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InternalResultantTraining July30 August10 2001 HongKong PROPRIETARY 1998ThomasGroup Inc AllRightsReserved TableofContents IntroductiontoThomasGroup Inc TotalCycleTimeatEsquelGroupTCTBasicsCrossFunctionalTeamsProcessMappingMeasurementsBarrierRemovalBarrierCharacterizationUsingCause EffectDiagramsCyclesofLearningandEffectiveMeetingManagement WhatistheThomasGroup WeareauniqueinternationalmanagementservicescompanythathelpsclientsimprovetheircompetitivenessandfinancialperformanceFoundedin1978 annualcompoundgrowth 30 Over200seniormanagementexecutiveswithbroadskills experienceAverageoperationsmanagementexperienceperResultantis22yearsProprietaryTotalCycleTimeMethodologytoimplementchangeGlobalHeadquartersLocations Dallas Detroit Frankfurt SingaporeandHongKongOver300successfulcycletimereductionprograms TGIMission ToMakeBusinessesCompetitiveByUsingToDrive TotalCycleTime ImprovedResponsivenessandAcceleratedResultsusingMinimumResources 3R s WhatWasThomasGroup sRoleAtEsquel Outsideobjectivechangeagent committedtoimprovedresultsDefinebusinessprocessescriticaltoEsquel scompetitivenessEstablishaggressiveperformancetargetsatwhichEsquelisentitledtooperate dramaticimprovementsoverbaselineApplyThomasGroup sTotalCycleTimemethodologytohelpEsquelreachentitledperformance withineighteenmonths TotalCycleTime TCT Basics CorporateCompetitivenessisDrivenbythe3R s Respondingquicklytocustomersneedsforpresentandfutureproducts services Resultsacceleration particularlyinfastdelivery lowercostsandimprovedquality Resourceeffectiveness particularlyinpeoplecostsandcashtied up R R R Faster BetterResultsthantheCompetition ButusingfewerResourcesthantheCompetition BusinessasaseriesofProcesses Allbusinessesorganizations whethermanufacturing services development software etc arecomposedofaseriesofdifferentbusinessprocesses Thesebusinessprocessstepsmustbe DocumentedandanalyzedtoensurethateachhasvalueCanbeexecutedintheminimumtimeHavethehighestpossibleaccuracyorFirstPassYield Thetimeittakesinallbusinessprocessesfromidentificationofanunmetmarketneeduntilthatneedissatisfied CycleTimeis ThetimeittakestogetsomethingdoneManufactureaproductDevelopaproductDeliveraserviceInstallafactoryReducecostsImprovequalityThetimeittakestochangethewayacompanydoesthings Mostdifficulttochange TotalCycleTimeis Thecombinedeffectofthecycletimesofallbusinessprocessesfromthetimeaneedexistsuntilitissatisfied TotalCycleTime TCT drivesImprovement TotalCycleTime TCT drivesImprovement AsuccessfulTCTProgramsuccessfullyreducesthecycletimesofallidentifiedbusinessprocessesandintegratestheseprocessesintoaseamlesstotalbusinessprocesswithaminimumTotalCycleTime CrossFunctionalTeam CFT WhatisaCross FunctionalTeam AteamrepresentingthevariousfunctionalareasofoneormorecompaniesTheMissionoftheCFTteamistoachieveagreedupon specificobjective s Theobjectivesareultimatelyaimedat DrivingcontinuousimprovementinkeybusinessprocessesRadicallyimprovingtheorganizations globalcompetitivenessInternalizingtheTCTprocessestoensurecontinuationoftheprocessimprovement WhyareCross FunctionalTeamsNeeded ProblemsandsolutionsdonotcompletelyresidewithinonedepartmentAllfunctionalelementsinvolvedinaprocessneedtocontributeMembersshouldbringknowledge objectivityandnewviewpointstoproblemsolving TheRoleoftheCFT TheCFTistheprocessownerofthekeyprocessesidentifiedforimprovement ThisprocessimprovementismeasuredbyCycleTime CT andFirstPassYield FPY results TheCFTisresponsiblefor TheidentificationofthekeyprocessesTheperiodiccollection analysis displayandreportingoftheCT FPYandothermeasurementsdata Identificationofbarriers