Operational Excellence Maturity Fundamental Basics

Objective:

 Understand what your customer wants.

 Define what the process is and how to perform it consistently.
 Balance workload by matching available capacity to demand.
 Organize teams around the process.
 Display visual information to manage performance.
 Teams drive continuous improvement.

Expected Outcome:

 Understand who the customer is and what they value.

 Understand performance against customer requirements.
 Understand which inputs have the largest impact on customer outputs.

 Understand your process and who is responsible for what activities.

 Perform work activities consistently to deliver predictable outcomes.
 Integrate Operating System to manage inputs and monitor outputs.

 Understand the amount of work that is expected to be done.

 Understand the number of resources required to complete the work.
 Balance workload to manage capacity during peaks and troughs.

 Teams are organized around the process to reduce inefficiencies.

 Understand where things are, and what is needed to complete the work.

 Visual controls are in place to proactively respond to potential service issues.

 Performance data is displayed over time to identify and react to trends.
 Visual Information is up to date and integrated with the overall MOS.

 First pass yield implemented as a key measure to help identify rework.

 Ability to identify root cause and corrective actions to address issues.
 Lean basics understood to help identify improvement opportunities.
OPEX DOCUMENTATION PROCESS

1.Focus the Service 2.Standardize the 3.Plan Service

Operation Service Operation. Operation to work.

6.Make
4.Organize the 5.Make the Service Improvements to
Service Operation Operation Visuals. the Service
Operation.

1.Focus the Service Operation

Objective

 Understand what your customer wants

Expected Outcomes

 Understand who the customer is and what they value

 Understand performance against customer requirements
 Understand which inputs have the largest impact on customer outputs.

OE Methods

 SIPOC
 Contract Scope Assessment
 High Level Process Flow
 3x3 Scorecard / Metrics
 Control Charts
Critical Concepts and Questions

Q1: Who are your customers and what are the outcomes that are
delivered to them?
Focus on the
Customer
Q2: Which operations activities are clearly tied to delivering the
contractually agreed outcomes?

Q3: What are the main activities performed end to end to deliver
Understand the
expected outcomes to the customer and what are the critical inputs
Process
that have the largest impact on these outcomes?

Q4: What are the customer’s service expectations in terms of Speed,

Quality and Cost and how is performance against these expectations
Measure
measured (both SLA and non-SLA)?
Service
Performance
Q5: What do you measure today to proactively ensure you deliver to
customer expectations?

Consistently Q6: How do you know if the outcomes delivered to customer are
Meet Service consistently meeting their service expectations today and will
Expectations continue to do so in the future?

OE Methods

SIPOC: The SIPOC (Supplier, Inputs, Process, Outputs and Customer).

 Provides context and scope of process being analyzed.

 Defines the customers of the process and how they measure process
performance.
 Defines the suppliers of the process and requirements of what they provide to
the process.
High Level Process Flow:

 Defines major steps (sub-processes) of the end-to-end process.

 Identifies Inputs and Outputs for each process step.
 Identifies Critical Process Inputs that drive process performance.

Classifying Inputs:

Criticality

 Critical: Inputs that have the largest impact on output performance.

 Non Critical: Inputs that impact output performance, but to a lesser extent.

Controllability

 Controllable: Inputs that fall within the control of the operations team (for
example, Training level)
  Uncontrollable: Inputs outside the team's control (for example, Volumes)

The easiest way to classify process inputs is to have a discussion with the right SMEs
and process team members.

3x3 Scorecards:

The 3x3 Scorecard:

 Displays the vital metrics for a process in a matrix format.

 Includes the three most vital metrics for our customer outputs on one side
(Speed, Cost and Quality).
 Shows the three most critical inputs that can be managed to ensure delivery of
those output metrics.

What does the 3x3 Scorecard accomplish?

 Enables a comprehensive understanding of our process performance.

 Enables teams to focus on key operational levers that drive performance.

 Equips teams to proactively manage operations using data to facilitate improved

decision making.

 Enables identification and prioritization of improvement opportunities using

data.
Data Collection: A data collection plan for the key metrics will provide consistency in
how metrics are captured and reported.

Data Collection Plan

Data
Data Sample Quality Collection
Source(s) Size Frequency Responsibility Process Control Form

The Control Charts:

 Separate problems with process execution (people) from problems with process
design (process).
 Offer early warning signs before problems occur and pre-define action plans
around process signals.
 Prevent over-adjustment (often called “tampering”) of a process operating
within normal parameters, which leads to additional problems.
 Support a stable operation that will result in predictable results.
Identifying Trends

Types of Variation:

Understanding Capability:

Capability simply refers to whether a process will predictably perform within the set
target. Looking at this data, is the process capable?

The answer is that we don’t have enough information plotted yet....

Yes the data is currently within the target, but we need control limits to ensure the
performance is predictable and without variation that could lead to exceeding the
target.

Assessing Capability:

We can determine whether a process is capable by comparing the process control limits
with target performance levels. A process is capable when the control limits fall within
the target.
 Why? Because the control limits indicate the normal operating parameters of the
process. If these exceed the target then the target can be missed despite the process
running as expected, therefore it is not capable.

