Documente Academic
Documente Profesional
Documente Cultură
SUPPLY ADMINISTRATION
CUSTOMER
OPERATIONS
RELATIONS
PRODUCT &
SERVICE
DEVELOPMENT
Stabilize Processes
Rely on Facts & Data
Standardize Processes
Insist on Direct Observation
Focus on Process
Embrace Scientific Thinking
Continuous Process Focus on Value Stream
Keep it Simple & Visual
Flow & Pull Value Improvement Identify & Eliminate Waste
Assure Quality at the Source No Defects Passed Forward
Seek Perfection Integrate Improvement with Work
The mission of The Shingo Prize for Operational Excellence is to create excellence
in organizations through the application of universally accepted principles
of operational excellence, alignment of management systems and the wise
application of improvement techniques across the entire organizational enterprise.
We do this by teaching correct principles and new paradigms that accelerate the
flow of value, align and empower people and transform organizational culture.
Vision
Our vision is to be the global standard of excellence in every industry; because
The Shingo Prize roots are in organizational recognition, we have learned three
very important principles:
3. For any organization to be successful, they must be able to see the truth about
where they are in the development of a high-performing, principle-based culture.
Healthcare Manufacturing
2
Forward
Building on the work of Dr. Shingo, the The Shingo Standard: A Story
The Shingo standard is, by design, the most
mission of The Shingo Prize is to assist
rigorous in the world. We believe Dr. Shingo
organizations of all kinds to create lasting
would only want to associate his name with
cultures of operational excellence. We
the very best. Applicants for recognition are
achieve our mission by focusing our efforts
held to an identical standard no matter
on timeless and universal principles.
where they are located in the world.
4
Fortunately, we had very good friends in always in the organizations ability to get
the Association for Manufacturing past the tools, events and programs and to
Excellence (AME) and the Society of align management systems with principles.
Manufacturing Engineers (SME). They told When such alignment took place, ideal
us they were beginning to lose confidence behaviors followed and perpetuated a
in recommending, carte blanche, our deep culture of operational excellence.
recipients as benchmarking sites for their
members. As much as this hurt, it forced Based on our findings, we developed
us to begin a deep and earnest assessment the Shingo model that consists of an
of our past recipients; specifically, which organized collection of guiding principles
ones had sustained their improvements (the House) and a transformation process
and which ones had lost ground. Our (the Diamond). Together, this framework
findings were alarming! has become the basis for everything we
do.
We learned that even the best of the best
had an extremely difficult time sustaining Education, Assessment and Recognition
the gains we had observed during their The Shingo Prize has three areas of focus:
assessments. Furthermore, we discovered education, assessment and recognition.
that our assessment criteria had two major
flaws: (1) our standard for what excellence We teach leaders to better understand
looked like was based too much on their role in building a culture of operational
outward appearance and not enough excellence and we teach managers how
on the deeply embedded culture of the to better align systems to drive ideal,
organization, and (2) we did not know how principle-based behaviors.
to accurately evaluate and measure the
truth regarding an organizations culture. Our focus on assessment is not as much
on awarding The Shingo Prize, but more
Our insights sparked a yearlong study on using the Shingo model as the basis for
to determine what did and did not work honest, self- and organizational-evaluation
in sustaining improvement efforts and to and initiating lasting improvements to the
understand the reasons behind success culture. In fact, we often say that The True
or failure. At the same time, we began to Shingo Prize is the culture of operational
dig back through all of Dr. Shingos books excellence that comes from a disciplined
to see if we could discover what it was application of the Shingo model into your
that we were missing. To our surprise and organization.
