Operational Excellence thru Six Sigma

Guest was Robert Stapp of OP-EX Direct Results

Business901 Podcast Transcript

This is a transcript of a podcast that featured Robert Stapp of OP-EX Direct Results Inc. In the 1st session of this 2-part series, Robert discusses Hoshin Kanri aka Policy Deployment. Robert is an executive professional with nineteen years Lean Six Sigma Operation Management experience domestic and internationally. He is a Certified Six Sigma Black Belt (since 1998) and Certified Lean Master (CLM) process improvement expert ( since 2005). Robert is an author and speaker for Lean Six Sigma business transformation and quality engineering solutions. As a certified kaizen instructor he has managed, facilitated and been involved in continual improvement his entire career. Robert is the Founder and President of OPEX Direct Results Inc. which was established in 2006 as an S-corporation based out of Huntington, Indiana as a performance improvement and management consulting firm which focuses on creating value and delivering results for clients. Operating Excellence is a highly advanced and sophisticated system of management sciences, which leverages Lean Six Sigma, Engineering Solutions and Leadership to establish world class performance. OPEX Direct Results Inc. has served both manufacturing and service industries; such as Health Care, Publishing, Food & Beverage, Automotive Manufacturing, Mining Equipment, Commercial Glass, Printing, Milling & Foundry Operations, and Construction Goods leveraging his experience and knowledge to positively transform entire business enterprises.

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Joe Dager : Welcome, everyone. This is Joe Dager with Business901. Today on the podcast I have Robert Stapp of OPEX Direct Results. He is from Huntington, Indiana. Robert, could you introduce your company, and tell us a little about yourself? Robert Stapp: I sure can, Joe. But I want to thank you first for having me on. We are based out of Huntington, Indiana. It's about 25 miles southwest of Fort Wayne. We established ourselves back in 1996, and we specifically focused on what we term as operating excellence. Operating excellence is really an advanced and sophisticated system of management sciences. We look to leverage Lean Six Sigma, engineering solutions, and leadership to establish what we call world-class performance. When we look at just Lean and Six Sigma, those aren't the only performance improvement tools that we try to incorporate. We consider ourselves the MMA of performance improvement. Back in the day, martial arts all began with different styles and methods. Today, we see this mixed martial art that's really transformed a whole business in terms of competitive fighting and all that. Well, for us, we've seen how Lean and Six Sigma, Theory of Constraints, and other performance improvement tools have been leveraged and used together at the right time in the right way, and it really brings about a strong result, tool-set.

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So, for us, we combine that with teaming, or what we call team-based activity, which is really paramount to operating excellence. That is, to engage everyone in the work-force and really approach it as a system, rather than just a tool-set. Joe: You know, I always hear that a lot, operation excellence, and best practices. Can you expand on that a little more? They hear operation excellence, What does that really mean to them? Robert: Well, Joe, when you look at operating excellence - let's just break it down. It's a philosophy of leadership, teamwork, and problem solving. It really results in continuous improvement throughout the entire organization or the business enterprise. It focuses on the needs of the customer. It looks at empowering employees and really optimizing all of the existing activities in that process. The value of operating excellence really lies in executing flawless safety, quality, productivity, delivery, looking at the human development, and really integrating into the DNA of a company this continuous improvement philosophy. It really stresses the need for continually improving by promoting a stronger teamwork atmosphere. So we're really focusing on the intellectual capital of a business, and that's first their employees, and then looking to equip them so that they have an opportunity to go in and improve their overall business strength. That's why we have on our logo this algebraic function or equation of Y=F of X.

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We believe that Y is a function of activities, and if you have your team focusing on performing at a level of excellence, then the outcome, or Y, is going to be an excellent outcome. For us, it's really about striving for that type, or that level, of excellence through teaming, or teamwork. Joe: I've seen so many people, when they fill out marketing plans and business plans, put objectives like I want to go from this point to this point in six months - they're good objectives. But I like to see measures that are used in the process, so that you can catch them in real time versus catching them at the end of a cycle. Are those some of the things you instill? Do you look at process improvements in measuring like current activity? Robert: Absolutely. Our focus is to stress the importance of focusing on what we call the key criteria - key criteria meaning the process criteria. Again, if we go back to that simple equation of Y=F of X, then we know that there are many factors or variables out there within the process, whether it be service or manufacturing. It doesn't matter. The essence of continuous improvement is really focusing on the process. The results will come. So many times I've seen businesses focus on the results. That's not bad. You need to know the score of the game. But it's really about execution. It's about the need to understand the process, the need to focus on that process and work to eliminate the waste in that process, also to reduce the variability in that process.

