Error-Proofing in Office & Service Environments

Company

LOGO

Error-Proofing Transactional, Service,

Creative, and Analytical Processes

August 12, 2010

© 2010 Karen Martin & Associates

Your Instructor

Early career as a scientist; migrated to

quality & operations design in the mid-80’s.

Launched Karen Martin & Associates in

1993.

Specialize in Lean transformations in non-

manufacturing environments.

Co-author of The Kaizen Event Planner;

co-developer of Metrics-Based Process

Mapping: An Excel-Based Solution.

Instructor in University of California, San

Diego’s Lean Enterprise program.

2

Karen Martin,

Principal

Karen Martin &

Associates


You will learn…

Common causes for errors.

The key metric (%C&A) for measuring

quality in office/service settings (review).

Error-proofing prioritization.

Root cause analysis tools.

Countermeasures for improving quality.

How to translate quality improvement into

productivity gains.

3

Building a Lean Enterprise

Jidoka


Eight Wastes (Muda)

Overproduction

Inventory

Waiting

Over-Processing

Errors ( Defects Rework)

Motion (people)

Transportation (material/data)

Underutilized

people

5


Process

Stabilization

Tools


Poka Yoke;

Error-Proofing


Potential Impact of Poor Quality

Customer

Death or injury

Slow delivery

Lost market share

Financial

Excessive expenses

Missed performance

bonuses

Cash flow

Legal / Regulatory

Non-compliance

Litigation

Staff

Interpersonal &

interdepartmental

tension

Stress & frustration

Turnover / absenteeism

Poor morale

Inability to attract talent

8


Cost of Poor Quality (COPQ)

Labor (Process Time)

To fix

To inspect/audit/monitor/approve

Turnover due to frustration & stress

Extended lead times

Cash flow

Material costs (sometimes)

Scrap

Rework

Storage costs (sometimes)

Litigation / regulatory fines 9

Quantify

COPQ to

establish your

current state

baseline from

which to

measure

improvement

© 2010 Karen Martin & Associates 10

The 1-10-100 rule states that as work moves

through a process, the cost of correcting an

error increases by a factor of 10.

Order entry example

Activity Cost

Order entered correctly $ 1

Error detected by billing dept $ 10

Error detected by customer $ 100

Cost of customers telling others ???

Prevention

Inspection

Failure

Big Failure

1-10-100 Quality Rule


Error-Proofing

Recognizes that every human will make errors.

Methodology that is used to strive toward zero defects by either preventing or automatically detecting defects.

Help people do the right thing; prevent them from doing the wrong thing. Key Toyota principle – Respect for people.

Errors become defects that require rework.

11


Levels of Error-Proofing

1. Prevention Make it impossible to make the error.

Make it difficult to make the error.

2. Detection Make it obvious the error has occurred.

3. No Impact Make it a “no impact” error.

12


Error-Proofing Tenets

Common tendency (non-Lean mindset) is to blame

people

“If they’d just be more careful…”

“They’re being lazy…”

Errors are not the result of careless or inattentive

employees.

Warning or “be careful” signs are not robust

solutions (and may be insulting)

Errors are evidence of a process design or

environmental problem, not a people problem.

Lean mindset: “We (the organization) have failed you.”

13

14

Quality:

People

aren’t the

problem.

The problem is

generally rooted in:

• Process design

• Technology capabilities

• Environmental conditions


Poor Input Quality Causes

Unnecessary Tension

Poorly designed processes are typically

behind interpersonal and interdepartmental

tension – not personalities.


You can’t

inspect in

quality.


Inspection in Non-Manufacturing

Reviews

Approvals

Audits

Signatures

Improvement goal: Eliminate the NEED

for inspection.

17


State of Quality in Office &

Service Environments

Office & service quality rarely measured.

If measured, typically “end state” quality.