delight, working from either end and toward
the middle, we arrived at a unanimous Recognition is given each year to
conclusion. The difference between successful challengers from around the
successful and unsuccessful efforts was world at the Annual Shingo Prize
6
Table of Contents
Dimension One
17
Cultural Enablers
Dimension Two
22
Continuous Process Improvement
Dimension Three
31
Enterprise Alignment
Dimension Four
37
Results
41 Scope of Transformation
44 Summary
47 Contact
The Shingo Model
10
Operational excellence cannot be a pro- ous process improvement, enterprise
gram, another new set of tools or a new alignment and results the ultimate end
management fad. Operational excellence of all business initiatives. These four di-
is the consequence of an enterprise-wide mensions overlay five core business
practice of ideal behaviors based on cor- systems: product/service development,
rect principles. As long as improvement is customer relations, operations, supply
seen as something outside the core work and a variety of management or admin-
of the business, as long as it is viewed istrative support systems.
as something else to do, operational
excellence will remain elusive.
Guiding Principles
When leaders anchor the corporate The Shingo Prize for Operational Excel-
mission, vision and values to principles lence did not create the 10 guiding princi-
of operational excellence and help as- ples of operational excellence, but rather
sociates to connect and anchor their they have always existed. In truth, there
own values to the same principles, they is ample evidence that these principles
enable a shift in the way people think and have been well understood, more or less,
behave. Changing the collective behavior at different times for thousands of years.
of the group changes the culture. This As the world has gone through cycles of
is a leadership responsibility that cannot advancement and decline, it seems these
be delegated. principles are routinely lost and forgot-
ten and must be re-discovered. Emerg-
ing from the dark ages into a period of
Principles of Operational Excellence enlightenment and industrialization, the
(The Shingo House) impact of these principles are only now
In his book Key Strategies for Plant beginning to be understood again.
Improvement, Dr. Shingo said, Think
in terms of categorical principles. The Certainly, and even surprisingly, most
Shingo house is a categorization of the business schools do not emphasize
guiding principles of operational excel- these principles even though they are
lence. Associated with each category are the driver for business execution excel-
also listed many important supporting lence. The cause for this may be that
concepts. these fundamental business principles
have been lost in management fads and
The principles are categorized into four tool boxes that become programs or
dimensions: cultural enablers, continu- flavors of the month.
SUPPLY ADMINISTRATION
CUSTOMER
OPERATIONS
RELATIONS
PRODUCT &
SERVICE
DEVELOPMENT
Stabilize Processes
Rely on Facts & Data
Standardize Processes
Insist on Direct Observation
Focus on Process
Embrace Scientific Thinking
Continuous Process Focus on Value Stream
Keep it Simple & Visual
Flow & Pull Value Improvement Identify & Eliminate Waste
Assure Quality at the Source No Defects Passed Forward
Seek Perfection Integrate Improvement with Work
For organizations to be successful over the long term, leaders must deeply and
personally understand the principles that govern their success. Furthermore,
they must ensure the behaviors of every person who contributes to the business
are in harmony with these principles. In short, the organizational culture they
build must be grounded in correct principles.
12
The Shingo Prize for Operational Ex- ability requires focusing on the culture;
cellence has made a diligent search of thats the easy part. The difficult part is
thought leaders over the last 100 years. in knowing how to really affect change.
Their work has been carefully analyzed The Shingo transformation process is a
and dissected, and the unique concepts methodology for accelerating a personal
or principles from each have been ex- and enterprise-wide transformation to
tracted. Compiling, distilling and pri- a culture of operational excellence. The
oritizing the list led to the 10 guiding process is based on the teaching of Dr.
principles on the left side
of the house and the sup-
porting concepts for each
Organizations can never sufficiently
dimension on the right release the full potential of their people
side. Supporting concepts by creating a tool-oriented culture.
are critical to pay attention
to but may not stand up to the rigor of Shingo who recognized that business
being universal, timeless and self-evident improvement comes through under-
like the guiding principles. standing the relationship between prin-
ciples, systems and tools.