substituteprocessesandnonvalueaddedactivitieswithineachprocess MaintenanceandexecutionofacontinuouslyupdatedbarrierremovalplantoachieveorsurpassentitlementinCTandFPY RoleandResponsibilityofCFTLeaders EnsurethatTCTprocessisfollowedandthatresultsareachievedquicklySetcleargoalsandholdtheteamaccountableLeadteamincarryingoutitsobjectivesEnsurethatteammeetingsareactionoriented 3W s KeepteamfocusedwithoutdominatingmeetingsTransferrequiredCFTskillstonewmembers RoleofTeamMembers Responsibleforcontributingtotheteam ssuccessby Representingcompany empowereddecisionmaker Communication inputfromandtotheirfunctionalorganizationAttendingandactivelyparticipatinginallmeetings orprovidinganempoweredsubstitutetoactandmakedecisionsforthemWorkingwiththeteamtoidentifybarriersandtheirrootcauses rankingandremovingthemDevelopingActionPlansanddrivingthoseActionPlanstocompletionUsingmeasurementstotrackprogressandassurespecificbusinessprocessorprocessesprogresstowardandreachentitledperformance RoleofTheScribe Preparesanddistributesthemeetingagenda2 3daysinadvanceofthemeeting Thisensuresparticipantscometothemeetingprepared Note MembersshouldsubmitdocumentationtobediscussedinthenextmeetingtotheScribeforattachmenttothemeetingagenda PreparesanddistributesthemeetingminutesandW3swithinoneworkingdayfollowingthemeetingdate TheMinutesaretoincludeAttendance Summaryofthetopicsdiscussed Significantdecisionsmade Nextmeetingdate timeandvenue OldW3swithstatusandNewW3sRequestsfeedbackonminutesfromteamtoensurethattheyreflecttheconsensusoftheteamMaintainstheoldandnewW3slistingsothatW3 s what who andwhen arealwayscurrentHighlightsW3completionsandshortfallstoteamforfurtheractionMaintainsaccurateandupdatedCFT BRTChartersPublicizesteamssuccessesServesasteamtimekeeperifnoneassigned W3 s TeamLeader TeamObjective Scribe Start End RoleofTheMeasurementSpecialist TheCFTMeasurementSpecialistisresponsibleforleadingandadvisingtheteamonmeasurements Functionsperformedare WorkswithBITmeasurementownertocoordinatemeasurementactivitiesfortheCFTteamWorkswithteammemberstocollectmeasurementdatatodefineBaseline EntitlementWorkswithteammemberstoassistintheminanalyzingmeasurementdataMonitorsimprovementofactualcycletimes firstpassyield AIP WIP delivery cost productivity etc DevelopsreportingformatswithhelpfromtheteamEnsuresthatallmeasurementstatusispublishedregularlyintheformofanapprovedCFTCockpitChart TheTCTProcess TheMethodologySequence 16STEPS 1 Identifythekeybusinessprocess2 Establishthescopeoftheprocess3 IdentifyandbringtogetherthekeyplayersfortheCFT4 Validatethescopeanddeterminetheprocessboundaries5 Maptheprocess includingCTandFPYdataforeachstep6 Establishbaseline asis performanceinCTandFPY7 Determinevalue addedandnon value addedprocessstepsandactivities8 Removenon value addedstepsandcreatea should be map Entitlementprocess 9 Determinemeaningfulmeasurements10 Designthemeasurementsystem drivedesiredbehavior11 EstablishinitialentitlementgoalsinCTsandFPYs othermeasurements12 Identifythebarrierstoprocessimprovement13 Developcause and effectdiagramtofindtherootcausebarriers14 Rank orderrootcausebarrierstodeterminethebestcourseofaction15 Assignandschedulebarrierremovalactions BRTs 16 Trackprogressthroughthemeasurementsystem THE16STEPPROCESSCANBEBROKENDOWNINTO4GROUPSOFACTIVITIES IDENTIFYthekeyprocesses processownersandkeyplayersDeterminethescopeandMAPtheprocessesSetupaMEASUREMENTsystem determinebaselineandentitlementIdentifyandremoveBARRIERStoimprovedprocessperformanceandmanageimprovementwithdrumbeatfeedbackprocess ProcessMapping BusinessProcessManagement EverythingwedoininourcompanyfitswithinabusinessprocessandHasaProcessFlowthatcanbedevelopedHasHistorythatcanbeanalyzedHasaFirstPassYieldHasaPerformanceBaseline