Shingo Prize Model and Application

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Model & Application GUIDELINES

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 examiners, 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. Miller Executive Director e Shingo Prize for Operational Excellence Jon M. Huntsman School of Business

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THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines

Model & Application

GUIDELINES

THE PRIZE FOR OPERATIONAL EXCELLENCE JON SHINGO M. HUNTSMAN SCHOOL OF BUSINESS UTAH STATE UNIVERSITY `

LOGAN, UTAH USA WWW.SHINGOPRIZE.ORG VERSION 7.1 — MAY 2012 COPYRIGHT © 2012 THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCE. ALL RIGHTS RESERVED

Shingo Mission 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.

Shingo Vision Our vision is to be the Standard of Excellence for every organization.

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Board of Governors Paul A. Brent

Bruce E. Hamilton

Mike Martyn

David Rowlands

Retired General Director Global Supply Mgt. Restructuring Delphi

President Greater Boston Manuacturing Partnership, Inc.

Principal SISU Consulting Group

CEO Gold Pride Pass

John E. Marushin

Richard J. Schonberger

Jerry Bussell

Thomas G. Hartman

Chie Operating Ocer Clear Path Solutions

Executive Advisor Underwriters Laboratories

Director o Operations AutoLiv North America

President Schonberger & Associates, Inc.

Knowledge Services

Jack Helmboldt

Operating Partner J.W. Childs Associates

Senior Vice President Denso Manuacturing ennessee, Inc.

Douglas F. Carlberg

Luis Izquierdo

President & CEO M2 Global echnology, Ltd.

Vice President, Corporate Operations Raytheon Company

Gary Convis

Michael Joyce

COO Bloom Energy Corporation

Senior Vice President, Operations and Program Managment Lockheed Martin

Arthur P. Byrne

Carolyn Corvi

Vice President, General Manager, Airplanes Programs Te Boeing Company Timothy A. Costello

Bill Kessler

Proessor & Director o Executive Programs Georgia ech ennenbaum Institute

Chairman & Chie Executive Ocer Builder Homesite, Inc.

George J. Koenigsaecker

Michael N. DaPrile

Julie Madigan

Executive Vice President SW Manuacturing, Inc.

Chie Executive Te Manuacturing Institute

President Lean Investments, LLC

Robert D. Miller

Executive Director Te Shingo Prize or Operational Excellence

John Shook

R. David Nelson

Kenneth Snyder

Chairman Quality Analytics

Executive Dean & Chie Administrative Ocer Jon M. Huntsman School o Business, Utah State University

Rusty Patterson

Chairman & CEO NCFAM Dennis K. Pawley

President & CEO Pawley Enterprises Gary Peterson

Executive Vice President– Supply Chain O.C. anner Company Cliord F. Ransom II

President Ransom Research, Inc. Peter N. Riley

President & CEO Lean Enterprise Institute

Carl G. Thor

President JarrettTor International John J. Van Gels

Vice President Operations & Supplier Management Te Boeing Company Alejandro von Rossum Sr.

Chie Executive Ocer, Chemical Division Cydsa Corporation S.A. de C.V.

EVP Integrated Operations Helen Zak Bell Helicopter extron President & COO Inc. TedaCare Center or Healthcare Value Don Ronchi Chie Human Resource Ocer Ceberus Operational and Advisory Company, LLC

Acknowledgements We wish to thank various people at Te Shingo Prize or Operational Excellence and the Jon M. Hunstman School o Business who made up the team that provided scholarly work, ideas that signicantly enhanced the clarity o the model and guidelines, and content editing. Tose most closely involved with the project include: Robert Miller, Jacob Raymer, Randall Cook, and Shaun Barker. A special thanks to Brian Atwater or his contribution regarding systemic thinking, especially the idea to create a systemic process model. We would also like to thank the members o our Board o Governors who provided practical insights and critical eedback through the years as the Shingo model evolved. Finally, each time we teach a course we receive valued input and ideas rom our Shingo aliates, whose expertise and riendship we truly value.

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Shingo Academy James F. Albaugh

Mark DeLuzio

Peter Lawson

John Shook

Executive Vice President Te Boeing Company

President Lean Horizons Consulting, LLC

Vice President, Manuacturing Ford Motor Company o Australia

President & CEO Lean Enterprise Institute

Joji Arai

Andy Eicheld

Hank Lenox

Harold M. Simons

Secretary General International Productivity Service

Senior Partner McKinsey & Company

Director, Ford Production System Ford Motor Company

Stan A. Askren

Executive Vice President, Manuacturing O.C. anner Company

Frank J. Ewasyshyn

David J. Logozzo

Executive Vice President -

President, LE Partners Lean Enterprise Institute

Manuacturing Chrysler Group

Jack Michaels

Chairman & Chie Executive Ocer Delphi Corporation

Orest J. Fiume

Chairman, President & CEO Snap-On Incorporated

Warren Batts

Louise L. Francesconi

Chairman, President & CEO HNI Corporation J. T. Battenberg

Chairman NAM upperware Corporation Norman Bodek

Former President Productivity, Inc. Guy D. Briggs

Vice President, General Motors General Manager, GM North America Vehicle Manuacturing Giord M. Brown

Plant Manager Cleveland Engine Plants, Ford Motor Company Vernon M. Buehler

Proessor Emeritus Utah State University Jerry Bussell

Executive Advisor UL Knowledge Services Arthur P. Byrne

Operating Partner J.W. Childs Associates Timothy A. Costello

Chairman & Chie Executive Ocer Builder Homesite, Inc. Stephen R. Covey

Co-ounder/Co-chairman Franklin/Covey Company H. Lawrence Culp, Jr.

President & CEO Danaher Corporation Michael N. DaPrile

Executive Vice President SW Manuacturing, Inc. Joseph C. Day

CEO & President Freudenberg, NOK Earnest W. Deavenport, Jr.

Former Chairman Eastman Chemical

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Former Vice President, Finance Te Wiremold Company President Raytheon Missile Systems Eliyahu M. Goldratt

Founder Goldratt Institute Benjamin S. Grin

Commanding General, Retired US Army Materiel Command Andrew M. Guarriello

Former Vice President & CEO A& Microelectronics’ Power Systems Bruce Hamilton

President Greater Boston Manuacturing Partnership, Inc. Thomas G. Hartman

President & Managing Director AutoLiv do Brasil Ltda Masaaki Imai

Chairman KAIZEN Institute o Japan Jerry J. Jasinowski

President National Association o Manuacturers Brian S. Jones

President & CEO Nypro, Inc. Daniel T. Jones

Founder & Chairman Lean Enterprise Academy Michael Joyce

Senior Vice President, Operations and Program ManagementLockheed Martin James H. Keyes

Chairman & CEO Johnson Controls Inc.

George J. Koenigsaecker

President Lean Investments, LLC

R. David Nelson

Chairman Quality Analytics Inc. Rodney O’Neal

President & Chie Operating Ocer Delphi Corporation Paul O’Neill

Former Secretary, US reasury Former Chairman and CEO, Alcoa, Inc. Hajime Ohba

President, SSC, Inc. oyota Suppler Support Center James J. Padilla

Chie Operating Ocer Ford Motor Company

Art Smalley

President Art o Lean, Inc. Mohsen Sohi

President & Chie Executive Ocer Freudenberg-NOK General Partnership James L. Solberg

Executive Director, Manuacturing, North American Powertrain’s Operations Ford Motor Company Anne Stevens

Chairman, President & CEO Carpenter echnology Corporation Carl G. Thor

President JarrettTor International John S. Toussaint

Dennis K. Pawley

CEO TedaCare Center or Healthcare Value

President & CEO Pawley Enterprises

Robert H. Transon

Cliord F. Ransom II

President Ransom Research, Inc. Ross E. Robson

President & CEO DnR Lean LLC Donald L. Runkle

Former Vice Chairman, Enterprise echnologies Delphi Corporation Russell Scaede

Owner Lean Manuacturing Systems Group, LLC Richard J. Schonberger

President Schonberger & Associates, Inc. Anand Sharma

President & CEO BM Consulting Group Ritsuo Shingo

Former President oyota China and Hino Motors China


Group Vice President Manuacturing Executive Oce Ford Motor Company Nickolas Vande Steeg

President & COO Parker Hannin Corporation Alejandro von Ro ssum, Sr.

CEO-Chemical Division Cydsa Corporativo S.A. de C.V. Michael J. Ward

President Autoliv Americas Donald J. Wetekam

President Aircra Services AAR Corporation David Wohleen

President, Electrical, Electronics, Saety & Interior Sector Delphi Corporation James Womack

Founder & President Lean Enterprise Institute

Table of Contents THE SHINGO MODEL FOR OPERATIONAL EXCELLENCE 8 Te House - Te Shingo Principles o Operational Excellence 9 Te Diamond - Te Shingo ransormational Process 12

Dimension 1: Cultural Enablers

12 13 14

Principle - Respect Every Individual Principle - Lead with Humility able 1 - Examples o Ideal Behavior or Cultural Enablers

16

Dimension 2: Continuous Process Improvement

16 17 17 17 17 18

Principle - Focus on Process Principle - Embrace Scientic Tinking Principle - Flow and Pull Value Principle - Assure Quality at the Source Principle - Seek Perection able 2 - Examples o Ideal Behavior or Continuous ProcessImprovement

22

Dimension 3: Enterprise Alignment

22 23 24

Principle - Create Constancy o Purpose Principle - Tink Systemically able 3 – Examples o Ideal Behavior or Enterprise Alignment

26

Dimension 4: Results

26 27

Principle - Create Value or the Customer able 4 - Examples o Ideal Behavior or Results

28

Scope o Transormation

28

Business and Management Systems

30

Summary

32

Te Shingo Model

ASSESSMENT CRITERIA 34 37 38 40 41

Assessment Criteria Dimension 1 - Cultural Enablers Dimension 2 - Continuous Process Improvement Dimension 3 - Enterprise Alignment Dimension 4 - Results

44

Assessment and Scoring

45 47 48

able 5: Scoring Matrix able 6: Behavior - Assessment Scale able 7: Results - Assessment Scale

APPLICATION PROCESS 50 Application Process 56

Writing the Achievement Report

58 60

Dimension Framework Recipients 5

THE SHINGO MODEL FOR OPERATIONAL EXCELLENCE

Principles o Operational Excellence Te search or improvement is instinctive. For businesses and indeed any organization to be successul 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 o all great leaders. In act, the passionate pursuit o perection, even knowing it is undamentally impossible to achieve, brings out the very best in every human being. Why So Many Fail Improvement 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 o a new tool set or the power o a charismatic personality. Improvement requires the transormation o a culture to one where every single person is engaged every day, in most oen small, but rom time to time, large change. In reality, every organization is naturally in some state o transormation. Te critical question is, to what end is the organization being transormed and who are the architects o the transormation? Te Shingo model o operational excellence asserts that successul organizational transormation occurs when leaders understand and take personal responsibility or architecting a deep and abiding culture o continuous improvement. Tis is not something that can be delegated to others. As the CEO o a very successul organization recently said, “Leaders lead culture!”

A CultureR. Built on Correct Principles Stephen Covey describes principles as undamental truths. He denes a principle as a natural law that is universally understood, timeless in its meaning, and undamentally

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inarguable because it is sel-evident. Dr. Covey teaches that values govern our actions but principles govern the consequence o our actions. Values are cultural, personal, interpretable, and variable. Our personal values inuence how we see the world and ultimately our choices or how to behave. Principles govern the outcomes o our choices. In other words, the values o an unprincipled person will very likely lead to behaviors that are ar rom ideal. Principles govern everything that happens in the natural world. Scientists the worldover continually search to understand more o the principles that govern the universe. Tey do not invent them; they only discover their existence and seek to do good by taking purposeul action based on knowledge o the guiding principle. Principles govern the laws o science; they determine the consequences o human relationships, and ultimately, principles inuence the successul outcome o every business endeavor.

