Strategic planning and Lean Six Sigma

Strategic planning is a process companies go through usually once a year and the plan is reviewed at least once every quarter. This process has inputs such as:

• Company mission

• Previous Strategic Plan and Key Performance Indices (KPI) results

• Market forecast

• Existing technology and skills

• Capacity constraints: human resources, equipment, financial resources

The outputs of this process are:

• New Strategic Plan

• Management Review Plan

Typical metrics of this planning process are:

• Actual Vs Plan: KPI results seen in Management Reviews

• Strategic Planning process lead time

• Number of iterations before the plan is approved

The Lean Six Sigma methodology may be applied to the improvement of this critical process in the company. Following the DMAIC steps, the following Lean Six Sigma tools can be applied to this planning process:

1. DEFINE:

• Project charter: Identify opportunities for improvement and the key players for this improvement project

• Strategic planning process map: document the current process defining who does what and when

2. MEASURE:

• Define and collect required data for the plan. Define the metrics of the Planning process itself

• Company KPI definitions: who collects the data and when? How are KPIs calculated? How timely are they?

• KPI measurement system validation: How accurate are they?

3. ANALYSE:

• Waste identification and removal in the current planning process:

• Waiting for data that should be readily available

• Data incoherence due to poor cross-functional communication

• Data duplication in multiple disconnected data bases, etc.

• Root cause analysis to understand discrepancies between planned and actual KPIs

• Bottleneck identification in the planning process: capacity constraints, yield loss, etc.

• Sources of variability in the planning process:

• I/S dependencies

• Multiple Excel sheets leading to incoherent data, etc.

• Failure Mode and Effects Analysis (FMEA): What can go wrong in our current planning process? How can we reduce risk?

4. IMPROVE:

• What are the main Strategic Planning process KPIs affecting the planning results

• Define the new Planning process map to achieve improvements: Who does what and when

• Poka-Yokes to avoid mistakes in this process: robust process

• Monte Carlo simulation to optimize the planning process

5. CONTROL:

• Implementation Plan to guarantee the accuracy, timely availability and effective deployment of the Strategic Plan

• Implementation of KPI real-time control at Company level to ensure process problems are detected and corrected on time before customers or the business is affected

• Visual controls to make it easier for workers and professionals to control their own processes

• Management Review Plan to ensure the Strategic Plan is alive all along the planned period: timely actions are put in place to correct deviations or the plan is modified to adapt to new situations.

The Strategic Plan is a worthwhile management effort as long as it is kept alive along the whole planned period and not some work done once a year and then forgotten.

Lean Six Sigma could help both in the improvement of the planning process and its deployment. It could also help in the plan reviews and its modification as a result of new situations.

Implementation of Lean Six Sigma in the company should also be one of the items included in the Strategic Plan:

• How are LSS responsibilities assigned to management

• LSS training plan: Black Belts, Green Belts, Champions, etc.

• LSS improvement projects plan and measurable results to be expected

• LSS project review schedule

• BB and GB dedication to LSS projects and rotation plan for LSS responsibilities in the company

Eventually LSS should become a way of life in the company practiced by everyone: management and employees.

Cornelio Abellanas

Lean Six Sigma Consultant

BITSPEC