1. Client Logo LEAN ENTERPRISE Implementation Workshop

2. Client Logo 2© The Delos Partnership 2006 January 2006 How will we proceed ? Day one :Team building and actual physical flow- mapping. Day two :Information flow-mapping, existing issues identification and documentation, flow techniques teaching, target flow design. Day three :Target flow presentation to sponsor, operational solution design for target flow and test. Intersession Day four :Performance measurement, change modelling, project execution structure design. Day five :Project planning, action plans, costs and benefits, return on investment, final presentation to sponsor.

3. Client Logo 3© The Delos Partnership 2006 January 2006 OBJECTIVES DAY 4 Learning the dashboard concept for process performance measurement. Dashboard design. Change model. Team structure for next steps Human implications. Technical implications.

4. Client Logo 4© The Delos Partnership 2006 January 2006 PROGRAM DAY 4 Intersession work summary, problems identification. Dashboard design. Costs and benefits. Lunch. Change model Tools for analysis and decision Project team structure and project leader identification. Human implications. Technical implications.

5. Client Logo 5© The Delos Partnership 2006 January 2006 Intersession Your mission was :

6. Client Logo 6© The Delos Partnership 2006 January 2006 What did you learn?

7. Client Logo 7© The Delos Partnership 2006 January 2006 PROGRAM DAY 4 Intersession work summary, problems identification. Dashboard design. Costs and benefits. Lunch. Change model Tools for analysis and decision Project team structure and project leader identification. Human implications. Technical implications.

8. Client Logo 8© The Delos Partnership 2006 January 2006 MEASURES

9. Client Logo 9© The Delos Partnership 2006 January 2006 PROCESS and RESULTS Do it right first time ! Do it better next time !

10. Client Logo 10© The Delos Partnership 2006 January 2006 Measures mess Too many… Only what is easy to measure… Mostly costs… Mostly results… € is common denominator… Few immediate feedback… Focused on operational departments… …and generally inaccurate.

11. Client Logo 11© The Delos Partnership 2006 January 2006 Basically, why measuring? To provide feedback information aimed at target, allowing actual positioning and steering corrections to bring. What are significant data? Who should collect? Who should analyse? Who should act? Where should one collect data? When should one collect data?

12. Client Logo 12© The Delos Partnership 2006 January 2006 MEASURES Build your measures on 7 key performance measurements, set targets, and visibly measure progress in a step of your management process. Localy collected, analysed and acted measurements Real time & History Limits indicators Analogue indicators

13. Client Logo 13© The Delos Partnership 2006 January 2006 Customer service Actual Previous New products launch 20 25 30 35 40 MPS completion Consumption Actual Est. FY9x Standard FY9x Direct 0 5 10 15 20 25 30 New products Critical path (weeks) -3 -2 0 1 2 3 New processes -3 -2 0 1 2 3 Quality Actual Objective Margins Revenue Actual Budget FY9x Project cum.costs Planned Actual 20 25 30 35 40 Activity level -8 -4 0 +4 +8 0 25 50 75 100 10 15 20 25 30 100 125 150 175 200 100 125 150 175 200 Planning completion Costs 85 95 105 115 125 Actual projects Project ABC Project XYZ Project MNO Plan R&DDoc. Ass. Test Com. Right 1 st time % Dashboard example Actual Previous Critical path (weeks) Actual Est. FY9x Standard FY9x 0 25 50 75 100

14. Client Logo 14© The Delos Partnership 2006 January 2006 Delos measurement model Focused on few key measures Designed and used locally Real time Process oriented Aligned with strategy Used to pilot education Aligned with individual objectives

15. Client Logo 15© The Delos Partnership 2006 January 2006 Customer Order Delivery – the “Perfect Order” Demand Forecast Accuracy Lead Time reduction and achievement – sales, production and suppliers Quality, Right First Time – production and suppliers Schedule Achievement – production and suppliers New Product Introduction Velocity – all activities, all functions Operational Measures Inventory turns Added value per employee Health, safety and environment Customer Satisfaction Ratings Working Capital as % of sales Return on Sales Return on Capital Employed Financial/External Measures Focus here Brings results here The Seven Core Measures

16. Client Logo 16© The Delos Partnership 2006 January 2006 Measure Controllers Not Results Measures Results

17. Client Logo 17© The Delos Partnership 2006 January 2006 DASHBOARD TEAMWORK Design your dashboard for new process 1h30

18. Client Logo 18© The Delos Partnership 2006 January 2006 New process dashboard

19. Client Logo 19© The Delos Partnership 2006 January 2006 Dashboard restitution Measures. Data collection process. Analysis process. Gap reduction process.