Principles Predict Perormance One o the most powerul aspects o principles is their ability to predict outcomes. Principles govern the outcome or consequence o the behavioral we aligns each make. our actual choices behavior with Te the closer ideal behavior that is linked to the principle, the greater the likelihood the outcomes o our behavior can be predicted. Tis is proound given that very ew things in any business can be predicted with a high degree o certainty. A culture where every employee understands and is committed to principle-based behavior will be a culture with a very high likelihood o achieving predictably excellent results. Similarly, a corporation not well grounded in principles will result in a wide variety o personal interpretations o how to apply their values in work situations.

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

M O D E L

build must be grounded in correct principles. lasting improvement. Quality Circles, Just-inime, otal Quality Management, Business Process Re-engineering, Six Sigma, and most recently, Lean are a ew illustrations o wellintentioned initiatives that have ar underdelivered on their promised benets. Our study o 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 o them. Te Shingo model or operational excellence is based on a systematic study o each o these improvement initiatives. Our approach bi-passes the tools that each program has engendered and ocuses rather on the underlying/guiding principles and supporting key concepts behind them. We recognize the necessity o good improvement tools but ocus on them only within the context o enabling a system to better drive ideal, principle-based behaviors. Te Shingo “House” provides a summary and categorization o this collection o guiding principles and supporting concepts.

Why Operational Excellence?

When taken in their totality, these timeless principles become the basis or building a lasting culture o excellence in the execution o one’s mission statement. We call this relationship between business results and principle-based behavior, “operational excellence.” Operational

For decades we have and all too oen experienced, the watched, disappointing eforts o programmatic improvement initiatives, leaving in their wake a trail o unintended negative consequences rarely resulting in

excellence be a program,ad. another new set o tools, orcannot a new management Operational excellence is the consequence o an enterprisewide practice o ideal behaviors, based on correct principles. As long as improvement is

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seen as something outside the core work o 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 o operational excellence and help associates to connect and anchor their own values to the same principles, they enable a shi in the way people think and behave. Changing the collective behavior o the group changes the culture. Tis is a leadership responsibility that cannot be delegated.

Principles o Operational Excellence (The Shingo House) In his book Key Strategies or Plant Improvement, Shigeo Shingo said, “Tink in terms o categorical principles.” Te Shingo House is a categorization o the guiding principles o operational excellence. Associated with each category are also listed many important supporting concepts.

Te principles are categorized into our dimensions: cultural enablers, continuous process improvement, enterprise alignment, and results – the ultimate end o all business initiatives. Tese our dimensions overlay ve core business systems: product/service development, customer relations, operations, supply, and a variety o management or administrative support systems.

Guiding Principles Te Shingo Prize or Operational Excellence did not create the 10 guiding principles o 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 diferent times or thousands o years. As the world has gone through cycles o advancement and decline, it seems these principles are routinely lost and orgotten and must be re-discovered. Emerging rom the dark ages into a period o enlightenment and industrialization, the impact o these principles are only now beginning to be understood again.

Figure 1: The Shingo House

Certainly, and even surprisingly, most business schools do not emphasize these principles even though they are the driver or business execution excellence. Te cause or this may be Create Value for theCustomer

Create Constancy of Purpose Think Systemically

Measure what Matters Align Behaviors with Performance Identify Cause & EffectRelationships

Results

Enterprise Alignment

SUPPLY

OPERATIONS

See Reality Focus on Long-term Align Systems Align Strategy Standardize DailyManagement

MANAGEMENT

CUSTOMER RELATIONS

PRODUCT & SERVICE DEVELOPMENT

Focus on Process Embrace Scientiﬁc Thinking Flow & Pull Value Assure Quality at the Source Seek Perfection

Lead with Humility Respect Every Individual

Continuous Process Improvement

Cultural Enablers

Stabilize Processes Rely on Facts & Data Standardize Processes Insist on Direct Observation Focus on Value Stream Keep it Simple & Visual Identify & Eliminate Waste No Defects Passed Forward Integrate Improvement with Work

Assure a Safe Environment Develop People Empower & Involve Everyone

™ The Shingo Prize

GUIDING PRINCIPLES

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SUPPORTING CONCEPTS

thathave thesebeen undamental business principles lost in management ads and tool boxes that become programs or “avors o the month.” Te Shingo Prize or Operational Excellence has made a diligent search o thought leaders over the last 100 years. Teir work has been careully analyzed and dissected and the unique concepts or principles rom each have been extracted. Compiling, distilling, and prioritizing the list led to the 10 guiding principles on the le side o the house and the supporting concepts or each dimension on the right side. Supporting concepts are critical to pay attention to but may not stand up to the rigor o being universal, timeless, and selevident like the guiding principles. Te dimensions are the result o “thinking categorically about the principles.” It is clear that all our dimensions o the model require ocus in order to achieve


excellence. In the same way that we need to comprehend objects in three dimensions to truly appreciate all o their characteristics, operational excellence must be viewed in these our dimensions in order to ully appreciate the power o the principles to afect business outcomes.

or meaning, the principle, and then attempt to organize them somehow into a system, or some kind o order. Finally, they create tools to better enable the systems to accomplish the purpose or which they were created.

M O D E L

Learning and Teaching the Principles Te rst step a leader must take in leading Transorming a Culture cultural transormation is a personal journey to understand what each o these guiding (Shingo Transormation Process) Many organizations and their leaders are principles mean conceptually and then what they mean personally. It is impossible or a coming to understand that that’s sustainability requires ocusing on the culture; the easy leader to lead the development o a principlebased culture until he or she has gone through part. Te dicult part is in knowing how to the deep personal reection required to begin a really afect change. cultural transormation. Tis is no trivial task. For many and perhaps most, ully embracing Te Shingo transormation process is a these principles requires a undamental remethodology or accelerating a personal thinking o the rules o engagement used and enterprise-wide transormation to to get to where they are. a culture o operational excellence. INDIVIDUAL FOCUS Te process is based on the At a minimum, leaders must be teaching o Dr. Shingo who Anchored to Core Values curious enough to experiGUIDING PRINCIPLES recognized that business AL ment with the principle. M improvement comes R I GN FI John Shook at the Lean through understanding AF DR E I VE Enterprise Institute IV the relationship DR taught us that it is between oen impossiprinciples, ble to “think systems, our way and tools. ORGANIZATIO NAL FOCU S

RESULTS Dr. Shingo understood that RE operational FI NE excellence is not AC H achieved by supercial IE VE imitation or the isolated and random use o tools and techniques (“know how’”). Instead, achieving operational excellence requires people to “know why” (i.e., an understanding o underlying principles.)

(Behavioral Evidence) Culture

SYSTEMS

into newa way o acting.” Rather, guided by correct prinLE AB ciples, one may do, EN T C observe, learn, and LE SE then do something else until we “act our way into TOOLS a new way o thinking.” By careully analyzing the cause-andefect relationship between principles and results, a leader will begin to shi their own belies about what drives optimal business perormance. Aer gaining this new insight it becomes the efective leader’s In the 1940s, the work o French social primary responsibility to see that others in scientist, Jean Piaget, led us to understand his/her organization have experiences where that learning occursthewhen people come the to they can gain the same insight. deeply understand meaning behind methodology. People naturally search rst ™

eS Th

h in

go

iz Pr

e

* Figure 2: Shingo Transormation Process

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Leaders who choose to disregard the principles that govern business outcomes do so at great peril. Whether we acknowledge them or not, the principles o operational excellence always govern the consequence o our leadership and management behaviors. An example may help. I we encourage, enable, or simply allow a culture to emerge where employees are thought o merely as an unortunate cost burden or that the smartest people are those that rise to the top, the consequence will be a workorce that is not ully engaged. Ideas or improvement are never articulated and acted on, people eel unullled in their work, and turnover is very high. Labor costs become excessively high, business systems stagnate, and innovation is not ast enough to compete in a rapidly changing business climate. Unwise leaders see this as a validation o what they believed rather than the disappointing end o a sel-ullling prophesy. When people understand principles or themselves, the “why,” they become empowered to take personal initiative. Leaders who teach associates the principles behind the tactics or the tools can be condent that innovation rom each individual will be pointed in the right direction. It is not necessary or a leader to dene ideal abehaviors others. I the principle is truly principle,or people with diferent values will readily be able to dene ideal behavior or themselves and over time, behaviors become consistent even in a diverse environment.

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

Aligning the Systems with Principles All work in organizations is the outcome o a system. Systems are either designed to produce a specic end goal or they evolve on their own. Systems drive the behavior o people or rather they create the conditions that cause people to behave in a certain way. One o the outcomes o 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. Te Shingo transormation process illustrates the critical need to align every business, management, and work system o the organization with the principles o operational excellence. When systems are properly aligned with principles, they strategically inuence people’s behavior toward the ideal.

Dr. Shingo also taught that the primary role o managers must shit rom reghting to designing, aligning, and improving systems. The Enabling Role o Improvement Tools A tool is nothing more than a point solution or a specic means to a specic end. Dr. Shingo reerred to tools as techniques or problemsolving, necessary but not sucient. He taught that tools should be selected to enable a system to perorm its intended purpose. In many ways, a system may be thought o as a collection o tools working together to accomplish an intended outcome. A successul enterprise is usually made up o complex business systems that can be urther divided into layers o sub-systems, each having embedded in them the necessary tools to enable the successul outcome o the system.

When leaders precisely dene the detailed and expected behaviors or others, resentment builds. It conveys mistrust and makes people eel incompetent.

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Perhaps the largest mistake made by corporations over the last three or our decades has been the inappropriate ocus on a specic tool-set as the basis or their improvement eforts. ools do not answer the question o “why,” only the question o “how.” Knowing the “how” without understanding ully the “why,” leaves people waiting or instructions and powerless to act on their own.

M O D E L

Powerul organizations are made up o powerul people who understand the principles that govern their successul contribution. Organizations can never suciently release the ull potential o their people by creating a tool-oriented culture.

Experiment with the Principle One o the principles o operational excellence is scientic thinking, which is intended to oster a culture o experimentation and deep learning. People must be able to put to test each o the principles espoused by the principlebased leader. Only when people see or themselves the cause-and-efect relationship o results relative to the principle, will they come to deeply and personally understand the value o the principle to themselves. Repetition through many cycles o learning in the experiment gives people a personal insight about the principle and empowers them to make personal judgments about its validity.

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Te ollowing pages are organized to ollow the bottom-up ow o the Shingo House. We begin with the oundation o cultural enablers and end with the principle o creating value or the customer. Tis ow is only or purposes o explaining the model. We clearly understand that value creation must ultimately be the ocus o any great organization and that ailure to put the customer rst always results in inward acing, unresponsive bureaucracies.

DIMENSION ONE:

CULTURAL ENABLERS

Cultural enablers make it possible or people within the organization to engage in the transormation journey, progress in their understanding, and ultimately build a culture o operational excellence. Operational excellence cannot be achieved through top-down directives or piecemeal implementation o tools. It requires a widespread commitment throughout the organization to execute according to the principles o operational excellence. A culture must be developed where every person in the organization demonstrates a high level o respect or every other person. Developing a culture o mutual respect and humility takes a consistent commitment over a sustained period o time.

Principle - Respect Every Individual Respect is a principle that enables the development o people and creates an environment or empowered associates to improve the processes that they “own.” Tis principle is stated in the context o “every individual” rather than “or people” as a group. Respect must become something that is deeply elt or and by every person in the organization. Respect or every individual naturally includes respect or individuals customers, or suppliers, or therepresenting community, and or society in general. Individuals are energized when this type o respect is demonstrated. Most associates will say that to be respected is

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HE SHINGO PRIZE or OPERAIONAL EXCELLENCE |Model & Application Guidelines

Cultural Enablers (People)

the most important thing they want rom their employment. When people eel respected, they give ar more than their hands; they give their minds and hearts.

rom anyone. Improvement is only possible when people are willing to abandon ownership, bias, and prejudice in their pursuit o a better way.

Respect or every individual becomes a powerul “why” or many o the values espoused by great organizations. For example, simply stating important values such as saety rst, empowerment, or open communication oen ails to create uniorm ideal behaviors throughout the enterprise. Tis is because these values are “what’s” that ail to answer or people the question o “why.” A principle answers the question o “why.”

