Transforming your Historical Metrics to a Futuristic State

Transforming your Historical Metrics to a Futuristic State Forrest W. Breyfogle III CEO, Smarter Solutions, Inc. SmarterSolutions.com +1 512.918.0280 Forrest@SmarterSolutions.com Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com)

Observations When times get tough who is one of the first people to get laid off? Process improvement practitioner Why does this termination occur, since one would think that in tough times process improvement is needed the most? It appears that improvement practitioner efforts are often not viewed by senior leadership as important to the enterprise as a whole. Why is it that scorecards often indicate an improvement was made to only find that things then again worsen. Did we really make an improvement when a red-yellow-green scorecard transitioned from red to green? Shouldn t we be doing things smarter? What is really needed? What are the major business-management issues of leadership? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 2

Leadership Business Management Issues 1. Executive management receives a monthly 60+ slide PowerPoint deck or a huge excel file which nets out the status of the organization s performance metrics. This report, which took much preparation resource, has out dated information, can be difficult to interpret, and does not present information in an actionable format. Data are only historic and not timely presented with prediction statements. 2. Quarterly executive management reviews (EMR) are lengthy and questionable in value. EMRs consume much resource for both executives and presenters. Presentations could highlight the status of corrective and preventative actions (CAPAs), but an alignment to business performance metrics is often lacking. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 3

Leadership Business Management Issues 3. There is much wasted resources fighting fires and the benefits of process improvement efforts seem questionable. Issues of the day that are supposedly resolved only reoccur. Also, 100 million dollars in saving may have been reported but nobody can find the money. 4. Our organization is operating in silos where little regard is given to the big picture. Performance goals are set by function; however, what is right for one function might not be the best for another function and the business as a whole. What will be described is a system that addresses all four of these business-management issues. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 4

Learning Objectives At the conclusion of this session, attendees should be able to Describe conversion of common-place dashboard and KPI reporting to a predictive statement; e.g., table of numbers, stoplight scorecards, and time-series report-outs. Describe how up-to-date 30,000-foot-level predictive metrics can be reported throughout an organization. Describe how to focus improvement efforts to those 30,000-foot-level metrics that benefit the enterprise as a whole. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 5

Polling Question 1 What types of dashboards does your current or past organization use? (choose more than one type, if appropriate) Red-yellow-green scorecards Table of numbers Time-series reporting Predictive process performance reporting No performance metric tracking Don t know Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 6

Example Conversions of Dashboard & KPI reporting to Predictive Statements Red-yellow-green Scorecard Conversion Table of Numbers Conversion Time-series-plot Conversion Percentages in a Table Conversion On-time Delivery Graphic Performance Conversion Product Service & Performance Percentage KPI Graphic Conversion Tabular Effectiveness Reporting Conversion Graphical Annual Time-series Reporting Conversion Failure Rate Bar Graph Report Conversion Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 8

Red/Yellow/Green Scorecard Discussion Red/Yellow/Green visuals are the most popular concept in scorecards because of the stoplight relationship. Only compare the instantaneous performance to a set goal No insight into trends or historical performance If the goal is not a specification, they are often ignored. Is that a good behavior? Graphics found at http://download.oracle.com/docs/cd/e15051_01/web.111 1/b31973/dv_intro.htm Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 9

A Corporation s Red-Yellow-Green Scorecard Monthly S C OR E C AR D Business Unit Name CUSTOMER FINANCE Measurement Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 CUSTOMER Customer Metric 0.63574 0.653576 0.660404 0.732996 0.62521 0.708566 0.641873 0.727115 0.687201 0.6123 0.670894 0.6341 0.654525 A Yellow if equal to or 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 higher than 0.720 Green if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 Customer Metric B 1.866044 1.804823 1.777056 1.87373 1.791988 1.826504 1.824634 1.799849 1.822007 1.838969 1.87088 1.893155 1.894069 Yellow if equal to or 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 higher than 1.830 Green if equal to or higher than 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 Customer Metric C 0.82475 0.730724 0.627179 0.728212 0.751174 0.801946 0.780248 0.761874 0.68133 0.790902 0.728168 0.790485 0.794933 Yellow if equal to or 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 higher than 0.750 Green if equal to or higher than 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 FINANCE Finance Metric A 3.387525 2.965966 3.042505 2.891057 3.485847 2.867981 2.764183 3.297147 3.301612 2.892969 2.737161 3.0936 2.772979 Yellow if equal to or higher than 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 Green if equal to or higher than 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309 2.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.288786 2.14113 Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 Finance Metric C 0.762611 0.958071 1.051227 0.867969 1.158351 0.82278 0.800541 0.989747 0.980718 0.611179 0.789868 1.035084 0.920254 Yellow if equal to or higher than 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Green if equal to or higher than 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 Finance Metric H 0.222716 0.480099 0.296397 0.203 0.3541 0.2326 0.1693 0.4552 0.2278 0.194 0.288 0.321 0.241 Yellow if equal to or higher than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 Green if equal to or higher than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Finance Metric I 0.490024 0.27568 0.190908 0.357 0.5284 0.4058 0.3391 0.3347 0.3247 0.327 0.286 0.383 0.247 Yellow if equal to or higher than 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Green if equal to or higher than 0.35 Monthly 0.35 0.35 SCORECARD 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 Business Unit Name INT E R NAL BUSINESS OPERATIONS IBO Metric A 1.7693 1.73499 1.80064 1.76888 1.76068 1.79877 1.863956 1.862206 1.829389 1.875557 1.741041 1.69758 1.704457 Yellow if equal to or higher than 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 Green if equal to or higher than 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 IBO Metric B 0.20531 0.18053 0.184817 0.16204 0.18 0.178 0.202 0.205 0.176 0.226 0.201 0.197 0.231 Yellow if equal to or less than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Green if equal to or less than 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 IBO Metric C 0.427692 0.505666 0.504354 0.568529 0.44906 0.464186 0.446241 0.422419 0.445758 0.475769 0.340339 0.366324 0.354783 FINANCE Yellow if equal to or less than 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 Green if equal to or less than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 IBO Metric D 2.66634 2.64814 2.69324 2.67166 2.68 2.66 2.67 2.68 2.65 2.67 2.67 2.69 2.7 Yellow if equal to or less than 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 Green if equal to or less than 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 IBO Metric F 0.113318 0.157456 0.163175 0.146534 0.113 0.143 0.143 0.173 0.143 0.163 0.133 0.143 0.143 Yellow if equal to or less than 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 Green if equal to or less than 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 IBO Metric G 0.043949 0.078984 0.051823 0.055083 0.110424 0.068515 0.080985 0.076333 0.07306 0.077379 0.103885 0.069867 0.142498 Yellow if equal to or less than 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 Green if equal to or less than 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 IBO Metric H 1.222222 1.222222 1.166667 1 1 1 1 1.166667 1.333333 1.25 1.230769 1.266667 1.3125 Yellow if equal to or higher than 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 Green if equal to or higher than 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 INTE R NAL BUSINESS OPS L E ARNING & GROWTH Measurement Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Finance Metric A 3.387525 2.965966 3.042505 2.891057 3.485847 Yellow if equal to or higher than 3.05 3.05 3.05 3.05 3.05 3.05 Green if equal to or higher than 3.1 3.1 3.1 3.1 3.1 3.1 Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309 Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 LEARNING AND GROWTH L&G Metric A 4.47048 5.23666 4.17365 4.57158 4.54306 4.31449 4.67242 3.67574 4.94651 3.57205 4.92629 4.55868 6.00471 Yellow if equal to or less than 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Green if equal to or less than 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 L&G Metric B 68.1916 69.643 57.0598 62.4947 59.6528 74.1863 77.7315 54.8459 57.6235 83.5998 66.4914 54.2673 50.719 Yellow if equal to or higher than 65 65 65 65 65 65 65 65 65 65 65 65 65 65 Green if equal to or higher than 75 75 75 75 75 75 75 75 75 75 75 75 75 75 RED YELLOW GREEN Finance Metric C 0.762611 0.958071 1.051227 0.867969 1.158351 Yellow if equal to or higher than 0.9 0.9 0.9 0.9 0.9 0.9 Green if equal to or higher than 0.95 0.95 0.95 0.95 0.95 0.95 IEE Vol. 2: Table 3.5 Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 10

