In our journey around the Flow & Feedback (2F) diagram in search of competitive advantage we are still in the Study phase of the Study-Act-Plan-Do (SAPDo) learning and improvement cycle.
But first a reminder of why we are all here:
To give a great total customer experience
And from that, a thought about enterprise excellence, which is when:
Everyone in a business or any other organisation really understands,
and takes responsibility for, keeping value flowing to their customers.
In this particular blog, as I continue to look at the 2F diagram step by step, I want to introduce you to how it can help you systematically improve performance and quality for your enterprise to become excellent. It is also worth pointing out that by improvement I mean both continual incremental improvement and innovation. This applies both at an organisational level and in detail at the process level.
Some people when talking about enterprise excellence give the impression that once you have achieved it then that’s it! Unfortunately the world is not standing still, which means that conditions will change over time inside and outside your business, in customers and in the supply chain. And anyway experience shows that decisions, about improvement and everything else, are compromises. Therefore later, further improvements are probably possible. And if you can see an opportunity to improve then so can your competitors.
We have been looking at using data properly processed in a PB chart as evidence to better understand performance throughout the organisation in both the value-adding and support processes. In this way we can make effective next steps of improvement to get and keep competitive advantage.
Let's now look at what your performance data might look like in a PB chart before you begin to improve your system of work or processes. In the graphic at the top, (A) is typical of many unimproved systems or processes. Unimproved systems or processes in the real world are often highly variable; sometimes to the extent that performance or quality in customers’ eyes is unacceptably unpredictable. This is a competitive disadvantage! Examples might be your customers experiencing highly variable outcomes in things like response times to enquiries or requests for quotation, in delivery times, in variable quality or in variable performance of specific characteristics that are important to them.
The two green dashed decision lines in PB charts help you to understand the degree of variability and predictability of your systems and processes. It is the spread or distance between these two lines that tells you the degree of variability of the performance measure you are looking at. Basically, relative to the average (red) line the narrower the distance the better. Points outside the two green lines alert you to exceptional or unusual events that signal unpredictability in the system or process. They are signals for action. The advantage of a PB chart is that you know when the event occurred so you have a better opportunity to understand why it occurred and put in place countermeasures or improvements.
In the food industry I came across an example of seven inch sausage rolls that were noticeably shorter. I kid you not! Result: unhappy customers. Definitely an uh-oh moment in the graphic at the top. In fact the sausage rolls were all of the correct weight. The problem was with a change in the consistency of the pastry before it was baked. Once this was sorted performance returned to the proper level.
You might see data points above the top green line of PB chart as in (A) above, which are a nice surprise of exceptionally high performance. For example, production output or the yield of a manufacturing or chemical process plant might be higher than usual. It is as important to understand why things have gone exceptionally well as it is why they have gone exceptionally badly. You can learn from such opportunities to improve the supply of your products or services.
Having used the PB charts to understand the reason for either wide variations or exceptional events, possibly combined with insights from other methods, you proceed around the SAPDo cycle. First deciding, in Act, what remedial or improvement action to take based on the evidence. It helps then to carefully Plan the test conditions and length to ensure that you are properly testing whether your change was an improvement. Then you are into the Do stage actually running, if possible, live. It then pays to return to the previous conditions to make sure that what you have observed in the test was not due to some other factor. And so you are back to Study comparing performance to see whether the change was an improvement. If not, it’s off around the cycle again with another change.
When your improvements work and they move you from (A) to (B) it usually brings the decision lines closer together and raises the average. This means that there is higher average performance, less variability and hence more predictability. You should not stop there. You and your whole organisation need to continue to look for opportunities to improve. Although future gains might be smaller, as suggested by (C), they are nevertheless critical to keeping your organisation's performance the best it can be.
The 2F diagram can represent a team, a department, a unit or a whole organisation. Remember, the SAPDo learning and improvement cycle can be used at a detailed activity or process level just as much as the whole business, which is implied by the 2F diagram itself. Continually renewing your understanding of and improving how your business or any other type of organisation is performing can be your trump card.
As we continue to explore the 2F diagram we will next look at outside influences on your business. We’ll draw on both my book Picture Your Business and on our new ebook Simply Manage. Picture Your Business is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing me.