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Courtesy of Daikin Applied's Thom Keehan, below is a transcript of his speaking session on 'Systems Thinking & Approach: The Enterprise Operating System for the Concept to Cash Value Stream' to Build a Thriving Enterprise that took place at BTOES iBPM Live Virtual Conference.
Applying the fundamentals and using a systematic approach to your improvement is critical now more than ever. Not only does our technology rapidly change, but so does the people using it. The fundamentals to the methods and tools have been modified, skipped, and/or politicized over the past decade leading to a deep approach rather than taking the first step of understanding how the enterprise operates. The structure and process must be in place for Strategic Planning, Policy Deployment, Annual Operations Execution, and Operational Excellence in order to keep your improvements sustainable. The approach must be packaged so that all people can be part of and accept the change. Key elements from this talk will be:
Determining your Optimum Speed & Predictability through the fundamentals of analyzing current performance, capability, and entitlement.
Use what’s needed, not what the standard has forced upon you. Finding the balance of Technical/Political/Cultural influences.
To know the difference between doing something Different versus Differently
Eliminating the Culture of Repetitive Problem Solving
Knowing if you are in a Recovery, Turnaround, or Transformation and the importance of using the right approach.
He's going to talk about Systems Thinking and Approach, the Enterprise Operating System, for the concept of cash value stream.
Tom Keane is the, is currently the VP of Enterprise Quality and Operational Excellence for ... applied, responsible for leading, enhancing quality across the entire enterprise. He has been involved in many forms of Operational Excellence since 19 95, including Lean, leading the Lean Office Initiative for GE, ... 2002 to 2005, which connected to the Lean Manufacturing Initiative.
Dom has run several recovery's, Turnarounds and Transformations. And it's always passionate about this topic as he believes it's a foundational component to business excellence.
Tom, it's a pleasure to have you here. Thank you, Great, Thanks for the invitation, Juggler.
And we're off that, OK, Well, thanks very much, everybody. I appreciate your attendance and I'm looking forward to speaking with you today and the questions and answers at the end. To start off the presentation, like, all of us are going through right now. Noises in the background will have to be accepted. Such as family members or pets. Do have a dog who loves to tease the rabbits and birds outside so that the event that we might go through of the topic I want to talk today is about how you view the system and the system that you've put together for your business excellence.
This is a topic that I've been very passionate about and working on, putting all those connections together for for many years. And, once done and the foundation has set, it can be quite powerful.
So, on the first page, I'd like to talk about what that approach means. No, first of all, what's the vision that you have? You know, why, why are you doing it? It's so important to understand why. From the mission of, how do we get our employees engaged? And, you know, we've become operationally excellent. So that we can help our growth or improve our productivity or create stability into the foundation.
The methods and tools are very important. First, you have to figure out how to help people adopt the change, to understand the why, and so that they, you know, can understand how to move along with any kind of work that you're trying to do across.
one of very important things is to be able to problem solve effectively and sustainably, and therefore optimize what your true capabilities are. When it comes to how fast you need to go at your customers' pace and how that predictability in your system and become very strong.
Of course, a lot of the side benefits we've all been working on for many years, which is product, you know, product cost, process, improvement, but really, you want to make sure that you can really get ahold of that data and that data becomes very predictable and high integrity so that you can always trust it.
Very importantly, you've got to be able to connect with your customers. A lot of times, you have to realize that. You move at the pace of your customers.
So, you have to be flexible in how you run everything from that customer viewpoint back, to really enable yourself to be able to have the optimum speed and predictability within your business.
So if you think about becoming a growth company, strategy deployment that are pushing cadre is a very good, because it helps takes that strategic plan that you have for your company and puts it into actionable, both long-term and short-term item that you work on. Creating a Lean Enterprise. So, understanding your value stream that I mentioned at the beginning from concept to cash and understanding how Kaizen, which means change for the better. How do we always continually improve ourselves?
And keeping your employees engaged. They have to be able to be able to adopt and to understand everything that you're trying to do. So that you can move them along with you, and that's really some of the foundational work that has to happen.
Um, On the next page, the idea for the objectives is really, how do you transform into a Lean Enterprise?
And there's three main objectives that, you know, have always been with me, as I've been doing this for the amount of time that I have. And that first one is enhancing and extending your current capabilities.
And this is important because we walk into many situations without understanding what's happened in the past, and what's been taken to a certain level, or what needs the most improvement. And really, that's about making sure that the people are happy, right?
Training and education. To be able to identify the opportunities and to be able to work. The problems that you might have in your, in your product line or your processes, your services, and your information, and how that flows both within and to your customers and your supply base.
The second one is building for the Future, So how do I maximize both my customer, my company, and shareholder value, while looking at the end to end value stream? So, I can always be ahead of the competition. That's really what, that building for the future of me.
