the factory. By utilizing the DMAIC (Define, Measure, Analyze, Implement, Control) approach to facilities planning and style, a scientific approach will be wont to produce and optimize facility layout supported Lean Manufacturing principles.
The process will be implemented as follows:
Define – We must first define the products to be manufactured and therefore the manufacturing process(es), as well as, related activities required to supply the merchandise. you'll also must define the amount of product(s) to be manufactured, routing process, supporting services required and timing.
Measure – within the measure phase we must determine the interconnection among all activities and regulate the space requirements for those activities. Creating an Activity Relationship Chart and a cloth Flow Map can prove very helpful at this stage of the method.
Analyze – within the analyze phase block layout alternatives should be developed, as well as, process flow alternatives. We must also create material handling and storage opportunity. Utilizing this information we are able to then generate opportunity facilities plans and evaluate the alternatives. The evaluation process should include listing the positive and negative aspects of every alternative, together with ranking the performance of every alternative against established criterion. Evaluation criteria should include initial investment required, annual operating costs, flexibility or easy changing or rearranging the installed system, easy future expansion, space utilization, availability of apparatus needed and supporting services required.
Implement – While implementing the facilities plan it's important for the facilities planner to get buy-in to the plan from both upper management and workplace employees. After deciding what layout alternative most closely fits evaluation criteria, an in depth layout should be developed. The detailed layout should include location of apparatus, cargo hold for staple and WIP, shipping and receiving area, office locations, Q.C. area, restroom location, waste location area(s), electrical requirements, mechanical requirements and lighting requirements. At now the layout design should be finalize utilizing the services of a licensed architect. Upon conclusion of the architectural layout for the ability, the planning package should move out for bid and therefore the implementation process should start after securing contractor services.
Control – Once the new facilities layout has been implemented, a post-installation audit should be performed to verify that the system is working definitely. If not functioning obviously, determine the causes and rectify. so as to keep up continued facility achievement, custom review of system operation should be appliance.
Utilizing this DMAIC method to the event of your new facility will help ensure production escalation and functionality of your facility for years to come back.
It is a team of employees from the same work area who meet on regular basis volunteering themselves in identifying the day to day problems and solve them using all tools and techniques.
Quality circle enhances mutual trust and bridges the gap between the management & their employees.
Objectives of Quality Circles:
- To increase quality & productivity of a process
- Reduce cost & improve safety
- To best utilize the human potential
- To promote teamwork
- To motivate employees for cohesive culture
Rules of Quality Circles:
Every member gets a chance to present an idea per turn
If you don’t have an idea just say pass
Ideas should not be evaluated among the members during their generation
When all the ideas are exhausted they are recorded
Voting method can used for selection of best ideas.
Implementation of Quality Circles:
Mid management representatives from all the departments form the steering committee. This committee makes the policies, controls & monitors all the quality circles in the organization. Employees at all levels are in the organization should attend the orientation program designed for them. Commitment from the top management is very important. One facilitator should be appointed who connects top management, QC steering committee & employees. Supervisors are trained to be Quality circle leaders. Volunteers from the same problem area are allowed to form a team. Regular meetings are conducted to train them initially & now all the suggestions relevant to the QC objectives are encouraged & discussed. Solutions and actions are to be implemented with immediate effect.
Benefits of Quality Circles:
- By utilizing the skills and knowledge of the employees we can find the solutions for the chronic problems by identifying the root causes.
- Team work is promoted
- Productivity & Quality is enhanced
- Cost reduction
- Mutual trust is elevated
- Improved safety
In-Depth Definition of the PDCA Cycle
The PDCA cycle, also known as the Deming cycle, was brought into the notoriety by Dr. Edwards Deming. This is a continuous improvement tool for processes. At its best, it is an effective technique for determine problems or issues as well as managing change. It is a great way to keep you on point.
Plan: Here you want to identify what the problem/issue is, then perform an analysis of this problem so you can test it and how it is affecting your bottom line. So if you do the preceding, you would identify the problem and understand the root cause of the problem, using data collected to decide which of the possible causes is the true root cause.