The dimensions are the result of think-
ing categorically about the principles. Dr. Shingo understood that operational
It is clear that all four dimensions of the excellence is not achieved by superficial
model require focus in order to achieve imitation or the isolated and random use
excellence. In the same way that we of tools and techniques (know how).
need to comprehend objects in three Instead, achieving operational excellence
dimensions to truly appreciate all of their requires people to know why (i.e., an
characteristics, operational excellence understanding of underlying principles.)
must be viewed in these four dimensions In the 1940s, the work of French social
in order to fully appreciate the power scientist, Jean Piaget, led us to under-
of the principles to affect business out- stand that learning occurs when people
comes. come to deeply understand the mean-
ing behind the methodology. People
Transforming a Culture naturally search first for meaning, the
(Shingo Transformation Process) principle and then attempt to organize
Many organizations and their leaders them somehow into a system or some
are coming to understand that sustain- kind of order. Finally, they create tools to
AL
AF
IG
ORGANIZATIONAL FOCUS
N
E
DR
IV
DR
IV
E
RESULTS Culture
(Behavioral Evidence)
SYSTEMS
E
BL
RE
A
FI
EN
NE
CT
AC
LE
SE
HI
EV
E
TOOLS
e
iz
Pr
go
in
Sh
e
Th
better enable the systems to accomplish tually and then what they mean person-
the purpose for which they were created. ally. It is impossible for a leader to lead
the development of a principle-based
Learning and Teaching the Principles culture until he or she has gone through
The first step a leader must take in lead- the deep personal reflection required to
ing cultural transformation is a personal begin a cultural transformation. This is
journey to understand what each of no trivial task. For many and perhaps
these guiding principles mean concep- most, fully embracing these principles
14
requires a fundamental re-thinking of the If we encourage, enable or simply allow
rules of engagement used to get to where a culture to emerge where employees
they are. are thought of merely as an unfortu-
nate cost burden or that the smartest
At a minimum, leaders must be curious people are those that rise to the top,
enough to experiment with the principle. the consequence will be a workforce
John Shook at the Lean Enterprise In- that is not fully engaged. Ideas for im-
stitute taught us that it is often impos- provement are never articulated and
sible to think our way into a new way acted on, people feel unfulfilled in their
of acting. Rather, guided by correct work and turnover is very high. Labor
principles, one may do, observe, learn costs become excessively high, busi-
16
Dimension One
D 1 : Cultural Enablers
Cultural enablers make it possible for There is also a need for humility on the part
people within the organization to engage of all members of an organization. Ideas
in the transformation journey, progress can come from anywhere. One can learn
in their understanding and, ultimately,
something new from anyone. Improve-
build a culture of operational excellence.
ment is only possible when people are
Operational excellence cannot be willing to abandon ownership, bias and
achieved through top-down directives prejudice in their pursuit of a better way.
or piecemeal implementation of tools.
It requires a widespread commitment
throughout the organization to execute Supporting Concept
according to the principles of operational Assure a Safe Environment
excellence. A culture must be developed
where every person in the organization There is no greater measure of respect
demonstrates a high level of respect for for the individual than creating a work
every other person. Developing a culture environment that promotes both the
of mutual respect and humility takes a health and safety of employees and the
consistent commitment over a sustained
protection of the environment and the
period of time.
community. Environmental and safety
18
only be achieved when every person at
Supporting Concept every level of the organization is able
Develop People to continuously innovate and improve.
Elimination of barriers to that innovation
People development has emerged as an becomes the responsibility of manage-
important and powerful cultural enabler ment.
and goes hand-in-hand with principles of
operational excellence. Through people Fundamental to the Shingo model is the
development, the organization creates concept of teaching people the key prin-
the new scientists that will drive future ciples (the why) behind everything they
improvement. People development is do. When people understand why, they
far greater than just classroom train- become empowered to take personal
ing. It includes hands-on experiences initiative. Managing a team of people who
where people can experience new ideas share a deep understanding and commit-
in a way that creates personal insight ment to the key concepts and principles
and a shift in mindsets and behavior. is much easier than managing the work
of those who are only doing what they
An organizations leaders must be com- are told. Empowered employees who
mitted to developing people and expand- understand relevant principles are far
ing the knowledge base. Leaders come more likely to make good decisions
to realize that expenses for education and about the direction and appropriateness
training are necessary investments for of their ideas for improvement.
long-term health; as such, the commit-
ment to this investment does not waver. Similarly, when employees have a clear
sense of direction and strategy and have
a real-time measure of contribution, they
Supporting Concept become a powerful force for propelling
Empower and Involve Everyone
the organization forward.
