How to Implement a Continuous Improvement Program

Launching a Continuous Improvement Program in any organization

 As technological advances and cultural shifts drastically change the way society thinks, acts, and speaks, many organizations are struggling to keep up. They are working harder, longer, and spending more money, with little success in gaining a competitive advantage.

Instead, organizations need to look within their critical infrastructure—their processes—to find the answer. Processes can become obsolete in the same way technology does. The way an organization operates needs to change as its customers do. Therefore, an organization's investment of time, resources, and energy should be directed in a robust Continuous Improvement (CI) Program that enables change and improvement in the organization's processes and culture. Embedding a CI culture into an organization's DNA will allow it to remain current and nimble enough to successfully change with, rather than react to market conditions.

It starts and ends with the customer

The most critical step in initiating a Continuous Improvement Program is understanding the voice of the customer. It drives the focus of the Continuous Improvement efforts. Organizations can employ a wide spectrum of indirect and direct approaches to gather customer insights.

Indirect approaches:

• Customer satisfaction surveys, polls, etc.

Benefits:

• Affordable and efficient to segment markets and understand how each segment feels
• Provides more quantifiable data that can be viewed and tracked in charts

Direct approaches:

• Immersive interviews—observe customers in the context of their environment in informal and formal observations. In informal observations, subjects don't grant explicit authority to observers to watch them.
• Structured interview—guided conversations that help enhance understanding of consumers' stories and engagement with their environment

Benefits:

• Deep understanding of customer needs

When deciding between indirect, direct, or even both, organizations need to weigh their time and budget constraints when selecting one method over another. Indirect methods are typically less costly, but also provide less in-depth data. Direct methods are usually more costly, but reach a much higher level of depth.

Define a structure and roadmap
In either case, the next step is to make meaningful and actionable insights that drive the Continuous Improvement strategy.

The next step in developing a Continuous Improvement Program is defining a structure that aligns with the customer-driven strategy. The CI approach is quite holistic and typically includes 5 elements: Voice of the Customer, Culture and Capabilities, Tools and Methodologies, Organizational Structure, and Processes and Routines. All elements of CI need to operate in tandem in order to make a successful CI initiative.

• Voice of the customer is about asking the right questions to understand customer satisfaction and whether the organization is exceeding expectations. The organization's perception of what customers need and want do not always match with that they really need and want. Constantly looping this customer feedback into operations ensures that strategy is always mindful of customer needs and leverages those insights to create a competitive advantage.
• Culture and capabilities entails taking small steps towards a customer-minded culture. More importantly, it ensures the efforts are embraced at all level of the organization and everyone speaks the same language about CI.
• Learning and applying relevant tools and methodologies enables members at all levels of the organization are equipped with the knowledge to recognize, analyze, and act on opportunities for improvement.

• Organizational structure: Establishing a dedicated team structure and governance structure for Continuous Improvement will ensure that the initiative has the support it needs to complete projects successfully and on time. The size of the team will depend on the size of the organization and its aspirations for a speedy introduction of CI.

• Process and routines are equally critical to the success of CI. CI should be focused on ensuring that all processes are lean and non-value-added aspects are reduced (and ideally, eliminated). It will be necessary to incorporate CI into existing management routines and build entirely new management routines for CI. To ensure meetings are valuable to all who attend, it's important that a well-structured agenda is organized and sent to meeting participants in advance.
  • During regular management meetings the CI Manager and CI Champion should provide updates on CI initiatives, progress, metrics to the management team.
  • During regular townhall meetings, CI initiative leads should present ongoing CI initiatives, teams, and progress with all local staff. These meetings should also encourage local staff to provide their recommendations for additional opportunities and ask any CI questions
  • During regular departmental meetings, departmental leaders should be encouraging staff to provide additional ideas for CI, updating staff on any initiatives that impact their departments
  • Visual management that displays CI progress should be updated regularly (monthly suggested). Departmental leaders should alert staff when the visual management is updated so that new progress can be viewed.

With the support structure decided, the team needs a roadmap before embarking on the Continuous Improvement journey. The roadmap lays out a high-level plan that CI teams should adhere to with regards to the project scope, timing, and major tasks, highlighting key project milestones.