Remember that clients do not feel averages. On average you can be inside the target, but
half of all units can fall outside the client’s requirements. Clients feel the variation.

Key Factors in a Control Chart

Stability vs. Capability - What is the difference?

Stability is an indication of the variation and predictability of a process. It is
independent of the performance target. Capability links the process performance back
to the target and asks if the target can be met over the long term. Stability and capability
are independent factors, although it is hard to be capable if you are not stable.

Special Cause Variation: Large fluctuations in data caused by a specific issue that
needs to be investigated. This leads to unpredictable performance
(Data outside control limits).

Normal Variation: The fluctuations in performance over time that are small and occur
due to natural shifts in the process (Data within the control limits).

Stability
Is the process predictable, with no special cause variations?
Measure: Data within control limits

Capability
Is the process able to consistently meet the target?
Measure: Control limits within the target.

Service Operations Maturity Framework:

Focused Operation: Review the details of the Focused Operation within the Service
Operations Maturity Framework.
 Stable Capable
 Team understands who the  Teams are able to predict
customer is and the their ability to meet service
expected outcomes expectations using control
delivered that are part of charts and understand
the contract scope variation in customer
 Client success measures in experience by measuring
place (3x3s) and control daily rather than average
charts used to validate performance
stable performance for at  Causal relationships
least 6 months between operational inputs
 Team can articulate the and outputs are actively
main activities performed managed and validated
end to end that deliver with data
expected outcomes to the  Team is operating at
customer Original Deal
Economics and is
consistently meeting
service expectations
If teams do not meet the minimum requirements for STABLE then they should be rated
as NOT STABLE.
Optimized
 Teams are delivering
optimal performance
through consistently
meeting performance
objectives and delivering
within the scope of the
contract (not over
delivering)
 Teams understand which
levers to pull as they spot
variation in performance
and act even though SLAs
are green
 Team has been operating at
or below Original Deal
Economics for > 6 months
and have continued to
demonstrate year on year
productivity improvements
 2.Standardize the Service Operation.

Objective

 Define what the process is and how to perform it consistently

Expected Outcomes

 Understand your process and who is responsible for what activities

 Perform work activities consistently to deliver predictable outcomes
 Integrate Operating System to manage inputs and monitor outputs

OE Methods

 Detailed Process Map

 Standard Work Instructions
 Agent Level Dashboard
 Control Plan
 Risk and Issue Log
 Management Operating System (MOS)

Critical Concepts and Questions

Q1: Are the detailed steps of your process documented, and if so does the
Document the documentation match how the process is actually performed?
Detailed
Process Q2: Are roles and responsibilities for performing tasks in the process clearly
communicated and documented?

Q3: How do you ensure work activities are performed consistently between
different team members to ensure predictable outcomes are delivered to the
Perform customer?
Activities
Consistently Q4: Do you know how long it takes to complete a specific work activity, and
does this link to clear performance expectations that are measured and
reported?
Q5: How do you manage critical process inputs that drive customer
outcomes, and what review mechanisms are in place to monitor and
Manage the communicate performance to various stakeholders?
Process
Q6: How are issues and risks tracked and managed, and are escalation paths
clearly defined to ensure critical issues are discussed at the right level?
Detailed Process Map

The Detailed Process Map allows you to ensure the steps of your process
documentation match how the process is actually performed by:

 Visualizing standard processes.

 Identifying decision points and escalation paths.
 Exposing differences between what is documented vs. how the process is
performed.

SIPOC

 Provides big picture context to:

o Understand who the customer of the process is.
o Identify the true process output and requirements.

High Level Process Map

 Defines major steps (sub-processes) of the end-to-end process.

 Identifies Inputs and Outputs for each process step.
 Identifies Critical Process Inputs that drive process performance.
 Detailed Process Map

 Defines the "how-to" level of each workflow step.

 Clarifies decision points in a process.
 Supports training and reference.

When developing a Detailed Process Map, keep in mind that you can't fix what you
can't see and clearly document! Be sure to capture ALL the steps that are followed
through the process

RACI Overview

The RACI diagram:

 Defines responsibilities and accountabilities across work streams

 Clarifies who is doing what to reduce the redundant work
 Encourages collaboration without making teamwork time consuming
 Clarifies where approvals are actually needed versus copied as an "FYI".

Review the table below to understand the key roles within the RACI diagram.
Role Description
Individual(s) who does / completes the task. Responsible for action plans /
R = Responsible
implementation. Determined by “Accountable” individual. Can be shared.

Individual ultimately expected to ensure performance, and has final decision making
A = Accountable
and veto authority. Can’t be shared.

Individual(s) to be consulted prior to a final decision or action; two-way

C = Consulted
communication. Can be shared.

Individual(s) who needs to be informed after a decision is made or action is taken;

I = Informed
one-way communication. Can be shared. .

