2007_08_26 Get That Project Started

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2007_08_26 Get That Project Started
  26 GEARS August 2007 by Dennis Madden   MAKING IT WORK  Get That Project  B efore we start a new project and establish ways to measure our progress, let’s recap what we’ve learned over the past couple issues. The What’s Working   study showed us that businesses that are customer centric enjoy a significantly higher level of success than those who  put profits first. Based on that, we’ve established why customers seek your services in the first place: they have a need. The  Need–Do  gap covered in May illus-trates the relationship between what the customer wants (the Need) and what a  business provides (the Do).When what you provide varies from what the customer wants, you have a gap. You may not even realize there’s a gap between what you provide and what the customer wants; you just know that business is off and you won-der why. But if customers are frequent-ing one business more than others it’s  because their Need–Do gap is smaller.In the July issue we discussed the idea of  y = f(x) . This formula represents the dependence of your outcome, the  yield,  to your processes and what you  put into these processes. We also estab-lished that all businesses are bound by this formula, whether they understand it or not.This brings us to the idea that meet-ing the customer’s needs is based on the  processes you follow and what you  put into those processes. To make sure you’re achieving the desired results, you have to monitor the outcome. If the outcome is less than desirable, you need to change the process until you get results that meet the customer’s needs.Okay, we’re getting closer. Let’s make a couple more statements, and then we’ll get into monitoring and mea-suring the results of the process. In the April issue of GEARS   we talked about quality, and declared that “quality is a state where both the customer and  pro-vider realize value entitlement in every aspect of the business relationship.”So this state of quality is the tar-get; it’s the  y  of our function. Based on that, we’re going to call everything that results in a yield or meets the customer’s needs as Critical To Quality,  or CTQ. These are the things we can identify that customers want and need; it’s what they value. On the right side of the equation we have the Critical To Process  items, or CTPs. These are the things you do and the processes you follow that provide the results the customer is looking for. We’ve come a long way to get to this point, but these concepts are so important that you really have to take them one step at a time. Now we’re ready to look at starting projects that’ll narrow the gap, and increase your qual-ity to the customer. There are many ways to address a project. How you do so is primarily based on the type  of project, but regardless, there are 5  basic steps you want to follow. They are expressed by the acronym DMAIC, which stands for Define, Measure, Analyze, Improve and Control. DMAIC Stage 1: Define The Define  stage is where you identify the CTQs you want to address. This can be one of the most difficult  parts of the process, and it’s why many  people never get their projects off the ground.The best way to define a prob-lem or a CTQ is to state the issue in the form of a question. For example, we’ve established in earlier articles that you should have about a 60/40% ratio  between male and female customers. Armed with this knowledge, you ask “What is the male/female ratio in my shop?”Right away this question moves you to the next step: Learning the ratio. If you had stated something like, “I need to increase my female customer count,” or “I think my male/female customer ratio is off,” it wouldn’t cause any action. In fact, you probably sensed the difference just reading these state-ments versus the question. This holds true with statements like: ã “Business is terrible.” ã “I think my rebuilder is slow.” ã “We can’t seem to get work out the door.” ã “We have too many CBs.” …and the list goes on and on.But once you put the issue in the form of a question, things change. Instead of stating that business is ter-rible, you could ask: “What has our  profit been each week for the past three months?” or, “What have car counts  been for each week over the past year?” If you think your rebuilder is too slow, you might ask: “How long does it take Charlie to rebuild each transmission?” DMAIC Stage 2: Measure The next step is to Measure  the data, to answer the question from the Define step. We asked, “What is the male/female ratio in my shop?” This question is easy to answer: Count them. Tally the number of men and women who come to your shop. You could even take a calendar and make simple tally marks on it to track the daily calls. And you should to count the number of customers that actually come to your  GEARS August 2007 27 shop, too. If you’re tracking your rebuilding time you’ll want to think about it first. Don’t try to track all of your rebuild times; you’ll never get a handle on them and get discouraged. First find out which transmission is the most com-mon in your shop, and begin with that.Figure 1 shows an actual list of transmissions from a shop that partici- pated in our What’s Working   study. It shows the rebuilds the shop did over a two-week period. Naturally, the more weeks you track, the more accurate your data will be, but in this case you can easily see the 4L60E, at 13 units, was the most popular. In fact, it repre-sents 29% of all the rebuilds they do.From there, you’ll want to know how long it takes your rebuilder to rebuild a 4L60E. There are several ways to measure this, and we’ll cover that in another article. The point is, Measure the data based on the question you