Do: This is where you will test or experiment with possible solutions and figure out which one is the best possible solution. Do small experiments to figure out quickly what changes are needed, then you can always go back on a bigger scale after you’ve gauged the improvements results on the smaller scale. Then you can measure the solution you have chosen to its full potential, and of course measure the resolved results.
Check: Here you are going to compare the results using before and after data that you have collected. Analyze the results and measure how effective the improvements were, and then make the supported hypothesis of whether or not the solutions used reached the desired objectives.
Act: Here you document the data from the results you obtained. Inform your team about the process changes, show the data if need be. Make suggestions if other process changes are needed.
Complete guide to understanding the role of benchmarking in Six Sigma
Benchmarking: What is it?
When you mention the word “benchmarking” how do ordinary people process it? Moreover, what’s “ordinary”? That looks like an honest subject for benchmarking. Someone building a computer might imagine of microprocessors and memory modules. These metrics change after you want to induce the fastest processor and dependable memory that you just can afford. However, life gets easier after we address the benchmarking sites. But alas, what will we find after we look deeply into the details? We see all kinds of irregularities. Different systems used for various memory modules. Well, meaning different buses and different processors, which might really skew the results. to not mention differences in temperature on interchangeable systems after you test several modules in a very row. The same happens to entrepreneur in their normal lives. A decision-maker that's unacquainted with six-sigma has to know what to try and do first. This dilemma is particularly the case in start-ups and little companies able to grow and be competitive on a bigger scale. Executives depend on their own experiences. Benchmarking gets confused with competitor analysis. In competitor analysis, how are you able to find all of the critical details? Who will share these details? So, the chief committee performs an ad-hoc analysis. Perhaps opinions are gathered from material experts within the company. And even after you make critical decisions, you notice no improvements. Many companies fail at now. Now here comes the Six Sigma professional, that jack of all trades within the misunderstood world of Continuous Improvement. we all know the deal; the proper tools for the proper job. Competitor analysis has its time and place, but that comes after a company’s processes are well- entrenched. So that’s where benchmarking comes in.
What is the objective of Benchmarking in Six Sigma?
Benchmarking may be a method that companies use to check the performance of their output thereto of a customary. the method of benchmarking is performed as a Six-Sigma DMAIC project. During the measurement phase, the “company” benchmarks the “standard.” The standard is also a compliance standard employed in the business, or it's going to be an industry leader. For this discussion, the quality are going to be an industry leader. It’ll have similar outputs, but a distinct customer base. The standard is also a vendor or a customer, but not a competitor. Outputs is also a process, a service, or a product. Benchmarking isn't competitor research that compares the performance of a competitor company to achieve a bonus. It’s a process of correlate your processes with an industry leader to find out a way to be better. Benchmarking affords a competitive edge through the event of best practices. So it focuses on the best
Types of Benchmarking
Benchmarking comes in four types:
1. Strategic This benchmark investigates how companies compete within the marketplace. the corporate and therefore the standard is also from different industries. Albeit, the competitive positioning within an industry should be the identical.
2. Project This benchmark examine techniques, like project management and products inauguration. Again, the corporate and therefore the standard can come from different industries. Development cycles should be similar in complication and time.
3. Performance This benchmark is an assessment of competitive positioning. the main focus would be either on price or quality. an organization can rarely be challenge while specializing in both.
4. Process The process is that the actual work. it's going to consider best-operating method, customer service, or manufacturing.
Hoshin kanri is a management tool or a planning process which uses a systematic approach to meet the strategic goals and plan to manage the goals. The aim of Hoshin Kanri is to finalise the strategic objectives and to align all the necessary resources and actions to meet the objectives.
The seven steps processes of Hoshin Kanri are
1) Establish organisation vision: What is the current mission and long term vision?
2) Determine breakthrough objectives
3) Determine annual objectives
4) Measure objectives with metrics
5) Implement the annual objectives
6) Review all the objectives monthly
7) Review all the objectives annually. Identify where the business needs improvement with each year progress.
Steps in detail:
1) The vision of the organisation is determined by asking why does an organization exists.
2) The management defines the main objective and also the mission. These are long-term objectives involving every individual of the organization.
3) The management and leadership teams breakdown these objectives into annual goals.