EntitlementHasactivitiesthatareNon Deterministic unpredictable CanbeMeasuredbycost firstpassyieldandcycletime BusinessProcessMaps InordertostarttheTCTProcess Step5ofthe 16Steps itisnecessarytoconstructProcessMap s ofthecriticalbusinessprocessesProcessMapsareagraphicalpictureoftheflow intime ofaprocessoractivityProcessMapsprovideanoverviewoftheprocessanddescribethepaththeprocessfollowsfrombeginningtocompletion starttostopasdefinedinthecharter ShowhowtheprocessesworkacrossfunctionalandgeographiclinesProcessmapsaredrawnatvariouslevelsofdetailtoassistintheevaluationofeachprocessstep Mapping ScopeoftheProcess Wemustfirstdefinethescopeandthepurposeoftheprocess Whatistheprocesstryingtoaccomplish Thescopeofanyprocessconsistsofthreeparts StartPoint Identifytheeventthatbeginstheprocess suchasreceiptofanorder StopPoint Identifytheeventoritemthatconcludestheprocess suchasshipmentofacustomer sorder ProcessBoundary determineswhichtransactionsandactivitiesaretobeaddressedintheProcessMap Forexample areweaddressingallproductsthataremadebyacompany orjustoneproductline Maps Cross FunctionalDiagrams Listthefunctions organizationsdowntheleftsideofthesheetofpaperShowtheprocessasaprogressionfromlefttorightastheprocessismappedacrossthepageThesymbolswhichrepresenteachstepareplacedinthesameroworrowsasthefunctionsinvolvedintheprocess TGI sbasicsymbolsetforcross functionalflowdiagramsinahigh levelprocessareshownbelow BusinessProcessManagement Inadditiontotheabove elongateasymbol toptobottom toshowparticipationinthesameprocessstepbymorethanonefunctionand ororganization Iftheparticipatingfunctionsarenotlistedadjacenttooneanother showparticipationwithsolidverticallinesandnonparticpationwithbrokenverticallines Arrowsalwaysgolefttoright Showreiterationlikethis Showdecisionslikethis Approved Yes No Approved Yes No or Color2 Orange Red Blue Cross FunctionalMappingProcess Definescope Listfunctionsinvolveddownlefthandsideofpaper Identifysequenceofactivities Correlateactivitieswithfunctions Mapactivitiesfromlefttorightcorrespondingtotheadvanceoftime ChangzhouProcessMap Page1 CT1 B L 18 ENT 14 FulfillmentFPYB 55 4 E 85 FPY3 B 97 E 100 1 75 Unit Day FulfillmentCT ChangzhouProcessMap Page2 FPY4 FPY5 FPY6 FPY7 FPY8 B 87 E 96 B 92 E 95 B 80 E 95 B 94 E 100 B 95 E 98 Unit Day B L ENT 5 25 6 6 5 8 1 5 3 CT2 CT3 CT4 Measurements Measurements Measurementsarenecessaryto keepscore e g howcanwedetermineifwearemakingimprovementsunlesswehavewelldefinedandmeaningfulmeasurementsMeasurementsmustbesimple easytounderstandandanaccuratemeasureoftheprocessMeasurementsshouldnotbe corruptible TimeandFirstPassYieldarethebestmeasurements StaticandDynamicCycleTimes CycleTimeshavespecificstartandstoptimes CycleTimeisabasicmeasureofprocesseffectivenessandagoodindicatorofthedisciplineandorderwithinaprocess OnemustdifferentiatebetweenStaticandDynamiccycletime StaticCycleTime sCT isasummaryofpastactions history Itisalaggingindicatorandisusuallyappliedtoprocessesthatchangeslowly DynamicCycleTime dCT isthepresent pulserate ofaprocessand thus aleading predictive indicator StaticCycleTimeMeasurement Staticcycletimeisthehistoricalmeasureofcycletimebasedonanalysisofindividualoutputsofaprocess Staticcycletimeisalaggingindicatorbecauseitreportsresultsaftercompletion CollectData UseCollectedDatatoIdentifyWheretoLook FrequencyofOccurrence Whatishappeninghere Usehigh lowdiagnosticanalysis andespeciallyhere StaticCycleTime PopulationofOne AfabricmanufacturingprocesswhichstartsonJune12andconcludesonJuly19hasastaticcycletimeof37days StaticCycleTime Forpopulationsofmorethanone