Standard Work Instructions

One tool that helps agents perform consistently is Standard Work Instructions (SWIs).
SWIs:

 Clarify performance expectations around time and quality

 Set standard processing time requirements for work activities
 Explain what is necessary to do each job
 Clarify required templates or files, such as a Control Plan or exception matrix
 Encourage compliance with a standard process
 Define performance expectations for specific activities within a process

Design is not important provided it is clear exactly how each process step should be
completed in terms of cycle time and quality.

We need the SWI to be a simple and visual instruction document to make

standardization possible. In addition, the SWI:

Provides instructions for activities within a given role

Provides guidance on templates or files to use and the location of the files and
templates.

May have different formats but the key is that it helps an agent perform a task a
standard way

Agent Level Dashboard

The Agent Level Dashboard is used to establish agent level performance metrics and
objectives. The dashboard uncovers who needs help to ensure performance expectations
are met.
Agent Productivity

The SWI needs to clearly communicate cycle time and quality expectations. This data
can be translated into agent level performance objectives which are measured and
tracked.

SWIs should have a target for Number of Transactions, which can be used to calculate
Agent Productivity.

Agent Productivity =Target Achieved (Agent Transactions Completed) /Target

Transaction.

To Understand Expected Processing Time for Transactions

Anticipated time to process (min) = Transactions completed x Expected Time per

transaction (min)

To Understand Actual Time Spent Processing

This is the time actually spent processing transactions, excluding meetings and breaks.
For this example:

Actual Time Spent Processing = 360 minutes

Then, Calculate Agent Productivity

Agent Transactions Completed 504

÷
Target Transactions 360
________________________________________
Agent Productivity 140%

Agent Accuracy

Quality targets at the agent level and monitor performance in dashboards.

Agent Transactions with errors /Agent transactions completed=
Agent Error rate=>agent accuracy (100%- Agent Error rate).

Sample Dash Board: The Average Score is the average of Accuracy and Productivity
Measures. This score is used to create ranking table, but each individual column should
be used to assess team performance.

Consider the relevant weighting of additional factors such as the # of Escalations or

Unscheduled Leave to establish a total score.
Control Plan

The Control Plan defines how to manage critical inputs and monitor outputs so teams
know how and when to proactively react.

A Control Plan:

 Enables management to focus on what’s important

 Enables early detection of problems, prompting proactive responses
 Establishes escalation plans that involve stakeholders with the appropriate level
of information
 Establishes stability in a new situation through effective process control

Most importantly, the Control Plan enables repeatable and predictable Service Delivery.
It allows us to control the right things that flow from the 3x3 Scorecard input and
output metrics.

Process Control Control Sample Spec Limit / Response

Responsibility Frequency
Step Subject Technique Size Requirements Plan

Risk and Issue Log

The next tool to help establish agent level performance metrics and objectives is the Risk
and Issue Log. This log is a:
  Structured way of capturing all risks and issues.
 Deliverable that summarizes accountability including escalation paths and
ownership for mitigation.
 Basic tracking system used in team meetings to prioritize and manage critical
action plans.
 Deliverable that provides clear ownership, with deadlines and status.

Due
ID Risk/Issue Impact Criticality Action Owner Status
Date
What is
What is the When
Issue name Indication of the proposed to Are
For easy risk impact Who is action
and seriousness of be done to actions
reference to the responsible will be
description the risk mitigate the on track
process taken by
risk

The formal way of capturing risks and issues and a way to assign owners and actions.

 Risk: Something that has the potential to impact Service Delivery or Cost which
has not yet occurred and requires mitigation planning.

 Issue: A specific problem has occurred which is currently impacting Service

Delivery or Cost and may require immediate resolution.

For Example:

Due
ID Risk/Issue Impact Criticality Action Owner Status
Date
Meeting with
Critical process Risk to overall SLA
client to flag
input from client based on client delays - Mike July
High issue and Green
1.1 not being received Potential impact to Brown 31
identify
on time relationship/fines
solution
Management Operating System

The next step to managing the process is to establish standard management operating
disciplines for Team Leads. The primary tool is the Management Operating System
(MOS).

This tool manages critical process inputs that drive customer outcomes and provides a
review mechanism to monitor and communicate performance to various stakeholders.
In addition, the MOS:
  Drives clear accountability for performance using data
 Agrees on action to address performance gaps
 Rapidly communicates tasks and ideas
 Provides information on structured meetings, which are process-dependent
rather than person-dependent
 Aligns information agents or teams use to manage the business vs. leadership
consolidated reports

Typical MOS Structure

The following items in the design:

 The MOS must enable communication both downward and upward.

 Be careful not to add more layers of bureaucracy or extra meetings, and eliminate
as many as possible.

 Evaluate current meetings and agendas against needs.

 Potentially consolidate meetings by adjusting agendas where applicable to meet

those needs

Who Will
Stakeholders/ Information Measure/ Forum/
Present the Frequency Objectives Decisions
Participants Needs Metrics Channel
Information
 The MOS helps the team cascade priorities down and escalates issues up to improve
communications. As given below,

Completing the MOS

Who Will
Stakeholders/ Information Measure/ Forum/
Present the Frequency Objectives Decisions
Participants Needs Metrics Channel
Information
Driving Results from the MOS

Service Operations Maturity Framework: Standardized Operation

Review the details of the Standardized Operation within the Service Operation Maturity
Framework.