Creating a cost effective culture, meaning I optimize my costs, and I operate within them. Sometimes I'm always very careful about what a no cost effort looks like. Durable material costs, take out, which I did at the very beginning of my career, has an engineer, because you can cost your way out of competition. So you have to be very careful juggling this kind of cost initiative, and that's why I call it more of a cost effective culture. How well can you operate at the right cost.
So the strategic process is important. You first have to have a strategic plan. Whether you're optimizing a function or a business unit, or the overall business itself, that strategic plan is very, very critical. Because everything builds on itself from that. So once you have that strategic plan and the vision set down, then you can look at your organization and say, How do I need to redesign this? How do I need to change it? to be able to be set up to actually execute the strategic plan?
From that, then having the operating model, how do we move ourselves through this value stream of the company so that we can satisfy our customers as needed?
Then creating that, focus on alignment, and that your projects and your programs and the prioritization and the alignment with strategy deployment, that's such an important method that really brings that altogether. And then of course, the whole operational excellence foundation that you have, bringing visibility and transparency with, you know, the right KPIs and the right operating rhythm, and the right visibility to what we're doing to improve and change the business. And this is really the beginning of how we think about our business as a system, And this is the beginning of systems thinking.
The operating model that I've worked on for a long time is really kind of getting a customer to customer value stream approach. At the bit twofold in this in this graphic. But you think about how your customers give you that market opportunity to a product, and this is where the translation of customer requirements is so critical.
For the next value stream, moving into a product launch, this is the translation of those customer requirements, and the technical requirements, and how we're going to get our products ready to launch into the manufacturing environment.
Then, the next one is, order to ship, how predictable an optimum can I be? And that's that translation of technical requirements into the bill of material, that we can put into the factory. And have everything up to date and ready to use, and then, of course, are shipped to delivery back to our customers.
Lot of the what I would call above the plant or back office functions inside of manufacturing are so critical. along the way that I've laid out on the bottom, like The product management process.
The sales management process, your design for manufacturing, designed for recycling, design for service, advanced engineering into the manufacturing operation to make sure you have all of your material ready to use.
Then the vertical component of this operating model is the strategic development of the strategy into strategy deployment, or the ocean condrey, into that annual operating plan.
So this is how I tried to depict it onto one page as to how the operating model. And it's really the value stream of the concept to cache.
Inside each one of those are core competencies that you need, or the core processes for your system. And this is very important because they all integrate with one another. So, you, for, for instance, the sales management process or how we actually strategically analyze our price and put it into the, into the market? The demand forecasting, our product management and our program management and how do we launch that in design reviews?
in the manufacturing operations, keeping everybody say, making sure we're getting the right environmental regulation than having good, solid total quality management across.
And then the integrated supply chain, looking at that network, understanding our cost model and understanding the best business practices that we might have to translate back into the business as improvement along the way.
Some of the processes and global financed and global human resources are laid out to make sure we have the right talent, We have the right skill base, and we have the right educational training program, and that we can measure and understand financially, How does all that play into everything?
The continuous improvement methods are really important, because it's the way I laid it out in those four, after many, many years of training and certification. You know, this whole first point of, how do we take change, get it adopted by the organization, and then accelerate that change the way through? So this is all about accepting change with the employee base. And then, when that occurs, you can start using Lean to eliminate that waste and see what you have in front of you, and clear your obstacles and barriers.
Then understanding the problems that come out, and how do I use the proper methodology? There are several problem solving methodologies that apply for the situation is not just one fits all, so it's important to understand what those are and where to buy in and really the basics of how do I analyze data? How do I look at the data, capture it, make sure I have the right measurement system, and the measurement system is, is, you know, accurate? And you know, it does everything that I needed to do and then I can look at that data and make sure I can start making decisions from it which then translate back to the improvement that I've made to the people. Hey, this is what we did run through the system, and this is what we got. Let's do another iteration.
one of the important things about this setup, with those core processes is that you have accountability and ownership. That one of the ones I always like to call out, is that you have demand forecasting in the sales and commercial operations area, and in the supply chain, you have your sales and operations planning.
So, when, although the ownership of that is in the sales and operations planning, the accountability is really from that demand forecasting, and that's how they start to really connect. And you can do that through all of these main areas of your, of your, of your enterprise value stream.
Then you have to be able to measure it, right? So how do I look at it and determine what are the right measurements that I have, a really good methodology? is the transfer function method, that Y equals F of X, where I can have my main core metric of say, operating profit?
Well then how do I take the variables that I have or those axes that I know mathematically tie to the improvement in that big why?
And then you have to operationalize it. So you have to do that as a little tree as it expands down inside of your business so we can still see how they all mathematically tie up.
You really executed as a business at that Y level, and then the axes are really the leading indicators that you have that will start to produce the performance and the predictability of what's going to happen.
And then, of course, having the right cadence and the right operating rhythm around how do I, you know, measure it? And, What do I make visible both on a weekly, monthly, or quarterly basis, so that we can see those improvements? And the employees are engaged as they see that improvement go through.