For an organization to be competitive,
Principle Respect Every Individual
the full potential of every single individual
Respect is a principle that enables the
must be realized. People are the only
development of people and creates an
organizational asset that has an infinite
environment for empowered associates
capacity to appreciate in value. The
to improve the processes that they
challenges of competing in global
own. This principle is stated in the
markets are so great that success can
The table on the following page will provide examples of ideal behavior for leaders, managers and associates.
The list is intended to provide examples of ideal behavior that flow from two guiding principles and should not in
any way be considered as an exhaustive list.
20
Examples of Ideal Principle-based Behavior
Leaders All leaders routinely spend time at the actual work locations where the
actual work is performed.
Leaders continuously seek the input of 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 ac-
knowledge important insights they have gained.
Leaders take responsibilitiy for applying principles of operational excel-
lence in their own lives and ensure these principles become the founda-
tion of organizational culture.
Leaders engage people at all levels in defining ideal, principle-based
behaviors and support managers in the alignment of all business and
management systems.
Leaders develop systems to ensure they remain publicly accountable for
their own principle-based behavior seeking feedback from all levels and
across the entire enterprise.
Leaders ensure products and services do not have an unintended nega-
tive impact on the sustainability of communities and the planet.
Managers All managers constantly work with others to better align systems with
ideal behaviors as defined by the guiding principles.
Managers act as coaches and mentors to others in the execution of
principle-based systems and are constantly receiving personal and orga-
nizational feedback for improvement.
All managers are visible in the work space and demonstrate an open-
ness to listen and learn from others.
Managers across the enterprise ensure associates have the information
they need to be successful in their work and push decisions out and
down to the appropriate levels.
Managers create a safe and productive work environment, keeping the
safety of all associates as the highest of all priorities.
Managers regularly review the skills and competencies required of all as-
sociates and work with each one to provide appropriate opportunities for
associates to gain new insight.
Managers ensure appropriate systems are in place to protect the environ-
ment and support for the communities where they are located.
22
D2: Continuous Process
Improvement
Continuous improvement begins by ity, quick delivery and a comprehensive
clearly defining value through the eyes of view of environmental health and safety.
customers. Expectations must be clearly
communicated so systems can be de- Continuous improvement focused on
signed to meet customer needs. Every flow of value requires both scientific
employee must know what good is, thinking and the capacity to identify and
whether his or her process is creating eliminate waste (things that interrupt the
good product or service, and they must continuous flow of value).
know what to do if it is not.
Principle Focus on Process
As associates learn to identify and elim-
A process focus recognizes that all out-
inate waste, they will, by necessity,
puts, whether product or service, are cre-
follow Dr. Shingos advice: Improve-
ated by processes acting upon inputs.
ment means the elimination of waste,
This simple truth is often overlooked:
and the most essential precondition for
Good processes will produce the in-
improvement is the proper pursuit of
tended output, as long as proper inputs
goals. We must not be mistaken, first
are provided.
of all, about what improvement means.
