The enhanced lean management system of Integrated Enterprise Excellence (IEE) provides the framework for integrating lean practices in an overall business management system that includes predictive scorecards, which are created from a process-output point of view.
Lean implementation with business system integration can occur with predictive scorecards and analytically determined strategies in an Integrated Enterprise Excellence (IEE) deployment. Lean alone can provide a very good tool set; however, it is not a business management system. To better address the challenges of the day, organizations need an effective business management system that integrates Lean tools with predictive scorecards and analytical/innovative strategies so that undertaken process improvement efforts have whole-enterprise benefits. The Integrated Enterprise Excellence (IEE)1 business management system, which is illustrated in Figure 1, accomplishes this organizational objective.
IEE addresses the business management scorecard and incorporation of lean principle issues that are described in a 1-minute video:
Enhanced Lean Management System through Lean Six Sigma Improvement Projects in IEE
In Lean Six Sigma, improvement projects are to follow a Define-Measure-Analyze-Improve-Control (DMAIC) roadmap. Within the IEE system, there are two DMAIC roadmaps; i.e., Project-DMAIC (P-DMAIC) and Enterprise process DMAIC (E-DMAIC). Figure 1 shows how the P-DMAIC roadmap connects with the E-DMAIC roadmap in the business systems improve phase.
This roadmap interconnection is made since process improvement projects are one of the primary two ways to improve the overall enterprise. The other improvement methodology is through a design project, which has its Define-Measure-Analyze-Design-Verify (DMADV) execution roadmap, as shown in the top of the figure.
Figure 1: Integrated Enterprise Excellence (IEE) System Phases
The E-DMAIC roadmap portion of this IEE system provides the framework for an enhanced business management system that structurally integrates the desired components of an overall business management system.
IEE Value Chain in a Enhanced Lean Management System Implementation
One aspect of the overall E-DMAIC system that addresses organizational control is the value chain, which integrates operational procedures with predictive performance metrics; i.e., a component of the Define and Measure phases of the E-DMAIC system. An example IEE value chain is illustrated in Figure 2. In this value chain, organization and control procedures are presented by clicking the drill downs of the rectangular boxes, while predictive 30,000-foot-level predictive performance metrics3 are displayed as a business scorecard by simply clicking on the oblong boxes.
Figure 2: IEE Value Chain
In addition to process-flow-charting-procedural steps, value chain rectangular boxes can be drilled down to a common-place Lean tool; i.e., value stream map, as illustrated in Figure 3.
Figure 3: Example of sub-process value stream map drill-down
In IEE’s value chain, Lean metrics such as lead time or on-time delivery can be assessed for process stability, noting that if a process has a recent region of stability, it can be considered predictable. For a continuous response that has a specification, an IEE stability assessment would be made through a 30,000-foot-level control chart, while the predictability statement would be made using a probability plot of the data from the recent region of stability.
Figure 4 illustrates this form of IEE metric report out where the probability plot provides an expected percent non-conformance rate if the process were to continue its current-state performance. For this process, about 13.7% of the transactions are expected to be beyond the specification limits of -5.0 and 1.0; i.e., (100-92.4)+6.2=13.8. An effective process improvement effort would result in the shift of the 30,000-foot-level control chart to a new, improved level of performance that is quantified through another probability plot of the after-improvement data.
Figure 4: 30,000-foot-level on-time delivery performance scorecard/dashboard report.
From Figure 7.8 Integrated Enterprise Excellence, Volume II, Business Deployment1
Aspects of the E-DMAIC roadmap include:1,2
- Deploy enterprise standardization so that important process elements are performed consistently in the best possible way.
- Ensure effective business process audits and business process management with their documented procedures in the value chain.
- Institutionalize process error-proofing wherever possible.
- Ensure that 30,000-foot-level scorecard/dashboard metrics with improvement objectives are tracked/reported correctly/effectively and incorporated into performance plans.
- Work with the conducting of regular monthly management meetings, giving inputs, when appropriate, to how data are presented and analyzed.
Enhanced Lean Management System: Lean Integration in an IEE System
In IEE, Lean can be used to describe at an enterprise level an organization’s as-is state:
- An organizational value chain can include standardized procedures, documentation, and value stream maps in one location that are readily accessible by those who need this information.
- Lean Metrics such as takt time, lead time, and defective rates can be assessed for stability and reported as predictive statements, when appropriate.
Relative to process improvement, Lean tools are integrated within the IEE system in several places:1,2
- In the analyze phase of E-DMAIC, value stream mapping of key processes can provide insight to where improvement efforts should focus.
- In the measure phase of P-DMAIC, the following Lean tools provide insight to where improvement efforts should focus: waste identification, takt time, Little’s law, observation worksheet, standardized work chart, combination work table, logic flow diagram, spaghetti diagram, 5 whys, and time-value diagram.
- In the improve phase of P-DMAIC, the following Lean tools provide direction or facilitation of improvement activities: Learning by doing, plan-do-check-act (PDCA), standard work and standard operating procedures, one-piece flow, poka-yoke, visual management, 5S method, kaizen event, kanban, demand management, heijunka, continuous flow and cell design, changeover reduction, and total productive maintenance (TPM).
A value chain breaks down common-place organizational silos where this business’ fundamental performance map provides scorecards and procedures that have ownership. Linkage of performance measurements with controls in the value chain provides a framework for preventing unhealthy behaviors, which can lead to very detrimental consequences as exemplified above. The described system provides the structure for organizational movement toward achievement of the 3Rs of business; i.e., everyone doing the Right things, and doing them Right, at the Right time.
The references and links below provide more information about these methods. To discuss application of lean implementation with business system integration or any other IEE application techniques, call +1 512.918.0280 or e-mail [email protected]
Enhancements to Traditional Business Practices
The following articles provide information about enhancements to traditional strategic planning and its execution:
- Business Management System: Issues and Resolution
- Enhanced Business Management System: Descriptive Videos
- Project Selection with Whole-enterprise Benefit
- Performance Reporting (KPI Reporting): Issues and Resolution
- Forrest W. Breyfogle III, Integrated Enterprise Excellence Volume II – Business Deployment: A Leaders’ Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard, Bridgeway Books/Citius Publishing, 2008
- Forrest W. Breyfogle III, Integrated Enterprise Excellence Volume III – Improvement Project Execution: A Management and Black Belt Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard, Bridgeway Books/Citius Publishing, 2008 (Chapter 11)
Contact Us to set up a time to discuss with Forrest Breyfogle how your organization might gain much from an Integrated Enterprise Excellence (IEE) Business Process Management System and creating a lean management system.