“In process” quality is a far more revealing

analytical tool, in terms of:

Determining how robust your process is

Identifying waste

Rebuilding interpersonal and interdepartmental

relationships

Capturing productivity gains

18


The Improvement Process

19

Plan

Do

Check

Act

Gain a deep

understanding

about the

current state


Measuring Process Quality

20

Customer

Step 1 Step 2 Step 3 Step 4


Key Lean Metric: Quality

%Complete and Accurate (%C&A)

% time downstream customer can perform task without

having to “CAC” the incoming work:

Correct information or material that was supplied

Add information that should have been supplied

Clarify information that should or could have been clear

This output metric is measured by the immediate

downstream customer and all subsequent downstream

customers.

If workers further downstream deem the output from a

particular step to be less than 100%, multiply their

assessment of quality with the previous assessments.

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Measuring Step-Specific Quality

22

Customer


%C&A =

70%

%C&A = 50%

%C&A =

85%

%C&A =

25%

%C&A =

80%


Measuring Step-Specific Quality

23

Customer


%C&A =

70%

%C&A = 50%

%C&A =

85%

%C&A =

25%

%C&A =

80%

Rolled First Pass Yield = 6% (.50 x .70 x .85 x .25 x .80) x 100


Two Ways to Measure

Value Stream Mapping

Holistic, macro view of process

Strategic planning tool

Metrics-Based Process Mapping

Micro view of process

Tactical design tool

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Mapping Post-it Conventions

# Staff

(if relevant)

Barriers to flow

(if relevant)

PT (process time)

LT (Lead time) % Complete &

Accurate

Step #

Activity

(Verb / Noun) Function that

performs the

task

Source Refrigeration & HVAC, Inc.

Current State Value Stream Map

Serv ice Deliv ery

Created February 11, 2009

CONFIDENTIAL

Customer

Receive

customer call

Call Center

PT = 2 mins.

%C&A = 60%

Review &

Post Invoices

Posting Admin

PT = 3 mins.

%C&A = 98%

Batch: 1x/day

0.0833

hours

2 minutes

2 hours

5 minutes

1.5

hours

90 minutes

1.25 hours

75 minutes

2 hours

120 minutes

4 hours

5 minutes

10.7

hours

10 minutes

48

hours

25 minutes

4 hours

3 minutes

10.7

hours

10 minutes

2 hours

4 minutes

480

hours Lead Time = 572 hours

Process Time = 349 minutes

Select &

Dispatch Tech

Dispatcher &

Service

Manager

PT = 5 mins.

%C&A = 60%

Make Repair;

Call to raise

the NTE

Tech

PT = 120 mins.

%C&A = 40%

Complete Call

in GP

Dispatcher

PT = 5 mins.

%C&A = 80%

Review

Service Call

Data

Service

Manager

PT = 10 mins.

%C&A = 50%

Batch: 2x/day

Review Open

Ticket Report

Billing Admin

PT = 25 mins.

%C&A = 75%

Upload time

card

Tech

PT = 0 mins.

%C&A = 70%

Batch: 1x/day

Close call in

Verisae

Account

Manager

(West)

PT = 1 mins.

%C&A = 90%

Batch: 1x/day

Process Time

Cards

Payroll Admin

PT = 10 mins.

%C&A = 90%

Batch: 1x/day

Process A/P

A/P Admin

PT = 15 mins.

%C&A = 85%

Batch: 1x/day

Tech

Assess

Problem

PT = 90 mins.

%C&A = 90%

Tech

Special Order

Part

Tech

Pick up Part

at Parts Store

PT = 75 mins.

%C&A = 95%

Tech

Get Part from

Truck

PT = 0 mins.

120 m.

Great

Plains

Verisae

(Customer)

Review

Invoices;

Close in

Verisae (Pac)

Account

Manager

PT = 10 mins.

%C&A = 85%

Batch: 3-5x per wk

Enter Invoices

into Verisae &

Excel; Mail

Invoices

Billing Admin

PT = 4 mins.

%C&A = 95%

Batch: 1x/week

Excel

Spreadsheet

(Customer)

40%

Receive

Cash; Post

Payment

Collections

75 m. 120 m. 240 m. 640 m. 6 days 240 mins. 640 m. 120 m. 60 days90 m.5 m.

