OE21 Guideline: 6.2a 

Process Efficiency and Effectiveness

Enhance customer value and satisfaction while achieving excellent process efficiency and effectiveness  

Strategic Objective:

Strategic Objective:

Minimize process cycle time and costs and eliminate defects that cause customer disatisfaction and loss​

Quality Objective:

Approved: DD-MMM-YY

Approved by: (Name) Chair, Leadership Focus Team (LFT)

Quality Objective:

Responsibility:

Lead: Operations Focus Team (OFT)  Support: Other focus teams

VALUE ADDED

 

1. Ensuring that key processes for design, production/creation, delivery, and support have optimized cycle time and lowest cost without loss of customer satisfaction and product or service quality.

 

2. Ensuring that products, services, and programs delivered to customers are free from defects that cause customer dissatisfaction and loss. 

 

3. Maintaining efficient and effective process improvement methods for determining solutions to problems or issues including defects, service errors, rework and related quality indicators. 

 

POLICY          6.0 COMMENTARY

6.2a Process Efficiency and Effectiveness - The organization has adopted the Baldrige Framework Item 6.2a Process Efficiency and Effectiveness, as the internal policy, including the following:

 

  • Efficiency and Effectiveness Factors: The organization incorporates cycle time, productivity, and other efficiency and effectiveness factors into the work processes;

 

  • Quality Factors: The organization uses process improvement methods to prevent defects, service errors, rework and related quality factors;

 

  • Cost Control Factors: The organization uses methods to minimize the costs of inspections, tests, and process, or performance audits, as appropriate; and to help balance the need for cost control with the needs of the customers

 

​​​7.1b (1) Process Efficiency and Effectiveness Results - The organization tracks current levels and trends in key measures or indicators of the operational performance of crucial work and support processes, including productivity, cycle time, defects, service errors, and other appropriate measures of process effectiveness, efficiency. The organization compares these results with the performance of competitors and other organizations with similar processes, as well as how these results differ by process types, as appropriate.

PROCESS

6.2a Flow Diagram (Figure 6.2a-1 Process Efficiency and Effectiveness)

6.2a Process Chart (Figure 6.2a-2 Process Efficiency and Effectiveness)

Inputs to 6.2a Process Efficiency and Effectiveness

  • Prioritized list of processes to be improved, problems to be solved, or opportunities to be pursued

  • Process Chart(s) for existing processes to be improved

  • Defect Logs (types and counts) for current processes where defects occur

  • OFT 6.2a SM Team Charter (survey) - included in OFT 6.2a Process Improvement Workbook 

 

  • OFT 6.2a SM datalog (survey) - included in OFT 6.2a Process Improvement Workbook 

 

  • OFT 6.2a SM story (survey) - included in OFT 6.2a Process Improvement Workbook 

Measurement and Analysis Tools and Techniques

Note: This workbook contains the following tabs:

  • Title - the title of the workbook (OFT 6.2a Process Improvement Workbook)

  • Guidelines (for using this workbook and tabs)

  • 1-Charter (for displaying Team Charter information)

    • SMcharter (survey input file containing 1-Charter information)

  • 2 - Current Process (process chart of the current process to be improved)

  • 3 - Analysis (defects counts tables used to create Pareto Chart and Clustered Bar Chart)

    • SMdatalog (survey inputs file containing defects counts for 3-Analysis)

  • 5 - Improved Process (process chart of the new, improved process)

  • 6 - Success Story (explains who, what, and results)

    • SMstory (survey inputs file containing story information for 6-Success Story tab)

Outputs from 6.2a Process Efficiency and Effectiveness

OFT_6.2a_Process_Improvement_Workbook (with all information in the tabs)

Success Stories from each workbook are published and shared on the organization's INTRANET

Case Study

  • Read the 6.2a Case Study

Implementation Instructions

Key Decision: The OE21 focus team responsible for this standard should begin by deciding whether or not the OE21 standard adds value (on is non-value added) when compared to any existing standard, SOP, or process the organization uses now. The decision process is:

 

1. The focus team studies all Tasks and tools used in the OE21 standard.

2. The focus team answers the questions:

  • NON-VALUE ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If YES, then the focus team should document that this standard is deemed as NVA, and then the focus team should proceed ahead to the next OE21 standard.