Stable Capable Optimized

 Team use Detailed Process
Flows and SWIs to ensure
work activities are
understood and performed
consistently
 Teams use defined standard
processing times that are
linked to performance
expectations that are
measured and reported
 Teams measure agent level
productivity and capacity
and have demonstrated
improvements by reducing
standard processing times

 Teams use an effective

MOS and Control Plan to
manage inputs and monitor
outputs
 Teams use an issue / risk
management and an
escalation process as part of
their MOS
 Operational reviews at all
levels (Process / Deal /
MOR) are done through
effective use of data and a
common set of
leading/lagging metrics
 There is a clear linkage
between leading metric
targets and the Control Plan
 Improvements are sustained
by keeping SWI's and
process documentation up
to date with the latest
improvements
 Improvement targets are
successfully achieved and
validated with data as part
of operational reviews at all
levels

Note: If teams do not meet the minimum requirements for STABLE then they should be
rated as NOT STABLE.
 3.Plan Service Operation to work

Objective

 Balance workload by matching available capacity to demand.

Expected Outcomes

 Understand the amount of work that is expected to be done.

 Understand the number of resources required to complete the work.
 Balance workload to manage capacity during peaks and troughs.

OE Methods

 Cross Training Skills Matrix.

 Resource Planning Tool.
 Volume, Productivity, and Capacity metrics.

Critical Concepts and Questions

Understand Q1: What skills are required to complete the expected work, and how does
Team Skills this compare with the skills available on your team?
Q2: How much time is spent in a day processing transactions and what level
Identify of processing efficiency does this represent?
Optimum
Headcount Q3: How many resources do you need to complete the expected workload,
and what data should the team collect to better understand this?
Q4: How much backlog are you able to maintain in your process while still
meeting customer delivery expectations?
Manage
Capacity Q5: How do you manage capacity to handle variation in customer volumes
without increasing headcount, working overtime or having poor capacity
utilization?

Cross Training Skills Matrix

The first tool is the Cross Training Skills Matrix, which provides a clear and simple way
of identifying the skills of each individual within a team for each process. The skills
matrix is a table format showing resources against processes or skills, and is usually
populated with something to indicate the level of training and experience of the
resource for a specific type of work.
The Cross Training Skills Matrix enables the team to identify training needs when
looked at in conjunction with volumes. In addition, this tool supports management
decisions in terms of approving PTO, and assigning surge resources and work
allocation. In order to be effective, it is critical to understand the skills and capability of
each individual.
Team A
Process 1 Process 2 Process 3 Process 4
(Completing Process 1)
Resource 1
Resource 2
Resource 3
Resource 4
Here is an example of Cross Training Skills Matrix.

Team A Process 1 Process 2 Process 3 Process 4 Process 5

(Completing (Invoice (Invoice (Invoice Processing - (Time and Expense (Time and Expense
Processing - UK Processing - EU Investment Reporting - Europe Reporting - EU
Process 1)
Bank) Europe Bank) Banking) Bank) Investment Banking)

Bob
Steve
Jill
Harry
Sue
Fully trained and experienced
Fully trained with limited experience
No training or experience

Resource Planning Tool

Why is it important to have the right number of resources?

The Resource Planning Tool helps understand how many resources needs available to
complete the volume of work is expecting to receive. By understanding how many
resources are required, and then will be able to balance workload and optimize the
headcount.

Example of Resource Planning Tool

In addition, the Resource Planning Tool provides visibility into key control metrics of
Inflow, Outflow, Backlog and # of FTEs to help react to potential capacity constraints.
Resource Planning Steps

Capacity Utilization

Plan Service Operations Work Conclusion

Let’s summarize some of the benefits of planning the Service Operation work. By
effectively planning, it is able to manage fluctuations in demand without having to add
additional resources.

 Daily expectations around work output and backlog are clear.

  Resource capacity is based on standard processing times and transaction
volumes.

 Team members are cross-trained to promote flexibility in managing capacity.

 Volume fluctuations are handled without increasing headcount, additional

overtime or having poor capacity utilization.