Onecanaveragethecycletimesofworkactionscompleted Forexample 30shirtscompletedduringaspecifictimeperiodhadthefollowingdistribution 4completedin2days3completedin7days8completedin3days2completedin8days7completedin4days6completedin9dayssCT Staticcycletime 4X2 8X3 7X4 3X7 2X8 6X9 30sCT 5 03daysforthatspecifictimeperiod DynamicCycleTime normal DynamiccycletimeisthecurrentprocessingtimeforarelativelyhighvolumeofactivitieswhereInProcessinventoryexistsatboththebeginningandendoftheperiod DynamicCycleTime ActionsinProcess AIP AverageProcessingSpeedNOTE Theperiodoftimemaybeoneday oneweek onemonth theshorterthetimeperiodthemoreinstantaneousthecycletimemeasurement DynamicCycleTime IsaleadingindicatordCT AIP s ProcessSpeedAIP sandprocessspeedcanvarythroughmeasurementperiodNeedparameterestimates DynamicCycleTimeExample Alldataisforaonemonthtimeperiod Non ManufacturingCycleTimeExample Youareoperatingapurchasingorganizationwiththefollowingcharacteristics Work in processinventorybeginningofmonth 1 800ordersWork in processinventoryendofmonth 2 200ordersTheaveragedailyplacementrateis 125perdayWhatisthecycletimeoftheoperationinworkdays DynamicandStaticCycleTimeComparison StaticCycleTimeDynamicCycleTime1 Laggingindicator1 Leadingindicator2 Formulainvolvesonlycycle2 FormulainvolvesAIPstimesofcompletedactionsandprocessingspeeds notjustcompletions3 Goodforlowtransaction3 Goodforhighprocessstepstransactionprocesssteps developnewproducts bigamountproduction CompletedCT1 CTn AverageAIPsnAverageProcessingSpd ProcessTotalCycleTime SubProcess 1 MarkerMaking SubProcess 2 Cutting SubProcess 3 Sewing SubProcess 4 Washing SubProcess 5 Press Pack CT1 CT2 CT3 CT4 CT5 TotalCycleTime ProcessesareoftencomprisedofseveralSubProcesses FirstPassYield Firstpassyield FPY ismeasureoftheQualityofaProcess No AIPsCompletedToSpec withoutrework firstpassFPY X100TotalNumberAIPsProcessedFirstPassYieldislessthanorequaltoprocessyield actual becauseProcessYieldtypicallyincludesrework ThedenominatorincludesanyAIPwhichleavestheprocessbeingmeasured Thisincludessuccessfulcompletions cancellations scrap etc FPYDefinedas Thepercentageofactivitiescompletingaprocessthefirsttime correctly withoutrework FirstPassYieldMeasurementsExamples EngineeringPercentdrawingstomanufacturingwhichdonotchangePercentprojectsthatgothroughmanufacturingwithnounscheduledengineeringhelpManufacturing PercentincomingpartsneitherreworkednorreturnedPercentassemblykitscompletewhendeliveredPercentgarmentscompletewithoutreworkPercentsubassembliesintofinalassemblywithnorework TestPercenteachtestpassingfirsttimewithnowaits noreworkPurchasingPercentpurchaserequestsokaytoorderwithnochangePercentincominggoodsabletobereceivedimmediately GenericFirstPassYieldModel Queue Work OK Rework OK Yes No ProcessYield Thisboundaryisdeterminedbywhatdataisavailable FirstPassYield Cancel Scrap ProcessBoundary GenericFirstPassYieldModel Queue Work OK Rework OK ProcessYield Thisboundaryisdeterminedbywhatdataisavailable FirstPassYield Cancel Scrap ProcessBoundary Yes90 No10 No20 Yes80 WhataretheFPYandProcessYieldhere YieldCalculations totalouts rework holdFPY totalouts scrap cancellationstotaloutsProcessYield totalouts scrap cancellationsPergiventimeperiod X100 X100 HowtocalculateFPY BaselineandEntitlement Baseline Anhistoricalor asis levelofperformance verifiedbymeasurement historicaldata 3monthsminimum AppliedtoanymeasureSometimesgood sometimesnotuptoexpectationsEntitlement Animprovedlevelofperformanceresultingfromameasurable documentedcycletimereductionprogramGenerallyequaltoorbetterthanindustrystandardsAnobjectiveratherthananarbitraryperformancelevelRequiresnonewresourcestoreachEntitlement