Model Application GUIDELINES - okyanusbilgiambari.com · 6 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE Model & Application Guidelines 7 Shingo Academy James F. Albaugh Executive Vice

Model &Application

GUIDELINES

435-797-2279www.shingoprize.org

a world standard...for a global economy

Model & ApplicationGUIDELINES

THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCEJON M. HUNTSMAN SCHOOL OF BUSINESSUTAH STATE UNIVERSITYLOGAN, UTAH USAWWW.SHINGOPRIZE.ORG

VERSION 7 — MAY 2012

COPY RIGHT © 2012 THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCE. ALL RIGHTS RESERVED

CONTACT INFORMATION

�e Shingo Prize for Operational ExcellenceJon M. Huntsman School of Business

Utah State University3521 Old Main Hill

Logan, UT 84322-3521(435) 797-2279

(435) 797-3440 FAXwww.ShingoPrize.org

For questions or comments contact:Shaun D. Barker

Director of Operations and [email protected]

Application forms are available online at www.ShingoPrize.org

Dear Shingo Associates,

�ank you for taking time to study our model for operational excellence and considering the bene�ts of using the model within your organization. Many of our associates have indicated that the model and assessment can assist in better understanding where you are on your journey toward operational excellence and how to accelerate your e�orts. We sincerely hope that this document will enable you to become more keenly aware of not only your strengths, but also your greatest opportunities for improvement.

If your intentions are to eventually challenge for �e Shingo Prize, this booklet will introduce you to the process of applying and preparing your achievement report. You will learn how our exam-iners, your peers from other companies, will evaluate, score and provide feedback to your facility.

�is booklet is di�erent from past issues. Based on our decades of experience in searching for, evaluating and recognizing some of the world’s very best companies, we have come to understand how truly di�cult it is for even the best to create sustainable transformation and build lasting cultures of operational excellence.

In the past, our search for great companies focused primarily on determining “the degree to which” the organization had successfully deployed the tools and techniques o�en associated with most of the business improvement programs conceived over the past few decades. Based on our long-term association with these companies and thought-leaders, we have come to understand that the focus on tools and techniques must be led by a thorough understanding of key concepts – or guiding principles around which the tools have been developed. �ose guiding principles become the bedrock of a corporate mind-set and the foundation for the design of systems that reinforce these principles in every action of every associate.

�is relationship between guiding principles, management systems and improvement tools is the basis for �e Shingo Prize model and our approach to organizational assessment. We invite all to review and engage in critical dialogue with your peers around the ideas presented here. �en contact us at www.shingoprize.org and we will be eager to share with you more of the details behind the model and assessment methodology.

Robert D. MillerExecutive Director�e Shingo Prize for Operational ExcellenceJon M. Huntsman School of Business

THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 4 5

The mission of The Shingo Prize is to create excellence

in organizations through the application of timeless,

universal, and self-evident principles of operational

excellence; alignment of management systems; and the

wise application of improvement techniques across the

entire organizational enterprise.

Our vision is to be the Standard of

Excellence for every organization.

Board of GovernorsShingo Mission

Shingo Vision

Paul A. BrentRetired General Director Global Supply Mgt. RestructuringDelphi

Jerry BussellExecutive AdvisorUnderwriters Laboratories Knowledge Services Arthur P. ByrneOperating PartnerJ.W. Childs Associates Douglas F. CarlbergPresident & CEOM2 Global Technology, Ltd. Gary ConvisCOOBloom Energy Corporation Carolyn CorviVice President, General Manager, Airplanes ProgramsThe Boeing Company Timothy A. CostelloChairman & Chief Executive OfficerBuilder Homesite, Inc. Michael N. DaPrileExecutive Vice PresidentSW Manufacturing, Inc.

Bruce E. HamiltonPresidentGreater Boston Manufacturing Partnership, Inc. Thomas G. HartmanPresident & Managing DirectorAutoLiv do Brasil Ltda Jack HelmboldtSenior Vice PresidentDenso Manufacturing Tennessee, Inc. Luis IzquierdoVice President, Corporate OperationsRaytheon Company Michael JoyceSenior Vice President, Operations and Program ManagmentLockheed Martin Bill KesslerProfessor & Director of Executive ProgramsGeorgia Tech Tennenbaum Institute George J. KoenigsaeckerPresidentLean Investments, LLC Julie MadiganChief ExecutiveThe Manufacturing Institute

Mike MartynPrincipalSISU Consulting Group John E. MarushinChief Operating OfficerClear Path Solutions Robert D. MillerExecutive DirectorThe Shingo Prize for Operational Excellence R. David NelsonChairmanQuality Analytics Rusty PattersonChairman & CEONCFAM Dennis K. PawleyPresident & CEOPawley Enterprises Gary PetersonExecutive Vice President–Supply ChainO.C. Tanner Company Clifford F. Ransom IIPresidentRansom Research, Inc. Peter N. RileyEVP Integrated OperationsBell Helicopter Textron Inc. Don RonchiChief Human Resource OfficerCeberus Operational and Advisory Company, LLC

David RowlandsCEOGold Pride Pass Richard J. SchonbergerPresidentSchonberger & Associates, Inc. John ShookPresident & CEOLean Enterprise Institute Kenneth SnyderExecutive Dean & Chief Administrative OfficerJon M. Huntsman School of Business, Utah State University Carl G. ThorPresidentJarrettThor International John J. Van GelsVice President Operations & Supplier ManagementThe Boeing Company Alejandro von Rossum Sr.Chief Executive Officer, Chemical DivisionCydsa Corporation S.A. de C.V. Helen ZakPresident & COOThedaCare Center for Healthcare Value

AcknowledgementsWe wish to thank various people at The Shingo Prize for Operational Excellence and The Jon M. Hunstman School of Business who made up the team that provided scholarly work, ideas that significantly enhanced the clarity of the model and guidelines, and content editing. Those most closely involved with the project include: Randall Cook, Robert Miller, Jacob Raymer, and Shaun Barker. A special thanks to Brian Atwater for his contribution regarding systemic thinking, especially the idea to create a systemic process model. We would also like to thank the members of our Board of Governors who provided practical insights and critical feedback through the years as the Shingo model evolved. Finally, each time we teach a course we receive valued input and ideas from our Shingo affiliates, whose expertise and friendship we truly value.


Shingo AcademyJames F. Albaugh Executive Vice PresidentThe Boeing Company

Joji AraiSecretary General International Productivity Service

Stan A. AskrenChairman, President & CEOHNI Corporation

J. T. BattenbergChairman & ChiefExecutive OfficerDelphi Corporation

Warren BattsChairman NAM Tupperware Corporation

Norman BodekFormer PresidentProductivity, Inc.

Guy D. BriggsVice President, General MotorsGeneral Manager, GM North America Vehicle Manufacturing

Gifford M. Brown Plant ManagerCleveland Engine Plants, Ford Motor Company

Vernon M. BuehlerProfessor EmeritusUtah State University

Jerry BussellExecutive AdvisorUL Knowledge Services

Arthur P. ByrneOperating PartnerJ.W. Childs Associates

Timothy A. CostelloChairman & Chief Executive OfficerBuilder Homesite, Inc.

Stephen R. Covey Co-founder/Co-chairman Franklin/Covey Company

H. Lawrence Culp, Jr. President & CEO Danaher Corporation

Michael N. DaPrile Executive Vice President SW Manufacturing, Inc.

Joseph C. Day CEO & President Freudenberg, NOK

Earnest W. Deavenport, Jr.Former Chairman Eastman Chemical

Mark DeLuzio President Lean Horizons Consulting, LLC

Frank J. Ewasyshyn Executive Vice President - ManufacturingChrysler Group

Orest J. FiumeFormer Vice President, Finance The Wiremold Company

Louise L. Francesconi President Raytheon Missile Systems

Eliyahu M. Goldratt Founder Goldratt Institute

Benjamin S. GriffinCommanding General, Retired US Army Materiel Command

Andrew M. Guarriello Former Vice President & CEO AT&T Microelectronics’ Power Systems

Bruce Hamilton President Greater Boston Manufacturing Partnership, Inc.

Thomas G. Hartman President & Managing Director AutoLiv do Brasil Ltda

Masaaki ImaiChairmanKAIZEN Institute of Japan

Jerry J. Jasinowski PresidentNational Association of Manufacturers

Brian S. Jones President & CEONypro, Inc.

Daniel T. Jones Founder & Chairman Lean Enterprise Academy

Michael JoyceSenior Vice President, Operations and Program Management Lockheed Martin

James H. Keyes Chairman & CEO Johnson Controls Inc.

George J. KoenigsaeckerPresidentLean Investments, LLC

Peters Lawson Vice President, Manufacturing Ford Motor Company of Australia

Hank Lenox Director, Ford Production System Ford Motor Company

David J. LogozzoPresident, LE Partners Lean Enterprise Institute

Jack Michaels Chairman, President & CEO Snap-On Incorporated

R. David Nelson Chairman Quality Analytics Inc.

Rodney O’NealPresident & Chief Operating OfficerDelphi Corporation

Paul O’NeillFormer Secretary, US Treasury Former Chairman and CEO, Alcoa, Inc.

Hajime OhbaPresident, TSSC, Inc. Toyota Suppler Support Center

James J. Padilla Chief Operating Officer Ford Motor Company

Dennis K. Pawley President & CEO Pawley Enterprises

Clifford F. Ransom II PresidentRansom Research, Inc.

Ross E. RobsonPresident & CEO DnR Lean LLC

Donald L. Runkle Former Vice Chairman, Enterprise Technologies Delphi Corporation

Russell Scaffede Owner Lean Manufacturing Systems Group, LLC

Richard J. Schonberger President Schonberger & Associates, Inc.

Anand Sharma President & CEO TBM Consulting Group

Ritsuo Shingo Former President Toyota China and Hino Motors China

John Shook President & CEO Lean Enterprise Institute

Harold M. Simons Executive Vice President, Manufacturing O.C. Tanner Company

Art Smalley President Art of Lean, Inc.

Mohsen Sohi President & Chief Executive Officer Freudenberg-NOK General Partnership

James L. Solberg Executive Director, Manufacturing, North American Powertrain’s OperationsFord Motor Company

Anne Stevens Chairman, President & CEO Carpenter Technology Corporation

Carl G. Thor President JarrettThor International

John S. Toussaint CEO ThedaCare Center for Healthcare Value

Robert H. Transon Group Vice President Manufacturing - Executive OfficeFord Motor Company

Nickolas Vande SteegPresident & COO Parker Hannifin Corporation

Alejandro von Rossum, Sr.CEO-Chemical Division Cydsa Corporativo S.A. de C.V.

Michael J. Ward President Autoliv Americas

Donald J. Wetekam PresidentAircraft Services AAR Corporation

David Wohleen President, Electrical, Electronics, Safety & Interior Sector Delphi Corporation

James Womack Founder & President Lean Enterprise Institute

THE SHINGO MODEL FOR OPERATIONAL EXCELLENCE 8 The House - The Shingo Principles of Operational Excellence 9 The Diamond - The Shingo Transformational Process

12 Dimension 1: Cultural Enablers 12 Principle - Respect Every Individual 13 Principle - Lead with Humility 14 Table One - Examples of Ideal Behavior for Cultural Enablers

16 Dimension 2: Continuous Process Improvement 16 Principle - Focus on Process 17 Principle - Embrace Scientific Thinking 17 Principle - Flow and Pull Value 17 Principle - Assure Quality at the Source 17 Principle - Seek Perfection 18 Table Two - Examples of Ideal Behavior for Continuous Process Improvement

22 Dimension 3: Enterprise Alignment 22 Principle - Create Constancy of Purpose 23 Principle - Think Systemically 23 Systemic Thinking Chart 25 Table Three – Examples of Ideal Behavior for Enterprise Alignment

28 Dimension 4: Results 28 Principle - Create Value for the Customer 29 Table Four - Examples of Ideal Behavior for Results

30 Scope of Transformation 30 Business & Management Systems

32 Summary 34 The Shingo Model

ASSESSMENT GUIDELINES

38 Assessment Criteria 39 Dimension 1 - Cultural Enablers 40 Dimension 2 - Continuous Process Improvement 42 Dimension 3 - Enterprise Alignment 43 Dimension 4 - Results

46 Assessment and Scoring 46 Assessment Areas 49 Behavior - Assessment Scale 50 Results - Assessment Scale

APPLICATION GUIDELINES

52 Application Process

58 Writing the Achievement Report 59 Introduction 59 Achievement Report Format 60 Dimension 1 - Cultural Enablers 60 Dimension 2 - Continuous Process Improvement 60 Dimension 3 - Enterprise Alignment 60 Dimension 4 - Results


THE SHINGO MODEL FOR

OPERATIONAL EXCELLENCE

inarguable because it is self-evident. Dr. Covey teaches that values govern our actions and principles govern the consequence of our actions.

Values are cultural, personal, interpretable, and variable. Our personal values influence how we see the world and ultimately our choices for how to behave. Principles govern the outcomes of our choices. In other words, the values of an unprincipled person will very likely lead to behaviors that have negative consequences.

Principles govern everything that happens in the natural world. Scientists the world-over continually search to understand more of the principles that govern the universe. They do not invent them; they only discover their existence and seek to do good by taking purposeful action based on knowledge of the guiding principle. Principles govern the laws of science; they determine the consequences of human relationships, and ultimately, principles influence the successful outcome of every business endeavor.

Principles Predict PerformanceOne of the most powerful aspects of principles is their ability to predict outcomes. Principles govern the outcome or consequence of the behavioral choices we each make. The closer our actual behavior aligns with the ideal behavior that is linked to the principle, the greater the likelihood that the outcomes of our behavior will be positive. This is profound given that very few things in any business can be predicted with a high degree of certainty. A culture where every employee understands and is committed to principle-based behavior will be a culture with a very high likelihood of achieving great business results.

Similarly, a corporation not grounded in principles, will result in a wide variety of personal interpretations of how to apply their values in work situations.

