u.s. general services administration applying lean six sigma to business continuity planning jason...
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U.S. General Services Administration
Applying Lean Six Sigma to Business Applying Lean Six Sigma to Business Continuity PlanningContinuity Planning
Jason Radde Office of Emergency Response and RecoveryPeter RusselburgOffice of Performance ImprovementGSA Training Conference and Expo04 May 2010
Agenda
• Introduction
• Background
• What is Lean Six Sigma?
• Continuity Planning and Lean Six Sigma
• Lean Six Sigma Role
• GSA Case Study
Lean Six Sigma Background
LSS is the private and public industry standard for continuous process improvement
Increase throughputShorten cycle timesReduce defectsLower costs
MotorolaTIIBMKodak AlliedSignalGE
Lockheed Martin BombardierJohn DeereWhirlpoolGenCorpNokiaSony
Siemens Compaq Toshiba DuPont Dow Chemical
MaytagFordHoneywellJohnson ControlsJohnson & Johnson
Bank Of AmericaUnited Health GroupCardinal HealthBlue CrossHome DepotXerox
US DoDWells FargoCitiGroup
20001992 1995 Today
IRSGSA NIH
Introduction
• In recent years, organizations (public/private, large/small) have begun to value the importance of conducting high-quality continuity planning
• The key to business continuity planning is to fully understand the critical business processes required to support an organization's essential functions, along with the resources are required to deliver them
• The growing complexity of day-to-day operations and dependencies on strategic business partners and IT systems has amplified the need for organizations to develop reliable Continuity Plans and a resilient infrastructure to ensure a minimum level of service during a disaster
• Lean and Six Sigma process improvement programs have been used to significantly improve financial and operational performance across all sectors of the commercial business spectrum, and have extended their impact into all major business functions and activities
• Over the past decade, the public sector has begun to adopt Lean and Six Sigma principles and roll-out internal Continuous Process Improvement (CPI) / Lean Six Sigma (LSS) programs to accommodate budget cuts and staffing reductions, as well as to improve efficiency, effectiveness, and accountability
What is Lean?
Lean is a discipline that aims to systematically
eliminate waste and other non-value adding
activities while improving the flow of value to the customer.
Lean expands the limited focus of more
traditional improvement efforts, leveraging the discipline across all
value streams.
• Focuses on improving speed and efficiency while eliminating waste within business processes
• Targets the “Seven Deadly Wastes” that plague virtually all businesses
• Reduces process complexity through the use of pull techniques, lean work methods and sourcing/supplier integration
• Reaches beyond visible symptoms (defects, waiting, etc.) to address structural factors and the root causes of waste
• Lean Thinking can be summarized in five principles:
“Specify and Focus on Value” “Identify the Value Stream” “Allow Value to Flow Without Interruptions” “Let the Customer Pull Value” “Continuously Pursue Perfection”
Identifying and Eliminating Waste
An approach to identifying and eliminating waste (low value-added activities)
Seven Deadly Wastes
Excessive Excessive MotionMotion
• Data at different source locations,• Manual signature and approval workflow• Office equipment distance from work areas
Waiting TimeWaiting Time• Waiting for decisions, approvals, meetings, etc.• Functional silos / Lack of Ownership• Inappropriate prioritization of work
Over-Over-productionproduction
• Focusing on details not valued by customer• Employees not empowered by full process
visibility forces need for “rule by committee”
Unnecessary Unnecessary ProcessingProcessing
• Policies prevent task completion• Redundant or unnecessary paper work• Transcribing information multiple times
DefectsDefects• Re-work of any kind• Poorly communicated customer requirements
that drive downstream rework
Excessive Excessive InventoryInventory
• Overstaffing work streams due to lack of understanding of critical path
• Minimal understanding of bottlenecks
Unnecessary Unnecessary TransportationTransportation
• Multiple unnecessary signatures needed for an approval
• Circulating products for unnecessary review
Typical White Collar Process
= True Value-Added
Searching for Information
Approval Wait Time
Meetings & Conference
Calls
Value-Added Project Work
~35%
Other
What is Six Sigma?
Six Sigma is a discipline that enables companies to
eliminate costly defects in their operations – and realize
breakthrough profits.
To achieve this, Six Sigma managers use data and
statistical analysis to locate process errors. A "sigma
rating" is then determined, which pinpoints the number
of defects-per-million-opportunities (DPMO) in any
manufacturing, service or transactional
procedure.
