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Synopsis

Want to generate the most business values with the least amount of time and cost? Even a thriving business can always find ways to make its processes leaner, faster, and more efficient.

This Process Optimization (Part 2) presentation includes templates for tried-and-true methods to help trim the fat. It includes slides for root cause analysis, risk identification, complexity and uncertainty matrix, Kaizen, 4M checklist, Andon board, Toyota Product System, Deming Cycle, PDCA, and many more that can be customized for various team environments. Let's review how these methods can be used to improve existing operations.

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Questions and answers
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Toyota is a prime example of a company that has successfully used the 4M checklist and Andon board for process improvement. The 4M checklist (Man, Machine, Material, Method) is a part of Toyota's Production System. They use it to identify and categorize potential sources of variation in a process. The Andon board, on the other hand, is a visual management tool that highlights the status of operations in real-time and signals any deviations from the norm. Toyota uses it to quickly identify and address issues, thereby reducing downtime and improving overall efficiency.

Some alternative strategies to the Deming Cycle and PDCA for process optimization include Six Sigma, Lean Manufacturing, and Total Quality Management (TQM). Six Sigma focuses on reducing process variation and enhancing process control, while Lean Manufacturing aims at waste reduction and process flow efficiency. TQM, on the other hand, is a management approach that focuses on long-term success through customer satisfaction.

Global companies like Apple and Google can implement the Toyota Production System (TPS) to improve their operations by adopting its two main principles: Just-In-Time (JIT) and Jidoka. JIT involves producing only what is needed, when it is needed, and in the amount needed, which can help in reducing waste and improving efficiency. Jidoka, on the other hand, empowers employees to stop the production process if a problem is detected, ensuring quality and preventing issues from escalating. Both principles require a culture of continuous improvement and respect for people, which can be cultivated through leadership commitment and employee training.

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Root cause analysis

Fishbone diagram

Before we get into individual methodologies, let's review ways that a project team can triage and plan process improvement efforts. To begin with, it's important to identify the main problem and the root of it first. In many cases, there are deeper causes to a problem than what the surface suggests.

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Grassroots movements play a significant role in shaping trends in process optimization. They often initiate change from the bottom up, identifying inefficiencies in existing processes and advocating for improvements. These movements can bring about innovative solutions that may not be apparent from a top-down perspective. They can also help in identifying the root causes of problems, as they are often closer to the operational issues. Furthermore, grassroots movements can foster a culture of continuous improvement, encouraging everyone within the organization to participate in process optimization.

Yes, one can use the analogy of a medical triage. In a medical emergency, doctors perform a triage to prioritize patients based on the severity of their condition. Similarly, in process improvement, teams identify and prioritize problems based on their impact on the business. The planning phase can be compared to a roadmap. Just as a roadmap provides the best route to reach a destination, the planning phase outlines the steps to achieve process improvement goals.

When beginners start learning about process optimization, they should first understand what process optimization is and why it's important. It's a strategy used to make business processes such as manufacturing, marketing, or service delivery more efficient and effective. They should know that the goal is to minimize costs and time while maximizing value and quality. They should also be aware of different methodologies used for process optimization, such as Lean, Six Sigma, and Total Quality Management. It's crucial to identify the main problem and its root cause before starting the optimization process. Lastly, they should understand that process optimization is a continuous process, not a one-time task.

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The Fishbone Diagram, also known as Ishikawa Diagram, presents the observed problem on the right hand side. (Slide 15)

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text] Let's say that a manufacturing team finds that a certain percentage of product fails inspection. With that main problem in mind, we can then break it down into individual components of the manufacturing process along the body of the diagram and list any possible issues under each component.

Five why's

Another way to conduct a root cause analysis is the 5 Why's framework. Unlike the fishbone diagram, the 5 Why's uses a more top-down approach. (Slide 16)

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Start with the big question by asking the first Why. Then, continue until five Why's have been asked to get to the finer points of the problem that weren't obvious to you at first.

Process risk

Risk identification

With any plans for change, there are risks that are already associated with the current process, and also risks that could come up with the new changes.

Whether the goal is to reduce the existing risks or to defend the business against potential future risks, it's important to lay out the possibilities to set a feasible expectation. (Slide 6)

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This also brings up the question of: what's a worthy trade-off? Does the business align with more of a "high risk, high reward" approach? Or does it want to play it safe?

Complexity and uncertainty

Related to risk management, map out any complexity and uncertainty implied by your process improvement plan on this matrix. (Slide 5)

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For example, for an organization that's looking for low risk and fast results, it could be worth starting with procedures in the lower-left quadrant. These are the low-hanging fruits that are not too complicated to implement and are fairly predictable. With that combination, you can see the results quickly after implementation.

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While specific company names are not mentioned in the content, many organizations across various industries have successfully implemented the low-hanging fruit strategy in process optimization. This strategy involves focusing on easy-to-implement changes that yield significant improvements. For instance, a manufacturing company might streamline its assembly line to reduce waste and increase efficiency, or a retail business might simplify its checkout process to enhance customer experience. These changes, while relatively simple to implement, can have a substantial impact on the organization's overall performance.

Some alternative strategies to process optimization that can yield fast results include Lean Management, Six Sigma, Business Process Reengineering, and Total Quality Management. These strategies focus on eliminating waste, reducing variation, redesigning processes, and improving overall quality respectively. They can be implemented quickly and can yield significant improvements in efficiency and effectiveness.

Global companies like Apple or Google can apply the concept of starting with low-hanging fruits for process optimization by identifying and implementing changes that are relatively simple and can yield immediate results. This could involve streamlining existing procedures, automating repetitive tasks, or eliminating unnecessary steps in a process. By focusing on these low-hanging fruits, these companies can achieve quick wins, which can build momentum and support for further process optimization efforts.

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Continuous improvement

Kaizen

Now, let's get into the individual tools that can be used throughout the process optimization exercise.

Kaizen is one of the most common tools when it comes to process improvement, and for good reasons. It's the framework that's brought great success to companies from Toyota to Nestle.

Kaizen can be visualized as an ever-revolving wheel. The key word here is "continuous". This means that improvement doesn't simply stop at step number 7. It continues to refine and redefine to achieve even better results. (Slide 21)

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If a team has a well-defined process improvement schedule, it can edit these steps to show specific dates or durations that correspond each step of the Kaizen process.

4M checklist

Under the Kaizen framework, the 4M checklist can be used to highlight and track detailed tasks on the ground. The 4 M's stand for: Man, Machine, Material, and Method. They allow a project team to be aware of all critical components with better clarity and organization. (Slide 22)

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Note that the 4M checklist doesn't discriminate against the finer details. When it comes to process improvement, even a small detail can lead to significant cost and time savings. These small improvements can also add up when they happen in a high-volume production setting.

Toyota production system (TPS)

The tools we just mentioned can all be aggregated into the Toyota Production System, or TPS. This is the main ideology that process optimization is founded upon. (Slide 29)

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In this powerhouse, we have the business goals at the top of the house, supported by pillars that are made of individual process optimization methods, and followed by the final successful results.

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