Monthly SCORECARD Business Unit Name Measurement Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 CUSTOMER Customer Metric A 0.63574 0.653576 0.660404 0.732996 0.62521 0.708566 0.641873 0.727115 0.687201 0.6123 0.670894 0.6341 Yellow if equal to or 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 higher than 0.720 Green if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 Customer Metric B 1.866044 1.804823 1.777056 1.87373 1.791988 1.826504 1.824634 1.799849 1.822007 1.838969 1.87088 1.893155 Yellow if equal to or 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 higher than 1.830 Green if equal to or higher than 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 Customer Metric C 0.82475 0.730724 0.627179 0.728212 0.751174 0.801946 0.780248 0.761874 0.68133 0.790902 0.728168 0.790485 Yellow if equal to or 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 higher than 0.750 Green if equal to or higher than 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 Let s examine Finance Metric B Let s examine this corporation s red-yellow-green scorecard FINANCE Finance Metric A 3.387525 2.965966 3.042505 2.891057 3.485847 2.867981 2.764183 3.297147 3.301612 2.892969 2.737161 3.0936 Yellow if equal to or higher than 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 3.05 Green if equal to or higher than 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309 2.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.288786 Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 Finance Metric C 0.762611 0.958071 1.051227 0.867969 1.158351 0.82278 0.800541 0.989747 0.980718 0.611179 0.789868 1.035084 Yellow if equal to or higher than 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Green if equal to or higher than 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 Finance Metric H 0.222716 0.480099 0.296397 0.203 0.3541 0.2326 0.1693 0.4552 0.2278 0.194 0.288 0.321 Yellow if equal to or higher than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 Green if equal to or higher than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Finance Metric I 0.490024 0.27568 0.190908 0.357 0.5284 0.4058 0.3391 0.3347 0.3247 0.327 0.286 0.383 Yellow if equal to or higher than 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Green if equal to or higher than 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 INTERNAL BUSINESS OPERATIONS IBO Metric A 1.7693 1.73499 1.80064 1.76888 1.76068 1.79877 1.863956 1.862206 1.829389 1.875557 1.741041 1.69758 Yellow if equal to or higher than 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 Green if equal to or higher than 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 IBO Metric B 0.20531 0.18053 0.184817 0.16204 0.18 0.178 0.202 0.205 0.176 0.226 0.201 0.197 Yellow if equal to or less than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Green if equal to or less than 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 IBO Metric C 0.427692 0.505666 0.504354 0.568529 0.44906 0.464186 0.446241 0.422419 0.445758 0.475769 0.340339 0.366324 Yellow if equal to or less than 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 Green if equal to or less than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 IBO Metric D 2.66634 2.64814 2.69324 2.67166 2.68 2.66 2.67 2.68 2.65 2.67 2.67 2.69 Yellow if equal to or less than 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 Green if equal to or less than 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 2.58 IBO Metric F 0.113318 0.157456 0.163175 0.146534 0.113 0.143 0.143 0.173 0.143 0.163 0.133 0.143 Yellow if equal to or less than 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 Green if equal to or less than 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 IBO Metric G 0.043949 0.078984 0.051823 0.055083 0.110424 0.068515 0.080985 0.076333 0.07306 0.077379 0.103885 0.069867 Yellow if equal to or less than 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 Green if equal to or less than 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 IBO Metric H 1.222222 1.222222 1.166667 1 1 1 1 1.166667 1.333333 1.25 1.230769 1.266667 Yellow if equal to or higher than 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 Green if equal to or higher than 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 LEARNING AND GROWTH L&G Metric A 4.47048 5.23666 4.17365 4.57158 4.54306 4.31449 4.67242 3.67574 4.94651 3.57205 4.92629 4.55868 Yellow if equal to or less than 5 5 5 5 5 5 5 5 5 5 5 5 5 Green if equal to or less than 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 L&G Metric B 68.1916 69.643 57.0598 62.4947 59.6528 74.1863 77.7315 54.8459 57.6235 83.5998 66.4914 54.2673 Yellow if equal to or higher than 65 65 65 65 65 65 65 65 65 65 65 65 65 Green if equal to or higher than 75 75 75 75 75 75 75 75 75 75 75 75 75 Green if equal to or higher than 3.1 3.1 3.1 3.1 3.1 3.1 Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309 Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 C 3.1 3.1 3.1 3.1 3.1 3.1 3.1 2.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.288786 33% red & 50% green? Special or Common Cause? 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.25 2.25 2.25 2.25 2.25 2.25 2.25 0 82278 0 800541 0 989747 0 980718 0 611179 0 789868 1 035084 Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 11

Building a Better Scorecard Response 2.7 2.6 2.5 2.4 2.3 2.2 2.1 2.0 1.9 Aug'04 UCL=2.6192 95 90 The metric is colored red when a goal is not being met Sep'04 Oct'04 Nov'04 Individuals Control Chart Dec'04 Jan'05 TRADITIONAL SCORECARD EXCERPT Traditional Performance Reporting Example Red-Yellow-Green Scorecard Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14 Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 IEE Improved Reporting for Process Assessment and Improvement INDIVIDUALS CONTROL CHART 80 70 60 _ 50 X=2.2583 40 30 20 10 5 blame game, and proliferation of fanciful stories about why goals Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 LCL=1.8974 Percent 2.2 2.3 Response Date Histogram 2.2 4 Most importantly, it tells us nothing about what 99 1 1.9 2.0 2.1 Normal Probability Plot and corrective action needs to be taken. This can result in counter productive initiatives, 24/7 firefighting, the weren t met. to expect in the future! 2.2 2.4 2.5 2.6 32.657 Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 12

