1. Problem Statement 2. Problem Objective 3. Primary Metric 4.

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1. Problem Statement2. Problem Objective3.
Primary Metric 4. BACK STOP Metric

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• Continuous Improvement Training
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Problem Statement and Objective

• The problem statement and objective should be
  S.M.A.R.T.
• Specific---Focuses on a particular process,
  process characteristic or area
• Measurable---Can be measured to establish
  justification for project and validate
  improvement
• Attainable---Narrow scope to allow successful
  completion in a specified period of time
• Relevant---Directly tied to business and
  corporate imperatives
• Time Bound---Specifies a realistic period of time
  (usually 3-5 months)

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Problem Statement (Description)

• There are two purposes of the problem statement
• To focus the team on a process deficiency
• To communicate the significance to others
• The problem statement does NOT include any guess
  as to the cause of the deficiency, or what
  actions will be taken

A poor problem statement RA costs are too high
due to product defects and will be reduced by
analyzing first and second level pareto charts.
A good problem statement From Jan Dec 2009, the
average RA costs are 7 of sales with a range of
1 to 12, resulting in a loss of 10M.
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Problem Statement
What if no data exists?

• Preliminary Problem Statement
• During X length of time, the Primary Metric
  (the issue) was X, which resulted in a loss of
  X.
• Specific data will be defined via data collection
  and analysis.

Warranty Returns
Specific data will have to be collected to
justify giving the project priority.
Data
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Problem Statement
Problem Statement After Data Collection From
1994 to 1998, Product A returns are 5 of sales
with a range of 2 to 12, resulting in a profit
impact of 5M.
of Returns for Product A
Returns by Product Group
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Objective

• The objective states the goal of the project. It
  must
• Address the issue described in the problem
  statement
• Quantify the expected performance improvement
• Identify the expected timing
• Like the problem statement, the objective does
  not state the cause of the deficiency or what
  actions will be taken

A poor objective Reduce R A costs by
implementing individual performance measures and
objectives.
A good objective Reduce R A costs (Product
A)from 5 to 2.5 of sales by year end XXXX,
which will result in a savings of 2.5M.
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Primary Metric

• The primary metric is the yardstick that will be
  used to measure your success. It must
• Be consistent with the problem statement and
  objective
• Include 3 series of data, plotted as a function
  of time
• baseline performance (average over the past 12
  months, if possible)
• actual performance
• Objective / goal

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Primary Metric training sample for Product A
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Secondary Metric(BACK STOP)

• The secondary metric is the conscience that will
  keep you honest
• Tracks potential negative consequences
• More than one may be required
• Examples cycle time, cost, customer satisfaction

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Sample Secondary Metric
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Sample BACK STOP Metrics

• Primary Metric Lead Time
• Potential Secondary Metric Quality, OT Costs,
  Costs
• Primary Metric Quality (Defects)
• Potential Secondary Metric Lead Time, OT Costs,
  Costs

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Standard Work

• This format becomes the standard for all
  improvement project types
• 5S / Safety area activity (1-day)
• Workplace Kaizen (2-day)
• Cross-functional team Kaizen (5-day)
• BB/LB/Gb type project (3 - 6 months)
• Capital projects / Inventory (6 -12 months)
• requires GM, Finance, Manufacturing, CI
  approvals