Because I lead with humility (the principle), I am open to good ideas and innovation rom anywhere in the organization (the value). Because Ilead with humility (the principle), I accept

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

Because we respect every individual (the principle), we always place saety frst (the value). Because we have respect or every individual (the principle), weempower people to act independently (the value). Because we have respect or every individual (the principle), we make all o our

M O D E L

responsibility and enable change (the value). Because I possess humility (the

principle), I seek, trust, and ollow the direction o those with a responsibility to lead (the value). Te ollowing table (see able 1) provides examples o ideal behavior or leaders, managers, and associates. Te list is intended to provide examples o ideal behavior that ow rom these two guiding principles and should not in any way be considered as an exhaustive list.

communications open and transparent

(the value). When people understand the “why,” they are ar more capable o consistently interpreting the correct behavioral implications o the value, the “what.”

Principle - Lead with Humility One common trait among leading practitioners o operational excellence is a sense o humility. Humility is an enabling principle that precedes learning and improvement. A leader’s willingness to seek input, listen careully, and continuously learn creates an environment where associates eel respected and energized and give reely o their creative abilities. Tere is also a need or humility on the part o all members o an organization. Ideas can come rom anywhere. One can learn something new

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Role Leaders

Managers

Associates

Examples o Ideal Principle-Based Behavior All leaders routinely spend time at the actual work locations where the actual work is perormed. Leaders continuously seek the input o 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 acknowledge important insights they have gained. Leaders take responsibility or applying principles o operational excellence in their own lives and ensure these principles become the oundation o organizational culture. Leaders engage people at all levels in dening ideal, principle-based behaviors and support managers in the alignment o all business and management systems. Leaders develop systems to ensure they remain publicly accountable or their own principle-based behavior seeking eedback rom all levels and across the entire enterprise. Leaders ensure products and services do not have an unintended negative impact on the sustainability o communities and the planet. All managers constantly work with others to better align systems with ideal behaviors as dened by the guiding principles. Managers act as coaches and mentors to others in the execution o principlebased systems and are constantly receiving personal and organizational eedback or improvement. All managers are visible in the work space and demonstrate an openness to listen and learn rom others. Managers across the enterprise ensure associates have the inormation they need to be successul in their work and push decisions out and down to the appropriate levels. Managers create a sae and productive work environment, keeping the saety o all associates as the highest o all priorities. Managers regularly review the skills and competencies required o all associates and work with each one to provide appropriate opportunities or associates to gain new insight. Managers ensure appropriate systems are in place to protect the environment and support or the communities where they are located. All associates, every day, demonstrate a commitment to the policies, principles, and standards developed or the areas in which they work. Associates seek out and learn rom others in the organization including leaders, managers, and peers. All associates take ull responsibility or their own personal development in relation to their contribution to the enterprise. Associates demonstrate a strong commitment to providing the greatest value or customers with the least amount o non-value-added resource. All seek to understand issues fow romo the customer’s andassociates strive to maximize the uninterrupted value to them.point o view Associates demonstrate an eagerness to learn new skills, take initiative, and share their learning and success with others.

Table 1: Examples o Ideal Behavior or Cultural Enablers 14


Cultural Enablers

Supporting Concept – Assure a Sae Environment Tere is no greater measure o respect or the individual than creating a work environment that promotes both the health and saety o employees and the protection o the environment and the community. Environmental and saety systems embody a philosophical and cultural commitment that begins with leadership. When leadership is committed, then the organization creates and supports appropriate systems and behaviors.

In short, saety is rst!

Supporting Concept – Empower & Involve Everyone For an organization to be competitive, the ull potential o every single individual must be realized. People are the only organizational asset that has an innite capacity to appreciate in value. Te challenges o competing in global markets are so great that success can only be achieved when every person at every level o the organization is able to continuously innovate and improve. Elimination o barriers to that innovation becomes the responsibility o management.

Supporting Concept – Develop People People development has emerged as an important and powerul cultural enabler and goes hand-in-hand with principles o operational excellence. Trough people development, the organization creates the “new scientists” that will drive uture improvement. People development is ar 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 shi in mindsets and behavior.

Fundamental to the Shingo model is the concept o 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 o people who share a deep understanding and commitment to the key concepts and principles is much easier than managing the work o those who are only doing what they are told. Empowered employees who understand relevant principles are ar more likely to make good decisions about the direction and appropriateness o their ideas or improvement.

An organization’s leaders must be committed

Similarly, when employees have a clear sense

to developing andcome expanding the knowledge base.people Leaders to realize that expenses or education and training are necessary investments or long-term health; as such, the commitment to this investment does not waver.

o direction strategy andthey havebecome a real-a time measureand o contribution, powerul orce or propelling the organization orward.

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Continuous improvement begins by clearly dening value through the eyes o 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 i it is not.

DIMENSION TWO:

CONTINUOUS PROCESS IMPROVEMENT

As associates learn to identiy and eliminate waste, they will, by necessity, ollow Dr. Shingo’s advice: “Improvement means the elimination o waste, and the most essential precondition or improvement is the proper pursuit o goals. We must not be mistaken, rst o all, about what improvement means. Te our goals o improvement must be to make things: easier, better, aster, and cheaper.” Particular emphasis is placed on a quicker, more exible response throughout the system. Te ocus or continuous improvement cannot be only quality or cost but instead must incorporate all aspects o value as perceived by the customer, including innovation, quality, cost, exibility, quick delivery, and a comprehensive view o environmental health and saety. Continuous improvement ocused on ow o value requires both scientic thinking and the capacity to identiy and eliminate waste (things that interrupt the continuous ow o value).

Principle – Focus on Process A process ocus recognizes that all outputs, whether product or service are created by processes acting upon inputs. Tis simple truth is oen overlooked: Good processes will produce the intended output, as long as proper inputs are provided. Process ocus also helps ocus problem-solving eforts on process rather than people. A complete shi to process ocus eliminates the tendency to nd the culprit (person) who made

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the mistake but rather leads to a pursuit o the real culprit (process) that allowed the mistake to be made. Tus, process ocus also supports the cultural enablers, creating an environment where learning rom mistakes can become a powerul element o continuous improvement.

Principle – Embrace Scientic Thinking A ocus on process lends itsel to scientic thinking, a natural method or learning and the most efective approach to improvement. All associates can be trained to use scientic thinking to improve the processes with which they work, creating a culture that provides common understanding, approach, and language regarding improvement. Scientic thinking is also results-based, placing a premium on dening and communicating desired outcomes throughout the organization. Tere are a variety o models or scientic thinking, such as PDCA (plan, do, check, and adjust), the QI Story, A3 thinking, and DMAIC (dene, measure, analyze, improve, and control).

Principle – Flow and Pull Value Flow thinking is the ocus on shortening leadtime rom the beginning o the value stream to the end o the value stream and on removing all barriers (waste) that impede the creation o value and its delivery to the customer. Flow is the best driver to make processes aster, easier, cheaper, and better. Other potential drivers such as unit cost or process variability are too narrowly ocused, distorting priorities and delivering suboptimal results. A cost ocus is particularly dangerous, when it creates perverse incentives and budget manipulations incidental to actual improvement. Pull is the concept o matching the rate o production to the level o demand, the goal in any environment. Yet pull is not easible or cost-efective without the exibility and short lead times that result rom ow.

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

M O D E L

Principle – Assure Quality at the Source Assuring quality at the source is the combination o three important concepts: (1) do not pass deects orward, (2) stop and x problems, and (3) respect the individual in the process. Deects are a source o instability and waste, so assuring quality at the source requires the establishment o processes or recognizing errors in the process itsel. Organizations must commit to stopping and xing processes that are creating deects, rather than keeping product or services moving while planning to x the issue later. Proper use o the human element in the process or thinking, analysis, problem solving, and the implementation o countermeasures is vital to continuous improvement. Principle – Seek Perection It is important to understand that the continuous process improvement journey has no end. Tis explains Dr. Shingo’s philosophy that one should always look or problems where there doesn’t appear to be any. Tis is contrary to the traditional belie: “I it isn’t broken, don’t x it.” Te pursuit o perection reveals that there is always opportunities or improvement. Tere is always waste, and the more a process is observed the more waste will be seen. While ocus on process guides and directs the improvement eforts, seeking or perection is the engine that keeps improvement energized and moving orward at an aggressive pace. Te term problem-solving may imply that aer a solution is implemented, improvement is done. Seeking perection and scientic thinking combine to nd countermeasures, not gameending solutions, and then revisits the issue again and again, pursuing perection without really expecting to nd it.

Flow and pull create enormous positive

Te ollowing table (see able 2, pg. 20) provides examples o ideal behavior or leaders,

benets all lead aspects any business. Focusing on ow in will to in improvements, including better saety and morale, more consistent quality with ewer deects, increases in ontime delivery and exibility, and lower costs,

managers, and associates. list isthat intended to provide examples o idealTe behavior ow rom these ve guiding principles and should not in any way be considered as an exhaustive list.

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Role Leaders

Managers

Associates

Examples o Ideal Principle-Based Behavior Every leader devotes a signicant amount o his/her time (up to 80 percent) ensuring the principles o continuous improvement are deeply embedded into every acet o the organizational culture. Every leader consistently evaluates their own behavior related to each o the principles. Leaders ensure continuous improvement is a part o their daily standard work and are accountable to others or their improvement. Leaders in all areas create a healthy tension between celebrating accomplishments and setting goals to move to the next level. All leaders in every area o themanagers organization establishment o to stretch goals and encourage and encourage associatesthe to push themselves levels o perormance that do not seem possible. Leaders consistently ask or and expect to see the application o appropriate tools to understand root cause prior to implementing countermeasures. Leaders expect and support the role o managers in designing and constantly improving systems at the business, management, improvement, and work levels as the rst course o action when results are less than expected. Every leader understands and balances the organizational ocus on both behaviors and results, holding themselves and others accountable or both. Managers in all areas devote a signicant amount o their time (up to 80 percent) ensuring the management systems o the organization are perectly aligned to drive ideal principle-based behavior. All managers participate with associates as required on improvement initiatives. Managers demonstrate knowledge o appropriate tools and use them regularly to solve problems related to their areas o 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 or and appropriately recognize associates or both demonstrating ideal behavior and or achieving business goals. Every associate in every part o the organization is engaged every day in using the appropriate tools o 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 o the tools. All associates demonstrate the courage and integrity to tell the truth, stop production, and be accountable or deects they observe or create themselves. Associates share their expertise in developing best practice standard work and demonstrate the discipline to ollow it until a better way has been developed.

Table 2: Examples o Ideal Behavior or Continuous Process Improvement

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Supporting Concept – Stabilize Processes Stability in processes is the bedrock oundation o any improvement system, creating consistency and repeatability. Stability is a prerequisite or improvement, providing a basis or problem identication and continuous improvement. Almost all o the continuous improvement principles rely on stability.

Stability is the precursor to achieving ow. Many o the rationalizations or waste are based on the instability o processes, as i they are beyond our control. Instead, we should apply the basic tools available to reduce or eliminate instability and create processes that enable the identication and elimination o waste. Supporting Concept – Rely on Facts & Data Dr. Shingo emphasized the importance o being data-driven in the pursuit o continuous improvement. He requently shared examples o specic 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 o the actual process be so detailed that when implementing a change in the process the improvement as evidenced by the data could

be predicted. Tus, reconciliation required between the predicted results andisthe actual results, making the improvement process truly data-driven. Te 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.

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 itsel serves as the management control mechanism. Supervisors are reed up or other tasks, when they are not “required” to monitor and control the work process.

M O D E L

Supporting Concept – Insist on Direct Observation Direct observation is a supporting principle tied to scientic thinking. It is in act the rst step o the scientic method. Direct observation is necessary to truly understand the process or phenomenon being studied. All too requently, perceptions, past experience, instincts, and inaccurate standards are misconstrued as reality. Trough direct observation, reality can be seen, conrmed, and established as the consensus. Supporting Concept – Focus on Value Stream Flow and pull value combined with ocus on process lead to the necessity o dening value streams and ocusing organizational attention on them. A value stream is the collection o all

o the required deliver value to the necessary customer. steps Dening whatto customers value is an essential step to ocus on the value stream. Clearly understanding the entire value stream, however, is the only way or an organization to improve the value delivered and/or improve the process by which it is delivered.