?%

?%

Supplier

%C&A %Complete and Accurate

AR Activity Ratio

FTE Full Time Equivalent

LT Lead Time

PT Process Time

RFPY Rolled First Pass Yield

Acronym Key

Lead Time to invoice = 86.2 hrs

Process Time =5.9 hrs.

NOTE: Business hours

Activity Ratio = 6.8%

RFPY = 1.1%

Lead time to cash = ? days

Current State Value Stream Map

Service Delivery – Call to Cash

RFPY = 1.1%


Summary Quality Metric

Rolled First Pass Yield (RFPY)

The percentage of occurrences where work

passes through the process “clean,” with no

“hiccups,” no rework (CAC) required.

RFPY = %C&A x %C&A x %C&A…

Common finding = 0-15%

Multiply ALL %C&A’s, even if parallel processes

(concurrent activities).

27


Metric Current State Projected

Future State

Projected %

Improvement

Lead Time (LT) 86.2 hours

Process Time (PT) 5.9 hours

% Activity 6.8%

Rolled First Pass

Yield (RFPY) 1.1%

# Handoffs 10

Service Delivery Value Stream

Call to Cash

Future State Value Stream Map

Source Refrigeration & HVAC, Inc.

Service Delivery

T&M Target example, refrigeration component repair, non-peak season (35 work orders per day)

Created February 13, 2009

CONFIDENTIAL

Customer%C&A = 99%

Dispatcher

Create W.O.

Dispatch Tech

PT = 7 mins.

%C&A = 85%

Supplier

Tech

Assess

Problem

PT = 75 mins.

%C&A = 90%

Billing Admin

Review W.O.,

payroll, AP &

invoice; post

immediately

PT = 25 mins.

%C&A = 95%

Billing Admin

Compare

invoice

register to

invoices and

mail invoices

PT = 5 mins.

%C&A = 99%

1x daily

Collections

Receive

Cash; Post

Payment

2 hrs.

0.117 hrs.

1.25 hrs.

1.25 hrs.

1.25 hrs.

1.25 hrs.

2 hrs.

2 hrs.

24 hrs.

0.417 hrs.

4 hrs.

0.0833 hrs.

480 hrs. Lead Time = 520 hrs.

Process Time = 5.12 hrs.

Tech

Make Repair;

Complete call

on handheld

PT = 120 mins.

%C&A = 75%

Verisae

(Customer)

Great

Plains

Tech

Pick up Part

at Parts Store

PT = 75 mins.

%C&A = 95%

Lead Time to invoice = 34.5 hrs

NOTE: Business hours

Process Time = 5.1 hrs.

Activity Ratio = 14.8%

RFPY = 45.4%

Lead time to cash = 67 days

`

%C&A %Complete and Accurate

AR Activity Ratio

FTE Full Time Equivalent

LT Lead Time

PT Process Time

RFPY Rolled First Pass Yield

Acronym Key

Excel

Spreadsheet

(Customer)

Billing Admin

Enter data

into Verisae

and Excel

from Daily

Report

PT = 5 mins.

%C&A = 99%

1x daily

Tech

Special Order

Part

10%

?

Tech

Contact Tech

Support As

Needed

Tech

Get Part from

Truck

PT = 0 mins.

?

EDI Interf ace

No EDI

120 mins. 75 mins. 75 mins. 2 hrs. 24 hrs. 4 hrs. 60 days

Create Tech

Support Center

Create EDI

Interface w/

Customers

Centralize

Dispatch

Improve Tech

Onboarding

Standardize

Truck Inventory

Improve Tech

Training; Create

Sub-levels

Install kanban

on trucks

Create

Customer Billing

Teams

Create stnd work

for invoicing

Create invoice

exception report

Explore flat rate

pricing

Create Tech

performance

report

Implement

GPS

Create Source

preferred T & C's

Separate labor

& payroll

Create EDI

Interface w/

Verisae

Establish

parameters for time

& parts by

service type

Future State Value Stream Map

Service Delivery – Call to Cash


Metric

Current State

Projected

Future State

(10 months)

