the dva business process - weebly

11/1/17

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TheDependency Variability Analysis

Business Process

Kevin KohlsPresident – Kohls Consulting

www.kohls-consulting.com

© 2017 Kohls Consulting

The DVA Business Process

• This presentation will address some of the false assumptions in business processes that have become obstacles to many continuous improvement efforts


The DVA Business Process

• It can be applied to many areas, but my consulting efforts focus on Throughput, Lead Time, and Inventory, while leveraging Throughput Accounting–This presentation will focus only on Throughput


Current Problems• LotsofEffort• Notenoughresults thatmakeadifference• OrdersLatetoCustomers- again• Too much inventory inthewrongplace• No inventory inhighdemandpositions• Prioritiesconstantly changing• Finger pointing andblame• Everything’s“Hot”• Constant firefighting• Chaosandconflict

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Trigger Results

BusinessProcess

Astable systemgivesrepeatable results

A Business Habit

☹

😃© 2017 Kohls Consulting

Trigger ResultsAstable systemgivesrepeatable

results

☹

Your Current, Poor Results caused by

Crisis is a Business Process


Trigger Results

Dayx + nLateagainToomuchs tockfor mostNos tockforothersFingerpointingPriority’s changedagainEverything’s “Hot”Constant firefightingChaos

Dayx + 3LateagainToomuchstockformostNostock forothersFingerpointingPriority’s changedagainEverything’s“Hot”Constant fire fightingChaos

Dayx + 2LateagainToomuch stockformostNostockforothersFingerpointingPriority’schangedagainEverything’s“Hot”ConstantfirefightingChaos

Dayx + 1LateagainToomuchstockformostNostockforothersFingerpointingPriority’schangedagainEverything’s“Hot”ConstantfirefightingChaos

DayxLateagainToomuchstockformostNostockforothersFingerpointingPriorities changedagainEverything’s“Hot”ConstantfirefightingChaos

Astable systemgivesrepeatable

results

What’s the wrong with the Existing

Business Process?


Decisions made in the Business Process Routine happen in a small window of time for most managers.

Constraint – Manager’s Time

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Constraint – Manager’s Time

• During this “thin slice” of time, Manager’s “manage”– Priorities– Resources• Engineers, Skilled Trades, IT, etc.

– Budget– Headcount– Resolve Conflicts– Lead, Teach, Learn– Etc.

Limited Resources


ALL ofthethingsdemandingamanager’stime


Whatmanagersactuallyattempttogetdone

The‘ThinSlice’• SetPriorities• AllocateResources• ResolveConflicts• MakeDecisions• ProvideDirection

Whatmanagersgetdone

ALL ofthethingsdemandingamanagerstime


The Illusion of Control• The lack of time drive managers to take actions they

believe will resolve the short term crisis– Do What it Takes!– Take Heroic Actions– Everyone Must Work Harder!– Everyone Must Be Busy and Efficient– Demand Improvement!– Rely on Past Experience & Knowledge to make Decisions

• Putting out today’s fire, only insures that there will be another one tomorrow...

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Constraint – Manager’s TimeCRISIS

(of the Day)

IllusionofControl

DayxLateagainToomuchstockformostNostockforothersFingerpointingPrioritieschangedagainEverything’s“Hot”ConstantfirefightingChaos

Manager’s Decisions don’t actually control the Results. Rather, they ensure the Results will be the same with each loop.

Manager’s HOPEthat the Results Tomorrow will be

different than Today


Trigger Results

DVABusinessProcess

Dayx + nDemandMetToomuchstockformostNostockforothersFingerpointingPriority’schangedagainEverything’s“Hot”ConstantfirefightingChaos

Dayx + 3DemandMetToomuchstockformostNostockforothersFingerpointingPriority’schangedagainEverything’s“Hot”ConstantfirefightingChaos



Dayx• DemandMet• OnTime• NoStockOuts• NoOverstocks• ClearPriorities• Problemsareidentifiedinthefuture

• Collaboration&Teamwork


results

Regular meetings

to address future Crisis

Desired State


RewardImprovedThroughput

TriggerWeeklyMeeting

FocusedRoutineDVABusinessProcess

• Objective: Clear & Concise• Quantifiable Metric• Necessary Conditions not

compromised

Predicts Future Performance

Team averts crises, Throughput

improves


RewardImprovedThroughput


BottleneckFocusImproveBottleneck

Analysis

FocusedRoutine

• Objective: Improve Throughput to meet Demand

• Metric: Jobs per Day• NC: Safety

FocusedRoutineDVA

BusinessProcess

Team empowered, has strong lever to

set priorities, improve systems,

and get results

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Dependency

Variation

FocusBuffer

Predict

Improve

Target

Actual

Trigger Results

Analysis

Goal&Metrics


Hopium Paradigm:ComplexMissionstatement,SiloEfficiencies,andtheHot,Hotter,andOh,Shitparadigm.