The four goals of improvement must be
to make things easier, better, faster and Process focus also helps focus prob-
cheaper. Particular emphasis is placed lem-solving efforts on process rather
on a quicker, more flexible response than people. A complete shift to pro-
throughout the system. cess focus eliminates the tendency to
find the culprit (person) who made the
The focus for continuous improvement mistake but rather leads to a pursuit of
cannot be only quality or cost but in- the real culprit (process) that allowed
stead must incorporate all aspects of the mistake to be made. Thus, process
value as perceived by the customer, in- focus also supports the cultural enablers,
cluding innovation, quality, cost, flexibil- creating an environment where learning
24
business. Focusing on flow will lead to Principle Seek Perfection
improvements, including better safety It is important to understand that the
and morale, more consistent quality continuous process improvement jour-
with fewer defects, increases in on-
ney has no end. This explains Dr. Shin-
time delivery and flexibility and lower
gos philosophy that one should always
costs, without running into the traditional
trade-offs. In addition, daily and weekly look for problems where there doesnt
results become more consistent and appear to be any. This is contrary to the
predictable. traditional belief: If it isnt broken, dont
fix it. The pursuit of perfection reveals
Principle that there are always opportunities for
Assure Quality at the Source improvement. There is always waste,
Assuring quality at the source is
and the more a process is observed the
the combination of three important
more waste will be seen. While focus
concepts: (1) do not pass defects
forward, (2) stop and fix problems and on process guides and directs the im-
(3) respect the individual in the process. provement efforts, seeking for perfec-
Defects are a source of instability and tion is the engine that keeps improve-
26
the value delivered and/or improve ing on the elimination of waste will con-
the process by which it is delivered. sistently drive appropriate behavior, while
the wrong focus can frequently become
a barrier to improvement, large inven-
Supporting Concept tory write-downs, fire sales or scrap.
Supporting
KeepConcept
it Simple&Keep
Visualit Simple
& Visual One way to view waste is that it is
In society today there is frequently a anything that slows or interrupts the
bias toward complex solutions and a continous flow of value to custom-
premium paid to those who seem to ers. In the end, identifying and elimi-
manage complexity well. However, it is nating waste is a concept that effec-
usually the case that better results at a tively engages the entire organization
lower cost can be achieved by simplifi- in the continuous improvement effort.
cation. Dr. Shingos life work in mistake
proofing is centered on this principle. Supporting Concept
Supporting Concept
No Defect Forward
Passed
Many of the seven forms of waste are No Defect Passed Forward
in fact the result of information deficits. This concept is essential for opera-
Making information visual is the support- tional excellence from many different
ing principle that when combined with sim- points of view. From a leaders per-
plification solves the information deficits. spective, it requires great courage to
stop the process long enough to un-
derstand the root cause and take coun-
Supporting Concept
Supporting Concept
Identify
and Eliminate Waste ter-measures that prevent the process
Identify and Eliminate Waste from reoccurring. For the leader, this
Identification and elimination of waste often means trading any short-term
is a practical concept for making pro- loss for substantial long-term gain.
cesses flow, thus it becomes a primary From a managers perspective, sys-
focus of continuous improvement. Waste tems must be in place to ensure that
elimination is a powerful supporting prin- any result that varies from the stan-
ciple because it is easily understood by dard, even slightly, creates an expec-
everyone associated with a value stream, tation of and support for immediate
compared to the complex concepts and action. We often call this swarming.
computations often associated with cost From an associates point of view, no
per unit, cost variances, statistical vari- defect passed forward requires a mind-
ability and other complex metrics. Focus- set of ownership and accountability. If
ever knowingly or willingly forward the of the daily work processes. Executives
outcome of their value contribution to are responsible for improving strategy
someone else if it contained the slight- setting processes or perhaps resource
est variation from the standard. alignment processes. They are primar-
ily responsible to deploy mission-critical
This supporting concept feeds the mind- strategy and metrics down into the orga-
set and tools of continuous improvement nization such that every person not only
and creates the conditions for seeking has a clear line of sight to what matters
perfection. It is possible to achieve per- the most but are also motivated by the
fection in the application of this concept. mission in a way that creates a compel-
ling case for improvement.
Supporting Concept
Supporting Concept Managers are responsible for improving
Integrate Improvement with Work
Integrate Improvement with Work quality systems, or performance devel-
As the migration toward a principle- opment systems or value stream flow.
based culture occurs, the activities and Line workers are responsible for improv-
approaches for continuous improvement ing their cycle times, or quality of work
become a part of the everyday work of or yields. Integrating improvement with
every employee in an organization. Asso- work is more than assigning responsi-
ciates become scientists who continu- bility. It entails the creation of standard-
ally assess the current state of their pro- ized work that defines systems for im-
cesses and pursue a better future state provement.
