Benchmarking for Lean Six Sigma Businesses or Processes for Projects

In 1912, Henry Ford of The Ford Motor Company watched men cut meat during a tour of a Chicago slaughter house. The carcasses were hanging on hooks mounted on a monorail. After each man performed his job he would push the carcass to the next station. Less than six months later, the worlds first assembly line started producing Magnetos in the Ford Highland Park Plant. In other words the idea that revolutionized modern manufacturing and automotive history was imported from another industry.

Benchmarking is simple as a concept but much more involved as a process. The ultimate payoff is that you can become the best of what you do, and continuously improve upon that superiority.
Benchmarking is a means of identifying best practices and using this knowledge to continuously improve our products, services, and systems so that we increase our capability to provide total customer satisfaction.
Today our performance is not of the same world-class standard as a benchmark business. The delta is the competitive gap
Benchmarking and improving our business as a result means a surge in business performance and a Competitive Advantage.

Key Point: Do Not Just Copy, Adopt and Adapt and then Advance

Define Performance Objectives:

What does it mean to Define Performance Objectives?

A performance objective is a statement of your projects output performance level that will satisfy the project Critical-To-Quality CTQ(s). It is the projected reduction in defects you plan to achieve for your process or product. Typically, this is stated in terms of defects per million opportunities (DPMO) reduction and a corresponding target Z-value. In the Lean Six Sigma Measure Phase, you determined the current process performance. In the Analyze Phase you will state what the end results of the Lean Six Sigma project will be by statistically defining the goal of the project. In addition, an estimate of financial benefits is due in Analyze.

Why is it important to Define Performance Objectives?

It is important to identify your improvement goals in measurable terms in order to define the level of improvement you wish to achieve and provide a focused target toward which you can direct your efforts.

If I benchmark, performance standards are based upon:

Closing the gap with the competition
Exceeded projected competitive performance
Similar performance in dissimilar businesses
Gathering best practices from multiple sources to become best in class
Becoming as good or better than a substitute product/service

If I do not benchmark, performance objectives are based upon:

For a process with a 3 Sigma Quality level or less, decrease percent of defects by 10x and for greater than 3 Sigma Quality level, decrease % defects by 2x
If your process is in statistical control (Run Chart or Control Chart), the next improved performance objective comes from a capability investment as in facilities, equipment, digitization, etc.
Corporate mandate
Compliance/legal
Voice of the Customer (VOC) data

Key for best results:

Be creative and think out of the box
Consider all organizations, not just corporations
Review all sectors such as Private, Public and NonProfit
Study domestic and International organizations

Benchmarking is the process of continually searching for the best methods, practices and processes, and either adopting or adapting their good features and implementing them to become the best of the best.

Key Point: Benchmarking is a continuous process of measuring products, services, and practices against the toughest competitors and/or those companies renowned as the leaders

Example: In the 1980s the Remington Rifle Company, a division of giant DuPont Corporation, had a technical issue it was struggling with. Market Research showed that customers wanted the shells of the bullets to be shiny. Plant Managers pay little or no attention to this CTQ, after all Remington had been making quality guns for a very long time. Nearby the plant in Arkansas was a Maybelline cosmetics plant that produced shiny lipstick cartridges about the same size and shape of the rifle shells. Remington realised that the company may have useful information to impart and made a site visit. And thus the problem was solved.

Benchmarking is:

A continuous process
A process of investigation that provides valuable information
A process of learning from others; a pragmatic search for ideas
A time-consuming, labor-intensive process requiring discipline
A viable tool that provides useful information for improving virtually any business process

Benchmarking is not:

A one-time event
A process of investigation that provides simple answers
Copying, imitating
Quick and easy
A buzzword, a fad

How is Benchmarking Used?

Compare performance of an existing process against other companies best-in-class practices.
Determine how those companies achieve their performance levels.
Improve internal performance levels.
A performance objective is determined by using Zbench, short-term, benchmarking, or defect reduction goals.
Benchmarking is a process of identify best practices, measuring our own practices against those best practices, and adapting the appropriate best practices to our own processes.
Revenue & cost implications are also due for benefit analysis.