Building a Better Scorecard Traditional Performance Reporting Example Red-Yellow-Green Scorecard Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14 Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 Integrated Enterprise Excellence (IEE) Scorecard System 1 Process is predictable If there is a recent region of stability, we can say that the process is predictable. So what do we predict? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 13

Building a Better Scorecard Individuals Control Chart 2.6 UCL= 2.62 Response 2.4 2.2 2.0 1.8 1 2 3 4 5 6 7 8 9 1011 1213 Observation Mean = 2.26 LCL=1.90 If a process is predictable, we can consider that data from the recent region of stability are a random sample of the future. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 14

Building a Better Scorecard Frequency 4 3 2 1 Percent 0 4 2 0 99 95 80 50 30 10 Histogram Histogram of Response Normal 2.2 2.2 2.0 2.0 2.1 2.1 2.2 2.3 2.3 2.4 2.4 2.5 Response Normal Probability Plot 2.2 1 1.9 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.6 Response 2.2 32.657 The red criterion, of less than 2.2, can be applied to the histogram for estimation of the percentage below 2.2; however, it is difficult to estimate from this graphic. A probability plot is a better approach since if the sample data are from a predictable process, this tool can provide a long-term performance estimate. Conclude: Approx. 32.6% is below 2.2. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 15

Building a Better Scorecard Traditional Performance Reporting Example Red-Yellow-Green Scorecard Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14 Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 Integrated Enterprise Excellence (IEE) Scorecard System 1 99 95 Normal Probability Plot 2 Percent 80 50 30 10 1 1.9 2.2 2.2 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Response 32.657 IEE reporting assesses predictability & then if the process is predictable provides a prediction statement. The probability plot provides process variability insight, which Edwards Deming said was important. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 16

Building a Better Scorecard Traditional Performance Reporting Example Red-Yellow-Green Scorecard Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14 Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 Integrated Enterprise Excellence (IEE) Scorecard System 1 2 Percent 99 95 80 50 30 10 1 1.9 Normal Probability Plot Predictable process with an approximate non-conformance rate of 32.6% 2.2 2.2 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Response 3 32.657 Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 17

