MasterControl Revs Operational Excellence Using Six Sigma

The de facto standard for excellent business operations is Lean Six Sigma. Only five years ago you could not say that. But today, in every industry and every geography, companies have determined that the principles and practices of Lean and Six Sigma are the world-class standard for designing, configuring, improving, and controlling business.

• Lean-with its recent Far East heritage-embodies the operational, cultural, and leadership philosophies which center all work on increasing customer value while reducing waste. It employs practices that purposely bring process waste to the surface, so it can be actively identified and eliminated by everyone in the organization.

• Six Sigma originated in large, U.S.-based corporations, like Motorola, Honeywell, and General Electric. It brings scientific rigor to operations management and quality improvement,providing tools to define key process metrics; accurately measure their performance; analyze, quantify, and prioritize process input-output relationships; develop targeted improvements; and then implement controls to maintain the gains achieved.
• Lean Six Sigma is the synergistic-or, in the worst cases, opportunistic-combination of the principles, tools, and methods of Lean and Six Sigma.

In a better-late-than-never move, ISO published 13053-1/2:2011, "Quantitative methods in process improvement - Six Sigma - Part 1: DMAIC/Part 2: Tools and techniques." This further confirms Six Sigma and Lean as the standards for global operations.

In good times, any operations approach works well enough. But in today's economy, "good enough" is no longer good enough. Companies striving to be world-class are standardizing on Lean Six Sigma because it has created the process performance improvements and efficiencies required for consistent business success. The track record of Lean Six Sigma has advanced it beyond its predecessors of TQM, theory of constraints, business process reengineering, and the like.

At MasterControl, we are applying Lean Six Sigma to increase the value we provide to our customers. At the same time, we are improving the quality of the products, services, and support we deliver. We are also reducing defects and waste in our operations. We call our Lean Six Sigma efforts our "Green Line Operational Excellence" program (GLOE), a name which recalls a challenge our CEO gave every employee to increase their capabilities and add more value each day.

MasterControl's Lean Six Sigma "house" showing the system of foundational, supporting, and capping principles, tools, and aims of their Green Line Operational Excellence program.

A cross-functional Kaizen team at MasterControl. From L-R: Craig Gygi, Dave Hunter, Jeff Parr, Maggie Hoff, Jon Beckstrand, Mike Hincks, Kevin Ballard, Colby Litnak, Lance Johnson.

Focusing on Our Customers: Adding Value, Reducing Waste

A steadfast core value of MasterControl is "customer success." This value stems from our belief that the product we sell is not software; instead, we see it as the end result of a successful customer, deriving value from what we have provided them.

Everything in MasterControl's GLOE program is targeted to increase the value we deliver to our customers. So we are programmatically looking at our customers, identifying their needs, and doing everything to address those needs and to provide them with more value.

To measure the value of our activities to our customers, we ask ourselves a progression of three key questions. If our answer to any of these questions is "no," then we re-think what we're doing:

• Is the process step (or task) you are doing going to change the form or fit of what you're delivering to the customer?
• Did you do the step-task correctly?
• Is the customer willing to pay for it?

One way of delivering more value is by reducing waste. So in our Green Line efforts we systematically look for waste in our work—waste that is obvious, waste that is hidden, and waste that we've simply grown accustomed to.

One of the simplest ways of identifying waste is to remind ourselves what it looks like and what forms it often takes. With our employees aware and searching, we're finding many aspects of our work and resources that could be better applied towards delivering value to our customers. At MasterControl we teach our employees to look for waste in seven forms or categories:

• Defects. When a process step is done incorrectly, it obviously is waste-you have to rework or scrap it, expending more resources to make up for the defective work.

• Transportation. When information or documents must be moved to continue the process, we know there is waste. Think of the three "value" questions that must be answered "yes" in order for something to have true value: transportation by itself definitely does not change the form, fit, or function of the item; so immediately you know that this activity must be waste!

• Waiting. Whenever a person or information or system sits idle, it is waiting. Like transportation, waiting does not add value and is wasteful.

• Inventory. Information in the middle of a process or finished documents waiting to be delivered are examples of inventory waste. These do not answer "yes" to the three value criteria questions. Inventory does not bring value to the customer and takes up valuable resources to maintain.

• Overproduction. Overproduction is when, in anticipation of a future need, we purposely produce more of an item than is presently needed. The problem with overproduction is that it always creates other waste like waiting or inventory. Even though it's tempting to get ahead, overproducing always creates more waste than it's worth.

• Motion. Movement or mouse clicks that are more than minimally required is waste.

• Extra processing. When you perform more work on an item than is needed, it is called extra processing and it is wasteful. Validating beyond a decided level of risk is a good example of extra processing.

Kaizen: Improving Each Day

Tackling improvement can be daunting. At MasterControl, kaizen organizes us so that we can make improvements that seem impossible at first by breaking them down to small pieces.

Kaizen is a Japanese term meaning improvement. It follows the classic Deming cycle of Plan-Do-Check-Act (PDCA) and parallels Six Sigma's Define-Measure-Analyze-Improve-Control (DMAIC) improvement project roadmap. In our Green Line program we use three kaizen approaches:

• Individual kaizen lets every employee ask what he or she can do to deliver greater value to the customer. This is something employees do on a daily basis.

• Departmental kaizen lets every department examine its processes and improve them. The frequency of this strategy depends on every department's needs.

• Cross-functional kaizen lets different departments come together to improve a process or solve an issue. We do one cross-functional kaizen every month at MasterControl.

Kaizen also lets everyone get involved in bringing about change. It's everyone's responsibility to help.

Kaizen Project Results

It's one thing to discuss theory and another to prove it works. Since beginning the Green Line program, we've made the following advancements at MasterControl:

• Order to fulfillment process: From two weeks to two minutes for orders from existing customers
• Point-to-point update process: From two weeks to 20 minutes for point-to-point software updates

We've completed other cross-functional projects with similarly valuable results, including better routing for specific customer questions, improved services RFQ turnaround times, to name a few.

MasterControl's Improvement Journey

Our Six Sigma program is still in its infancy. We'll continue to focus on our customers, eliminate waste, add value and improve each day as we practice Six Sigma's tenets. Look for an update in this newsletter on MasterControl's Green Line program in the next six months.

Craig Gygi serves as MasterControl's executive vice president of operations. He is a recognized quality industry leader and veteran of continuous improvement. He is a Master Black Belt, a bestselling Lean Six Sigma author, and a master practitioner, teacher, deployer, and developer-integrator of the methods of Lean, Six Sigma, Design for Six Sigma (DFSS), and business process management (BPM). Gygi is responsible for MasterControl's product development, quality assurance, technical support, information technology, services and product management functions.

Most recently, Gygi served as the principle consultant and managing director at CKGygi LLC, a firm he founded that specializes in assisting organizations implement Lean and Six Sigma methods, establish and measure critical metrics for key business processes and provide advanced analytical and quality engineering expertise for engineering, design, production and back-office projects and programs. He also served as director of aerospace quality and operational excellence at ES3 and as director of operational excellence at Fiji Water. Craig was the founder, president and director of software development for TolStack, Inc. With more than 18 years' experience applying and leading continuous improvement, Gygi is a recognized leader in the quality industry. Recently, he was instrumental in helping one of his clients win the 2011 Shingo Prize, considered the global Nobel Prize for operations. Craig received both a Bachelor of Science degree and a Master of Science degree in Mechanical Engineering from BYU. He may be reached at cgygi@mastercontrol.com.