Why Operational Excellence?For decades we have watched, and all too often experienced, the disappointing efforts of programmatic improvement initiatives, leaving in their wake a trail of unintended negative consequences rarely resulting in

Principles of Operational Excellence The search for improvement is instinctive. For businesses and indeed any organization to be successful in the long term, they must be engaged in a relentless quest to make things better. Failure to make this an organizational priority will inevitably result in organizational decline. Excellence must be the pursuit of all great leaders. In fact, the passionate pursuit of perfection, even knowing it is fundamentally impossible to achieve, brings out the very best in every human being.

Why So Many FailImprovement is hard work! It requires great leaders, smart managers, and empowered people. Improvement cannot be delegated down, organized into a program, or trained into the people. Improvement requires more than the application of a new tool set or the power of a charismatic personality. Improvement requires the transformation of a culture to one where every single person is engaged every day, in most often small, but from time to time, large change.

In reality, every organization is naturally in some state of transformation. The critical question is, to what end is the organization being transformed and who are the architects of the transformation? The Shingo model of operational excellence asserts that successful organizational transformation occurs when leaders understand and take personal responsibility for architecting a deep and abiding culture of continuous improvement. This is not something that can be delegated to others. As the CEO of a very successful organization recently said, “Leaders lead culture!”

A Culture Built on Correct PrinciplesStephen R. Covey describes principles as fundamental truths. He defines a principle as a natural law that is universally understood, timeless in its meaning and fundamentally

lasting improvement. Quality Circles, Just-in-Time, Total Quality Management, Business Process Re-engineering, Six Sigma, and most recently, Lean are a few illustrations of well-intentioned initiatives that have far under-delivered on their promised benefits. Our study of these programs over the last 25 years has led us to believe that the problem has nothing to do with the concepts and everything to do with the programmatic, tool-oriented deployment of them.

The Shingo model for operational excellence is based on a systematic study of each of these improvement initiatives. Our approach bi-passes the tools that each program has engendered and focuses rather on the underlying/guiding principles and supporting key concepts behind them. We recognize the necessity of good improvement tools but focus on them only within the context of enabling a system to better drive ideal, principle-based behaviors. The Shingo “House” provides a summary and categorization of this collection of guiding principles and supporting concepts.

When taken in their totality, these timeless principles become the basis for building a lasting culture of excellence in the execution of one’s mission statement. We call this relationship between business results and principle-based behavior, “operational excellence.” Operational excellence cannot be a program, another new set of tools, or a new management fad. Operational excellence is the consequence of an enterprise-wide practice of ideal behaviors, based on correct principles.

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For organizations to be successful over the long term, leaders must deeply and personally understand the principles that govern their success. Further, they must ensure the behaviors of every person who contributes to the business are in harmony with these principles. In short, the organizational culture they build must be grounded in correct principles.


As long as improvement is seen as something outside the core work of the business, as long as it is viewed as “something else to do,” operational excellence will remain elusive.

When leaders anchor the corporate mission, vision, and values to principles of operational excellence and help associates to connect and anchor their own values to the same principles, they enable a shift in the way people think and behave. Changing the collective behavior of the group changes the culture. This is leadership responsibility that cannot be delegated.

Principles of Operational Excellence(The Shingo House)In his book Key Strategies for Plant Improvement, Shigeo Shingo said, “Think in terms of categorical principles.” The Shingo House is a categorization of the guiding principles of operational excellence. Associated with

The dimensions are the result of “thinking categorically about the principles.” It is clear that all four dimensions of the model require focus in order to achieve excellence. In the same way that we need to comprehend objects in three dimensions to truly appreciate all of their characteristics, operational excellence must be viewed in these four dimensions in order to fully appreciate the power of the principles to affect business outcomes.

Transforming a Culture (Shingo Transformation Process) Many organizations and their leaders are coming to understand that sustainability requires focusing on the culture; that’s the easy part. The difficult part is in knowing how to really affect a change. The Shingo transformation process is a methodology for accelerating a personal and enterprise-wide transformation to a culture of operational excellence. The process is based on the teaching of Dr. Shigeo Shingo who recognized that business improvement came through understanding the relationship between principles, systems, and tools.

Dr. Shingo understood that operational excellence is not achieved by superficial imitation or the isolated and random use of tools and techniques (“know how’”). Instead, achieving operational excellence requires people to “know why” — i.e., an understanding of underlying principles.

In the 1940s, the work of French social scientist, Piaget, led us to understand that learning occurs when people come to deeply understand the meaning behind the methodology. People naturally search first for meaning, the principle, and then attempt to organize them somehow into a system, or

each category are also listed many important supporting concepts.

The principles are categorized into four dimensions: cultural enablers, continuous process improvement, enterprise alignment, and results – the ultimate end of all business initiatives. These four dimensions overlay five core business systems: product/service development, customer relations, operations, supply and a variety of management or administrative support systems.

Guiding PrinciplesThe Shingo Prize for Operational Excellence did not create the 10 guiding principles of operational excellence but rather they have always existed. In truth, there is ample evidence that these principles have been well understood, more or less, at different time for thousands of years. As the world has gone through cycles of advancement and decline, it seems these principles are routinely lost and forgotten and must be re-discovered. Emerging from the dark ages into a period of enlightenment and industrialization, the impact of these principles are only now beginning to be understood again.

Certainly, and even surprisingly, business schools do not emphasize these principles even though they

are the driver for business execution excellence. The cause for this may be that these fundamental business principles have been lost in management fads and tool boxes that become programs or “flavors of the month.”

The Shingo Prize for Operational Excellence has made a diligent search of thought leaders over the last 100 years. Their work has been carefully analyzed and dissected and the unique concepts or principles from each have been extracted. Compiling, distilling, and prioritizing the list led to the 10 guiding

principles on the left side of the house and the supporting concepts for each dimension on the right side. Supporting concepts are critical to pay attention to but may not stand up to the rigor of being universal, timeless, and self-evident like the principles.

some kind of order. Finally, they create tools to better enable the systems to accomplish the purpose for which they were created. Learning and Teaching the PrinciplesThe first step a leader must take in leading cultural transformation is a personal journey to understand what each of these guiding principles mean conceptually and then what they mean personally. It is impossible for a leader to lead the development of a principle-based culture until he or she has gone through

the deep reflection required to begin a personal transformation. This is no trivial

task. For many and perhaps most, fully embracing these principles requires

a fundamental re-thinking of the rules of engagement used to

get to where they are.

At a minimum, leaders must be

curious enough to experiment

with the

principle. John Shook

at the Lean Enterprise Institute

taught us that it is often impossible to

“think our way into a new way of acting.” Rather, guided

by correct principles, one may do, observe, learn, and then do

something else until we “act our way into a new way of thinking.” By carefully

analyzing the cause-and-effect relationship between principles and results, a leader will begin to shift their own beliefs about what drives optimal business performance. After gaining this new insight it becomes the effective leader’s primary responsibility to see that others in his/her organization have experiences where they can gain the same insight.

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Results

Enterprise Alignment

Continuous ProcessImprovement

Cultural Enablers

Create Constancy of PurposeThink Systemically

Focus on Process

Flow & Pull ValueAssure Quality at the Source

Lead with HumilityRespect Every Individual

Create Value for the Customer

See Reality Focus on Long-term

Align Systems Align Strategy

Stabilize Processes Rely Facts & Data

Standardize Processes

Focus on Value StreamKeep it Simple & Visual

Integrate Improvement with Work

Empower & Involve EveryoneDevelop People

Assure a Safe Environment

Align Behaviors with Performance

™ The Shingo Prize

GUIDING PRINCIPLES SUPPORTING CONCEPTS

MANAGEMENTSUPPLY

OPERATIONSCUSTOMERRELATIONS

PRODUCT& SERVICE

DEVELOPMENT

Embrace Scienti�c Thinking

Seek Perfection

Insist on Direct Observation

Identify and Eliminate Waste

Measure what Matters

Identify Cause & E�ect Relationships

No Defects Passed Forward

Standardized Daily Managment


Leaders who choose to disregard the principles that govern business outcomes do so at great peril. Whether we acknowledge them or not, the principles of operational excellence always govern the consequence of our leadership and management behaviors. An example may help.

If we encourage, enable, or simply allow a culture to emerge where employees are thought of merely as an unfortunate cost burden or that the smartest people are those that rise to the top, the consequence will be a workforce that is not fully engaged, ideas for improvement are never articulated and acted on, people feel unfulfilled in their work, and turnover is very high. Labor costs become excessively high, business systems stagnate, and innovation is not fast enough to compete in a rapidly changing business climate. Unwise leaders see this as a validation of what they believed rather than the sad end of a self-fulfilling prophesy.

When people understand principles for themselves, the “why,” they become empowered to take personal initiative. Leaders who teach associates the principles behind the tactics or the tools can be confident that innovation from each individual will be pointed in the right direction. It is not necessary for a leader to define ideal behaviors for others. If the principle is truly a principle, diverse people with different values will readily be able to define ideal behavior for themselves and be very consistent with others.

Dr. Shingo understood this and taught that the primary role of a leader is to drive the principles of operational excellence into the culture.

Aligning the Systems with PrinciplesAll work in organizations is the outcome of a system. Systems are either designed to produce a specific end goal or they evolve on their own. Systems drive the behavior of people or rather they create the conditions that cause people to behave in a certain way. One of the outcomes of poorly designed systems is enormous variation in behavior or even consistently bad behavior. Variation in behavior leads to variation in results. Operational excellence requires ideal behavior that translates into consistent and ideal results.

Experiment with the PrincipleOne of the principles of operational excellence is scientific thinking, which is intended to foster a culture of experimentation and deep learning. People must be able to put to the test each of the principles espoused by the principle-based leader. Only when people see for themselves the cause-and-effect relationship of results relative to the principle, will they come to deeply understand the value of the principle to them personally. Repetition through many cycles of learning in the experiment gives people a personal insight about the principle and empowers them to make personal judgments about its validity.

The Shingo transformation process illustrates the critical need to align every business, management, and work system of the organization with the principles of operational excellence. When systems are properly aligned with principles, they strategically influence people’s behavior toward the ideal.

Dr. Shingo also taught that the primary role of managers must shift from fire-fighting to designing, aligning, and improving systems.

The Enabling Role of Improvement ToolsA tool is nothing more than a point solution or a specific means to a specific end. Dr. Shingo referred to tools as techniques for problem-solving, necessary but not sufficient. He taught that tools should be selected to enable a system to perform its intended purpose. In many ways, a system may be thought of as a collection of tools working together to accomplish an intended outcome. A successful enterprise is usually made up of complex business systems that can be further divided into layers of sub-systems, each having embedded in them the necessary tools to enable the successful purpose of the system.

Perhaps the largest mistake made by corporations over the last three or four decades has been the inappropriate focus on a specific tool-set as the basis for their improvement efforts. Tools do not answer the question of “why,” only the question of “how.” Knowing the “how” without understanding fully the “why,” leaves people waiting for instructions and are powerless to act on their own. Organizations can never sufficiently release the full potential of their people by creating a tool-oriented culture.

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Cultural Enablers (People)

DIMENSION ONE:

CULTURALENABLERS

throughout the enterprise. This is because these values are “what’s” that fail to answer for people the question of “why.” A principle answers the question of “why.”

Here is a way to think about the alignment of principles with these kinds of values.

Because we respect every individual (the principle); therefore, we always place safety first (the value). Because we have respect for every individual (the principle); therefore, we empower people to act independently (the value). Because we have respect for every individual (the principle); therefore, we make all of our communications open and transparent (the value). When people understand the “why,” they are far more capable of consistently interpreting the correct behavioral implications of the value, the “what.”

Principle - Lead with HumilityOne common trait among leading practitioners of operational excellence is a sense of humility. Humility is an enabling principle that precedes learning and improvement. A leader’s willingness to seek input, listen carefully, and continuously learn creates an environment where associates feel respected and energized and give freely of their creative abilities. There is also a need for humility on the part of all members of an organization. Ideas can come from anywhere. One can learn something new from anyone. Improvement is only possible when people are willing to abandon ownership, bias, and prejudice in their pursuit of a better way.

Because I Lead with Humility (the principle); therefore, I am open to good ideas and innovation from anywhere in the organization (the value). Because

Cultural enablers make it possible for people within the organization to engage in the transformation journey, progress in their understanding, and ultimately build a culture of operational excellence.

Operational excellence cannot be achieved through top-down directives or piecemeal implementation of tools. It requires a widespread commitment throughout the organization to execute according to the principles of operational excellence. A culture must be developed where every person in the organization demonstrates a high level of respect for every other person. Developing a culture of mutual respect and humility takes a consistent commitment over a sustained period of time.

Principle - Respect Every IndividualRespect is a principle that enables the development of people and creates an environment for empowered associates to improve the processes that they “own.” This principle is stated in the context of “every individual” rather than “for people” as a group. Respect must become something that is deeply felt for and by every person in the organization.

Respect for every individual naturally includes respect for individuals representing customers, suppliers, the community, and society in general. Individuals are energized when this type of respect is demonstrated. Most associates will say that to be respected is the most important thing they want from their employment. When people feel respected they give far more than their hands; they give their minds and hearts.

Respect for every individual becomes a powerful “why” for many of the values espoused by great organizations. For example, simply stating important values such as safety first, empowerment, or open communications often fails to create uniform ideal behaviors

I Lead with Humility (the principle); therefore, I accept responsibility and enable change (the value). Because I possess humility (the principle); therefore I seek, trust, and follow the direction of those with a responsibility to lead (the value).

The following table provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that comes from these two guiding principles and should not in any way be considered as an exhaustive list.

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Cultural Enablers

Supporting Concept – Assure a Safe EnvironmentThere is no greater measure of respect for the individual than creating a work environment that promotes both the health and safety of employees and the protection of the environ-ment and the community. Environmental and safety systems embody a philosophical and cultural commitment that begins with leader-ship. When leadership is committed, then the organization creates and supports appropriate systems and behaviors.