Table of Numbers Conversion Current dashboard report-out Week Ending New Sales % Change vs prev week Total Sales Product A % Change vs prev week Market Share New Share Change vs prev week Marke t Share Total Share Change vs prev week New Sales % Change vs prev week Total Sales Product B % Change vs prev week Market Share New Share Change vs prev week Marke t Share Total Share Change vs prev week New Sales % Change vs prev week Total Sales Product C 1/2/2013 13,766 26.8% 47,831 23.3% 16.3% 0.4% 16.3% -0.1% 16,474 22.9% 66,900 21.7% 15.0% 0.3% 16.6% 0.1% 11,103 18.1% 41,041 19.6% 1.6% -0.1% 1.6% 0.0% 20,666 22.3% 71,409 22.2% 13.5% -0.2% 12.7% 0.1% 1/9/2013 16,543 20.2% 50,525 5.6% 15.8% -0.6% 16.0% -0.2% 20,675 25.5% 71,833 7.4% 15.8% 0.7% 16.9% 0.3% 12,314 10.9% 41,157 0.3% 1.5% -0.1% 1.6% -0.1% 25,581 23.8% 75,818 6.2% 14.0% 0.5% 12.9% 0.2% 1/16/2013 14,944-9.7% 46,176-8.6% 15.4% -0.3% 16.0% 0.0% 18,043-12.7% 64,307-10.5% 15.1% -0.6% 16.5% -0.3% 11,551-6.2% 37,770-8.2% 1.5% 0.0% 1.5% 0.0% 24,457-4.4% 72,104-4.9% 14.1% 0.1% 13.0% 0.1% 1/23/2013 14,180-5.1% 44,156-4.4% 15.4% 0.0% 16.1% 0.0% 17,035-5.6% 61,152-4.9% 14.8% -0.3% 16.3% -0.2% 10,720-7.2% 35,652-5.6% 1.4% -0.1% 1.5% -0.1% 23,584-3.6% 69,904-3.1% 13.9% -0.2% 13.1% 0.1% 1/30/2013 14,590 2.9% 44,962 1.8% 16.0% 0.5% 16.2% 0.2% 17,037 0.0% 61,974 1.3% 14.9% 0.1% 16.3% 0.0% 10,833 1.1% 36,145 1.4% 1.3% 0.0% 1.5% 0.0% 24,185 2.5% 69,990 0.1% 13.9% 0.0% 12.9% -0.2% 2/6/2013 15,672 7.4% 49,380 9.8% 15.6% -0.4% 15.9% -0.4% 18,802 10.4% 69,285 11.8% 15.3% 0.4% 16.6% 0.3% 12,405 14.5% 41,159 13.9% 1.4% 0.1% 1.6% 0.1% 26,335 8.9% 75,735 8.2% 14.1% 0.2% 12.8% -0.1% 2/13/2013 15,629-0.3% 46,811-5.2% 16.2% 0.6% 16.3% 0.4% 17,677-6.0% 64,067-7.5% 15.0% -0.3% 16.5% -0.1% 11,346-8.5% 37,360-9.2% 1.3% -0.1% 1.5% -0.1% 25,389-3.6% 73,045-3.6% 14.0% 0.0% 13.1% 0.3% 2/20/2013 15,252-2.4% 45,623-2.5% 16.3% 0.1% 16.3% 0.0% 17,040-3.6% 61,264-4.4% 14.9% -0.1% 16.3% -0.2% 10,781-5.0% 35,725-4.4% 1.3% 0.0% 1.5% 0.0% 25,441 0.2% 71,843-1.6% 14.3% 0.3% 13.1% 0.0% 2/27/2013 15,659 2.7% 47,178 3.4% 16.2% -0.2% 16.4% 0.1% 17,772 4.3% 63,058 2.9% 15.0% 0.1% 16.2% -0.1% 11,292 4.7% 37,441 4.8% 1.3% 0.0% 1.5% 0.0% 26,342 3.5% 73,728 2.6% 14.3% 0.0% 13.1% -0.1% 3/6/2013 16,655 6.4% 50,764 7.6% 16.6% 0.5% 16.2% -0.2% 19,700 10.8% 70,595 12.0% 15.7% 0.7% 16.6% 0.4% 12,351 9.4% 42,090 12.4% 1.4% 0.1% 1.6% 0.1% 27,865 5.8% 80,373 9.0% 14.5% 0.2% 13.1% 0.0% 3/13/2013 16,399-1.5% 47,655-6.1% 17.1% 0.4% 16.5% 0.3% 18,139-7.9% 64,781-8.2% 15.3% -0.4% 16.6% 0.0% 11,388-7.8% 37,958-9.8% 1.4% 0.0% 1.5% 0.0% 27,408-1.6% 75,339-6.3% 14.9% 0.4% 13.2% 0.2% 3/20/2013 16,098-1.8% 47,039-1.3% 17.2% 0.1% 16.6% 0.1% 18,442 1.7% 63,487-2.0% 15.8% 0.5% 16.6% 0.0% 11,202-1.6% 36,747-3.2% 1.4% 0.0% 1.5% 0.0% 26,575-3.0% 74,892-0.6% 14.9% 0.0% 13.4% 0.2% 3/27/2013 15,294-5.0% 46,242-1.7% 16.6% -0.6% 16.5% -0.1% 17,982-2.5% 62,445-1.6% 15.6% -0.2% 16.5% -0.1% 10,721-4.3% 36,585-0.4% 1.4% 0.0% 1.5% 0.0% 26,955 1.4% 74,064-1.1% 15.2% 0.3% 13.4% 0.0% 4/3/2013 16,565 8.3% 50,045 8.2% 17.0% 0.4% 16.6% 0.1% 18,602 3.4% 67,219 7.6% 15.3% -0.3% 16.4% -0.1% 11,788 10.0% 40,105 9.6% 1.5% 0.1% 1.6% 0.0% 27,043 0.3% 78,818 6.4% 14.7% -0.5% 13.2% -0.2% 4/10/2013 15,305-7.6% 47,943-4.2% 16.3% -0.7% 16.5% -0.1% 17,458-6.1% 64,249-4.4% 15.2% -0.2% 16.4% 0.1% 10,758-8.7% 36,332-9.4% 1.4% -0.1% 1.5% -0.1% 25,434-5.9% 74,021-6.1% 14.5% -0.1% 13.0% -0.2% 4/17/2013 15,764 3.0% 46,619-2.8% 16.9% 0.6% 16.6% 0.1% 17,443-0.1% 63,398-1.3% 15.3% 0.1% 16.4% 0.0% 10,578-1.7% 35,341-2.7% 1.4% 0.0% 1.5% 0.0% 24,951-1.9% 73,496-0.7% 14.3% -0.2% 13.1% 0.1% 4/24/2013 16,139 2.4% 47,265 1.4% 17.3% 0.3% 16.8% 0.2% 17,818 2.1% 62,423-1.5% 15.7% 0.4% 16.4% 0.0% 10,487-0.9% 34,756-1.7% 1.4% 0.0% 1.5% 0.0% 25,869 3.7% 73,614 0.2% 14.8% 0.5% 13.2% 0.1% 5/1/2013 16,195 0.3% 48,898 3.5% 17.3% 0.0% 16.6% -0.2% 17,426-2.2% 65,171 4.4% 15.2% -0.5% 16.5% 0.0% 10,866 3.6% 37,136 6.8% 1.4% 0.0% 1.5% 0.0% 26,217 1.3% 77,765 5.6% 14.7% -0.1% 13.3% 0.1% 5/8/2013 16,790 3.7% 50,040 2.3% 17.1% -0.2% 16.7% 0.1% 18,609 6.8% 66,981 2.8% 15.7% 0.5% 16.6% 0.2% 10,967 0.9% 37,423 0.8% 1.4% 0.0% 1.5% 0.0% 25,817-1.5% 77,014-1.0% 14.5% -0.2% 13.2% -0.1% 5/15/2013 16,018-4.6% 48,037-4.0% 17.2% 0.1% 17.0% 0.3% 17,440-6.3% 62,864-6.1% 15.2% -0.4% 16.4% -0.2% 10,032-8.5% 34,199-8.6% 1.4% 0.0% 1.4% -0.1% 25,661-0.6% 74,165-3.7% 15.0% 0.5% 13.3% 0.1% 5/22/2013 16,706 4.3% 49,400 2.8% 17.2% 0.0% 17.0% 0.0% 17,355-0.5% 63,588 1.2% 15.2% 0.0% 16.5% 0.1% 10,461 4.3% 35,730 4.5% 1.4% 0.0% 1.5% 0.0% 25,955 1.1% 76,249 2.8% 14.6% -0.4% 13.3% 0.0% 5/29/2013 14,361-14.0% 46,153-6.6% 16.9% -0.3% 16.9% -0.1% 16,026-7.7% 60,815-4.4% 15.2% 0.0% 16.4% -0.1% 9,321-10.9% 32,690-8.5% 1.4% 0.0% 1.4% 0.0% 22,997-11.4% 72,038-5.5% 14.6% -0.1% 13.3% 0.0% 6/5/2013 17,090 19.0% 52,563 13.9% 17.2% 0.4% 16.9% 0.0% 18,395 14.8% 68,453 12.6% 15.3% 0.1% 16.5% 0.1% 11,439 22.7% 39,125 19.7% 1.5% 0.1% 1.5% What 0.1% 26,443 conclusions 15.0% 80,977 12.4% 14.2% can -0.4% be 13.2% -0.1% 6/12/2013 16,571-3.0% 49,576-5.7% 17.6% 0.4% 17.1% 0.3% 17,506-4.8% 64,245-6.1% 15.3% 0.0% 16.6% 0.1% 9,919-13.3% 33,585-14.2% 1.4% -0.1% 1.4% -0.1% 26,069-1.4% 76,465-5.6% 14.7% 0.6% 13.5% 0.3% 6/19/2013 16,073-3.0% 49,064-1.0% 17.2% -0.4% 17.2% 0.0% 17,455-0.3% 63,126-1.7% 15.4% 0.1% 16.5% -0.2% 10,206 2.9% 33,963 1.1% 1.4% 0.1% 1.4% 0.0% 25,480-2.3% 76,062-0.5% 14.6% -0.2% 13.5% 0.0% 6/26/2013 16,292 1.4% 49,335 0.6% 17.7% 0.4% 17.3% 0.1% 17,466 0.1% 63,170 0.1% 15.5% 0.1% 16.5% 0.0% 9,552-6.4% 33,591-1.1% 1.4% -0.1% 1.4% made 0.0% 24,916 from -2.2% 76,084 this 0.0% table 14.2% -0.3% of 13.5% 0.1% 7/3/2013 16,607 1.9% 53,662 8.8% 17.5% -0.2% 17.2% -0.1% 18,501 5.9% 70,202 11.1% 15.8% 0.3% 16.6% 0.1% 10,831 13.4% 38,905 15.8% 1.5% 0.1% 1.5% 0.1% 26,143 4.9% 82,605 8.6% 14.5% 0.2% 13.2% -0.3% 7/10/2013 16,919 1.9% 51,201-4.6% 17.6% 0.1% 17.3% 0.1% 18,454-0.3% 67,052-4.5% 15.5% -0.3% 16.8% 0.2% 10,252-5.3% 34,457-11.4% 1.4% -0.1% 1.4% -0.1% 26,005-0.5% 77,745-5.9% 14.3% -0.1% 13.3% 0.1% 7/17/2013 16,401-3.1% 49,970-2.4% 17.2% -0.4% 17.1% -0.2% 18,398-0.3% 65,442-2.4% 15.5% 0.0% 16.5% -0.3% 10,415 1.6% 34,774 0.9% 1.5% 0.1% 1.4% 0.0% 26,797 3.0% 79,598 2.4% 14.7% 0.4% 13.6% 0.2% % Change vs prev week Market Share New Share Change vs prev week Market Share Total Share Change vs prev week New Sales % Change vs prev week Total Sales Product D % Change vs prev week numbers? Market Share New Share Change vs prev week Market Share Total Share Change vs prev week What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 19

