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Control Plans:
Ensuring the Economic Return of the Application of Statistical Thinking in
Improvement Projects
Robert Mitchell3M Corporate Quality
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Statistical Thinking is a philosophy of learning and action based on the following
fundamental principles:
All work occurs in a system of interconnected processes
Variation exists in all processes
Understanding and reducing variation are keys to success.
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Improvement using Statistical Thinking
Process Variation Data Improvement
Statistical MethodsStatistical Thinking
Philosophy Analysis Action
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Process
OutputsCustomers
ProcessInputs
Suppliers
S I P O C
A series of activities that converts inputs into outputs
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The Bottom Line:
How do we capture the benefits from the application of Statistical Thinking ?
Y = f(x)
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How Projects Impact The Business -Examples
Revenue Growth - Increase top line through capacity expansion and new product introduction/extension
Operating Margin - Bottom-line impact of capacity expansion (growth) or cost reduction (productivity)
Working Capital - Cash impact of inventory or receivable reductions or reduced thruput time (cycle time reduction - improved turns)
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How Projects Impact The Business -Examples
Revenue Preservation - Maintain volume otherwise lost (due to stockouts or lost customers, etc.)
Cost Avoidance - Reduce the planned spend (that would have otherwise been incurred)
Reduce NVA - Redeployment of resources (personnel, equipment, etc.) without removing their cost from the overall system - consider customer satisfaction
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Project Selection Elements
• Clarify the ‘big picture’ using the strategic plan and annual business plan for the business– Top-down project identification
• Establish productivity baseline– Bottom-up project identification
• Prioritize projects based on business metrics
• Select key projects with leadership support
• Check for accountability
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Clarifying the Big Picture
• The functional goals should support the business plans.
• The key metrics (Critical Y’s) for the business are identified and goals set for each year.
• Projects should support the key business directives and should be measurable through the process key metrics.
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Project Identification Methods
Two fundamental methods:• Top-Down
Projects are identified through association with the metrics of the company’s Strategic Plan
• Bottom-UpProjects are identified through association with current process issues.
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Project Selection Approaches
Strategic / Operating Plan MetricsOpportunities to reach the
goals
Opportunities to reach the
goals
Problems, Defects, Dissatisfied Customers, Downtime, Pain
Issues needing attention
Issues needing attention
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Example: Goal Tree Alignment
Productivity / Cost
Working Capital / Cash
Growth
Employee Satisfaction
Better
Increase Top Box
Yield, RTY
Faster
Rate
Cycle Time
Cheaper
Reduce Waste
COPQ
How
Reduce Rework
First Time Acceptance
Eliminate non-value add
Decrease RM Cost
GoalsGoals
MetricsMetrics
ProjectsProjects
Why
More Valued Features
Increase On-time delivery
Fewer Defects
Increase Capability
Reduce Cycle Time
Redesign Process Flow
Reduce Waste
Lower Inventory
Works Best for Operational Projects
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Example: SIPOC Model
CustomersSuppliers x
x
x Outputs
DDefectefect
Inputs
Effectiveness of Effectiveness of InputsInputs• RM Consistency• Intellectual Property• RM Availability• Mgmt Strategic Goals• Market Presence• Availability of
Information
Efficiency of Efficiency of ProcessProcess• Rolled Throughput
Yield, First Pass Yield• Rework, Scrap, Waste• Throughput• % Things Gone Right• Days of Stock• Days Beyond Terms
Effectiveness of Effectiveness of OutputsOutputs• CTQ Performance• Product Features• On-Time Delivery• # Warranty Claims• Customer Loyalty• Response Time
Works Best for Transactional Projects
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COPQ IcebergTip of COPQ Iceberg
Lost OpportunityHidden Factory
Full COPQ, 15-25% of Sales
Intangible, more difficult to measure
Tangible, easier to measure
Average COPQ Approximately 20% of Sales
Excessive Overtime, Premium Freight Costs, Expediting
Costs, Excess Inventory, Consumed Capacity, Customer Allowances, More Setups, Lost Sales,
Late Delivery, Long Cycle Times,
Engineering Change Orders, Lost
Customer Loyalty
Customer Returns, Waste, Scrap,
Rejects, Inspection Costs, Recalls,
Rework, Warranty Claims
Traditional Quality Costs, 4-5% of Sales
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Entitlement
Defines what’s possible - a vision
