Supplementary tools

Force field analysis

Description

Force field analysis identifies the factors and forces that aid or hinder change. Factors that aid change are referred to as 'driving forces' and those that hinder change as 'restraining forces'.

When should it be used?

It should be used when planning to implement a change. Typically the LSCIT would use it during the diagnostic phase. The action plan derived from the force field analysis will be used during the fix-it phase.

What will you get?

You will identify the driving and restraining forces for change that will enable you to generate an action plan.

The process

. The change should be identified and clearly defined.
. A force field analysis proforma should be drawn up and a brainstorming session should take place to determine the forces that will aid or hinder current activities/processes.
. A scoring system can be used (e.g. 1 - weak, 5 - strong) which will assist in the prioritisation of the forces. This is important when considering the action plan as it enables you to prioritise those actions.
. The forces should be discussed and action plan agreed.

PEST analysis

Description

PEST (political, economic, social and technological) analysis looks at various influences affecting a business or environment. It provides a structured way of understanding the environment in which a project is working and is able to contribute to strategy development, risk analysis and stakeholder analysis.

When should it be used?

Where you need to understand the environment in which a project is operating, for example, as part of a strategy review. Typically it is used during the diagnostic phase although it should be a continuous process that may be applied throughout a project.

What will you get?

The PEST analysis will provide an overview of the environment the business is in and will help identify both internal and external influences affecting that business.

The process

The factors involved should be brainstormed under the PEST categories (as below). The factors identified will confirm whether there is likely to be a considerable impact on the business and its strategy. Once the PEST analysis is complete, it can be fed into the next stage of strategy development. The following table is populated with sample questions that could be asked during PEST analysis, although these will vary based on the nature of the project.

Political

. How stable is the political environment?
. Will government policy influence laws that regulate or tax your business?
. What is the government's position on marketing ethics?
. What is the government's policy on the economy?
. Does the government have a view on culture and religion?
. Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others?

Economic

. Interest rates
. The level of inflation Employment level per capita
. Long-term prospects for the economy gross domestic product (GDP) per capita

Social

. What is the dominant religion?
. What are attitudes to foreign products and services?
. Does language impact upon the diffusion of products onto markets?
. How much time do consumers have for leisure?
. What are the roles of men and women within society?
. How long are the population living? Are the older generations wealthy?
. Do the population have a strong/weak opinion on green issues?

Technological

. Does technology allow for products and services to be made more cheaply and to a better standard of quality?
. Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc?
. How is distribution changed by new technologies e.g. books via the internet, flight tickets, auctions, etc?
. Does technology offer companies a new way to communicate with consumers e.g. banners, customer relationship management (CRM)

Probability and impact assessment

Description

This assessment helps you use the metrics of probability and impact to identify the level of risk of an event.

When should it be used?

It should be used to identify a level of risk and can be used to populate a risk register.

What will you get?

. Identified and prioritised risks.
. A level of risk that accounts for probability and impact.
. An auditable measure of attributes of that risk.

The process

Step 1: identify, list and characterise all the elements of risk.
Step 2: analyse and grade risks against probability by impact or occurrence.

The following is a simple format showing how probability/impact can

High

Either:

has the potential to cause a BSC or key LSCIT objective to fail

Or:

Performance > project fails to deliver a primary project Time > project delivered later than the approved date (70% > late) Benefits < project fails to deliver less than 50% of expected benefit

Medium

Either:

has the potential to cause a key LSCIT environment objective to fail

Or:

Performance > project fails to deliver a secondary project objective Time > project delivered later than the expected date (30-70% late) Benefits < project fails to achieve 16-50% of expected benefits

Low

Either:

has the potential to cause an LSCIT project objective to fail

Or:

Performance > project fails to deliver other objectives Time > project delivered later than the approved date (0-30% late) Benefits < project fails to achieve 15% of expected benefits

Responsibility charting (RACI)

Description

RACI is a structured approach to identify individuals and/or groups that are responsible or accountable and/or need to be consulted and informed about a project. It enables you to identify potential problems and plan how to manage individual's or organisations.

When should it be used?
It should be used at all stages within a project when you wish to:

. Identify individual and organisational roles and expectations.
. Develop management and communications plans.

What will you get?

A matrix of stakeholders for a project that defines whether they are responsible, accountable, consulted or informed. You will also get plans of how to manage the stakeholders during the project.

The process

Hold a brainstorming session(s) involving people with knowledge of the environment in which your project will work. Identify the stakeholders and decide whether they are responsible, accountable, consulted or informed.