In short, safety is first!

Supporting Concept – Develop PeoplePeople development has emerged as an important and powerful cultural enabler and goes hand-in-hand with principles of op-erational excellence. Through people devel-opment, the organization creates the “new scientists” that will drive future improvement. People development is far greater than just classroom training. It includes hands-on experiences where people can experience new ideas in a way that creates personal insight and a shift in mindsets and behavior. An organization’s leaders must be commit-ted to developing people and expanding the knowledge base. Leaders come to realize that expenses for education and training are necessary investments for long-term health; as such, the commitment to this investment does not waver.

Supporting Concept – Empower & Involve EveryoneFor an organization to be competitive, the full potential of every single individual must be re-alized. People are the only organizational asset that has an infinite capacity to appreciate in value. The challenges of competing in global markets are so great that success can only be achieved when every person at every level of the organization is able to continuously in-novate and improve. Elimination of barriers to that innovation becomes the responsibility of management.

Fundamental to the Shingo model is the con-cept of teaching people the key principles (the why) behind everything they do. When people understand why, they become empowered to take personal initiative. Managing a team of people who share a deep understanding and commitment to the key concepts and prin-ciples is much easier than managing the work of those who are only doing what they are told. Empowered employees who understand relevant principles are far more likely to make good decisions about the direction and appro-priateness of their ideas for improvement.

Similarly, when employees have a clear sense of direction and strategy and have a real-time measure of contribution, they become a powerful force for propelling the organization forward.

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Table One: Examples of Ideal Behavior for Cultural Enablers

Category Examples of Ideal Principle-Based BehaviorLeaders All leaders routinely spend time at the actual work locations where the actual

work is performed.

Leaders continuously seek the input of others, listen to their input, and adapt their actions based on what they learn.

Leaders in all areas demonstrate a willingness to learn and publicly acknowl-edge important insights they have gained.

Leaders take responsibility for applying principles of operational excellence in their own lives and ensure these principles become the foundation of organi-zational culture.

Leaders engage people at all levels in defining ideal, principle-based behav-iors and support managers in the alignment of all business and management systems.

Leaders develop systems to ensure they remain publicly accountable for their own principle-based behavior seeking feedback from all levels and across the entire enterprise.

Leaders ensure products and services do not have an unintended negative impact on the sustainability of communities and the planet.

Managers All managers constantly work with others to better align systems with ideal behaviors as defined by the guiding principles.

Managers act as coaches and mentors to others in the execution of principle-based systems and are constantly receiving personal and organizational feedback for improvement.

All managers are visible in the work space and demonstrate an openness to listen and learn from others.

Managers across the enterprise ensure associates have the information they need to be successful in their work and push decisions out and down to the appropriate levels.

Managers create a safe and productive work environment- keeping the safety of all associates as the highest of all priorities.

Managers regularly review the skills and competencies required of all associ-ates and work with each one to provide appropriate opportunities for associ-ates to gain new insight.

Managers ensure appropriate systems are in place to protect the environment and support for the communities where they are located.

Associates All associates, every day, demonstrate a commitment to the policies, prin-ciples, and standards developed for the areas in which they work.

Associates seek out and learn from others in the organization including leaders, managers, and peers.

All associates take full responsibility for their own personal development in relation to their contribution to the enterprise.

Associates demonstrate a strong commitment to providing the greatest value for customers with the least amount of non-value-added resource.

All associates seek to understand issues from the customer’s point of view and strive to maximize the uninterrupted flow of value to them.

Associates demonstrate an eagerness to learn new skills, take initiative and share their learning and success with others.


CONTINUOUS PROCESS IMPROVEMENT

DIMENSION TWO:

CONTINUOUS PROCESS

IMPROVEMENT

the mistake but rather leads to a pursuit of the real culprit (process) that allowed the mistake to be made. Thus, process focus also supports the cultural enablers, creating an environment where learning from mistakes can become a powerful element of continuous improvement.

Principle – Embrace Scientific ThinkingA focus on process lends itself to scientific thinking, a natural method for learning and the most effective approach to improvement. All associates can be trained to use scientific thinking to improve the processes with which they work creating a culture that provides common understanding, approach, and language regarding improvement. Scientific thinking is also results-based, placing a premium on defining and communicating desired outcomes throughout the organization.

There are a variety of models for scientific thinking, such as PDCA (plan, do, check, and adjust), the QI Story, A3 thinking, and DMAIC (define, measure, analyze, improve, and control).

Principle – Flow and Pull ValueFlow thinking is the focus on shortening lead-time from the beginning of the value stream to the end of the value stream and on removing all barriers (waste) that impede the creation of value and its delivery to the customer. Flow is the best driver to make processes faster, easier, cheaper, and better. Other potential drivers such as unit cost or process variability are too narrowly focused, distorting priorities and delivering suboptimal results. A cost focus is particularly dangerous, when it creates perverse incentives and budget manipulations incidental to actual improvement.

Pull is the concept of matching the rate of production to the level of demand, the goal in any environment. Yet pull is not feasible or cost-effective without the flexibility and short lead times that result from flow.

Flow and pull create enormous positive benefits in all aspects in any business. Focusing on flow will lead to improvements, including better safety and morale, more consistent quality with fewer defects, increases in on-time delivery and flexibility, and lower costs,

Continuous improvement begins by clearly defining value through the eyes of customers. Expectations must be clearly communicated so systems can be designed to meet customer needs. Every employee must know “what good is,” whether his or her process is creating good product or service, and they must know what to do if it is not.

As associates learn to identify and eliminate waste, they will by necessity follow Dr. Shingo’s advice: “Improvement means the elimination of waste, and the most essential precondition for improvement is the proper pursuit of goals. We must not be mistaken, first of all, about what improvement means. The four goals of improvement must be to make things: Easier, better, faster, and cheaper.” Particular emphasis is placed on a quicker, more flexible response throughout the system.

The focus for continuous improvement cannot be only quality or cost but instead must incorporate all aspects of value as perceived by the customer, including innovation, quality, cost, flexibility, quick delivery, and a comprehensive view of environmental health and safety.

Continuous improvement focused on flow of value requires both scientific thinking and the capacity to identify and eliminate waste (things that interrupt the continuous flow of value).

Principle – Focus on Process A process focus recognizes that all outputs, whether product or service are created by processes acting upon inputs. This simple truth is often overlooked: Good processes will produce the intended output, as long as proper inputs are provided.

Process focus also helps focus problem-solving efforts on process rather than people. A complete shift to process focus eliminates the tendency to find the culprit (person) who made

without running into the traditional trade-offs. In addition, daily and weekly results become more consistent and predictable.

Principle – Assure Quality at the SourceAssuring quality at the source is the combination of three important concepts: (1) do not pass defects forward, (2) stop and fix problems, and (3) respect the individual in the process. Defects are a source of instability and waste, so assuring quality at the source requires the establishment of processes for recognizing errors in the process itself. Organizations must commit to stopping and fixing processes that are creating defects, rather than keeping product or services moving while planning to fix the issue later. Proper use of the human element in the process for thinking, analysis, problem solving, and the implementation of countermeasures is vital to continuous improvement.

Principle – Seek Perfection It is important to understand that the continuous process improvement journey has no end. This explains Dr. Shingo’s philosophy that one should always look for problems where there doesn’t appear to be any. This is contrary to the traditional belief: “If it isn’t broken, don’t fix it.” The pursuit of perfection reveals that there are always opportunities for improvement. There is always waste, and the more a process is observed the more waste will be seen.

While focus on process guides and directs the improvement efforts, seeking for perfection is the engine that keeps improvement energized and moving forward at an aggressive pace. The term problem-solving may imply that after a solution is implemented, improvement is done. Seeking perfection and scientific thinking combine to find countermeasures, not game-ending solutions, and then revisits the issue again and again, pursuing perfection without really expecting to find it.

The following table provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that come from these five guiding principles and should not in any way be considered as an exhaustive list.

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Supporting Concept – Stabilize ProcessesStability in processes is the bedrock foundation of any improvement system, creating consistency and repeatability. Stability is a prerequisite for improvement, providing a basis for problem identification and continuous improvement. Almost all of the continuous improvement principles rely on stability.

Stability is the precursor to achieving flow. Many of the rationalizations for waste are based on the instability of processes, as if they are beyond our control. Instead, we should apply the basic tools available to reduce or eliminate instability and create processes that enable the identification and elimination of waste.

Supporting Concept – Rely on Data & FactsShingo emphasized the importance of being data-driven in the pursuit of continuous improvement. He frequently shared examples of specific situations where data was collected, but it was not the correct data or the data wasn’t actually being used in the improvement process. Finally, he was adamant that the understanding of the actual process be so detailed that when implementing a change in the process the improvement in the data could be predicted. Thus, reconciliation is required between the predicted results and the actual results, making the improvement process truly data-driven. The principle is that when data is treated loosely or imprecisely, there is a tendency to leave potential improvement on the table or, even worse, to not achieve any improvement at all.

Supporting Concept –Standardize Processes While stability is a necessary precondition for creating flow and improvement, standardization builds control into the process itself. Standardization is the supporting principle behind maintaining improvement,

rather than springing back to preceding practices and results. Standardization also eliminates the need to control operations through cost standards, production targets, or other traditional supervisory methods. When standardization is in place, the work itself serves as the management control mechanism. Supervisors are freed up for other tasks, when they are not “required” to monitor and control the output and costs.

Supporting Concept –Insist on Direct ObservationDirect observation is a supporting principle tied to scientific thinking. It is in fact the first step of the scientific method. Direct observation is necessary to truly understand the process or phenomenon being studied. All too frequently, perceptions, past experience, instincts, and inaccurate standards are misconstrued as reality. Through direct observation, reality can be seen, confirmed, and established as the consensus.

Supporting Concept – Focus on Value StreamFlow and pull value combined with focus on process lead to the necessity of defining value streams and focusing organizational attention on them. A value stream is the collection of all of the necessary steps required to deliver value to the customer. Defining what customers value is an essential step to focus on the value stream. Clearly understanding the entire value stream, however, is the only way for an organization to improve the value delivered and/or improve the process by which it is delivered.

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Category Examples of Ideal Principle-Based BehaviorLeaders Every leader devotes a significant amount of his/her time (up to 80 percent)

ensuring the principles of continuous improvement are deeply embedded into every facet of the organizational culture.

Every leader consistently evaluates their own behavior related to each of the principles.

Leaders ensure continuous improvement is a part of their daily standard work and are accountable to others for their improvement.

Leaders in all areas create a healthy tension between celebrating accomplish-ments and setting goals to move to the next level.

All leaders in every area of the organization encourage the establishment of stretch goals and encourage managers and associates to push themselves to levels of performance that do not seem possible.

Leaders consistently ask for and expect to see the application of appropriate tools to understand root cause prior to implementing countermeasures.

Leaders expect and support the role of managers in designing and constantly improving systems at the business, management, improvement, and work levels as the first course of action when results are less than expected.

Every leader understands and balances the organizational focus on both be-haviors and results, holding themselves and others accountable for both.

Managers Every leader understands and balances the organizational focus on both be-haviors and results, holding themselves and others accountable for both.

All managers participate with associates as required on improvement initiatives.

Managers demonstrate knowledge of appropriate tools and use them regu-larly to solve problems related to their areas of responsibility.

Managers ensure the necessary resources are always available to support continuous improvement and help associates to understand the reasons why a particular idea may not be implementable, empowering them to create even better ideas the next time.

All managers watch for and appropriately recognize associates for both dem-onstrating ideal behavior and for achieving business goals.

Associates Every associate in every part of the organization is engaged every day in us-ing the appropriate tools of continuous improvement to eliminate waste and maximize value creation.

Associates everywhere seek to understand the principles (the why) behind the tools (the how); they learn and use that knowledge to continuously improve the application of the tools.

All associates demonstrate the courage and integrity to tell the truth, stop pro-duction, and be accountable for defects they observe or create themselves.

Associates share their expertise in developing best practice standard work and demonstrate the discipline to follow it until a better way has been developed.


Table Two: Examples of Ideal Behavior for Continuous Process Improvement


Supporting Concept –Keep it Simple & Visual

“Everything should be made as simple as possible, but not simpler.” ~Albert Einstein

“Simplicity is the ultimate sophistication.” ~Leonardo DaVinci

In society today, there is frequently a bias toward complex solutions and a premium paid to those who seem to manage complexity well. However, it is usually the case that better results at a lower cost can be achieved by simplification. Dr. Shingo’s life work in mistake proofing is centered on this principle.

Many of the seven forms of waste are in fact the result of information deficits. Making information visual is the supporting principle that when combined with simplification solves the information deficits.

Supporting Concept –Identify and Eliminate WasteIdentification and elimination of waste is a practical concept for making processes flow, thus it becomes a primary focus of continuous improvement. Waste elimination is a powerful supporting principle because it is easily understood by everyone associated with a value stream, compared to the complex concepts and computations often associated with cost per unit, cost variances, statistical variability, and other complex metrics. Focusing on the elimination of waste will

Supporting Concept –Integrate Improvement with WorkAs the migration toward a principle-based culture occurs, the activities and approaches for continuous improvement become a part of the everyday work of every employee in an organization. Associates become “scientists” who continually assess the current state of their processes and pursue a better future state that will enhance the value (or eliminate the waste) and thus pursue perfection.

Each person in an organization performs daily work. When improvement is integrated with work, each person accepts responsibility for improvement of the daily work processes. Executives are responsible for improving strategy setting processes or perhaps resource alignment processes. They are primarily responsible to deploy mission-critical strategy and metrics down into the organization such that every person not only has a clear line of sight to what matters the most but are also motivated by the mission in a way that creates a compelling case for improvement.

Managers are responsible for improving quality systems, or performance development systems, or value stream flow. Line workers are responsible for improving their cycle times, or quality of work, or yields. Integrating improvement with work is more than assigning responsibility. It entails the creation of standardized work that defines procedures for improvement.

