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Introduction To Operational Excellence

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Introduction To Operational Excellence

  1. 1. Operational Excellence<br />Business Process Management <br />& Continuous Improvement<br />Ahmed Mansour, MD ImproVision Consulting<br />
  2. 2. Background.<br />The Continuous Improvement Model.<br />Managing Business Processes:<br />Methodology.<br />Identifying Opportunities.<br />Improvement Approach.<br />Tools and Solutions.<br />Role of People in Continuous Improvement<br />Contents<br />
  3. 3. Economic Crisis limited Revenues growth opportunities, must focus on Cost Efficiency to sustain profits.<br />Background<br />Revenue<br />Cost<br />Profit<br />2008<br />2009<br />2008<br />2009<br />Crisis Growth Opportunity<br />Traditional Growth Model<br /><ul><li>Need to survive growing, fierce Global competition.
  4. 4. Reducing risks and improving product / Service quality key to sustain success with Customers, Authorities and Investors.
  5. 5. Businesses Process Management provides tools to meet these challenges, through the identification of Continuous Operational Improvement Opportunities.</li></li></ul><li>Key Concepts of Continuous Improvement<br />Doing the Right<br />Things<br />Customer Focus<br />Doing Things<br />Right<br />Work Process Improvement <br />Continuous Measurement<br />Fact-based<br />Supportive Work <br />Environment<br />Involving Everyone<br />in making it happen<br />
  6. 6. What is Six Sigma?<br />Six Sigma is a business process improvement approach that seeks to find and eliminate the causes of mistakes or defects that occur in business processes. <br />Six Sigma integrates the tools of systems engineering, process thinking, statistical methods and business analysis in a rigorous approach to focus on problems that are of critical importance to customers.<br />Outcomes of Six Sigma include enhanced process performance, improved customer satisfaction, and increased financial results.<br />Six Sigma has been proven at respected companies across a variety of processes, functions, products, and industries.<br />Six Sigma integrates both human and process approaches to business improvement, provides a clear focus on delivering bottom-line results, and applies a systematic, sequential use of quality improvement and statistical tools in an overall approach that finds and eliminates the root cause of problems.<br />
  7. 7. What is Six Sigma?<br />Business<br />Statistics<br />Process<br />Systems<br />Quality<br />Change Mgt<br />Six Sigma Approach<br />Improved Financial Results<br />Enhanced Processes<br />Satisfied Customers <br />Zero Defects<br />Reduced Bottlenecks<br />
  8. 8. Key Success factors<br />Processes<br />VISION<br />People<br />Systems<br />…Link People, to Systems, using Processes to achieve Visions! <br />
  9. 9. Business Objectives<br /> Ensure Alignment / Control<br />Standardize Organization Processes, Policies and Procedures and ensure common understanding among all employees.<br />Provide a consistent performance, measurement and evaluation system.<br />Simplify Administrative work<br />Establish comprehensive and sound Roles and Responsibilities.<br />Minimize effort / time in retrieving needed reference material.<br />Improve Visibility and Decision Making<br />Improve Management ability to proactively control operation.<br />Provide consistent and continuously improving Performance.<br /> Discover Areas for Improvement<br />Assess fit of current Model for Organization Strategies and Industry Best Practices and identify areas for improvement.<br />
  10. 10. Improvement Methodology<br />Improve<br />Define<br />Measure<br />Analyze<br />Control<br />D<br />C<br />I<br />A<br />M<br />Customers for your<br />products or services <br />identified<br />Customer requirements<br />defined<br />Work process defined<br />Baseline<br />performance<br />measured<br />Improvement<br />opportunity<br />identified or<br />confirmed<br />(in $ terms)<br />Root causes<br />of gaps verified<br />Solution<br />implemented<br />Benefits<br />captured<br />Procedures<br />and practices<br />in place<br />to ensure<br />sustained<br />process<br />performance<br />Deliverable<br />Characterization<br />Optimization<br />Sustainment<br />Key focus: 1. Measurable and demonstrable bottom-line results<br /> 2. Higher customer satisfaction<br /> 3. Data driven decision making<br />
  11. 11. The CI Funnel Approach<br />D<br />M<br />A<br />I<br />C<br />Improve<br />Define<br />Measure<br />Analyze<br />Control<br />
