June 21 2012 Process Performance Metrics Presentation
description
Transcript of June 21 2012 Process Performance Metrics Presentation
MCS
Developing and Using Process
Performance Metrics
Calgary Community of Business Process Management Professionals
June 21, 2012
Gordon Masiuk, PresidentMasiuk Consulting Services Ltd.www.business-performance-excellence.ca
MCS
What are your expectations
from this session?
MCS© 2012 Gord Masiuk
Agenda
• Overview of Performance Metrics
• 6 main Performance Metrics
• Key Steps and Considerations in Developing Performance Metrics
• Aligning Metrics to Organizational Strategy
MCS© 2012 Gord Masiuk
MCS© 2012 Gord Masiuk
Exercise
• In small groups, take 5 minutes and identify 5-6 performance metrics that are important in your organizations, your division, your team, or for yourself.
• Print those metrics on the yellow stickies
• Nominate someone from your group to share your metrics.
MCS© 2012 Gord Masiuk
Why are Measures Important?
MCS
Why are Processes Important?
MCS© 2012 Gord Masiuk
Why are Processes Important?
All work gets done through a formal or informal process!
MCS© 2012 Gord Masiuk
Why are Processes Important?
Deming's 85/15 rule:
85% of a worker's effectiveness is determined by the system they work within, only 15% by their own skill.
MCS
Why do we need to measure performance?
MCS© 2012 Gord Masiuk
He’s right! When you look at it that way, it’s not so bad!
MCS© 2012 Gord Masiuk
Why Measure Performance?
• Helps us know if we are accomplishing results!
• Measures put goals in perspective
• Provide a baseline of performance which can be used to quantify and assess changes in results over time
• Pinpoint opportunities for process improvement
• Understand capability of the process and what we can expect from a statistical perspective
• Provides people with feedback to help them understand how they are performing and what they need to continue doing, or do differently
MCS© 2012 Gord Masiuk
Process Metrics
• Reliable process metrics need to measure aspects of the process/output of the process that are linked to business strategy and corporate goals.
• Process metrics by themselves can provide for:
– Establishment of a baseline of performance
– Tracking of performance
– Communication about performance
– Identifying areas for improvement
• Process metrics do not by themselves generate improvement – improvement depends on metrics, however, to effect improvement, a well focused plan needs to be developed, implemented and monitored.
MCS© 2012 Gord Masiuk
Output Outcome
Effectiveness
Customer Requests, Input or Feedback
Input
Internal Efficiency
Process Model
Value AddedTransformation
Process
© Gord Masiuk 1994
Suppliers
MCS© 2012 Gord Masiuk
Types of Process Measures
• Input Measures: assessment of products, services or information that feed into a process. E.g.: supplier product/service quality, on time delivery, stakeholder feedback.
• Process/Efficiency Measures: assessment of how well the process is functioning. E.g.: cycle time, task time, uptime, accuracy, completeness, degree of rework/duplication, cost.
• Output/Result Measures: assessment of the outputs of the process. E.g.: Quality - meeting employee/team/stakeholder requirements, quantity/volume produced.
• Outcome Measures: assessment of the outcome (impact) of outputs on the business and stakeholders. E.g.: stakeholder satisfaction, business value, productivity.
MCS© 2012 Gord Masiuk
Types of Process Measures:Example: Geoscience Approved to Survey Pending
Input Measures: • Accuracy and Completeness of 7 mandatory data fields inputted
into WL.Process/Efficiency Measures: • Cycle time from GA to SP, • Degree of rework and delays associated with incomplete or
inaccurate data.Output/Result Measures: • Accuracy and completeness of information in “survey pending”
electronic notification to Survey Coordinator. Baseline: 60% of surveys pending are 100% complete and accurate.
Outcome Measures: • Survey Coordinator satisfaction of data provided, • Number or % of surveys pending meeting mandatory data fields
that can move to “survey requested”, • Number of notifications to reservoir engineers or geologists from
survey coordinator requesting complete or accurate data for survey pending.
MCS© 2012 Gord Masiuk
SMART Goals and Metrics
Goals Metrics
S Specific
M Measurable
A Actionable
R Relevant
T Timely
Is the metric clear, easy to understand?
Is the data readily available?
Can you influence a change in the result?
Does the metric measure what is important?
How often do you need the data?
Is the result or outcomeclearly stated?
Can the result be measured?
Can the goal be achieved?
Does the goal link to thestrategy or business plan?
Is the completion time of thegoal clearly identified?