Implications of this concept are that improvement initiatives that require organization, the definition of projects, assignment of full-time personnel, or the use of special titles should be seen as transitional. As long as improvement largely depends on these things, the culture of operational excellence will remain elusive.

consistently drive appropriate behavior, while the wrong focus can frequently become a barrier to improvement, large inventory write-downs, fire sales, or scrap. In the end, identifying and eliminating waste is a concept that effectively engages the entire organization in the continuous improvement effort.

Supporting Concept –No Defect Passed ForwardThis concept is essential for operational excellence from many different points of view. From a leader’s perspective, it requires great courage to stop the process long enough to understand the root cause and take counter-measures that prevent the process from reoccurring. For the leader, this often means trading any short-term loss for substantial long-term gain.

From a manager’s perspective, systems must be in place to ensure that any result that varies from the standard, even slightly, creates an expectation of and support for immediate action. We often call this “swarming.”

From an associate’s point of view, “no defect passed forward” requires a mindset of ownership and accountability. If standards are clearly defined, every person should know what good is. Leaders and managers should role model then create the conditions for associates to develop the mindset of personal integrity; meaning, that no one would ever knowingly or willingly forward the outcome of their value contribution to someone else if it contained the slightest variation from the standard.

This supporting concept feeds the mindset and tools of continuous improvement and creates the conditions for seeking perfection. It is possible to achieve perfection in the application of this concept.

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provides a unifying vision. This sense of direction helps people keep their eyes on the horizon so that when tactical decisions require a temporary detour, they understand why and can contribute to getting back on track.

The second category for where constancy of purpose can be achieved is in the establishment of the guiding principles upon which the organization is grounded. Principles are universal, timeless, and self-evident laws that govern the consequences of our actions. The degree to which principles are adhered will always impact the success of any organization. Leaders must come to understand which principles have the greatest impact on results and then make certain every aspect of the organization is organized to drive behavior that is in greatest harmony with the principles.

Having established direction and guiding principles, a leader must align strategy and performance metrics broadly and deep into the organization. A system must be built to ensure constant communication, both up and down.

One of the most significant failures of modern management is its focus on strategy and planning without considering execution. To succeed, organizations must develop management processes that align work and behaviors with both philosophy/principles and direction in ways that are simple, comprehensible, actionable, and standardized. Individual leaders cannot develop individual approaches to management without introducing massive waste into an organization.

Strategy deployment requires a management process built around scientific thinking, with more emphasis on cycles of learning than on perfect plans. It is essential to establish effective communication, a process for gaining consensus, clear accountability, and systems where execution and countermeasures are planned and tracked, whether through PDCA or a similar methodology. In essence, operational excellence is the definition of successful strategy deployment, when business strategies are aligned with correct principles.

The sum of individual efforts rarely even approximates the effective alignment of the pieces into a single integrated whole. Creating value for customers is ultimately accomplished through the effective alignment of every value stream in an organization.

Principle – Create Constancy of Purpose Almost every aspect of any organization is in a constant state of change. Customers change, customer’s expectations change, competitors change, markets change, technology changes, leadership and management changes, processes change, products change, strategies change, even values or the implied meaning of those values change. Even knowing this, the first of W. Edwards Deming’s “14 Points” is to create constancy of purpose. How is this possible?

Purpose, at the highest level answers the question: “Why does this organization exist?” It is incumbent upon leaders to find agreement on philosophical and strategic direction that

Changes in direction, guiding principles, and key metrics should be treated like changes in the national constitution. Organizations that frequently redirect philosophies and strategies fail to recognize the tremendous waste associated with instability, fluctuation, and perhaps most importantly, the loss of human commitment.

Principle – Think Systemically Systemic thinking is the principle that unifies all the other principles of operational excellence and enables organizations to sustain their culture of continuous improvement and develop a constancy of purpose.

Systemic thinking requires organizations to both analyze and synthesize. Analysis, or convergent thinking is focused on taking things apart to see what can be learned from the various components. We call this “looking into things.” Synthesis, or divergent thinking, is focused on seeing how things might work together. We call this “looking out of things.” Convergent thinking includes being logical and organized while divergent thinking embodies being imaginative and interpersonal. Operational excellence requires both.

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DIMENSION THREE:

ENTERPRISE ALIGNMENT

Looking into things-take apart

Looking out of things-see how things work together

2Synthesize

1Analyze

(Convergent Thinking) (Divergent Thinking)

Systemicthinking

Concept

Tools

Tools

Concept



Leaders realize that the impact of synergy — how things work together — is far greater than the sum of the parts. As managers design and align systems with correct principles they must shift from thinking purely analytically to thinking systemically. Systemic thinking is comprised of three parts: holistic thinking, dynamic thinking, and closed-loop thinking.

Holistic thinking is about seeing the “big picture.” It requires two things. First, everyone has a common vision concerning what they are working to achieve. The second requirement is transparency across the system.

Dynamic thinking requires recognizing that all current situations are the result of interactions between parts of a system that occur over time, rather than snap-shot events.

Closed-loop thinking requires under-standing how changes within the system ripple across the value stream affecting the work/behavior of other employees in the same department, in other departments, external customers, suppliers, and other stakeholders.

As managers move into systemic thinking, the full value of operational excellence is realized across the organization, the enterprise, and ultimately the entire value chain. As associates adopt systemic thinking practices, they gain the necessary perspective to safely initiate improvement projects on their own. Ultimately, this understanding is what allows improvement effort to transition from being solely top-down to more of a grass roots effort.

The following table provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that come from these two guiding principles and should not in any way be considered as an exhaustive list.

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Category Examples of Ideal Principle-Based BehaviorLeaders All leaders share a common, clear, and compelling vision of the future and talk

about it in a consistent way everywhere they go.

Leaders create and consistently execute a system of “catch ball” to present ideas on strategy down and across the organization, receive feedback, and build organizational consensus.

Leaders establish a simple system of metrics and accountability that aligns and prioritizes the work, decision making, and improvement efforts of the organization.

Leaders focus both on results and behavior, setting targets and accountability for both.

Managers Managers ensure a continuous flow of information (both horizontally and verti-cally) to associates, making sure they fully understand the context for their work and the goals they set.

Managers develop systems to ensure all associates understand strategy, tactics, and metrics and know how their work contributes.

All managers ensure people have enough information and a broad enough perspective to know the implications of their recommendations and actions.

Associates Associates ask questions that expand thinking to the broader context beyond their own jobs.

Associates seek job experiences that broaden their perspective.

All associates know the performance and behavioral metrics for their area, use them to create personal and team improvement, and connect their work with company goals.

Table Three: Examples of Ideal Behavior for Enterprise Alignment


Supporting Concept – See Reality This is a very important concept. Most managers and leaders consider themselves quite capable of seeing the world around them and assessing the current situational realities. However, Dr. Shingo teaches that people can have blind spots created by long-held paradigms, experience, history, expectations, etc. Thus the practice of “go and see” was developed based on the principle that reality needs to be perceived and understood based upon the five senses.

Most organizations create barriers that make it very difficult for people to see and tell the truth about what they see. A recently retired US senator wrote that having travelled on numerous trips with other political and military leaders to areas of serious world conflict, his greatest disappointment was that virtually all of their assessments of progress were greatly distorted from the actual data they observed.

Further, most organizations unintentionally build cultures that prevent the free flow of information that communicates an honest picture of reality. Max De Pree said, “The first responsibility of a leader is to define reality.” A leader must establish systems that make organizational performance and associate behavior transparent to all.

No leader can effectively lead without having a firm grasp of the current business realities.

Supporting Concept – Focus on Long-term Jeffrey Liker highlights the principle of long-term focus, which provides a foundation of stability in the executive suite that can be achieved in no other way. When an organization creates a long-term focus, it is

Supporting Concept –Standardized Daily ManagementThe concept of having some level of detailed work description for how to actually do daily work applies at all levels of the organization. Regardless of the perception among many leaders, their work can and should also be organized into standard components. Standard daily management creates a reference point from which continuous improve can be based. Standard daily management can also lead to greater process control, reduction in variability, improved quality and flexibility, stability (i.e. predictable outcomes), visibility of abnormalities, clear expectations, and a platform for individual and organizational learning. Standard daily management enables creativity that is focused and controlled rather than ad hoc. Leaders who follow standard work send a clear message that they are serious and no one is above continuous improvement.

more likely that decisions will in fact pursue safety, quality, delivery, and cost rather than monthly or quarterly financial targets or bonus cut-offs. In conjunction with taking care of the short- and medium-term priorities, thinking in terms of 20- to 50-year legacy goals significantly reduces the tendencies for knee-jerk reactions to urgent pressures.

Supporting Concept – Align Systems From the stakeholders’ perspective, the full potential is realized only when most critical aspects of an enterprise share a common platform of principles of operational excellence, management systems, and tools. While it is expected that organizations develop some unique elements of their local culture, it is also expected that principles become a common, uniting part of each locale. Top-level leadership, staff, and business processes should exemplify the same principles, systems, and tools as do the operational components of the enterprise.

Supporting Concept – Align Strategy Policy deployment is a planning and implementation system, based on scientific thinking, employee involvement, and respect for the individual. At the strategy level, policy deployment provides leadership with the necessary principles, systems, and tools to carefully align key objectives and execution strategies while empowering the organization through cascading levels of detail to achieve those objectives. Because so many people are involved, clarity is critical; the simplicity of aligning strategy helps keep everyone, literally, on the same (single) page, pointed in the same direction.


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Results

to know to be able to plan, organize, and control. Within a model where widespread involvement is essential for continuous improvement and consistent performance, it is important to define measures that matter to those who will be using them. Therefore, line associates need different measures than leaders responsible for the overall enterprise. Many thought leaders on measurement have suggested the new measurements need to: 1) be directly tied to strategic priorities – move the dial, 2) be simple and easy to capture, 3) give timely feedback that is tied to the cycle of work, and 4) drive improvement.

Measures that matter can be created throughout the organization to assure that everyone is focused on the appropriate strategic activities and driving continuous improvement that moves the whole enterprise ahead.

Supporting Concept –Align Behaviors with PerformanceIdeal behavior drives long-term results. This happens when the systems are aligned with principles of operational excellence. Managers should help each person anchor their own personal values with these same principles. Personal values are what ultimately drive individual behaviors. Leaders are responsible

The basic principle of the results dimension is that businesses must flow value, with value typically defined as something for which customers are willing to pay. Therefore, the definition can include many stakeholders: Customers willing to pay; investors willing to invest; communities willing to support; and employees willing to commit their trust, confidence, and careers. Operational excellence creates the flow of value to all stakeholders, improving customer satisfaction and stakeholder value, while maintaining a safe and healthy environment.

Principle – Create Value for the CustomerEvery aspect of an organization should be focused on creating value for the customers, investors, employees, and communities. Again, it is helpful to consider the true north concept that should guide decision-making and continuous improvement. An organization should drive all aspects of value, including quality, flexible responsiveness to customers, and return to stakeholders (e.g., growth, revenue, profit, safety, and environmental impact).

The following table provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that come from this single guiding principle and should not in any way be considered as an exhaustive list.

Supporting Concept – Measure what MattersHistorically, measurement has been focused on management – what management needed

for creating the environment and the process for people to evaluate the correctness of their own values relative to the performance results required of the organization.

A business set a goal to reduce customer complaints only to find that as they did, they began to lose valuable customers. The measure was driving behavior that made complaining such a painful experience that they just stopped calling. A better measure might have been to increase the number of complaints so that every single disappointment is given an opportunity to be resolved.

Supporting Concept –Identify Cause & Effect RelationshipsWhen we want to make a car go faster, we simply press more on the gas pedal. So, the “dial” is the speedometer. What moves the dial? Pressing on the gas pedal. Why does this work? Because there is a physical linkage from the pedal to the engine to the axle. There is a clear cause-and-effect relationship.

Organizations must follow the linkages to determine the cause-and-effect relationships and how goals can be achieved. This is the same concept as root-cause analysis but applied to creating value.

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DIMENSION FOUR:

RESULTS

Category Examples of Ideal Principle-Based Behavior

Leaders Leaders make sure the company scorecard is balanced between results and behavior.

Leaders ensure the voice of the customer is clearly heard throughout the entire organization.

Leaders systematically discuss all business results with employees, encouraging questions and discussion.

Managers All managers implement systems that place value creation and waste elimina-tion at the heart of management and improvement efforts.

Managers routinely discuss with associates the relationship between actual re-sults and the systems and principles that are creating them.

Managers make sure that established metrics are aligned upward and side-to-side and are understood and committed to by the people who affect them, so people can see instantly where they are relative to the targets and they know how to move the dial.

Associates All associates systematically review results and ask questions to understand cause-and-effect.

Associates use results metrics to prioritize and take personal initiative to make improvements that impact the areas where improvement is needed most.

Table Four: Examples of Ideal Behavior for Results


Operations• Product or Service Delivery

• Materials management

• Process engineering

• Maintenance

• Quality assurance and reliability

• Testing

Supply• Supplier Selection and Qualification

• Supplier development and partnering

• Procurement process

• Logistics

Management Support• Recruiting

• Compensation and benefits

• Training and employee development

• Employee relations and satisfaction

• Capital budgeting

• Budgeting

• Financial reporting

• Management accounting reporting

• Accounts receivable and accounts payable

(A/R and A/P)

• Asset management

• Computer systems and support

• Computer application design and/or support

• Networking systems and support

Business & Management SystemsThe principles of operational excellence must be applied across all the business and management systems. The pie in the center of the House represents the scope of transformation within an organization, including all basic customer-facing business systems and all management support system. The systems associated with each of five typical business areas could include:

Customer Relations• Sales

• Advertising/promotion

• Order processing and tracking

• Responsive/flexible scheduling

• Invoicing and collections

• Warranty

• Product/service development

• Business processes

Product or Service Development• Market segmentation and selection

• Research

• Development of products or services,

processes, and prototypes

• New product or service launch

Many, if not all, of these management support processes are fundamentally non-value-added in a pure lean sense; that is the customer would not pay extra for these. However, some part of each process is “necessary non-value-added work” that is currently vital to the proper functioning of the organization and the eventual effectiveness of the value-added processes, (i.e., a company needs to pay taxes), but the customer doesn’t necessarily get value from the process. Applying the principles to these processes will help to make sure that they are completed as quickly as possible with the fewest possible resources.