Service Operations Maturity Framework: Planned Operation

Review the details of the Planned Operation within the Service Operations Maturity
Framework

Stable Capable Optimized

 Teams understand the
volume of work that is
expected to be done and the
number of resources
required to complete that
work
 Teams use inflow, outflow,
and backlog as key leading
metrics to understand when
and how to proactively
react to capacity issues
 Teams have clear
Productivity and Capacity
Utilization targets to meet
both service and cost
objectives
 Load balancing is used to
manage daily work
activities and handle
variation in volume without
the need for increased
headcount or additional
overtime
 Teams use data to
understand the relationship
between resources capacity
and service levels
 Capacity is measured
across all teams to
understand how and when
to flex capacity
 Teams use data to illustrate
that the deal is running at
optimal capacity to meet
service expectations
 Teams are staffed below
Original Deal Economics to
handle average volumes
and manage volume
fluctuations through flexing
capacity of cross trained
resources across both teams
and deals

Note: If teams do not meet the minimum requirements for STABLE then they should be
rated as NOT STABLE.
 4.Organize the Service Operation

Objective

 Organize teams around the process

Expected Outcomes

 Teams are organized around the process to reduce inefficiencies, both in terms of
the physical layout and alignment of resources to the workflow
 Understand where things are, and what is needed to complete the work

OE Methods

 Resource and Workflow Alignment

 Office Layout
 The 5-S

Critical Concepts and Questions

Organize Teams and Q1: Are your teams organized effectively around the workflow so
Align Workflows they can be efficient while processing transactions?
Q2: Are your teams organized around the process to reduce
Eliminate Inefficiencies inefficiencies associated with unnecessary motion, transportation
or waiting?
Maintain Office Q3: Does your work environment help you understand where
Efficiency things are and what is needed to complete work effectively?

Resource and Workflow Alignment

Resource and Workflow Alignment helps you get better organized around the process:

 It is critical to organize the process to the workforce.

 This means understanding the different work types and changes in the process
volumes and rearranging your resources to be as efficient as possible.

The next several pages outline some examples of how to arrange the work on the floor.
Please keep in mind there is not one right answer, but rather recommendations on how
to align resources and workflows.
Choosing an Alignment Process

What alignment of process and resources should I use?

There is not one correct answer for the best way to align your process and resources.
The grid below provides guidance on what to consider based on the volume of the
process and the variability of the transaction type.

Note: It is important that a certain number of resources are cross-trained across

different process steps and teams as this allows you to flex capacity based on the
incoming volumes as discussed in Module 3 - Planning Service Operations Work.

Office Layout: Team Placement

Before:

 High Hold Time

 High Resolution Time
 Low First Call Resolution
 SLA Misses

Help Desk members need to walk up to Tier 2 Support for resolution and follow up
After:

 Low Hold Time

 Low Resolution Time
 High First Call Resolution
 Green SLAs

A simple change in the layout has the potential to reduce turnaround time by 2
minutes!

The 5-S

The 5-S Philosophy

Focuses on effective workplace organization and standardized work procedures.

 Simplifies your work environment, reduces waste and non-value activity while
improving quality efficiency and safety.

 Ensures a clean and organized workplace to help the team to uncover potential
problems, as problems cannot be clearly seen when the workplace is
unorganized.
The 5-S: Sort

Sort out unnecessary items in the workplace and discard if not required

Sort Steps

 Identify items as necessary or not necessary

 Red tag items that are not needed
 Have a red tag disposal procedure
 Schedule time for sorting

Benefits

 Sorting frees extra space on the floor, and potentially reduces space costs. The
free space can be used to accommodate additional desks or work spaces as
needed.
 Sorting your files and folders on your computer frees up the bytes required for
data storage, which subsequently reduces data storage and backup costs.

Philosophy: If in doubt, throw it out!

The 5-S: Set

Arrange necessary items in a good order so they can be easily picked out to use later.

Set Steps

 Organize necessary items to minimize motion.

 Mark designated areas for the items sorted.
 Use tags, labels, and signboards for easy identification.
 Use visual controls to readily identify missing items.

Benefits

 Enables easy identification which reduces search time.

 Highlights beforehand if something is missing from its place.

Philosophy: A place for everything and everything in its place!

The 5-S: Shine

Clean your workplace thoroughly so that there is no dust or irrelevant items.

Shine Steps

 Inspect the area.

 Remove irrelevant items.
 Have a check list of what should be cleaned.
 Keep the area dust free and litter free (Clean desk policy).

Benefits

 Helps sustain S1 and S2.

 Keeps equipment in ready to use condition
 Enhances longevity of equipment.
 A clean, well ordered place raises team spirit.
 Improves safety of the work place.

Philosophy: To make a place lean, keep it clean!

The 5-S: Standardize

Create standards and initiate steps to maintain them.

Standardize Steps

 Develop standards for how you work (SWIs).

 Develop standardized formats for reports and trackers.
 Have standard visuals and team boards.
 Develop standards for S1 to S3.

Benefits

 Reduces variation in the way work is performed.

 Reduces rework/validation of data and reports.
 Helps sustain S1 to S3.

Sample SWI:

Philosophy: Standardize to get organized!

The 5-S: Sustain

Ensure adherence by all employees to the standards developed in steps 1 through 4.

Sustain Steps

 Communicate and promote 5-S.

 Train everyone on 5-S.
 Revisit, revise, and improve at regular intervals.
 Continue to audit and revise standards.
 Schedule time for 5-S to improve ownership by allocating areas.
 Motivate through recognition.

Benefits

 Increases awareness for 5-S.

 Increases enthusiasm and support for 5-S as people see the benefits.
 Helps sustain S1 to S4.

Philosophy: Hold the gains, replicate the successes!