As an example, you know, one of the important things is to be able to connect, right. So, if we think about, you know, product development, right? So the big why would be our lead time, for instance, are we have the right lead time for what our customers' expectations are. And those are affected by those axes of how, well, if I'm moving through my program management process, so the first pass yield as they go through the gate.
How much time does it take me to go through each one of the phase gates of the, of the program management process?
How long It takes me the number of changes after I frozen the design.
Then, you get into the manufacturing, which would be that order to ship lead time at the big Y, And you can see that one of the effective measurement, that that design for manufacturing. Which is on time launch starts. So how well was able to launch this product on the time that we said we're going to based on a lot of those leading indicators. That we see within product development.
Then, the idea of using a balanced scorecard is really important. So that you can see from input to output of your business, how well am I doing? And if I see something that doesn't work well, all the way back into sales and commercials, such as, you know, the quote or proposal quality. How that affects all the way through. And if I can mitigate it and resolve the issue that we have all the way up front. I take away so much waste. And so many of the problems that just moved their way down that value.
Then, the culture of what we have is the fundamentals for any kind of continuous improvement process. Excellent. Business excellence.
What we want to call it, but the real foundations and the fundamentals are so important when we talk about lean, and the five principles that we've been operating under for so long, and that making sure that the value, and we understand it from the customer's perspective, The value stream, that we have, identifying that, and then using some of the tools, like value stream mapping, to make it visible and understand where we have opportunities for improvement, then being able to move into flow.
So I'm not batching and I can see my issues as they arise rather than big chunks, you know, from batch mentality, which allows me to then operate on top. So I replenish as my customers are pulling on my work, both internal and external. And then that kind of an approach, which is perfection, how do I always want to improve and make sure I can take it to that level?
Now, as we move a little deeper, we start identifying what the wastes are. And those, those waists have been some of the fundamentals for a long time.
You know, waiting time, transportation, overproduction motion, really one of the ones we have to look at, you know, constantly are, What is the people's talent that we are either have a block to or we're not utilizing as much as we really should? And that's a really critical one because it's your people that are actually putting all these changes and making all this work. So you gotta make sure that you have the right, you know skill base and that you're not overlooking. any kind of talents or skills that you have right in front of me. And then, of course, especially above the plant, outside of Manufacturing, it's so important to be able to put that blueprint down on paper, which is the value stream map.
And outside of manufacturing, so much of that waste is in the information flow where you see repetitive pulls on data from Excel spreadsheets or this person, or e-mails or phone calls. And, being able to identify that and lay that out is crucial because, so, much of the issues in the process flow can be mitigated or taken care of through the work that you can do to improve the information flow. And then, of course, understanding your time. Lean is really, you know, all about time. How do I make sure I have more time to do the things that are truly value added. That I need to work.
The timeline, which varies on the type of product that you're working on, but the the four ways that I've always looked at it. First, is that it's exposed really. Just kind of make things visible so you can see what the non value added activities are and you can start clearing that way.
Then, next, it's expand. How do I start to move where I am outside to other? The other inputs and the other outlets that I have. So, a great place to start is in manufacturing. I'm one of your lines. Then move to the rest of manufacturing, start to move into engineering, and our supply chain. So it's important to start expanding it, so you have control of how this system actually starts to come together.
Then, you can start working on how do I compress. May lead times to the optimum level. You know, that speed is a lot like inventory, and when too much inventory is a waste to little inventory as a way, your optimum inventory is what you're working for, Speed is the same way, You've got to be able to optimize your speed and work to your current capability, always trying to get a little better. And then, of course, then allows you to really connect with your customer and operate on poll, and this is where you can really start to see some of the increased margin. So, over the years doing this, you know, it's really been proven discipline. I've been using this kind of approach since about 2003. It's important to realize that, you know, doing it the right way really takes time. Sometimes, sometimes it can be quicker, but a lot of times, you know, it's, you know, very important to understand that in some of these things will take longer than you might anticipate or that you want to accept.
Focusing on the customer both of your process and your company is really so critical to be able to have that voice to make sure you can adjust and be as flexible as you need to And then of course, any chance you get just removing waste along the valid value stream. It's like doing your gumbo walks through the office of the factory. You see waste, you put it in the right the right, then, whether it's recycling, or trash or cardboard. So, the details behind that are on this next page where?
To get into that exposed mode, it's about the small fires that you can create. You know, what's really visible to people, and how can you show? how do I take that fire that so many people are interested in and show how this work and start to help that?
Then you really utilizing, you know, five us and the types of waste and if you think about it, five S is a problem solving methodology. Right? It helps you sort what you have in front of you. You start to set an order on where I need things, and where I don't need things shines, so that everything is ready to use as it is. You know, sustain and standardization are so critical. And then moving into that value stream mapping to make sure everything is clear in front of you. And then the expand part is, what are the wing to wing value stream mapping, meaning it's not just about one particular line and manufacturing, it's all the engineering process, the Process. I'm into it.