Principles of operational excellence should be applied conscientiously in all of these business and management support processes. As understanding deepens and application spreads throughout the entire enterprise, a consistent culture develops which is self-perpetuating and self-directing.

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SCOPE OFTRANSFORMATION

SCOPE OF TRANSFORMATION


improvement planning. A few use the Shingo model as a way to recognize their associates for excellent work, and others use it to demonstrate to current and prospective customers that they can compete with anyone in the world. Some use the Shingo model for all of the above.

The real Shingo Prize, however, is the business results that come from the relentless pursuit of a standard of excellence that is, without question, the most rigorous in the world. Those who use the Shingo model will embark on a journey that will accelerate the transformation of their organization into powerful, dynamic, nimble competitors.

No obstacle – affordable healthcare, efficient transportation, emerging global environmental concerns – will be beyond the reach of those who embrace principles of operational excellence and make certain that every person in their extended value stream deeply understands the “why” behind the “what.”

Operational excellence is the vision that many organizations have established to drive improvement. Programs, names, tools, projects, and personalities are insufficient to create lasting change. Real change is only possible when timeless principles of operational excellence are understood and deeply embedded into culture. The focus of leaders must change to become more oriented toward driving principles and culture while the manager’s focus becomes more on designing and aligning systems to drive ideal principle-based behavior.

The ultimate mission of The Shingo Prize for Operational Excellence is to assist organizations of all kinds in building operational excellence. The Shingo model may be used as a benchmark for what excellence at the highest level should look like. It may be used to align all elements of an organization around a common set of guiding principles and a proven methodology for transformation. Some use the Shingo model as the basis for organizational assessment and

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SUMMARY

37

The Shingo Model

The Shingo Transformational Process

TOOLS

RESULTS SYSTEMS

GUIDING PRINCIPLESCore Values Anchored to

Culture(Behavioral Evidence)

AFFIRM

DRIVE

ENABLE

SELECT

REFINE

ACHIEVE

ALIGN

DRIVE

INDIVIDUAL FOCUS

ORGANIZATIONAL FOCUS

TM The Shingo Prize

The Shingo Principles of Operational Excellence

Results



Cultural Enablers


Focus on Process















MANAGEMENTSUPPLY


PRODUCT& SERVICE

DEVELOPMENT


Seek Perfection







The Shingo Model


Go & See

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Go & SeeGo & See

GoGo SeeSee

GoGo SeeSee

Go & SeeGo & See

HomeworkTeam WebinarPersonal Call

HomeworkTeam WebinarPersonal Coaching

HomeworkTeam WebinarPersonal Coaching

HomeworkTeam WebinarShingo Exchange Blog

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LEARNING FLOW: The 4 Disciplines of Operational ExcellenceDISCOVER � BUILD � LEAD � ALIGN

Discipline 1: �

Principles of Operational Excellence Transformation Process Principles Behavior � Assessment

Discipline 2: Building Systems to Drive the Right BehaviorSynthesize � Interconnect � Adjust

Discipline 3: Leading with PrinciplesLearning Cycle � Teaching Cycle � Engagement

Discipline 4: Behavior based Strategy DeploymentTSP Mapping � True North Measures� Organizational Alignment Le

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Executive Education Certificate – USU/Shingo Prize

(3 Day)

(3 Day)

(3 Day)

(3 Day)

DISCOVER the BRIDGE

BUILD the VEHICLE

the DRIVER

ALIGN the DIRECTION

Recognized at International Shingo Prize Conference

Participants in the workshops will be able to:

Copyright © The Shingo PrizeAdministered by the Jon M. Huntsman School of Business at Utah State University

Executive Education Certificate – USU/Shingo Prize

benefits• Describe the of focusing on principles• Articulate principle-driven behavior• Identify how tools link to systems• See and assess behavior to provide constructive feedback • Explore what adjustments could be made to improve systems in driving

ideal behavior

fire-fightingScientifically

• Select high impact systems to drive ideal behavior• experiment with adjusting systems• Re-align systems to eliminate work-a-rounds/ • Build system reliability - monitor behavior

• Clarify teaching role: when to mentor, coach, lecture• Unify the learning & teaching cycles• Ask questions that inspire & motivate• Unleash talent and passion• Create a workforce that engages in continuous improvement

specific• Translate your desired culture into behaviors• Monitor behavior (KBI) & performance (KPI)• Align and measure the execution of YOUR strategy• Create a visual map to align & adjust your culture

LEAD

DISCOVERPrinciples of Operational Excellence– Organizational Transformation with Principles, System & Tools

BUILDBuilding Systems to Drive the Right Behavior– Mobilizing Capabilities

LEADLeading with Principles– A Leader’s role in Creating Individual & Organizational Alignment

ALIGNBehavior-Based Strategy Deployment– Aligning Performance with Ideal Behavior

Shingo Executive Education Courses: Taught Separately

Shingo Executive Education Year Long Certi�cate Track: This 12-month, highly-integrated educationalexperience, coaches executives on how to lead their organization through a "Principle-based Cultural Transformation".

THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 40

The Shingo Principles of Operational Excellence The Shingo Transformational Process

The Shingo Model

Results



Cultural Enablers


Focus on Process















MANAGEMENTSUPPLY


PRODUCT& SERVICE

DEVELOPMENT


Seek Perfection







TOOLS

RESULTS SYSTEMS

GUIDING PRINCIPLESCore Values Anchored to

Culture(Behavioral Evidence)

AFFIRM

DRIVE

ENABLE

SELECT

REFINE

ACHIEVE

ALIGN

DRIVE

INDIVIDUAL FOCUS

ORGANIZATIONAL FOCUS

TM The Shingo Prize


performance. Most measures are aligned to corporate goals and cascade to the lowest level. Silos are difficult to identify.

The Shingo Silver Medallion is awarded to organizations who demonstrate strong use of tools and techniques, have mature systems that drive improvement, and are beginning to align thinking and organizational behavior with correct principles of operational excellence. Leadership is involved in improvement efforts and supports the alignment of principles of operational excellence with systems. Managers are deeply involved and focused on driving behaviors through the design of systems. Associates are involved every day in using improvement tools to drive continuous improvement in their areas of responsibility. Understanding the “why” has begun to penetrate the associate level of the organization. Improvement activity is focused on multiple business systems. At the silver level the scorecard has a broad spectrum of measures and is beginning to include behavioral elements. Key measures are stable with mostly positive trends, and all levels understand how to affect the measures appropriately for their areas. There are goals being set in most business systems. Alignment is clear and apparent in most business systems; plans have been set in place to bring them into alignment where it is not. There are few silos left.

The Shingo Bronze Medallion is awarded to organizations that demonstrate strong use of tools and techniques for business improvement and are working to develop effective systems to create continuity and consistency of tools applied throughout the business entity. Leadership is setting the direction for improvement and supports the efforts of others. Managers are involved in developing systems and helping others use tools effectively. Associates are trained and participate at a high rate on improvement projects. Understanding the “why” has still not penetrated down to the associate level of the organization. Improvement activity is still heavily focused on operations and has begun in support areas. At the bronze level measures are beginning to communicate cause and effect. Key measures have begun to stabilize with trends being mostly positive with some backsliding still evident. There are goals

The Shingo assessment methodology is being embraced by organizations all over the world, without barrier to industry or geography. We have seen involvement expand far beyond its manufacturing roots into healthcare, government, and financial services. There are three levels of recognition in place to encourage organizations to engage and utilize the Shingo model as early as possible in their cultural transformation. Organizations can be awarded The Shingo Prize, Shingo Silver Medallion, and Shingo Bronze Medallion. A third party, non-biased assessment of your organization can provide a benchmark and eye-opening feedback that will accelerate your cultural transformation. The Shingo Prize is awarded to organizations that demonstrate a culture where principles of operational excellence are deeply embedded into the thinking and behavior of all leaders, managers, and associates. Performance is measured both in terms of business results and the degree to which business, management, improvement, and work systems are driving appropriate and ideal behavior at all levels. Leadership is strongly focused on ensuring that principles of operational excellence are deeply imbedded into the culture and regularly assessed for improvement. Managers are focused on continuously improving systems to drive behavior that is closely aligned with the principles of operational excellence. Associates are taking responsibility for improving not only their work systems but also other systems within their value stream. Understanding the “why” has penetrated the associate level of the organization. Improvement activity has begun to focus on the enterprise as a whole. At The Shingo Prize level, the scorecard has clearly defined performance measures and is beginning to include measures of behavior. Key measures are stable, predictable, and mature with positive trends and few anomalies. There are realistic and challenging goals in most areas with a good understanding of world-class

being set in many areas outside of operations. Alignment may still be weak in areas other than operations, but efforts are being made to improve and work toward aligning the entire enterprise. Silos are beginning to fall. The cultural assessment is broken into three distinct evaluation sections, the achievement report, the Shingo Cultural Online Performance Evaluation (SCOPE, new and planned to come online this year), and the site visit. Each section is evaluated and may be used to clarify, amplify, and verify the other sections.

Achievement reports are written by each applicant and tell the story of their transformation to operational excellence. The achievement report covers each dimension of the model and discusses the principles, systems, and tools that are evident and the results they have produced. The achievement report, along with the SCOPE survey, is used by members of the Shingo Board of Examiners to evaluate an applicant’s eligibility to be awarded a site visit. Not all applicants will be awarded a site visit; furthermore, not all organizations that receive a site visit will become recipients. Further instruction on writing the achievement report will be provided in a later section of this document.

SCOPE will be administered to each applying entity. All data received from SCOPE will populate a Shingo database and be used to provide feedback to the applicant. Feedback from SCOPE will be part of a packet, which will be provided to each applicant regardless of whether or not they are awarded a site visit.

Site visits that are awarded to applicants follow a standard format. In summary, they are conducted by a team of examiners that have been trained and selected by The Shingo Prize for Operational Excellence. The team generally spends two days at the site evaluating the culture of the applicant; duration of a site visit may be extended depending on the application. Examiners observe behaviors, review documentation and measures, and ask questions of all levels and business systems of the applying entity. Examiners are provided all evaluation resources available that pertain to an applicant. This could include, but is not limited to, the achievement report, the SCOPE survey results, and past documentation used to challenge.

ASSESSMENT GUIDELINES

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Results



Cultural Enablers








Identify Cause & Effect Relationships



MANAGEMENTSUPPLY


PRODUCT& SERVICE

DEVELOPMENT

Focus on Process



Embrace Scientific Thinking

Seek Perfection








Identify and Eliminate WasteNo Defects Passed Forward

SUPPLY MANAGEMENT

OPERATIONS CUSTOMERRELATIONS

PRODUCT& SERVICE

DEVELOPMENT

BUSINESSSYSTEMS

This robust assessment process is used for all entities applying for The Shingo Prize. It is the most rigorous cultural assessment available because it combines documentation in the achievement report (perceived reality) along with two sources of direct observation, the SCOPE survey, and the site visit (actual reality). This provides the most accurate assessment of your culture available.

Assessment Criteria

This section covers the four dimensions of the model and serves as a guide and provides

Dimension 1 – Cultural Enablers (250 Points Total)

Guiding Principles:

Lead with humility

Respect every individual

Supporting Concepts:

Empower and involve everyone

Develop people

Assure a safe environment

The following are examples of systems that drive behaviors and are aligned to principles as exemplified in the model (the first portion of this document). Some tools are also listed as examples. This is not intended to be a check list, nor is it all inclusive. Not all will be present in every organization, and organizations may have others not listed here. These are simply examples and provide organizations some guidance on what an assessment would evaluate.

Systems:

• Individual development

• On-the-job training/training within industry

(OJT/TWI)

• Coaching

• Standard daily management

• Leadership development

• Idea sharing

• Suggestion and involvement

• Reward and recognition

• Communication

• Environmental, health, and safety

• Education/training

• Community involvement

• Recruitment and succession planning

• Accountability

examples of systems that drive principle-level behavior and tools that support those systems. The following is not intended to be a check list for each dimension; it simply provides examples of principles, systems, and tools in each dimension. The systems and tools observed during an assessment are the artifacts of a culture. The behavior that is observed during an assessment is key to evaluating the level of cultural transformation that an organization has achieved. Ideal behaviors are characteristic of the highest level of achievement and are exemplified previously in the model. Examples of questions in each dimension are also included for guidance purposes.

It is important to note that every business system within an organization is assessed to the entire model, operations, product and service development, customer relations, management, and supply. Business systems may be characterized differently in any given organization although the assessment methodology still applies. The following diagram illustrates the relationship between the different systems in an organization.

Tools:

• Arrangements with educational institutions

• Personal development plans

• Lean training curriculum and materials

• Meetings/huddles

• Suggestion forms and measures

• Community open house

• Fundraisers

The following are examples of questions that examiners would be engaged in answering and understanding during an organizational assessment. Answers to these and other questions asked of leaders, managers, and associates will provide examiners with an understanding of the culture of an organization. This is not intended to be a complete list; it is for guidance and learning purposes. Examiners will also evaluate the frequency, duration, intensity, scope, and role of the behaviors that characterize the culture of an organization. The behavior assessment scale provided on page 49 of this document provides further understanding of this process.

Questions:

Open ended questions directed toward leaders, manager, associates, and other observations provide answers to the sample questions below. Once behavioral evidence is observed and collected by examiners, it is rated with the behavioral assessment scale.

1. Is on-the-job coaching in lean practices a

daily part of the culture?

2. Is formal lean training and education

ongoing and updated?