Provides a performance level for which to aim
Tells you how your process performance relates to perfection
Provides an internal benchmark
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EntitlementBest Possible Performance– Rolled Throughput Yield = 100%– Cost of Poor Quality = $0– Speed:
• Best observed performance over a “short” period of time• Predicted by business process design• Predicted by “should” map
– Capacity: • Performance specified by equipment manufacturer• Predicted by engineering & scientific fundamentals• Best observed performance over a “short” period of time• Best performance predicted by empirical relationships developed
from process data
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Improvement Methodology
PLAN
DOCHECK
ACT
Define
Measure
AnalyzeImprove
Control
PDCA DMAIC
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Control Plans / MethodsImportance to the improvement process
Documented control methods for all critical Process Output Variables and Process Input Variables in the process drives sustained gainsEffective control methods maintain the level of performance over the long termProvides a complete ‘critical to operation’ list of variables and their associated measurement systems / control methodsIdentifies the Reaction Plan for the Process Owners to resolve any out-of-control occurrences
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Control Plans / MethodsOutputs
Updated Control Plans and methods for all critical Process Output Variables and Process Input Variables
Completed Reaction Plan for each Process Input Variable / Process Output Variable
Sampling methods and measurement system controls in place for each Critical Process Input Variable and Process Output Variable
Procedures and appropriate documentation
Identified and completed training for all pertinent personnel / functions affected by changes in the process
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ISO 9001:2000
ManagementResponsibility
Measurement,analysis,
improvement
ResourceManagement
ProductRealization
Input Output
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Three Diamonds of ISO
Management Review(5.6.1)
Corrective/Preventive Action(8.5)
Internal Auditing(8.2.2)
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Benefits That Can Be Maintained/ Gained With ISO 9001:2000
• Improved consistency of products and services through documentation of standards and specifications
• Organizational retention and transfer of process knowledge through improved documentation.
• Current and accurate raw material specifications• Improved calibration and accuracy of measuring
devices
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Benefits That Can Be Maintained/ Gained With ISO 9001:2000
• Discipline to follow documented processes• Established requirements for training and record
keeping• Improved system performance• Provides a process to reliably deliver what you
promise to customers
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Benefits That Can Be Maintained/ Gained With ISO 9001:2000
• Identifies improvement project opportunities with supporting information about:
• Current performance levels
• Measures and
• Processes used
• Provides a framework to sustain the gains of continuous improvement projects
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Case Study – Adhesive Performance
CorporateCritical Y:
• Growth• Cost• Cash
Business UnitCritical Y
Project Y
FinancialImpact
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Adhesion Performance ImprovementFinal Capability• Process in control• Mean on target @29.9
oz/inch • 50% reduction in variation
Initial Capability• 3 KPOV out of Control• Mean 35 oz/inch over
target of 30
0S u b g ro u p 5 0 1 0 0
2 03 04 05 06 07 08 09 0
Indi
vidua
l Val
ue
1 2P ro c e ss
M e a n = 2 9 .9 0U C L = 3 7 .2 8
L C L = 2 2 .5 1
1 2
0
1 0
2 0
3 0
Mov
ing
Ran
ge
R = 2 .7 7 6
U C L = 9 .0 7 0
L C L = 0
1 2
P S A - A d h e s io n
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Adhesion Performance Control Plan
• Transitioned 8 of 12 identified critical X’s from uncontrolled to controlled variables
• Documented new SOPs, implemented mistake proofing, and instituted training– Critical Y’s
• Adhesion to Glass• 5-Bond
– Critical X’s• Ct Wt Profile• Coating Appearance• Adhesive Formulation
• ISO 9001:2000 Management Review– Quarterly internal audits of control plan
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Key Learnings - Control Plans
• Start developing the control plan as soon as possible– After completion of Measure or Analyze phase
• Select the appropriate process owner and keep him / her informed of and involved in the Control Plan – Team membership of Process Owner is crucial.– If project outcome is not important to the PO, you have
chosen the wrong Process Owner.
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Key Learnings - Control Plans
• Keep the Control Plan as simple as needed to sustain the desired results– Don’t replace a complex project with an equally complex
control plan.– Use existing culture and SOP
• Simplify or mistake proof process to prevent the need for Active Control