Once the strategy and road map have been defined many organizations consider the pilot vs. big bang approach to the CI rollout. The big bang approach may be quick and dirty, but sustainable changes are typically achieved by an accumulation of small and manageable changes. For long-term CI sustainment, taking the pilot approach is superior, as it allows the culture of CI to be embedded and provides opportunities to adjust the program as necessary. The more important decision in the matter is in selecting the pilot site(s). These sites will be the organization's first taste of the CI Program. Consider sites that have many low-hanging fruit opportunities, bandwidth and capabilities to take on a new corporate initiative, and a leadership team committed to seeing CI's success.

Getting down to business

Once the pilot sites have been identified and contacted, it's time to get down to diagnostic brass tacks. Before rolling the Continuous Improvement Program across the network and hiring agents of change, it is critical to prove the value of the Continuous Improvement Program by running a pilot program, modeling how the full roll-out would be expected to go. Prior to launching improvements at the pilot, problems and their root causes must first be understood and prioritized.

On-site interviews to determine underlying pain points

Obtaining qualitative data gathered through interviews during the diagnostics phase is an opportunity to form a relationship with the local team. It's important to gain perspectives from all levels of the business—from those on the shop floor through senior leadership.

To get the most honest responses, consider conducting the interview in a 1:1 setting, as to not overwhelm the interviewee, and without any presence from the site's management. The environment of the interview should be a safe space for the interviewee to express any concerns or difficulties, as well as share praise. The objectives of the interview should be to understand the pain points and frustrations felt during the job, company strengths, and culture.  Both positive and negative team influencers should be interviewed and engaged in the change management process. It is critical to get to the "Negative Nancy's" early and often so they buy in to the program. Once they buy in, change will happen much more easily.

Interviewers should pose questions that fall into 5 main categories:

• Employment background—for context, role clarification, and job responsibilities
• Training environment—on-boarding experience, career path, and suggested improvements to training current-state
• Communication—routine communication channels, communication gaps, feedback loops
• Efficiency—non-value added work, "a good day" hypothetical, process change opportunity
• Team Synergies—team engagement, best practices, team gaps

Analyze data on OTD, RFT, and other relevant metrics

For the most robust analysis possible, qualitative inputs ought to be compounded by quantitative counterpoints. By working with local IT resources, request data on key factors that determine the performance of the organization's product or service. Some common examples are:

• Delivery—on time delivery of the company's product or service
• Efficiency—cycle time, backlog, utilization
• Quality—right first time, the number of errors in the production, damages
• Voice of the Customer—Customer Service call reasons, order claim data

What do the operational processes currently look like?

After people and metrics, processes are another key factor to investigate. What are the current operating procedures? Where does the organization want to go from there? These questions are best answered by creating process maps that define the current-state. Only then can a future-state map be drawn up of the desired vision.

Identify key processes at the site and map them from end-to-end. This adds significant value when pin pointing precisely where and when an issue exists. Process mapping is ideally performed as a group activity with other key members of the site engaged. Allowing different voices to chime in allows for any discrepancies or issues to be more easily highlighted.

Multi-Observational Studies & Observations

With the employees' interview input and data indicating operational problems, independent research is to be done by the Continuous Improvement team through observations of processes.

The Multi-Observational Study (MOS) is a proven approach to gathering thousands of data point on the efficiency of the staff. It is conducted by running a series of observations throughout all shifts of a site.  The main task involved is to walk through all active work areas and make note of what each person is doing. For example, a Continuous Improvement team member might walk the floor of one department and observe, "I see one person picking product off the shelf, one person is sweeping, 2 people are walking, 1 person is on the phone with his girlfriend, and 2 people are having a work related conversation."

Rather than writing out long observations, define a list of all potential activities and number them so that the proctor only needs to jot down a 1 or 2-digit number.  By doing this for multiple shifts and collecting 1000s of data points, the organization can understand actual workflow and check if anything seems out of place. While the activities are very specific, they fall into one of three major buckets:

• VA – "Value added," this is time spent doing activities that the final consumer of the product is willing to pay for
• NVA – "Non-value added," this is time spent doing activities that the final consumer of the product is not willing to pay for
• R-NVA – "Required non-value added," this is time spent doing activities that the final consumer of the product is not willing to pay for, however the activity is required for sustainability of the business or to meet regulatory requirements

The VA, NVA, and R-NVA calculated at this stage can create a site baseline for any efficiency improvements that are implemented during the CI effort.