3. Is there a process flow where suggestions

are processed quickly and feedback is

received by the originator?

4. Is the organization a safe and clean

workplace where safety and environmental

standards are continually improving?

5. Does the recognition system focus on

performance that encourages ideal behavior

and is it frequent, timely, and specific?

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Dimension 2 –Continuous Process Improvement (350 Points Total)

Guiding Principles:

Focus on process

Embrace scientific thinking

Flow and pull value

Assure quality at the source

Seek perfection


No defects passed forward

Stabilize processes

Rely on data and fact

Standardize processes

Insist on direct observation

Focus on value stream

Keep it simple and visual

Identify and eliminate waste

Integrate improvement with work

The following are examples of systems that drive behaviors and are aligned to principles as exemplified in the model (the first portion of this document). Some tools are also listed. This is not intended to be a check list, nor is it all inclusive. Not all will be present in every organization, and organizations may have others not listed here. These are simply examples and provide organizations some guidance on what an assessment would evaluate.

Tools:

• Customer surveys

• Component standardization and modularity

• Standard operating procedures (SOP)

• Tools of quality (i.e. pareto charts,

storyboarding, cause-and-effect diagrams,

5-whys, or similar problem-solving

techniques)

• Benchmarking visit

• Right-sized equipment and facilities

• Production control boards

• Red tags

• Floor tape


Systems:

• Voice of the customer

• Problem-solving (A3 Thinking,

PDCA,DMAIC)

• Value stream analysis

• Total productive maintenance (TPM)

• Visual management

• 5S methodology

• Supplier development

• Continuous improvement methodology

• Production Process Preparation (3P)

• Quick changeover or setup reductions

(SMED)

• Error proofing/zero defects

• New market development and current

market exploitation

• Quality function deployment, concurrent

engineering, etc. for product development

• Theory of constraints – managing

bottlenecks

• Systems that make the customer/supplier

linkage visible throughout all stages of the

process and encourage/require regular

communication

• Design for manufacturability, testing,

maintenance, assembly — i.e. making it

simpler and easier to deliver best quality

and quickest, most reliable response to the

customer at the lowest cost

• Involve suppliers and customers in

product/service design and continuous

improvement

• Direct observation (go and see) and data-

based decisions and actions

• Cellular design/layout

• Variety reduction

Questions:

Open ended questions directed toward leaders, manager, and associates and other observations provide answers to the sample questions below. Once behavioral evidence is observed and collected by examiners, it is rated with the behavioral assessment scale.

1. Is the current state and future state an

ongoing continuous cycle that is actively

pursued with a visual, detailed action plan

and timeline?

2. Are standards and work instructions simple

and visual for all work processes? Are they

updated with improvements routinely? Are

they followed with regard to timing and

sequence?

3. Are managers and supervisors routinely

observing the actual process in order to

gather factual data to understand the

problems and opportunities?

4. Are improvements made by following

a scientific method, PDCA, DMAIC, A3

thinking, etc.? Is there a coaching process

in place for problem-solving? Are problems

being addressed at the lowest possible

level of the organization?

5. Are problems, defects, and abnormal

conditions signaled and stopped

immediately at the point of occurrence and

the root cause pursued?

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Dimension 3 – Enterprise Alignment (200 Points Total)

Guiding Principles:

Create constancy of purpose

Think systemically


See reality

Focus on long-term

Align systems

Align strategy

Standardized daily management

The following are examples of systems that drive behaviors and are aligned to principles as exemplified in the model (the first portion of this document). Some tools are also listed. This is not intended to be a check list, nor is it all inclusive. Not all will be present in every organization, and organizations may have others not listed here. These are simply examples and provide organizations some guidance on what an assessment would evaluate.

Systems:

• Strategy deployment

• Daily management

• Assessment

• Communication

• Customer relationship management (CRM)

• Information technology

• Accounting/finance

• Measurement/scorecard

• Reporting/accountability

Questions:

Open ended questions directed toward leaders, manager, associates, and other observations provide answers to the sample questions below. Once behavioral evidence is observed and collected by examiners, it is rated with the behavioral assessment scale.

1. Is there a structured process for aligning

goals and strategic priorities that is simple

and visible at all levels of the organization?

2. Do leaders hold to the guiding principles

through hard times?

3. Are support functions seamlessly integrated

to aid operations in creating value (process-

based versus silo culture)?

4. Do information systems provide direct

flow of pertinent information that is

easily accessible and usable across the

extended enterprise (no shadow systems

or spreadsheets)?

5. Do leaders and managers have a standard

work process that enables them to monitor

and maintain company alignment?

Tools:

• Daily management standard work sheets

• Surveys

• Meetings

• X-Matrix

• Mission statement

• Vision statement

• Goals

• Values

• Business models


Dimension 4 – Results (200 Points)

Guiding Principle:

Create value for the customer


Measures that matters

Align behavior with performance

Identify cause and effect relationships

The following are examples of systems that drive behaviors and are aligned to principles as exemplified in the model (the first portion of this document). Some tools are also listed. This is not intended to be a check list, nor is it all inclusive. Not all will be present in every organization, and organizations may have oth-ers not listed here. These are simply examples and provide organizations some guidance on what an assessment would evaluate.

Systems:

• Voice of the customer

• Strategy deployment

• Communications

• Visual management

• Management reporting

Tools:

• Huddles

• Control boards

• Score cards

• All employee meetings

• Surveys

The following are examples of questions that examiners would be engaged in answering and understanding during an organizational

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assessment. Answers to these and other questions asked of leaders, managers, and associates will provide examiners with an understanding of the culture of an organiza-tion. This is not intended to be a complete list; it is for guidance and learning purposes. Results will also be evaluated based on stabil-ity, trend/level, alignment, and improvement usage. The results assessment scale provided on page 50 of this document provides further understanding of this process.

Questions:

Open ended questions directed toward lead-ers, manager, associates, and other observa-tions provide answers to the sample questions below. Once behavioral evidence is observed and collected by examiners it is rated with the behavioral assessment scale.

1. Are measures simple? Is there is a com-

mon understanding of what is measured

and why it is measured? Are measures

directly tied to the organization’s overall

objective?

2. Are measures used to drive improvements?

3. Do performance measures drive the right

behaviors?

4. Are tracking boards used routinely for

open discussion and feedback so that ad-

justments can be made, and at what level?

5. Are principles, systems, and tools aligned

in such a way that guiding principles help

align the systems to select appropriate

tools to achieve performance targets?

4.A Quality

Strongly recommended measures:

• Quality to the customer (defect-free delivery)

• Finished product first pass yield and/or rework

• Resource utilization (floor space, vehicles,

etc.) (high utilization without adverse effects

on responsiveness)

• Return on investment

• Revenue per employee hour worked

• Portfolio value (new products and existing)

• Maintenance profiles (percent preventive

for example)

• Other appropriate measures

4.C Delivery


• On-time delivery complete to customer

requested date

• Total lead time (the time from customer

order to customer receipt, assuming no

finished goods inventory)

• Processing cycle time (into process to out-

of process)

Examples of other supporting measures that could be provided are:

• Time from or to supplier to receipt of ma-

terials

• Customer awards, audits, and surveys

• Premium freight as percent of production

costs

• Mis-shipments

• Warranty response and service

• Reorder rate

• Field performance data

• Backorder data

• System availability


4.D Customer Satisfaction


• Market share

• Customer surveys


• Internal quality (quality within the plant)

• No disclosures (recalls later)

• Designs that meet customer needs

• Unplanned scrap rate

• Overall cost of quality

• Process variation measures

• Customer returns

• Supplier quality

• Warranty cost


4.B Cost/Productivity


• Productivity of cash (cash flow)

• Key value stream margins

• Turns (of what is produced)


• Cost per unit

• Labor hours per unit

• Labor productivity – organizational physi-

cal or financial output as compared to labor

quantity

• Asset productivity (organizational output

compared to value of physical assets em-

ployed)

• Inventory turns (organizational raw, work-

ing, and finished inventories compared to

relevant total cost or revenue)

• Cost structure (reduction in key cost cat-

egories)

• Energy productivity (physical or financial

output compared to energy cost or quantity)


• Success of new products

• New contract awards

• Share of category

• Customer retention

• Net promoter score

• Customer engagement in programs

• Measure of customer intent (awareness and

consideration)


4.E Safety/Environment/Morale


• Number of ideas per employee and degree

of employee implementation of them

• Near misses

• Survey (measure of employee trust and confi-

dence in organization and management)


• Reportables

• Waste to landfill

• Recycling

• Emissions

• Energy consumption

• Utilization of high potential talent

• Talent pipeline strength (succession planning)


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The intent of the assessment is to evaluate the entire applying entity to determine the degree to which the principles of operational excellence are deeply embedded into the culture of the entire organization. The assessment evaluates results, as well as behavior. Each business system will be assessed to the entire model, all dimensions and principles therein. Three dimensions of the model are scored based on the behavioral assessment scale, cultural enablers, continuous process improvement, and enterprise alignment. The fourth dimension, results, is scored using the results assessment scale. Both scales are presented in the next few pages. Each dimension of the model will be scored in the format below, the scoring matrix. As represented in the scoring matrix below, behavioral dimensions will be divided into three main categories for assessment purposes: Leaders, operations and support. There are also two sub categories for assessment under operations and support. They are managers and associates. Weights have been assigned to each category. The assessment will provide a gap analysis that can be used to focus improvement activities. It will provide a baseline of cultural reality that will enable an organization to move forward on its journey toward building a culture of operational excellence.

The following illustration is representative of how an organization is assessed, the weights given and points assigned to each dimension. In an effort to promote continuous improvement, the feedback received by an organization after a site visit will provide a level that the organization achieved in each area. This level can be compared with the assessment scales that are provided in this document.

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Behavior – Assessment Scale Senior leadership, managers, and associates at the applying entity in each business system will be assessed to determine the degree to which their behaviors are in alignment with the principles of operational excellence. Are the leaders, managers, and employees doing things that will result in the desired culture? Examiners will be looking for behaviors and other indicators that define and describe the culture of the organization. The difference between the current culture and the ideal culture, the Shingo standard, is the gap that is identified for improvement focus.

Understanding the principles, throughout the organization, establishing and executing systems that support these principles, and selecting and utilizing appropriate tools and techniques guide an organization to achieve its business plans and goals. Scoring is based on examiners’ observations as they assess the facility. Examiners are trained to look for behaviors and performance. Behaviors and performance are taken into account in the scoring.

Articulating Behavior

FREQUENCY – How often do we see the behavior?

DURATION – Are we seeing the behavior for the first time, or have we seen this behavior for years?

INTENSITY – Is there a sense of passion and importance for the behavior (i.e. to deviate would signal problems)?

SCOPE – Do we see the behavior in just a few cells/areas, or is it widespread throughout the organization?

ROLE – Do we see appropriate focus on tools, systems, and principles at each level of the organization, leaders, managers, and associates?

The following list of descriptors is the basis for assessing Cultural Enablers, Continuous Process Improvement, and Enterprise Alignment.

Statement of Purpose: The purpose of our assessment is to determine the degree to which the behaviors in an organization are aligned with the principles of operational excellence. Ideal behavior (Level 5) is represented as the standard for operational excellence.

Business systems that fully match the descriptors would score at the top of the indicated range.

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Behavior Assessment Scale

Lenses Level 10-20%

Level 221-40%

Level 341-60%

Level 4

Operational Excellence (Standard)

61-80%Level 581-100%

Leadership focused mostly on fire-fighting and largely absent from improvement efforts

Managers mostly look to specialists to create improvement through project orientation

Assoolates occasionally asked to participate on an improvement team usually led by someone outside their natural work team

Assoolatesunderstand principles “the why” behind the toolsand are leadersfor improving not only their own work systems but also others within their value stream

Assoolates involved every day in using tools to drive continuous improvement in their own areas of responsibility

Assoolates trained and participate in improvement projects

Assoolates focus on doing their jobs and are largely treated like an expense

Management primarily focusedon continuously improving systems to drive behavior more closely aligned with principles of operational excellence

Managers focus on driving behaviors through the design of systems

Leaders and managers involved in developing systems and helping others to use tools effectively

Management orientation toward getting results “at all costs”

Leadership aware of other’s initiatives to improve but largely uninvolved

Leadership sets direction for improvement and supports efforts of others

Leadership involved in improvement efforts and supports the alignment of principles of operational excellence with systems

Leadership focused on ensuring the principles of operational excellence are driven deeply into the culture and regularly assessed for improvement

Role

Frequency

Duration

Intensity

Scope

Infrequent Event-based Frequent Consistent Constant

Isolated Silos Predominantly Multiple Business Enterprise-wide Operations Processes

Point Solution Internal Value Stream Functional Value Integrated Value Extended Value Stream Stream Stream

Rare Irregular Common Predominant Uniform

Initiated Experimental Repeatable Established Culturally Ingrained

Undeveloped Formative Predictable Stable Mature

Apathetic Apparent Moderate Persistent Tenacious

Indifferent Individual Local Commitment Wide Commitment Full Commitment Commitment


Results – Assessment ScaleThe following list of descriptors is the basis for assessing the measures in the results section.

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Results Assessment Scale

Lenses Level 10-20%

Level 221-40%

Level 341-60%

Level 461-80%

Level 581-100%

Little to no evidence of stability

Little to no predictability

Beginning to implement

Unpredictable

0-1 years

Has begun to stabilize

Initiating predictability

Building maturity

All levels have become comfortable with the measures

2-3 years

Stable

Predictable

Long-term

Mature

4+ years

Little to no systematic feedback

Sporadic feedback

Little evidence of goal setting some evidence in operations

Regular feedback in some areas

All areas do not address feedback systematically

Many areas beyond operations have a process to set goals

Routine feedback to appropriate party

Evidence of feedback in all areas

Almost all areas have goals that are realistic and challenging

Isolated with inconsistent usage of measures

Little alignment

Strong silos

Some areas aligned, other than operations

Performance measures aligned in operations

Silos are beginning to fall

Working toward enterprise-wide alignment

All measures align to corporate goals and down to the lowest level

Enterprise-wide extended value stream

No silos

Level is low

Trend is poor

Little to no evidence of goals

Little evidence tono evidence of benchmarking

Moderate improve-ment in level

Benchmarking is industry-focused

Trends are mostly positive to flat with some backsliding

High level of attainment considered world-class

Benchmarks constantly raise the bar and are a function of process not industry

Positive trend with very few anomalies to explain

Trend is well above expectations

Stability

Trend/Level

Alignment

Improvement

Measures that match the descriptors would score at the top of the indicated range.


that help develop skills in assessing alignment and also how to address misalignments by embedding your principles into your work and management systems.