Table of Numbers Conversion Let s focus on one aspect of the table-of-numbers dashboard. Week Ending New Sales % Change vs prev week Total Sales Product A % Change vs prev week Market Share New Share Change vs prev week Marke t Share Total Share Change vs prev week 1/2/2013 13,766 26.8% 47,831 23.3% 16.3% 0.4% 16.3% -0.1% 1/9/2013 16,543 20.2% 50,525 5.6% 15.8% -0.6% 16.0% -0.2% 1/16/2013 14,944-9.7% 46,176-8.6% 15.4% -0.3% 16.0% 0.0% 1/23/2013 14,180-5.1% 44,156-4.4% 15.4% 0.0% 16.1% 0.0% Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 20

Table of Numbers Conversion In this executive dashboard: Much emphasis is given to comparing one week to the next. There is no mention of profitability as a key performance indicator (KPI) metric. Sales and other costs are not addressed. The format of this executive dashboard does not encourage process improvement efforts. Focus is given to new sales, not existing customers. Week Ending New Sales % Change vs prev week Total Sales Product A % Change vs prev week Market Share New Share Change vs prev week Marke t Share Total Share Change vs prev week 1/2/2013 13,766 26.8% 47,831 23.3% 16.3% 0.4% 16.3% -0.1% 1/9/2013 16,543 20.2% 50,525 5.6% 15.8% -0.6% 16.0% -0.2% 1/16/2013 14,944-9.7% 46,176-8.6% 15.4% -0.3% 16.0% 0.0% 1/23/2013 14,180-5.1% 44,156-4.4% 15.4% 0.0% 16.1% 0.0% Will now describe predictive performance reporting for total sales and product type. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 21

Table of Numbers Conversion 30,000-foot-level report-out for total sales IEE Scorecard for Total Sales of All Products Individual Value 260000 250000 240000 230000 220000 210000 I-chart UCL=254728 _ X=225571 Percent 99 95 80 50 Probability plot Normal 90 50 Mean 225571 StDev 9331 N 29 AD 0.533 P-Value 0.158 200000 190000 1/2/2013 1/23/2013 2/13/2013 3/6/2013 3/27/2013 4/17/2013 5/8/2013 Week 5/29/2013 6/19/2013 7/10/2013 LCL=196414 1 200000 210000 220000 230000 240000 Process values The process is predictable. The est. median is 225571 with 80% of the events between 213613 and 237529. 20 5 213613 225571 237529 10 Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 22

Table of Numbers Conversion 20,000-foot-level report-out for Product A Sales IEE Scorecard for Product A Sales Individual Value 57500 55000 52500 50000 47500 45000 I-chart 1 2 UCL=55993 _ X=50767 LCL=45542 Percent 99 95 80 50 Probability plot Normal 90 50 Mean 50767 StDev 1770 N 7 AD 0.409 P-Value 0.245 42500 40000 1/2/2013 1/23/2013 2/13/2013 3/6/2013 3/27/2013 4/17/2013 5/8/2013 Week 5/29/2013 6/19/2013 7/10/2013 20 5 1 46000 48499 50767 53036 48000 50000 52000 Process values 54000 10 Understanding: Process change had occurred. The process is predictable since the last process change. The est. median is 50767 with 80% of the events between 48498 and 53035. Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 23

Table of Numbers Conversion 20,000-foot-level report-out for Product B sales IEE Scorecard for Product B Sales Individual Value 75000 70000 65000 60000 55000 1/2/2013 1/23/2013 2/13/2013 3/6/2013 3/27/2013 I-chart 4/17/2013 5/8/2013 Week 5/29/2013 6/19/2013 7/10/2013 UCL=74049 _ X=64950 LCL=55851 63000 66000 69000 Process values The process is predictable. The est. median is 64949 with 80% of the events between 61156 and 68743. Percent 99 95 80 50 20 5 1 61156 60000 Probability plot Normal 64950 68743 72000 90 50 10 Mean 64950 StDev 2960 N 29 AD 0.803 P-Value 0.033 Action: Do nothing, unless prediction statement is unsatisfactory Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 24

Table of Numbers Conversion 20,000-foot-level report-out for Product C sales IEE Scorecard for Product C Sales Individual Value 45000 40000 35000 30000 25000 1/2/2013 1/23/2013 2/13/2013 3/6/2013 3/27/2013 I-chart 1 2 4/17/2013 5/8/2013 Week 5/29/2013 6/19/2013 7/10/2013 UCL=43191 _ X=35102 LCL=27012 1 30000 32500 35000 37500 Process values The process is predictable since the last process change. The est. median is 35101 with 80% of the events between 32265 and 37938. Percent 99 95 80 50 20 5 32266 Probability plot Normal 35102 37938 40000 90 50 10 Mean 35102 StDev 2213 N 10 AD 0.829 P-Value 0.021 Understanding: Process change had occurred. Action: Understand why product sales seemed to have decreased and take corrective action, if appropriate. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 25

Table of Numbers Conversion 20,000-foot-level report-out for Product D sales Individual Value 85000 80000 75000 70000 65000 1 2 1/2/2013 1/23/2013 2/13/2013 3/6/2013 3/27/2013 I-chart 4/17/2013 5/8/2013 Week IEE Scorecard for Product D Sales 5/29/2013 6/19/2013 7/10/2013 UCL=84640 _ X=76569 LCL=68498 1 70000 75000 80000 Process values The process is predictable since the last process change. The est. median is 76569 with 80% of the events between 72971 and 80167. Percent 99 95 80 50 20 5 72971 Probability plot Normal 76569 80167 85000 90 50 10 Mean 76569 StDev 2808 N 20 AD 0.301 P-Value 0.546 Understanding: Process change had occurred. Action: Do nothing, unless prediction statement is unsatisfactory. Overall Observation: Better conclusions can be made from a 30,000-footlevel report about process performance and process improvement needs. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 26