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So the output, or the Y, is always going to be a result of focusing on the key criteria. Too many times I've seen, again, businesses that will focus on the results, and it really drives negative behavior. Joe: Yes, I've seen that, because it's like having a teenage son. As you tell them - you can't do this, this and this. You give him the rules, but there's always a way to get around them. Robert: Absolutely. That's a great point. So many times that happens, Joe. Again, if you just focus on the result - I can take the result - not to say that people are out there to find a work-around or a way to do something to impact the result in a negative fashion, but there are so many ways to achieve a result. But truly the best way is to focus on the process and let the process drive the result. Joe: I'm always intrigued by how consultants walk in and look at a company. If I've been there 20 years, working in this process and doing it, how is a consultant going to come in and really help me? Robert: Again a great question. It is really, what we call the extra set of eyes. So many times we get really relaxed in the environment that we work in just like anything else, and at times it's hard to focus or to see the opportunities that are out there unless we have time to sit back. That's the issue that we find. Many of our clients are in a very fast paced strong demand situation. They are wanting to supply their customers with a very solid high quality service or product, and because of that, their demand is very high.

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And so they're working diligently to provide for their customers because delivery is one of the outputs that are extremely important, especially in this age - we all want things very quick. But we want it to maintain a high degree of quality. And what happens is, so many times, we get into this firefighting mode. And we spend so much time putting out the fires and making sure that things are being delivered in terms of service or product that we forget about the process. And again the result is the delivery of that service or product. So many times, they forget about the process that drives that output. What we do is that we have the time just to study and understand that business stream. And the first thing that we like to do is that - we're very proud of the fact that we go in and touch and feel the business and try to become part of it (we like to feel the pain). That is the only way to truly understand your client. And the best way for that is to go to the "Gemba" - what we call the point of operation, and it's also called the shop floor. Gemba is the place where everything happens. And that's the only place that you'll find opportunities. You will not find them sitting at a desk. So that's the first that we'll go, and we'll take the time to study the environment, study the business flow, and study the entire process flow. And look for the wastes, look through the variability, and look for ways to develop processes and opportunities for the teams to go in and change, and look for a positive output.

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Joe: Do you look at the overall picture of it? I know it's different each time, because there's certain areas that you are usually called in for or where you concentrate on a certain activity or a certain part of the process flow. When you first walk in, what's your typical engagement? Robert: Well, it's what we call an assessment. We go in and again the first thing that we will do is walk the shop floor or walk the point of operation, Gemba, with the management team. And we'll study the flow of that process. We also, like you had mentioned, we do like to study the metrics or what's called the Key Process Indicators, if a business has those set aside as part of their overall management plan. And we like to look at those KPIs to understand where opportunities might lie: whether it is in quality, or their safety, or cost issues, or delivery. We also use the tool called Value Stream Mapping, which is an excellent way to visualize the overall business enterprise and to capture every function from communication and exchange of information to the true flow of that service or process. And we will use that as a map to identify another tool, called Kaizen, which is a continuous improvement team activity where you go in and really attack certain areas and create what we call a breakthrough. So again, it's interviewing and working with the management team, interviewing and working with the employees, going out to Gemba and studying the environment, and also mapping that enterprise through that value stream activity. And with all of those tools together, we get a really solid picture of the business.
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Joe: When you describe those things, I see many Lean tools being used. Where part does Six Sigma play? Robert: Six Sigma and Lean, are so interchangeable for us. We look at Six Sigma as a carpenter that's a trimmer. Then we have a carpenter that builds the framing or the framework of the house. And when you first go in - of course you have to build the foundation; you have to pour the concrete; you have to build the structure itself. And then you'll have another set of carpenters that will come in and put up the drywall and fill in the inside of this structure. And then you need someone to come in and do all of the trim work, and really put the detail into that structure. And that's what we look to Six Sigma. We want to get the low hanging fruit with Lean. We really want to attack and eliminate the waste so that we can create an environment where the variability is reduced, based upon eliminating those wastes. We do not want noise in the system. Then we'll look to using Six Sigma to really fine tune that process and to really use that statistical approach to attack certain areas, whether it be in the quality or the productivity areas, and really fine tune that, deliver a stronger capability. So for us again, it's when you when you apply the tool. Not necessarily - I was going to say not necessarily how, but that's not true. It's the how as well, but it's also the when.