In addition, participants will develop a comprehensive working knowledge of The Shingo Prize assessment criteria, which includes methods for assessment of the progress an organization has made in its lean transformation. By completing this training, participants will learn how to use the Shingo model and assessment criteria to complete internal self-assessment that will clearly identify areas for focus and improvement in the entire organization.

For detailed information on this workshop and other available training opportunities for leaders and managers specific to the Shingo model, please visit our website at www.ShingoPrize.org or call our office at (435) 797-2279.

Although we will make every attempt to accommodate other languages, the official language of The Shingo Prize for Operational Excellence is English. This means all training, materials, feedback, and communications are performed in English. Exceptions may be when we have an instructor that speaks a preferred language.

Eligibility Requirements

An entity interested in challenging for The Shingo Prize must meet the following eligibility requirements:

• Applying entities may be from any industry

including, but not limited to: Services,

manufacturing, healthcare, and the public

sector. An entity should have common

ownership throughout the application (e.g. a

manufacturer and supplier, not operated or

owned by the same company) should each

apply as a separate entity

• An entity should be in business long enough

to establish stability

• An applying entity may not be in bankruptcy

proceedings or knowingly considering such.

This would include significant restructuring

or reduction in operations

• An applying entity may not be under

investigation by any government or private

entity for malfeasance

• An applying entity must be able to show

measures that are specific to the applying

entity (divisional or corporate metrics are

not sufficient). A minimum of three full years

of data is required. Most measures should

show trends and levels and be tied to

improvements. Examiners will be evaluating

level, trend, and the correlation between

improvement activities and the reported

results. It is expected that lean initiatives

will have an impact on the bottom line.

Keep in mind that the Shingo assessment

evaluates the entire applying entity to the

model as detailed below. If documentation

of three full years of measures is an issue,

it should be discussed with office of The

Shingo Prize for Operational Excellence

before preparing the achievement report.

Further explanation of measures is

provided below in Dimension Four – Results

- An applying entity may be eligible to

challenge as a large or small organization.

Achievement qualifications are the same

for each; and since organizations are not

competing against each other, reference

to an organizations size is useful only

for purpose of pricing and planning for

examination teams.

Application Process

We have developed a three-tier award to enable organizations to challenge early on in their transformation journey using the Shingo assessment process to benchmark and improve their organizations along the way. The Shingo assessment provides valuable feedback from an impartial third party. When utilized, it can help accelerate the transformation process. Awards can be achieved at three levels: the Shingo Bronze Medallion, the Shingo Silver Medallion, and The Shingo Prize.

We encourage organizations to take the opportunity to contact the office of The Shingo Prize for Operational Excellence well in advance of the date they plan to apply. This enables us to help with the process, answer questions, and provide training. Applying early leaves ample time to execute a plan for the application process and to budget appropriately.

Because the Shingo model focuses on cultural transformation, we strongly recommend as many associates as possible go through the following training program before an organization applies. The workshop, Principles of Operational Excellence and Assessment, is available to the public, or for maximum effectiveness and participation, the workshop can be delivered on-site at your facility. This workshop has been critical for providing a common understanding of the Shingo model and the assessment process. The training workshop is described below:

Principles of Operational Excellence

Workshop participants will gain an understanding of the Shingo model and the underlying principles behind The Shingo Prize philosophy and approach. Participants will learn and gain experience in aligning your organizational principles and core values with your systems. There will be group activities

APPLICATIO

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APPLICATION GUIDELINES

Small Organization Large Organization 250 people or less More than 250 people

Not part of a larger organization

250 people or less if part of a larger organization

Government entities

Large organizations may need to be broken up into multiple applications


Where to Apply

Applications, profile sheets, and other documents must be e-mailed to Shaun Barker at [email protected] and Ha Chau at [email protected]. Please contact Shaun with any questions you may have via email or by phone at (435) 797-3815.

Achievement Reports

Achievement reports should be written after the application is approved, ensuring an applying entity is eligible to proceed. Achievement reports will be accepted any time throughout the year. Achievement reports not received in time to be processed before the Annual Shingo Prize International Conference and Awards Ceremony (usually held in April or May) will be recognized at the following year’s ceremony. Applicants will be advised of an approximate process time-table based on the date the achievement report is received and that the work is in-process. If an application cannot be processed in time for the next Conference and Awards Ceremony the application will become part of the following year’s applications. Please submit the achievement report early if you are concerned about a specific conference date. An

Questions regarding eligibility must be clarified through the office of The Shingo Prize for Operational Excellence during the application process, prior to writing and submitting the achievement report. The application and profile sheets help to evaluate eligibility.

Re-Applications

Re-applications are encouraged for the following circumstances:

• No recipient status was awarded on the last

application

• Bronze or Silver Medallion status was

awarded on the last application, and the

entity wishes to attempt to advance its status

(in general it will take at least two full years

of intense focus and commitment between

challenges to show the improvements

necessary to advance)

• The Shingo Prize was awarded and the

entity is ready to renew its award status,

which expires after five years for The Shingo

Prize recipients and three years for Bronze

and Silver Medallion recipients Re-applications must relate to substantially the same entity as the original application. A new application and achievement report must be submitted. The achievement report for re-application should highlight the achievements made since the last challenge supporting a bid to re-challenge. Please use the re-application form that is available at www.ShingoPrize.org.

Application Forms and Profile Sheets

An application form and profile sheet should be sent to the office of The Shingo Prize for Operational Excellence as soon as an applicant decides to pursue an award at any level, even if the intended achievement report submission date is up to one year out. The intent of the application is to help us plan our workload and assist the applicant through a smooth process. A two-page (maximum) company profile sheet should be formatted according to examples provided at www.ShingoPrize.org.

application fee of $6,000 for large organizations or $3,000 for small organizations must be submitted with the achievement report. For payment information, please call the office of The Shingo Prize for Operational Excellence at (435) 797-2279.

Site Visit Assessments

Site visit assessments will be scheduled as soon as possible after a site visit is awarded based on the achievement report review. Candidates being considered for any level of recognition through the office of The Shingo Prize for Operational Excellence will receive a site visit assessment by an examination team based on final review of the achievement report. An average large facility will require five to eight examiners.

Site visits will be scheduled throughout the year and are dependent on the applicant’s achievement report submission date and availability of the site and examiners for an assessment. Site visits not scheduled in time to process before the Annual Shingo Prize International Conference and Awards Ceremony (usually held in April or May) will be recognized at the following year’s ceremony.

Please do not include any confidential or classified information in the profile sheet, as it may ultimately be posted to the Shingo website or provided to the media. Sample forms are available at www.ShingoPrize.org.

The graph on the following page is an example that might be included in the report.

Application forms should also be accompanied by information pertaining to dimension four, results. Results should be provided in each section, quality, cost/productivity, delivery, customer satisfaction, and safety/environment/morale. Please provide enough data so that an analysis of stability is possible. Provide as much data as possible especially if it is data that shows performance before lean implementation began. There is a minimum data requirement of three years. Provide each measure at the level of aggregation where it is most used by management (monthly at the least). Charts representing measurement and improvement are best displayed with the shortest interval possible. Averaging over months, quarters, or years may mask information that could otherwise be very useful. If acronyms are used, please explain each along with the calculation used for each measure.

The application, profile sheet, and applying entity’s results will be processed as received and should be approved prior to writing the achievement report. This ensures there are no eligibility issues and that we have addressed all of the applicant’s questions and concerns early on. A completed and approved application form is due before the achievement report is sent. A notice of eligibility confirmation will be sent to the applying entity. Please note that the applying entity’s results sections are not being analyzed at this point in the process.

There are no fees due at this point in the process.

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Application Timeline

The Shingo Prize application and assessment process includes the following six steps:

1. An application form, profile sheet, and

results should be sent to the office

of The Shingo Prize for Operational

Excellence as soon as an applicant has

decided to pursue The Shingo Prize.

Preferred timing: One year before intended achievement report submittal

2. Achievement reports are submitted and

reviewed. Achievement reports should be

written according to the instructions found

in the “Writing the Achievement Report”

section (see below). Application and re-

application fees are due along with the

achievement report (see fees section below).

Approximate lead time for achievement report review: 30 days

3. Achievement reports with appropriate

recommendations from examiners

will receive a site visit assessment.

Preferred timing for a site visit: 45 to 60 days after applicant notification

4. Based on the site visit assessment results,

the Board of Examiners will recommend

the applicant to the Executive Committee

for: no award level, the Shingo Bronze

Medallion, the Shingo Silver Medallion, or

The Shingo Prize. Applicant will be invoiced

a site visit examination fee directly after

the visit (see approximate fees below).

Approximate lead time for the feedback report: 30 days

5. The Executive Committee reviews the

recommendations. Organizations will be

notified of their status in approximately

30 days after the site visit assessment.

The primary objective of the site visit assessment is to verify, clarify, and amplify the information contained in the achievement report. In terms of clarification, companies should be prepared with updated measures reported in their achievement report during the site visit assessment.

Applicants will be notified whether or not a site visit will be awarded approximately 30 days after the achievement report is received. Applicants awarded a site visit will be contacted to make arrangements. Applicants awarded a site visit are required to pay an additional site visit fee. The cost of each site visit assessment is based in part on the nature, size, and location of the applying entity and the number of examiners needed. Fees generally average between $10,000 and $20,000 for a single organization utilizing four to eight site visit examiners. Small organizations may have lower fees depending on the size of the facility, the product or service, and the number of examiners needed to evaluate the facility. The invoice is for a site visit fee and will not be broken down in any more detail than the total fee. International applications will be subject to additional fees to cover additional expenses. These fees will be determined during the application eligibility process. International applications will be expected to pay the estimated site visit fee prior to the visit.

Site visit fees within North America will be invoiced and sent to the applying entity within 30 days of the site visit. Payment is due upon receipt.

All examiners are required to sign a non-disclosure agreement that is kept on file at the office of The Shingo Prize for Operational Excellence. Examiners are assigned in such a manner that conflicts of interest are avoided. Each applicant will receive a list of examiners who will be involved on a site visit assessment. The applying organization will be asked for written authorization for all examiners that participate on the site visit assessment. Organizations that have representatives on The Shingo Prize Board of Governors or Board of Examiners are allowed to challenge, but their representative will be disqualified from participation in the assessment, review, and selection processes.

Decisions made by the committee are final

and not subject to appeal. Applicants will

receive a written feedback report after

status notification.

6. After an award level has been determined,

a recipient may invite, at the recipient’s

expense, a member of the Shingo staff to

present the award at a local celebration.

This is best done after the public

recognition occurs, but if the time between

the recognition and the Shingo Conference

is too great, an organization may schedule

it to suit their purposes. All recipients from

around the world will be recognized publicly

at the Annual Shingo Prize International

Conference and Awards Ceremony. Official

recognition will be given at the Annual

International Conference and Awards

Ceremony.

The times given are approximate and subject to change depending on many factors, including workload in the office of The Shingo Prize for Operational Excellence. Please do not use these times to estimate whether or not your application will be completed in time for a specific Awards Ceremony. The staff at the office of The Shingo Prize for Operational Excellence will advise you if timing is in question upon your application submittal.

Fees

Fees are due with the achievement report. Applicants will be invoiced within 30 days after the site visit. The invoice is for a site visit fee and will not be broken down in any more detail than the total fee. International applications will be subject to additional fees. These fees will be determined during the application eligibility process and an estimated fee will be collected before a site visit occurs.

Applicants are asked not to divulge proprietary information regarding products, processes, or sensitive financial results. Our interest is in operational excellence, and we do not require this information. Please do not include any confidential information in your achievement report or other documents sent to the office of The Shingo Prize for Operational Excellence. Please do send information you feel will be helpful to examiners in assessing the cultural transformation of your organization.

Recipient Recognition Opportunities

Once an award level is determined, a recipient has many opportunities to be recognized for its achievements. All recipients from around the world will be recognized officially and publicly at the Annual Shingo Prize International Conference and Awards Ceremony (usually held in April or May). Recipients will be recognized through press releases and announcements on social media sites. The Shingo Prize recipients are posted on The Shingo Prize website for five years, and Shingo Silver Medallion and Bronze Medallion recipients are posted for three years. Recipient companies may tell their transformational story through potential speaking opportunities at The Shingo Prize conferences, and they can also gain exposure by providing guided tours for The Shingo Prize for Operational Excellence.

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Application Re-Application Site VisitSmall Organization $3,000

Small Organization $3,000

$10,000-$20,000

Large Organization $6,000

Large Organization $6,000

$10,000-$20,000


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WRITING THE ACHIEVEMENT

REPORT

The achievement report is the document for determining whether or not an applicant is awarded a site visit. A Shingo Prize applicant must prepare an achievement report that demonstrates how the organization has transformed its culture based on the principles of operational excellence represented in the Shingo model. The achievement report should also address frequency, intensity, duration, scope, and role of the behaviors that are apparent in the current culture of the applicant.

The achievement report should be written according to the format below. This format focuses on each dimension of the model and should include information about individual business systems and their achievements. Please note that if a site visit is conducted, all business systems will be assessed to all dimensions of the model in much the same way. The business systems include senior leadership, customer relations, product/service development, operations, supply, and management support processes.

