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INCLUDES EXCERPT FROM
      THE NEW BOOK BY
AWARD WINNING AUTHOR
FORREST W. BREYFOGLE III
BUSINESS HAZARDS OF THE 21ST CENTURY


The increasing competitive pressures of a global economy are forcing executives
to react faster to changing business conditions and customer requirements, under
conditions of stringent cost containment.

Line managers and decision-makers need to have an efficient and effective system for
day-to-day business operation with access to performance metrics that lead to the most
appropriate and cost effective activities.

In short, what’s needed is an enterprise level performance measurement and
improvement system to drive financial and operational success under the most
challenging conditions.

         The answer? Integrated Enterprise Excellence (IEE)

                                         Compliance
                                                             Commoditization
                        Regulations




            Liability
              Suits
                                                          Global
                                                        Competition
“Forrest’s Integrated Enterprise Excellence (IEE) system
                                is not simply a methodology for doing Six Sigma projects.
                                IEE offers an overall management system that provides the
                                framework where companies can implement and benefit from
                                Dr. Deming’s methodologies.”
                                                                       —Bill Wiggenhorn, Retired President of
                                                                       Motorola University

        IEE: A NEW AND ENHANCED ENTERPRISE IMPROVEMENT SYSTEM TO MEET THE
        BUSINESS AND PROFESSIONAL DEMANDS OF THE TWENTY FIRST CENTURY


        •	 Integrates	analytics	with	innovation

        •	 Provides	the	framework	and	integration	of	quality	management	tools,	analytics,
           innovation, and improvement methodologies

               - Ford                      - Crosby                      - Theory of Constraints
               - Shewart                   - Smith                       - Lean Six Sigma
               - Toyota (TPS)              - Motorola                    - Hoshin Kanri
               - Feigenbaum                - QMS                         - The Balanced Scorecard
               - TQM                       - Welch                       - DMAIC
               - Deming                    - Six Sigma                   - Design of Experiments
               - Juran                     - Kaizen Events               - Taylor

                                  “Other books are light years behind Forrest’s 4-book suite,
                                   which not only provides senior management with Lean
                                   Sigma performance scorecards, but also a how-to roadmap
                                   for Enron-effect avoidance.”
                                                                   —Frank Shines, Lean Six Sigma Engagement
                                                                   Leader, Industriaplex
The evolution of ideas...




  F




                                                                                   a


                                                                                  ...the integration of best practices
IEE DIFFERENTIATORS/INNOVATIONS



•	 Alignment	and	blending	of	Enterprise	value	chain	with:	
     operational metrics ➮ analytics and innovation ➮ financial goals ➮ strategies ➮
     operational goals ➮ improvement/design projects ➮ controls
•	 Two-level	application	of	the	Lean	Six	Sigma	(Define	-	Measure	-	Analyze	-	Improve			
						-	Control:	DMAIC)	roadmap:
	         -	Enterprise	process	level:	E-DMAIC
	         -	Project	level:	P-DMAIC	with	a	true	integration	of	Six	Sigma	and	Lean	tools
•	 Design	for	IEE	(DFIEE)	projects	that	have	enterprise	needs	alignment	for:
          - Product design
          - Process design
          - Information technology development
•	 Creation	and	presentation	of	business	metrics	that	get	organizations	out												
						of	the	firefighting	mode:
	         -	30,000-foot-level	view:	Ongoing	operational	measurements	
	         -	Satellite-level	view:	Ongoing	business/financial	measurements
•	 Insightful	synthesis	and	graphical	representation	of	data:
          - The IEE scorecard/dashboard
          - Enterprise analytics with innovation
•	 Better	ways	to	use	conventional	tools	for	improved	decision	making	at	the																																			
                                                                                    	
						enterprise	level:
	         -	IEE	30,000-foot-level	and	satellite-level	charts:	Enables	assessment	of																																		
            predictability
	         -	IEE	probability	plots:	Enables	performance	forecasts
	         -	IEE	P-DMAIC	roadmap:	Provides	step-by-step	direction	for	improving																																							
                                                                                    	
            performance



                                                          “IEE represents the best of best practices in measurement
                                                          and improvement. It transcends Lean Six Sigma and the
                                                          Balanced Scorecard. It’s a powerful business system that
                                                          blends analytics with innovation and arms everyone in
                                                          the organization with the tools needed to contribute to
                                                          success. Aptly named, it truly integrates enterprise
                                                          excellence.”           —Mike Jones, Past President, ASQ
THE INTEGRATED ENTERPRISE EXCELLENCE SYSTEM



The IEE system is documented in a new set of four books by Forrest W. Breyfogle III,
Crosby Medalist and author of best seller, Implementing Six Sigma (ASQ recognized
body of knowledge for black belt certification training)

The set of books highlights common business systems issues and presents
IEE as an enhanced methodology that can improve organizational efficiency
and effectiveness. The series documents a set of best practices derived
from the strengths of past systems – illustrating the basics of structuring
IEE metrics and a no-nonsense roadmap to initiate process improvement
and achieve substantial benefits. IEE takes Lean Six Sigma and the Balanced Scorecard
to the next level in the pursuit of enterprise excellence.

A	new	paperback:	The Integrated Enterprise Excellence System - an introductory
overview	for	managers	and	practioners	highlighting:
•	 	 merging	business	and	professional	challenges	of	the	21st	century
   E
•	 Limitations	of	“last	century”	methods
•	 Enhanced	features	and	benefits	of	IEE	implementation
       - for the enterprise
       - for the project
       - for the manager and practitioner

	 hree	hardcover	volumes:	Integrated Enterprise Excellence
T
•	 Volume	I	-	The	Basics	
•	 Volume	II	-	Business	Deployment
•	 Volume	III	-		Improvement	Project	Execution
Integrated Enterprise Excellence: Going Beyond Lean Six Sigma and the Balanced Scorecard
                                                 Forrest W. Breyfogle III

   Excerpts condensed from: The Integrated Enterprise Excellence System: An Enhanced, Unified Approach to Balanced
      Scorecards, Strategic Planning, and Business Improvement, Forrest W. Breyfogle III, Bridgeway Books, 2008.
                                         Figures are reproduced with permission.

                                         Are We Answering the Right Questions?
Management must ask the right questions; the right questions lead to the wise use of statistical and nonstatistical techniques
to obtain knowledge from facts and data. Management needs to operate using the bromide: In God we trust; all others bring
data. This book describes how to operate with a knowledge-centered activity (KCA) focus, which can redirect businesses so
that efforts are more productive.
    Because Six Sigma projects begin with a problem statement, it is a de facto problem-solving system. The introduction
of Lean Six Sigma has expanded problem statement opportunities to include the reduction of waste of time and resources.
    But project deployments that center on the use of Lean or Six Sigma tools may not significantly impact the
organization’s big picture. Organizations may not pick the best projects to work on, which can result in suboptimizations,
possibly making the system as a whole worse.

                                        Moving Toward the Three Rs of Business
Integrated Enterprise Excellence (IEE) is an encompassing business system that addresses the above issues, and more; that
is:


         IEE is a sustainable business management governance system, which integrates business scorecards,
         strategies, and process improvement so that organizations move toward the three Rs of business (everyone
         is doing the Right things and doing them Right at the Right time). IEE provides the framework for
         innovation and continual improvement, which goes beyond Lean Six Sigma’s project-based defect and
         waste reduction methods. The existence and excellence of a business depend more on customers and cash;
         or, E = MC 2. As a business way of life, IEE provides the organizational orchestration to achieve more
         customer and cash.