Supporting Concept – Standardize Processes While stability is a necessary precondition or creating ow and improvement, standardization builds control into the process itsel. Standardization is the supporting principle behind maintaining improvement,

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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 requently 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 simplication. Dr. Shingo’s lie’s work in mistake proong is centered on this principle. Many o the seven orms o waste are in act the result o inormation decits. Making inormation visual is the supporting principle that when combined with simplication solves the inormation decits. Supporting Concept – Identiy & Eliminate Waste Identication and elimination o waste is

a practical concept or making processes ow, thus it becomes a primary ocus o continuous improvement. Waste elimination is a powerul supporting principle because it is easily understood by everyone associated with a value stream, compared to the complex concepts and computations oen associated with cost per unit, cost variances, statistical variability, and other complex metrics. Focusing on the elimination o waste will consistently drive appropriate behavior,

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while the wrong ocus can requently become a barrier to improvement, large inventory write-downs, re sales, or scrap. In the end, identiying and eliminating waste is a concept that efectively engages the entire organization in the continuous improvement efort. Supporting Concept – No Deect Passed Forward Tis concept is essential or operational excellence rom many diferent points o view. From a leader’s perspective, it requires great courage to stop the process long enough to understand the root cause and take countermeasures that prevent the process rom reoccurring. For the leader, this oen means trading any short-term loss or substantial long-term gain.

From a manager’s perspective, systems must be in place to ensure that any result that varies rom the standard, even slightly, creates an expectation o and support or immediate action. We oen call this “swarming.” From an associate’s point o view, “no deect passed orward” requires a mindset o ownership and accountability. I standards are clearly dened, every person should know what good is. Leaders and managers should role model then the create the conditions or associates to develop mindset o personal integrity; meaning, that no one would ever knowingly or willingly orward the outcome o their value contribution to someone else i it contained the slightest variation rom the standard. Tis supporting concept eeds the mindset and tools o continuous improvement and creates the conditions or seeking perection. It is possible to achieve perection in the application o this concept.



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

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

M O D E L

Each person in an organization perorms daily work. When improvement is integrated with work, each person accepts responsibility or improvement o the daily work processes. Executives are responsible or improving strategy-setting processes or perhaps resource alignment processes. Tey are primarily responsible to deploy mission-critical strategy and metrics down into the organization such that every person not only has a clear line o sight to what matters the most but are also motivated by the mission in a way that creates a compelling case or improvement. Managers are responsible or improving quality systems, or perormance development systems, or value stream ow. Line workers are responsible or improving their cycle times, or qualitywith o work, or yields. Integrating improvement work is more than assigning responsibility. It entails the creation o standardized work that denes procedures or improvement.

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One o the most signicant ailures o modern management is its ocus on strategy and planning without considering execution. o succeed, organizations must develop management systems that align work and behaviors with principles and direction in ways that are simple, comprehensible, actionable, and standardized. We call this Principlebased Strategy Deployment. Individual leaders cannot develop individual approaches to management without introducing massive waste into an organization.

DIMENSION THREE:

ENTERPRISE ALIGNMENT

Strategy deployment requires a management process built around scientic thinking, with more emphasis on cycles o learning than on perect plans. It is essential to establish efective communication, a process or 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 denition o successul strategy deployment when business strategies are aligned with correct principles. Te sum o individual eforts rarely even approximates the efective alignment o the pieces into a single integrated whole. Creating value or customers is ultimately accomplished through the efective alignment o every value stream in an organization.

Principle – Create Constancy o Purpose Almost every aspect o any organization is always in a constant state o 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 o those values Even knowingmeaning this, the rst o W. change. Edwards Deming’s “14 Points” is to create constancy o purpose. How is this possible?

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Purpose, at the highest level, answers the question: “Why does this organization exist?” It is incumbent upon leaders to nd agreement on philosophical and strategic direction that provides a uniying vision. Tis sense o 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. Te second category or where constancy o purpose can be achieved is in the establishment o the guiding principles upon which the organization is grounded. Principles are universal, timeless, and sel-evident laws that govern the consequences o our actions. Te degree to which principles are adhered will always impact the long-term success o any organization. Leaders must come to understand which principles have the greatest impact on their results and then make certain every aspect o the organization is aligned to drive behavior that is in greatest harmony with the principles. Having established direction and guiding principles, a leader must align strategy and perormance metrics broadly and deep into the organization. A system must be built to ensure constant communication, both up and down. Changes in direction, guiding principles, and key metrics should be treated like changes in the national constitution. Organizations that requently redirect philosophies and strategies ail to recognize the tremendous waste associated with instability, uctuation, and perhaps most importantly, the loss o human commitment.

Systemic thinking requires organizations to both analyze and synthesize. Analysis, or convergent thinking, is ocused on taking things apart to see what can be learned rom the various components. We call this “looking into things.” Convergent thinking is what leads us to ocus on the “how.” Synthesis, or divergent thinking, is ocused on seeing how things might work together. We call this “looking out o things.” Divergent thinking is what leads us to ocus on the “why.” Operational excellence requires both.

M O D E L

Leaders realize that the impact o synergy — how things work together — is ar greater than the sum o the parts. As managers design and align systems with correct principles they must shi rom thinking purely analytically to thinking systemically. Systemic thinking is comprised o three parts: holistic thinking, dynamic thinking, and closed-loop thinking. As managers move into systemic thinking, the ull value o 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 saely initiate improvement projects on their own. Ultimately, this understanding is what allows improvement to transition romefort. being solely top-downefort to more o a grass roots Te ollowing table (see able 3, pg. 26) provides examples o ideal behavior or leaders, managers, and associates. Te list is intended to provide examples o ideal behavior that ow rom these two guiding principles and should not in any way be considered as an exhaustive list.

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

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Role Leaders

Managers

Associates

Examples o Ideal Principle-Based Behavior All leaders share a common, clear, and compelling vision o the uture and talk about it in a consistent way everywhere they go. Leaders create and consistently execute a system o “catch ball” to present ideas on strategy down and across the organization, receive eedback, and build organizational consensus. Leaders establish a simple system o metrics and accountability that aligns and prioritizes the work, decision making, and improvement eorts o the organization. Leaders ocus both on results and behavior, setting targets and accountability or both. Managers ensure a continuous fow o inormation (both horizontally and vertically) to associates, making sure they ully understand the context or 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 inormation and a broad enough perspective to know the implications o their recommendations and actions. 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 perormance and behavioral metrics or their area, use them to create personal and team improvement, and connect their work with company goals.

Table 3: Examples o Ideal Behavior or Enterprise Alignment

Supporting Concept – See Reality Tis is a very important concept. Most managers and leaders consider themselves quite capable o 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. Tus the practice o “go and see” was developed based on the principle that reality needs to be perceived and understood based upon the ve senses.

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were greatly distorted rom the actual data they observed. Further, most organizations unintentionally build cultures that prevent the ree ow o inormation that communicates an honest picture o reality. Max De Pree said, “Te rst responsibility o a leader is to dene reality.” A leader must establish systems that make organizational perormance and associate behavior transparent to all. No leader can efectively lead without having a rm grasp o the current business realities.

Most organizations create barriers that make it very dicult or people to see and tell the truth about what they see. A recently retired

Supporting Concept – Focus on Long-term

US senator wrote that having travelled on numerous trips with other political and military leaders to areas o serious world conict, his greatest disappointment was that virtually all o their assessments o progress

Jefrey Liker which highlights the principle o longterm ocus, provides a oundation o stability in the executive suite that can be achieved in no other way.When an organization creates a long-term ocus, it is more likely that



decisions will in act pursue saety, quality, delivery, and cost rather than just monthly or quarterly nancial targets or bonus cut-ofs. In conjunction with taking care o the short- and medium-term priorities, thinking in terms o 20- to 50-year legacy goals signicantly reduces the tendencies or knee-jerk reactions to urgent pressures. Supporting Concept – Align Systems From the stakeholders’ perspective, the ull potential is realized only when most critical aspects o an enterprise share a common platorm o principles o operational excellence, management systems, and tools. While it is expected that organizations develop some unique elements o their local culture, it is also expected that principles become a common, uniting part o each locale. op-level leadership, staf, and business processes should exempliy the same principles, systems, and tools as do the operational components o the enterprise. Supporting Concept – Align Strategy Policy deployment is a planning and implementation system, based on scientic thinking, employee involvement, and respect

involved, clarity is critical; the simplicity o aligning strategy helps keep everyone, literally, on the same (single) page, pointed in the same direction.

M O D E L

Supporting Concept – Standardize Daily Management Te concept o having some level o detailed work description or how to actually do daily work applies at all levels o the organization. Regardless o the perception among many leaders, their work can and should be organized into standard components.

Standard daily management creates a reerence point rom which continuous improvement can be based. Standard daily management can lead to greater process control, reduction in variability, improved quality and exibility, stability (i.e. predictable outcomes), visibility o abnormalities, clear expectations, and a platorm or individual and organizational learning. Standard daily management enables creativity that is ocused and controlled rather than ad hoc. Leaders who ollow standard work send a clear message that they are serious and no one is above continuous improvement.

or the individual. At the strategy level, policy deployment provides leadership with the necessary principles, systems, and tools to careully align key objectives and execution strategies while empowering the organization through cascading levels o detail to achieve those objectives. Because so many people are

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Te basic principle o the results dimension is that businesses must ow value, with value typically dened as something or which customers are willing to pay. Tereore, the denition can include many stakeholders: Customers willing to pay; investors willing to invest; communities willing to support; and employees willing to commit their trust, condence, and careers. Operational excellence creates the ow o value to all stakeholders, improving customer satisaction and stakeholder value, while maintaining a sae and healthy environment.

DIMENSION FOUR:

RESULTS

Principle – Create Value or the Customer Every aspect o an organization should be ocused on creating value or the customers, investors, employees, and communities. Again, it is helpul to consider the true north concept that should guide decision-making and continuous improvement. An organization should drive all aspects o value, including quality, exible responsiveness to customers, and return to stakeholders (e.g., growth, revenue, prot, saety, and environmental impact). Te ollowing table (see able 4, pg. 29) provides examples o ideal behavior or leaders, managers, and associates. Te list is intended to provide examples o ideal behavior that ow rom this single guiding principle and should not in any way be considered as an exhaustive list. Supporting Concept – Measure what Matters Historically, measurement has been ocused on management – what management needed to know to be able to plan, organize, and control. Within a model where widespread involvement

is essential perormance, or continuousit improvement consistent is importantand to dene measures that matter to those who will be using them. Tereore, line associates need

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Results

Role

Examples o Ideal Principle-Based Behavior

Leaders

Leaders make sure the company scorecard is balanced between results and behavior. Leaders ensure the voice o the customer is clearly heard throughout the entire organization. Leaders systematically discuss all business results with employees, encouraging questions and discussion. All managers implement systems that place value creation and waste elimination at the heart o management and improvement eorts. Managers routinely discuss with associates the relationship between actual

Managers

Associates

M O D E L

results and the systems and principles that are creating them. Managers make sure that established metrics are aligned upward and side-toside and are understood and committed to by the people who aect them, so people can see instantly where they are relative to the targets and they know how to move the dial. All associates systematically review results and ask questions to understand cause-and-eect. Associates use results metrics to prioritize and take personal initiative to make improvements that impact the areas where improvement is needed most.

Table 4: Examples o Ideal Behavior or Results

diferent measures than leaders responsible or 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 eedback that is tied to the cycle o work, and 4) drive improvement. Measures that matter can be created throughout the organization to assure that everyone is ocused on the appropriate strategic activities and driving continuous improvement that moves the whole enterprise ahead. Supporting Concept – Align Behaviors with Perormance Ideal behavior drives long-term results. Tis happens when the systems are aligned with principles o 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 or creating the environment and the process or people to evaluate the correctness o their own values relative to the perormance results required o the organization.

A business set a goal to reduce customer complaints only to nd that as they did, they began to lose valuable customers. Te measure was driving behavior that made complaining such a painul experience that they just stopped calling. A better measure might have been to increase the number o complaints so that every single disappointment is given an opportunity to be resolved. Supporting Concept – Identiy Cause & Efect Relationships When we want to make a car go aster, 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 rom the pedal to the engine to the axle. Tere is a clear cause-and-efect relationship.