© 2001 Gord Masiuk
MCS© 2012 Gord Masiuk
The 6 Key Performance Indicators
• Quality
• Time
• Cost
• Quantity
• Satisfaction/Importance
• Value/business results
© 2001 Gord Masiuk
MCS© 2012 Gord Masiuk
Metrics Defined
Quality
• Accuracy
• Uniformity
• Reliability
• Serviceability
• Deliverability
• Utility
• Durability
– Example: % of calls dropped by your telephone service provider in the last 90 days.
© 2001 Gord Masiuk
MCS© 2012 Gord Masiuk
Metrics Defined
Time
• Cycle time
• Task time
• Up time
• Down time
• Delay time
– Example: Length of time to approve an AFE from when it was submitted
– Example: Average hours of downtime of the company network per work day
© 2001 Gord Masiuk
MCS© 2012 Gord Masiuk
Metrics Defined
Cost
• Labor
• Material
• Equipment
• Opportunity cost
• Cost of poor quality
• Cost added only (rework, duplication, waste)
• Life Cycle cost
– Example: average cost of 1 km of road asphalt installed on one lane of the Trans Canada Highway in Alberta in 2011
© 2001 Gord Masiuk
MCS© 2012 Gord Masiuk
Metrics Defined
Quantity
• Production Volumes/Ratios
• Sales volumes/ratios
• Revenues
• Profits
• New Customers
• $, Time, People, Ideas ...
• How Much? How Little?
– Average board feet of production per day at Sawmill Plant C for Q1, 2012.
– Number of new customers acquired in 2011.
MCS© 2012 Gord Masiuk
Metrics Defined
Stakeholder/Customer Satisfaction
• Requirements of stakeholders are met• Quality attributes indicated by the stakeholder• Rating of service/product by importance and
satisfaction• “Employee Engagement” rating• New customers attracted• Retention rate of current customers/employees• Customer/employee complaints
– Example: Drilling contractor satisfaction and importance ratings on promised turnaround time for invoice payment from Accounts Payable
© 2001 Gord Masiuk
MCS© 2012 Gord Masiuk
Importance
Satisfa
ction
Low High
High
IMPROVEMENTIMPROVEMENTPRIORITIESPRIORITIES
REDEPLOYMENTREDEPLOYMENTOF RESOURCES?OF RESOURCES?
LOW PRIORITYLOW PRIORITYSERVICES/OFFERINGSSERVICES/OFFERINGS
(VALUE(VALUE--ADDED?)ADDED?)
Measuring Outcomes Using
A Stakeholder Satisfaction Index (SSI)
ORGANIZATIONALORGANIZATIONALSTRENGTHSSTRENGTHS
© Gord Masiuk 1994
High
MCS© 2012 Gord Masiuk
Metrics DefinedBusiness Value
• Profits generated by production area
• Opportunities gained or lost
• Market share
• Company growth
• Share value
• Returns to shareholders
• Economic valuation of organization
• Awards, industry recognition, certifications
– Average net revenue/retail product category during Q4, 2011
© 2001 Gord Masiuk
MCS© 2012 Gord Masiuk
Core Customer Service Metrics - Retail Example
CostCost Quality Quantity Time Quality Quantity Time Customer BusinessCustomer Business
Satisfaction ValueSatisfaction Value
MetricsMetrics
ComponentComponent
CustomersCustomers
Market ResearchMarket Research
MerchandisingMerchandising
SuppliersSuppliers
Supply ChainSupply Chain
Retail OpsRetail Ops
BrandBrand
Ad AgencyAd Agency
Retail StoresRetail Stores Service Sales Service Sales CSI Rev/ProfitCSI Rev/Profit
Services Meet Spec Services Meet Spec On Time SLA, CSI Revenue On Time SLA, CSI Revenue
Services Meet Spec Of Ads On Time Services Meet Spec Of Ads On Time SLA, CSI RevenueSLA, CSI Revenue
Accuracy Inventory Cycle Time CSI (Stores) OpAccuracy Inventory Cycle Time CSI (Stores) Optimizationtimization
Accuracy Meet Spec Cycle/Delivery CSI Accuracy Meet Spec Cycle/Delivery CSI LogisticsLogistics
Total Cost Accuracy Completeness Cycle Time Total Cost Accuracy Completeness Cycle Time SLA ProductSLA Product
Inventory of Product, Ordered Cycle Time Inventory of Product, Ordered Cycle Time BU CSI Sales, RevBU CSI Sales, Rev
Cost AccuracyCost Accuracy
Research Completeness Depth Cycle Time BU CSI Potential Accuracy Sales, Rev
[------------------Meet Requirements---------------------] Sales, Rev
MCS© 2012 Gord Masiuk
MCS
Developing Process Metrics
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
1. Define the boundaries of the process – what triggers the process to start, and where does it end?
2. Define the output (product, service or solution) of the process –what specifically is produced?
3. Who is the stakeholder (internal or external) of the process? Why is the output important to them? What are their specific requirements? i.e.: specific attributes of the output they require?