Projected %

Improvement

Lead Time (LT) 86.2 hours 34.5 hours 60.0%

Process Time (PT) 5.9 hours 5.1 hours 13.6%

% Activity 6.8% 14.8% 45.9%

Rolled First Pass

Yield (RFPY) 1.1% 45.4% 3,990%

# Handoffs 10 5 50%

Service Delivery Value Stream

Call to Invoice Segment

Projected Improvement

0.8 hrs/service call x 75,000 calls/yr Freed

Capacity = 1,875 hrs/year

= 32 FTEs


What do you do with freed capacity?

Absorb additional work without increasing staff

Reduce paid overtime

Better work/life balance

Slow down & think

Innovate – create new revenue streams

Conduct ongoing continuous improvement activities

Do a better job with fewer errors and higher safety

Get to know your customers; build stronger supplier relationships

Mentor staff to create career growth opportunities

Provide additional workforce development; cross-training

Do the things you haven’t been able to get to; get caught up

Collaborate with other areas

Reduce payroll through natural attrition

31


Reasons for Errors

Lack of effective training

Non-standardized work

Excessive complexity

Time delays between input

and output (holding info in

one’s head too long)

Multi-tasking

Rushing

Poor knowledge re: internal

customer requirements

Hardware / software issues

Similarities

Environmental

Interruptions/ distractions

Noise, odor, lighting

Ambiguous information

Unclear instruction

Poor handwriting

Blurry images (technology-

related

32


Root Cause Analysis

33


Root Cause Analysis (RCA)

RCA is necessary to:

Avoid jumping to conclusions.

Avoid creating “band-aid” fixes (addressing only the symptoms).

Select proper countermeasures.

Design and implement lasting solutions that truly eliminate the problem.

34

Root Cause Analysis: 4 Key Tools

CauseCause--andand--Effect DiagramEffect Diagram

Machine Measurement Environment

People Material / Info Method

Budgets

Submitted Late

Lack of experience

Time availability

No sense of import

No stnd spread sheet

Email vs. FedEx

No standard work

Input rec’d late

Forecast in other system

Manual vs. PC

System avail.

No milestones

$ vs. units

Weather delays

Dispersed sales force

Changing schedule

Machine Measurement Environment

People Material / Info Method

Budgets

Submitted Late

Lack of experience

Time availability

No sense of import

No stnd spread sheet

Email vs. FedEx

No standard work

Input rec’d late

Forecast in other system

Manual vs. PC

System avail.

No milestones

$ vs. units

Weather delays

Dispersed sales force

Changing schedule

5 Why’s

Why?

Why?

Why?

Why?

Why?

Check Sheets Quantify Occurrences

|Equipment failure

|||||||||||||Changing customer

requirements w/ no

adjustment to expected

delivery

||||||||||Order entry error

|||Staffing/absenteeism

|||||Quality issue requiring

rework

|||||||Material shortage

Tally Reason

|Equipment failure

|||||||||||||Changing customer

requirements w/ no


delivery

||||||||||Order entry error

|||Staffing/absenteeism

|||||Quality issue requiring

rework

|||||||Material shortage

Tally Reason


Root Cause Analysis Tools

Simple problems

Five Why’s

Problem Analysis Tree

More complex problems

Brainstorm causes (fishbone)

Tally frequency of most likely causes

(check sheet)

Identify relevant few (Pareto analysis)

for countermeasure development

36

If

necessary

Five Why’s Example

1. Why is the error report being prepared?

My supervisor told me to.

2. Supervisor – Why are you asking for this report?

One of the standard reports to be prepared per my

predecessor – I have yet to determine its usage.

3. Predecessor – Why did you initiate this report?

Report was required in the past because personnel in

order entry were making data input errors.