28
Supporting Concept implementing a change in the process,
Supporting Concept
Rely on Data
Rely&on
Facts
Data & Facts the improvement, as evidenced by
the data, could be predicted. Thus,
Shingo emphasized the importance reconciliation is required between the
of being data-driven in the pursuit of predicted results and the actual results,
continuous improvement. He frequently making the improvement process truly
shared examples of specific situations data-driven. The principle is that when
where data was collected, but it was data is treated loosely or imprecisely,
not the correct data or the data wasnt there is a tendency to leave potential
actually being used in the improvement improvement on the table or, even
process. Finally, he was adamant worse, to not achieve any improvement
that the understanding of the actual at all.
process be so detailed that when
The following table provides examples of ideal behavior for leaders, managers and associates. The list is intended
to provide examples of ideal behavior that flow from this single guiding principle and should not in any way be
considered as an exhaustive list.
30
Dimension Three
One of the most significant failures of when business strategies are aligned
modern management is its focus on with correct principles.
strategy and planning without consid-
ering execution. To succeed, organiza- The sum of individual efforts rarely even
tions must develop management sys- approximates the effective alignment
of the pieces into a single integrated
tems that align work and behaviors with
whole. Creating value for customers is
principles and direction in ways that are
ultimately accomplished through the ef-
simple, comprehensible, actionable and
fective alignment of every value stream
standardized. We call this Principle-
in an organization.
based Strategy Deployment. Individ-
ual leaders cannot develop individual Principle
approaches to management without in- Create Constancy of Purpose
troducing massive waste into an orga- Almost every aspect of any organiza-
nization. tion is always in a constant state of
change. Customers change, custom-
Strategy deployment requires a man- ers expectations change, competitors
agement system built around scientific change, markets change, technology
thinking, with more emphasis on cycles changes, leadership and management
changes, processes change, products
of learning than on perfect plans. It is es-
change, strategies change, even values
sential to establish effective communica-
or the implied meaning of those values
tion, a process for gaining consensus,
change. Even knowing this, the first of
clear accountability and systems where
W. Edwards Demings 14 Points is to
execution and countermeasures are create constancy of purpose. How is
planned and tracked, whether through this possible?
PDCA or a similar methodology. In es-
sence, operational excellence is the defi- Purpose, at the highest level answers the
nition of successful strategy deployment question: Why does this organization
32
exist? It is incumbent upon leaders to changes in the national constitution. Or-
find agreement on philosophical and ganizations that frequently redirect phi-
strategic direction that provides a uni- losophies and strategies fail to recog-
fying vision. This sense of direction helps nize the tremendous waste associated
people keep their eyes on the horizon with instability, fluctuation and, perhaps
so that when tactical decisions require most importantly, the loss of human
a temporary detour, they understand commitment.
why and can contribute to getting back
on track. Principle Think Systemically
Systemic thinking is the principle that
The second category for where con- unifies all the other principles of oper-
stancy of purpose can be achieved is ational excellence and enables organi-
in the establishment of the guiding prin- zations to sustain their culture of con-
ciples upon which the organization is tinuous improvement and develop a
grounded. Principles are universal, time- constancy of purpose.
less and self-evident laws that govern
the consequences of our actions. The Systemic thinking requires organizations
degree to which principles are adhered to both analyze and synthesize. Analy-
will always impact the long-term success sis, or convergent thinking, is focused on
of any organization. Leaders must come taking things apart to see what can be
to understand which principles have the learned from the various components.
greatest impact on their results and then We call this looking into things. Con-
make certain every aspect of the organi- vergent thinking is what leads us to focus
zation is aligned to drive behavior that is on the how. Synthesis, or divergent
in greatest harmony with the principles. thinking, is focused on seeing how things
might work together. We call this looking
Having established direction and guiding out of things. Divergent thinking is what
principles, a leader must align strategy leads us to focus on the why. Opera-
and performance metrics broadly and tional excellence requires both.
deeply into the organization. A system
must be built to ensure constant com- Leaders realize that the impact of syn-
munication, both up and down. ergy how things work together is
far greater than the sum of the parts.