  12. 12. Gate 1<br />Gate 2<br />Gate 3<br />Gate 5<br />Gate Process – Analogy with house build<br />Define<br />Improve<br />Measure / Analyze<br />Control<br />DMAIC<br />Planning<br />Design<br />Develop<br />Close out<br />Definition<br />Gate 4<br />How big is the problem ?<br /> Develop the specification.<br /> First view of potential solutions<br />A detailed plan is developed. Costs and benefits. Roles and responsibilities<br />Are we ready to go ?<br />All detailed instructions/ procedures should be ready<br />Is there a need ?<br /> Why ?<br /> Understand the requirements <br />Did we deliver what was required ?<br />I want a house. <br />Initial ideas - 4 bedrooms, <br />3 reception rooms, <br />3 bathrooms<br />Contractors engaged, detailed design of all rooms and facilities - costs and timings developed<br />House is built, ready to move in. Is it sufficiently ready for me to move in ?<br />Is the house exactly what I planned? Did it meet all my requirements ? Happy or sad ?<br />First ideas of potential options for my house – preliminary costs<br />Stage 2<br />Stage 3<br />Stage 5<br />Stage 4<br />Stage 1<br />PLC<br />
  13. 13. Applying the Model<br />General Management<br />Operational Six Sigma<br />Transactional Six Sigma<br />Supply Chain<br />Operations<br />& Logistics<br />Marketing<br />& Sales <br />Business Support<br />Marketing / Brand <br />Sourcing<br />Production<br />Finance <br />& Accounting<br />Purchasing<br />Quality Control<br />Sales<br />HR<br />Cost Control<br />Warehousing<br />Customer Service<br />General Administration<br />Contract Management<br />Distribution<br />
  14. 14. Production Process Example<br />Production<br />Cycle<br />
  15. 15. Identifying Opportunities<br />Focusing on key opportunities … “The 80/20 Rule”<br />Example:<br />Cost of Production= Raw Materials+ Additives + Electricity + Electrical items + Mechanical items + Fuels + Lubricants.<br />
  16. 16. Improvement Approach<br />Significant Production Cost Reduction can be achieved by controlling Raw Material Consumption<br />People<br />Material<br />Ignorance<br />Quality<br />Handling<br />Warehousing<br />Excess<br />Material<br />Speed<br />Pressure<br />Cleanliness<br />Processing<br />Equipment<br />Methods<br />
  17. 17. Performance Improvement Decision:<br />Increase Call Centre staff by one person<br />Performance Improvement:<br />Call Centre Bottleneck Resolved<br />Customer Service Process Example<br />PROCESS INTELLIGENCE - PREDICTIVE<br />BUSINESS PROCESS ANALYSIS SOLUTIONS<br />Process Modelling and Simulation<br />Process Design<br />Engine<br />Collaboration<br />Engine<br />Simulation<br />Engine<br />015<br />120<br />120<br />075<br />Customer requests flow through applications.<br />The End to End business process consists of events from many applications.<br />The process can be optimized using Modelling and Simulation of the real process data. <br />PRODUCTION PROCESSES <br />Applications, Technology & Resources<br />Events are generated by the applications. <br />BPM System extracts these events and transforms them into Process Intelligence data.<br />Modelling to Execution <br />BPMN Lite Modelling<br />Operational Dashboard<br />BPM Workflow<br />Legacy Application<br />Call Centre<br />ERM<br />ERP<br />BPM Systems enable continuous process improvement and support Lean Six Sigma initiatives.<br />Simulation of Production Process<br />Measure<br />Process Analysis<br />Engine<br />Reporting<br />BPMN Model<br />PROCESS INTELLIGENCE - REAL TIME & HISTORIC<br />
  18. 18. Engaging People in BPM initiatives<br />Processes are executed by People, they will make or break any BPM initiative.<br />Roles and Responsibilities may be changed significantly by Process Re-engineering.<br />Involvement, Buy-in & Empowerment of People is a key success factor.<br />Proper Change Management plans must be part of any successful Project.<br />Phase 1 Phase 2 Phase 3<br />Re-trusting<br />Per formance<br />Excited <br />Shock<br />Hopeful/ <br />Skeptical<br />Denial<br />Anger<br />Relief<br />Fear<br />Impatience<br />Anxiety<br />Acceptance<br />Confusion<br />Undirected Energy <br />Time<br />
  19. 19. … In a Nutshell<br />Cost Control is the answer to Profitability under severe Revenue growth limitations.<br />Savings can be made by applying a “DMAIC” approach across all Process areas, to continuously identify opportunities for improvement.<br />Significant Cost reduction can be achieved by focusing on the “right” performance issues (80/20).<br />BPM System Solutions offer “Enablers” to achieve strategic goals.<br />Organization Change Management determines the success of any BPM initiative.<br />Operational Excellence is key to sustain competitive position for the Business in today’s economic conditions.<br />
  20. 20. Thank You<br />Copyright ImproVision Consulting, 2009<br />
  21. 21. For more information contact us<br />®<br />BRINGING VISIONS TO LIFE!<br />56 Palestine street, Maadi, Cairo, Egypt<br />Email:<br />Phone: +2 02 27545773<br />Fax: +2 02 27539825<br /><br />