4) The determined annual goals are developed across the organisation at all levels right from the top management down to each employee.
5) Now execution of the goals is initiated.
6) Executions of all the monthly plans are monitored through reviews.
7) At last during the annual review meeting the results are validated.
Continuous improvement is a part of Hoshin Kanri which plays a key role for successful implementation.
The goals are to be communicated across all levels, realistic and mutually agreed in order to motivate, empower and collect the detailed feedback for effective execution of the action plans.
PDCA is another tool to be used for making continuous improvement and has to be iterative. Portfolio Kanban is used for execution of Hoshin Kanri goals as it can be mapped and tracked on a Kanban board.
For an organisation to be successful, vision & goals are compulsory that should be adapted with the dynamic changing world.
Six Sigma Green Belt Vs Six Sigma Black Belt
Six Sigma may be a Quality Management Strategy wont to identify the Defects in a very process and rectify them so as to boost the Customer satisfaction and Profitability of the organization by implementing Quality guidelines. Six Sigma teams contains different levels of members in keeping with the Classification of Six Sigma including Green Belt and Black Belt. Six Sigma Black Belt Certification may be a Higher level certification any person can gain after a Six Sigma Green Belt.
The key characteristic between the Green Belt and black Belt lies here.
Six Sigma Green Belt explains the Key Fundamentals, Tips and Techniques of Six Sigma for the folks that are engaged on their first Six Sigma Projects. Define, Measure, Analyze, Improve and Control are the approach explained including Graphical analysis techniques and Lean Six Sigma Processes. a licensed Green belt assists with analysis and Data collection for Black Belt Projects and Leads Smaller Projects. Most of the Organizations believe Green belts are the long run of the corporate. the most reason is that they gain experience by working with stake holders altogether the degree within the company.
Six Sigma Black Belt is for the folks that already gained a Six Sigma Green Belt Certification and moved forward to figure on number of projects. In Black Belt Certification they get trained on Deeply analysis tools. Their syllabus includes Green Belt material with some instructions on Stakeholder determine, Change Management and Advanced Statistical tools. A Black Belt should have a Above average Analytical skills, a bit Computer proficient and a decent level in Computer analysis and basic math. a licensed Black belt works on Problem-Solving Projects or Cross Functional projects altogether the departments of the organization. they're a decent Project Leaders and Excellent Communicators. However Master Black belt is specifically and trained about 20 and above Green belts and Black belts.
Finally the Six Sigma Green belt and Black Belt holders are Excellent Problem Solvers.
Six Sigma Green Belt Vs Six Sigma Black BeltSix Sigma Green Belt Vs Six Sigma Black BeltSix Sigma Green Belt Vs Six Sigma Black Belt
10 Tips for a Successful Gemba Walk
When we chat with leaders about how they are using individual continuous improvement tools and techniques, Gemba Walks are often a hot topic. Interestingly, we discover that either individuals view them as very effective and good thanks to connect with the team and find opportunities for improvement, or they see them as an enormous waste of your time. What sets the 2 camps apart? We find that leaders who get the foremost out of their appointment to the Gemba have some things in frequent. they typically follow each of those best practices. By adopting them, many leaders who didn’t get lots out of their Gemba walks are ready to make them rather more useful.
1. Schedule Time for Visiting the Gemba The first step to a good Gemba walk goes on the Gemba walk. Folks who really get pleasure from doing Gemba walks have learned that it must be moved from the “To Do” list to the calendar. By scheduling time, you help make sure that it'll actually happen. Because let’s face it, if it's just another thing on a protracted list of things to try and do, it'll likely get pushed back when other issues demand attention.
2. Have a particular Plan or Topic for Your Gemba Walk You never know what you'll see at the Gemba, so you must have an open mind, but it's also useful to own a particular plan for every walk. Perhaps your focus can be on the waste of motion or on 5S on a given day. Choosing something to get on the lookout beforehand helps keep your Gemba walk from becoming more of an informal stroll.
3. Communicate Your Intentions beforehand Gemba walks should never feel to employees sort of a surprise inspection. they're to be collaborative, never punitive. Before you start doing Gemba walks take care to provide everyone who are observed the background into the approach. Explain that you just are asking questions and searching for methods to enhance the method. Ask them to complete each task as they normally would and check out to avoid the “observer effect,” within which your presence changes employee behavior.