Synthesize insights and create a list of opportunities for improvement

As interviews and observations are collected, common themes will stand out.  The themes will come to life as the interviews and insights get grouped into opportunity areas—like Housekeeping/5S, Damages, or Employee On-Boarding—and are organized in a centralized table. The table, called the Opportunity Tracker, describes the improvement opportunity description, current state, short term/long term opportunity, priority ranking, and more. The objective is to understand what problems exist and to what extent. With this data logged, the prioritization process can begin.

While reviewing the Opportunity Tracker with site management, prioritize each observation. While opportunities with high priority make the most sense to develop into work streams, other factors need to be considered like work stream impact. Should the low-hanging fruit be picked first or to tackle the most difficult, yet most impactful issue? It is advisable to select some low-hanging fruit that will help spur creative momentum for projects that require heavier lifting. The typical site will prioritize 2-3 work streams at a time, tackling specific operational processes.

Select team members

Armed with data, context from interviews, and work stream objectives, an army of site employees will need to be assembled to carry out the mission. A main consideration when building a successful team is to build it cross-functional in nature. By doing so, employees that may not work in the same department, but influence the same process at various touchpoints will be brought together. At this time a Work Stream lead is also to be identified and made responsible for overseeing the team's success.

For example, in a distribution center where Tefen recently launched a CI Program, a Returns Process Improvement Work Stream was developed and its team included a Receiving Manager, Returns Associate, Customer Care Representative, Sales Representative and Transportation Manager. While many of these employees had never worked together, their diverse perspectives and insights proved to be valuable when implementing countermeasures that touched their respective departments.

To get the work stream team off the ground, follow Lean Six Sigma's DMAIC approach for problem solving.

Define

Create a Team Charter that answers the following questions:

• What is the problem the team seeks to solve?
• What is the scope of the project?
• What is the expected outcome?
• Who is on the team?

Measure

Next we must ask, "What does success look like?" The most effective way is to define success through performance metrics that allow the team and site leadership to measure their progress over time.

Analyze

This is where the cross-functional team really gets into motion. Part of the CI Manager's primary duties is not just to problem solve, but to teach work stream team members to do so as well. In the analysis phase, the objective is to build capabilities, sharing root-cause analysis tools such as:

• Fishbone Diagram
• The 5 Whys
• SIPOC Mapping
• Spaghetti Mapping

Armed with analysis tools, the team will begin to identify the gaps between current performance and the goal or future-state vision.

I mprove

Now that the gaps are identified, the team is charged with developing creative improvement levers that fix the problems and prevent them from returning.

To keep improvement initiatives from going stale, weekly team meetings are to be instituted, so that the team can continuously develop action items, create deadlines, and assign owners to the various counters.

These meetings are structured to focus on project progress. What has changed since the last meeting? What do the metrics tell us? Are there new risks that threaten the deadlines or success of the initiative? What new ideas has the team come up with to drive us towards the team goal? Answering these questions is at the center of the team meetings and tracking the initiative status in an Action Log will ensure no subject slides off the table. Established metrics become critical to updates during the meetings, so that they can track metrics and monitor the countermeasures implemented.

Control

As initiatives go into effect, their sustainment will be necessary to ensure that they stick. Through process standardization, documented operating procedures, checklists, and audits, consistency will be attainable. Control charts and KPI dashboards should be used to visualize the metric change over time. Eventually, work stream closure can be considered once new process has been standardized and responsible actors deliver their pieces day-after-day.

Reviewing the pilot

After reviewing the results of the pilot, a "lessons learned session" is critical to ensure that the entire network-wide rollout is successful. Lessons learned is an introspective process that is at the heart of continuous improvement. Lessons learned processes vary from one organization to the next, but three factors are necessary to have: ownership, proper documentation, and reflection time before and after projects. After the pilot and lessons learned sessions, the executive leadership must decide whether to proceed with a network-wide rollout. If that decision is made, it is then time to hire a team of Continuous Improvement managers who will manage tactical CI efforts at the network level.

The role of a CI Manager is an important one. They conduct the launches of the CI Program at each site in the network. They provide the knowledge, tools, and training to the staff at each site to equip them for a successful CI journey. They are also responsible for ensuring that the local team is managing their opportunities, keeping on schedule and staying on scope even after the launch.