4. Data entry – Why were orders being input with errors?

Orders received via fax were blurry and hard to read.

5. Data entry - Why were the fax orders hard to read?

Fax machine was old and of low quality. It was replaced

10 months ago and errors no longer are occurring.

Problem: Report is taking too much of an employee’s time;

team questions whether the report is needed

Problem Analysis Tree Problem: Documents are not being translated well and on time

Late or poorly

translated

documents

Translation

problems**

Lost docs*

In physical transit

In cyberspace

In in-basket

In out-basket

* Lost and found = 40%; lost & never found = 5%; stuck in system = 55%

** Rework on over 50% of documents

Translator doesn’t

understand original

Translator

understands

original, but still

poor translation

Poor

original

Translator

skills

Wrong

technical

vocabulary

Poorly

expressed

No tracking

Large batches

Confusing

formats

Faxed / poor

resolution

Random

vocabulary

Lack of training

No standard

Selection

Unclear

expectations

Training

Poor editing

Uneven

workload


Cause-and-Effect Diagram (aka Fishbone, Ishikawa)

Brainstorming tool used to identify all possible causes for an undesirable effect in 6 categories: People (“Man”)

Material/Information - Inputs used in the process

Method - Procedures, work instructions, processes

Machine - Equipment, computers, tools, supplies

Measurement - Techniques used for assessing the quality/quantity of work, including inspection

Environment (“Mother Nature”) - External & internal

Use other categories if appropriate

39


Cause-and-Effect Diagram (continued)

Decreases the likelihood that something is being

overlooked

Shows us the possible causes, but not how

much each contributes, if at all, to the problem

Does not provide solutions / countermeasures

40

Call back cause-and-effect diagram.igx

Call Backs

PeopleMaterial

Substitute part

Environment

Unplanned conditions

Measurement

Poor data

Method

Machine

Equipment variety

Inherent problem in case

Repeat failure

Wrong part

Bad part

No help available

Not reaching out for help

Tech training

Tech ambition

No criteria for calling for help

Wrong tech sent

Lack of defined metrics

Rushing

Circled items indicate likely highest volume root causes

Cause and Effect Diagram – Call Backs

Cause-and-Effect Diagram

Medication Administration Errors


Check Sheets

Help collect and record process data in an organized way (how often are certain events occurring?)

Provides factual data to help analyze process (transition from subjective to objective)

Detects patterns

Includes “likely candidates” from Cause-and-Effect Diagram (the relevant few)

Basis for Pareto Analysis

NOTE: Make it easy & collect data for limited period of time only

43


Check Sheets Quantify Occurrences

Reason Tally

Material shortage ||||| ||

Quality issue requiring

rework |||||

Staffing/absenteeism |||

Order entry error ||||| |||||

Changing customer

requirements w/ no


delivery

||||| ||||| |||

Equipment failure |

44

Root Cause Analysis: Late Shipments


Pareto Analysis

Named after Wilfredo Pareto (18th century Italian economist/statistician) who discovered the 80-20 principle. 20% of the people held 80% of the wealth

Focuses our attention on the VITAL FEW issues that have the greatest impact to avoid spending energy on the TRIVIAL MANY.

A type of bar graph that displays information/data in order of significance.

A visual aid for defining & prioritizing problems.

45

Pareto Chart

Credit Application Delays

2909

627561

242180

2493

41%

77%86%

100%97%

94%

0

500

1000

1500

2000

2500

3000

3500

No Signature Insufficient Bank

Info

No prior address Current

Customer

No Credit History Other

Reason for Delay

Occu

rren

ces

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Error-Proofing Process Design

Priorities

Goals:

First, avoid making the error. (Lean priority)

Second, avoid passing errors to downstream internal customer.

Third, avoid passing errors to external customer. (Traditional priority)

Typical non-Lean solution – Inspection!

47


Priorities for Designing Error-

Proofing into the Process

1. Make it impossible to make the error.

2. Make it harder to make the error.

3. Make it obvious the error has occurred.

4. Make the system robust so it tolerates the error.

48


Error Proofing Priorities

Goals:

Make it impossible to make the error.