    Organizations create strategic plans, policies, and goals that describe the intent of the organization. Goals should have
measurable results, which are attained through defined action plans. The question of concern is: How effective and aligned
are these management-system practices within an organization? Improvements to this system can dramatically impact an
organization’s bottom line.
    An IEE system measures the overall organization using scorecard/dashboard metrics at two levels: satellite-level and
30,000-foot-level. Business metrics that could be classified as satellite-level are enterprise measurements like gross revenue
and profit margin. Operational metrics at the 30,000-foot-level include defective rates, lead times, days sales outstanding
(DSO), and other tracked operational measurements.
    Long-lasting improvements in the 30,000-foot-level scorecard/dashboard metrics are the result of systematic process
improvement and design projects. The IEE improvement-metric system creates a stimulus that results in a pull for the
creation of projects that are in true alignment with business needs.
    Both satellite-level and 30,000-foot-level metrics are tracked over time and are not bounded by calendar year. If nothing
has changed in ten years, satellite-level and 30,000-foot-level charts present how the system performed over the past ten
years. Organizations will find it very beneficial when they align project selection with satellite-level measures using theory
of constraint (TOC) metrics; that is, throughput, inventory, and operating expense. Data presented in the satellite-level
and 30,000-foot-level scorecard/dashboard format provide additional business insight when compared to tabular quarterly
format reporting.
    The basic IEE process is described in Figure 1. Strategies are created in step five after the enterprise is analyzed and
SMART (Specific, Measurable, Actionable, Relevant, Time-based) satellite-level metric goals are established.
Figure 1: The Integrated Enterprise Excellence (IEE) system.




     Define–measure–analyze–improve–control (DMAIC) is the traditional roadmap for Lean Six Sigma process-
improvement projects. DMAIC is used in IEE not only to describe process-improvement project execution steps, but also to
establish the framework for the overall enterprise process.
     Figure 2 shows how the IEE enterprise process DMAIC roadmap has linkage in the enterprise process improve phase to
the improvement project DMAIC roadmap and design project define–measure–analyze–design–verify (DMADV) roadmap.
The measure phase of the IEE improvement project DMAIC roadmap has additional drill-downs. I refer to the enterprise-
process DMAIC roadmap as E-DMAIC and to the project execution roadmap as P-DMAIC.

    Figure 2: IEE high-level enterprise process roadmap with P-DMAIC process improvement and DMADV design
                                 project roadmaps (MSA: measurement systems analysis).




     The E-DMAIC system provides an infrastructure for linking high-level enterprise-process-performance measurements,
analyses, improvements, and controls. This framework can lead to the development of specific improvement strategies that
are in true alignment with business goals.
     Functional value-chain, metric-improvement needs that are in alignment with the business measurement goals can be
developed from these strategies. Each business-measurement goal has an owner whose performance is measured against
achieving the relevant metric goal.
     If an improvement is desired for an enterprise 30,000-foot-level metric, a Pareto chart is useful to determine which
areas should be given focus for improving the 30,000-foot-level metric as a whole; that is, the creation of targeted projects
that are pulled for creation by metric improvement needs.
     This approach is quite different from passing down across-the-board goals like “improving on-time shipments” for all
sites. With the IEE approach, sites that are performing well need only maintain their performance, while other sites that are
not performing well would get the needed attention to improve their performance. In the sites that are not doing well, one or
more projects could be created by this metric improvement need.
Are Measurements Leading to the Right Activity?
One common type of scorecard uses red, yellow, and green to show whether immediate actions are needed relative to meet-
ing established objectives:
• Green: Meets all of the standards for success.
• Yellow: Achieved some, but not all of the criteria.
• Red: Has any one of a number of serious flaws.

      Does this type of scorecard lead to the right behavior? Goals are important; however, metric targets need to be SMART.
Arbitrary goal setting and managing to these goals can lead to the wrong behavior!
      Let’s now discuss the presentation of red–yellow–green scorecards in the format shown in Figure 3. There are many
metrics, grouped by business area. Also, many are colored red and metrics even transition from red to green and back. Final-
ly, there are a great many metrics for one scorecard.

                                                                   Figure 3: Red-yellow-green tabular scorecard example.
                         Monthly SCORECARD
                         Business Unit Name

                         Measurement                         Targets Aug'04        Sep'04       Oct'04       Nov'04       Dec'04       Jan'05       Feb'05       Mar'05       Apr'05       May'05      Jun'05       Jul'05       Aug'05
                         CUSTOMER
                         Customer Metric A                              0.63574 0.653576 0.660404 0.732996 0.62521 0.708566 0.641873 0.727115 0.687201    0.6123 0.670894   0.6341 0.654525


                                                                                                                                                                                                                                                                  RED
                         Yellow if equal to or higher than     0.720       0.720    0.720    0.720    0.720    0.720    0.720    0.720    0.720   0.720    0.720     0.720   0.720     0.720
                         Green if equal to or higher than      0.750       0.750    0.750    0.750    0.750    0.750    0.750    0.750    0.750   0.750    0.750     0.750   0.750     0.750

                  CUSTOMER
                         Customer Metric B                             1.866044 1.804823 1.777056 1.87373 1.791988 1.826504 1.824634 1.799849 1.822007 1.838969 1.87088 1.893155 1.894069
                         Yellow if equal to or higher than     1.830       1.830    1.830    1.830    1.830    1.830    1.830    1.830    1.830   1.830    1.830     1.830   1.830     1.830
                         Green if equal to or higher than      1.860       1.860    1.860    1.860    1.860    1.860    1.860    1.860    1.860   1.860    1.860     1.860   1.860     1.860


                                                                                                                                                                                                                                                               YELLOW
                         Customer Metric C                              0.82475 0.730724 0.627179 0.728212 0.751174 0.801946 0.780248 0.761874 0.68133 0.790902 0.728168 0.790485 0.794933
                         Yellow if equal to or higher than     0.750       0.750    0.750    0.750    0.750    0.750    0.750    0.750    0.750   0.750    0.750     0.750   0.750     0.750
                         Green if equal to or higher than      0.780       0.780    0.780    0.780    0.780    0.780    0.780    0.780    0.780   0.780    0.780     0.780   0.780     0.780

                         FINANCE
                         Finance Metric A
                         Yellow if equal to or higher than
                         Green if equal to or higher than
                                                                3.05
                                                                 3.1
                                                                       3.387525
                                                                            3.05
                                                                             3.1
                                                                                   2.965966
                                                                                        3.05
                                                                                         3.1
                                                                                                 3.042505 2.891057 3.485847 2.867981 2.764183 3.297147 3.301612 2.892969 2.737161
                                                                                                      3.05
                                                                                                       3.1
                                                                                                               3.05
                                                                                                                 3.1
                                                                                                                        3.05
                                                                                                                         3.1
                                                                                                                                 3.05
                                                                                                                                  3.1
                                                                                                                                          3.05
                                                                                                                                           3.1
                                                                                                                                                   3.05
                                                                                                                                                    3.1
                                                                                                                                                            3.05
                                                                                                                                                             3.1
                                                                                                                                                                     3.05
                                                                                                                                                                       3.1
                                                                                                                                                                              3.05
                                                                                                                                                                                3.1
                                                                                                                                                                                     3.0936 2.772979
                                                                                                                                                                                       3.05
                                                                                                                                                                                         3.1
                                                                                                                                                                                                 3.05
                                                                                                                                                                                                   3.1
                                                                                                                                                                                                                                                                GREEN
                         Finance Metric B                               2.09819    2.254758      2.345674 2.207099 2.316309 2.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.288786 2.14113
                         Yellow if equal to or higher than       2.2         2.2         2.2           2.2       2.2      2.2      2.2      2.2      2.2      2.2      2.2      2.2      2.2       2.2
                         Green if equal to or higher than       2.25        2.25        2.25          2.25     2.25     2.25     2.25     2.25     2.25     2.25     2.25     2.25     2.25      2.25