4. Who are the suppliers to the process? What inputs do they need to deliver to the process?
5. Develop process metrics based on the stakeholder requirements and aligned with organizational goals
6. Ensure that data for the process metrics is available and reliable, and can be reported on
7. Design a process that will effectively create the desired output for the stakeholder, and is linked to the organizational goals
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
1. Define the boundaries of the process – what triggers the process to start, and where does it end?
• Helps you to keep from focusing on actions or requirements outside of the process, defines precisely where and when the process starts and ends. E.g.: Pit Stop
• Also, by defining the start and end of the process, the inputs and outputs can more easily be defined
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
2. Define the output (product, service or solution) of the process – what specifically is produced, what the result is.
• Use the “Leave it Behind Test” - An output or result is something that can be left behind (e.g.: report produced, number of wells serviced)
• Use the “Dead Man’s Test” – If a dead man can do it, it is not a result or output (e.g.: zero defects, zero accidents)
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
3. Who is the stakeholder (internal or external) of the process? Why is the output important to them? What are their specific requirements? i.e.: specific attributes of the output they require?
• The stakeholder is any person or organization that uses the output from the process
– Flow charts are helpful in determining who the stakeholder is, along with knowing from where/whom a request is coming from
– Determine who pays the bills
• What does the stakeholder really need and want? How do you know?
– Surveys, interviews, checklists, etc., can be helpful in determining stakeholder requirements
– Use the Stakeholder Satisfaction Index to determine what is important
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
4. Who are the suppliers to the process? What inputs do they need to deliver to the process?
• Suppliers can be internal or external providers of products, services or solutions
• Processes should identify metrics for suppliers including:
– Quality, quantity, timeliness, costs, compliance to specific stakeholder standards, satisfaction/importance scores
– Service Level Agreements specifying expectations will help to create consistency, and provide the framework for performance reviews
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
5. Develop process metrics based on the customer/ stakeholder requirements and business goals
• What does the stakeholder really need and want? How do you know?
• How do the stakeholder and process metrics align with the business goals?
• Internal process metrics need to support customer or business metrics, but may differ in nature i.e.: focusing on internal accuracy may positively affect external stakeholder metrics for timeliness.
• Select internal process metrics that allow for diagnosis of process performance. (e.g.: well DT and causes)
• Industry benchmarks can be helpful once the process has been well developed, streamlined, and improved. The industry benchmarks can be used to focus on performance critical to the company strategy.
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
6. Ensure that data for the process metrics is available and reliable, and can be reported on
• The need for the data to be available, reliable and consistent is critical to measuring process performance.
• Are data systems capable of tracking the metrics?
• Can the data be collected and reported to key stakeholders on a regular basis?
• Does the data allow for effective decision making?
• Identify and resolve any data integrity issues that may affect the quality of analysis, trending, results.
MCS© 2012 Gord Masiuk
Key Steps in Developing Process Metrics
7. Design a process that will effectively create the desired output for the customer
• The process should be designed in such a way as to produce the desired output in the most efficient way
• Areas of potential waste, duplication, rework, delays etc., should be identified and streamlined out of the process. These typically account for 30-50% of employee time.
• Does the output meet the specifications of the customer? What data would tell us?
• Does the output contribute to a specific business outcome/result? If not, how does the process and its result support a business or customer need?
MCS© 2012 Gord Masiuk
Example: Going for a Dental Checkup
• Trigger, Start and End of the “checkup”process:
• Output:
• Customer:
• Key Inputs:
• Suppliers:
• Process Metrics:
• Check Up Process:
MCS
Tools for Process Metrics
MCS© 2012 Gord Masiuk
Tools For Process Analysis
• Quality Management Tools (7 improvement tools, 7 planning tools)
• LEAN 6 Sigma Tools (Value Stream Maps)
• Software (Visio, Minitab, ProVision, ARIS)
• Real time process modeling software
• Templates
MCS© 2012 Gord Masiuk
TO-BE AFE PROCESS - BLOCK DIAGRAMOPERATED AFE
1.00 Project
Approved in
Capital Manager
2.00 Create an AFE 3.00 Get Approval
for AFE
4.00 Set up AFE in
SAP and Get
Network Number
5.00 Charges made
to AFE
6.00 Close AFE
Macro Process – 2nd Level Process – 3rd Level Detail
MCS© 2012 Gord Masiuk
TO-BE AFE PROCESS - BLOCK DIAGRAMOPERATED AFE
1.00 Project
Approved in
Capital Manager
2.00 Create an AFE 3.00 Get Approval
for AFE
4.00 Set up AFE in
SAP and Get
Network Number
5.00 Charges made
to AFE
6.00 Close AFE
1.02 Project
information is verified
1.01 Project Manager
and/or AFE Admin
sets up project.