Four Ways a Condo Warranty Can Benefit You

We have all had a dishwasher that puttered out or a washing machine that sat idle with clothes floating in a well of water. Fixing creaky old appliances can be costly, and it often seems there is no way of avoiding such expenses. However, many owners and renters have found a solution: purchasing a condo warranty.

Unlike insurance-which covers natural disasters, calamities, and theft-a warranty is a service contract that, among other things, covers major appliances for members of a condominium. These warranties are specifically designed to work within the existing support structure and services provided by your association, so you only pay for the protection you need. Here are four ways a condo warranty can benefit you.

Covers Major Home Appliances and Systems

While the definitions of major systems and appliances may vary from policy to policy, a condo warranty will typically cover HVAC, plumbing, electrical, hot water heaters, garbage disposals, dishwashers, stoves and ovens, washers and dryers, and garage doors. Refrigerators are often covered when they are in the property at the time of purchase. This can be even more beneficial in the event that a retailer or chain goes out of business and/or any coverage you have on the product lapses.

Enhances Market Value

Condo warranties are, in general, cost-saving tools when it comes to maintenance. However, they can also be an enhanced benefit in a competitive seller’s market because they increase a unit’s marketability. According to the National Home Warranty Association, units on the market that covered by warranties tend to sell about 50 percent faster than homes that are not.

Protects from Potential Post-Sale Legal Disputes

Warranties generally protect the condo’s seller from post-sale legal disputes. They allow for the purchaser to invest with confidence, as they are given more security than what is offered by a statute of limitations, which, in most cases, only lasts four years. On the flip side, sellers can avoid legal disputes based on faulty or dysfunctional appliances and systems because they are covered. Of course, reviewing the fine print for specifics is always highly encouraged before purchasing a property.

Provides Peace of Mind

Out of the nine most crucial appliances in the home, at least one is expected to break down at some point in its 13-year average lifespan. A new buyer is assured some peace of mind in knowing that if something goes awry with any of the condo’s major appliances or systems, they will likely be covered by the warranty.

Why You Need Liability Coverage From Your Insurance Company

Designed to cover professional practitioners against claims of negligence made by clients or patients, professional liability insurance goes by many names. When used in the medical profession, it is commonly called medical malpractice coverage. Notaries public also require this security, but they refer to it as errors and omissions insurance. Real estate brokers, management consultants, and even website developers are all eligible for protection.

What’s It For?

Insurance is used to protect people in case something unfortunate happens. Auto policies protect them in the event of an accident; medical policies protect them from unexpected illnesses; commercial policies protect them from a number of mishaps. If there is a fire, theft, or an accident on the job, the commercial variety will cover it.

Why You Need It

Few companies are fortunate enough to survive for a protracted period of time without getting sued by a client, customer, or employee. Liability coverage from an insurance company is the only shield most businesses have against litigious attorneys. This goes double when an employer competes in a risky industry like construction. Why?

A construction site is arguably the most dangerous working environment on earth. Not because people are careless, but because making something, anything, is risky. Workers fall down stairs; they trip on cords; they cut themselves. Builders must assume this risk and purchase the right amount of coverage from their insurance company to protect them from financial ruin. But that’s not all.

These policies not only shield the employer, but they also safeguard his workers. If an electrician falls off a ladder or a carpenter cuts himself, a liability policy will pay his medical bills. Commercial coverage will also cover most attorney fees and court costs if someone files a suit against you.

How Much Do You Need?

As you might expect, the size of the policy often depends on the size of the business. Most actuaries recommend at least one million dollars of professional liability coverage for small businesses. Large businesses and corporations obviously need a lot more and often carry huge policies. Because lawsuits are quite common in the medical profession, malpractice insurance is the most common form of liability coverage.

Most doctors have several million dollars of malpractice coverage at all times. When they work in a large practice, that figure might be five or even ten times as high. Lawyers and accountants must also carry liability because of the high rate of litigation in their fields. But what about everybody else?

Numerous Benefits

Any business that can be held financially responsible for failing to complete a project on time may need to purchase a professional liability policy from their insurance company. This includes general contractors, architects, builders, and many, many more. These policies also cover personal injury, breach of warranty, intellectual property, and security. In short, any company that has more than one employee should have liability coverage.

Don’t Invalidate Fire Insurance

Don’t invalidate your fire insurance policy.