4. Avoid Distractions Keep your attention focused on your purpose and avoid getting sidetracked by unrelated people or activities. you may want to bring your phone for the aim of keeping notes or taking photos, but it's an honest idea to stay it on silent and switch off notifications so you get the foremost out of some time at the Gemba.
5. Brush abreast of the 8 Wastes Before You Go Whether you're a seasoned Lean practitioner or someone who is new the thought of formal continuous improvement, it's an honest idea to seem over the 8 wastes before you start your walk. that may help confirm that your mind is trying to find every opportunity to enhance the worth stream. take care to contemplate the wastes of: • Over processing • Motion • Transport • Defects • Over production • Inventory • Waiting • Human potential
6. Take some time It can take ages to induce a full picture of what's happening at the Gemba, so don’t rush. If a process is repeated intermittently, allow time to work out several cycles. Avoid jumping to conclusions. you'll be surprised how something plays out if you wait long enough to work out it.
7. Ask plenty of Questions and Solicit Feedback A Gemba walk could be a involvement to tug out the old “When?, Where?, Why?, What?, Who?, and How?” These questions can expedite your get to the guts of every potential convenience for improvement and produce a more robust understanding of how Standard Work is or isn’t being applied. it's also smart to ask the workers being observed for suggestions. they'll okay know exactly the way to improve a process, but not feel empowered to act. That’s something that you just must know.
8. After the Walk, Share Your Observations with the Team Whether you intend to form changes as a results of your walk or not, take care to produce feedback and follow up with employees. they'll likely be very interested by what you recognized and took far from the experience. Following up along with your comments will make your next visit even more practical.
9. Avoid Making Process Changes on the Fly It may be tempting to leap in and make changes to processes while you're within the middle of the walk, but this is often generally not an honest idea. (Urgent safety concerns are an exception.) it's much better to require the time to digest what you have got seen and reflect on possible solutions before taking actions.
10. Make a thought Once you’ve considered your observations, make a thought for action. If no changes are to be made, then your plan may simply be to schedule your next walk. If opportunities for improvement were identified, decide how improvements are made. you'll embark a PDSA or a DMAIC cycle, or perhaps a rapid improvement appearance is so as. These common habits of adequate Gemba walkers can make your next walk more useful. We’re sure there are more great ideas. If you have got a tip that has helped improve your experience at the Gemba, please add it to the comments, we’re all ears!
Bottleneck is a tool that helps to identify the constraints in a process flow and finds the root causes to fix it. Even if the process steps operates at maximum capacity there remains the work pending which causes delay.
Ex: Software testing process & reviewing the quality.
If the workflow of the process is not smooth and unpredictable you have the bottleneck. The problem lies in identifying the bottleneck & taking appropriate action to prevent them.
Following are the steps to identify a bottleneck
1) Visualize: When your work process is monitored closely using a Kanban board one can easily identify where the workflow is obstructed or gets piled up leading to a bottleneck.
2) Map the activities: Using a Kanban board the queues and activities are to be separated and by comparing the waiting time in queue and the time taken for an activity we can easily identify the bottleneck.
3) Cycle time at each stage: Record cycle time at every stage which reveals where is the constrain and the bottleneck.
One way of resolving the bottleneck is allocating extra resources at any stage of a process will help to overcome the bottleneck. In some situations the cost of the solutions may be high but if not resolved initially it may cost you more in later stages.
Following are the steps to be carried out to overcome bottleneck.
1) Never leave it idle: The bottleneck stage should be operated at full capacity to avoid the ripple effect on the workflow.
2) Bottleneck strain reduction: Ensure quality at each stage. A poor quality prior to bottleneck will cost you time and money.
3) Control WIP limits: Maintain lower limits on work in progress. Higher the WIP higher is the risk.
4) Batch processing: Prefer to process the operation in batches but prefer to choose a lower batch size than the large batch size.
5) Provide more resources: In order to speed up the process increase the capacity of the bottleneck process
Minimum interruptions are a key to healthy production system. These can be controlled with lean bottleneck analysis & Kanban workflows to ensure smooth workflow process.