1.03 Email
Notifications sent to
Distribution List
1.04 Project put on
hold or cancelled.
Is the project
funded? (A)
No
Yes
Capital
Manager
1.05 Project reviewed
by PM.
Well
Launcher
Link
F rom
D ec is io n
"F "
Link
F rom
5.2.2.4
Refund
Process -
From
Decision (I)
PEEP Well
Launcher
CS
Explorer
Capital
Manager
2nd Level
Macro Process – 2nd Level Process – 3rd Level Detail
MCS© 2012 Gord Masiuk
TO-BE AFE PROCESS - BLOCK DIAGRAMOPERATED AFE
1.00 Project
Approved in
Capital Manager
2.00 Create an AFE 3.00 Get Approval
for AFE
4.00 Set up AFE in
SAP and Get
Network Number
5.00 Charges made
to AFE
6.00 Close AFE
Macro Process – 2nd Level Process – 3rd Level Detail
1.02 Project
information is verified
1.01 Project Manager
and/or AFE Admin
sets up project.
1.03 Email
Notifications sent to
Distribution List
1.04 Project put on
hold or cancelled.
Is the project
funded? (A)
No
Yes
Capital
Manager
1.05 Project reviewed
by PM.
Well
Launcher
Link
F rom
D ec is io n
"F "
Link
F rom
5.2.2.4
Refund
Process -
From
Decision (I)
PEEP Well
Launcher
CS
Explorer
Capital
Manager
2nd Level
3rd Level
Name of person & date – typically Process LeadLast Reviewed By:
Identify what information systems and/or what screens are usedSystem/Screens Used:
Who does this? (What specific role is responsible?)Responsibility:
For this step in the process, if applicable, define the:
oTask time (actual work time);oCycle time (elapsed time – from when the step starts to when the next step would start);oCosts (can include hard costs as well as hourly labor costs X task time);oQuality attributes needed (accuracy, completeness, meeting spec/customer requirements, delivery time, etc.);oQuantity (number of outputs/cycles in this step).
Process Metrics:
What output is produced (e.g. information, analysis, document, notification, approval etc.)Outputs Produced:
What info/materials/documents/products/hardware, etc., are needed to complete this step?Inputs Required:
What causes this step to happen? (e.g. receipt of notification, phone call from someone)Trigger:
Describe the critical steps in the procedure and/or a web link to where a detailed procedure is located e.g. “8 Simple
Rules for Generating an AFE Network Number”
Procedure Description:
Write a short sentence explain why this is needed, what value is addedPurpose:
Number & Name of Sub-process (if Applicable)Sub-Process:
Name of Process StepProcess Step Name:
Process Step NumberProcess Step #:
Name of ProcessProcess:
3rd Level Process Details Template
MCS© 2012 Gord Masiuk
Name of person & date – typically Process LeadLast Reviewed By:
Identify what information systems and/or what screens are usedSystem/Screens Used:
Who does this? (What specific role is responsible?)Responsibility:
For this step in the process, if applicable, define the:
oTask time (actual work time);oCycle time (elapsed time – from when the step starts to when the next step would start);oCosts (can include hard costs as well as hourly labor costs X task time);oQuality attributes needed (accuracy, completeness, meeting spec/customer requirements, delivery time, etc.);oQuantity (number of outputs/cycles in this step).
Process Metrics:
What output is produced (e.g. information, analysis, document, notification, approval etc.)
Outputs Produced:
What info/materials/documents/products/hardware, etc., are needed
to complete this step?