  • VALUE-ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If NO, then the focus team should proceed ahead to complete the following OE21 Implementation instructions.

 

Note: The NVA finding will be used later in the OE21 Certification Audit process.

START IMPLEMENTATION

INTRODUCTION TO OE21 PROCESS IMPROVEMENT TOOLS - To incorporate cycle time reduction, cost control, productivity improvement, and other efficiency and effectiveness factors into the work processes; the organization uses one or more Lean process management methods, including the OFT_6.2a_Process_Improvement_Workbook - a set of spreadsheet and survey tools used to analyze and improve processes. 

 

This Process Improvement spreadsheet model is a collection of sheets and surveys that are used in process improvement initiatives; defined as projects aimed at improving process efficiency and effectiveness. The spreadsheet model comes loaded with simulated data from the Elafino Sports Center Case Study. There are nine (9) tabs in this model, described as follows:

 

1 - Charter - A set of descriptive cells used as a Team Charter (agreement) that describes what, why, who, when and other details about a particular Process Improvement Imitative. The data that appears in the 1-Charter tab is linked directly to the tab named SMcharter. The data comes from an online survey of the same name. Once the survey is finished, the data are exported from the survey system and input into the SMcharter tab and then the 1-Charter tab is populated.

 

2 - Current Process - This tab shows the example current process for the Case Study Elafino Sports Center Adult Hockey Training (before process improvement). The OE21 guideline 6.1a. Product, Service and Process Design is used to create this process chart. (Refer that guideline if necessary). Notice that the cycle time was 8.75 hours and that customer complaints (defects) are added as red text notes alongside the steps where these complaints originated.

 

3 -Analysis - A sheet that contains defect types and counts (number of defects per day) for a one-week period. The yellow (unprotected) fields are where the defect types are input. The data range occupies cells C10 to I21. The data in this range is linked directly to the tab named SMdatalog. These data automatically create the Pareto Chart and the Clustered Bar Chart. 

   •    Pareto Chart - Presents the number of defects from highest to lowest. The red measure across the Pareto Chart is a cumulative defect count by percent.

 

   •    Clustered Bar Chart (at the bottom) shows the count of defects by day (Sun through Sat). The value of this chart is knowing which type of defects occur the most on particular days of the week.

 

   •    Sigma Level: The almost perfect case is Six (6) Sigma which is 3.4 defects per 1 million opportunities. The example shows DPMO (defects per million occurrences) of 110,091. The Sigma Level formula shows a value of 2.7 which is far below the desired Sigma Level of 6. The Sigma Table is provided on this sheet. 

 

Collectively, the data range of defect counts, Pareto Chart, Clustered Bar Chart, and Sigma Level tell us that improving this process should be a very high priority.

 

4 - Innovation - A sheet used to log (record) "Innovation Sessions" using the OE21 6.1d Innovation Management process. Each innovation session includes a Target Question, the number of responses (Ideas) to the Innovator survey, a list of categories associated with the suggested ideas, and a list of suggested Actions. Innovation sessions are normally conducted for each unique defect type. In the Elafino Case Study, there were seven (7) types of defects. After major defects have been addressed with the Innovation process, the organization should have the information needed to create the Improved Process).

 

5 - Improved Process - This tab shows the improved process for the Case Study Elafino Sports Center Adult Hockey Training (after process improvement). The OE21 6.1a Product, Service, and Process Design were used to create this process chart. Notice that the cycle time was reduced by 3 hours, from 8.75 hours to 5.75 hours.  The revised processes and practices used to eliminate or significantly reduce the number of customer complaints (defects) was added as blue text notes alongside the steps where changes are implemented. The improved process should have a positive impact on process effectiveness (defects) and efficiency (cycle time and cost). 

 

6 - Success Story - A set of descriptive cells are used as a Success Story (agreement) that describes the outcomes of the Process Improvement initiative. All tabs in this model contribute to the success story. The success story may be shared on the organization's INTRANET or INTERNET as desired. The data that appears in the 6-Success Story tab is linked directly to the tab named SMstory. The data in SMstory comes from an online survey of the same name. Once the survey is finished, the data are exported from the survey system and input into the SMstory tab and then the 7-Success Story tab is populated. The final step is to share the Success Story on the organization's Intranet or the Internet.
 

