What is the objective of Practical Process Improvement?
The objective of PPI is profitable growth. This objective is achieved in two ways:
Customer allegiance. In the twenty first century, merely satisfying our customers is not enough. Improving the entire experience for the customer including price, availability (rapid delivery), and product quality must be the focus. By addressing all three of these areas, the customers’ perceptions will improve over time and build their loyalty. Their dedication to you will then lead to increased sales and revenue.
Involvement of all employees. To achieve successful cost reduction, every employee must be actively involved and believe in the process. The executive team focuses on achieving near-term and long-term enterprise objectives leading to profitable growth. PPI Teams work on projects assigned by management. PPI Teams then analyze the processes of production, improve response times, lower their costs, and improve quality for the customer.
It is very simple. All employees in the enterprise work continuously as individuals and on PPI teams to improve the processes of production and to reduce costs. All efforts are aligned from the boardroom to the shop floor. All employees conduct their work with the goal of building customer allegiance. When we consistently work to improve everything we do from the viewpoint of the customer, we achieve profitable growth.
What is the basis for Practical Process Improvement?
PPI is based on three strategic principles:
1) Apply Logical Simplicity,
2) Utilize Practical Methods and Tools, and
3) Involve Everyone:
Apply Logical Simplicity: As Albert Einstein once said, “Logical simplicity is the only path that leads to more profound knowledge.” Simplicity is the cornerstone of program effectiveness and translates to a key competitive advantage.
Utilize Practical Methods and Tools: The methods and tools are practical and easy to use. Their incorporation into the daily work of the entire enterprise is key.
Involve Everyone: Improvement is everybody’s job. The best way to improve customer allegiance and profit is to actively involve all employees in the process
How does PPI achieve this objective?
Meaningful Engagement at all levels of the Organization.
a.) Management involvement is a cornerstone of the program. Management “buy-in” (a common buzzword) is insufficient. Without senior, mid-level, and junior managers’ participation, any program will die – PPI is no exception. Therefore, PPI establishes roles and duties for managers at all levels, and these roles and duties are not voluntary.
b.) PPI uses a powerful team-based improvement program along with The Eight Step Method©. Teams work best when they have an objective outside of the team itself; and in the PPI program, every team’s objective is profitable growth. Enhanced teamwork is a wonderful byproduct managed carefully within the PPI method.
Focus on customer allegiance. We must never lose sight of the customer or focus only internally on efficiency and local improvement. The goal is customer loyalty and allegiance within a framework of mutual trust and accountability. Innovation is integral to these efforts.
- Optimize enterprise operations. PPI is more than a program to improve manufacturing operations. PPI employs the concept of “processes of production”, that is, optimizing all of the processes in the enterprise to improve profitability. (Processes of production encompass all enterprise functions –for example: legal, finance, human resources, order processing, marketing, sales, customer service, information technology, supplier management, logistics and warehousing, and all other enterprise entities.) There are several aspects to this concept. First, it is important to recognize that all functions within the enterprise contribute to profitability, and therefore, all functions should be subject to continuous improvement activities. Second, all revenue and cost savings do not necessarily contribute to profitable growth. Improvements must be considered in the larger context of enterprise optimization. Third, the enterprise definition is enlarged to encompass all elements of the value chain – from suppliers to customers. This integrated system is managed in ways that optimize the output (profit) by employing the strategy of mutual trust and accountability in and between all enterprise components.
How is PPI different from other improvement programs?
The objective of PPI is profitable growth, not team building or achieving some internal level of quality. Everyone in the enterprise is engaged to achieve the objective of profitable growth – increasing revenue and reducing costs through continual improvement and unrelenting efforts to achieve customer allegiance.
PPI efforts are aimed at enterprise optimization. This means, among other things, that the entire value chain is integrated as a system and that efforts are aimed at optimizing the entire value chain. (Profit is not achieved by squeezing individual components, suppliers, or customers.)
PPI efforts are focused on customer allegiance (not merely efficiency and internal improvement).
Innovation is integral to PPI efforts.
Improvement is everyone’s job, not limited to efforts of outside experts, black belts, upper management, or the quality department.