Inputs Required:
What causes this step to happen? (e.g. receipt of notification, phone call from someone)
Trigger:
Describe the critical steps in the procedure and/or a web link to
where a detailed procedure is located e.g. “8 Simple Rules for
Generating an AFE Network Number”
Procedure Description:
Write a short sentence explain why this is needed, what value is
added
Purpose:
Number & Name of Sub-process (if Applicable)Sub-Process:
Name of Process StepProcess Step Name:
Process Step NumberProcess Step #:
Name of ProcessProcess:
3rd Level Process Details Template
MCS
Applying Metrics To Company Goals and
Processes
MCS© 2012 Gord Masiuk
MCS© 2012 Gord Masiuk
The Strategic/Performance Link
Goals Design Management
OrganizationLevel
Business
ProcessLevel
Job/PerformerLevel
OrganizationGoals/Measures
OrganizationDesign
OrganizationManagement
ProcessProcessGoals/MeasuresGoals/Measures
Job/PerformerGoals/Measures
ProcessDesign
JobDesign
ProcessManagement
Job/PerformerManagement
Adapted from Pritchett, Rummler & Brache
MCS© 2012 Gord Masiuk
Reduce Rig Release to On Stream
Cycle time by 10%
MCS© 2012 Gord Masiuk
Goals/Measures (What)Goals/Measures (What)
OrganizationOrganizationGoals/MeasuresGoals/Measures
ProcessProcessGoals/MeasuresGoals/Measures
Job/PerformerJob/PerformerGoals/MeasuresGoals/Measures
Example: Alignment of Goals and Measures With Business Outcomes
“Reduce rig release to on-stream cycle time by 10% ” I.E. from 159 days to 143 days, a net reduction of 16 days per well
•District Area will reduce rig release to on-stream cycle time by 10% on average per well (from 139.3 to 125.4 days, a net reduction of 14.9 days)
• Identify and eliminate major process delays
•Central Team will reduce rig release to on-stream cycle time by 10% on average per well (from 216.5 to 194.9 days, a net reduction of 21.6 days)
• Identify and eliminate major process delays
MCS© 2012 Gord Masiuk
Strategies (How)Strategies (How)
Understand what the Understand what the
cycle time is for each cycle time is for each
phase of the RR to OS phase of the RR to OS
process, identify the process, identify the
root causes of delays root causes of delays
and implement and and implement and
standardize process standardize process
changes to realize changes to realize
cycle time reductions cycle time reductions
““Set milestones to Set milestones to
capitalize on capitalize on
planning planning
efficienciesefficiencies””
Example: Alignment of Goals and Measures With Business Outcomes
Goals/Measures (What)Goals/Measures (What)
OrganizationOrganizationGoals/MeasuresGoals/Measures
ProcessProcessGoals/MeasuresGoals/Measures
Job/PerformerJob/PerformerGoals/MeasuresGoals/Measures
“Reduce rig release to on-stream cycle time by 10% ” I.E. from 159 days to 143 days, a net reduction of 16 days per well
•District Area will reduce rig release to on-stream cycle time by 10% on average per well (from 139.3 to 125.4 days, a net reduction of 14.9 days)
• Identify and eliminate major process delays
•Central Team will reduce rig release to on-stream cycle time by 10% on average per well (from 216.5 to 194.9 days, a net reduction of 21.6 days)
• Identify and eliminate major process delays
MCS© 2012 Gord Masiuk
Rig Release to Onstream Cycle Time By Category
2006-2008 Cumulative Average
38
30
47
21
16
50
29
39
25
19
30
1923
28
4
0
10
20
30
40
50
60
Rig Release to Completion
Start (Admin Hand Offs)
Completion Start to
Completion End (Core
Work)
Completion End to Tie In
Start (Admin Hand Offs)
Tie In Start to Tie In End
(Core Work)
Tie In End to Onstream
(Admin Hand Offs)
Cycle Time Days
2006 2007 2008
MCS© 2012 Gord Masiuk
Cumulative Average Cycle Time 2006-2007 With
2008 Target
164
155
145142 144
147150
153157
154158 159
60
80
100
120
140
160
180
Jan Feb March April May June July Aug Sep Oct Nov Dec
Cycle Time Days
2006 (Baseline) 2007 (Baseline) 2008 (Target)
143
131
MCS© 2012 Gord Masiuk
Cumulative Average Cycle Time
2006-2008 Rig Release to Onstream Comparisons
164
155
145142 144
147150
153157
154158 159
129 127
9592 92 94
99 98 96
8580 80
60
80
100
120
140
160
180
Jan Feb March April May June July Aug Sep Oct Nov Dec
Cycle Time Days
2006 (Baseline) 2007 (Baseline) 2008 Actuals 2008 (Target)
MCS© 2012 Gord Masiuk
Benefits Summary: Bottom Line Impacts
• 49% reduction in rig release to on stream cycle time (79 days).
• One time cash flow impact for 2008 was approximately $43MM, due to a production increase of 741,000 BOE for 2008 (approximately 2030 BOE/day increase).