                  FINANCE
                         Finance Metric C                              0.762611    0.958071      1.051227 0.867969 1.158351 0.82278 0.800541 0.989747 0.980718 0.611179 0.789868 1.035084 0.920254
                         Yellow if equal to or higher than       0.9         0.9         0.9           0.9       0.9      0.9      0.9      0.9      0.9      0.9      0.9      0.9      0.9       0.9
                         Green if equal to or higher than       0.95        0.95        0.95          0.95     0.95     0.95     0.95     0.95     0.95     0.95     0.95     0.95     0.95      0.95
                         Finance Metric H                              0.222716    0.480099      0.296397     0.203   0.3541   0.2326   0.1693   0.4552   0.2278    0.194    0.288    0.321     0.241
                         Yellow if equal to or higher than      0.21        0.21        0.21          0.21     0.21     0.21     0.21     0.21     0.21     0.21     0.21     0.21     0.21      0.21
                         Green if equal to or higher than       0.25        0.25        0.25          0.25     0.25     0.25     0.25     0.25     0.25     0.25     0.25     0.25     0.25      0.25
                         Finance Metric I                              0.490024     0.27568      0.190908     0.357   0.5284   0.4058   0.3391   0.3347   0.3247    0.327    0.286    0.383     0.247
                         Yellow if equal to or higher than
                         Green if equal to or higher than          Monthly SCORECARD
                                                                 0.3
                                                                0.35
                                                                             0.3
                                                                            0.35
                                                                                         0.3
                                                                                        0.35
                                                                                                       0.3
                                                                                                      0.35
                                                                                                                 0.3
                                                                                                               0.35
                                                                                                                          0.3
                                                                                                                        0.35
                                                                                                                                   0.3
                                                                                                                                 0.35
                                                                                                                                            0.3
                                                                                                                                          0.35
                                                                                                                                                     0.3
                                                                                                                                                   0.35
                                                                                                                                                              0.3
                                                                                                                                                            0.35
                                                                                                                                                                       0.3
                                                                                                                                                                     0.35
                                                                                                                                                                                0.3
                                                                                                                                                                              0.35
                                                                                                                                                                                         0.3
                                                                                                                                                                                       0.35
                                                                                                                                                                                                   0.3
                                                                                                                                                                                                 0.35

                         INTERNAL BUSINESS
                         OPERATIONS
                                                                   Business Unit Name
                         IBO Metric A                                    1.7693      1.73499      1.80064      1.76888      1.76068      1.79877 1.863956 1.862206 1.829389 1.875557 1.741041                         1.69758 1.704457
                         Yellow if equal to or higher than      1.70       1.70          1.70         1.70         1.70         1.70         1.70     1.70     1.70     1.70     1.70     1.70                            1.70     1.70
                         Green if equal to or higher than       1.73       1.73          1.73         1.73         1.73         1.73         1.73     1.73     1.73     1.73     1.73     1.73                            1.73     1.73
                         IBO Metric B
                         Yellow if equal to or less than           Measurement 0.16204 0.25 0.178 0.202 0.205 0.176 0.226 0.201 0.197 0.231
                                                                0.25
                                                                      0.20531 0.18053 0.184817
                                                                          0.25     0.25     0.25  0.25
                                                                                                        0.18
                                                                                                                0.25     0.25     0.25    0.25     Targets 0.25 0.25
                                                                                                                                                   0.25     0.25      Aug'04          Sep'04      Oct'04     Nov'04     Dec'04
                         Green if equal to or less than         0.22      0.22     0.22     0.22  0.22  0.22    0.22     0.22     0.22    0.22     0.22     0.22     0.22     0.22
                         IBO Metric C
                                                                   FINANCE 0.504354 0.568529 0.44906 0.464186 0.446241 0.422419 0.445758 0.475769 0.340339 0.366324 0.354783
                                                                     0.427692 0.505666


                    INTERNAL
                         Yellow if equal to or less than        0.26      0.26     0.26     0.26  0.26  0.26    0.26     0.26     0.26    0.26     0.26     0.26     0.26     0.26

                                                                   Finance2.60 2.69324 A 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.603.387525 2.965966 3.042505 2.891057 3.485847
                                                                                     Metric 2.67166 2.68 2.66 2.67 2.68 2.65 2.67 2.67 2.69 2.60
                         Green if equal to or less than         0.21      0.21     0.21     0.21  0.21  0.21    0.21     0.21     0.21    0.21     0.21     0.21     0.21     0.21
                         IBO Metric D                                 2.66634 2.64814                                                                                           2.7

                  BUSINESS OPS
                         Yellow if equal to or less than        2.60      2.60              2.60
                         Green if equal to or less than
                         IBO Metric F                              Yellow if equal 0.146534 higher than 0.173 0.143 0.163 0.133 0.143 0.143 3.05
                                                                2.58
                                                                     0.113318 0.157456 0.163175 to or 0.113
                                                                          2.58     2.58     2.58  2.58  2.58    2.58
                                                                                                               0.143
                                                                                                                         2.58
                                                                                                                        0.143
                                                                                                                                  2.58    2.58     2.58
                                                                                                                                                            3.05 2.58 2.58
                                                                                                                                                            2.58
                                                                                                                                                                                             3.05      3.05        3.05        3.05
                         Yellow if equal to or less than       0.086     0.086    0.086    0.086 0.086 0.086   0.086    0.086    0.086  0.086     0.086    0.086    0.086    0.086
                         Green if equal to or less than
                         IBO Metric G
                                                                   Green0.078984 0.051823 to0.068 0.110424 0.068515 0.080985 0.076333 0.07306 0.077379 0.103885 0.069867 0.142498 3.1
                                                               0.068     0.068
                                                                     0.043949
                                                                                if equal 0.055083 higher than 0.068 0.068 0.068 0.068 0.068 0.068
                                                                                  0.068    0.068
                                                                                                  or 0.068 0.068 0.068                                         3.1                            3.1        3.1        3.1         3.1
                         Yellow if equal to or less than        0.06
                                                                   Finance0.05 1.166667 B 0.05 0.05 0.05 0.05 1.166667 1.333333 0.05 1.230769 1.266667 2.09819 2.254758 2.345674 2.207099 2.316309
                                                                          0.06     0.06
                                                                                     Metric
                                                                                            0.06  0.06  0.06    0.06     0.06     0.06    0.06     0.06     0.06     0.06     0.06
                         Green if equal to or less than         0.05      0.05              0.05                                  0.05    0.05              0.05     0.05     0.05
                         IBO Metric H                                1.222222 1.222222               1     1       1        1                      1.25                     1.3125
                         Yellow if equal to or higher than
                         Green if equal to or higher than          Yellow if equal to1.45 higher than 1.45 1.45 1.45 1.45 1.45 1.45 2.2
                                                                1.33
                                                                1.45
                                                                          1.33
                                                                          1.45
                                                                                   1.33
                                                                                   1.45
                                                                                            1.33
                                                                                            1.45    or 1.45 1.45 1.45 1.33 1.33 1.33 1.33 1.33 1.33
                                                                                                  1.33  1.33    1.33     1.33
                                                                                                                                                               2.2                            2.2        2.2        2.2         2.2
                         LEARNING AND GROWTH
                         L&G Metric A
                                                                   Green 5.23666 4.17365 to or higher than 3.67574 4.94651 3.57205 4.92629 4.55868 6.00471 2.25
                                                                      4.47048
                                                                                if equal 4.57158 4.54306 4.31449 4.67242                                    2.25                             2.25      2.25        2.25        2.25
                         Yellow if equal to or less than           5          5             5            5            5            5            5            5            5            5           5            5            5            5
                         Green if equal to or less than
                                                                   Finance Metric C 4.5 59.6528 74.1863 77.7315
                                                                 4.5      4.5     4.5     4.5        4.5 4.5  4.5                                                       4.5          4.5         4.5          4.5
                                                                                                                                                                                                                 0.762611
                                                                                                                                                                                                                      4.5  4.5
                                                                                                                                                                                                                                              0.958071 1.051227 0.867969    1.158351
                  LEARNING
                         L&G Metric B                                68.1916  69.643 57.0598 62.4947                                                               54.8459      57.6235     83.5998      66.4914      54.2673
                                                                                                                                                                                                                   50.719
                         Yellow if equal to or higher than        65       65      65      65     65  65  65   65                                                        65           65          65           65      65   65
                         Green if equal to or higher than          Yellow if 75 75 to or higher75 75
                                                                  75       75       equal 75 75            than                                                          75           75          75         0.9
                                                                                                                                                                                                               75      75  0.9
                                                                                                                                                                                                                            75                      0.9      0.9      0.9         0.9
                  & GROWTH                                         Green if equal to or higher than                                                                                                         0.95          0.95                     0.95     0.95     0.95        0.95