Changes in direction, guiding principles As managers design and align systems
and key metrics should be treated like with correct principles, they must shift
34
bonus cut-offs. In conjunction with taking empowering the organization through
care of the short- and medium-term cascading levels of detail to achieve
priorities, thinking in terms of 20- to 50- those objectives. Because so many
year legacy goals significantly reduces people are involved, clarity is critical. An
the tendencies for knee-jerk reactions aligned strategy helps keep everyone,
to urgent pressures. literally, on the same (single) page and
pointed in the same direction.
Supporting Concept
Supporting Concept
Align Systems Supporting Concept
Align Systems Supporting Concept
Standardized Daily Management
From the stakeholders perspective, Standardized Daily Management
the full potential is realized only when The concept of having some level of
most critical aspects of an enterprise detailed work description for how to
share a common platform of principles
actually do daily work applies at all levels
of operational excellence, management
of the organization. Regardless of the
systems and tools. While it is expected
perception among many leaders, their
that organizations develop some unique
work can and should be organized into
elements of their local culture, it is also
standard components.
expected that principles become a
common, unifying part of each locale.
Standard daily management creates a
Top-level leadership, staff and business
reference point from which continuous
processes should exemplify the same
improvement can be based. Standard
principles, systems and tools as do
daily management can lead to greater
the operational components of the
enterprise. process control, reduction in variability,
improved quality and flexibility, stability
(i.e. predictable outcomes), visibility of
Supporting Concept abnormalities, clear expectations and a
Supporting Concept
Align Strategy
Align Strategy platform for individual and organizational
Policy deployment is a planning and learning. Standard daily management
implementation system, based on enables creativity that is focused and
scientific thinking, employee involvement controlled rather than ad hoc.
and respect for the individual. At the
strategy level, policy deployment provides Leaders who follow standard work send
leadership with the necessary principles, a clear message that they are serious
systems and tools to carefully align key and no one is above continuous
objectives and execution strategies while improvement.
Leaders All leaders share a common, clear and compelling vision of the
future and talk about it in a consistent way everywhere they
go.
Leaders create and consistently execute a system of catch
ball to present ideas on strategy down and across the organi-
zation, receive feedback and build organizational consensus.
Leaders establish a simple system of metrics and account-
ability that aligns and prioritizes the work, decision making and
improvement efforts of the organization.
36
Dimension Four
38
values are what ultimately drive indi- So, the dial is the speedometer. What
vidual behaviors. Leaders are respon- moves the dial? Pressing on the gas
sible for creating the environment and pedal. Why does this work? Because
the process for people to evaluate the there is a physical linkage from the pedal
correctness of their own values relative to the engine to the axle. There is a clear
to the performance results required of cause-and-effect relationship.
the organization.
Organizations must follow the link-
One business set a goal to reduce cus- ages to determine the cause-and-ef-
tomer complaints only to find that as fect relationships and how goals can
they did, they began to lose valuable be achieved. This is the same concept
customers. The measure was driving as root-cause analysis but applied to
behavior that made complaining such a creating value.
painful experience that they just stopped
calling. A better measure might have
been to increase the number of com-
plaints so that every single disappoint-
ment is given an opportunity to be re-
solved.
Supporting Concept
Supporting Concept
Identify Cause Relationships
and Effect
Identify Cause & Effect Relationships
When we want to make a car go faster,
we simply press more on the gas pedal.
The following table provides examples of ideal behavior for leaders, managers and associates. The list is intended
to provide examples of ideal behavior that flow from this single guiding principle and should not in any way be
Managers All managers implement systems that place value creation and
waste elimination at the heart of management and improve-
ment efforts.