  • OFT_6.2a_Process_Improvement_Workbook (.xlsx)

 

IMPLEMENTATION OF OE21 PROCESS IMPROVEMENT MODEL 

 

Task 6.2a-1 Select Process to be Improved or Problem to be Solved - The Operations Focus Team (OFT) along with other focus teams, periodically evaluate key process problems or issues that are deemed as important to the organization and need to be resolved. The OFT, with the approval of the Leadership Focus Team (LFT), selects a particular process problem. 

 

Examples of processes or problems to be solved:

 

  • A process that takes too long or costs too much as it is repeated

 

  • A process that experiences defects, rework or waste (non-value added)

 

  • A problem with adverse impact on the organization workforce, key suppliers, customers, local communities, operations facilities, equipment, vehicles, internet, communications, financials, marketplace or strategies

 

Task 6.2a-2 Launch Survey (SMcharter) and collect information for Team Charter - Use the survey system (Survey Methods) to launch the Smcharter survey. This survey is used to collect the inputs that are needed to create the Team Charter.

  • OFT 6.2a SM Team Charter (survey)

 

Task 6.2a-3 Export (SMcharter) file; insert into Process Improvement tab 1-Charter  

 

Team Charter - The tab (1-Charter) contains a set of descriptive cells used as a Team Charter (agreement) that describes what, why, who, when and other details about a particular Process Improvement Imitative. The data that appears in the 1-Charter tab is linked directly to the tab named SMcharter. The data comes from an online survey of the same name. Once the survey is finished, the data are exported from the survey system and input into the SMcharter tab, which in turn populates the 1-Charter tab.

 

  Figure 6.2a-3 Team Charter is an example of Case Study information that has been input into the Team Charter tab:

 

Figure 6.2a-3 Team Charter

  • PROGRESS: You have reached Milestone 1 (good work). Input the status [10%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.2a-4    Create or update Process Chart (current process) Input Information into (2-Current Process tab) - The OFT and the facilitator use the Process Chart (current process) tab to chart the current process, including steps, responsibilities, process time (Pt), wait time (Wt) and non-value added time (NVA). Figure 6.2a-4 Process Chart (Current) of Case Study information that has been input into the 2-Current Process tab.

Figure 6.2a-4 from tab 2-Current Process 

Note 1: The current (before improvement) process shows Ct of 8.75 hours and 7 defect types

 

Note 2: The customer complaints (defects) are captured from customers when they reserve their training session (and find the session not available) or after they finish a training session.

Note 3: The assumption is that one or more of the process performers (instructor, crew, admissions) receives and records complaints by type, day and week.

Note 4: The current process appears should be improved to add one additional training session each day and to remove or significantly reduce the types and quantity of complaints (defects).

 

Task 6.2a-5 Record defect types & counts each week - The Operations Focus Team (OFT) assigns a person to record customer complaints (defects) received during execution of the Current Process. Examples of customer complaints are shown in red text in Figure 6.2a-4. A simple log (spreadsheet, notepad or another tool) is used to record the number of complaints (defects) received for the week, including the day of the week (Monday through Sunday) that each complaint was received. The Team Charter should specify the number of weeks that complaints are recorded before inputting them into the SMdatalog survey (see step 6.2a-6). If defects are counted for two or more weeks, then they should be averaged to show the typical (average) number of complaints received each day of the week (Monday to Sunday), as shown in Figure 6.2a-5. The average defect numbers by day and by type are then ready for input into the SMdatalog survey (task 6.2a-6).

Figure 6.2a-5 Weekly Averaged Defect Counts

 

Note: The averaged numbers are rounded to fractional values (e.g., 2.5, 5.5).

Task 6.2a-6 Launch Survey (SMdatalog) and input defect types and counts - At the end of the defect count recording period specified in the Team Charter, the OFT person responsible retrieves the data logs with averaged counts by day (Figure 6.2a-5), launches the SMdatalog survey and inputs the weekly average counts into the survey.

 

  • OFT 6.2a SM datalog (survey)

 

Task 6.2a-7    Export (SMdatalog) file; insert into Process Improvement tab (3-Analysis)

When all inputs are in the SMdatalog survey, the survey is closed and the results exported to a file to be named SMdatalog. This file is then inserted into the SMdatalog tab in the Process Analysis model. This action populates the 3-Analysis tab as shown in Figures 6.2a-6, -7 and -8 below.