How can you have a metric that is red for the entire reporting period? Is no one monitoring it? Is it based on an arbitrary
target and just ignored? We don’t know, but all options are possible.
    Effective, long-lasting improvements to processes are not made by firefighting. Process improvements are made by
examining all Copyright 1992 – 2006. All rights reserved. Smarter Solutions, Inc. to determine what should be done differently in the overall process,
               common-cause output data collectively
as opposed to assessing the points that are beyond the criteria as individual occurrences. This can be accomplished through
execution of a P-DMAIC project.

     IEE scorecard/dashboard tracking is accomplished through the following process:
     1. Assess process predictability; i.e., is the process stable or in statistical control?
     2. When the process is considered predictable, formulate a prediction statement for the latest region of stability. The
         usual reporting format for this prediction statement is the following:
      a. When there is a specification requirement: nonconformance percentage or defects per million opportunities
         (DPMO).
      b. When there is no specification requirement: median response and 80 percent frequency of occurrence rate.
Applying the IEE scorecard/dashboard metric-reporting process to the Figure 3 data set yields the following:
      1. As previously stated, the purpose of charting is to stimulate improvements when appropriate. Figure 4 provides
      an IEE assessment of how well this is accomplished. This figure contains a control chart, probability plot, and
      histogram. When there are no occurrences beyond the upper and lower control limits, no patterns or data shifts,
      the process is said to be in control. When this occurs, we have reason to believe that the up-and-down variability is
      the result of common-cause variability; that is, the process is predictable. Since this process is predictable, we can
      consider past data from the region of stability to be a random sample of the future!
      2. The histogram shown in Figure 4 is a traditional tool that describes the distribution of random data from a
      population that has a continuous response. However, it is difficult to determine from a histogram the expected
      percentage beyond a criterion. A probability plot is a better tool to determine the nonconformance percentage. In a
      probability plot, actual data values are plotted on a coordinate system where “percentage less than” is on the y-axis.
      The probability plot in Figure 3 provides an estimate that approximately 32.6 percent of future monthly reporting
      will be less than the lower-bound criterion, unless a fundamental process improvement is made or something else
      external to the process occurs. We also observe that this percentage value is consistent with an estimated proportion
      below the 2.2 reference line in the histogram, and also is similar to the percentage of red occurrences; that is, 5 out
      of 13. If this nonconformance percentage of 32.6 percent is undesirable, this metric would pull for project creation.
Figure 4: Illustration of IEE improved finance metric B, continuous-response reporting: Red-yellow-green scorecard
                          versus IEE reporting (Histogram included for illustrative purposes only).

                                              Traditional Performance Reporting Example – Red-Yellow-Green Scorecard
                                                              Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05
                       Finance Metric B                                 2.10   2.25     2.35 2.21    2.32   2.21   2.16   2.49  2.51   2.16    2.17  2.29    2.14
                       Yellow if equal to or higher than         2.20   2.20   2.20     2.20 2.20    2.20   2.20   2.20   2.20  2.20   2.20    2.20  2.20    2.20
                       G reen if equal to or higher than         2.25   2.25   2.25     2.25 2.25    2.25   2.25   2.25   2.25  2.25   2.25    2.25  2.25    2.25


                                                   IEE Improved Reporting for Process Assessment and Improvement
                                             Individuals Control Chart                                                  N o r m a l P r o b a b ilit y P lo t
                                                                                                       99
                     2.7
                     2.6                                                              UCL=2.6192       95
                                                                                                       90
                     2.5                                                                               80
                     2.4                                                                               70
                                                                                      _                60
                     2.3                                                                               50
                                                                                      X=2.2583         40
                     2.2                                                                               30                                                                   3 2 .6 5 7
                                                                                                       20
                     2.1                                                                               10
                     2.0                                                                                5
                     1.9                                                              LCL=1.8974
                                                                                                        1
                           4 4 4 4 4 5 5 5 5 5 5 5 5                                                        1.9   2.0   2.1      2.2       2.3       2.4        2.5   2.6
                          0 '0 0 0 0 0 0 0 0 0 0 0 0
                        g' p t' v' c' n' b' r' r' y' n' l' g'
                       u e c o e a e a p a u u u                                                                                 R e sp on se
                      A S O N D J F M A M J            J A                                                                    Histogram
                                                           Date                                                                 2.2
                                                                                                        4

                                                                                                        3

                                                                                                        2

                                                                                                        1

                                                                                                        0
                                                                                                            1.9   2.0   2.1       2.2   2.3          2.4        2.5   2.6
                                                                                                                                  Response

                                    Predictable process with an approximate 32.6% nonconformance rate

                                    (i.e., Using the current process, Finance Metric B will be below 2.2 about 1/3 of the time.)



                                                                                     Benefits of IEE
The IEE system is not only excellent for viewing high-level operational business metrics, but it also provides the tools to
solve tough problems. For example, IEE techniques were used to help one company use design of experiments (DOE) to
fix a 12-year-old biscuit crumbliness problem in a fast food chain. Another DOE fixed a major die breakage problem in
an aluminum extrusion process, which resulted in increased throughput for the entire plant. Another company was able to
eliminate several warehouses because of improved process flows. IEE is more of a business system than a “do-project”
system such as Six Sigma and Lean Six Sigma. IEE takes Lean Six Sigma and the Balanced Scorecard to the next level.
IEE REFERENCE TEXTS



 The Integrated Enterprise Excellence System
 IEE methods, tools and techniques – and how they creatively integrate the best practices of
 established business measurement and improvement systems.
“This book is rich in content, with examples of how specific analytical and decision support
 techniques can be merged to create a climate for perpetual enterprise growth and progress.”
 Matt Spinola, CEO, Primacy Relocation
ISBN-13:	978-1-934454-11-4					ISBN-10:	1-934454-11-7				216	pages,	paperback,	$16.95