Managers routinely discuss with associates the relationship
between actual results and the systems and principles that are
creating them.
Managers make sure that established metrics are aligned
upward and side-to-side and are understood and committed
to by the people who affect them, so people can see instantly
where they are relative to the targets and they know how to
move the dial.
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Scope of Transformation
Warranty Testing
Product/service development
Business processes
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Many, if not all, of these management
Supply support processes are fundamentally
non-value-added in a pure lean sense;
Supplier selection and qualification that is, the customer would not pay
extra for these. However, some part of
Supplier development and partnering each process is necessary non-value-
added work that is currently vital to the
proper functioning of the organization
and the eventual effectiveness of the
Administration value-added processes, (i.e., a company
needs to pay taxes), but the customer
Recruiting doesnt necessarily get value from the
process. Applying the principles to these
Compensation and benefits processes will help to make sure that
they are completed as quickly as pos-
Training and employee development sible with the fewest possible resources.
Asset management
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Summary
Operational excellence is the vision that compete with anyone in the world. Some
many organizations have established to use the Shingo model for all of the above.
drive improvement. Programs, names,
tools, projects and personalities are The real Shingo Prize, however, is
insufficient to create lasting change. Real the business results that come from
change is only possible when timeless the relentless pursuit of a standard of
principles of operational excellence are excellence that is, without question,
understood and deeply embedded the most rigorous in the world. Those
into culture. The focus of leaders must who use the Shingo model will embark
change to become more oriented toward on a journey that will accelerate the
driving principles and culture while the transformation of their organization into
managers focus becomes more on powerful, dynamic, nimble competitors.
designing and aligning systems to drive
ideal principle-based behavior. No obstacle affordable healthcare,
efficient transportation, emerging
The ultimate mission of The Shingo Prize global environmental concerns will be
for Operational Excellence is to assist beyond the reach of those who embrace
organizations of all kinds in building principles of operational excellence.
operational excellence. The Shingo Leaders must make certain that every
model may be used as a benchmark person deeply understand the principles
for what excellence at the highest level that govern the consequence of their
should look like. It may be used to align behaviors.
all elements of an organization around a
common set of guiding principles and a Principles of operational excellence
proven methodology for transformation. are the only foundation on which
Some use the Shingo model as the organizational culture can be built with
basis for organizational assessment confidence that it will stand the test of
and improvement planning. A few use time. Cultures built on principles and
the Shingo model as a way to recognize eliminate much of the normal variation
their associates for excellent work, and of business and, to a large extent,
others use it to demonstrate to current become more predictable in their ability
and prospective customers that they can to execute on business strategy.
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THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCE
Jon M. Huntsman School of Business
The Mission of The Shingo Prize is to create excellence in organizations through the
application of universally accepted principles of operational excellence, alignment of
management systems and the wise application of improvement techniques across
the entire organizational enterprise. We do this by teaching correct principles and
new paradigms that accelerate the flow of value, align and empower people, and
transform organizational culture.
http://www.shingoprize.org/
We wish to thank various people at The Shingo Prize for Operational Excellence
and the Jon M. Huntsman School of Business who made up the team that
provided scholarly work, ideas that significantly enhanced the clarity of the model
and guidelines, and the content editing. Those most closely involved with the
project include: Robert Miller, Jacob Raymer, Randall Cook, and Shaun Barker. A
special thanks to Brian Atwater for his contribution regarding systemic thinking,
especially the idea to create a systematic process model. We would also like to
thank the members of our Board of Governors who provided practical insights
and critical feedback through the years as the Shingo model evolved. Finally,
each time we teach a course we receive valued input and ideas from our Shingo
affiliates, whose expertise and friendship we truly value.
AL
AF
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RESULTS Culture
(Behavioral Evidence)
SYSTEMS
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NE
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AC
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HI
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TOOLS
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THE SHINGO PRIZE
for OPERATIONAL EXCELLENCE TM