• Each day the cycle time was reduced, generated over $550,000 in additional cash flow in 2008.
MCS© 2012 Gord Masiuk
HR Vendor Contracting Process
• Government Human Resource Department
• 200+ contracts per year
• 9 sign offs including 3 departments and contractor
• Average cycle time to complete the process was 22-30 work days (5-6 calendar weeks)
• Standard contract was 19 pages long requiring triplication (57 pages per contract)
• 70% of contracts signed off after work completion
• Auditors indicated that this level of performance was not in compliance and the changes were required.
MCS© 2012 Gord Masiuk
MCS© 2012 Gord Masiuk
As Is Process
• 17 major steps
• Task time varied from 2 minutes to 30 minutes per step for a total of 2 hours 38 minutes
• Cycle between steps time varied from 15 minutes to 168 hours for a total of 22 - 30 work days
• Cost of the process in task time $61.25 per contract if there was no rework/revisions
• 19 page contract X 3 copies = 57 pages per contract
MCS© 2012 Gord Masiuk
Process Step – (Original Process) Cycle Time
Task Time
Cost
1. Program Assistant develops "Application for Services" and "Contract"
15 min 15 min .25 X $25 = $6.25
2. Documents sent to Prog. Mgr. for approval/signing
1 - 24 hrs
2 min .04 X $25 = $1.00
3. Documents sent to Br. Mgr. for approval/signing
3 - 24 hrs
2 min .04 X $25 = $1.00
4. Documents sent to Exec. Dir. for approval/signing
24 hours
2 min .04 X $25 = $1.00
5. Documents sent to Office Mgr for approval/signing/assign ARF
24 hours
5 min .09 X $25 = $2.25
6. Documents sent to Adm. Clerk for processing
24 hours
15 min .25 X $25 = $6.25
7. Documents sent to Labour-Finance for approval/signing
3-7 D (72-168 H)
30 min .5 X $25 = $12.50
8. Documents sent to Adm. Clerk for processing
24 hours
5 min .09 X $25 = $2.25
9. Documents sent to Prg. Assistant, develop cover letter
1 - 24 hours
10 min .17 X $25 = $4.25
10. Prg Mgr reviews/signs cover letter 1 hour 2 min .04 X $25 = $1.00
11. Prg Assistant develops package and mails out documents to contractor
5 days (120 Hr)
5 min .09 X $25 = $2.25
12. Contractor reviews/signs contract, mails to PAO
5 days (120 Hr)
15 min .25 X $25 = $6.25(contractor)
13. Prg Assistant processes documents, forwards to Exec Director for approval/signing
24 hours
10 min .17 X $25 = $425
14. Documents sent to Prg Assistant for processing/copying/filing
24 hours
15 min .25 X $25 = $6.25
15. Original contract sent to Adm Clerk for processing/copying/filing
24 hours
15 min .25 X $25 = $6.25
16. Original contract sent to Labour-Finance for processing
48 hours
5 min .09 X $25 = $2.25
17. Copy of contract sent to contractor by mail 3 days (72 Hr)
5 min .09 X $25 = $2.25
TOTALS (Hours/Minutes) 534.25 -
721.26 hr
158 min $61.25
TOTALS (Days/Hours) (22.26 - 30.06 days)
(2 Hr 38 Min)
MCS© 2012 Gord Masiuk
To Be Process Designed and Implemented
• 10 major steps
• Task time varied from 2 minutes to 15 minutes per step for a total of 1 hour 16 minutes
• Cycle between steps time varied from 5 minutes to 72 hours for a total of 8 work days
• Cost of the process in task time $29.25
• 1 page contract X 3 = 3 pages per contract
MCS© 2012 Gord Masiuk
MCS© 2012 Gord Masiuk
Process Step – (Streamlined Process) Cycle Time
Task Time
Cost
1. Program Assistant develops "Contract" & established ARF #
7 min 7 min .12 X $25 = $6.00
2. Document sent to Program. Mgr. for approval/signing
5 min 2 min 04 X $25 = $1.00
3. Document FAXed to consultant for approval/signing