Maintain Office Efficiency Summary

What has sustaining the 5-S's helped Mike and his teams realize?

 The team’s work environment is now visibly much cleaner and better organized.

 The teams spend less time searching for lost items or on unnecessary motion.

 The teams follow Standard Work Instructions (SWI's) and process checklists to
perform their work.

 The teams make a habit of maintaining established procedures to reflect best

practices.

Organize the Service Operation Conclusion

Let’s summarize some of the benefits of Organize the Service Operation; the teams'
productivity will increase when teams’ are more organized. The time invested to get
organized has certainly paid off!

 When assessing the process volumes and variability to ensure the resources are
aligned in the best way to the process and the product families.
  Teams are organized around the process to drive increased efficiency by
eliminating unnecessary waste associated with Motion, Transportation, Waiting,
and Inventory.

 The teams are living by 5-S philosophy to drive an organized workplace that is
more efficient:
o Sort: Clearing the work area
o Set: Designating locations
o Shine: Cleanliness and workplace appearance
o Standardize: Everyone doing things the same way

Service Operations Maturity Framework: Organized Operation

Review the details of the Organized Operation within the Service Operations Maturity
Framework

Stable Capable Optimized

 Teams segment transaction
types to better understand
processing volumes and
variation in processing time
 Office appears well
organized with no sign of
clutter on desks or in the
work space
 Teams understand where
things are, and what is
needed to complete their
work effectively
 Resources are aligned to
workflow based on volume
and variability of
transactions to improve
efficiency (e.g., product
families)
 Teams are able to
demonstrate how their
office layout is organized
around the process to
improve efficiency
 Teams are consistently
practicing 5-S as a means
to drive an organized office
 Teams are able to
demonstrate with data how
aligning resources to
workflow has improved
productivity
 Teams are able to
demonstrate with data how
application of 5-S has
resulted in improved
business performance

If teams do not meet the minimum requirements for STABLE then they should be rated
as NOT STABLE.
 5.Make the Service Operation Visuals

Objective

 Display visual information to manage performance.

Expected Outcomes

 Visual controls are in place to proactively respond to potential service issues.

 Performance data is displayed over time to identify and react to trends.
 Visual Information is up to date and integrated with the overall MOS.

OE Methods

 Visual Management Display / MOS integration.

 Visual Management Plan.

Critical Concepts and Questions

Manage
Q1: How do you utilize tools on a daily basis and integrate them into
Performance Using
your MOS to efficiently execute overall service delivery performance?
Daily Visuals
Manage
Q2: How do you utilize tools on a weekly basis and integrate them into
Performance Using
your MOS to efficiently execute overall service delivery performance?
Weekly Visuals
Manage
Q3: How do you utilize tools on a monthly basis and integrate them
Performance
into your MOS to efficiently execute overall service delivery
Using Monthly
performance?
Visuals
Q4: How do you capture the visual elements of the process to clearly
Standardize Process
state both the roles and responsibilities and how the process should be
Using Visuals
executed?
Integrate Visual Q5: How do all the visual elements of a mature Service Operation work
Elements together to allow the clear and effective running of a process?

Visual Management Display

The Visual Management Display:

 Is an effective visual display to help communicate information clearly.

  Will help Mike link and organize his data with the MOS. It will also allow Mike
to use the information on hand and make decisions at an appropriate level and
frequency.

 Is critical to achieving a long-term cultural change as the information displayed

will help create a clear and shared vision of both the purpose and performance of
the process.

Daily Integrated MOS and Visual Display Actions

Review the steps to understand your core metrics used for daily operations, such
as daily team huddles and how they integrate with the MOS.

Understand the Daily Flow of Tools

The Process Performance Notice Board should contain the critical metrics needed to
manage the process on a daily basis. Because it ties in directly with the MOS, be sure to
place it in a location where the daily huddles take place.

The Control Plan is central to linking the Visual Display to the MOS and decision
making opportunities. By having an effective MOS, you can manage triggers and
actions from the Control Charts, 3x3 Scorecard, or Agent Level Dashboards.
Use key planning visuals within the daily huddles to ensure the appropriate allocation
of work. For example, the Skills Matrix or FTE Availability visuals should be clear about
who is available and what they are capable of. In turn, this data should match the
Inflow / Outflow visual which clearly states the amount of work coming in.

Weekly Integrated MOS and Visual Display Actions

Review the steps to understand your core metrics used on a weekly basis, such
as weekly meetings for Team Leads and how those integrate with the MOS.
Understand the Weekly Flow of Tools

It is important to know what actions to take as issues become apparent within the visual
information.
For example, issues are flagged in the Control Plan. The Control Charts flow into the
MOS and should be used in weekly huddles (and daily huddles where available) to
drive operational decisions.

Monthly Integrated MOS and Visual Display Actions

Review the steps to understand your core metrics used on a monthly basis, such
as monthly meetings for Operational Leads and how those integrate with the MOS
Understand the Monthly Flow of Tools

Understanding the Process Structure

Use a separate board to display critical information. This information will help provide
a shared vision of the purpose and structure of the process and outcomes.
To review, the MOS is a critical component in Visual Management. The SIPOC must be
clear about who the customer is, and what the outputs are. The SIPOC flows down to
the High-Level Process Flow, and shows how each individual element of the process
contributes to the overall goal.