 Integrated Enterprise Excellence, Volume 1 - The Basics
 Four golfing friends discuss improvement systems. They improve their games in
 both business and golf using IEE concepts, going beyond Lean Six Sigma and the Balanced
 scorecard.
“An essential handbook for every manager leading Six Sigma or Lean Six Sigma teams; it is also
 geared for managers who are uncertain as to their need for these initiatives.”
 J. Scott Dickman, CEO, Oracle Packaging Company
ISBN-13:	978-1-934454-12-1					ISBN-10:	1-934454-12-5				168	pages,	hardcover,	$27.95



 Integrated Enterprise Excellence, Volume 2 - Business Deployment
 An IEE system creation manual for leaders and implementation teams. Describes an enterprise
 measurement, analysis, and improvement system where organizations transition from
 firefighting	toward	the	three	R’s	of	business:	everyone	doing	the	right	things	and	doing	them	
 right at the right time.
“…chronicles a significant renewal in the methodologies applied to achieve total quality at the
 enterprise level…with a thoughtfully integrated approach.”
 Christopher B. Galvin, Chairman, Harrison Street Capital LLC, Former Chairman and CEO,
 Motorola, Inc.
ISBN-13:	978-1-934454-15-2					ISBN-10:	1-934454-15-X				560	pages,	hardcover,	$54.95



 Integrated Enterprise Excellence, Volume 3 - Improvement Project Execution
 An IEE system implementation handbook for the improvement project manager. Provides a
 detailed step-by-step project roadmap which integrates Six Sigma and
 Lean tools.
“This book deserves to become a standard desk reference for everyone in the organization
 responsible for meeting goals. It makes valuable reading for organization leaders and Six Sigma
 practitioners…it is the most thorough and detailed reference guide for IEE….”
 Bill Wiggenhorn, Former President, Motorola University
 Keith Moe, Former Group Vice President, 3M
ISBN-13:	978-1-934454-16-9					ISBN-10:	1-934454-16-8				1200	pages,	hardcover,	$124.95
WHEN PLAYING A CHALLENGE COURSE - GET HELP FROM A PRO!



Visit the Smarter Solutions, Inc. website at www.SmarterSolutions.com to see how IEE
can	help	your	enterprise	overcome	the	challenges	of	the	21st	century.

Download free additional articles from the Smarter Solutions online resource library

Order IEE books direct from the Smarter Solutions store, Amazon.com, Barnes &
Noble, or other book sellers.

Enroll in a scheduled IEE webinar or training session, or schedule a live one-hour or
one-day workshop for your professional society or enterprise.


     Standard	IEE	offerings	include:	
     •	 Webinars
     •	 Executive	overviews
     •	 One-hour	and	one-day	workshops
     •	 Workout/deployment
     •	 Champion	training	and	mentoring
     •	 Green	belt
                                                  “…a unique and innovative approach to applying Lean
     •	 Black	belt                                 Six Sigma.”
     •	 Master	black	belt
     •	 Design	for	IEE                                        —René Kapik, MBB, Medical Team Leader,
                                                              Precision Fabrics
     •	 Lean	Six	Sigma	graduate	workshop
     •	 Rent	a	master	black	belt


                                                   “What grandmaster chess is to checkers, Integrated
Call or write us for more information              Enterprise Excellence is to the organizational improvement
                                                   practices being deployed in most businesses today.
Smarter Solutions, Inc.                            Forrest Breyfogle’s system provides a roadmap that blends
                                                   analytics with innovation at both the enterprise and
11044	Research	Boulevard                           project execution levels. It makes Lean Six Sigma sing.”
Austin,	TX	78759
                                                              —Kenneth E. Case, PhD, PE; Regents Professor
Phone:	512.918.0280                                           Emeritus, School of Industrial Engineering and
Fax:	512.996.8318                                             Management, Oklahoma State University; Past
info@SmarterSolutions.com                                     President, ASQ
www.SmarterSolutions.com
Forrest W. Breyfogle III is the CEO and president of Smarter Solutions, Inc. and the
       developer of the Integrated Enterprise Excellence (IEE) system. Forrest received the
       ASQ Crosby Medal for his book, Implementing Six Sigma, 2nd edition. He has authored
       or co-authored eleven books and published over eighty technical articles on Six Sigma
       and Lean methods. A professional engineer and ASQ fellow, Forrest is a member of
       the board of advisors for the University of Texas Center for Performing Excellence. The
       Smarter Solutions team provides business measurement and improvement consultation
       and education for organizations worldwide.




Smarter Solutions, Inc.
11044 Research boulevard
Austin, TX 78759
Phone: 512.918.0280
Fax:512.996.8318
info@SmarterSolutions.com
www.SmarterSolutions.com