Time-series-plot Conversion Current dashboard report-out Previous Year Current Year JAN FEB MAR APL MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APL MAY JUN JUL AUG SEP OCT NOV DEC Report 1 4,918 5,331 5,815 5,750 5,597 4,941 4,834 4,306 4,699 4,548 4,184 3,627 5,245 Report 2 418 1,295 1,379 1,194 1,008 919 1,340 Report 3 1,015 958 443 515 370 370 437 473 411 447 313 368 538 Report 4 213 449 394 309 430 349 274 260 276 361 277 170 138 Report 5 109 105 191 202 168 102 102 178 82 95 93 162 106 Report 6 4,324 4,808 5,641 4,974 6,052 5,478 4,562 4,568 4,793 4,967 5,557 4,369 3,567 Tool Usage Trends 2013 2014 JAN FEB MAR APL MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APL MAY JUN JUL AUG SEP OCT NOV DEC Report 1 4,918 5,331 5,815 5,750 5,597 4,941 4,834 4,306 4,699 4,548 4,184 3,627 5,245 Report 2 418 1,295 1,379 1,194 1,008 919 1,340 Report 3 1,015 958 443 515 370 370 437 473 411 447 313 368 538 Report 4 213 449 394 309 430 349 274 260 276 361 277 170 138 What conclusions can be made from this chart? What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 28

Time-series-plot Conversion Enlargement of Report 1 6000 Time Series Plot of Report 1 5500 Response 5000 4500 4000 What conclusions can be made from this chart? 3500 JAN FEB MAR APL MAY JUN JUL AUG Month SEP OCT NOV DEC JAN What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 29

Time-series-plot Conversion 30,000-foot-level tool usage Report 1 IEE Scorecard for Tool Usage Report 1 Individual Value 6000 5500 5000 4500 4000 3500 JAN FEB MAR APL MAY JUN JUL I-chart axplot AUG SEP OCT NOV 1 DEC JAN UCL=6124 _ X=4907 LCL=3691 Percent 99 95 80 50 20 5 1 3000 4080 Probability plot Normal 4907 4000 5000 Process values 5735 6000 90 50 10 Mean 4907 StDev 645.9 N 13 AD 0.158 P-Value 0.935 The process is not-predictable Action: Could investigate special-cause condition. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 30

Time-series-plot Conversion Enlargement of Report 2 1500 Time Series Plot of Report 2 1250 Response 1000 750 500 What conclusions can be made from this chart? JAN FEB MAR APL MAY JUN JUL AUG Month SEP OCT NOV DEC JAN What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 31

Time-series-plot Conversion 30,000-foot-level tool usage Report 2 IEE Scorecard for Tool Usage Report 2 Individual Value 2000 1500 1000 500 JAN FEB MAR APL MAY JUN JUL I-chart axplot AUG SEP OCT NOV DEC JAN UCL=1895 _ X=1079 LCL=263 1000 1500 Process values The process is predictable The est. median is 1079 with 80% of the occurrences from 645.80 to 1512.2 Percent 99 95 80 50 20 5 1 500 646 Probability plot Normal 1079 1512 2000 90 50 10 Mean 1079 StDev 338.0 N 7 AD 0.456 P-Value 0.181 Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 32

Time-series-plot Conversion Enlargement of Report 3 1100 Time Series Plot of Report 3 1000 900 Response 800 700 600 500 400 300 What conclusions can be made from this chart? JAN FEB MAR APL MAY JUN JUL AUG Month SEP OCT NOV DEC JAN What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 33

Time-series-plot Conversion 30,000-foot-level tool usage Report 3 IEE Scorecard for Tool Usage Report 3 Individual Value 1200 1000 800 600 400 200 1 2 I-chart JAN FEB MAR APL MAY JUN JUL axplot AUG SEP OCT NOV DEC JAN UCL=633 _ X=426 LCL=219 400 500 Process values The process is predictable since the last process change The est. median is 425.90 with 80% of the occurrences from 338.84 to 512.97 Percent 99 95 80 50 20 5 1 300 338.8 Probability plot Normal 425.9 513.0 600 90 50 10 Mean 425.9 StDev 67.94 N 11 AD 0.222 P-Value 0.772 Understanding: Process change had occurred. Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 34

Time-series-plot Conversion Enlargement of Report 4 450 Time Series Plot of Report 4 400 350 Response 300 250 200 150 What conclusions can be made from this chart? 100 JAN FEB MAR APL MAY JUN JUL AUG Month SEP OCT NOV DEC JAN What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 35

Time-series-plot Conversion 30,000-foot-level tool usage Report 4 IEE Scorecard for Tool Usage Report 4 Individual Value 500 400 300 200 100 JAN FEB MAR APL MAY JUN JUL I-chart axplot AUG SEP OCT NOV DEC JAN UCL=519.6 _ X=300 LCL=80.4 200 300 400 Process values The process is predictable The est. median is 300 with 80% of the occurrences from 178.29 to 421.71 Percent 99 95 80 50 20 5 1 100 178.3 Probability plot Normal 300 421.7 500 90 50 10 Mean 300 StDev 94.97 N 13 AD 0.185 P-Value 0.887 Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 36

Time-series-plot Conversion Enlargement of Report 5 Time Series Plot of Report 5 200 180 Response 160 140 120 100 80 What conclusions can be made from this chart? JAN FEB MAR APL MAY JUN JUL AUG Month SEP OCT NOV DEC JAN What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 37

Time-series-plot Conversion 30,000-foot-level tool usage Report 5 IEE Scorecard for Tool Usage Report 5 Individual Value 250 200 150 100 50 0 JAN FEB MAR APL MAY JUN JUL I-chart axplot AUG SEP OCT NOV DEC JAN UCL=244.1 _ X=130.4 LCL=16.7 100 150 Process values The process is predictable The est. median is 130.38 with 80% of the occurrences from 75.783 to 184.98 Percent 99 95 80 50 20 5 1 50 75.8 Probability plot Normal 130.4 185.0 200 250 90 50 10 Mean 130.4 StDev 42.61 N 13 AD 1.017 P-Value 0.007 Understanding: Appears that the response is from two distributions. Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 38

Time-series-plot Conversion Enlargement of Report 6 Time Series Plot of Report 6 6000 5500 Report 6 5000 4500 4000 What conclusions can be made from this chart? 3500 JAN FEB MAR APL MAY JUN JUL AUG Month SEP OCT NOV DEC JAN What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 39