Task 6.2a-8    Observe Data Analysis Charts (Pareto, ClusterBar, Sigma Level)

Figure 6.2a-6 tab: 3-Analysis - Data Table with Defect Types and Counts

      Note 1: The list of defects come from 2-Current Process tab red-text notes

Note 2: The counts in white cells (Sun-Sat) come from survey SMdatalog

Figure 6.2a-7-1 tab: 3-Analysis - Pareto Chart

 

Note 1: The list of defects come from 2-Current Process tab red-text notes

Note 2: The counts per defect come from the Defect Table (Figure 6.2a-6)

Note 3: The Pareto chart automatically sorts Defects by high to low counts

Note 4: The red line is cumulative defects up to 100%

Note 5: Note that the majority of defect counts come from defects 1, 6 and 5

Note 6: The normal practice is to work on the highest defect counts first.

 

Figure 6.2a-7-2 tab: 3-Analysis - Clustered Bar Chart

 

Note 1: The list of defects come from 2-Current Process tab red-text notes

Note 2: The counts per defect come from the Defect Table (Figure 6.2a-6)

Note 3: The Bar chart automatically displays Defect counts by day of the week

Note 4: The majority of defects tend to occur on Fridays

Note 5: Learning what is unique about Fridays may be helpful

Figure 6.2a-8 tab: 3-Analysis - Sigma Level Estimates

Input 1: The number of customers per session is 15 (max for one training session)

Input 2: The number of sessions per week is 18 (2 per day; 6 days/week)

 

Calculation 1: The max customers per week is 270 (15 customers/session x 18 sessions/week

 

Calculation 2: The number of customer defects/week is 162 (from data table; figure 6.2a-6)

 

Calculation 3: The number of defect types is 7 (from data table; figure 6.2a-6)

 

Calculation 4: The yield (defects/units) is defects/week (162) / customers/week (27) = 59.9%

 

Calculation 5: % of customers that experience defects each week is 40.1% (1-59.9%)

 

Calculation 6: DPMO (defects per 1,000,000) uses a complex formula that shows show 85,626 per 1M

 

Calculation 7: Sigma Level uses a complex formula that shows 2.9 Sigma vs. highest of 6 Sigma which is 3.4 defects per 1,000,000 opportunities

 

Summary: This analysis shows that the process (Adult Hockey Training) has poor effectiveness (many customers with seven types of defects with high counts ). This process needs to be improved. 

  • PROGRESS: You have reached Milestone 2 (good work). Input the status [44%] on the organization's OE21 Intranet Main page alongside the title of this standard.

 

Task 6.2a-9  Plan and execute ACI-Innovator sessions for each major defect type

For each significant defect type counted, use Oe21 6.1d Innovation Management to conduct a series of OE21-innovator sessions. Each innovation session has one target question and collects 1-10 ideas with categories as shown in Figure 6.2a-9.​​

Task 6.2a-10 Input session ideas, categories, and analysis into tab (4-Innovation)

Figure 6.2a-9 tab: 4-Innovation - log of 1 or more Innovation Sessions results

 

In the Process Improvement model, use the 4-Innovation tab to document results as shown in the example above for Defect 1.

 

Note 1: If any additional financial analysis is needed, it might be inserted to the right of the information shown in Figure 6.2a-9 (see the example in the Process Improvement model tab).

 

Note 2: When finished with all Innovation Sessions, this tab is used to help create the new Improved Process as presented in Figure 6.2a-10.

  • PROGRESS: You have reached Milestone 3 (good work). Input the status [71%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.2a-11 Create Improved Process Chart; edit defect elimination steps; compute new Ct

 

Use all information from the Process Improvement model tabs 3-Analysis and 4-Innovation to create the new improved process chart as shown below. ​

Figure 6.2a-10 tab: 5 -Improved Process 

 

Note 1: The new (after improvement) process shows Ct has been reduced from 8.75 hours to 5.75 hours, which is about a 34% decrease in cycle time (Ct), making the process far more efficient.

Note 2: The customer complaints (defects) are captured from customers when they reserve their training session (and find the session not available) or after they finish a training session.