• Complements Lean by eliminating costly defects and variations from business operations
• Provides a highly structured approach/process to business improvement through the elimination of variation (defects) in products and service processes (true Six Sigma performance equates to 3.4 DPMO)
• Ensures that process objectives and outputs are targeted towards customer defined objectives
• Is typically supported by a “belt” certification program. “Green Belts” and “Black Belts” execute projects under the guidance of Six Sigma “Master Black Belts.”
Six Sigma Methodology
Six Sigma offers a potent suite of tools used in improving the quality of a company’s operations and support processes
Phase Activities Tools
Define• Establish project structure and scope• Identify the problem• Identify factors critical to the process• Set goals
• Project charter• SIPOC diagram• Problem statement
Measure • Develop means of input measurement• Quantify process capability / determine
variation in measurement process
• Process capability analysis• Gage R&R concepts• Quality tools
Analyze• Utilize tools to determine key drivers
causing variation in process• Identify root causes and hypotheses• Search for correlations among variables
• Process mapping, cause and effect • Ishikawa diagrams, root cause analysis• Pareto analysis, histograms, run charts
Improve• Prepare organization for change• Establish operating tolerances drivers• Identify and implement improvements• Test new process and solicit feedback
• Quality tools (QFD)• Regression analysis, capability analysis• Change management concepts• Process mapping
Control• Implement controls to ensure
improvements are accepted• Monitor and adjust process as necessary,
focusing on customer’s point of view
• Mistake proofing concepts• Post project metrics• Making change last
Continuity Planning and Lean Six Sigma
Continuity Planning Elements
• Assess organization functions to identify personnel, materials, processes and equipment necessary to keep the business operating
• Review process flow charts and identify operations critical to survival/recovery and cross organization interdependencies; including expedited decision-making capability and high-value systems
• Define crisis management procedures and individual responsibilities in advance; make sure the individuals involved know their roles and responsibilities, understand your gaps, and plan for how they can be filled
Lean Six Sigma Principles
• Who are the customers and what are their priorities? What is the performance standard?
Identify core processes, key customers and customer requirements
Engage stakeholders and clearly determine objective
• How is the process performing today and how is it measured? What might be causing it?
Understand the flow of value across an enterprise
Understanding workload and capabilities
Continuity Planning and Lean Six Sigma
Continuity Planning Elements
• Develop a comprehensive Continuity Plan; with input from major stakeholders and process owners from all Mission Essential Functions
• Establish procedures for succession of management, and engage suppliers, shippers, resources and other partners in planning
• Review emergency plans annually to ensure as business/priorities change so does your preparedness requirements
Lean Six Sigma Principles
• What are the most important causes of the process issue?
Conduct appropriate analysis – using real data (FMEA, QFD, Root Cause, Cause & Effect, 5-Why, etc)
• What are the solutions? How do we implement them?
Apply LSS philosophy to drive out waste and risk
Model and pilot results
Execute implementation and deliver relevant training
• How do we sustain the benefits?
Establish control plan
Initiate continuous improvement plans
Project Background
• In May 2007, the President issued National Security Presidential Directive 51/Homeland Security Presidential Directive-20 (NSPD-51/HSPD-20). The National Continuity Policy is an updated, integrated approach to maintaining a comprehensive and effective continuity capability to ensure the preservation of our constitutional form of government and the continuing performance of National Essential Functions under all conditions.
• In August 2007, the President approved the National Continuity Policy Implementation Plan (NCPIP), which directed Departments and Agencies (D/As) of the Executive Branch to identify their Primary Mission Essential Functions (PMEF) which support the eight National Essential Functions (NEF’s) and directed the Secretary of Homeland Security to issue Federal Continuity Directives to provide guidance to D/As on how to implement the NCPIP.