Then you start to figure out how do I level load, what my customers are asking for? I can get into one piece flow, which applies not just inside of a manufacturing, but also inside the office environment. Then I can be able to start to pull and produce as needed and I don't have that waste the time that I had before and I really utilized Kanban as as needed.
Now, a good topic of strategy deployment, because when you get those foundational things done, then, or in progress, then you can start to use the strategy, deployment method, or pushing boundaries.
one of the things I just love so much about strategy deployment, is it really connects everything together. It's really not a choice anymore. Right? You, you start to see what the big issues and the big programs and breakthroughs you can do or sales in commercial operations and product development in integrated supply chain and finance and HR.
So it really does bring it all together, And really, one of the more important things that I've put across that middle is that people connect the entire system, and this whole systems approach, that's one of the foundations you're building on, are the people inside of your business.
So setting that true north from the strategic plan, we want to be here in the next 3 to 5 years. Whatever the, whatever the the life cycle of the product is, you know, the pace that you are working to, then what are the breakthroughs? I don't do it today, but I've got to be able to do it in order to hit that true north that I have.
Then what are the strategic initiatives I need to do this year to execute on those breakthrough objectives? And then how am I going to measure it? So if you think about a true north is, we want to grow. And one of the breakthroughs would be, we have to improve our product development lead time. The Strategic Initiative for this year might be, we've really gotta get our design review process accurate. We really got to improve our program management process and then having the right measurements in front of their, and keeping that operating cadence. So, to me, this is really where the system connection all comes together. And those of you who have not seen an Ex Matrix, which is one of the visible tools that you have from doing strategy deployment, is kind of a summarized as, and here's my goal, And then, what am I going to go do? How much of it on the left-hand side, is it that I need to get done this year? And then, how are those strategic initiatives are those projects? That's how I'm going to actually start to make that progress.
And then, the measures of how you're going to get it as the leading indicators, or business metrics. And then, Who is it that's working on? And this becomes quite a good visual management leadership tool, because you can look at who is working on something to take it all the way over to the, to the true north.
Or you can look at the true north and find out who is actually working out that.
So, this is a great way to say, you know, if you're working on something that's not on this, why are you working on it? You know? This is our plan on how we're going to execute our strategy, and what you try to move to get the visibility of what programs and projects you're working on, because it's not in addition to its instead. And that's a cultural shift that has to happen as you, as you work through a strategy.
Then, it comes into the operational excellence. This is the fundamentals of continuous improvement that, over the years, I've just found to be so critical to bring the system, you know, constantly in motion and improvement. That first one is adopting change, and this is how you get your, the people in the organization, to understand why you're making the change, to help them move into the acceptance mode.
Most changes, you know, in a Venn diagram have technical, you know, rationale, and political rationale, and cultural rationale, and the whole goal is to try to balance that around, but that technical, political, and cultural is it.
Something that takes a lot of effort to manage, to keep the employees engaged, and understanding why you're moving forward. And, then, of course, the lean. And it's about how you lead lean through your company as well. That's a very critical point of what we do.
You know, you can look through LinkedIn and see a lot of people's different approaches, but the execution of Lean is one thing, but how you lead it through your business is another, and that's, that's an important item. So, not just about clearing the waste and all the methods and tools inside of Lean, but how does it actually move its way through your business and get everybody together?
Then the problem solving method. You know, I've seen a lot of problems trying to be solved with the wrong method, and someone's working on an accounts payables project, which is the one that always dixon line, for nine months. And I kept asking why, and they were using the wrong tool. They were using something for a product versus a process, So they didn't have the right data and results, they needed to make those decisions, And once we made that change, it was about a month and a half that it took to get them through. So, that's really important, is to understand which method you need to use for the problem at hand. Then, of course, making sure everybody understands how to measure that data, You know, within the cell, inside the environment, in your office. Setting up any kind of performance board inside your office, so people can look at the data and understand what it means.
There's a lot of, lot of data generation that's not always value added. So you really have to make sure the data that you're using to make decisions is just right there, in front and it's critical to understand how to look at it and what it's telling you. What do you need to do from looking at it?
That first one that I talked about is adopting change, right? So, it's talking about how do I lead change through the business?
Many times, we do a current state, and then a future state and an action plan, three months, six months, 12 months. Maybe that sounds familiar to you. But this continues this, this.
adopting change is really about the transition state, how do I manage myself through the transition state. And this is a great methodology to take your team from current to future state, for not just the actions that have to happen. But the people themselves is, how do they move through that transition state changes heart. A lot of people get set in their ways, and we all know this from the work that we've done. So having a methodology to help guide you through that transition state is really important.