PPI engages all enterprise functions – it is not just a program for manufacturing operations. Improvement is required in all “processes of production.” In practice we find that some of the greatest gains are made in the processes of production outside of manufacturing in functions such as order processing, information technology, finance, human resources, legal, and supplier management.
PPI methods and tools are simple and powerful, optimized for utilization by everyone in the enterprise.
What is the primary method used for PPI improvement activities?
PPI teams employ The Eight Step Method©.
What tools are used within The Eight Step Method?
The Eight Step Method incorporates Basic and Statistical Tools. All of the tools are simple and powerful and within the grasp of all enterprise employees. In PPI we avoid complex arithmetic models and focus on practical, easy methods and tools to analyze data.
PPI Basic Tools
A few other tools
PPI Statistical Tools
Process Behavior Charts
Printable Chart Forms
There are critical factors at work with these tools: They are elegant in their simplicity, powerful in their application, and allow people to concentrate on data analysis, not mathematical complexity. Some tools facilitate individual and team efforts, while others are descriptive, providing a full understanding of the current situation. Some provide a simple way to analyze data and lead to conclusions and potential solutions, while still others allow us to test the validity of our solutions.
Many quality and productivity improvement program methods require difficult arithmetic, conjecture, and complex models to analyze operational processes. Most of the time practitioners of theses methods lead us to an analysis of the arithmetic and algorithms of a model (often based on conjecture and/or assumptions). They are analyzing arithmetic, not data. PPI avoids these methods.
The primary theory of continual improvement, and therefore the basis for PPI tool utilization, is found in the simple and elegant Process Behavior Chart. This tool provides the basis for managing and decision-making, i.e., for determining what to improve and when to improve. Other tools are selected for their ability to support individual and team improvement efforts.
The Process Behavior Chart is used as a guide for decision-making that leads to improvement efforts and utilization of other tools. The theory behind this chart helps us to understand when team improvement activities are appropriate (routine variation), or, conversely, if we are faced with a situation when individual and/or management intervention is appropriate (exceptional variation).
This is a Process Behavior Chart displaying routine variation indicating that the underlying process is subject only to the effects of common causes and is likely to be predictable in the future. Only a fundamental change in the process will lead to improvement – best carried out by a process improvement team.
This is a Process Behavior Chart displaying exceptional variation indicating that the underlying process is subject to the effects of special (assignable) causes and is likely to be unpredictable in the future. Individuals and/or management may take appropriate action.
How is the PPI program managed?
The primary structural element of the PPI program is the executive team (the top-level executives in the enterprise) who form the Steering Committee. One of the most important duties of the Steering Committee is to create an aim for the organization. The aim is a concise statement of the purpose (or mission) of the enterprise, the long-term objective (or vision) and the guiding principles (or values). The aim is usually no more than one page in length written in common language. Creating a suitable aim is more than the product of a weekend management retreat; it is very carefully constructed as the guiding strategy for the enterprise.
The Steering Committee also develops a system of metrics, linked directly to measuring progress toward accomplishing the long-term aim, as well as nearer term objectives. The system of metrics can be thought of as a gauge of progress. And when Process Behavior Charts are employed, we have a reasonable indication of the future ― metrics provide the Steering Committee a predictive tool.
The Steering Committee is faced with four fairly simple questions on a daily basis:
- How are we doing?
- What are we going to do now?
- How will we do it?
- And, how will we know when we have accomplished what we have set out to do?
The answers to these questions operationally define the enterprise. The aim and system of metrics provide the method to answer these questions and the benchmark to measure success.
Under the Steering Committee, the PPI program establishes a supporting structure:
- Program Champion: a senior level executive responsible for the success of the program
- Process Manager: An expert who acts as a trainer, tutor, and coach to ensure success of the PPI program
- Program Coordinator: a manager responsible for day-to-day management of the program
- Program Administrator: a person responsible for assisting the Program Coordinator with routine logistics and administration.
- Process Champions: managers assigned to each team who are responsible for the teams’ success
- Facilitators: responsible for actively engaging teams using The Eight Step Method