20. Client Logo 20© The Delos Partnership 2006 January 2006 Existing measures What are existing measures ?  Full list : What, How, Who What will you do of them ?  Replace  Used for a second level analysis  Maintained

21. Client Logo 21© The Delos Partnership 2006 January 2006 PROGRAM DAY 4 Intersession work summary, problems identification. Dashboard design. Costs and benefits. Lunch. Change model Tools for analysis and decision Project team structure and project leader identification. Human implications. Technical implications.

22. Client Logo 22© The Delos Partnership 2006 January 2006 COSTS and BENEFITS € BENEFITS Direct labour Material  Purchasing  Inventory Overhead costs COSTS Systems Team and education Investments

23. Client Logo 23© The Delos Partnership 2006 January 2006 Benefits Projects benefits belongs to four categories:  Social welfare increase  Human relationship improvement  Adequacy to norms  Technical and economical In a business environment only first level is systematically documented. In many cases second level is documented …

24. Client Logo 24© The Delos Partnership 2006 January 2006 Costs & Benefits € Document your financial and non-financial benefits evaluation and supporting hypothesis. Document non-financial costs of your project, financial costs will be documented after project planning.

25. Client Logo 25© The Delos Partnership 2006 January 2006 Lunch

26. Client Logo 26© The Delos Partnership 2006 January 2006 PROGRAM DAY 4 Intersession work summary, problems identification. Dashboard design. Costs and benefits. Lunch. Change model Tools for analysis and decision Project team structure and project leader identification. Human implications. Technical implications.

27. Client Logo 27© The Delos Partnership 2006 January 2006 Systems Change Management From: The Art of Visioning, Michael Doyle Michael Doyle Associates © Actual Status + & - Initial energy History Vision Strategy Obstacles Future environment Opportunities & dangers Action plan

28. Client Logo 28© The Delos Partnership 2006 January 2006 Delos Delta Model OVERCOMINGOBSTACLESOVERCOMINGOBSTACLES PROPELSPROPELS STEERSSTEERS ManagingThechangesManagingThechanges

29. Client Logo 29© The Delos Partnership 2006 January 2006 Delos Change Journey MobiliseDesignCommunicateReviewUnderstandASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS Excellence is an endless journey, not a destination

30. Client Logo 30© The Delos Partnership 2006 January 2006 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Assessment of current position Initial Education programme Identify critical priorities for change Resources required to implement the change Business Assessment Top Management Workshop Middle Management Workshop Steering Committee Project Leader Project Team

31. Client Logo 31© The Delos Partnership 2006 January 2006 Delos Change Journey Integrated Enterprise Planning Sales Forecasting and Demand Management Supply Chain Techniques Programme Management Integrated Enterprise Planning Sales Forecasting and Demand Management Supply Chain Techniques Programme Management MobiliseDesignCommunicateReviewUnderstand ASSESS Set up the project/programme organisation Begin to communicate the planned changes Workshops support development of outline policies, procedures, and organisation Integrated Enterprise Planning SENIOR TEAM REVIEW PRIORITISATION PROCESS INNOVATIONINNOVATION CUSTOMERSCUSTOMERS SUPPLIERSSUPPLIERS STAGE- GATE PROJECT MANAGEMENT SUPPLY CHAIN LINKS FORECASTING ORDER MANAGEMENT SALES MANAGEMENT MASTER SCHEDULING PURCHASING PROCESS CUSTOMER SERVICE BUDGETSFINANCIALS

32. Client Logo 32© The Delos Partnership 2006 January 2006 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Task teams develop the ideas into policies, procedures, systems and jobs. Task teams made up of key business staff Prepare communication and training Integrated Performance Measurement Lean and Agile Management Supplier Relationship Management Customer Relationship Management Integrated Performance Measurement Lean and Agile Management Supplier Relationship Management Customer Relationship Management Integrated Performance Measurement Master Scheduling Course Master Production Schedule ManufacturingScheduleSupplierSchedule Annual Operating Plan Sales and Operations Planning

33. Client Logo 33© The Delos Partnership 2006 January 2006 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Demand Manager Roll out new policies, procedures, systems & jobs through education & communication The final stage of this step is “go live” or cutover Master Scheduler Master Scheduling Course Master Production Schedule ManufacturingScheduleSupplierSchedule Annua l Operat ing Plan Sales and Operations Planning

34. Client Logo 34© The Delos Partnership 2006 January 2006 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Sustain the changes made Ensure maximum possible benefits Assessment to identify “next wave” of change ASSESS Business Assessment