- Map your process to identify the interruptions
- Redistribution of resources to resolve some of the bottlenecks.
- Maintain the workflow with continuous bottleneck analysis.
Total Quality Management (TQM) Tools
Total quality management (TQM) tools help organizations to spot, consider and assess qualitative and quantitative data that's significant to their business. These tools can analyze procedures, ideas, statistics, cause and effect concerns and other issues significant to their organizations. Each of which might be examined and wont to enhance the effectiveness, efficiency, standardization and overall quality of procedures, commodity or work environment, in accordance with ISO 9000 standards (SQ, 2004). per Quality America, Inc. the quantity of TQM tools is near 100 and are available in various forms, like brainstorming, focus groups, check lists, charts and graphs, diagrams and other analysis tools. in an exceedingly different vein, manuals and standards are TQM tools further, as they furnish direction and best practice guidelines to you and/or your staff. TQM tools illustrate and aid within the assimilation of complicated information such as:
1) Identification of your target market
2) Assessment of customer needs
3) Competition analysis
4) market research
5) Brainstorming ideas
6) Productivity changes
7) Various statistics
8) Staff duties and work flow analysis
9) Statement of purpose
10) Financial analysis
11) Model creation
12) Business structure
13) Logistic analysis
The list goes on, though actually TQM tools may be utilized in any situation, for any number of reasons, and might be exceptionally effective if used properly. TQM Tools The following are a number of the foremost common TQM tools in use today. Each is employed for, and identifies, specific information in an exceedingly specific manner. It should be noted that tools should be utilized in conjunction with other tools to grasp the complete scope of the problem being analyzed or illustrated. Simply using one tool may inhibit your understanding of the info provided, or may close you off to further possibilities.
1. Pie Charts and Bar Graphs wont to identify and compare data units as they relate to at least one issue or the entire, like budgets, vault space available, extent of funds, etc.
2. Histograms parenthetically and examine various data element so as to form decisions regarding them Effective when comparing statistical, survey, or questionnaire results.
3. Run Chart Follows a process over a particular period of your time, like accumulation rates, to trace high and low points in its run, and basically identify trends, shifts and patterns.
a) Pareto Charts / Analysis Rates issues per importance and frequency by compute specific problems or causes in an enormously manner that facilitates problem solving. Identify groupings of qualitative data, like most frequent complaint, most ordinarily purchased preservation aid, etc. so as to live which have priority.· may be scheduled over select periods of your time to trace changes. they will even be created on reflection, as a before and after analysis of a process change.
4. physical phenomenon Analysis to spot driving and restraining forces occurring in an exceedingly chosen process so as to grasp why that exact process functions because it does. as an example, analyze the driving and restraining forces of catering predominantly to genealogists. to spot restraining forces that require to be eradicated, or driving forces that require to be improved, so as to function at a better level of efficiency.
5. Focus Groups Useful for marketing or advertising organizations to check products on the overall public. · comprises various people from the overall public who use and discuss your product, providing impartial feedback to assist you identify whether your product needs improvement or if it should be introduced onto the market.
6. Brainstorming and Affinity Diagrams Teams using creativity to spot various attitude surrounding a problem. An affinity diagram, which might be created using anything from permissive software to post-it notes organized on a wall, may be a tool to arrange brainstorming ideas
7. Tree Diagram · to spot the assorted tasks involved in, and therefore the full scope of, a project. · to spot hierarchies, whether of personnel, business structure, or priorities. · to spot inputs and outputs of a project, procedure, process, etc
8. Flowcharts and Modeling Diagrams · Assist within the explanation and analysis of every step in an exceedingly process by illustrating it in an exceedingly clear and extensive manner. · Identify areas where workflow is also blocked, or diverted, and where workflow is fluid. · Identify where steps must be added or removed to boost efficiency and make standardized workflow
9. Scatter Diagram · parenthetically and validate hunches · to find cause and effect relationships, further as bonds and correlations, between two variables · To chart the positive and negative direction of relationships
10. Relations Diagram · to grasp the relationships between various factors, issues, events, etc. so on understand their importance within the overall organizational view.