17 min 15 min .25 X $25 = $6.25 (contractor)
4. Documents FAXed to Program Assistant, processed, sent to Exp. Officer for signing
24 hrs 10 min .17 X $25 = $4.25
5. Director signs contract, forwards to Prg Assistant
24 hrs 2 min .04 X $25 = $1.00
6. Program Assistant processes/copies/files document
15 min 15 min .25 X $25 = $6.25
7. Prg Assistant forwards contract copy to consultant
3 days 5 min 09 X $25 = $2.25
8. Original contract sent to Adm Clerk for processing/copying/filing
24 hours 15 min .25 X $25 = $6.25
9. Original contract sent to Labour-Finance for processing
48 hours 5 min .09 X $25 = $2.25
TOTALS (Hours/Minutes) 192.75
Hrs 76 min $29.25
TOTALS (Days/Hours) 8.16
Days 1Hr 16
Min
MCS© 2012 Gord Masiuk
Net Improvements
• 2 sign offs from 9 including contractor (78% reduction)
• 52% reduction in task time per contract ($32 savings)
• 69% reduction in cycle time (435 hours)
• 95% reduction in paper (57 sheets to 3)
• As Is process required a cycle time of 450 hours to put contract into effect. The To Be process requires 36 minutes (99.86% improvement)
• Net savings in cost/materials per year: $6,400.00
• Net savings in task time per year: 273 hours (34, 8 hour days)
MCS© 2012 Gord Masiuk
Vendor Contract CI Process Redesign Initiative
12,250
5,850 6,400
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Original Process Redesigned/Streamlined
Process
Difference (52%
Savings)
Cost of Original and Redesigned Processes
Dollars (Annual)
Performance Improvements: Cost
MCS© 2012 Gord Masiuk
Performance Improvements: Cycle Time
Vendor Contract CI Process Redesign Initiative
627.76
192.5
435.26
0
100
200
300
400
500
600
700
Original Process Redesigned/Streamlined
Process
Difference (69%
Reduction)
Cycle Time of Orginal and Redesigned Processes
Hours - Per Contract
MCS© 2012 Gord Masiuk
Performance Improvement: Task Time
Vendor Contract CI Process Redesign Initiative
158
8276
0
20
40
60
80
100
120
140
160
180
Original Process Redesigned/Streamlined
Process
Difference (52%
Reduction)
Task Time of Original and Redesigned Processes
Minutes - Per Contract
MCS© 2012 Gord Masiuk
Performance Improvement: Materials
Vendor Contract CI Process Redesign Initiative
57
3
54
0
10
20
30
40
50
60
Original Process Redesigned/Streamlined
Process
Difference (95%
Reduction)
Materials (Paper/Copies for Contracts) for Original and Redesigned Processes
Number of Sheets Per Contract
MCS© 2012 Gord Masiuk
The ritual of passing the leadership role to a new generation in an ancient kingdom8..
MCS© 2012 Gord Masiuk
• What is the single most important leadership attribute represented by the 5 idols?
– Visionary?
– Decision Maker?
– Implementor?
– Creating Community Collaboration?
– Inspirational Communicator?
• Which one should the new heir pick?
MCS© 2012 Gord Masiuk
The Dynamic Business Scorecard (DBSC)
MCS© 2012 Gord Masiuk
The DBSC
• Key Components
– People
– Business Processes
– Technology
– Products/Services/Solutions
– Customer Response
– Business Results
• Defines your strategy, and measures
– Operational Excellence
– Customer Intimacy
– Product Leadership & Innovation
MCS© 2012 Gord Masiuk
Business Processes• Cycle time (execution
planning to on stream)• Cost (per: meter drilled;
completion; tie-in; on stream etc.)
• Quality (% of results that meet budget, spec/standards, safety, timing etc)
People• Engagement rating• Retention rate• % of personal and
team goals fully achieved
Output • Quantity (wells drilled, completed, tied-in, on stream etc.)