Organizations must ollow the linkages to determine the cause-and-efect relationships and how goals can be achieved. Tis is the same concept as root-cause analysis but applied to creating value.

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Business & Management Systems Te principles o operational excellence must be applied across all the business and management systems. Te center wheel o the House represents the scope o transormation within an organization, including all basic customer-acing business systems and all management support system. Te systems associated with each o ve typical business areas could include:

SCOPE OF TRANSFORMATION

Customer Relations • Sales • Advertising/promotion • Order processing and tracking • Responsive/exible 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

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SCOPE OF TRANSFORMATION

Operations • Product or service delivery • Materials management • Process engineering • Maintenance • Quality assurance and reliability • Testing Supply • Supplier selection and qualication • Supplier development and partnering • Procurement process • Logistics Management Support • Recruiting • Compensation and benets • Training and employee development • Employee relations and satisfaction • Capital budgeting • Budgeting • Financial reporting

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

M O D E L

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

• 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

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SUMMARY

Operational excellence is the vision that many organizations have established to drive improvement. Programs, names, tools, projects, and personalities are insucient to create lasting change. Real change is only possible when timeless principles o operational excellence are understood and deeply embedded into culture. Te ocus o leaders must change to become more oriented toward driving principles and culture while the manager’s ocus becomes more on designing and aligning systems to drive ideal principlebased behavior. Te ultimate mission o Te Shingo Prize or Operational Excellence is to assist organizations o all kinds in building operational excellence. Te Shingo model may be used as a benchmark or what excellence at the highest level should look like. It may be used to align all elements o an organization around a common set o guiding principles and a proven methodology or transormation. Some use the Shingo model as the basis or organizational assessment and

30


improvement planning. A ew use the Shingo model as a way to recognize their associates or 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 or all o the above.

M O D E L

The real Shingo Prize, however, is the business results that come rom the relentless pursuit o a standard o excellence that is, without question, the most rigorous in the world. Tose who use the Shingo model will embark on a journey that will accelerate the transormation o their organization into powerul, dynamic, nimble competitors. No obstacle – afordable healthcare, ecient transportation, emerging global environmental concerns – will be beyond the reach o those who embrace principles o operational excellence and make certain that every person in their extended value stream deeply understands the “why” behind the “what.”

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Underwriters Laboritories LLC Northbrook, Illinois Juan Amador +1 847-272-8800 www.ul.com

e Manufacturing Institute London, UK Eilish Henry +44 161 875 2513 [email protected]

s s

s s

ITESM

GBMP Inc.

China Center for Operational Excellence

Queretaro, Mexico Abel Gomez Medina +52 442-238-3352 www.shingoprizemexico.org

Boston, Massachusetts Bruce Hamilton +001 617-287-7729 www.neshingoprize.org

Shanghai, China Chris Deans +86 136-716-0040 [email protected]

i

Shingo Executive Education Courses: Taught Separately DISCOVER

BUILD

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

Building Systems to Drive the Right Behavior – Mobilizing Capabilities

LEAD

ALIGN

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

Behavior-Based Strategy Deployment – Aligning Performance with Ideal Behavior

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

LEARNING FLOW: The

4 Disciplines of Operational Excellence

DISCOVERŇ BUILD Ň LEAD Ň ALIGN

Timeline Approx. (weeks)

Participants in the workshops will be able to:     

Describe the benefits 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

(3 Day)

Discipline 1:Principles of Operational Excellence

4

Organizational Transformation with Principles, Systems & Tools

Go See Go && See

Homework Team Webinar Personal Call

  

Select high impact systems to drive ideal behavior Scientifically Experiment with adjusting systems Re-align systems to eliminate work-a-rounds/fire-fighting Build system reliability -monitor behavior

8

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(3 Day)



0

DISCOVERthe BRIDGE

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BUILD the VEHICLE Discipline 2:Building Systems to Drive the Right Behavior Mobilizing Capabilities

Go

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Homework Team Webinar Personal Coaching

20

24

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(3 Day) LEAD the     

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

Discipline 3:Leading with Principles A Leader’s role in Creating Individual & Organizational Alignment

Go

See

Homework Team Webinar Personal Coaching

   

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

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40

44

(3 Day)



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DRIVER

ALIGN the DIRECTION

Discipline 4:Behavior-based Strategy Deployment Aligning Performance with Ideal Behavior

Go & See

Homework Team Webinar Shingo Exchange Blog

48

52

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Recognized at International Shingo Prize Conference Executive Education Certificate – USU/Shingo Prize

Copyright © The Shingo Prize

Administered by the Jon M. Huntsman School of Business at Ut ah State University ii THE SHINGO PRIZE for OPERATIONAL EXCELLENCE

| Model & Application Guidelines

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ASSESSMENT CRITERIA

Te Shingo assessment methodology is being embraced by organizations all over the world, without barrier to industry or geography. We have seen involvement expand ar beyond its manuacturing roots into healthcare, government, and nancial services. Tere are three levels o recognition in place to encourage organizations to engage and utilize the Shingo model as early as possible in their cultural transormation. Organizations can be awarded Te Shingo Prize, Shingo Silver Medallion, and Shingo Bronze Medallion. A third party, non-biased assessment o your organization can provide a benchmark and eye-opening eedback that will accelerate your cultural transormation.

The Shingo Prize is awarded to organizations that demonstrate a culture where principles o operational excellence are deeply embedded into the thinking and behavior o all leaders, managers, and associates. Perormance is measured both in terms o 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 ocused on ensuring that principles o operational excellence are deeply imbedded into the culture and regularly assessed or improvement. Managers are ocused on continuously improving systems to drive behavior that is closely aligned with the principles o operational excellence. Associates are taking responsibility or improving not only their work systems but also other systems within their value stream. Understanding the “why” has penetrated the associate level o the organization. Improvement activity has begun to ocus on the enterprise as a whole. At Te Shingo Prize level, the scorecard has clearly dened perormance measures and is beginning are to include o behavior. Key measures stable, measures predictable, and mature with positive trends and ew anomalies. Tere are realistic and challenging goals in most areas with a good understanding o world-class

34


perormance. Most measures are aligned to corporate goals and cascade to the lowest level. Silos are dicult to identiy.

The Shingo Silver Medallion is awarded to organizations who demonstrate strong use o tools and techniques, have mature systems that drive improvement, and are beginning to align thinking and organizational behavior with correct principles o operational excellence. Leadership is involved in improvement eforts and supports the alignment o principles o operational excellence with systems. Managers are deeply involved and ocused on driving behaviors through the design o systems. Associates are involved every day in using improvement tools to drive continuous improvement in their areas o responsibility. Understanding the “why” has begun to penetrate the associate level o the organization. Improvement activity is ocused on multiple business systems. At the silver level the scorecard has a broad spectrum o measures and is beginning to include behavioral elements. Key measures are stable with mostly positive trends, and all levels understand how to afect the measures appropriately or their areas. Tere are goals being set in most business systems. Alignment is clearand apparent in most business systems; plans have been set in place to

being set in many areas outside o operations. Alignment may still be weak in areas other than operations, but eforts are being made to improve and work toward aligning the entire enterprise. Silos are beginning to all. Te cultural assessment is broken into three distinct evaluation sections, the achievement report, the Shingo Cultural Online Perormance Evaluation (SCOPE, new and planned to come online this year), and the site visit. Each section is evaluated and may be used to clariy, ampliy, and veriy the other sections. Achievement reports are written by each applicant and tell the story o their transormation to operational excellence. Te achievement report covers each dimension o the model and discusses the principles, systems, and tools that are evident and the results they have produced. Te achievement report, along with the SCOPE survey, is used by members o the Shingo Board o Examiners to evaluate an applicant’s eligibility to be awarded a site visit. Not all applicants will be awarded a site visit; urthermore, 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 o this document.

A S S E S S M E N T C R IE T R IA

bring will data be administered to each applying entity. All received rom SCOPE will are ewthem silosinto le. alignment where it is not. Tere SCOPE populate a Shingo database and be used to provide eedback to the applicant. Feedback The Shingo Bronze Medallion is awarded to organizations that demonstrate strong rom SCOPE will be part o a packet, which will be provided to each applicant regardless o use o tools and techniques or business improvement and are working to develop whether or not they are awarded a site visit. efective systems to create continuity and Site visits that are awarded to applicants ollow a consistency o tools applied throughout the business entity. Leadership is setting the standard ormat. In summary, they are conducted direction or improvement and supports the by a team o examiners that have been trained eforts o others. Managers are involved in and selected by Te Shingo Prize or Operational developing systems and helping others use Excellence. Te team generally spends two days tools efectively. Associates are trained and at the site evaluating the culture o the applicant; participate at a high rate on improvement duration o a site visit may be extended depending on the application. Examiners observe behaviors, projects. Understanding the “why” has still review documentation and measures, and ask not penetrated down to the associate level o the organization. Improvement activity is still questions o all levels and business systems o the applying entity. Examiners are provided all heavily ocused begun evaluation resources available that pertain to an in support areas.on Atoperations the bronze and levelhas measures applicant. Tis could include, but is not limited to, are beginning to communicate cause and the achievement report, the SCOPE survey results, efect. Key measures have begun to stabilize and past documentation used to challenge. with trends being mostly positive with some backsliding still evident. Tere are goals 35

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

Assessment Criteria Tis section covers the our dimensions o the model and serves as a guide and provides



Results



SUPPLY

OPERAT IONS


MANAGEMENT

CUST OMER RELAT IONS

examples o systems that drive principle-level behavior and tools that support those systems. Te ollowing is not intended to be a check list or each dimension; it simply provides examples o principles, systems, and tools in each dimension. Te systems and tools observed during an assessment are the artiacts o a culture. Te behavior that is observed during an assessment is key to evaluating the level o cultural transormation that an organization has achieved. Ideal behaviors are characteristic o the highest level o achievement and are exemplied previously in the model. Examples o questions in each dimension are also included or 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 diferently in any given organization although the assessment methodology still applies. Te ollowing diagram illustrates the relationship between the diferent systems in an organization (see Figure 3).







Cultural Enablers

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GUIDING PRINCIPLES

S UP PLY

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Figure 3: Systems Model 36


Tools:

Dimension 1 – Cultural Enablers (250 Points) Guiding Principles: Lead with humility Respect every individual

Supporting Concepts: Assure a sae environment Develop people Empower and involve everyone Te ollowing are examples o systems that drive behaviors and are aligned to principles as exemplied in the model (the rst portion o this document). Some tools are also listed as examples. Tis 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. Tese are simply examples and provide organizations some guidance on what an assessment would evaluate.

Systems: • Individual development • On-the-job training/training within industry (OJ/WI) • 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

• Arrangements with educational institutions • Personal development plans • Lean training curriculum and materials • Meetings/huddles • Suggestion forms and measures • Community open house • Fundraisers

Te ollowing are examples o questions that examiners would be engaged in answering and understanding during an organizational assessment. Answers to these and other questions asked o leaders, managers, and associates will provide examiners with an understanding o the culture o an organization. Tis is not intended to be a complete list; it is or guidance and learning purposes. Examiners will also evaluate the requency, duration, intensity, scope, and role o the behaviors that characterize the culture o an organization. Te behavior assessment scale provided on page 53 o this document provides urther understanding o this process.

A S S E S S M E N T C R

Questions:

IE T R IA

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 behavior assessment scale. 1. Is on-the-job coaching in lean practices a daily part o the culture? 2. Is ormal lean training and education ongoing and updated? 3. Is there a process ow where suggestions are processed quickly and eedback is received by the srcinator? 4. Is the organization a sae and clean workplace where saety and environmental standards are continually improving? 5. Does the recognition system ocus on perormance that encourages ideal behavior; and is it requent, timely, and specic? 37

Systems:

Dimension 2 – Continuous Process Improvement (350 Points) Guiding Principles: Focus on process Embrace scientic thinking Flow and pull value Assure quality at the source Seek perection

Supporting Concepts: Stabilize processes Rely on data and act Standardize processes Insist on direct observation Focus on value stream Keep it simple and visual Identiy and eliminate waste No deects passed orward Integrate improvement with work Te ollowing are examples o systems that drive behaviors and are aligned to principles as exemplied in the model (the rst portion o this document). Some tools are also listed. Tis 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. Tese are simply examples and provide organizations some guidance on what an assessment would evaluate.