35. Client Logo 35© The Delos Partnership 2006 January 2006 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand Identify quick Benefits Develop Change Vision InternalSell-in ReviewSystems Establish Resources Resources Gain quick Benefits Detailed Process Design Public/PrivateWorkshops DevelopSystems Develop Task Teams Gain early Benefits Document Policies etc InternalEducation CreateSystems EstablishOrganisation SecureBenefits Refine ASSESSContinueEducation RefineSystems GainTeamwork ASSESS Cost/Benefit Develop Bus Strategy InitialEducation AppointSponsor PILOTPILOTPILOT

36. Client Logo 36© The Delos Partnership 2006 January 2006 Real World 1.If you dream of the impossible the incredible can be achieved 2.Many small steps 3.Needs everyone’s involvement 4.It’s all about changing mindware and not software 5.Performance measures need to change

37. Client Logo 37© The Delos Partnership 2006 January 2006 Common implementation issues 1.Not recognising financial benefits 2.Organisational silos 3.Insufficient project resource from inside 4.Inactive Steering Committee 5.Failure to develop and keep to a realistic plan 6.Failure to implement line accountability 7.Lack of acceptance of new performance measures 8.Yellow submarines

38. Client Logo 38© The Delos Partnership 2006 January 2006 Anticipating stress points along the ERP journey Project team Employees Middle managers Executive team Scope crisis No 1 Scope crisis No 2 Sudden depth scare Scope crisis No 3 Real world shock Eva- luation avoid- ance New challenge panic Loss Sponsor- ship fights Resource draining Test of nerve Sponsor switch Informed resistance Early results disappointment Shock over early failures Smoke and fire Ownership struggle Wet blankets Sniping & rumours Scope established Redesign solution Blue printTransition plan Prototype results Pilot results Full operation Imple- mentation crawl

39. Client Logo 39© The Delos Partnership 2006 January 2006 STOP The Inhibitors Good at ideas but poor at delivery Consensus decision-making Organisational politics Short attention span Changing responsibilities Lack of belief Inadequate systems Too many initiatives

40. Client Logo 40© The Delos Partnership 2006 January 2006 Enablers GO Discuss, decide, then do Establish clear business vision Address ‘difficult’ issues Advertise success Reward delivery, not ideas Encourage change and risk-taking Resource properly The board to publicly lead

41. Client Logo 41© The Delos Partnership 2006 January 2006 Delos Change Journey - Enabled MobiliseDesignCommunicateReviewUnderstand Identify quick Benefits Develop Change Vision InternalSell-in ReviewSystems Establish Resources Resources Gain quick Benefits Detailed Process Design Public/PrivateWorkshops DevelopSystems Develop Task Teams Gain early Benefits Document Policies etc InternalEducation CreateSystems EstablishOrganisation SecureBenefits Refine ASSESSContinueEducation RefineSystems GainTeamwork ASSESS Cost/Benefit Develop Bus Strategy InitialEducation AppointSponsor PILOTPILOTPILOT Discuss, decide, then do The board to publicly lead Establish clear business vision Address ‘difficult’ issues Encourage change and risk-taking Advertise success Reward delivery, not ideas Resource properly

42. Client Logo 42© The Delos Partnership 2006 January 2006 Leadership Management and Senior Team Managers People Commitment and involvement of all

43. Client Logo 43© The Delos Partnership 2006 January 2006 Business Excellence - Paradigm Challenge “The difficulty lies, not in the new ideas, but in escaping from the old ones.” John Maynard Keynes 1936

44. Client Logo 44© The Delos Partnership 2006 January 2006 Key activities MONTHS Activity0-344-789-1111-1415 EducationProject TeamPilotManagersPilotUsers InternalPilotLive IEPDefine ProcessPilotPilot processPilotAdd all familiesPilotLive InnovationDefine ProcessPilotDefine policiesPilotEstablish organisationPilotLive Demand PlanDefine ProcessPilotDefine PoliciesPilotEstablish organisationPilotLive MPSMTS v ATOPilotDefine PoliciesPilotEstablish organisationPilotLive IRA AccuracyControl GroupInitCycle CountingPilotLive BOM AccuracyFind ErrorsFix ErrorsUploadLive BOM StructureDefineRestructure and set up all Bills of MaterialsLive RoutingsFind errorsFix ErrorsLive Planning DataDefineSet upLive PurchasingDevelop Purchasing ToolsPilotEducate all vendorsLive ManufacturingDevelop Lean ManufacturingPilotEstablish across businessLive FinanceDevelop costing and IEP/Budget LinkPilotDevelop costs, Inv and WIP valuesLive Cont ImpDevelop Continuous Improvement toolsPilotEstablish across businessLive SoftwarePT debugPilotCarry out Software modifications and interfacesPilotLive