I find this a very strange case but it just shows how important it is to read the small print as if you ignore the conditions of the policy your policy could be invalidated.

In this case it was a condition of the FIRE insurance that the SECURITY Alarm was maintained and monitored. Times had been tough for the insured and he let the maintenance of the security alarm lapse and as the ARC had not been paid for 6 months they stopped monitoring the site.

Vandals broke in and set fire to the factory. It was a furniture company and they incurred losses of over £750,000.

The case went to the High Court, the judge had nothing but sympathy for the Directors of the Company and he took ‘no pleasure’ in ruling that as it was a condition of the combined insurance policy that alarm was to be monitored by an external firm, the Insurers did not have to meet the claim.

There are often conditions attached to the insurance policies we take out which relate directly to the risk. We need to make sure our cars have valid MOTs in order not to invalidate the policy. We are required to notify the insurance company if we get a speeding fine but, to my mind oddly, you do not have to tell them if you decide to do the Speed Awareness Course rather than pay the fine.

I have just come across a case, now in front of the insurance Ombudsman, where an insurance company voided the policy and returned all the premiums because the policy holder had unwittingly exceed the value of the ‘valuables’ within their contents insurance. They had insured the contents of their house for £60,000 but there was a clause stating that the value of the valuables should not exceed 66% of this.

They had to rush their daughter to hospital, and while they were out the thieves struck taking goods and damaging the property to the value of £70,000. When assessing the claim the loss adjusters calculated that the value if the valuables in the house exceeded £40,000. Normally claims would be ‘averaged’ to reflect the under insurance, but the insurance company in this case argued that the under insurance voided the policy. As I said this case is in front of the ombudsman as I write.

Back to case in hand where a fire insurance claim was dismissed as a security alarm and monitoring were allowed to lapse. Clients of ours run a hotel and there is someone on reception all the time so if the fire alarm is activated there was always someone on duty to respond. We came round to the time when the annual contract with the ARC [monitoring station] needed to be renewed. The Hotel Manger wanted to cancel it as it was considered an unnecessary expense. I said I agreed but asked him to check with his insurers to make sure they had no objections. The Insurers confirmed; monitoring was a condition of the policy.

Often with in the insurance policy there is a clause that the fire alarm is maintained in accordance with British Standards. It would be interesting to know whether a similar claim has been dismissed as the Fire Alarm has not been adequately maintained.

Core Agency Values – What Are They and Why Are They Important?

Let’s begin with the question; why are agency values important? Agency values are important because they will likely determine the success or failure of your agency. Now that gets my attention.

Whenever the success or failure of a business venture rests on one concept, it warrants the time and effort to understand what’s behind the question; what focus or concept do we believe will best produce the result we desire. So, one might ask; just exactly what are some agency values.

To begin, Values are what drives effort and effort is what produces results, good or bad. Effort in the wrong places seldom produces the right results. So there are really two things here that are important-Effort and Direction. While both are important, Effort comes first-you gotta have some before you can direct it. Today we are only talking about Effort, Direction is for another day.

An example of how values drive Effort is often and most visibly played out in sales. A lot of sales activity (Effort) often produces more sales but possibly not the right sales (Direction). Now here is the exciting part-You can really, control your effort by choosing the right Values and matching the talent of new hire to those Values. The key here is to understand that people work to satisfy their values, not yours and don’t try to put into someone something that is not already there. All that boils down to looking for and hiring people who have values that match the agency needs.

So now it is beginning to get clear. Why do we want to know your agency values? Answer; so you can hire people with values similar to those of our agency. Now what are some agency Values of importance?

1. Theoretical Values- those who value knowledge and continuous learning or intellectual growth.
2. Traditional Values- those who value the tradition inherent in social structure, rules, regulations and principals.
3. Utilitarian Values- those who value achievement, results, and rewards for their investments of time, resources and energy.
4. Individualistic Values- those who value personal recognition, freedom and control over their future and the future of others.
5. Social Values- those who act to enhance the well-being of others.
6. Aesthetic Values- those who pursue a balance in their lives, who are creative, self-expressive and have a love for beauty and nature.

And here is the real important stuff, after 40 years of research and working with agencies, of all sizes, we know the values most likely to produce success in any situation.