And then, the Fundamentals of Lean, which I know a lot of times, I, I, see people in the hallway, What are the five principles of Lean thinking? You? know, that, just to make sure those fundamentals are in. Right? And that's defining value, identifying your value stream, and then value stream mapping, what you have in front of you generating flow, responding to, pull, and seek perfection. I've seen some derivations of this that happens And I always get a little passionate about what I see that you know, these have been these fundamentals for since the, you know for since the book came out That Dan Jones and Jim Womack wrote In 19 89 right? And so that's what I always make sure that we're building off of. Is that fundamental and that The Foundation?
And this is the algorithm that we use for, you know, how do you select the right problem solving method that you have. So we all have products, services, information and processes.
So if the problem is new when you haven't seen before, sometimes your solution is known or unknown. If it's unknown, then the method that uses of the innovation method, how do I IDA and create and empathize. How do I work my way through that. But if the solution you think might be known as then if it's a process or a product that lead you to those two different problem solving methodologies and this to me is what design for six Sigma used to be or was intended to be? Which was: How do I define, measure, analyze, redesigned, and verify?
How do I, you know, identify, you know, define, design, optimized, and verify, so those are important, But if you have anything that exists, that takes you to the other side, right?
And if it's known, it's a cut and paste, right, as I take a solution that somebody has already done already proven and I apply it to what I have. And that's very important to have. You gotta have the right database, so the right knowledge inside the business, the things that have worked before, that you want to continue on.
And then the unknown, of course, you have two different types, right?
You have a deviation, meaning I've been operating at five, and all of a sudden I hit 10, right? Very, very big jump in my data. And let the deviation that I have in the process and that would use that AP methodology for everything. that continuous improvement. Because I've moved away from 5 to 5.5 to 6, 6.2, 7, that's what we would use more of the demand for define, measure, analyze, improve, and control methodology for. Then of course, there's all sorts of other ones you know, like phi, Y and PDCA. And it's important to know that those are the representations.
But at the highest level, really understanding what your problem solving methodologies are and which ones to use are important.
And then, of course, data.
Understanding, how do I collect data, and how do I trust it?
And then, once I've collected, how do I interpret it, how do I make it so everybody can look at it and understand, what I'm trying to do with this data at hand?
Then, I need to describe it, analyze it, I have, you know, Bell curves, and I have X bar charts, or whatever.
I need to actually look at it, analyze it, to make sure that it then becomes predictable for me, and you can, once you've, you know, make it predictable, is validated, you can use it in such a powerful way, to your inputs in both your input parts of that process. So, that the analysis of data and making it simple and its representation for everybody to connect to, is really critical.
And problem solving in general, To me, there's five steps that you use to to solve a problem. First, you have to determine what to solve.
Way back early in my career, I always hear someone say, What problem are you trying to solve? And that was a great way to really start what it is that I, that I'm trying to work on. So, that's the first one, determine what to solve, and then there's the components of it. You know, what, what is it that I have in front of me that I use are of that problem, What are those components they need to improve upon?
Then how do I sort through all that, so I know what the critical ones are? Then I start solving the problem and then, of course, the easiest part, analyze, and solve it. So, obviously, that's the one that takes the hardest time, but the approach to all problems are very similar. Which, I believe, kind of lays it out and these five, the method that you choose that, I showed two slides ago, is what's critical. And as we become very effective problem solvers within the business, it really starts to be the cement inside the bricks upbringing. That system together for the entire business. And, then understanding, how do I look at it across the enterprise? Well, it's important to kind of create a, learn, do lead culture, right? So from, from, making sure that everybody can actually go do that, so all your employees are problem solvers.
So, you've got to have that ability, and the methods and tools at all levels in the organization to be able to solve it. And then, how do I do it? So, I got to be able to demonstrate the business impact, but I've got to be able to understand how to work my way through the methodology. Then, of course, people start to become leaders of this as they go through the business, And then they go back and they help the new people learn. So, it's an endless cycle of learn to lead that really drives your overall, no quality cost, delivery and speed.
Now, the result is, is important because I used to always think about, you know, Lean as the elimination of waste. But Lean is also about time.
And if you think about it, capacity is work, plus waste.
So, if I can eliminate the waste, I've now freed up more capacity. So my business can grow.
Waste this time, if I can eliminate the waste, I have more time and I can optimize my time for speed and flexibility, which allows me to grow. And then, of course, waste as the non value added activities. So, this gives you better customer, focus, better relationships with your supply base, and overall, just, just really good customer connection to be able to grow at their predictable pace that they need, as well.
So, time gives you that option for creativity, which allows you for innovation, and time also gives you capacity, which is helpful for growth. So, this, this approach to how now the whole system comes together.
So, I have, know, the right options that I need to work on. Whether I need to become more innovative, or I need to grow, or I need to pull back and become cost effective, that's where the predictability using lean and understanding that time. Is that, is that real fundamental, that are the foundation? that we're trying to work?
And then I'll go back to those three kind of objectives that to me that the systems approach to to the Enterprise Value stream is which is you know, enhancing and extending your current capability.