. Responsible for the activity (i.e. does) and is therefore a key person for a review group or stakeholder group.
. Accountable for the project and the risk (i.e. owns) and therefore needs to receive information about progress and any issues which might prevent completion of the task.
. Need to be Consulted - because they may have the funds or have some sort of vested interest.
. Need to be Informed - they have a lesser interest.
. Analyse the RACI grid and identify potential problems e.g. no one is Responsible, more than one person is Accountable etc.
. Develop your management and communications plans.

Process simulation

Description

Simulation of an existing or proposed system will enable 'What if' analysis to optimise productivity and help to cost-justify the decision to improve the productivity of that system.

When should it be used?

It should be used as an economical decision-making tool prior to implementation, allowing you to gain an understanding and visualise the effects of change and costs involved.

What will you get?

. Capital equipment justification.
. Effects of downtimes and set-up times.
. Flexible automation decisions.
. Just-in-time (JIT) implementation.
. Material handling equipment selection.
. Manpower requirement analysis.
. Production scheduling optimisation.
. Lean manufacturing applications.

The process Simulation provides a means to investigate and evaluate real systems, for which it would be unsuitable to directly experiment upon either due to ethical, disruptive or economical reasons. Systems that are only at a conceptual or design stage and therefore unavailable for study, or which are simply too unwieldy to manipulate, can also be simulated.

Simulation is an iterative process, which does not directly solve a given problem. It merely provides information or insight into the performance or behaviour of a system, which in turn contributes to solving the problem. By iterating a simulation experiment with parameter changes from one run to the next, an optimum or near optimum solution can be obtained for a particular problem.

The iterative process of defining and developing a process simulation model is illustrated below.

Stakeholder analysis and management

Description

Stakeholder analysis identifies individuals and groups that have an influence, interest or expectation of a project and enables you to develop a strategy for managing them.

When should it be used?

It should be used at the start of a project, during the diagnostic phase, but also as a management tool throughout the project.

What will you get?

Stakeholder analysis allows you to:

. Identify and understand the different needs of stakeholders; i.e. those people or organisations that can help or hinder your progress.
. Identify and understand the people and organisation's to consult to ensure they understand and buy in to your project.
. Assess the "power" people or organisations have to influence the outcome of a process.
. Develop a strategy for dealing with them.
. Formulate a communication strategy for those people and organisations that while not directly involved need to understand how the changes you implement will affect them.

The process

Stakeholder analysis should not be done in isolation, the larger the number of people the more comprehensive the final analysis. A stakeholder analysis is usually carried out in three stages:

SWOT analysis

Description

SWOT analysis is used for analysing and highlighting the strengths, weaknesses, opportunities and threats of an organisation, activity or output.

A strength is anything that you do well or that is a positive factor.

A weakness is a limitation, fault, or defect.

An opportunity is anything that might be used to advantage.

A threat is anything that is potentially damaging.

When should it be used?

This type of analysis should be used during any review process where structured analysis of the situation is required. Typically it enables the strategy and plan to be developed.

What will you get?

. A documented understanding of a process, an organisation's strengths, weaknesses, opportunities and threats. . The ability to develop a strategy or approach for minimising the weakness and threats and exploiting the strengths and opportunities.

The process

A SWOT analysis is usually done in 3 phases

Example - SWOT analysis based on Performance, Appraisal and Development Review process (PADR)

Strengths

. Reports completed on time
. Staff & managers discuss development needs . Objective based
. Focus on development needs
. Link between performance & pay
. 50% of staff receive bonuses

Weaknesses

. Bureaucratic
. Divisive
. Time consuming
. Bonus recommendations not well written
. Non consolidated bonus
. Undermines team ethos
. Bonus recommendation not a guarantee of receipt
. Rigid adherence to the 50/50 split

Opportunities

. Better targeted training for all
. Staff & managers better understand the job
. Decisions on bonus payment more objective

Threats

. Cluster managers have difficulty deciding who should get bonus
. Arbitrary cut-off for people receiving bonus
. Variable standard of reporting
. Lower staff morale
. Bonus decisions made by people unfamiliar with the job
. Bonus recommendations made by people unfamiliar with the job

Six Sigma

Description

Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process from manufacturing to transactional, and from product to service.

When should it be used?

Many of the tools used in a Six Sigma project will be the same as used in other process improvement techniques, such as Lean Manufacturing. However whilst Lean is a holistic collection of tool, striving to eliminate waste to enable greater process velocity and flow, Six Sigma focuses on variability. Process variability can be a major cause of waste in a process, further strengthening the links between Six Sigma and Lean manufacturing.