The Detailed Process Maps and SWIs should be clear and simple, and should be
displayed on each agent’s desktop to ensure they follow a consistent process.

Visual Management Plan

How do you keep your Visual Display up to date, consistent, and focused? The tool is
the Visual Management Plan, which will help you determine the type of information to
display, how often to display the information, and finally, who is accountable for
updating the information. All of these items will help you keep your Visual Display up
to date and consistent.

The Visual Management Plan is typically in a table format. Click each area on the Visual
Management Plan to learn about the key information.

Target
Objectives Data Type of Data Location Refresh Rate Accountability
Audience

Working across remote locations?

Many of you will be used to working in Operations that are spread across many
locations globally. While you cannot have a single notice board it is critical an MOS is
still running and that the tools described are forming part of the huddles. Use the visual
management plan to ensure information is shared virtually by using resources such
as SharePoint.

Process Performance Notice Board

Here is an example of how tools can be displayed on a Process Performance Notice

Board.
Process Structure Notice Board

Here is an example of how the tools can be displayed on a Process Structure Notice
Board.
Example: Frequency of Integrated MOS and Visual Display Actions

Service Operations Maturity Framework: Visual Operation

Review the details of the Visual Operation within the Service Operation Maturity
Framework.

Stable Capable Optimized

 Performance data is clearly
displayed over time using
control charts to identify
and react to trends and
understand performance
against service expectations
 Visual displays are used as
an integral part of daily
huddles and MOS, whch
allows all resources to
understand the team's
performance on work
allocation and the key
leading metrics for the day
 Teams use visual controls
to decide when to
proactively react to avoid
potential service and/or
capacity issues
 Process and Leadership
teams are able to gauge the
health of the overall
process through the visual
representation as they walk
the floor
 Improvement actions result
in improved performance
as seen on the team's visual
display of performance
 Teams have demonstrated
continued improvement in
performance driven through
visual displays of rewards
and recognition and
improved performance on
the floor

 The end to end process is

clearly displayed in a
central location for the
teams to use, along with
SWIs at each agent's desk

Note: If teams do not meet the minimum requirements for STABLE then they should be
rated as NOT STABLE.
 6.Improve the Service Operation

Objective

 Teams drive continuous improvement.

Expected Outcomes

 First pass yield implemented as a key measure to help identify rework.

 Ability to identify root cause and corrective actions to address issues.
 Lean basics understood to help identify improvement opportunities.

OE Methods

 First Pass Yield/Rolled Throughput Yield.

 Process Analysis/Waste Walk.
 Fishbone Diagram.
 Pareto.
 5 Whys.

Critical Concepts and Questions

Baseline Your Q1: Do you understand your performance today, and your target
Performance performance in the future for your key output metrics?
Q2: Do your teams use data to understand where in the process there is
Analyze Data
scope to make improvements?
Identify Causal Q3: How does your team drill down into the process to identify the root
Factors cause of any issues and identify potential corrective actions?
Identify Q4: How do your teams identify and prioritize improvement
Improvement opportunities, and are these linked back to the original
Actions improvement targets?
Implement and
Q5: How are the improvements validated, communicated, and
Sustain
sustained once implemented?
Improvements
Understanding the Key Steps in an Improving Operation

Analyzing 3x3 Scorecards and Control Charts

A good place to start the analysis of potential improvement areas is within the 3x3
Scorecard and corresponding Control Charts.

According to the new target from BPO, we should be now processing 35 invoices per
person per day.
What are you looking for?
The analysis indicates that a key input has room to improve. This could be obvious, like
performance outside of targets or strong negative trends. You need to look in detail at
trends and capability, and identify whether each input is performing to an optimal level

Analyzing Rolled Throughput Yield

There is a difference between the error rate the customer feels and the true number of
defects in a process. Understanding the real yield helps to identify true waste in the
process and potential areas for improvement.

While the customer is only feeling an error rate of 0.5%, the rework loop that has been
built into the process is masking the true error rate within the process, as some errors
are captured internally and corrected, adding cost to the process. It is this information
that starts to tell us the real health of the process.

First Pass Yield

The first pass yield is the yield rate at a particular step in the process before any errors
are corrected.
As you can see, approximately 2% of processed units are picked up as defective on their
first pass through the Post Invoice for Payment process step and are corrected. This
means the first pass yield at this step is 98%.
The customer still feels an error rate of 0.5%.
Looking for Rework Loops

To understand the true amount of rework within a process, you need to first
understand the first pass defects at every stage and roll them up as if no corrections
were made. This is called the Rolled Throughput Yield.
PLEASE NOTE that the Resolve Invoice Exceptions process step is an explicit rework
loop. Therefore, all units passing through that loop are counted as defects from the
previous step.

Calculating Rolled Throughput Yield

Review the information below on how to determine the Rolled Throughput Yield.