Note 3: The assumption is that one or more of the process performers (instructor, crew, admissions) receives and records complaints by type, day and week.

Note 4: The new (improved) process adds one additional training session each day (3 sessions/day) and removes or significantly reduces most of the older process customer complaints (defects).

 

Note 5: The new (improved) process should result in an increase in gross profit (sales - the cost of goods sold) because of the increased efficiency (time savings) and added revenue from providing one extra session per day for 15 paying customers. (See the tab named 4-Innovation; right side financial tables showing Profit Gain of $450 per day (per week $2,700) and per year $135,000.

Task 6.2a-12    Launch Survey (SMstory) and collect information for Success Story - At the end of the data collection and analysis work for this process improvement initiative, the OFT assigns one or more persons to work in collaboration to create the Success Story for the initiative. The SMstory survey is used to help create and input the responses to some questions in the SMstory survey. 

  • OFT 6.2a SM story (survey)

Task 6.2a-13    Export (SMstory) file; insert into Process Improvement tab 6 -(Success Story)

When all inputs are in the SMdatalog survey, the survey is closed and the results exported to a file to be named SMstory. This file is then inserted into the SMstory tab in the Process Analysis model.

 

This action populates the 6-Success Story tab partially shown in Figures 6.2-11 below.

Figure 6.2a-11 Items 1 to 5 of the Success Story (17 items total)

 

Note 1: The Process Analysis model tab named 6-Success Story is automatically populated by the links to the tab named SMstory, described in Task 6.2-13. 

 

Note 2: See the tab titled 6-Success Story to read all 17 Items. 

 

Task 6.2a-14  Share Success Story -Most or all success stories should be shared with the workforce, key stakeholders and major customers. The preferred way to share success stories from this Oe21 guideline is to publish them on the organization's Intranet and/or the public Internet website. Success stories may need to be protected from key competitors, in which case the organization's Intranet would be preferred. Once the success story is visible on the Intranet pages, the workforce should receive an email or another form of announcement with a link to the success story.

 

Acknowledgment - Another OE21 recommendation is to include the names, titles and organization work units who were responsible for the success story. Recognition and rewards for achieving success are known to significantly improve manager and worker engagement and satisfaction.  

  • PROGRESS: You have reached Milestone 4 (good work). Input the status [93%] on the organization's OE21 Intranet Main page alongside the title of this standard.

 

Task 6.2a-15 Update Operations Excellence Action Plan - From the CI-Toolkit shared folder, open a copy of the Operations Excellence Action Plan. Add tasks, responsibilities and other information necessary to implement quality and risk management.

 

  • OFT_6.1a_Operations_Excellence_Action_Plan (.xlsx)

 

Task 6.2a-16 Input Process Improvement Metrics into PMS.  This applies if the organization has a Performance Measurement System (PMS) capable of input and tracking of trend charts for measures and targets. Assuming that a PMS is available, the OFT uses the Metrics Table for Process Efficiency and Effectiveness (Figure 6.2a-12) to select appropriate (metrics) for tracking trends of process and operational effectiveness.

  • OFT 7.1 PMS Operations Excellence Metrics (sheet) 

 

As a minimum, the OFT selects, input and tracks key measures for operational effectiveness, including:

 

  • Percent (%) of Defects per Key Process (vs. target of < 1 %)

  • Percent (%) of Process Costs that meet target costs (goal: near 100%)

  • Percent (%) of Process Cycle times that meet target cycle times (goal: near 100%) 

Task 6.2a-17 Review Process Improvement Metrics into PMS. On a quarterly basis, the OFT with support from all focus teams uses the PMS to monitor trends of process efficiency and effectiveness versus goals. These measures are updated quarterly, or when changes require updates. The OFT appropriate action to drive measures towards their goals. When performance goals are met, the OFT may raise the goals higher. See OE21 4.1 Task 4.1.5 for guidance.

Figure 6.2a-12 is an example Metrics Table for Process Efficiency

Figure 6.2a-13 is an example Trend Chart for Process Efficiency.

  • PROGRESS: You have reached Milestone 5 (congratulations). Input the status [100%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Figure 6.2a-12 Metrics Table for Process Efficiency (example)

Figure 6.2a-13 Trend Chart for Process Effectiveness (example)