Monday, May 20, 2013

Focus and Leverage Part 214

In our final posting in this series on the Intermediate Objectives Map we will demonstrate a simple method you can use to create a focused improvement plan.  The key to creating a focused improvement plan using the IO Map, is to develop the improvement plan around the messages contained within the Necessary Conditions.  You will be able to see the deficiencies that currently exist and create countermeasures for each one.

Before moving on to creating your plan, there is one step I neglected to mention that you really should do prior to constructing an IO Map.  This missing piece is that it's helpful for you to define your span of control and sphere of influence as described by Bill Dettmer in his 2007 paper, The Intermediate Objectives Map.  Quite simply your span of control includes all aspects of your system over which you have unilateral change authority, meaning that it lies within your area of control.  Contrast this with your sphere of influence, over which you have no change control, but one you can certainly influence.  There are things (including people) that you might be able to influence if you can lay out a logical argument and the IO Map provides that roadmap.  Knowing your span of control and sphere of influence will help you later on as you search for solutions, meaning that you will have a much better idea of whose help you might need.  The IO Map is the first step in defining what the system should be doing versus what the system is actually doing.
In my last posting I pointed out that the correct direction of the arrows linking the NC's, CSF's and the Goal should correctly be from the bottom to the top of the IO Map toward the Goal.  In this posting you will notice that this is the case.  The direction in this case is intended to demonstrate the "order" of how things happen and the response that is intended to take place.  For example, for the injection (solution), Implement Active Listening, we see that if it is implemented, there should see a positive response on both Ideas Being Solicited and Implemented and Fear of Lay-Offs.  If both of these occur as planned, then the result should be a Stable and Involved Workforce (CSF).  Likewise, when the remaining solutions are in place, the NC's and the CSF's should come to fruition and the Goal should be achieved.  At least that was the plan for this team of executives.
If we look at the figure below and scrutinize it, we see that there are four primary improvement projects that the team believes, if implemented correctly, will drive improvement to each of the five Critical Success Factors and ultimately achieve their goal.

1.  Implement TOC’s Drum Buffer Rope.  The team believed that this project will impact two NC's and ultimately two CSFs, Highly Satisfied customer by improving the on-time delivery rate and Throughput High and Growing by synchronizing work to meet demand.

2.  Implement an integrated Lean, Six Sigma and Constraints Management, but only at the system constraint.  In so doing, this will automatically drive throughput higher and will continue to do so when the constraint moves.  In addition, the team believed that this project could ultimately drive costs lower, hence the reason for the hashed line extending to it.

3.  Implement Active Listening.  Active listening is the process of soliciting and implementing solutions provided by the subject matter experts, the people building the product or delivering the service.  In our team’s experience, this will also have an immediate, positive impact on the morale of the work force as well as helping to drive down the fear of lay-offs.  Both of these will help create a stable and involved workforce.

4.  Implement Dynamic Replenishment.  One of the keys to profitability is to reduce inventory and avoid part’s stock-outs and the team believed that they should implement a parts replenishment system that was based upon usage rather than on a forecast.  In so doing, the team believed that two dramatic improvements would happen.  First, the overall inventory should decrease by at least 40% and secondly, part’s stock-outs should virtually disappear.  The team had learned from their TOC training that these two benefits occur because part’s replenishment will now be based upon actual consumption and not a forecast.

The hashed lines are intended to demonstrate actions that should have an indirect influence over the appropriate boxed entities.  For example, the team believed that by implementing TLS (i.e. an integrated Lean, Six Sigma and TOC improvement methodology), the product costs should be lower.
So here it is, a different way to utilize an Intermediate Objectives Map which is both easy to understand and construct and one that permits the development of a very focused improvement plan based upon how your system is currently functioning.  In Bruce and my experience, using this approach many times, teams that develop and use the IO Map, will emphatically embrace it because it is their plan.  And the good news is, from start to finish it only takes hours to complete, rather than days or weeks to develop.  Before signing off, we want to state once again that we both believe that a full TP analysis is clearly the best way to go, but we also realize that when leadership time/availability and/or support is/are key factors, this method works quite well.

Bob Sproull




Bob Sproull said...

Thanks Anonymous for your suggestion, but I think the blog is doing well. This month, I am projecting roughly 235,000 page views if the current rate holds for the month. Having said this, I will try your idea in a couple of future posts.

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