DVA Paradigm: The unifying Purpose of the company that resolves conflict helps establish teamwork and establishes trust

System Metrics – Throughput, Inventory, Lead Time, Operating Expense

Goal&Metrics

% % %

Hottest!

Oh, S4!T


Dependency

OrganizationoftheManagersoftheSystemthatproducesourProduct

Hopium Paradigm:Managersmanagetheperformanceofthelinksinthesystem

DVA Paradigm: Manage the result of the system, which is dependent on the performance of the links


Hopium Paradigm:Everylinkshouldperformaspredicted.Workshouldbebalanced.Novariationisallowed.

DVA Paradigm: The performance of each link will vary over time. Work can not help but be unbalanced in execution. Variation exists.

Variation

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Hopium Paradigm:Let’slookathowwearebeingmeasuredtodeterminewhatweshouldworkonnext.Purple?

DVA Paradigm: Here are the results of the weekly analysis that predicts the impact of fixing the issues at the bottleneck link, Light Blue.

Analysis

IncreasedJPH

Demand


Hopium Paradigm:Everything’sALWAYSLate-What’stheBIGGESTcurrentcrisisoftheday?(Reactive)

DVA Paradigm: A Predicted Crisis triggers Problem Solving, but they occur less frequently and can be addressed with minimal conflict and chaos

Predict

P-1002EO-004

P-1001P-1002MO-003EO-004SO-005


Hopium Paradigm:Takeyourbestguessatwhat’sthehighestpriority– mostlate,volumeofshouting,biggestcustomer,etc.

DVA Paradigm: Analysis creates focus areas for Managers to improve through problem solving

To Do List for “Precious” Resources

FOCUS! Secondary

Focus


Hopium Paradigm:Buffersarewasteandshouldbeeliminatedinallareas.Thegoalistoeliminateallvariationandwaste.

DVA Paradigm: Buffers absorb variation (that always exists) and protect the bottleneck, increasing throughput. Buffers that improve throughput are considered “profitable waste.”

There are three types of buffers – capacity, time and inventory.

Designing Buffers into your systems in a critical part of the Analysis Step

Buffer

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Hopium Paradigm:Constantlychangingprioritiesasmanagementandleadersfightoverresources.Multi-taskingcausewasteandmakeimplementationtimedragout.

DVA Paradigm: Clear priorities with minimal multi-tasking.

To Do List for “Precious” Resources

FOCUS!

Improve

Hopefor

0

50

100

150

200

250

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350

1 2 3 4 5 6 7 8 9101112131415161718

Get Improvement

Deeper Dive?© 2017 Kohls Consulting

Hopium Paradigm- DESIRED:Ifyoumandateimprovementeventstobeheldforeveryarea,theywill beheld,andsystemwideimprovementswill result

QuarterlyReviewonCIMetrics

Quota&MetricsMet

Setup&ExecutePlantomeetQuota&Metrics

Hopium Paradigms Extend to the Continuous Improvement “Habit”

Costsarereduced,profits

increase


QuarterlyReviewonCIMetrics (Most,Many,Some)

Quota&MetricsMet,butprobablynotintheBottleneckarea

SetupPlanforeachareatomeetQuota&Metricswith

strongincentives

Hopium Paradigm Realization forContinuous Improvement “Habit”

Systemasawholefailstomake

significantbusinessimprovements

Make“incentives”

bigger

Takepartofmanager’s

“ThinSlice”toExecutePlan

Crisis&HotJobsconsume“Thin

Slice”

Fail to Improve, Bottleneck --Fail to improve the System

%% % % % % %

%%

%

Hottest!

Oh, S4!T

The Bottleneck is always the

busiest resource! It always has something to work on and

somewhere to put it!

OR, Throughput goes down while Metrics are met!


Starting List (New)

Addicted to Hopium

Availably of Limited

ResourcesPredicted Result?

All of the Things the Manager of the

Limited Resources has to Accomplish

Hopefor

%% % % % % %

%%

%

EachGroupNeedstoShowImprovement

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DVA Paradigm: If you focus your resources on the right areas, you will improve throughput, reduce lead times, reduce inventory and improve on-time performance.