45. Client Logo 45© The Delos Partnership 2006 January 2006 Identify organisational barriers

46. Client Logo 46© The Delos Partnership 2006 January 2006 Where should you achieve greatest attitude changes

47. Client Logo 47© The Delos Partnership 2006 January 2006 Roles and responsibilities to clarify

48. Client Logo 48© The Delos Partnership 2006 January 2006 PROGRAM DAY 4 Intersession work summary, problems identification. Dashboard design. Costs and benefits. Lunch. Change model Tools for analysis and decision Project team structure and project leader identification. Human implications. Technical implications.

49. Client Logo 49© The Delos Partnership 2006 January 2006 Problem solving tools for HEAT Traditional problem solving tools Other problem solving tools Problem solving process

50. Client Logo 50© The Delos Partnership 2006 January 2006 Tools for continuous improvement Flow Chart Check Sheet Pareto Chart Cause & effect diagram Run Chart Histogram Scatter diagram Control chart

51. Client Logo 51© The Delos Partnership 2006 January 2006 Seven management & planning tools x x x oo Affinity diagram Interrelationship digraph Tree diagram Prioritization matrices Matrix diagram Activity-network diagram Process-decision program chart Known Unknown

52. Client Logo 52© The Delos Partnership 2006 January 2006 Affinity Diagram  When you need to find the major themes out of a large number of ideas, opinions or issues. It groups those items that are naturally related and then identifies the one concept that ties each grouping together. It is a creative, rather than logical process, that produces consensus by sorting cards rather than by discussion. Use When:  Chaos exists.  The team is drowning in a large volume of ideas.  Breakthrough thinking is required.  Broad issues/themes must be identified.

53. Client Logo 53© The Delos Partnership 2006 January 2006 Interrelationship Digraph  When you need to graphically map out the cause and effect links among all items generated. The clustering of relationship arrows indicate the issues/ causes that are the most fundamental among all the related items. Use When:  Root causes must be identified.  There are a large number of interrelated issues that need to be better defined.  Data is not available to identify root causes.  Scarce resources require a carefully focused effort.

54. Client Logo 54© The Delos Partnership 2006 January 2006 Interrelationship Digraph

55. Client Logo 55© The Delos Partnership 2006 January 2006 Interrelationship Digraph Causes and effects are not linear

56. Client Logo 56© The Delos Partnership 2006 January 2006 Interrelationship Digraph Causes and effects are not linear

57. Client Logo 57© The Delos Partnership 2006 January 2006 Tree Diagram  When you need to systematically map out, in increasing detail the full range of paths and tasks that need to be accomplished to achieve a primary goal and each related subgoal. Use When:  Broad objectives must be broken down into specific implementation detail.  All of the implementation options must be explored. Assignable tasks must be created.

58. Client Logo 58© The Delos Partnership 2006 January 2006 TREE DIAGRAM Level 1 Level 2 Level 3 Level 2 Level 3 Level 2 Level 3 Level 4

59. Client Logo 59© The Delos Partnership 2006 January 2006 Prioritization Matrices: Full Analytical Criteria Method  When you need to prioritize tasks, issues,or possible options based on known, weighted criteria. Using a combination Tree and Matrix Diagram format, they narrow down options to the most desirable/effective choice. Use When:  Key issues identified and action options must be narrowed down.  There is disagreement over the relative importance of decision making criteria.  Limited implementation resources prevent you from doing all the options.  The options generated are strongly related.  Ranking options, not simply sequencing tasks to be done.

60. Client Logo 60© The Delos Partnership 2006 January 2006 Prioritization Matrices: Full Analytical Criteria Method

61. Client Logo 61© The Delos Partnership 2006 January 2006 Process Decision Program Chart (PDPC)  When you need to map out conceivable events and contingencies that can occur in any implementation plan along with appropriate countermeasures. Use When:  The task is new, unique, or substantially revised.  The task is complex and the stakes of failure are high.  The implementation must keep to a tight time schedule.  There are problems with a reasonable chance of happening.