asked in the Define step. DMAIC Stage 3: Analyze  Now it’s time to Analyze  the data. We’ll use the male/female ratio for this example: Suppose you counted the number of customers that called and the number of customers that actually came in the shop. Is the ratio the same? If your female numbers are below the 40% level, it might indicate your adver-tising is unappealing to women.On the other hand, if your call-in ratio is significantly higher than your walk-in ratio, it indicates your advertis-ing isn’t the problem. Maybe female customers drive up to your shop and keep going; the appearance of your shop is the problem.Then again, maybe your ratio is fine but your overall customer count is Figure 1       28 GEARS August 2007 down. Here you don’t have a gender-specific issue; it’s just that no one is calling or coming in. In that case, you need to look elsewhere. If your overall customer count is down, you may want to begin by sur-veying your customers. Even though these are the customers who came in, they may still have some issues with your shop; they just weren’t bad enough to cause them  to go elsewhere.Or you could survey them on how they heard about you. You might be surprised to learn that the advertising you’ve been using is completely inef-fective, and the only customers you’re getting are from referrals. Referrals are great, but this may indicate your advertising isn’t good enough to gener-ate a call on its own, without a recom-mendation from someone the consumer trusts. Another thing you gain by going through the Define and Measuring steps properly is, if you go to a training seminar or management program, you have relevant questions to ask and you can really narrow your focus to areas you’ve already identified. You can give the management expert some real data, and the advice you get will be far bet-ter than the generic response they’ve  prepared for the program.Imagine going into a training pro-gram and your only reason to be there is business is bad. So you get a couple good, general ideas, but you don’t real-ly get something that addresses serious  problems with your business, because you haven’t taken the time to identify those problems.The reason? You haven’t put the  problem in the form of a question… a question that causes you to take action. In fact, if you look up the word  prob-lem,  you’ll find a definition something like this: “A question to be considered, solved, or answered.” Now, before we leave the Analyze  phase, consider this: So far we’ve been discussing CTQs; Critical To Quality components. That is, the  y of our for-mula. The things that are important to the customer and give us value entitle-ment.  The Define and Measure steps are related to CTQs.When you go into the Analyze  phase of the five-step process you’re still considering   CTQs, but during this  phase you switch your focus to CTPs (Critical To Process). Figure 2 illus-trates this idea. The formula  y = f(x) is transformed to CTQ = f(CTP). As you can see, the Define and Measure phases focus on the CTQs, where the Improve and Control phases focus on the CTPs. It’s the  Analyze  phase that bridges the two. DMAIC Stage 4: Improve The Improve  phase takes the ideas, training or variation-to-process concepts you addressed in the Analyze  phase and puts them to work. What you do here depends completely on what  part of your business you’re trying to improve, based on what you discovered in the first three steps of the process.For example, if your male/female ratio is 90/10 for customers that come through the door, but it’s 65/35 for customers that call, you might con-clude your problem is the appearance  of your shop.On the other hand, if your ratio for call-ins and walk-ins is the same, but low overall, you might look at different forms of advertising.Whatever decision you make, you  put it to work during the Improve  phase… and continue measuring the results. Here you’re going to Measure, Analyze and Improve… Measure, Analyze and Improve. If something works, you continue in that direction; if it doesn’t, you change direction.Recently, Toyota took the lead in car sales, unseating General Motors. Toyota is a company steeped in a pro-cess known as  Lean Manufacturing,  which was actually developed by its founder, Sakichi Toyoda. Part of Lean Manufacturing is a process known as  Kaizen;  translated it means continuous improvement  . This is more than just a catchphrase, and if you’re interested, there’s all kinds of information on it on the internet. The point is that it’s minor changes over a period of time that gives you huge results. DMAIC Stage 5: Control Once you achieve the changes you set out, you want to Control  them, so they continue to provide the results you wanted. You don’t just  set it and  forget it.  No, you continue to Measure, Analyze and Improve… continuous improvement.With only two months until Expo, now’s the time to identify some key areas of your business to improve. Take those key areas and put them in the form of questions. If you can, collect data related to your questions and bring them to class on Thursday. We’ll work on these five key areas, so by Sunday you’ll have an action plan you can put to work the moment you get home.Because, as Rodger Bland pointed out in his What’s Working   article, page 22 of this issue, it’s people of  ACTION   that get results. Figure 2 MAKING IT WORK: Get That Project Started!   Automatic Drive P.O. Box 440Bellows Falls, VT 05101-0440 USA 800-843-2600 ã 802-463-9722 ã F: ã ©2007 Sonnax Industries, Inc. TIME TESTED ã INDUSTRY TRUSTED TM Look what you can FIX… for less  Visitwww.sonnax.comfor more informationabout all our products and tools, and tolocate a Sonnax Transmission Specialties  ®  distributor near you. 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