GSA Case Study
• In February 2008, the Secretary of Homeland Security issued Federal Continuity Directive 2 (FCD-2) which provides guidance for D/As on identifying their Mission Essential Functions (MEF’s), and potential PMEF. It further provides direction to D/As on conducting Business Process Analyses (BPA) and Business Impact Analyses (BIA) and the process for submission and approval of the approved PMEF
• In 2009 the Office of Emergency Response and Recovery embarked on an effort to identify and develop a resilient operational infrastructure for the agency’s PMEF; this effort included the development of a BIA designed to identify assets that support the GSA PMEF, the initial inter-dependencies between them and the potential outage impact following a disruption
• Building on the results of the BIA Phase I effort, OERR engaged the Office of Performance Improvement’s CPI Program to further zero-in agency MEFs, specifically to de-scope the number of functions and volume of workload covered by the PMEF to establish a more manageable, lower risk requirement
Project Approach
Define Measure Analyze Improve Control
• Clearly define MEF criteria criteria with agency stakeholders, to include defining not just what is in scope, but what is out of scope
• Document through process mapping / value stream mapping all agency activities that comply with the definition for MEFs as established during the Define Phase
• Analyze time and resource requirements for each MEF, including risk / resiliency profiles, and contingency options
• Develop a comprehensive GSA Resiliency Improvement Plan, including highlighting areas with high risk or resiliency deficiencies
• Begin to execute tactical planning using Continuity Plan and address risk areas / deficiencies with integrated improvement initiatives
Objectives
Key Activities• Define the scope of the
project effort and identify key Stakeholders
• Define MEF selection criteria
• Develop a prioritization strategy for MEF selection
• Identify and validate the MEFs (and respective MEF owners)
• Identify key processes and interdependencies
• Identify all major inputs and outputs
• Obtain and analyze current MEF universe
• Determine MEF outage impact
• Determine gaps• Determine time and
resource requirements
• Determine opportunities to streamline processes
• Define system requirements
• Define required modifications to current state operations
• Ensure MEF owners are aware of their roles in Continuity Planning
• Deploy improvement efforts to shore up resiliency of operations
• Conduct integrated planning
• Project Charter• Standard MEF definition• Stakeholder Analysis• Data Collection Plan
• Data collection results (workload, resources, locations, work volume)
• Suppliers, Inputs, Processes, Outputs, Customers (SIPOCs)
• Value Stream Maps
• Time and Resource vs. Capacity Analysis
• FMEA• 5-Why Analysis• MEF QFD – Prioritization
Matrix
• Resiliency Improvement Plan
• Agency-Wide Out-brief
• Development of Future Project Charters
• Contingency Planning Efforts
Project Objective
Establish and apply a common interpretation of MEF across the agency, to document, quantify and analyze all critical processes, resources, and dependencies and to develop an effective agency-wide Continuity Plan
Representative Products / Deliverables
Define Phase
Phase Objective
Clearly define Mission Essential Function (MEF) criteria with agency stakeholders, to include defining not just what is in scope, but what is out of scope
Challenges Develop and deploy a jointly
developed standard for agency MEFs Reduce variability in identifying
mission essential activities and establish clear guidance on activities qualified as in and out of scope
Facilitate the identification of MEF process owners and high-analytical value process documentation
To ensure success, it is critical to get a commitment from the key stakeholders and process owners – as well as rigorously ensure the definition is applied uniformly across a diverse range of business activities
Key Success Factors
Typical Deliverables/Tools
Project Charter CTQ Tree
RACI Matrix Level I Process Map
Measure Phase
Phase Objective
Document through process mapping / value stream mapping all agency activities that comply with the definition for MEFs as established during the Define Phase
Challenges Conduct comprehensive process
documentation of GSA MEFs Identify and document key processes
that support the MEFs, including workload, locations, inputs and outputs, resources, internal and external interdependencies
Understand the end-to-end flow of work, and the exact portion of a function that support the MEF itself
This effort requires a significant time investment and is extremely dependent on the quality of the data collected and open participation on the part of process owners and key stakeholders
Key Success Factors
Typical Deliverables/Tools
SIPOC Value Stream Maps
Data Collection Plan
Analyze Phase
Phase Objective
Analyze time and resource requirements for each MEF, including risk / resiliency profiles, and contingency options
Challenges Analyze current state MEF capabilities
(across organizations and regions) to assess gaps and vulnerabilities, inter-dependencies, deficiencies, and opportunities to improve enterprise visibility and clarity for the planning process and determine the optimal distribution of key activities and critical infrastructure needs