The achievement report should follow the outline provided. Each dimension should address the application of principles, systems (selection, development, and effectiveness), and choice and use of tools and techniques. The required measures under Dimension Four – Results are considered essential for all organizations. Results should be addressed in terms of stability, trend and level, alignment, and improvement. An applicant should also include any measurements that assist in controlling and improving basic business systems: Senior leadership, customer relations, product/service development, operations, supply, and management support processes. Applicants should explain and support their choice of measures. It is important that all five categories of measurements are addressed. The intent of this dimension is for the applicant to provide information to the examiners about

how the organization selects what to measure and how measurements are used to drive improvement. It should also show results of the lean implementation and where the applicant stands relative to best-in-class. Include information that helps examiners understand how the cause-and-effect relationship between measures and results is taught to and understood by all associates. It is important that results in the achievement report are understandable and have explanations where needed. Please refer to dimension four, results, in the model and guidelines for complete details on measures.

Applicants are asked not to divulge proprietary information regarding products, processes, or sensitive financial results. Our interest is in operational excellence, and we do not require this information. Please do not include any confidential information in your achievement report or other documents sent to the office of The Shingo Prize for Operational Excellence.

Keep in mind that this report is being reviewed by a team of examiners from a diverse group of industries. They are very experienced in lean but most likely are not experienced with your organization. Please do not assume that acronyms and organizational language will be understood. Flow, clarity, and conciseness of the report are important; generally, 50 pages is the maximum length. The intent of this report is to tell the examiners your cultural transformation story as simply and efficiently as possible. Please make sure that if photos are included in the report, they are high impact, legible, and of good quality.

The achievement report is about the applying entity, not the overall organization. Please limit references to the overall organization to areas that are applicable and critical (i.e. if you are trying to show alignment of strategy or constancy of purpose). Measures should be specific to the applying entity. Reports with excessive reference to the overall organization may be returned to the applicant. Examiners cannot evaluate an applicant based on information about an entire organization when the applying entity is really a sub-set.

The achievement report should include, in the first pages before the table of contents, a copy of the application form.

The report must be printed on 8½ x 11-inch paper using a fixed-pitch font of 11 characters per inch. Sheets should be double-sided, single spaced. The report is generally limited to a maximum length of 50 printed pages. The report should be coil bound. The official language of the achievement report is English.

Ten (10) hard copies and one (1) digital copy on a CD or thumb drive of the achievement report, meeting all above-stated criteria and format requirements, can be turned in up to one year after the application has been approved.

Achievement Report Format

While writing the achievement report, remember to be specific about the business system you are referring to (i.e. senior leadership, customer relations, product/service development, operations, supply, and management support processes). The achievement report should discuss the assessment criteria detailed earlier in this document. Principles, systems, and tools have been clearly defined for each dimension of the model.

Introduction The introduction allows an organization to highlight some of its strengths and share a brief company overview. The company profile sheet may be used in this section, see www.ShingoPrize.org for examples.


Include the following items in the report:

• Describe your organization’s philosophy

toward creating value as it relates to the

principles in the Shingo model

• Provide the measures used in each

measurement area defined above. Report

anything that is used effectively to drive

improvement in the organization

• The measures will be submitted with the

application and profile sheet. This section in

the achievement report will be significantly

more detailed than the measures that were

submitted with the application. All categories

in this section must be addressed either

with a measurement and the discussion

points below or a full explanation of why a

particular category is not measured

Dimension 1 –Cultural Enablers In this dimension an organization should describe its cultural enablers as they relate to the principles in the Shingo model. Care should be taken to sufficiently describe how your organization’s systems and practices drive principle-based (ideal) behavior in each subsection. Clearly discuss examples of tools, systems, and principles in each of the business system.

Dimension 2 –Continuous Process Improvement Describe your organization’s philosophy toward applying lean principles and concepts. At Toyota, this would be a description of the Toyota Production System. Continuous process improvement will be evaluated in part based upon how well your organization implements its philosophy across all the business systems.

Discussion of each measure should contain:

• A clear definition of the measure and its

computation

• The trend and level of performance in each

area as compared to benchmarks or goals

• Why the measure is the appropriate measure

for that subsection or category

• Any major technical adjustments that have

been made to the measure

• How the measure is used to stimulate

improvement

• What key activities “move the dial” on that

metric

Please provide enough data so that an analysis of stability is possible. Provide as much data as possible; especially, if it is data that shows performance before lean implementation began. Provide each measure at the level of aggregation where it is most used by management (monthly at the least). It is possible that examiners may ask for a less aggregated version of specific data. Charts representing measurement and improvement are best displayed with the shortest interval possible. Averaging over months, quarters, or years may mask information that could otherwise be very useful. When data is obviously collected and used weekly, don’t average it into monthly or annual figures for the purposes of this report. Please use appropriate scales. Provide the data as you would normally use it.

All measurement categories must be covered – quality, cost/productivity, delivery, customer satisfaction and safety/environment/morale – and include a minimum of three years of data.

Applicants are asked not to divulge proprietary information regarding products, processes, or sensitive financial results. Our interest is in operational excellence, and we do not require this information. Please do not include any confidential information in your achievement report or other documents sent to the office of The Shingo Prize for Operational Excellence.

Dimension 3 –Enterprise Alignment In this dimension an organization should describe its lean culture as it relates to the principles in the Shingo model. Care should be taken to sufficiently describe how your organization’s systems and activities drive principle-based behavior in each business system. Clearly discuss examples of tools, systems, and principles.

Dimension 4 –Results There are five main internal measurement areas for operational excellence: quality, cost/productivity, delivery, customer satisfaction, and safety/environment/morale. Each area has its own strongly suggested measures and supporting measures detailed earlier in this document.

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2012 Rexam Beverage Can, Aguas Claras Cans Aguas Claras, Rio Grande do Sul/Viamao,

Brazil

2011 Goodyear do Brasil Produtos de Borracha LtdaAmericana, Sao Paulo, Brazil

US Synthetic Orem, UT, USA

2010 John Deere, Power Products Greeneville, TN, USA

Lycoming Engines Williamsport, PA, USA

2009 Autoliv Airbag Module Facility Ogden, UT, USA

Autoliv Inflator Facility Brigham City, UT, USA

E-Z-GO Augusta, GA, USA

Guanajuato Manufacturing Complex North PlantSilao, Mexico

Interiores Aéreos S.A. De C.V. Gulfstream AerospaceMexicali, Mexico

2012

Pentair Technical Products Reynosa, Tamaulipas, Mexico

2011 Autoliv (China) Steering Wheel Co., Ltd. Shanghai, Shanghai, China

Barnes Group Inc. Acting Through Its Barnes Aerospace OEM Strategic Business Unit Ogden, UT, USA

DJ Orthopedics de Mexico S.A.de C.V. Tijuana, Baja California, Mexico

Lundbeck, Supply Operation & Engineering (Valby and Lumsas site) Valby, Copenhagen, Denmark

Remy Components, S. de R.L. de C.V.San Luis Potosi, Mexico

Rexam Beverage Can South America-Recife EndsCabo Sto Agostinho, Brazil

Tobyhanna Army Depot (AN/MST-T1(V)), MiniMutesTobyhanna, PA, USA

2010 Autoliv Steering Wheels Mexico AQW S. de R.L. de C.V. El Marques, Queretaro, Mexico

Goodyear Tire & Rubber Lawton, OK, USA

Hi-Tech Gears Ltd. Manesar, Gurgaon, Haryana, India

2009 402D Electronics Maintenance Group, Warner Robins Air Logistics Center, Robins Air Force Base Warner Robins, GA, USA

Carestream Health Inc., Rochester FinishingRochester, NY, USA

EFI Electronics by Schneider Electric Salt Lake City, UT, USA

HID GlobalNorth Haven, CT, USA

Lockheed Martin Missiles and Fire Control, Camden OperationsEast Camden, AR, USA

Valeo Sylvania Iluminacion Queretaro, Mexico

2012 Johnson Controls Lerma Plant Lerma, Mexico

Remy Automotive Brasil Ltda. Brusque, Santa Catarina, Brazil

2011 Denver Health, Community Health Services Denver, CO, USA

Letterkenny Army Depot, Aviation Ground Power UnitChambersburg, PA, USA

Leyland Trucks Ltd Leyland, Lancashire, UK

Rexam Plastic Packaging do Brasil Jundiai, Sao Paulo, Brazil

US Army Armament Research, Development & Engineering Center Picatinny Arsenal, NJ, USA

2010 Letterkenny Army Depot, Patriot Missile Chambersburg, PA, USA

Tobyhanna Army Depot, AIM-9M Sidewinder MissileTobyhanna, PA, USA

2009Aviation Center Logistics Command and Army Fleet Support, Lowe Army Heliport Ft. Rucker, AL, USA

BAE Systems - Samlesbury

Blackburn, Lancashire, UK

Baxter Healthcare

Los Angeles, CA, USA

Fleet Readiness Center Southeast, TSRS Shop

Jacksonville, FL, USA

Red River Army Depot, Up-Armored High Mobility Multipurpose Wheeled Vehicle (UAH)/HEAT

Texarkana, TX, USA

Ultraframe UK Ltd. Clitheroe, Lancashire, UK

Visteon Interamerican Plant Apodaca, N.L., Mexico

The Shingo Prize

The Shingo Prize is awarded to organizations that demonstrate a culture where principles of operational excellence are deeply embedded into the thinking and behavior of all leaders, managers and associates. Performance is measured both in terms of business results and the degree to which business, management and work systems are driving appropriate and optimum behavior at all levels. Leadership is beginning to focus on insuring that principles of operational excellence are deeply imbedded into the culture and regularly assessed for improvement.

OPERATI ONALEXCELLENCE

for

OPERATI ONALEXCELLENCE

for

Shingo Silver Medallion

Shingo Bronze Medallion

THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 70

The Shingo Research and Professional

Publication Award

The Shingo Research and Professional Publication Award recognizes and promotes research and writing regarding new knowledge and understanding of lean and operational excellence. Awards are given in four categories: (1) books (monographs), (2) published articles, (3) case studies, and (4) applied publications/multimedia programs. Research or publications submitted should provide new theory or novel application. Reviews, re-statements, textbooks, and/or edited versions will generally not be considered.

2012The Toyota Way to Lean LeadershipJeffrey K. LikerGary Convis

The Toyota Way to Continuous Im-provementJeffrey K. LikerJames K. Franz

Lean principles, learning, and knowl-edge work: Evidence from a Software Services ProviderBradley R. StaatsDavid J. BrunnerDavid M. Upton

Building a Lean Fulfillment StreamRobert MartichenkoKevin von Grabe

Lean Office and Service SimplifiedDrew Locher

Liquid Lean: Developing Lean Culture in the Process IndustriesRaymond C. Floyd

On The MendJohn ToussaintRoger A. Gerard

Transforming Health Care: Virginia Mason Medical Center’s Pursuit of the Perfect Patient ExperienceCharles Kenney

Work That Makes Sense: Operator-Led Visuality Dr. Gwendolyn D. Galsworth

The Remedy: Bringing Lean Thinking out of the Factory to Transform the Entire Organization Pascal Dennis

2011 Lean Enablers for Systems EngineeringBohdan W.OppenheimEarll. M. MurrnanDeborah A. Secor

Toast Value Stream MappingBruce Hamilton

Follow the LearnerDr. Sami Bahri

The Lean ManagerMichael Balle, Freddy Balle

Toyota Under FireJeff Liker

Toyota KataMike Rother

Lean ITMike OrzenSteve Bell

Stories From My SenseiSteve Hoeft

2010 Creating Lean DealersDavid VruntJohn Kiff

Breaking Through to Flow Ian Glenday

The Kaizen Event FieldbookMark Hamel

CONTACT INFORMATION

�e Shingo Prize for Operational ExcellenceJon M. Huntsman School of Business

Utah State University3521 Old Main Hill

Logan, UT 84322-3521(435) 797-2279

(435) 797-3440 FAXwww.ShingoPrize.org

For questions or comments contact:Shaun D. Barker

Director of Operations and [email protected]

Application forms are available online at www.ShingoPrize.org

Dear Shingo Associates,

�ank you for taking time to study our model for operational excellence and considering the bene�ts of using the model within your organization. Many of our associates have indicated that the model and assessment can assist in better understanding where you are on your journey toward operational excellence and how to accelerate your e�orts. We sincerely hope that this document will enable you to become more keenly aware of not only your strengths, but also your greatest opportunities for improvement.

If your intentions are to eventually challenge for �e Shingo Prize, this booklet will introduce you to the process of applying and preparing your achievement report. You will learn how our exam-iners, your peers from other companies, will evaluate, score and provide feedback to your facility.

�is booklet is di�erent from past issues. Based on our decades of experience in searching for, evaluating and recognizing some of the world’s very best companies, we have come to understand how truly di�cult it is for even the best to create sustainable transformation and build lasting cultures of operational excellence.

In the past, our search for great companies focused primarily on determining “the degree to which” the organization had successfully deployed the tools and techniques o�en associated with most of the business improvement programs conceived over the past few decades. Based on our long-term association with these companies and thought-leaders, we have come to understand that the focus on tools and techniques must be led by a thorough understanding of key concepts – or guiding principles around which the tools have been developed. �ose guiding principles become the bedrock of a corporate mind-set and the foundation for the design of systems that reinforce these principles in every action of every associate.

�is relationship between guiding principles, management systems and improvement tools is the basis for �e Shingo Prize model and our approach to organizational assessment. We invite all to review and engage in critical dialogue with your peers around the ideas presented here. �en contact us at www.shingoprize.org and we will be eager to share with you more of the details behind the model and assessment methodology.

Robert D. MillerExecutive Director�e Shingo Prize for Operational ExcellenceJon M. Huntsman School of Business

Model &Application

GUIDELINES

435-797-2279www.shingoprize.org

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Model Application GUIDELINES - okyanusbilgiambari.com · 6 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE Model & Application Guidelines 7 Shingo Academy James F. Albaugh Executive Vice