Time-series-plot Conversion 30,000-foot-level tool usage Report 6 IEE Scorecard for Tool Usage Report 6 Individual Value 7000 6000 5000 4000 3000 JAN FEB MAR APL MAY JUN JUL I-chart axplot AUG SEP OCT NOV DEC JAN UCL=6567 _ X=4897 LCL=3226 1 3000 4000 5000 Process values The process is predictable The est. median is 4896.9 with 80% of the occurrences from 4046.2 to 5747.5 Percent 99 95 80 50 20 5 4046 Probability plot Normal 4897 5748 6000 90 50 10 Mean 4897 StDev 663.7 N 13 AD 0.243 P-Value 0.709 Action: Do nothing, unless prediction statement is unsatisfactory. Overall Observation: Better understanding and conclusions can be made from a 30,000-foot-level report-out about process performance and process improvement needs. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 40

Percentages in a Table Conversion Current reporting Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Wastage 4.92 5.08 5.18 5.34 5.41 5.35 5.66 5.09 5.48 5.23 5.26 5.63 5.30 Notice how emphasis is given to the annual numbers; e.g., YTD What conclusions can be made from this chart? What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 42

Percentages in a Table Conversion A 30,000-foot-level report-out for this process is: IEE Scorecard for Overall Wastage I-chart 8 Old Method 1 New Method Percentage 7 6 5 4 3 6-Jan-13 17-Feb-13 31-Mar-13 12-May-13 23-Jun-13 4-Aug-13 Week 15-Sep-13 The process is predictable. The estimated performance is 4.3 percent wastage. 27-Oct-13 8-Dec-13 26-Jan-14 9-Mar-14 UCL=5.489 _ X=4.343 LCL=3.198 Understanding: Process change had occurred. Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 43

On-time Delivery Graphic Performance Conversion Current reporting ON-TIME DELIVERY PERFORMANCE FOR 2011-2013 120.0 100.0 2013 YTD ON-TIME AVG = 70.1% > 2 Weeks Late >1-2 Weeks Late 1 Week Late On Time Goal = 80% 100% 80.0 % On Time 60.0 40.0 20.0 What conclusions can be made from this chart? 0.0 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 45

On-time Delivery Graphic Performance Conversion A 30,000-foot-level report-out for this process is: IEE Scorecard for Data 20 I-chart of Mean 1 2 3 I-chart of Std. Deviation Using Box-Cox Transformation With Lambda = 0.00 1 2 3 Subgroup Mean 10 0-10 1 UCL=5.50 _ X=-6.14 Ln Subgrp. Std. Deviation 4 3 2-20 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Subgroup Period Apr-13 Aug-13 Dec-13 LCL=-17.78 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Subgroup Period A natural log transform was applied to account for skewness of Std Deviations Aug-13 Dec-13 99.9 99 90 Probability plot Normal Mean -5.814 StDev 21.55 N 156 AD 10.919 90 P-Value <0.005 Understanding: Process change had occurred. Percent 50 50 0.1-100 The current process is predictable. The est. median is -5.814 with 80% of the events between -33.43 and 21.805. 10 1-50 -33.4-5.8 21.8 0 50 Data values in current stage 100 10 Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 46

Product Service & Performance Percentage KPI Graphic Conversion Current reporting: What conclusions can be made from this chart? What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 48

Product Service & Performance Percentage KPI Graphic Conversion A 30,000-foot-level report-out for this process is: IEE Dashboard for Service Non-Availability Transformed Value 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0 1/7/2012 3/24/2012 I-chart Using Box-Cox Transformation With Lambda = 0.00 6/9/2012 8/25/2012 11/10/2012 1 1/26/2013 Weeks 4/13/2013 6/29/2013 9/14/2013 11/30/2013 The process is predictable (2 out-of-control signals close to limits considered common-cause) The estimated peformance is 3.2 percent non-availability. 1 Understanding: Process has not improved. Action: Undertake process improvement effort if goal of 2.0 percent or less mean non-availability is desired. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 49

Tabular Effectiveness Reporting Conversion Current reporting: DIVISION MONTH END OEE REPORTING JANUARY 2014 Plant 1 Line 1 Line 2 Plant 2 Line 3 Line 4 Line 5 Line 6 Line 7 Line 8 Plant 3 Line 9 Line 10 Line 11 Line 12 Line 13 Line 14 Plant 4 Availability% 79.6% 65.1% 83.0% 78.3% 86.5% 82.1% 83.9% 85.5% 82.1% 82.8% 83.6% 92.6% 90.6% 82.3% 77.0% 72.9% 81.1% 84.3% Rate% QR 92.6% 93.9% 100.0% 98.4% 100.5% 99.4% 97.3% 91.6% 93.2% 99.3% 98.1% 80.8% 95.9% 94.5% 100.0% 86.1% 95.6% 92.8% Quality% 81.0% 90.0% 93.5% 92.6% 82.8% 87.0% 83.3% 93.2% 88.9% 91.2% 88.4% 93.3% 94.4% 93.9% 86.7% 86.9% 92.1% 92.3% OEE% 59.7% 55.0% 77.6% 71.3% 72.0% 71.0% 68.0% 73.0% 68.0% 75.0% 72.5% 69.8% 82.0% 73.0% 66.7% 54.5% 71.4% 72.2% OEE = Overall Equipment Effectiveness=(Availability)*(Performance)*(Quality) OEE = Overall Equipment Effectiveness What conclusions can be made from this table? What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 51

Tabular Effectiveness Reporting Conversion A 30,000-foot-level report-out for this process is: IEE Scorecard for OEE Percentage Line 2 90.0% I-chart UCL=89.2% Individual Value 80.0% 70.0% 60.0% 50.0% 40.0% W1 W6 1 W11 W16 W21 W26 Week W31 W36 W41 W46 _ X=69.7% LCL=50.3% Understanding: Process is unstable. The process is not-predictable Action: Understand source for instability and resolve issue(s). Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 52

Tabular Effectiveness Reporting Conversion A 30,000-foot-level report-out for this process is: IEE Scorecard for OEE Percentage Line 1 Individual Value 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 1 1 W1 W6 W11 The process is not-predictable W16 I-chart 1 1 W21 W26 W31 Week W36 W41 W46 UCL=83.7% _ X=68.4% LCL=53.0% Understanding: Process was unstable and now appears stable. Action: Stage chart where stability seemed to occur. Look into what changed at this point in time. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 53

Tabular Effectiveness Reporting Conversion A 30,000-foot-level report-out for this process is: IEE Scorecard for OEE Percentage Line 1 90.0% I-chart 1 2 1 Individual Value 80.0% 70.0% 60.0% 50.0% 40.0% W1 1 W6 W11 W16 W21 W26 Week The process is predictable The estimated performance is an OEE rate of 70.3%. W31 W36 W41 W46 UCL=79.0% _ X=70.3% LCL=61.5% Understanding: Process change had occurred. Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 54

