page 1
page 2
page 3
page 4
page 5
page 6
page 7
page 8
page 9
page 10
page 11
page 12
page 13
page 14
page 15
page 16
page 17
page 18
page 19
page 20
page 21
page 22
page 23
page 24
page 25
page 26
page 27
page 28
page 29
page 30
page 31
page 32
page 33
page 34
page 35
page 36
page 37
page 38
page 39
page 40
page 41
page 42
page 43
page 44
page 45
page 46
page 47
page 48
page 49
page 50
page 51
page 52
page 53
page 54
page 55
page 56
page 57
page 58
page 59
page 60
page 61
page 62
page 63
page 64
page 65
page 66
page 67
page 68
page 69
page 70
page 71
page 72
page 73
page 74
page 75
page 76
page 77
page 78
page 79
page 80
page 81
page 82
page 83
page 84

efforts and improve sustainment. Some of the results from these efforts include: • Change management. In just two days the team delivered a 57 percent reduction in non-value added activities and a 55 percent reduction in handoffs which led to a significant overall reduction in the cycle time for the change management process. • Asset receiving. The kaizen team achieved a 55 percent reduction in total in-house receiving transportation time and a 59 percent reduction in total travel distance for items moved during Businessexcellence May 07 26 change is realistic and achievable. In this case, the team chose a pilot area and conducted a half-day “vision event” where they created a future state map or vision for the future of the pilot value stream. They identified, from the current state map, where opportunities for improvement lay and their potential benefit to their clients. They prioritized their actions by impact versus effort and then created a sixmonth calendar of events to execute the activities. The final element was to create a “back of the envelope” cost-benefit analysis to communicate the opportunity to the organization. As would be expected some of the greatest opportunities came from business processes which support the steady state operations. In this particular value stream these included asset receiving, server stand-up, change management, and server decommissioning. Each opportunity was scheduled as a cross-functional kaizen event along with some pre-event data collection and post event sustainment activities. The events were designed to leverage the analytical elements and capabilities of six sigma and the “applied common sense” of lean to accelerate the improvement

must communicate the need for change, become fully engaged and supportive of the new efforts and align accountability. Simply providing lip service to the new way will lead to certain failure. There is ample opportunity to improve IT and data center performance and create a competitive advantage. One senior IT executive described their data center performance as “the best of a sorry lot” when giving the reason for adopting a different approach to creating operational excellence. The challenge lies in breaking free the embedded culture from viewing their business from a technology, project and functional perspective. Creating an end-to-end, customer value perspective creates its own unique challenges, but also offers exciting potential for the future of data center operations. LeanSigma provides the tools and methodologies to capture the endto- end perspective. While engaging the workforce and increasing the speed; ultimately, the data center acquires the benefi ts of transformation. Early evidence suggests that organizations which adopt these tools from industry are able to realize the same magnitude of improvement that has been achieved for decades in manufacturing. Those organizations who embrace the approach early will undoubtedly create sustainable competitive advantages just as Toyota, GE, Honeywell and other organizations have in manufacturing. asset receiving. Between August 2005 and August 2006 the site collected over $512,000 of excess inventory which was eliminated by the end of the fi ve-day kaizen event. • Server standup kaizen (BQ-RFU). The team reduced cycle time by 15 percent on average for all projects leading to a conservative benefi t of $400,000 annually. The reduction was achieved by eliminating 29 percent of the processing delays and over 50 percent of the process handoffs. • Server Decommissioning. Another kaizen team identifi ed $1.6 million in incurred and unbilled costs due to timing of billing stoppage combined with long decommission lead times. They also achieved a 30 percent reduction in end-to-end cycle time resulting in additional labor savings, a 66 percent reduction in lead time, an 81 percent reduction in failure points and a 71 percent reduction in handoffs. • Business Qualifi cation. This kaizen team eliminated 6,000 person work hours from the downstream process. While these types of results have been typical in manufacturing organizations leveraging lean and six sigma, it was not until the team saw the results themselves that they believed the application of these tools could deliver this type of results for an IT organization. This data center continues to leverage this approach for improvement and has begun to work in another value stream while continuing the improvement efforts in the pilot value stream. At present the team believes there is ample opportunity to improve operating costs by fi ve percent to ten percent annually. Certainly the organization described above is realizing tremendous results by leveraging tools from industry. But this has not been without challenges for the site culture and leadership. Like most IT organizations, they are not inherently “process thinkers” but system and technology thinkers. They tend to see things from a project and functional perspective and not from end-to-end as the client. To truly capture the benefi ts of LeanSigma, an organization’s leadership must themselves begin to view the opportunities for improvement from the vantage point of the client and then drive the population to do the same. This not only requires a shift in thinking but may also require a new organizational structure or even redesigned performance management and incentive compensation systems to align the actions of the organizations to the client’s perspective. In addition to organizational changes leadership often needs to support and highlight the early successes of radical restructuring. Every body in motion continues along the same path unless acted upon by an outside force. That outside force must be leadership providing “air cover” for the early adopters willing to step outside the status quo and try new approaches. Leadership Operational excellence May 07 Businessexcellence 27 “Every body in motion continues along the same path unless acted upon by an outside force. That outside force must be leadership” Mike Bawn & Jeff Watzka are management consultants with Guidon Performance Solutions