Lean Manufacturing Focuses on Identification and Elimination of Waste

Six Sigma is a Statistical Tool (Method) that Identifies & reduces Variability that Causes Waste

What will you get?

Sigma measures variation in a process or product. The greater the Sigma level, the lower the level of variation in a product or process. Lower levels of variation translate to higher levels of quality or performance. So a process operating at Six Sigma levels of quality will have six standard deviations (Sigma's) between the mean average of the data set and the nearest specification limit.

The Process

There are various Six Sigma programmes, however the most commonly applied is called DMAIC.

Define

Select Critical To Satisfaction CTS) characteristics and performance

Measure

Create/validate measurement system

Analyse

Identify sources of variation from performance objectives

Redesign

Revise current measurement systems if incorrect

Improve

Discover process relationships and establish new procedures

Control

Implement process controls

IDEF mapping

Description

IDEF is a method designed to model the decisions, actions, and activities of an organisation or system. IDEFØ was derived from a well established graphical language, the Structured Analysis and Design Technique (SADT).

When is it used?

IDEF is used for the analysis of an information system, and to promote good communication of non production areas with production and the customer. It offers a more detailed analysis of an information flow than can be determined via Value Stream Mapping. It is particularly suited to applying lean techniques through non production based processes.

What will you get?

As an analysis tool, IDEFØ assists in identifying what functions are performed, what is needed to perform those functions, what the current system does right, and what the current system does wrong. The detailed analysis will provide a list of all value adding and wasteful tasks that are required within a particular information flow, thus providing the means to streamline the flow.

The Process

Activities can be described by their inputs, outputs, controls, and resources required. IDEFØ is based around a visual representation of each activity within a process.

The description of the activities of a system can be easily broken down into sub boxes, and therefore refined into greater and greater detail until the model is as descriptive as necessary for the decision-making task at hand. The process can be continued recursively to the desired level of detail.

When an existing enterprise is being analysed and modelled (often referred to as AS-IS modelling), observed activities can be described and then combined into a higher level activity. This process also continues until the highest level activity has been described. Acronyms

References

The following books each give valuable advice to those grappling with all phases of lean conversion or improvement. It is not a comprehensive list but is enough to give an insight into some examples of how to manage the transition, and some case studies of various environments.

Title Author The New lean Toolbox John Bicheno The Machine that Changed the World Womack and Jones Lean Thinking Womack and Jones The Goal Goldratt and Fox

www.mindtools.com
www.lean.org
www.managementsupport.com
www.ttm.co.uk

Acronyms

VA Value Added
NVA Non Value Added
ENVA Essential Non Value Added
SMED Single Minute Exchange of Die
SWOT Strengths, Weaknesses, Opportunities, Threats
PERT
PEST Political, economic, Social, Technological
KPI Key Performance Indicators
OEE Overall Equipment Effectiveness
TPM Total Productive Maintenance
JFDI Just F#©£!^ Do It
IDEF Input
OPF One Piece Flow
VSM Value Stream Mapping
DMAIC Define, Measure, Analyse, Improve, Control
PDCA Plan, Do, Check, Act

For Reference, some commonly used Japanese lean words:

Kanban Ticket or signal, used in pull systems Kaikaku Step change project Kaizen Continuous Improvement Poka Yoke Mistake proofing, used to avoid quality issues Nagare 'U' shaped one piece flow cell Heijunka Smooth demand, level scheduling Ishikawa Cause & Effect (Fishbone) Gemba Workplace where VA happens (shopfloor)

7 QCD Measures (Required by the DTI)

1. Productivity Improvement (People productivity)

% Number of goods/units made ÷ Number of direct operator hours

2. Scrap/Defect Reduction (Not right first time)

% Quantity of defective units ÷ Total quantity of units supplied Improvement in

3. Space Utilisation

% Sales turnover of area ÷ Square metres of area

4. On Time Delivery Improvement (Delivery schedule achievement)

% Number of planned deliveries - [Number not on time + number of incorrect quality deliveries] ÷ Number of planned deliveries

5. Increased Stock Turns

% Sales turnover of product ÷ Value of (raw materials + WIP + finished goods)

6. Equipment productivity (Overall Equipment Effectiveness)

% Availability % x Performance % x Quality %

7. Value Added Per Person

% £ Output Value - input value ÷ Number of employees

In addition:

8. Increased Value Added (£s)

(£s) £ Final Value Added - Initial Value Added (where Value Added = Profit Before Interest and Tax + Costs (of Employees, Depreciation and Amortisation)).

9. Increase in Turnover

Reported in £ New Turnover - Old Turnover