The success of this phase is dependent on data quality, but can be enhanced by engaging key process owners and technical experts in the analysis and knowledge sharing regarding enterprise responsibilities
Key Success Factors
Typical Deliverables/Tools
Pareto Analysis
Budgetary Set-up
$0$200,000,000$400,000,000
$600,000,000$800,000,000
$1,000,000,000$1,200,000,000$1,400,000,000
$1,600,000,000$1,800,000,000$2,000,000,000
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FMEA
Cause and Effect Analysis
Quality Function Deployment
Improve Phase
Phase Objective
Develop a comprehensive GSA Continuity Plan, including highlighting areas with high risk or resiliency deficiencies
Challenges Design a plan that captures the critical
activities to support the PMEF, and identifies functional delivery risks
Develop a plan that captures the intricate organizational and resource inter-dependencies
Develop a plan that reduces the functional and process complexity that can compromise mission effectiveness and process reliability
This phase requires broad participation from process owners and stakeholders, with a strong understanding of the core requirements and philosophy driving this effort
Key Success Factors
Typical Deliverables/Tools
Prioritization Matrix5-S
Before and After VSM
Control Phase
Phase Objective
Begin to execute tactical planning using Continuity Plan and address risk areas / deficiencies with integrated improvement initiatives
Challenges
GSA will implement a regular test, training, and exercise program based on the requirements and recommendations outlined in the Continuity Plan - designed specifically to test and improve upon GSA’s ability to support the requirements of the PMEF
A good testing/training program should be designed to challenge capabilities, identify potential risk areas, and document improvement opportunities with the use of realistic, challenging situations
Key Success Factors
Typical Deliverables/Tools
Implementation Plan
WK6WK5WK4WK3WK2WK1
PHASE 2 – PLAN EXECUTION
Step 2.1 – Determine Priorities & Design Roadmap
Del. 2.1.1 – Recommendations & Benefits Projections
Del. 2.1.2 – Prioritized Opportunity Set
Del. 2.1.3 – Organizational Effectiveness Plan
Del. 2.1.4 – Strategy Deployment Program
Del. 2.1.5 – Design & Implementation Schedule
Del. 2.1.6 – Risk Assessment & Mitigation Requirements
Del. 2.1.7 – Business Case
Step 2.2 – Design Detailed Initiatives
Del. 2.2.1 – Detailed & Executable Project Plans
WK7
PHASE 1 – Set Supply Chain Vision
Step 1.1 – Define Supply Chain Requirements
Del. 1.1.1 – Definition of Vedanta Strategic Vision
Del. 1.1.2 – Evaluation of Internal Staff Points of View
Del. 1.1.3 – Definition of Extended Supply Chain Requirements
Step 1.2 – Baseline Assessment & Gap Analysis
Del. 1.2.1 – Gap Analysis & Requirements
Del. 1.2.2 – Analysis of Extended Supply Chain Processes
Del. 1.2.3 – Analysis of 3rd-Party Networks & Mgmt. Practices
Del. 1.2.4 – Analysis of Business & Manual Systems
Del. 1.2.5 – Assessment (Int. & Ext.) of Personal Care Sector
Del. 1.2.6 – High-Level Spend Analysis
WK8 WK12WK11WK10WK9PHASES, STEPS & DELIVERABLES
WK6WK5WK4WK3WK2WK1
PHASE 2 – PLAN EXECUTION
Step 2.1 – Determine Priorities & Design Roadmap
Del. 2.1.1 – Recommendations & Benefits Projections
Del. 2.1.2 – Prioritized Opportunity Set
Del. 2.1.3 – Organizational Effectiveness Plan
Del. 2.1.4 – Strategy Deployment Program
Del. 2.1.5 – Design & Implementation Schedule
Del. 2.1.6 – Risk Assessment & Mitigation Requirements
Del. 2.1.7 – Business Case
Step 2.2 – Design Detailed Initiatives
Del. 2.2.1 – Detailed & Executable Project Plans
WK7
PHASE 1 – Set Supply Chain Vision
Step 1.1 – Define Supply Chain Requirements
Del. 1.1.1 – Definition of Vedanta Strategic Vision
Del. 1.1.2 – Evaluation of Internal Staff Points of View
Del. 1.1.3 – Definition of Extended Supply Chain Requirements
Step 1.2 – Baseline Assessment & Gap Analysis
Del. 1.2.1 – Gap Analysis & Requirements
Del. 1.2.2 – Analysis of Extended Supply Chain Processes
Del. 1.2.3 – Analysis of 3rd-Party Networks & Mgmt. Practices
Del. 1.2.4 – Analysis of Business & Manual Systems
Del. 1.2.5 – Assessment (Int. & Ext.) of Personal Care Sector
Del. 1.2.6 – High-Level Spend Analysis
WK8 WK12WK11WK10WK9PHASES, STEPS & DELIVERABLES
Workshop Steering Committee MeetingBi-Weekly Update
Illustrative
Governance Plan
Monitor performance of SC initiatives
Measure initiative progress in addressing business objectives
Determine cost, schedule, and technical initiative risks and issues
Review/resolve risks and issues and escalate for resolution as necessary
Monitor performance of SC initiatives
Measure initiative progress in addressing business objectives
Determine cost, schedule, and technical initiative risks and issues
Review/resolve risks and issues and escalate for resolution as necessary
Update SC effectiveness by conducting and documenting detail business objective review
Define new SC initiatives as required and conduct financial impact analysis
Update SC initiative deployment roadmap
Communicate updates to key stakeholders
Update SC effectiveness by conducting and documenting detail business objective review
Define new SC initiatives as required and conduct financial impact analysis