It's very important understand what is the performance of MTV right now with my current capability? And then what's the entitlement? What's the, I did it once, and how can I stretch myself to make sure that I can do it more and more often. And there's always a lot of great work that's happening that you just need to work on, make visible, enhance, and then extended across the rest of the value stream.
Always be thinking about, how do I build for the future? And that strategy deployment, pushing conry method, really helps you get there without that target, you know, 2, 3, 4 years in the future. And, what are the big things I need to do, different, in order to be able to hit they're not differently, but different in order to be able to hit that. And always keeping in mind a cost effective culture, Just running your costs properly, whether it's for any kind of cost measure you have to take for for materials, or just your costs in general, you're SG&A, but managing it so that it's more of a cost effective approach, and your entire organization feels that an operating data to fit with their own money, that they were using to run.
And with that, I want to thank everybody for the time and attention, and the new way that we're doing, we're doing conferences and presentations, so appreciate the appreciate your attention, and I look forward to the questions and answers, OK, Josey.
Terrific, Tom. Outstanding presentation. Thank you so much for that. We have questions that have come through here, why you're making the presentation. So we're going to capture those. And, and the end, we'll have a chat about, as we're having this chat, for those of you haven't submitted questions, yeah, go ahead and submit your questions, and I'll pick a few of them here and, and that will convey them to Tom. So first 1 first 1 comes from an ... Martinez and the and the is asking if this is a good question. I don't, because they're very practical questions. And says this great presentation, Tom, and where do you see the optimum reporting structure to have continuous improvement groups report in the organization? So you have seen a lot of different structures of continuous improvement reporting, Just interested on your, kind of an overview, pros and cons, and maybe where you think is the optimal place for that continuous improvement group, should report into it.
Yeah, I'll answer it right off the bat, and then I'll talk about different methods. Really, this is what should be reporting to the CEO, you know, the CEO is guiding the business, and this is the way that you decide, how do I improve? You know, across. And how do I become more customer response. I, I've seen it reporting in different places, you, know, whether it's in manufacturing, because that's kinda where it all started, and that's what people believe. Or reports to. the CFO, or the CIO. But, really the most effective place that it's been in, is that to me, is reporting straight to the CEO, because you have to be unbiased. You can't have, you know your, your, your opinions, telling you, I have to focus their, or, I'm being influenced the focus. There. You really have to be that unbiased view and the customer advocate.
So, any type of quality or our operational excellence initiative, is really trying to be that advocate for the customer so that you can take your business to the right level or wherever it needs to be. Whether you're looking for growth or you're looking for innovation, But that, that, to me, is where the optimum place.
I agree, I agree. So, I'm going to ask a follow up on that one. Where do you see that? often, it gets reporting into and the, it's really not that good data reporting to that area, and you see quite often, it's going in that direction.
They put me on the spot, you know, the place where I tended to see it, not operate well, as when it reported in, through, find out, or IT. So, a lot of IT and finance report together. And, in the past, I've seen that and I've operated in it. And it's difficult, because then it becomes kind of more of a cost initiative, right? Because we're all concerned about what the numbers are that this is going to generate, or, Well, we don't need to improve that process. We just need to get an IT system.
Anytime you just put in an IT system without, you know, re-engineering the process first. You know, you're running into trouble, right? You should buy a system to manage your process. You should not. I mean, you know, have your process set up first and then get the system to support that process.
So, sometimes we're a little little backward how it how it goes. So that's, that's one area. Another areas.
and in heavy manufacturing oriented businesses, It's typically into the operation, and that's OK. Depending on the type of leader, that you are, that, you know, you can, that, you have, or that you work with, to go across.
The person leading the initiative with enough credibility and background to go left and right outside of manufacturing, So, but I will go back the Optimum places to the CEO That's terrific. Ladies and gentlemen, for those of you who are listening to this, to this, to this chat, you know, later on, go back and listen to this again, because what Tom has just given you here is really gold. Because they, even throughout our whole conference, on an Intelligent Business Process Management. We're gonna see this forces off, you know, information technology or technology. Bullying. The one side. And the other forces of leadership. And what is the right you know bland of those forces? And he has just given as a great summary on, on what's on whatsapp topic that's critical for long-term success. So, OK, I'm gonna move on here to a question from ruler all day. So Rolla asks, how do you deal with the limited time available from leadership teams and staff to apply this approaches? Often, there is resistance to taking the time to run.
The workshops are projects that you need to run, to make those improvements. So, Tom, how? How do you get that leadership attention and focus, so that you, so that you can really get significant improvements for the organization, and said, You know, the, as you know, leadership is distracted as so many different things.
How have you in your, in your career, grabbed their attention and made this relevant for them?
Yeah, the, it's twofold, right.
You always pick on what the hot topic is, right, or what's the problem that we've never been able to solve. That's one of the crucial one, because, then people see, you're working on an item that people have been working on for seven years, and no one's figured that one out yet. That's always a good way to get people's attention, because it makes it visible again. But really, the pre work that you would do, within yourself and your team, This, is, How do I identify what the true benefits are going to be for that.
