The most popular and well known of the continuous improvement methodologies is Six Sigma that was developed by Motorola and successfully adopted by others such as Honeywell and most notably, General Electric. Six Sigma is a highly formalized, process oriented improvement tool that is data focused. Another quality operating system is the less known, but very successful, Achieving Competitive Excellence (ACE) operating system. This system was developed and is practiced by United Technologies Corporation (UTC). I was trained in its' use and the Finance team used it extensively at Chubb Fire & Security. The ACE system is broader based than the Six-Sigma approach and enables the user to define the problems and solutions within each process.
Every department at UTC is expected to apply the ACE methodology to their work. Within my Finance team, I selected Payroll as a key area for our "customers" (internal), that had high impact when there was an error. And our experience was that with over 15,000 guards working different shifts in different states around the country, on various different awards and penalty rates, this was an area where we did have a high error rate on a sensitive issue - their pay.
Key steps in the ACE process improvement methodology include:
The team maps the process in question "Value Stream Mapping" in order to identify waste and inefficiencies. Errors are known as Turnbacks or Escapes - both of which will represent bottlenecks or rework, or wrong product getting through the process and off to the customer.
Based on the Value Stream Mapping, QCPC or Quality Clinic Process Charts are documented to record the number of errors in each step of a process. It is this ongoing monitoring of the number of errors by source that enables the team to recognise those problems that occur most frequently.
One can then baseline the current performance (numerically) and commence the process improvement project.
DIVE -
Define the problem
Investigate to find root causes
Verify the proposed corrective actions
Ensure that the corrective actions are working effectively
RRCA -
Relentless Root Cause Analysis
Otherwise known as the 5 Why's - because it is anticipated that you need to go to at least 5 levels of cause and effect to get back to the actual root causes, of any systemic issue.
The payroll process for the Guards business which we addressed at Chubb had numerous sources of error which led to a substantial number of incorrect payments each fortnight for the employees. After running an ACE project with the team for a 3 months, we were able to reduce these errors by over 93%, which allowed us to reduce the rework time in the pay office significantly and get everybody paid on time and correctly, ultimately saving 4 FTEs and reducing the angst in our guards workforce.
I would strongly recommend adopting ACE or at least using the tools and processes discussed above, to address any concerns over business process efficiency.
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