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IEE Brochure

  • 1. INCLUDES EXCERPT FROM THE NEW BOOK BY AWARD WINNING AUTHOR FORREST W. BREYFOGLE III
  • 2. BUSINESS HAZARDS OF THE 21ST CENTURY The increasing competitive pressures of a global economy are forcing executives to react faster to changing business conditions and customer requirements, under conditions of stringent cost containment. Line managers and decision-makers need to have an efficient and effective system for day-to-day business operation with access to performance metrics that lead to the most appropriate and cost effective activities. In short, what’s needed is an enterprise level performance measurement and improvement system to drive financial and operational success under the most challenging conditions. The answer? Integrated Enterprise Excellence (IEE) Compliance Commoditization Regulations Liability Suits Global Competition
  • 3. “Forrest’s Integrated Enterprise Excellence (IEE) system is not simply a methodology for doing Six Sigma projects. IEE offers an overall management system that provides the framework where companies can implement and benefit from Dr. Deming’s methodologies.” —Bill Wiggenhorn, Retired President of Motorola University IEE: A NEW AND ENHANCED ENTERPRISE IMPROVEMENT SYSTEM TO MEET THE BUSINESS AND PROFESSIONAL DEMANDS OF THE TWENTY FIRST CENTURY • Integrates analytics with innovation • Provides the framework and integration of quality management tools, analytics, innovation, and improvement methodologies - Ford - Crosby - Theory of Constraints - Shewart - Smith - Lean Six Sigma - Toyota (TPS) - Motorola - Hoshin Kanri - Feigenbaum - QMS - The Balanced Scorecard - TQM - Welch - DMAIC - Deming - Six Sigma - Design of Experiments - Juran - Kaizen Events - Taylor “Other books are light years behind Forrest’s 4-book suite, which not only provides senior management with Lean Sigma performance scorecards, but also a how-to roadmap for Enron-effect avoidance.” —Frank Shines, Lean Six Sigma Engagement Leader, Industriaplex The evolution of ideas... F a ...the integration of best practices
  • 4. IEE DIFFERENTIATORS/INNOVATIONS • Alignment and blending of Enterprise value chain with: operational metrics ➮ analytics and innovation ➮ financial goals ➮ strategies ➮ operational goals ➮ improvement/design projects ➮ controls • Two-level application of the Lean Six Sigma (Define - Measure - Analyze - Improve - Control: DMAIC) roadmap: - Enterprise process level: E-DMAIC - Project level: P-DMAIC with a true integration of Six Sigma and Lean tools • Design for IEE (DFIEE) projects that have enterprise needs alignment for: - Product design - Process design - Information technology development • Creation and presentation of business metrics that get organizations out of the firefighting mode: - 30,000-foot-level view: Ongoing operational measurements - Satellite-level view: Ongoing business/financial measurements • Insightful synthesis and graphical representation of data: - The IEE scorecard/dashboard - Enterprise analytics with innovation • Better ways to use conventional tools for improved decision making at the enterprise level: - IEE 30,000-foot-level and satellite-level charts: Enables assessment of predictability - IEE probability plots: Enables performance forecasts - IEE P-DMAIC roadmap: Provides step-by-step direction for improving performance “IEE represents the best of best practices in measurement and improvement. It transcends Lean Six Sigma and the Balanced Scorecard. It’s a powerful business system that blends analytics with innovation and arms everyone in the organization with the tools needed to contribute to success. Aptly named, it truly integrates enterprise excellence.” —Mike Jones, Past President, ASQ
  • 5. THE INTEGRATED ENTERPRISE EXCELLENCE SYSTEM The IEE system is documented in a new set of four books by Forrest W. Breyfogle III, Crosby Medalist and author of best seller, Implementing Six Sigma (ASQ recognized body of knowledge for black belt certification training) The set of books highlights common business systems issues and presents IEE as an enhanced methodology that can improve organizational efficiency and effectiveness. The series documents a set of best practices derived from the strengths of past systems – illustrating the basics of structuring IEE metrics and a no-nonsense roadmap to initiate process improvement and achieve substantial benefits. IEE takes Lean Six Sigma and the Balanced Scorecard to the next level in the pursuit of enterprise excellence. A new paperback: The Integrated Enterprise Excellence System - an introductory overview for managers and practioners highlighting: • merging business and professional challenges of the 21st century E • Limitations of “last century” methods • Enhanced features and benefits of IEE implementation - for the enterprise - for the project - for the manager and practitioner hree hardcover volumes: Integrated Enterprise Excellence T • Volume I - The Basics • Volume II - Business Deployment • Volume III - Improvement Project Execution
  • 6. Integrated Enterprise Excellence: Going Beyond Lean Six Sigma and the Balanced Scorecard Forrest W. Breyfogle III Excerpts condensed from: The Integrated Enterprise Excellence System: An Enhanced, Unified Approach to Balanced Scorecards, Strategic Planning, and Business Improvement, Forrest W. Breyfogle III, Bridgeway Books, 2008. Figures are reproduced with permission. Are We Answering the Right Questions? Management must ask the right questions; the right questions lead to the wise use of statistical and nonstatistical techniques to obtain knowledge from facts and data. Management needs to operate using the bromide: In God we trust; all others bring data. This book describes how to operate with a knowledge-centered activity (KCA) focus, which can redirect businesses so that efforts are more productive. Because Six Sigma projects begin with a problem statement, it is a de facto problem-solving system. The introduction of Lean Six Sigma has expanded problem statement opportunities to include the reduction of waste of time and resources. But project deployments that center on the use of Lean or Six Sigma tools may not significantly impact the organization’s big picture. Organizations may not pick the best projects to work on, which can result in suboptimizations, possibly making the system as a whole worse. Moving Toward the Three Rs of Business Integrated Enterprise Excellence (IEE) is an encompassing business system that addresses the above issues, and more; that is: IEE is a sustainable business management governance system, which integrates business scorecards, strategies, and process improvement so that organizations move toward the three Rs of business (everyone is doing the Right things and doing them Right at the Right time). IEE provides the framework for innovation and continual improvement, which goes beyond Lean Six Sigma’s project-based defect and waste reduction methods. The existence and excellence of a business depend more on customers and cash; or, E = MC 2. As a business way of life, IEE provides the organizational orchestration to achieve more customer and cash. Organizations create strategic plans, policies, and goals that describe the intent of the organization. Goals should have measurable results, which are attained through defined action plans. The question of concern is: How effective and aligned are these management-system practices within an organization? Improvements to this system can dramatically impact an organization’s bottom line. An IEE system measures the overall organization using scorecard/dashboard metrics at two levels: satellite-level and 30,000-foot-level. Business metrics that could be classified as satellite-level are enterprise measurements like gross revenue and profit margin. Operational metrics at the 30,000-foot-level include defective rates, lead times, days sales outstanding (DSO), and other tracked operational measurements. Long-lasting improvements in the 30,000-foot-level scorecard/dashboard metrics are the result of systematic process improvement and design projects. The IEE improvement-metric system creates a stimulus that results in a pull for the creation of projects that are in true alignment with business needs. Both satellite-level and 30,000-foot-level metrics are tracked over time and are not bounded by calendar year. If nothing has changed in ten years, satellite-level and 30,000-foot-level charts present how the system performed over the past ten years. Organizations will find it very beneficial when they align project selection with satellite-level measures using theory of constraint (TOC) metrics; that is, throughput, inventory, and operating expense. Data presented in the satellite-level and 30,000-foot-level scorecard/dashboard format provide additional business insight when compared to tabular quarterly format reporting. The basic IEE process is described in Figure 1. Strategies are created in step five after the enterprise is analyzed and SMART (Specific, Measurable, Actionable, Relevant, Time-based) satellite-level metric goals are established.