The CI Manager should be an outside business manager who serves as the liaison between the management team and the staff on the floor performing the activities. There is a certain skill set that is necessary: clear communicator, organized planner, influential figure, technical knowledge, great facilitator, and Lean Six Sigma knowledge. A team of managers to roll out the program will be necessary.

There is a major decision as to whether or not to hire internally or externally. While internal candidates may be easier to embed in the culture, they also may not be able to bring prior experience. On the other hand, while external candidates may have a learning curve with the culture, they will be able to endow a large amount of knowledge and skills with the teams.

Train the Trainer

With the success of the pilot and the hiring of talent for CI Managers, the company is ready to begin launching CI Programs in each site around the network. However certain training must be performed to strengthen the CI Manager's weaknesses.

To smooth out the transition from pilot to network implementation, CI managers should shadow the actor responsible for running the pilot. Dependent on resources and budgeting, the pilot runner may have been external consultants, internal process engineers, or project managers. In any case, this actor will serve as the guide for the CI Managers as they are on-boarded into the role and understanding the process. The lessons learned from the pilot phase will allow the CI Managers to stand on the shoulders of the lessons already learned.

What begins as a shadowing through the various phases, from diagnostics, to opportunity prioritization, and into work stream success, should eventually transition to the CI Manager for full responsibility.

Before rolling out the launch, training CI Managers with respect to their expectations, implementation plan, roadmap, and skills preparation will be necessary. Though even with this training, independent training and learning will be necessary.

 The training should cover the following topics:

• Expectations
• Project timeline
• Project roadmap
• Team building
• Excel skills
• Presentation skills
• PowerPoint skills
• Data analysis skills
• Workshop facilitation skills
• And other critical skills (to fill in at identified skills gap)

Training sessions should also be conducted in a way that enables the team of managers to get motivated about the project, get excited about working with each other, and become one team.

As the CI Managers are launching their first sites, it's important for the teams to begin developing initiatives, routines, and processes to ensure that the new changes that are being put in place stick. There are a few initiatives to consider to ensure sustainability: metrics, management routines, visual management, associate engagement, management and sponsorship messaging.

Incorporating discussion on CI initiatives and metrics in management routines yields an increase in the integrity of the program in the eyes of the rest of the management team and the staff. Discussion around CI progress should be had just as we have updates for each department. This allows for the spirit of CI to be in the minds and have the status of the other departments. In these discussions we can actively discuss CI as a part of the overall strategy and operations of the organization.

Along with management routines, visual management, sponsorship messaging, and communication are critical to keeping CI fresh and alive in the minds of the employees. They bring additional visibility to the ongoing initiatives, and bring recognition to hard working associates and management staff contributing to the effort. For communication, update the entire organization (inclusive of all shifts) at least quarterly about the program and how they can get involved.

Sustained success

In the short-term the most critical factor for sustaining the CI Program is having engagement at all levels of the business, but in particular it depends upon employee engagement. With almost every initiative, the organization will need the help of its associates. It's critical to keep them engaged and involved from the very beginning. In most cases, people want to contribute to the process, have their voices heard, and perform meaningful work. By getting them involved, buy-in is obtained by the most important people in the process—those that will be doing the new processes. If engagement is lost, the success for the program will be compromised.

As the company achieves progress through the CI process, undoubtedly the question will arise, "How do we sustain these improvements long-term?" The answer is deceptively simple—it must be an embedded, lasting tenant of the company's culture.

Sustaining success is a topic that is worthy of its own article, but any company that has successfully implemented a CI Program has done so by developing a robust auditing process. To avoid backsliding into old habits and ways of thinking, implementing operational controls are necessary at multiple levels of the organization and are not only on the shoulders of CI Managers and champions. Everyone is accountable for owning checking their processes. Standard Operating Procedures and checklists are critical tools that should reflect the new changes, and provide the criteria for competency audits—defining a job well-done. Supervisors take in feedback and are responsible for ensuring compliance, and when necessary perform CAPAs. Management controls the big picture of the CI process, ensuring the message and goals are clear.

Once the purpose of audit is made clear, employees and management can take advantage of the program and share efficiencies and innovation that they see. Deploying the program is just the first step in a journey to continuous improvement.

By Leah Schultheis, Consultant at Tefen USA, and Sarah Simonson, Consultant at Tefen USA

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Source: http://www.tefen.com/insights/industries/Life_Sciences/launching_a_continuous_improvement_program_in_any_organization

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