RewardImproved__________




results

Designing the DVA Business ProcessContinuous Improvement “Habit”


Here

Goal & Financial

PerformanceThroughput

LeadTime

Inventory

OperatingExpense

DVA Paradigm: Establish a focused routine that is directed at key factors that will lead to profitability and the goal.

The DVA Process That Gets There

It’s no longer a Thinking Process, but a Doing Process for Organizations





results


Solution: Addicted to Success

Thin Slice Likely ResultTo Do List ImpactAnalysis

Dependency

Variation

Analysis

0

50

100

150

200

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1 2 3 4 5 6 7 8 9101112131415161718


Implementation





results

TakeyourThinSliceand:• Champion Implementation• Learn andparticipate

• EnoughtoBelieve• Prioritize beingpartof

Routine• Prioritize removing

obstacles• Reinforcethismethod

insteadoffailingbacktotheoldmethods

Expert• Teach• Assure Belief• Pilot• Implement DVA• Find and fix DVA Obstacles• Move from Lead and Teach

to Support

Team• CommittoTraining• CommittotheRoutine

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Entrenched Routine





results

TakepartofyourThinSliceand:• Allocate Resources• ResolveConflicts• ProvideDirection• FollowRoutine– don’t

makeyourselfa“specialexception”

Expert• MovefromInternal

SupporttoPeriodicOutsideSupport

Team• RunRoutine• Strivetoincreasespeedof

routine,minimizetimerequiredinManager’sslice

Are You in a Hopium Paradigm?

You are part of a system that manages:• Links, hoping improving each one

will lead to system improvement• Hope those links have little or no

variability.• Only requires your current

organizational knowledge and experience to operate and improve

And You Get Repeatable Results:• Constant Crisis• Fix Everything Mentality• Constantly shifting priorities• Improvement Process that stops

and starts• Minimal Long Term Improvement

Do You Want to Move to a DVA Paradigm?

You are part of a system that manages:• A System, whose performance is

dependent on the performance of its links

• And those links have variability.• The system is complex enough to

require analysis

You want that analysis to help you:• Proactively Predict a Problem• Create a focus point for your

limited resources• Allow you to set priorities for your

improvement process• Drive results, and establish an

entrench routine


Awarding-winningauthorKevinKohls’has

publishedthefirstofthreebusinessnovelsint

he

“AddictedtoHopium”series.Thisbook isfocused

onThroughput,andrevealshowtocreateand

sustainanimprovementprocessfocusedon

improvingthroughput tomeetthedemandof

successfulproducts. Itnotonlytakesafreshloo

k

atimplementingamethod toanalyzeandimprove

throughput,butalsoincludescomponents that

willallowthemethodtobecomea“habit.”These

designedhabitsallowtheprocesstobe

maintainedovermany,manyyears,survivingthe

lossof“processchampions”andthedamagethat

comeswithManagementChurn.

Kohls introducesreaderstotheDependency

VariationAnalysis(DVA)model,whichisused

asthebasisforthisbook. DVAcombinesthe

TheoryofConstraints,simulation,thedesign

ofahabit,andelementsofmotivationintoa

simpleexecutionprocessthatyieldsboth

short- andlong-termsustainableresults.

AddictedtoHopium followsfictionalcharacterAndrewWright,anemployee

ofMegaCo Manufacturing,ashestrugglestomeetthedemanding

requirementsofanew,possiblecustomer.Thecustomerisnotonlylooking

foracommitmentfromMegaCo tomaketheirdemand;heisaskingthemto

proveit throughtheuseofananalysis.Thecust

omerinsiststhatthisanalysis

takeasystemviewpointandincludevariation.ButMegaCo isaddictedto

Hopium.Theymakewhateverpromisethatisneededtogetthepurchase

orderandthenhope theycanmakethatpromise.Whichtheyrarelydo.How

canAndrewbreakthisaddictionandhelpMegaCo securethecontra

ctand

keeptheirpromise?

Aformerautomotiveexecutive,Kohls’premierexampleistheThroughput

ImprovementProcess,whichhedevelopedatanassemblyplantin1987.

Surprisingly,thisprocessisstillinplacethirtyye

arslater,becomingnotonly

thetemplateforcurrentproduction improvement,butthebasisforde

signing

andvalidatingfuturesystemsacrossthisglobalauto

motivemanufacturer.

Addicted to Hopium- Throughput

Kevin Kohls

Using the DVA Business Process

to Break the Guesswork Habit

Kevin Kohls

Throughput

Addictedto Hopium

To find out more about DVA, and how to improve Throughput, pick up a copy of Addicted to Hopium – Throughput on Amazon.

Contact us directly at:[email protected] or248-931-1959

www.kohls-consulting.com

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