Graphical Annual Time-series Reporting Conversion Current reporting: A Company's Energy System SAIDI -YTD Normalized (Normalized Based on IEEE Op Co Storm Days) SAIDI(Minutes) 120 100 80 60 40 20 0 5.79 3.62 OP Co YTD Results Region 1: Actual 13.16, Target 10.33, Diff +2.84 Region 2: Actual 13.71, Target 10.99, Diff +2.72 Region 3: Actual 19.57, Target 13.49, Diff +6.09 Region 4: Actual 12.28, Target 19.01, Diff -6.73 Current YTD Corp Target Current YTD Actual 2013 YTD Actual 2012 YTD Actual 2011 YTD Actual YTD March 2013: 11.46 2012: 14.02 2011: 14.72 10.81 7.86 15.68 12.52 18.44 27.59 41.68 57.71 69.94 System includes all outages including secondary. Based on sustained outages only (> 5 minutes), Meter based Customer Counts. 79.40 86.57 92.09 Good 98.75 97.04 95.99 95.59 What conclusions can be made from this chart? What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 56

Graphical Annual Time-series Reporting Conversion A 30,000-foot-level report-out for this process is: IEE Scorecard for Transmissions SAIDI (Min. per Month) Transformed Value 2 1 0-1 -2-3 -4 Jan-10 I-chart Using Box-Cox Transformation With Lambda = 0.00 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Month Dec-12 May-13 Oct-13 Mar-14 UCL=1.490 _ X=-0.970 LCL=-3.430 The process is predictable The est. median is 0.3791 with 80% of the events between 0.1404 and 1.0231. Approx. monthly mean = 0.4859 min. (annual mean = 5.8308 min.) Percent 99 95 80 50 20 5 1 0.1 0.140 Probability plot Lognormal 0.379 1.023 1 Process values 90 50 10 Loc -0.9699 Scale 0.7747 N 51 AD 0.957 P-Value 0.014 Action: Do nothing, unless prediction statement is unsatisfactory. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 57

120,000 110,000 100,000 Failure Rate Bar Graph Report Conversion Current reporting: 103,347 109,791 97,274 Plant DPMU Plant Actual 104,815 Goal DPMU = defects per million units 90,000 80,000 78,608 85,344 79,574 74,294 84,334 70,000 60,000 50,000 2010 2011 2012 2013 Jan '14 Feb '14 Mar '14 Apr '14 YTD What conclusions can be made from this chart? What actions or non-actions should be taken? Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 59

Failure Rate Bar Graph Report Conversion A 30,000-foot-level report-out for this process is: IEE Scorecard for Plant DPMU I-chart Individual Value 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 UCL=119,057 _ X=82,248 LCL=45,439 Understanding: Process has not improved and is not capable of achieving an average DPMU rate of 68,000 or less. 12/04 12/06 12/08 12/10 12/12 13/02 13/04 Month The process is predictable The estimated performance is 82248.0 per period. 13/06 13/08 13/10 13/12 14/02 14/04 Action: Undertake a structured process improvement effort, if this metric achievement is needed by the business. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 60

Traditional Dashboard Conversion Discussion Additional discussion on each of the previous dashboard conversions is available https://www.smartersolutions.com/business-system-iee/iee-enterpriseprocess-management/performance-measurement-system/ Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 61

Creation of a 30,000-foot-level Report-out Within the IEE Enterprise Performance Reporting System (EPRS) software there is a Minitab add-in that provides 30,000-foot-level reporting as part of the EPRS automatic-metric-updating system. This 30,000-footlevel reporting Minitab add-in is also available as a stand-alone product, which is available at no charge. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 62

Polling Question 2 What type of dashboard do you think should be used in organizations so that the most appropriate decisions are made? Red-yellow-green scorecards Table of numbers Time-series reporting 30,000-foot-level process performance reporting No performance metric tracking Don t know Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 63

Polling Question 3 How are strategic improvement projects or kaizen events chosen in your current or past organization? High-level management selects projects from a listing of business problems/processes that they think should be addressed or improved. Managers assign projects that they think should be undertaken. To make a metric s response better. Don t know. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 64

Hospital IEE Value Chain Illustration Voice of the customer Sales and marketing Delivery of clinical services Invoice and collect Report financials Enterprise Process Management (EPM) IT Housekeeping Food service Patient transportation IEE = Integrated Enterprise Excellence A clickable Enterprise Performance Reporting System (EPRS) approach can integrate real-time predictive performance metrics with processes; i.e., Y=f(X). Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 66

Hospital IEE Value Chain Voice of the customer Enterprise Process Management (EPM) Sales and marketing IT Delivery of clinical services Housekeeping Invoice and collect Food service Report financials Patient transportation Functional metrics relative to quality, cost, and time Metrics: Delivery of Clinical Services Y Length of Stay Weekly errors per 1000 patients Y=f(x) Fixed costs Average daily census TOC variable costs Mortality Top Level Value Chain Repeat admission x Step B1 Step B2 Process: Delivery of Clinical Services No Start Step 1? Yes Step A2 Step A3 End Generic flowchart or value-stream map Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 67

Hospital IEE Value Chain Metrics: Delivery of Clinical Services Length of Stay Weekly errors per 1000 patients Fixed costs Step B1 Average daily TOC variable census costs Step B2 Mortality Top Level Value Chain Repeat admission Process: Delivery of Clinical Services No IEE Value Chain can be a repository for information, which describes what the organization does and how it performs. Start Step 1? Website Link Yes Step A2 Step A3 End PDF document, spreadsheet, etc. link Top Level Value Chain Step A2 Start Step A2.1 Step A2.2 Step A2.3 Step A2.4 End Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 68

Hospital IEE Value Chain Metrics: Delivery of Clinical Services Process: Delivery of Clinical Services Length of Stay Weekly errors per 1000 patients Fixed costs Step B1 No Average daily TOC variable census costs Step B2 Mortality Top Level Value Chain Repeat admission Yes Start Step 1? Step A2 Step A3 End Reporting Delivery of Services: LOS The process is predictable between subgroups and within subgroups. The estimated median of 262.8 with 80% of the occurrences between 149.6 to 375.9 Comment: There are no comments. Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 69

Hospital IEE Value Chain Metrics: Delivery of Clinical Services Process: Delivery of Clinical Services Length of Stay Weekly errors per 1000 patients Fixed costs Step B1 No Average daily TOC variable census costs Step B2 Mortality Top Level Value Chain Repeat admission Yes Reporting Del. of Services: Weekly Errors Start Step 1? Step A2 Step A3 End The process is predictable. The estimated error rate is 10.84 per thousand. Comment: Process improvement was made in week 30 where error rate reduced from approximately 48 to 11 per 1000 patients Copyright 1992 2014. All rights reserved. Smarter Solutions, Inc. (www.smartersolutions.com) 70