Then be able to attach it to their scorecard, what they look at, whether it's revenue, margin, SG&A. Those are the ones that were really grab their attention. And, you have to figure out how to tie it back to a number. And I know that that's, you know, you know, theoretically, we'd love to be able to say that improved. you know, productivity, but you gotta be able to say that, that did something for me.
So, if you're gonna say, I'm going to open up more capacity, because I did so much great productivity work. I now have 12%. And if you fill it with 12% more orders, then I can show that kind of benefit. Or we've optimized how our labor productivity or efficiency. Or, you know, how many rework items. We have an accounts payable. Those those items that they feel their pain to is how you really get their attention on how to work on it.
So, you have to put yourself in the position as a customer. Meaning the CEO, the CFO, the COO. This is where you get their attention is understanding you're solving one of their critical items that they look at or they receive feedback on from their management.
Excellent. Excellent. The next question here comes from the Canon Broker asking for problem identification process. We look at complaints data. Any problem the business wants to overcome such as Target Achievement, ELA SLA achievement quality improvement Gamba walks on the question. Is there are other ways to identify problems in the process? Well, how do you go about identifying problems in a process?
So, the first place I go is the end of the process. That's where you're gonna start to see what your issues are. So one of the things, you know, recently worked on his final inspection and identifying what we're finding and final inspection? not just fixing it. And that final inspection doesn't just mean the product, it can also be any kind of administrative processes you have as well.
And then you start working your way back to find out where that occurred, right, and if I can fix it where it occurred, and I know this is the old adage, the fundamental of the Toyota production system, right? Pull the cord, stop the line, fix the problem, and then start up again.
But, it really is a fundamental way to look at it.
So, you've got to be able to see it, Then you've gotta be able to measure it. Then you gotta make it visible, and then you can start, you know, getting the right solution and the right problem solving in that place to start to improve it.
But really, it starts at the end of the process and working your way back, I am sure, many people on this, when they go on a plant tour, they say, I want to start at the end, and I want to work my way back, because it causes you to think about it differently, and question things, as they kinda come apart into pieces versus watching them build.
Sometimes you can go right through the beginning of that process without thinking too much about it, but when you start to see pieces come off, where you start to see parts of the process, remove, you can start to see some exposure of what to what you need to work on.
This is excellent. Excellent. Personally, I would spend all the time here on the Q and A Instead of the presentation, because the presentation is awesome, but the insights that we have an opportunity to get from someone like you who have been on the trenches leading improvement innovation for decades and it's phenomenal. So on this topic that you just mention, Peter Rowe both hand has a question related to Customer Experience, which you just alluded to that in your, in your comments. And he's thinking in the context of consistent customer experience. At an airline, I'm assuming that's the industry that he comes from. So, his question is, a specific one about customer experience on airlines, and that if you can highlight the role of quality assurance to collect process defect data.
Specifically, to drive continuous improvement in employee feedback and training. So, collecting the process defect data to drive continuous improvement in employee training. Can you share a little bit of your experiences with that type of context? Yeah. So, 1 1 of the no tasks that quality is typically given is, find out as fast as you can, what's happening to my product with my customers, Want to get them to feel.
However you get that data is so critical. If you wait until it becomes a warranty claim, or, you know, I'm losing customers because of this, you've waited too long. You've gotta know the moment that they've commissioned whatever product or service or information you have, how do I capture data on what they're experiencing right away.
And it can be a survey, or it can be call center data, or, you know, you name it, but it's there, And data can come in many forms. Data can be a number, or a data can be a yes or no, good or bad, a 0 1. So, once any kind of subjective data, you get enough of it, it can become objective data, and then you can start to use it to analyze.
So you've got to figure out, how do I get that feedback from my customer base as rapidly, as soon as possible?
And the method to analyze it, and to be able to use it to make a decision on what I need to do different upstream, that, you know, up in your own value stream, this is critical. And just recently, you know, we've had a lot of data, you know, in the company I'm working for right now, between warranty and shipping. And all that data is gold. Because that's what I can look at and decide, what do I need to do differently in my processes to avoid my customer from dealing that all over again?
Then two other, critical, you know, components of that, especially in the airline industry, I would say, is how fast and my resolving the issues my customers, are feeling.
Right. So I, I always, I always made no Lean six Sigma Trainers mad, because I could say, I can take four weeks of training and summarize it. In NaN, I want to know the mean, the median, the standard deviation and the 95th percentile point. You give me those four points. I can tell you anything about a process that you need to know. Right.
That 95th percentile, man, that's, that's, that's where you're losing business, is those customers that are sitting at the 95th percentile waiting for you to solve their problems.
So a lot of people measure the average or the median, and we solve problems in 48 hours.
The problem is, is the bottom five are waiting two weeks, three weeks, two months, and they're the ones that are telling 10 people how bad your operating for. So I like to operate at the 95th percentile with no, to make sure I'm bringing that bell curve, right, taking all that variation out of it.