62. Client Logo 62© The Delos Partnership 2006 January 2006 Process Decision Program Chart (PDPC) Action Risk Correction Risk Correction Risk Correction 1 x o o o o x

63. Client Logo 63© The Delos Partnership 2006 January 2006 Process Decision Program Chart (PDPC)

64. Client Logo 64© The Delos Partnership 2006 January 2006 Matrix Diagram  When you need to organize two or more sets of ideas, issues, etc. by graphically showing the logical connecting points between items in each set. A Matrix Diagram can show the presence and strength of any relationship. Use When:  Definable and assignable tasks must be "deployed" to your organization.  When chosen activities must be tested against other current activities.  When the organization must prioritize present activities against new objectives.

65. Client Logo 65© The Delos Partnership 2006 January 2006 Matrix Diagram

66. Client Logo 66© The Delos Partnership 2006 January 2006 The Activity Network Diagram  When you need to plan the most appro­priate schedule for the completion of any complex task and all its related subtasks. It determines total implementation time, simultaneous tasks and key subtasks to be monitored. Use When:  The task is a complex one. The subtasks are familiar with known durations. The project is a critical organization target. Simultaneous implementation paths must be coordinated. There is little margin for error in the actual vs. the estimated time to completion.

67. Client Logo 67© The Delos Partnership 2006 January 2006 Activity Network Diagram (CPM) StartEnd Activity Deliverable Activity Deliverable Activity Deliverable Activity

68. Client Logo 68© The Delos Partnership 2006 January 2006 Seven management & planning tools x x x oo Affinity diagram Interrelationship digraph Tree diagram Prioritization matrices Matrix diagram Activity-network diagram Process-decision program chart Known Unknown

69. Client Logo 69© The Delos Partnership 2006 January 2006 A universal process for improvement p a d c DEMING CIRCLE PDCA P = Plan Define a problem or opportunity Analyse the situation. Study and define the problem; brainstorm for causes and corrective actions; and think creatively to determine the best approach and best possible corrective actions. Develop an implementation plan D = Do Implement corrective action Document the procedures and observations Use data-gathering tools to collect information. C = Check Analyse information. Monitor trends. Compare obtained results against expected result from the plan. A = Act If the results are as expected, do nothing. If the results are not as expected, repeat the PDCA cycle. Document the process and the revised plan. originally conceived by Walter Shewhart in 1930's

70. Client Logo 70© The Delos Partnership 2006 January 2006 Six Sigma, Lean, TQM, …

71. Client Logo 71© The Delos Partnership 2006 January 2006 PROGRAM DAY 4 Intersession work summary, problems identification. Dashboard design. Costs and benefits. Lunch. Change model Tools for analysis and decision Project team structure and project leader identification. Human implications. Technical implications.

72. Client Logo 72© The Delos Partnership 2006 January 2006 Multifunctional Team Project organisation Action teams Torch-bearer Steering committee Project manager Project Team Catalyst Consultant or Process Owner External support

73. Client Logo 73© The Delos Partnership 2006 January 2006 Choosing the project leader 1List criteria 2List possibilities (graveyards are filled with irreplaceable people) 2Vote 3Build strong consensus

74. Client Logo 74© The Delos Partnership 2006 January 2006 Project team meetings Decide:  Frequency  Duration  Permanent agenda  Participants  Reports aim, format, distribution  Preparation work aim, format, distribution

75. Client Logo 75© The Delos Partnership 2006 January 2006 Project HEATeam & Education status

76. Client Logo 76© The Delos Partnership 2006 January 2006 PROGRAM DAY 4 Intersession work summary, problems identification. Dashboard design. Costs and benefits. Lunch. Change model Tools for analysis and decision Project team structure and project leader identification. Human implications. Technical implications.

77. Client Logo 77© The Delos Partnership 2006 January 2006 Human implications What will be the impact of changes on people?  Operational team mission  Leader  Responsibilities  Communication  Authority  Support ...

78. Client Logo 78© The Delos Partnership 2006 January 2006 TECHNICAL IMPLICATIONS What will be the project technical implications?  Manufacturing  Sales  R&D  Suppliers  Information systems  Clients ...

79. Client Logo 79© The Delos Partnership 2006 January 2006 Conclusion Your opinion on today Program for tomorrow

80. Client Logo 80© The Delos Partnership 2006 January 2006 How will we proceed ? Day one :Team building and actual physical flow- mapping. Day two :Supports flow-mapping, existing issues identification and documentation, target flow design. Day three :Target flow presentation to sponsor, operational solution design and test. Intersession Day four :Performance measurement, change modelling, project execution structure design. Day five :Project planning, action plans, costs and benefits, return on investment, final presentation to sponsor.

81. Client Logo 81© The Delos Partnership 2006 January 2006 See you tomorrow!