Make it harder to make the error.

Make it obvious the error has occurred.

Make the system robust so it tolerates the error.

49

Impossible to make the error –

mechanical/physical solutions

typically needed.

Error-Proofing (Poka Yoke) Data Entry


Goals:





52

Make It Harder to Make Errors




Goals:



Make it obvious the error has occurred. Sight – spell check, grammar check

Sound – beeps at the checkout stand

Smell – additive to natural gas

Touch – ?


54

55

Make It Obvious That

an Error Has Occurred



Goals:





56


“No Impact” Error

Mistake Proofing

Goals: First, avoid making errors.

Second, avoid passing errors to downstream internal customer.

Third, avoid passing errors to external customer.

Design robust processes with: No errors

No “impact errors” if errors occur at all

We have a tendency to be less diligent when we know a downstream inspection will occur.

58


Establishing a Quality Culture

Remove all obstacles to an employee’s success

Adequate time for quality work

Pressure-free

Effective training

Robust processes

Automation

Make problems visible

Stop “the line” / fix problems immediately

Honesty is honored; Blame-free

Improvement-oriented

Inspection is a last resort, not the first solution. 59


Types of Inspection

Self-inspection (point of

origin inspection) – most

desirable

Downstream inspection –

less desirable (we’re less

diligent)

3rd party inspection before it

reaches an external

customer – adds excess cost

3rd party inspection after the

fact – NO!

60


Ways to Error-Proof Data Entry

Technology

Correct data to begin with

Process

Simplify! (Why multiple

fixes for the same

problem?)

People

Effective training!

Grouping data / cadence

Reading aloud

Time for self-inspection

61

Environment

Information

enhancement

Audible or visual

warnings

Physical workspace

Reduce noise, smells,

interruptions

Adequate breaks

Rethink production

standards


Ways to Error-Proof Data Entry

(continued)

System-related

Software

Drop-down menus instead of

free text field

Required fields

Pop-up warnings

Programming / macros

Hardware

Dual monitors

Ergonomic considerations

Process-related

Standardized work Proper sequencing

(logical order of work)

Job aids & visual

reminders

Checklists

Verbalize information

Repeat orders

Measurement &

feedback

62

Error-Proofing

Help people do the right thing; prevent them from doing the wrong thing (e.g. automation, physical restrictions, warnings)

Create easy standard work tools (e.g. checklists)

Provide adequate training & retraining

Visual work instructions

See one, do one, teach one

Send work back upstream for completion and/or correction and follow-up with add’l training

Have customer requirements discussions with upstream suppliers

63

Quality-at-the-Source

Make problems visual

The work stops immediately when an error

is detected!

Cross-trained workers are better at

detecting errors

DO NOT RELY ON INSPECTION!!!

64

Reasons for Errors

Lack of training

Lack of standardization

Overly complicated processes

Time delays between input and output

Multi-tasking

Interruptions

Rushing

Ambiguous information

Unclear instruction

Poor handwriting

Blurry images (technology-related)

65

Ambiguous Information

66


Standardized Work

A tool for maintaining quality, safety,

productivity, and employee morale

at the highest possible levels.

67


Review: Elements of Quality-at-

the-Source

Standardize work.

Make problems visual.

The work stops immediately when an error

is detected!

Cross-trained workers are better at

detecting errors.

Eliminate or minimize reliance on

inspection.

68



You will learn…

Common causes for errors.

The key metric (%C&A) for measuring

quality in office/service settings (review).

Error-proofing prioritization.

Root cause analysis tools.

Countermeasures for improving quality.

How to translate quality improvement into

productivity gains.

70

Resources

71

Chapter 8 Chapter 11


Karen Martin, Principal

7770 Regents Road #635

San Diego, CA 92122

858.677.6799

[email protected]

Subscribe to monthly newsletter:

www.ksmartin.com/subscribe

72

For Further Questions