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So many times people go into a very low hanging fruit environment and try to apply Six Sigma. You can have good outcomes with that, but I don't believe that it will be as strong. Again the tool was not meant for that. That's when we see the tools of Lean, being a much stronger opportunity than we would have with Six Sigma. But, again, Six Sigma comes into play as you get into design and you get into implementation of processes, you're trying to deliver higher capabilities. So for us that's the application, or at least the chronological application of Lean and then Six Sigma. Joe: Yes, I see it many times, if there isn't good measurements in place, it is difficult to apply Six Sigma to begin with. And that's just what you're really saying, I think: is with the low hanging fruit - with LEAN, you can go in there and lop it off, get their measurements in place and then really start fine tuning things with Six Sigma. Robert: Yeah, exactly. If you look at Six Sigma, you have to have data and you have to have clean data. And so to begin with, if you have no data, and that goes back to what we were discussing prior, and that is really going in and cleaning up that environment, picking up that low hanging fruit, and you use a tool called Hoshin Kanri or what is also termed as policy deployment, and that's a strategy. It's really a means, by which you establish goals and measures, and you work towards those goals and "Hoshin" really keeps all those activities (at all levels of the company) in line to its overarching strategic plan.

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And then you can systematically probe the What's and the When's and the Who's and the How's throughout that entire business enterprise, and that's how you can then use Six Sigma like a surgeon. You can go in if you have good clean data. Because just as anyone that practices Six Sigma understands, you have to first define and then you have to measure. So that measurement or those measures that you're using should be very clean before you move into the next step, which is the analyze, and then the improve, and control phase. Joe: How would you know that you're ready for Lean Six Sigma or a consultant? As a company, I'm sitting here and I'm looking at ways to improve. I think this is an ideal time to do it because, let's face it, most manufacturers - most industries are slow right now. What a way to get your quality in order when you have some extra time to do it actually. I don't want to make it sound like you should not be beating the bushes, getting your house in order first should be a priority at any time. I want to take that step. I want to do something. I want to improve the quality of the company. What should I look for and how should I determine who to call and who to talk to?

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Robert: Again, great question. I think that first it is hard for folks. They don't know what they don't know, OK. So it is something that they at least have to have had some exposure to. And with so much out there in terms of LEAN and Six Sigma and operating excellence and just the whole philosophy of continuously improving.... Most of us have had the opportunity to at least come across materials or come across speakers or someone that has at least put that out there. And if you are someone that delivers a service or a product, you have a customer. And you know that the customer is very demanding, which they should be. They're paying hard-earned money to receive something, and so it is up to us to deliver a very high quality service or product to them. With that in mind, we're always trying to delight our customers. And so we know that to continuously improve ourselves, to do that and to meet the ever-changing expectations of our customers we're always going to have to improve. So, I think the time is anytime. It's when you decide that you want to be set apart. It's when you decide that you want to move from being a good company to a great company. That's when you say to yourself: "OK. We need to take this path, and this path is the path of operating excellence, of looking at pulling into our business resources and knowledge and talent that will help us achieve that."

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Now, how to do that? There are a lot of different ways. I have seen companies and clients that have gone out and picked up some very good books that are out there today. They will sit and educate themselves on these particular processes, and to me that's the first thing you need to do, is you need to understand this thing called operating excellence, these pools of LEAN and Six Sigma. Joe: So I do some research, I look at the books, and I decide: "OK." What do you think is the most important thing when one of your clients begins Lean Six Sigma? What's the most important thing for him to recognize or to do out of the box? Robert: Communication. Recently on my blog, I talked about a particular operating executive years ago, asked me where I see one of the most important areas within a management force of a business for a successful operating excellence transformation. And I said: "It's at the front line." And the reason for that is the front line is where the things are done. Whether it is the director of a nursing staff, or a foreman of a manufacturing environment, or a lead server in a restaurant, all of these folks are responsible for what we call Gemba or the front line. They need to be aware of what's taking place, that there is a change taking place because most of the time they are very dedicated and very passionate to the current system. Because of that, because they are very focused and passionate to that current system, they have to know that there is a change in that system. And they have to be educated and equipped for that.