  • 7. Figure 1: The Integrated Enterprise Excellence (IEE) system. Define–measure–analyze–improve–control (DMAIC) is the traditional roadmap for Lean Six Sigma process- improvement projects. DMAIC is used in IEE not only to describe process-improvement project execution steps, but also to establish the framework for the overall enterprise process. Figure 2 shows how the IEE enterprise process DMAIC roadmap has linkage in the enterprise process improve phase to the improvement project DMAIC roadmap and design project define–measure–analyze–design–verify (DMADV) roadmap. The measure phase of the IEE improvement project DMAIC roadmap has additional drill-downs. I refer to the enterprise- process DMAIC roadmap as E-DMAIC and to the project execution roadmap as P-DMAIC. Figure 2: IEE high-level enterprise process roadmap with P-DMAIC process improvement and DMADV design project roadmaps (MSA: measurement systems analysis). The E-DMAIC system provides an infrastructure for linking high-level enterprise-process-performance measurements, analyses, improvements, and controls. This framework can lead to the development of specific improvement strategies that are in true alignment with business goals. Functional value-chain, metric-improvement needs that are in alignment with the business measurement goals can be developed from these strategies. Each business-measurement goal has an owner whose performance is measured against achieving the relevant metric goal. If an improvement is desired for an enterprise 30,000-foot-level metric, a Pareto chart is useful to determine which areas should be given focus for improving the 30,000-foot-level metric as a whole; that is, the creation of targeted projects that are pulled for creation by metric improvement needs. This approach is quite different from passing down across-the-board goals like “improving on-time shipments” for all sites. With the IEE approach, sites that are performing well need only maintain their performance, while other sites that are not performing well would get the needed attention to improve their performance. In the sites that are not doing well, one or more projects could be created by this metric improvement need.
  • 8. Are Measurements Leading to the Right Activity? One common type of scorecard uses red, yellow, and green to show whether immediate actions are needed relative to meet- ing established objectives: • Green: Meets all of the standards for success. • Yellow: Achieved some, but not all of the criteria. • Red: Has any one of a number of serious flaws. Does this type of scorecard lead to the right behavior? Goals are important; however, metric targets need to be SMART. Arbitrary goal setting and managing to these goals can lead to the wrong behavior! Let’s now discuss the presentation of red–yellow–green scorecards in the format shown in Figure 3. There are many metrics, grouped by business area. Also, many are colored red and metrics even transition from red to green and back. Final- ly, there are a great many metrics for one scorecard. Figure 3: Red-yellow-green tabular scorecard example. Monthly SCORECARD Business Unit Name Measurement Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 CUSTOMER Customer Metric A 0.63574 0.653576 0.660404 0.732996 0.62521 0.708566 0.641873 0.727115 0.687201 0.6123 0.670894 0.6341 0.654525 RED Yellow if equal to or higher than 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 0.720 Green if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 CUSTOMER Customer Metric B 1.866044 1.804823 1.777056 1.87373 1.791988 1.826504 1.824634 1.799849 1.822007 1.838969 1.87088 1.893155 1.894069 Yellow if equal to or higher than 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 1.830 Green if equal to or higher than 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 1.860 YELLOW Customer Metric C 0.82475 0.730724 0.627179 0.728212 0.751174 0.801946 0.780248 0.761874 0.68133 0.790902 0.728168 0.790485 0.794933 Yellow if equal to or higher than 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 Green if equal to or higher than 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 0.780 FINANCE Finance Metric A Yellow if equal to or higher than Green if equal to or higher than 3.05 3.1 3.387525 3.05 3.1 2.965966 3.05 3.1 3.042505 2.891057 3.485847 2.867981 2.764183 3.297147 3.301612 2.892969 2.737161 3.05 3.1 3.05 3.1 3.05 3.1 3.05 3.1 3.05 3.1 3.05 3.1 3.05 3.1 3.05 3.1 3.05 3.1 3.0936 2.772979 3.05 3.1 3.05 3.1 GREEN Finance Metric B 2.09819 2.254758 2.345674 2.207099 2.316309 2.214396 2.156223 2.493305 2.509988 2.163489 2.168469 2.288786 2.14113 Yellow if equal to or higher than 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Green if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 FINANCE Finance Metric C 0.762611 0.958071 1.051227 0.867969 1.158351 0.82278 0.800541 0.989747 0.980718 0.611179 0.789868 1.035084 0.920254 Yellow if equal to or higher than 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Green if equal to or higher than 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 Finance Metric H 0.222716 0.480099 0.296397 0.203 0.3541 0.2326 0.1693 0.4552 0.2278 0.194 0.288 0.321 0.241 Yellow if equal to or higher than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 Green if equal to or higher than 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Finance Metric I 0.490024 0.27568 0.190908 0.357 0.5284 0.4058 0.3391 0.3347 0.3247 0.327 0.286 0.383 0.247 Yellow if equal to or higher than Green if equal to or higher than Monthly SCORECARD 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 0.3 0.35 INTERNAL BUSINESS OPERATIONS Business Unit Name IBO Metric A 1.7693 1.73499 1.80064 1.76888 1.76068 1.79877 1.863956 1.862206 1.829389 1.875557 1.741041 1.69758 1.704457 Yellow if equal to or higher than 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 Green if equal to or higher than 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 IBO Metric B Yellow if equal to or less than Measurement 0.16204 0.25 0.178 0.202 0.205 0.176 0.226 0.201 0.197 0.231 0.25 0.20531 0.18053 0.184817 0.25 0.25 0.25 0.25 0.18 0.25 0.25 0.25 0.25 Targets 0.25 0.25 0.25 0.25 Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Green if equal to or less than 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 IBO Metric C FINANCE 0.504354 0.568529 0.44906 0.464186 0.446241 0.422419 0.445758 0.475769 0.340339 0.366324 0.354783 0.427692 0.505666 INTERNAL Yellow if equal to or less than 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 Finance2.60 2.69324 A 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.603.387525 2.965966 3.042505 2.891057 3.485847 Metric 2.67166 2.68 2.66 2.67 2.68 2.65 2.67 2.67 2.69 2.60 Green if equal to or less than 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 IBO Metric D 2.66634 2.64814 2.7 BUSINESS OPS Yellow if equal to or less than 2.60 2.60 2.60 Green if equal to or less than IBO Metric F Yellow if equal 0.146534 higher than 0.173 0.143 0.163 0.133 0.143 0.143 3.05 2.58 0.113318 0.157456 0.163175 to or 0.113 2.58 2.58 2.58 2.58 2.58 2.58 0.143 2.58 0.143 2.58 2.58 2.58 3.05 2.58 2.58 2.58 3.05 3.05 3.05 3.05 Yellow if equal to or less than 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 0.086 Green if equal to or less than IBO Metric G Green0.078984 0.051823 to0.068 0.110424 0.068515 0.080985 0.076333 0.07306 0.077379 0.103885 0.069867 0.142498 3.1 0.068 0.068 0.043949 if equal 0.055083 higher than 0.068 0.068 0.068 0.068 0.068 0.068 0.068 0.068 or 0.068 0.068 0.068 3.1 3.1 3.1 3.1 3.1 Yellow if equal to or less than 0.06 Finance0.05 1.166667 B 0.05 0.05 0.05 0.05 1.166667 1.333333 0.05 1.230769 1.266667 2.09819 2.254758 2.345674 2.207099 2.316309 0.06 0.06 Metric 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 Green if equal to or less than 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 IBO Metric H 1.222222 1.222222 1 1 1 1 1.25 1.3125 Yellow if equal to or higher than Green if equal to or higher than Yellow if equal to1.45 higher than 1.45 1.45 1.45 1.45 1.45 1.45 2.2 1.33 1.45 1.33 1.45 1.33 1.45 1.33 1.45 or 1.45 1.45 1.45 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 2.2 2.2 2.2 2.2 2.2 LEARNING AND GROWTH L&G Metric A Green 5.23666 4.17365 to or higher than 3.67574 4.94651 3.57205 4.92629 4.55868 6.00471 2.25 4.47048 if equal 4.57158 4.54306 4.31449 4.67242 2.25 2.25 2.25 2.25 2.25 Yellow if equal to or less than 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Green if equal to or less than Finance Metric C 4.5 59.6528 74.1863 77.7315 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 0.762611 4.5 4.5 0.958071 1.051227 0.867969 1.158351 LEARNING L&G Metric B 68.1916 69.643 57.0598 62.4947 54.8459 57.6235 83.5998 66.4914 54.2673 50.719 Yellow if equal to or higher than 65 65 65 65 65 65 65 65 65 65 65 65 65 65 Green if equal to or higher than Yellow if 75 75 to or higher75 75 75 75 equal 75 75 than 75 75 75 0.9 75 75 0.9 75 0.9 0.9 0.9 0.9 & GROWTH Green if equal to or higher than 0.95 0.95 0.95 0.95 0.95 0.95 How can you have a metric that is red for the entire reporting period? Is no one monitoring it? Is it based on an arbitrary target and just ignored? We don’t know, but all options are possible. Effective, long-lasting improvements to processes are not made by firefighting. Process improvements are made by examining all Copyright 1992 – 2006. All rights reserved. Smarter Solutions, Inc. to determine what should be done differently in the overall process, common-cause output data collectively as opposed to assessing the points that are beyond the criteria as individual occurrences. This can be accomplished through execution of a P-DMAIC project. IEE scorecard/dashboard tracking is accomplished through the following process: 1. Assess process predictability; i.e., is the process stable or in statistical control? 2. When the process is considered predictable, formulate a prediction statement for the latest region of stability. The usual reporting format for this prediction statement is the following: a. When there is a specification requirement: nonconformance percentage or defects per million opportunities (DPMO). b. When there is no specification requirement: median response and 80 percent frequency of occurrence rate.