Removing Waste from the Process

Before you start to analyze your process, it is important to understand the difference
between activities that are Value Added and Non-Value Added, which are required,
and those activities that are Waste.
7 Forms of Waste

Form of Waste Example

Motion Reaching, bending, unnecessary steps within the office or work area
Functional handoffs (including electronic), document movement (physical
Transportation
or electronic)
Working ahead of schedule, building up large transaction queues, keeping
Over Production
people "busy"
Excessive information, unnecessary reports, unnecessary approvals,
Over Processing
excessive specifications
Time waiting to receive a quote from a supplier, turnaround time to get an
Waiting
approval
Transactions/documents waiting in queue (e.g., incomplete customer order,
Inventory
unreleased engineer drawing)
Customer orders with incomplete information, rejected documents,
Defects
revisions/iterations
Waste Walk, Part 1

Note: The three red highlights indicate the areas where waste was identified.

Waste Walk, Part 2

Note: The four red highlights indicate the areas where waste was identified.
Process Analysis: Identifying Waste to Remove

Process analysis is about looking for waste activity in a process and removing it. For
example, this process takes 40 hours, but there is considerable activity that is not adding
value to the client.

Process Analysis Summary

Building a Fishbone

The team can use a Cause and Effect Fishbone Diagram to work with Subject Matter
Experts to identify why a specific problem is happening.

Accounts Payable Fishbone

We need to know why these errors occur, and understand if there is a pattern with
certain times, certain suppliers, systems, or transactions. We should focus our efforts on
the vital few reasons.
Fishbone Summary

Accounts Payable Pareto

The key root cause can be identified by collecting data on the identified causes.
The examples shown below are from the Fishbone diagram. We verified our
assumptions with data and saw a Pareto Principle - that 20% of the reason types
resulted in 80% of the mistakes.
Pareto Summary

The 5 Whys

The 5 Whys technique helps you focus on the root cause of the problem, and is used in
conjunction with other causal analysis techniques such as the Fishbone, Process, or
Pareto analysis.

To push for root causes, start with the problem you are trying to solve and then ask
WHY (about) five times.

Example
Problem: Books in the British Library are getting corroded in the racks.

1. Why are they corroded? Because of bat waste.

2. Why are there so many bats? They come to eat rats in the night.

3. Why are there so many rats? There is lots of food in the trash.

4. Why is there food in the library? Readers bring food inside.

5. Why are the readers bringing food inside? There is no rule to stop them.

Solution: Create a rule to ban food inside the library

Solution

 Define minimum data requirement for invoice

 Communicate minimum data requirement to all vendors
 Implement a step to check invoice for minimum data before scanning reject back
to supplier with details on minimum data requirements
5 Whys Summary

Causal Factors and Identified Actions

Solution

 Define minimum data requirement for invoice.

 Communicate minimum data requirement to all vendors.
 Implement a step to check invoice for minimum data before scanning reject back
to supplier with details on minimum data requirements.
Managing and Monitoring Improvements

In order to manage all of the project ideas in the pipeline, teams must use a methodical
approach.

To manage the Project Implementation:

 Establish a review mechanism with necessary stakeholders to keep them

informed.

 Review the status on completed actions.

 Validate the action had the desired result.

 Redeploy the newly available FTEs using a plan.

Validate with the Finance Department that savings have come through.

Improve the Service Operation Conclusion

How should team operate in the future?

 First Pass Yield should be implemented as a standard measure to help the teams
identify opportunities to reduce rework and lower cost.

 The teams should have a Root Cause Corrective Action process in place to
identify the root cause of repeated service issues, and they have put the
necessary controls in place to address them.

 The teams should have a basic understanding of process analysis, and use this to
identify and remove waste in the process and drive a culture of continuous
improvement.

 Identification of improvement opportunities is a standard part of the teams MOS,

while data is used to validate the impact that improvements have made on
performance.

Note: Click here to access the BPO Operational Maturity Homepage. This
homepage contains additional information to help you improve operational
maturity with your team, including all the tools and templates discussed in
this module.
Service Operations Maturity Framework: Improve Operation

Review the details of the Improved Operation within the Service Operation Maturity
Framework.

Stable Capable Optimized

 Teams know the current
baseline performance of the
process and have targets in
place to improve
performance
 Teams have the ability to
identify root cause and take
corrective actions to
address issues
 Teams understand the work
breakdown and are
increasing total available
processing time to drive
improved productivity
 Teams measure Rolled
Throughput Yield and use
this as a means to identify
and implement
improvement opportunities
 Teams understand and use
the 7 forms of waste as a
tool to identify and
implement improvement
opportunities
 Teams have a mechanism
to identify and prioritize
improvement opportunities
as part of their MOS
 Teams use data to validate
improvements in the Rolled
Throughput Yield and how
this relates to cost
 Teams validate that
improvements are both
achieved and sustained
using data as part of their
Visual Management and
MOS

Note: If teams do not meet minimum requirements for STABLE then rate as NOT
STABLE.