And in the service industry, you get plenty of customer feedback that you can use to analyze and make those kinds of analysis.
That's right. You know, you know, Tom, this is great, because it does, that this airline example is a perfect example of the us long term practitioners use, right? Because the customers do not feel the average of our processes. They feel the full variation of our processes, That's right, tell me that I'm 90% on time, on the flights on average, but I'm part of that 10% time. That's not on time for me. It's always delayed. Right? So right variation, not the average. And that's a great way of the examples that you provided there. OK, lots of questions, another one here, and I'll take as many as I can, and this time, another one from Mark McDonald and Mark is saying that, you know, the systems thinking approach. What do you see as the most challenging aspect of getting leadership to understand the buy in on systems thinking?
Yeah, so, it is the it is difficult, right, and no matter how much experience and credibility you have, right, you still have to prove it, Right? So, to be able to get to that systems level, you do have to start with a model.
Like, you know, like, there's one line in one place that needs to operate efficiently, and I'm talking about receivables, process, payables process, a, you know, a talent recruitment process, as well as a product, manufacturing process. So, this approach applies, and I've applied it in everywhere.
You've gotta pick your model line, that people care about, that you can make visible, and you start working your way out. And when you make it big enough, where you can start to see what the inputs to that process are, that are causing you issues. That's when you can say, that's why I need to go to engineering, or, that's why I needed to go to IT, and get them involved in that. So, then, you bring in them, right? And then, you go to the output, and you're saying, it's not managed properly. So, I gotta bring them in, and it takes time, and it takes that change adoption methodology, right? Because this is where you encounter the most technical, political, and cultural issues, right? Or resistance.
So, that whole methodology of how do I adopt change? How do I get people to say yes, to what we're trying to do, is when you can expose, I can eliminate all this in the middle of my process, if you allow me to work on the input?
And that's how you can start to expand yourself into the systems approach.
That's terrific. Tom, unfortunately, we're out of time now, we terrific presentation. Great Q and A We it's a real honor to have someone of your caliber, inexperienced, you know, sharing, sharing that knowledge with us. So thank you so much for being with us today.
Yeah, thanks Josie. I appreciate the facilitation, and thanks to everybody who paid attention.
Thank you, Tom. Ladies and gentlemen, terrific. First session. It's just the beginning. When we come back, we're gonna have less Cooper talking to us about how to use AI ops to improve digital business processes. So, we're gonna go towards digital processes and our next segment and keep your questions coming. I could only get to a few of the questions. There are excellent questions. We're going to keep this going on, because I think we learn as much on the Q&A as we learned throughout the entire presentation. So, make your voice heard. Make sure to submit your questions for every one of the subsequent sessions. So, we're going to close this session, and we're going to start back up 10 minutes study the top of the hour. And the presentation starts at the top of the hour. And it's as you close your session, I ask you to close your webinar session.
And there will be a popup that comes up with, with our ability to provide feedback on the session. And any comments that you may have so far. So, thank you very much, and we'll see you back soon at the top of the hour.
Vice President, Enterprise Quality & Operational Excellence,
Thom Keehan is currently the Vice President of Quality & Operational Excellence for Daikin Applied. Previously, he was the Chief Innovation Officer and Founder of Lean serv LLC, a consulting and Professional Services company. During his 26-year career, he had expatassignments with General Electric in Turkey, Romania, Canada and England. He served as Vice President at Tenneco leading the global Operational Excellence initiative for the company over seeing Manufacturing & Business Operations. Thom has an extensive background in the design and launch of enterprise-wide business systems utilizing his comprehensive background of Lean Six Sigma and Problem Solving leading companies through Recovery, Turnaround and Transformation. Previously, he was the Vice President of Power Solutions at Johnson Controls.In this role, Thom developed and executed the Business Transformation for Power Solutions five-year business strategy, and led a team of highly qualified experts to directly impact Quality,Cost, and Delivery to customers, both external and internal. He was the Executive Lean Enterprise & Business Transformation Leader at GE Transportation where he led the re-launch of GE's Lean Six Sigma program across the enterprise of GE Transportation focused on product quality, speed to market, and cost effectiveness. Thom was also the Chief Operating Officer &Business Transformation Leader at GE Capital/ Garanti Bank where he overcame cultural and language barriers to lead the full Operations organization and pioneered Lean Six Sigma methodologies within the Banking industry of Turkey and Romania.
In addition, Thom has held positions in Engineering, Manufacturing, Supply Chain, Finance, and Banking within the Appliances, Plastics, Corporate, Capital, and Transportation divisions of GE as well as three Joint Ventures. Within his consulting business, Thom has also re-engineer edvarious functions while acting as interim executive. He holds Master’s and Bachelor’s degrees in Mechanical Engineering from the University of Virginia and is a graduate of GE’s prestigious Edison Engineering Program and Advanced Courses.
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