Baseline TheoreticalandEntitlement PerfectWorldLotsizeof1NoQueueNoset upsNodowntimeDedicatedResources Historicalbest expeditedorhandcarriedlot Comparisontocompetition sbestComparisontobestofsimilarprocessinotherindustries Historicallybasedmeasurementoftheeverydayperformancelevelofabusinessprocessthathasbeenmapped FactorappliedtotheoreticaltoestimateentitlementGenerally2to3xforaproductionorlinearprocessGenerally2to10 xforanon productionornon linearprocessMultiplierprovidestransitionfromunobtainableperfectworldtoaccountforrealworldinefficiencies Multiplier Theoretical Entitlement Baseline CycleTime TypicalPerformanceDistributions FrequencyofOccurrence Shorter Longer Theoretical StrategicBestOftenRequiresIncreasedInvestment EntitlementRealizablePerformanceUsingExistingResources BaselineExistingPerformance MeasurementsReportingTheCockpitChart CustomerSatisfaction Claims ReturnsCustomerSurveyResults MarketShare ofAddressableMarketUS NonUS CycleTime CT QuotationsSamples RevenueVolume OperatingMargin HK Gaoming PenangMeasuredin andinQuantity dozens Operatingincomeaspercentage CT FPYOrderEntry SalesDiscounting FactoryLoading ofCapacityDozens actual SalesExpenses VsBudgetVsRevenue On TimeDelivery SamplesProduction BarrierRemoval TypicalBarriers DyeprocessDefectdensityStrengthofmaterialsPricingColormatching inspectionMerchandisingMaterialhandling InspectionversuspreventionLargelotsizesBottlenecksPoorschedulingPoorprocessdesign implementationReworkCommunicationLowfirstpassyieldPushvs pull MeasurementsandcontrolsPerformanceincentivesBusinessisviewedasdisjointedfunctionsDenialNegotiatingpriceParadigmsthatresistchangeTop DownManagement SubjectMatterBusinessProcessCulture WhyRemoveBarriers ImprovecycletimeImprovefirstpassyieldImprovecostImproveotheroperationalindicesReducefrustration BusinessProcessBarriers BarriersareInterrelated Cultureconstrainsbusinessprocessperformancethatinturnconstrainssubjectmatterperformance Notremovingbarrierswillcreatesubstituteprocesses Barriersandsubstituteprocessesoftenoverlapandaresometimesmutuallyreinforcing Rewardingemployeesfortheuseorimplementationofsubstituteprocessestendstolock intheexistingculturebarrierorparadigm CultureBarriers SubstituteProcesses SubjectMatterBarriers BarrierIdentificationandCharacterization SubjectMatterBarriers Uniqueindustryorbusinesscontent SewingmachinethreadtensionWorkstation sbootsequenceCellphonewiringschematicUniquefunctionalexpertisecontent ManufacturingspecificationGarmentpatternmakingAccountingcostsystemMarketingdatasheet Typically SubjectMatterBarrierscanberemovedbyindividualcontributorsiftheyarenotconstrainedbybusinessprocessandculturebarriers BarrierIdentificationandCharacterization BusinessProcessBarriers PreventactivitiesfromfittingintoasetofseamlessprocessesthatmeetentitlementLotsizeBottlenecksintheprocessflowPoorschedulingPoorprocessdesign Typically BusinessProcessBarrierscanberemovedbymiddlemanagementifuppermanagementandanoutsideleader driverremovetheconstrainingculturebarriers BarrierIdentificationandCharacterization CultureBarriers SomeexamplesLackofTCTMindsetViewBusinessasdisjointedfunctionsPoorResourceallocationOrganizationstructure ormisuseoforganization LackofaccountabilityLackofleadershipLackofrootcauseproblemsolving Typically BusinessCultureBarriersmustberemovedbyuppermanagementworkingwithanoutsideleader driver SubstituteProcess SubstituteProcesses Alternateprocessesand work arounds thatemployeesimplementinordertoreduceoreliminatetheimpactofbarriers Theyareanaturalgrowthfromthefailuretoremovesubje

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