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So, again, communication is the first thing that needs to take place. Catch-ball that I discussed on the blog, is a great tool for that, Joe. It allows them to basically pitch ideas and to pitch information and discussion back and forth throughout the organization to get various points of feedback, various points of debate on how to properly execute this change that is going to take place. Once you do that, then you would, at least, have players that are getting ready participate in this process change. You, at least, have them ready and equipped understand that they are needed and that they are important and that they have idea of what's going to be taking place so they can help transfer this knowledge Gemba. And that's all the employees throughout the business enterprise. to to an to

Change is hard, Joe. A lot of people fear change. And so, to help mitigate a lot of issues that happen because of that fear, if you had your front line equipped and ready, they are your best resource to make sure that you have a very fluid and solid transformation. Joe: When you talk about transformation, what types of resistance do you feel? I guess when I see it when I'm working with someone from a marketing perspective I see that "ah ha" moment when they finally get it. They understand. I'll put it in simple terminology, but they understand ideal client and target market all at once. When they finally, truly understand that, they understand themselves and all these marketing ideas open up to them on how to go to that target market where before they were struggling with their market because they were trying to figure out how to market to the world.

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And that "ah ha" moment is never outside the company, it's always within the company when they figure out who their client is. It's so funny to see that because when you start in the marketing process you go through that and people just struggle with it. They resist you because everybody is their client, but finally when they see it the light just opens up to them and just a flood of ideas on just how to reach the people come forth. What's your "ah ha" moment within a company when you see that they get it, they understand, they take hold of the quality process, and the transformation takes place? Robert: You know, there are these little epiphanies that happen, these "ah has" and then there is the overall business "ah ha", the grand "ah ha" of them all. When you start to see these smaller "ah has" take place within a business, it's when you literally see the employees engage these tools. And they are participating, again, in what we call the Kaizen event, which is a continuous improvement team event. They are working together, and they are applying these new learned tools, and they see at the end of that week where they had been able to change their process and deliver a different, a better result. That is one of the smaller "ah hah". When you see the business "ah ha" it typically is within the first year or two, and, again, it's because you have this collective of good, strong outcomes. The folks in Gemba are starting to see the positive aspects of these new tools that they are applying. They are building this house, and they start to see it.

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Then, all of a sudden they look and they review, again, going back to that Hoshin plan, and they begin to see, after looking back over a year, that they were literally able to affect those KPIs, those key process indicators, in areas of safety or service, or quality and delivery. One of the best areas that we like to focus on right off the bat is safety, Joe, is because we have to protect our people. When they begin to see that they can literally change their environment and protect themselves and protect the product and service and the company, and they are using this philosophy, these tools, these teamwork tools to achieve that. And they see that they have been able to achieve a much higher safety rate. Then, again, that's the business "ah ha", and they begin to take that and transfer it into service and quality and delivery. So, again, they'll see it immediately when they run these kaizen events, but then, again, they'll see the collective impact as it changes their KPIs over a year. Joe: I want to wrap this up now. I appreciate your time and all your expertise that you offered. Tell me how someone can get a hold of you if they are interested. Robert: Contact me directly, that number is 260-366-4504. I can also be reached through email at results@opexdirect.com which is all one word. And we also have a web address where people can get free downloads, and they can sign up for classes that we have where we teach and certify in these processes at our OP-EX Institute. They can find that at www.opexdirect.com.

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Joseph T. Dager
Lean Six Sigma Black Belt

Ph: 260-438-0411

Fax: 260-818-2022

Email: jtdager@business901.com Web/Blog: http://www.business901.com

What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R.

Twitter: @business901

Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt and a certified coach of the Duct Tape Marketing Consulting organization, Business901 provides and implements marketing, project and performance planning methodologies in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan. An example of how we may work: Business901 could start with a consulting style utilizing an individual from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop, Business901 moves into a coachs role supporting the process as needed. The goal of implementing a system is that the processes will become a habit and not an event. Part of your marketing strategy is to learn and implement these tools.
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