38

• Voice of the customer • Problem-solving (A3 inking, 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 proong/zero defects • New market development and current market exploitation • Quality function deployment, concurrent

engineering, etc. or product development • eory of constraints – managing bottlenecks • Systems that make the customer/supplier linkage visible throughout all stages o 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 databased decisions and actions • Cellular design/layout • Variety reduction


Tools:

Questions:

• Customer surveys • Component standardization and modularity • Standard operating procedures (SOP) • Tools of quality (i.e. pareto charts,

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 behavior assessment scale.

storyboarding, cause-and-efect diagrams, 5-whys, or similar problem-solving techniques) • Benchmarking visit • Right-sized equipment and facilities • Production control boards • Red tags • Floor tape

Te ollowing are examples o questions that examiners would be engaged in answering and understanding during an organizational assessment. Answers to these and other questions asked o leaders, managers, and associates will provide examiners with an understanding o the culture o an organization. Tis is not intended to be a complete list; it is or guidance and learning purposes. Examiners will also evaluate the requency, duration, intensity, scope, and role o the behaviors thatTe characterize culture o an organization. behaviorthe assessment scale provided on page 53 o this document provides urther understanding o this process.

1. Is the current state and uture 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 or all work processes? Are they updated with improvements routinely? Are they ollowed with regard to timing and sequence? 3. Are managers and supervisors routinely observing the actual process in order to gather actual data to understand the problems and opportunities? 4. Are improvements made by ollowing a scientic method, PDCA, DMAIC, A3 thinking, etc.? Is there a coaching process in place or problem-solving? Are problems being addressed at the lowest possible level o the organization? 5. Are problems, deects, and abnormal conditions signaled and stopped immediately at the point o occurrence and the root cause pursued?


39

Tools:

Dimension 3 – Enterprise Alignment (200 Points) Guiding Principles: Create constancy o purpose Tink systemically

Supporting Concepts: See reality Focus on long-term Align systems Align strategy Standardize daily management Te ollowing are examples o systems that drive behaviors and are aligned to principles as exemplied in the model (the rst portion o this document). Some tools are also listed. Tis is not intended to be a check list, nor is it all inclusive. Not all will be present in every organization, and organizations may

• Daily management standard work sheets • Surveys • Meetings • X-Matrix • Mission statement • Vision statement • Goals • Values • Business models

Te ollowing are examples o questions that examiners would be engaged in answering and understanding during an organizational assessment. Answers to these and other questions asked o leaders, managers, and associates will provide examiners with an understanding o the culture o an organization. Tis is not intended to be a complete list; it is or guidance and learning purposes. Examiners will also evaluate the requency, duration, intensity, scope, and role o the behaviors that characterize the culture o an organization. Te behavior assessment scale provided on page 53 o this document provides urther understanding o this process.

have othersand not provide listed here. Tese are simply examples organizations some guidance on what an assessment would evaluate.

Systems: • Strategy deployment • Daily management • Assessment • Communication • Customer relationship management (CRM) • Information technology • Accounting/nance • Measurement/scorecard • Reporting/accountability

40


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 behavior assessment scale.

Dimension 4 – Results (200 Points)

1. Is there a structured process or aligning goals and strategic priorities that is simple

Create value or the customer

and visible at all levels o the organization? 2. Do leaders hold to the guiding principles through hard times? 3. Are support unctions seamlessly integrated to aid operations in creating value (processbased versus silo culture)? 4. Do inormation systems provide direct ow o pertinent inormation 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?

Guiding Principle:

Supporting Concepts: Measure what matters Align behaviors with perormance Identiy cause-and-efect relationships A S S E S S M E N T C R

Te ollowing are examples o systems that drive behaviors and are aligned to principles as exemplied in the model (the rst portion o this document). Some tools are also listed. Tis 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. Tese are simply examples and provide organizations some guidance on what an assessment would evaluate.

IE T R IA

Systems: • Voice of the customer • Strategy deployment • Communications • Visual management • Management reporting

Tools: • Huddles • Control boards • Score cards • All employee meetings • Surveys

Te ollowing are examples o questions that examiners would be engaged in answering and understanding during an organizational assessment. Answers to these and other 41

questions asked o leaders, managers, and associates will provide examiners with an understanding o the culture o an organization. Tis is not intended to be a complete list; it is or guidance and learning purposes. Results will also be evaluated based on stability, trend/level, alignment, and improvement usage. Te results assessment scale provided on page 54 o this document provides urther understanding o this process.

Examples o other supporting measures that could be provided are:

Questions:

• Customer returns • Supplier quality • Warranty cost • Other appropriate measures

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 behavior and results assessment scale.

4.B Cost/Productivity Strongly recommended measures:

1. Are measures simple? Is there is a common understanding o 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 perormance measures drive the right

• Productivity of cash (cash ow) • Key value stream margins • Turns (of what is produced)

behaviors? 4. Are tracking boards used routinely or open discussion and eedback so that adjustments 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 perormance targets?

• Cost per unit • Labor hours per unit • Labor productivity – organizational physical or nancial output as compared to labor quantity • Asset productivity (organizational output compared to value o physical assets employed) • Inventory turns (organizational raw, working, and nished inventories compared to relevant total cost or revenue) • Cost structure (reduction in key cost categories)

4.A Quality Strongly recommended measures: • Quality to the customer (defect-free delivery) • Finished product rst pass yield and/or rework

42

• 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


• Energy productivity (physical or nancial output compared to energy cost or quantity) • Resource utilization (oor space, vehicles,


etc.) (high utilization without adverse efects on responsiveness) • Return on investment • Revenue per employee hour worked • Portfolio value (new products and existing) • Maintenance proles (percent preventive for example) • Other appropriate measures


4.C Delivery

• Measure of customer intent (awareness and consideration) • Other appropriate measures

Strongly recommended measures: • On-time delivery complete to customer requested date • Total lead time (the time from customer order to customer receipt, assuming no nished goods inventory) • Processing cycle time (into process to out-of

process)


• Success of new products • New contract awards • Share of category • Customer retention • Net promoter score • Customer engagement in programs

4.E Saety/Environment/Morale Strongly recommended measures:


• Number of ideas per employee and degree of

employee implementation o them • Near misses • Survey (measure of employee trust and condence in organization andmanagement)

Examples o other supporting measures that could be provided are: • Time from or to supplier to receipt of materials • 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 • Other appropriate measures

IE T R IA

• Reportables • Waste to landll • Recycling • Emissions • Energy consumption • Utilization of high-potential talent • Talent pipeline strength (succession planning) • Other appropriate measures

4.D Customer Satisaction Strongly recommended measures: • Market share • Customer surveys

43

ASSESSMENT AND SCORING

Te intent o the assessment is to evaluate the entire applying entity to determine the degree to which the principles o operational excellence are deeply embedded into the culture o the entire organization. Te assessment evaluates results, as well as behavior. Each business system will be assessed to the entire model, all dimensions and principles therein. Tree dimensions o the model are scored based on the behavior assessment scale, cultural enablers, continuous process improvement, and enterprise alignment. Te ourth dimension, results, is scored using the behavior and results assessment scale. Both scales are presented in the next ew pages. Each dimension o the model will be scored in the ormat below, the scoring matrix. As represented in the scoring matrix on the next page, the rst three dimensions will be divided into three main categories or assessment purposes: leaders, operations, and support. Tere are also two subcategories or assessment under operations and support. Tey are managers and associates. Weights have been assigned to each category. Te assessment will provide a gap analysis that can be used to ocus improvement activities. It will provide a baseline o cultural reality that will enable an organization to move orward on its journey toward building a culture o operational excellence. Te ollowing illustration is representative o how an organization is assessed, the weights given, and points assigned to each dimension. In an efort to promote continuous improvement, the eedback received by an organization aer a site visit will provide a level that the organization achieved in each area. Tis level can be compared with the assessment scales that are provided in this document (see able 5).

44



(20%) (20%)

IE T R IA

(20%) (20%) (20%)

Table 5: Scoring Matrix

45

Behavior – Assessment Scale

Articulating Behavior

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 o operational excellence. Are the leaders, managers, and associates doing things that will result in the desired culture? Examiners will be looking or behaviors and other indicators that dene and describe the culture o the organization. Te diference between the current culture and the ideal culture, the Shingo standard, is the gap that is identied or improvement ocus.

FREQUENCY – How oen do we see the behavior?

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 acility. Examiners are trained to look or behaviors and perormance. Behaviors and perormance are taken into account in the scoring.

DURATION – Are we seeing the behavior or the rst time, or have we seen this behavior or years? INTENSITY – Is there a sense o passion and importance or the behavior (i.e. to deviate would signal problems)?

SCOPE – Do we see the behavior in just a ew cells/areas, or is it widespread throughout the organization? ROLE – Do we see appropriate ocus on tools, systems, and principles at each level o the organization: leaders, managers, and associates? Te ollowing list o descriptors is the basis or assessing Cultural Enablers, Continuous Process Improvement, and Enterprise Alignment. Statement o Purpose: Te purpose o our assessment is toindetermine the degree which the behaviors an organization aretoaligned with the principles o operational excellence. Ideal behavior (Level 5) is represented as the standard or operational excellence. Business systems that ully match the descriptors would score at the top o the indicated range (see able 6).

46


Behavior Assessment Scale Operat ional Excellence (St andard)

Lenses

Role

Level 1 0-20%

Level 2 21-40%

Level 3 41-60%

Level 4 61-80%

Level 5 81-100%

Leadersare focused mostly on re-ghting and largely absent from improvement efforts

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

Leadersset direction for improvement and supports efforts of others

Leadersare involved in improvement efforts and supports the alignment of principles of

Leadersare focused on ensuring the principles of operational excellence are driven deeply into

operational excellence with systems

the culture and regularly assessed for improvement

Managers are oriented toward getting results “at all costs”

Managers mostly look to specialists to create improvement through project orientation

Managers are involved in developing systems and helping others to use tools effectively

Managers focus on driving behaviors through the design of systems

Managers are primarily focused on continuously improving systems to drive behavior more closely aligned with principles of operational excellence

Associatesfocus on doing their jobs and are largely treated like an expense

Associatesare occasionally asked to participate on an improvement team usually led by someone outside their

Associatesare trained and participate in improvement projects

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

Associates understand principles “the why” behind the tools and are leaders for improving not only their own work

natural work team

Frequency

Duration

Intensity

Scope


systems but also others within their value stream

Infrequent

Event-based

Frequent

Consistent

Constant

Rare

Irregular

Common

Predominant

Uniform

Initiated

Experimental

Repeatable

Established

Culturally Ingrained

Undeveloped

Formative

Predictable

Stable

Mature

Apathetic

Apparent

Moderate

Persistent

Tenacious

Indifferent

Individual Commitment

Local Commitment

Wide Commitment

Full Commitment

Isolated

Silos

Predominantly Operations

Multiple Business Processes

Enterprise-wide

Point Solution

Internal Value Stream

Functional Value Stream

Integrated Value Stream

Extended Value Stream

Table 6: Behavior Assessment Scale

47

Results – Assessment Scale Te ollowing list o descriptors is the basis or assessing the measures in the results section.

Measures that match the descriptors would score at the top o the indicated range (see able 7).