Update SC initiative deployment roadmap
Communicate updates to key stakeholders
Submit SC budget request and provide funding rationale
Assess impacts of budget changes and escalate issues as necessary
Reprioritize SC initiative deployment roadmap in response to budget changes
Update SC effectiveness plan and communicate changes
Submit SC budget request and provide funding rationale
Assess impacts of budget changes and escalate issues as necessary
Reprioritize SC initiative deployment roadmap in response to budget changes
Update SC effectiveness plan and communicate changes
SC Effectiveness Management Process
Frequency of Occurrence
Primary Processes
KeyManagement
Activities
Review Review Business Business
ObjectivesObjectives
Manage SCManage SCInvestmentInvestment
Measure SCMeasure SCPerformancePerformance
Maintain SC Maintain SC EffectivenessEffectiveness
ContinuouslyContinuously MonthlyMonthly QuarterlyQuarterly AnnuallyAnnually
Collect and document new business objectives and requirements
Define required SC capabilities and filter based on importance
Identify SC capabilities required to meet business objectives and determine financial impact
Define new initiatives or changes to existing ones
Collect and document new business objectives and requirements
Define required SC capabilities and filter based on importance
Identify SC capabilities required to meet business objectives and determine financial impact
Define new initiatives or changes to existing ones
Monitor performance of SC initiatives
Measure initiative progress in addressing business objectives
Determine cost, schedule, and technical initiative risks and issues
Review/resolve risks and issues and escalate for resolution as necessary
Monitor performance of SC initiatives
Measure initiative progress in addressing business objectives
Determine cost, schedule, and technical initiative risks and issues
Review/resolve risks and issues and escalate for resolution as necessary
Update SC effectiveness by conducting and documenting detail business objective review
Define new SC initiatives as required and conduct financial impact analysis
Update SC initiative deployment roadmap
Communicate updates to key stakeholders
Update SC effectiveness by conducting and documenting detail business objective review
Define new SC initiatives as required and conduct financial impact analysis
Update SC initiative deployment roadmap
Communicate updates to key stakeholders
Submit SC budget request and provide funding rationale
Assess impacts of budget changes and escalate issues as necessary
Reprioritize SC initiative deployment roadmap in response to budget changes
Update SC effectiveness plan and communicate changes
Submit SC budget request and provide funding rationale
Assess impacts of budget changes and escalate issues as necessary
Reprioritize SC initiative deployment roadmap in response to budget changes
Update SC effectiveness plan and communicate changes
SC Effectiveness Management Process
Frequency of Occurrence
Primary Processes
KeyManagement
Activities
Review Review Business Business
ObjectivesObjectives
Manage SCManage SCInvestmentInvestment
Measure SCMeasure SCPerformancePerformance
Maintain SC Maintain SC EffectivenessEffectiveness
ContinuouslyContinuously MonthlyMonthly QuarterlyQuarterly AnnuallyAnnually
Collect and document new business objectives and requirements
Define required SC capabilities and filter based on importance
Identify SC capabilities required to meet business objectives and determine financial impact
Define new initiatives or changes to existing ones
Collect and document new business objectives and requirements
Define required SC capabilities and filter based on importance
Identify SC capabilities required to meet business objectives and determine financial impact
Define new initiatives or changes to existing ones
Control Plan Improvement Charters
Summary
• Understanding an organization’s essential functions and critical business processes is key to conducting proper business continuity planning, and Lean Six Sigma offers specific tools and methodologies which can greatly facilitate and improve this process
• In addition to the direct benefits achieved on the Continuity Planning project, indirect benefits will be gained through an increased knowledge about agency processes that could provide valuable, time-saving support to unrelated improvement efforts
• The driving cultural transformation behind Lean Six Sigma is the “Continuous Improvement” element – organizations and individuals are empowered to take hard looks at their operations, identify improvement opportunities and pursue them
• This cultural element is supported by a rigorous training effort directed across the enterprise to help individuals identify waste, with the tools and techniques to eliminate it – but also requires significant outreach and education of senior leadership to inform them of how they can support these types of initiatives
Questions
• If you have any questions about the Continuity Planning effort and/or the Continuous Process Improvement program at GSA please contact:
Jason RaddePolicy and Plans Division (DP)Office of Emergency Response and [email protected]
or
Peter RusselburgCPI Program ManagerOffice of Performance [email protected]