• Quantity of wells drilled out of season
• New production/ uplift
• % increase in base production
CustomerRequirements • “Customer”
satisfaction rating• % of products/services
meeting customer requirements/SLAs
• # of customer acknowledgements
Business Results• Cash flow• $/BOE• Net Revenue • ROI
E&P Company Divisional
Dynamic Business Scorecard
Division
OutcomesInput Process Output Customer
Outcomes
Feedback
MCS© 2012 Gord Masiuk
Products & Services Business Results
Business Processes
People
Client Response
Operational Excellence:HR-Dynamic Business Score Card
Goal: Zero Defects in Transactions
Goal: Low Cost Provider of Choice
Measures:
•Zero defect in transactional
services
•Degree of process standardization
and consistency (%,# processes
including IT standardized)
•HR Process efficiency, quality
•Selected Saratoga, Shandwich,
IABC Benchmarks
Goal: HR Products and
Services Conform to
Established Standards
and Company
Requirements
Measures:
•Degree of compliance to
legislative and service
level obligations
•Degree of consistency of
design and implementation
support of HR programs,
products and services
Goal: Client Satisfaction
Measures:
•Client Satisfaction and
Value levels (CSI*
measures) of design and
implementation support of
programs, products and
services
•% of clients who perceive
HR as a value added
business partner
Goal: Desirable Place to Work
Goal: Develop HR, Leader
and Individual
Contributor Competencies
Measures:
•Engagement level for HR Employees
•Engagement level for Company
Employees
•% HR Staff at full competency for
job roll
Goal: Key Contributors
To The Business
Goal: HR Meets
Business Targets
Measures:
•Cost savings in HR due to
efficiency gains
•Company cost savings or
efficiency gains resulting
from HR support
•Budget $ v.s Actual $
•Degree to which HR
Contributes to the
company strategy
HR &
Company
Outcomes
Input Process Output Customer
Outcomes
Feedback
* Client Satisfaction Index
MCS© 2012 Gord Masiuk
Customer Intimacy:Sample DBSC Measures
Products &
Services
Business
Results
Business Processes
People
Customer
Response
•Employee skill sets and
competencies meet job
requirements for service
excellence and
understanding and
meeting unique customer
requirements.
•Wellness Index
•Turnover rate
•Employee Satisfaction
•Conformance to customer
expectations for service
and quality eg: reliability,
service delivery, cost,
quality, cycle time.
•Products and
services meet the
specifications of
customers 100%
of the time
•Highest level of
Customer
Satisfaction in
industry for existing
and customized
products and services
•100% obligations
met
•Customer issues
resolved within
specified time
•Retention rate
•MVA in top
quartile of
industry
•ROE in top
quartile of industry
•Increasing market
share at supply and
market end
•Revenue/margin
from existing
and customized
products and
services
Business
OutcomesInput Process
Output
Customer
Outcomes
Feedback
MCS© 2012 Gord Masiuk
Product Leadership/Innovation:Sample DBSC Measures
Products &
Services
Business
Results
Business Processes
People
Customer
Response
•Employee skill sets &
competencies meet job
requirements for creativity,
creating new technology,
services, products and cross-
business unit solutions, and
marketing.
•ROI from T&D
•# of new ideas generated
•EE sat, wellness index,
turnover rate
•Cycle time (research-
design- development-
implementation)
• Flexibility/adaptability in
operations to meet new
business environment
requirements
•Speed of communication
•# of new
technologies,
products and
services
developed and
offered
•Highest level
of Customer
Satisfaction in
Industry
•Take up rate on
new technology,
service and
product
offerings
•%/# of new
offerings sold
•Customer
Retention rate
•MVA in top quartile
of industry
•ROE in top quartile of
industry
•Increasing market
share at supply and
market end
•Revenue and profit
from new product and
service offerings
TCPL
OutcomesInput Process
Output
Customer
Outcomes
Feedback
MCS© 2012 Gord Masiuk
User/Customer Focus-Focus on Customer Satisfaction-Focus on creating engagement with the business on strategic issues
Metrics Include:-Satisfaction and Importance ratings, -Service Quality ratings
Business Contribution-Control of Costs/Expenses-Assessed business impact of IT projects
Metrics include:-ROI, IRR, NPV etc., contributed to the business
Operational Excellence-Focus on efficient and effective internal IT operations
Metrics Include:-Cost, quality, cycle time, project metrics
Future Orientation-Focus on capability development of staff-Focus on researching and aligning applications with future business needs
Metrics Include:-People competency/capability levels (innovation, strategic thinking)
IT Score Card
MCS© 2012 Gord Masiuk
Tips for Developing Process Metrics
• SMART goals are needed to develop SMART metrics. Goals focus on results, not activities.
• Create a few, easily understood metrics. Numerous complex metrics are not very helpful. One metric can skew the focus of efforts, unintentionally creating negative impacts.
• Ensure you have reliable data to populate the metrics.
• Ratios are very helpful in “normalizing” data and allows “apples to apples” comparisons
• Use graphs or charts to display the data. It is much easier to identify trends or patterns from charts than from pages of numbers
MCS© 2012 Gord Masiuk
Challenges With Process Metrics
• Goals and metrics in your process may need to change from time to time due to internal events – make sure what you are measuring is still relevant
• Find time to periodically review the results and measures of the process with customers and make adjustments as needed
• More than one process may be impacting the result and measures of your process
MCS© 2012 Gord Masiuk
We could tell them it’s a crack in the projector lens
MCS© 2012 Gord Masiuk
Contact Information:
Gordon Masiuk (403) 880-0917
www.business-performance-excellence.ca
Thank You!