Results Assessment Scale

Lenses

Level 1

Level 2

Level 3

Level 4

Level 5

0-20%

21-40%

41-60%

61-80%

81-100%

Little to no evidence of stability

Stability

Little to no predictability Beginning to implement

Has begun to stabilize

Stable

Initiating predictability

Predictable

Building maturity

Long-term

All levels have become comfortable with the measures

Mature 4+ years

Unpredictable 2-3 years 0-1 years

Level is low

Moderate improvement in level

Trend is poor

Trend/Level

Little to no evidence of goals Little evidence to no evidence of benchmarking

Benchmarking is industry-focused Trends are mostly positive to at 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

Isolated with inconsistent usage of measures

Alignment

Little alignment

Some areas aligned, other than operations Performance measures aligned in operations

Strong silos Silos are beginning to fall

All measures align to corporate goals and down to the lowest level Enterprise-wide extended value stream No silos

Working toward enterprise-wide alignment Little to no systematic feedback

Regular feedback in some areas

Routine feedback to appropriate party

Sporadic feedback

All areas do not address feedback systematically

Evidence of feedback in all areas

Improvement Little evidence of goal setting some evidence in operations

Many areas beyond operations have a process to set goals

Table 7: Results Assessment Scale

48


Almost all areas have goals that are realistic and challenging


49

APPLICATION PROCESS

Application Process We have developed a three-tier award to enable organizations to challenge early on in their transormation journey using the Shingo assessment process to benchmark and improve their organizations along the way. Te Shingo assessment provides valuable eedback rom an impartial third party. When utilized, it can help accelerate the transormation process. Awards can be achieved at three levels: Shingo Bronze Medallion, Shingo Silver Medallion, and Te Shingo Prize. We encourage organizations to take the opportunity to contact the oce o Te Shingo Prize or Operational Excellence well in advance o the date they plan to apply. Tis enables us to help with the process, answer questions, and provide training. Applying early leaves ample time to execute a plan or the application process and to budget appropriately. Because the Shingo model ocuses on cultural transormation, we strongly recommend as many associates as possible to go through the ollowing training program beore an organization applies. Te workshop, Principles o Operational Excellence and Assessment, is available to the public, or or maximum efectiveness and participation, the workshop can be delivered on-site at your acility. Tis workshop has been critical or providing a common understanding o the Shingo model and the assessment process. Te training workshop is described below:

Principles o Operational Excellence Workshop participants will gain an understanding o the Shingo model and the underlying principles behind Te Shingo Prize philosophy and approach. Participants will learn and gain experience in aligning your organizational principles and core values with your systems. Tere will be group activities

50


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 o Te Shingo Prize assessment criteria, which includes methods or assessment o the progress an organization has made in its lean transormation. By completing this training, participants will learn how to use the Shingo model and assessment criteria to complete internal sel-assessment that will clearly identiy areas or ocus and improvement in the entire organization. For detailed inormation on this workshop and other available training opportunities or leaders and managers specic to the Shingo model, please visit our website at www.ShingoPrize.org or call our oce at (435) 797-2279. Although we will make every attempt to accommodate other languages, the ocial language o Te Shingo Prize or Operational Excellence is English. Tis means all training, materials, eedback, and communications are perormed in English. Exceptions may

• An applying entity may not be under investigation by any government or private entity or maleasance • An applying entity must be able to show measures that are specic to the applying entity (divisional or corporate metrics are not sucient). A minimum o three ull years o 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. I documentation o three ull years o measures is an issue, it should be discussed with the oce o Te Shingo Prize or Operational Excellence beore preparing the achievement report. Further explanation o measures is provided below in Dimension 4 – Results - An applying entity may be eligible to challenge as a large or small organization. Achievement qualications are the same or each; and since organizations are not competing against each other, reerence to an organizations size is useul only or purpose o pricing and planning or examination teams (see able 8).

be when we have an instructor that speaks a preerred language.

Small Organization

Large Organization

Eligibility Requirements

250 people or less in entire enterprise

More than 250 people

An entity interested in challenging or Te Shingo Prize must meet the ollowing eligibility requirements: Not part o a larger organization

250 people or less i part o a larger organization Government entities

Large organizations may • Applying entities may be rom any industry need to be broken up into including, but not limited to: services, multiple applications manuacturing, healthcare, and the public sector. An entity should have common ownership throughout the application (e.g. a Table 8: Organization Size manuacturer and supplier, not operated or owned by the same company) should each Questions regarding eligibility must be claried apply as a separate entity through the oce o Te Shingo Prize or • An entity should be in business long enough Operational Excellence during the application to establish process, prior to writing and submitting the • An applyingstability entity may not be in bankruptcy achievement report. Te application and proceedings or knowingly considering such. prole sheets help to evaluate eligibility. Tis would include signicant restructuring or reduction in operations

A P P L IC A T IO N P R O C E S S 51

Re-Applications Re-applications are encouraged or the ollowing 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 ull years o intense ocus and commitment between challenges to show the improvements necessary to advance) • e Shingo Prize was awarded and the entity is ready to renew its award status, which expires aer ve years or Te Shingo Prize recipients and three years or Bronze and Silver Medallion recipients

be provided in each section, quality, cost/ productivity, delivery, customer satisaction, and saety/environment/morale. Please provide enough data so that an analysis o stability is possible. Provide as much data as possible especially i it is data that shows perormance beore lean implementation began. Tere is a minimum data requirement o three years. Provide each measure at the level o 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 inormation that could otherwise be very useul. I acronyms are used, please explain each along with the calculation used or each measure.

Re-applications must relate to substantially the same entity as the srcinal application. A new application and achievement report must be submitted. Te achievement report or reapplication should highlight the achievements made since the last challenge supporting a bid to re-challenge. Please use the re-application orm that is available at www.ShingoPrize.org.

Te graph on the ollowing page (see Figure 4) is an example that might be included in the report.

Application Forms and Prole Sheets

eligibility issues and that we have addressedearly all o the applicant’s questions and concerns on. A completed and approved application orm is due beore the achievement report is sent. A notice o eligibility conrmation will be sent to the applying entity. Please note that the applying entity’s results sections are not analyzed at this point in the process.

An application orm and prole sheet should be sent to the oce o Te Shingo Prize or Operational Excellence as soon as an applicant decides to pursue an award at any level, even i the intended achievement report submission date is up to one year out. Te intent o the application is to help us plan our workload and assist the applicant through a smooth process. A two-page (maximum) company prole sheet should be ormatted according to examples provided at www.ShingoPrize.org. Please do not include any condential or classied inormation in the prole sheet, as it may ultimately be posted to the Shingo website or provided to the media. Sample orms are available at www.ShingoPrize.org.

52

Application orms should also be accompanied by inormation pertaining to Dimension 4, Results. Results should

Te application, prole sheet, and applying entity’s results will be processed as received and should be approved prior to writing the achievement report. Tis ensures there are no

Tere are no ees due at this point in the process.

Where to Apply Applications, prole 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.


Finished Product First Pass Yield 50,000

45,000

40,000

35,000

30,000

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20,000

15,000

10,000

5,000

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Figure 4: Finished Product First Pass Yield

Achievement Reports

Site Visit Assessments

Achievement reports should be written aer 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 beore the Annual Shingo Prize International Conerence and Awards Ceremony (usually held in April or May) will be recognized at the ollowing year’s ceremony. Applicants will be advised o an approximate process time-table based on the date the achievement report is received and that the work is in-process. I an application cannot be processed in time or the next Conerence and Awards Ceremony, the application will become part o the ollowing year’s applications. Please submit the achievement report early i you are concerned about a specic conerence date. An application ee o $6,000 or large organizations or $3,000 or small organizations must be submitted with the achievement report. For

Site visit assessments will be scheduled as soon as possible aer a site visit is awarded based on the achievement report review. Candidates being considered or any level o recognition through the oce o Te Shingo Prize or Operational Excellence will receive a site visit assessment by an examination team based on nal review o the achievement report. An average large acility will require ve to eight examiners. Site visits will be scheduled throughout the year and are dependent on the applicant’s achievement report submission date and availability o the site and examiners or an assessment. Site visits not scheduled in time to process beore the Annual Shingo Prize International Conerence and Awards Ceremony will be recognized at the ollowing year’s ceremony.

A P P L IC A T IO N P R O C E S S

payment inormation, please callExcellence the oce o Te Shingo Prize or Operational at (435) 797-2279.

53

Te primary objective o the site visit assessment is to veriy, clariy, and ampliy the inormation contained in the achievement report. In terms o clarication, companies should be prepared with updated measures reported in their achievement report during the site visit assessment. Applicants will be notied whether or not a site visit will be awarded approximately 30 days aer 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 ee. Te cost o each site visit assessment is based in part on the nature, size, and location o the applying entity and the number o examiners needed. Fees generally average between $10,000 and $20,000 or a single organization utilizing our to eight site visit examiners. Small organizations may have lower ees depending on the size o the acility, the product or service, and the number o examiners needed to evaluate the acility. Te invoice is or a site visit ee and will not be broken down in any more detail than the total ee. International applications will be subject to additional ees to cover additional expenses. Tese ees will be determined during the application eligibility process. International applications be prior expected estimated site will visit ee to the to visit.pay the

Applicants are asked not to divulge proprietary inormation regarding products, processes, or sensitive nancial results. Our interest is in operational excellence, and we do not require this inormation. Please do not include any condential inormation in your achievement report or other documents sent to the oce o Te Shingo Prize or Operational Excellence. Please do send inormation you eel will be helpul to examiners in assessing the cultural transormation o your organization.

Recipient Recognition Opportunities Once an award level is determined, a recipient has many opportunities to be recognized or its achievements. All recipients rom around the world will be recognized ocially and publicly at the Annual Shingo Prize International Conerence and Awards Ceremony (usually held in April or May). Recipients will be recognized through press releases and announcements on social media sites. Te Shingo Prize recipients are posted on Te Shingo Prize website or ve years, and Shingo Silver Medallion and Bronze Medallion recipients are posted or three years. Recipient companies may tell their transormational story through potential speaking opportunities at Te Shingo Prize Conerence, and they can also gain exposure by guided tours or Te Shingo Prize orproviding Operational Excellence.

Site visit ees within North America will be invoiced and sent to the applying entity within 30 days o the site visit. Payment is due upon receipt. All examiners are required to sign a nondisclosure agreement that is kept on le at the oce o Te Shingo Prize or Operational Excellence. Examiners are assigned in such a manner that conicts o interest are avoided. Each applicant will receive a list o examiners who will be involved on a site visit assessment. Te applying organization will be asked or written authorization or all examiners that participate on the site visit assessment. Organizations that have representatives on Te Shingo Prize Board o Governors or Board o Examiners are allowed to challenge, but their representative will be disqualied rom participation in the assessment, review, and selection processes. 54


Application Timeline Te Shingo Prize application and assessment process includes the ollowing six steps: 1. An application orm, prole sheet, and results should be sent to the oce o Te Shingo Prize or Operational Excellence as soon as an applicant has decided to challenge or Te Shingo Prize. Preerred timing: One year beore intended achievement report submittal 2. Achievement reports are submitted and reviewed. Achievement reports should be written according to the instructions ound in the “Writing the Achievement Report” section (see below). Application and reapplication ees are due along with the achievement report (see ees section below). Approximate lead time or achievement report review: 30 days 3. Achievement reports with appropriate recommendations rom examiners will receive a site visit assessment. Preerred timing or a site visit: 45 to 60 days aer applicant notication 4. Based on the site visit assessment results, the Board o Examiners will recommend the applicant to the Executive Committee or: no award level, the Shingo Bronze Medallion, the Shingo Silver Medallion, or Te Shingo Prize. Applicant will be invoiced a site visit examination ee directly aer the visit (see approximate ees below).

30 days aer the site visit assessment. Decisions made by the committee are nal and not subject to appeal. Applicants will receive a written eedback report aer status notication. 6. Aer an award level has been determined, a recipient may invite, at the recipient’s expense, a member o the Shingo staf to present the award at a local celebration. Tis is best done aer the public recognition occurs; but i the time between the recognition and the Shingo Conerence is too great, an organization may schedule it to suit their purposes. All recipients rom around the world will be recognized publicly at the Annual Shingo Prize International Conerence and Awards Ceremony. Te times given are approximate and subject to change depending on many actors, including workload in the oce o Te Shingo Prize or Operational Excellence. Please do not use these times to estimate whether or not your application will be completed in time or a specic Awards Ceremony. Te staf at the oce o Te Shingo Prize or Operational Excellence will advise you i timing is in question upon your application submittal.

Fees Fees are due with the achievement report. Applicants will be invoiced within 30 days aer the site visit. Te invoice is or a site visit ee and will not be broken down in any more detail than the total ee. International applications will be subject to additional ees. Tese ees will be determined during the application eligibility process and an estimated ee will be collected beore a site visit occurs (see able 9).