  • 9. Applying the IEE scorecard/dashboard metric-reporting process to the Figure 3 data set yields the following: 1. As previously stated, the purpose of charting is to stimulate improvements when appropriate. Figure 4 provides an IEE assessment of how well this is accomplished. This figure contains a control chart, probability plot, and histogram. When there are no occurrences beyond the upper and lower control limits, no patterns or data shifts, the process is said to be in control. When this occurs, we have reason to believe that the up-and-down variability is the result of common-cause variability; that is, the process is predictable. Since this process is predictable, we can consider past data from the region of stability to be a random sample of the future! 2. The histogram shown in Figure 4 is a traditional tool that describes the distribution of random data from a population that has a continuous response. However, it is difficult to determine from a histogram the expected percentage beyond a criterion. A probability plot is a better tool to determine the nonconformance percentage. In a probability plot, actual data values are plotted on a coordinate system where “percentage less than” is on the y-axis. The probability plot in Figure 3 provides an estimate that approximately 32.6 percent of future monthly reporting will be less than the lower-bound criterion, unless a fundamental process improvement is made or something else external to the process occurs. We also observe that this percentage value is consistent with an estimated proportion below the 2.2 reference line in the histogram, and also is similar to the percentage of red occurrences; that is, 5 out of 13. If this nonconformance percentage of 32.6 percent is undesirable, this metric would pull for project creation. Figure 4: Illustration of IEE improved finance metric B, continuous-response reporting: Red-yellow-green scorecard versus IEE reporting (Histogram included for illustrative purposes only). Traditional Performance Reporting Example – Red-Yellow-Green Scorecard Targets Aug'04 Sep'04 Oct'04 Nov'04 Dec'04 Jan'05 Feb'05 Mar'05 Apr'05 May'05 Jun'05 Jul'05 Aug'05 Finance Metric B 2.10 2.25 2.35 2.21 2.32 2.21 2.16 2.49 2.51 2.16 2.17 2.29 2.14 Yellow if equal to or higher than 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 G reen if equal to or higher than 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 IEE Improved Reporting for Process Assessment and Improvement Individuals Control Chart N o r m a l P r o b a b ilit y P lo t 99 2.7 2.6 UCL=2.6192 95 90 2.5 80 2.4 70 _ 60 2.3 50 X=2.2583 40 2.2 30 3 2 .6 5 7 20 2.1 10 2.0 5 1.9 LCL=1.8974 1 4 4 4 4 4 5 5 5 5 5 5 5 5 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 0 '0 0 0 0 0 0 0 0 0 0 0 0 g' p t' v' c' n' b' r' r' y' n' l' g' u e c o e a e a p a u u u R e sp on se A S O N D J F M A M J J A Histogram Date 2.2 4 3 2 1 0 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Response Predictable process with an approximate 32.6% nonconformance rate (i.e., Using the current process, Finance Metric B will be below 2.2 about 1/3 of the time.) Benefits of IEE The IEE system is not only excellent for viewing high-level operational business metrics, but it also provides the tools to solve tough problems. For example, IEE techniques were used to help one company use design of experiments (DOE) to fix a 12-year-old biscuit crumbliness problem in a fast food chain. Another DOE fixed a major die breakage problem in an aluminum extrusion process, which resulted in increased throughput for the entire plant. Another company was able to eliminate several warehouses because of improved process flows. IEE is more of a business system than a “do-project” system such as Six Sigma and Lean Six Sigma. IEE takes Lean Six Sigma and the Balanced Scorecard to the next level.
  • 10. IEE REFERENCE TEXTS The Integrated Enterprise Excellence System IEE methods, tools and techniques – and how they creatively integrate the best practices of established business measurement and improvement systems. “This book is rich in content, with examples of how specific analytical and decision support techniques can be merged to create a climate for perpetual enterprise growth and progress.” Matt Spinola, CEO, Primacy Relocation ISBN-13: 978-1-934454-11-4 ISBN-10: 1-934454-11-7 216 pages, paperback, $16.95 Integrated Enterprise Excellence, Volume 1 - The Basics Four golfing friends discuss improvement systems. They improve their games in both business and golf using IEE concepts, going beyond Lean Six Sigma and the Balanced scorecard. “An essential handbook for every manager leading Six Sigma or Lean Six Sigma teams; it is also geared for managers who are uncertain as to their need for these initiatives.” J. Scott Dickman, CEO, Oracle Packaging Company ISBN-13: 978-1-934454-12-1 ISBN-10: 1-934454-12-5 168 pages, hardcover, $27.95 Integrated Enterprise Excellence, Volume 2 - Business Deployment An IEE system creation manual for leaders and implementation teams. Describes an enterprise measurement, analysis, and improvement system where organizations transition from firefighting toward the three R’s of business: everyone doing the right things and doing them right at the right time. “…chronicles a significant renewal in the methodologies applied to achieve total quality at the enterprise level…with a thoughtfully integrated approach.” Christopher B. Galvin, Chairman, Harrison Street Capital LLC, Former Chairman and CEO, Motorola, Inc. ISBN-13: 978-1-934454-15-2 ISBN-10: 1-934454-15-X 560 pages, hardcover, $54.95 Integrated Enterprise Excellence, Volume 3 - Improvement Project Execution An IEE system implementation handbook for the improvement project manager. Provides a detailed step-by-step project roadmap which integrates Six Sigma and Lean tools. “This book deserves to become a standard desk reference for everyone in the organization responsible for meeting goals. It makes valuable reading for organization leaders and Six Sigma practitioners…it is the most thorough and detailed reference guide for IEE….” Bill Wiggenhorn, Former President, Motorola University Keith Moe, Former Group Vice President, 3M ISBN-13: 978-1-934454-16-9 ISBN-10: 1-934454-16-8 1200 pages, hardcover, $124.95
  • 11. WHEN PLAYING A CHALLENGE COURSE - GET HELP FROM A PRO! Visit the Smarter Solutions, Inc. website at www.SmarterSolutions.com to see how IEE can help your enterprise overcome the challenges of the 21st century. Download free additional articles from the Smarter Solutions online resource library Order IEE books direct from the Smarter Solutions store, Amazon.com, Barnes & Noble, or other book sellers. Enroll in a scheduled IEE webinar or training session, or schedule a live one-hour or one-day workshop for your professional society or enterprise. Standard IEE offerings include: • Webinars • Executive overviews • One-hour and one-day workshops • Workout/deployment • Champion training and mentoring • Green belt “…a unique and innovative approach to applying Lean • Black belt Six Sigma.” • Master black belt • Design for IEE —René Kapik, MBB, Medical Team Leader, Precision Fabrics • Lean Six Sigma graduate workshop • Rent a master black belt “What grandmaster chess is to checkers, Integrated Call or write us for more information Enterprise Excellence is to the organizational improvement practices being deployed in most businesses today. Smarter Solutions, Inc. Forrest Breyfogle’s system provides a roadmap that blends analytics with innovation at both the enterprise and 11044 Research Boulevard project execution levels. It makes Lean Six Sigma sing.” Austin, TX 78759 —Kenneth E. Case, PhD, PE; Regents Professor Phone: 512.918.0280 Emeritus, School of Industrial Engineering and Fax: 512.996.8318 Management, Oklahoma State University; Past info@SmarterSolutions.com President, ASQ www.SmarterSolutions.com
  • 12. Forrest W. Breyfogle III is the CEO and president of Smarter Solutions, Inc. and the developer of the Integrated Enterprise Excellence (IEE) system. Forrest received the ASQ Crosby Medal for his book, Implementing Six Sigma, 2nd edition. He has authored or co-authored eleven books and published over eighty technical articles on Six Sigma and Lean methods. A professional engineer and ASQ fellow, Forrest is a member of the board of advisors for the University of Texas Center for Performing Excellence. The Smarter Solutions team provides business measurement and improvement consultation and education for organizations worldwide. Smarter Solutions, Inc. 11044 Research boulevard Austin, TX 78759 Phone: 512.918.0280 Fax:512.996.8318 info@SmarterSolutions.com www.SmarterSolutions.com