A P P L IC A T IO N P R O C E S S

Application Re-Application SiteV isit Approximate lead time or the eedback report: Small Organization Small Organization $10,000-$20,000 30 days $3,000 $3,000 5. Te Executive Committee reviews the

Large Organization Large Organization $10,000-$20,000 $6,000 $6,000

recommendations. Organizations will be notied o their status in approximately Table 9: Fees

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WRITING THE ACHIEVEMENT REPORT

Te achievement report is the document or 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 transormed its culture based on the principles o operational excellence represented in the Shingo model. Te achievement report should also address requency, intensity, duration, scope, and role o the behaviors that are apparent in the current culture o the applicant. Te achievement report should be written according to the ormat below. Tis ormat ocuses on each dimension o the model and should include inormation about individual business systems and their achievements. Please note that i a site visit is conducted, all business systems will be assessed to all dimensions o the model in much the same way. Te business systems include senior leadership, customer relations, product/service development, operations, supply, and management support processes. Te achievement report should ollow the outline provided. Each dimension should address the application o principles, systems (selection, development, and efectiveness), and choice and use o tools and techniques. Te required measures under Dimension 4 – Results are considered essential or all organizations. Results should be addressed in terms o 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 o measures. It is important that all ve categories o measurements are addressed. Te intent o this dimension is or the applicant to provide inormation to the examiners about

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how the organization selects what to measure and how measurements are used to drive improvement. It should also show results o the lean implementation and where the applicant stands relative to best-in-class. Include inormation that helps examiners understand how the cause-and-efect relationship between measures and results is taught and understood by all associates. It is important that results in the achievement report are understandable and have explanations where needed. Please reer to Dimension 4, Results, in the model and guidelines or complete details on measures. Applicants are asked not to divulge proprietary inormation regarding products, processes, or sensitive nancial results. Our interest is in operational excellence, and we do not require this inormation. Please do not include any condential inormation in your achievement report or other documents sent to the oce o Te Shingo Prize or Operational Excellence.

Te achievement report should include, in the rst pages beore the table o contents, a copy o the application orm. Te report must be printed on:

• • • • •

8½ x 11-inch paper using a xed-pitch ont o 11 characters per inch Sheets should be double-sided, single spaced. Te report is generally limited to a maximum length o 50 printed pages. Te report should be coil bound. Te ocial language o the achievement report is English.

en (10) hard copies and one (1) digital copy on a CD or thumb drive o the achievement report, meeting all above-stated criteria and ormat requirements, can be turned in up to one year aer the application has been approved.

Keep in mind that this report is being reviewed by a team o examiners rom a diverse group o industries. Tey 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 o

Achievement Report Format

thethe report are important; generally, is maximum length. Te intent 50 o pages this report is to tell the examiners your cultural transormation story as simply and eciently as possible. Please make sure that i photos are included in the report, they are high impact, legible, and o good quality.

and management Te achievement reportsupport shouldprocesses). discuss the assessment criteria detailed earlier in this document. Principles, systems, and tools have been clearly dened or each dimension o the model.

Te achievement report is about the applying entity, not the overall organization. Please limit reerences to the overall organization to areas that are applicable and critical (i.e. i you are trying to show alignment o strategy or constancy o purpose). Measures should be specic to the applying entity. Reports with excessive reerence to the overall organization may be returned to the applicant. Examiners cannot evaluate an applicant based on inormation about an entire organization when the applying entity is really a sub-set.

While writing the achievement report, remember to be specic about the business system you are reerring to (i.e. senior leadership, customer relations, product/ service development, operations, supply,

Introduction Te introduction allows an organization to highlight some o its strengths and share a brie company overview. Te company prole sheet may be used in this section, see www. ShingoPrize.org or examples.


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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 suciently describe how your organization’s systems and practices drive principle-based (ideal) behavior in each subsection. Clearly discuss examples o tools, systems, and principles in each o the business system.

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

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 suciently describe how your organization’s systems and activities drive principle-based behavior in each business system. Clearly discuss examples o tools, systems, and principles.

Dimension 4 – Results Tere are ve main internal measurement areas or operational excellence: quality, cost/ productivity, delivery, customer satisaction, and saety/environment/morale. Each area has its own strongly suggested measures and supporting measures detailed earlier in this document.


Include the ollowing 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 dened above. Report anything that is used efectively to drive improvement in the organization • e measures will be submitted with the application and prole sheet. Tis section in the achievement report will be signicantly 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 ull explanation o why a particular category is not measured

Discussion o each measure should contain: • A clear denition o the measure and its computation • e trend and level of performance in each area as compared to benchmarks or goals • Why the measure is the appropriate measure or 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 o stability is possible. Provide as much data as possible; especially, i it is data that shows perormance beore lean implementation began. Provide each measure at the level o aggregation where it is most used by management (monthly at the least). It is possible that examiners may ask or a less aggregated version o specic data. Charts representing measurement and improvement are best displayed with the shortest interval possible. Averaging over months, quarters, or years may mask inormation that could otherwise be very useul. When data is obviously collected and used weekly, don’t average it into monthly or annual gures or the purposes o 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 satisaction and saety/environment/morale – and include a minimum o three years o data. Applicants are asked not to divulge proprietary inormation regarding products, processes, or sensitive nancial results. Our interest is in operational excellence, and we do not require this inormation. Please do not include any condential inormation in your achievement report or other documents sent toExcellence. the oce o Te Shingo Prize or Operational


The Shingo Prize 2012 Rexam Beverage Can, Aguas Claras Cans Aguas Claras, Rio Grande do Sul/Viamao, Brazil 2011 Goodyear do Brasil Produtos de Borracha Ltda Americana, Sao Paulo, Brazil

2009 Autoliv Airbag Module Facility Ogden, Utah, USA Autoliv Infator Facility Brigham City, Utah, USA E-Z-GO Augusta, Georgia, USA

US Synthetic Orem, Utah, USA

Guanajuato Manuacturing Complex North Plant Silao, Mexico

2010 John Deere, Power Products Greeneville, ennessee, USA

Interiores Aéreos S.A. De C.V. Gulstream Aerospace Mexicali, Mexico

Lycoming Engines Williamsport, Pennsylvania, USA

Te Shingo Prize is awarded to organizations that demonstrate a culture where principles o operational excellence are deeply embedded into the thinking and behavior o all leaders, managers, and associates. Perormance is measured both in terms o 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 ocus on ensuring that principles o operational excellence are deeply imbedded into the culture and regularly assessed or improvement.

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Shingo Silver Medallion 2012 Pentair Technical Products Reynosa, amaulipas, Mexico 2011 Autoliv (China) Steering Wheel Co., Ltd. Shanghai, China

2010 Autoliv Steering Wheels Mexico AQW S. de R.L. de C.V. El Marques, Queretaro, Mexico Goodyear Tire & Rubber Lawton, Oklahoma, USA Hi-Tech Gears Ltd.

Group Inc. OEM Acting ThroughBusiness Its Barnes Aerospace Strategic Unit Ogden, Utah, USA dj Orthopedics de Mexico S.A. de C.V. ijuana, Baja Caliornia, Mexico

Manesar, Gurgaon, Haryana, India 2009 402D Electronics Maintenance Group, Warner Robins Air Logistics Center, Robins Air Force Base Warner Robins, Georgia, USA

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

Carestream Health Inc., Rochester Finishing Rochester, New York, USA

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

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

Rexam Beverage Can South AmericaRecie Ends Cabo Sto Agostinho, Brazil

HID Global North Haven, Connecticut, USA

Tobyhanna Army Depot (AN/MST-T1(V)), MiniMutes obyhanna, Pennsylvania, USA

Lockheed Martin Missiles and Fire Control, Camden Operations East Camden, Arkansas, USA Valeo Sylvania Iluminacion Queretaro, Mexico

Te Shingo Silver Medallion is awarded to organizations that demonstrate strong use o tools and techniques, have mature systems that drive improvement, and are beginning to align thinking and organizational behavior with correct principles o operational excellence. At the silver level the scorecard has a broad spectrum o measures and is beginning to include behavioral elements. Key measures are stable with mostly positive trends and all levels understand how to afect the measures appropriately or their areas.

S

H

IN

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MEDAL

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SILVER

O

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OPE AL E X RAT IO N E CE L L E NC

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Shingo Bronze Medallion 2012 Johnson Controls Lerma Plant Lerma, Mexico

Tobyhanna Army Depot, AIM-9M Sidewinder Missile obyhanna, Pennsylvania, USA

Remy Automotive Brasil Ltda. Brusque, Santa Catarina, Brazil

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

2011 Denver Health, Community Health Services Denver, Colorado, USA Letterkenny Army Depot, Aviation Ground Power Unit Chambersburg, Pennsylvania, 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, New Jersey, USA 2010 Letterkenny Army Depot, Patriot Missile Chambersburg, Pennsylvania, USA

BAE Systems - Samlesbury Blackburn, Lancashire, UK Baxter Healthcare Los Angeles, Caliornia, USA Fleet Readiness Center Southeast, TSRS Shop Jacksonville, Florida, USA Red River Army Depot, Up-Armored High Mobility Multipurpose Wheeled Vehicle (UAH)/HEAT exarkana, exas, USA Ultrarame UK Ltd. Clitheroe, Lancashire, UK Visteon Interamerican Plant Apodaca, N.L., Mexico

Te Shingo Bronze Medallion is awarded to organizations that demonstrate strong use o tools and techniques or business improvement and are working to develop efective systems to create continuity and consistency o tools application throughout the business entity.

S

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MEDA

BRONZE

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Key measures have begun to stabilize with trends being mostly positive with some backsliding still evident. are in goals being in many areas outside o operations. Alignment may stillTere be weak areas othersetthan operations but eforts are being made to improve and work toward aligning the entire enterprise. Silos are beginning to all.

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O

L

PE A EX RA TIO N E CE LLEN C

N

The Shingo Research and Professional Publication Award 2012 Te oyota Way to Lean Leadership

Jefrey K. Liker Gary Convis Te oyota Way to Continuous Improvement

Jefrey K. Liker James K. Franz “Lean principles, learning, and knowledge work: Evidence rom a sofware services provider”

Bradley R. Staats David J. Brunner David M. Upton Building a Lean Fulllment Stream

Robert Martichenko Kevin von Grabe Lean Ofce and Service Simplied

Drew Locher Liquid Lean: Developing Lean Culture in the Process Industries

Raymond C. Floyd

On Te Mend: Revolutionizing Healthcare to Save Lives and ransorm the Industry

Follow the Learner

John oussaint Roger A. Gerard

Te Lean Manager

ransorming Health Care: Virginia Mason Medical Center’s Pursuit o the Perect Patient Experience

oyota Under Fire

Sami Bahri Michael Balle Freddy Balle Jef Liker

Charles Kenney

oyota Kata

Work Tat Makes Sense: Operator-Led Visuality

Lean I

Gwendolyn D. Galsworth Te Remedy: Bringing Lean Tinking out o the Factory to ransorm the Entire Organization

Pascal Dennis

Mike Rother Mike Orzen Steve Bell Stories From My Sensei

Steve Hoe

2010 Creating Lean Dealers

2011

“Lean Enablers or Systems Engineering”

Bohdan W.Oppenheim Earll. M. Murrnan Deborah A. Secor

David Vrunt John Kif Breaking Trough to Flow

Ian Glenday

“Toast Value Stream Mapping”

Te Kaizen Event Fieldbook

Bruce Hamilton

Mark Hamel

Te Shingo Research and Proessional Publication Award recognizes and promotes research and writing regarding new knowledge and understanding o lean and operational excellence. Awards are given in our categories: (1) books (monographs), (2) published articles, (3) case studies, and (4) applied publications/ multimedia programs. Research or publications submitted theorywill or novel application. Reviews, re-statements, textbooks,should and/orprovide editednew versions generally not be considered.

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CONTACT INFORMATION e Shingo Prize for Operational Excellence Jon M. Huntsman School of Business Utah State University 3521 Old Main Hill Logan, UT 84322-3521 (435) 797-2279 (435) 797-3440 FAX www.ShingoPrize.org For questions or comments contact: Shaun D. Barker Director of Operations and Assessment [email protected] Application forms are available online at www.ShingoPrize.org

III

435-797-2279 www.shingoprize.org

Shingo Prize Model and Application

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