June 17, 2017

Global Logistics Business Market in 2022 - $12.25 trillion

A new report published by Allied Market Research, titled, Logistics Market by Mode of Transport, and End-user Industry: Global Opportunity Analysis and Industry Forecast, 2014 - 2022, projects that the global logistics market is anticipated to reach $12,256 billion by 2022 with a CAGR of 3.48% from 2016 to 2022.

Among end-user, manufacturing segment dominated the global market in 2014, accounting for about 26% share in the total revenue of logistics market. Transport of raw material to manufacturers for the production is a growth factor for world logistics market by manufacturing industry.

Retail, Trade and Transport, Utilities, Health care etc are other segments.



June 7, 2017

Statistical Quality Control – Industrial Engineering

SQC is an Efficiency Improvement Technique

SQC is brought into industrial engineering practice as an efficiency improvement technique.

In a narrow sense, some companies refer to their product inspection activity as quality control. In such companies inspection is the sole quality assurance activity. In many companies, now, a more elaborate quality assurance process is installed. In these organizations, quality control encompasses not only inspection but also quality planning, process controls, incoming material control, analysis and correction action in respect of defects, and quality reporting. An appropriate definition for quality control is “quality control is a system for verification and maintenance of a desired level of quality in a product or process by careful planning, the use of proper equipment, continuing inspection, and corrective action where required.”

Is industrial engineering department responsible for quality control? Some scholars in the IE discipline think so. But according to me, IE curriculums had only “Statistical quality control (SQC)” as a subject. Statistical quality control alone does not cover the entire scope of quality engineering and quality management.

Why only SQC? Because Statistical quality control is an efficient improvement innovation for quality engineering. Statistical quality control text books generally provide the explanation on the following lines (Halpern[1]).

Inspection of finished production on a 100% basis is a technique, which, with proper controls, theoretically should be one of the surest ways to eliminate defective products from being supplied to the next stage in production or ultimately to the customer. In practice, the 100% inspection is not as fool proof as may be expected. Experience has shown that the monotony and repetition inherent in 100% inspection tends to create boredom and fatigue with the result that not all defective units are eliminated. Thus in inspection activity, a behavioral dimension is brought in.

Statistical quality control technique of acceptance sampling, is relatively inexpensive as it inspects only a small percentage of items from a production lot or shipping lot, less time consuming, not fatiguing for inspectors, and it is based on well-established principles of probability theory.

The underlying idea is that SQC provides as good a quality assurance as 100% inspection provides and the cost involved in very low compared to 100% inspection.

Industrial engineers as efficiency designers understood the productivity potential of SQC, accepted SQC and promoted its use in practice. For introducing SQC, industrial engineers need not become functional quality system designers. The functional quality specialists still decide what characteristics of the product or item is to be inspected and how it is to be inspected. Industrial engineers design acceptance plans and install the SQC systems and demonstrate its utility and maintain the system. Thus industrial engineers collaborate with the quality specialists and play their role in the design of quality control system. But as the SQC evolved over 75 years period, quality engineers and managers now are capable of developing SQC systems and the role of IEs is now minimal. But productivity improvement of inspection and quality processes is still the task of IEs and this issue is covered in a separate note.

Poka Yoke is contributed by Industrial Engineer, Shigeo Shingo to quality engineering area.

Types of sampling plans



MIL-STD-105D is for inspection by attributes. This means the inspected item is classified as either acceptable or defective. It has the following features:

1. Plans

MIL-STD-105D provides two types of plans which protect lot quality.

i). AQL plans

ii). LTPD plans

2. Level of inspection

Three general inspection levels. I, II, and III.

For small sample sizes, four levels, S1, S2, S3, and S$.

3. Inspection severity

i) Normal

ii) Tightened inspection

iii) Reduced inspection

4. Sampling types

Three basic sampling methods: simple, double and multiple

MIL:-STD-414 is for inspection by variable.


Sigmund Halpern, The Assurance Sciences, Prentice Hall, 1978

Originally posted in

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June

July - August - September - October - November - December

Updated 9 June 2017, 14 December 2011

The Socio Economic Approach to Management (SEAM)

Job Enrichment leads to Organization's Enrichment. It leads to Society's Enrichment.
Make your associates more Valuable. Your organization becomes more Valuable. Your Society and Nation becomes more Valuable.

The primary source for this article is the literature review by Chato B. Hazelberger in his Phd Thesis "Looking for the Evidence of TFW Virus." [School of Education UST, Minnesota, 2014].

In the 1970’s the Socio Economic Approach to Management (SEAM) was created in France as a systematic approach to management. Henri Savall and a group of researchers sought to integrate classical scientific management theories with the human relations school (Savall, 2010). The goal was to recognize and integrate the human factor, which according to the SEAM founders was overemphasized by the neoclassical human relations school and underappreciated by the traditional proponents of scientific management. What emerged was SEAM, which found its home at ISEOR. In 1973 ISEOR was created to manage SEAM consulting, and later doctoral work in SEAM (Savall, 2010).

SEAM is carried out by a team of consultants, who are referred to as intervener researchers. This title reflects the consultant’s role as both a consultant in the change process, and in continuing the research work of ISEOR.

Key to SEAM is the concept of hidden costs (Savall, 2008). Hidden costs are economic inefficiencies that come from dysfunctions. Dysfunctions can be explained as the gap between what is planned or directed and what actually occurs in the organization. By getting rid of the dysfunctions, an organization can release untapped potential allowing greater growth, new ideas, and cost savings.

SEAM classifies looks for dysfunctions in any of six categories: working conditions, work organization, time management, communication-coordination-cooperation, integrated training and strategic implementation. By finding dysfunctions in these areas and revealing their costs, SEAM finds additional revenue that can be returned to the bottom line, create potential for individual growth which will benefit the organization, and provide a better working environment.

From the beginning, SEAM was concerned about not just making organizations more effective, but also in studying the causes of the six dysfunctions. Early on, Savall (2013) suggested there was a flaw in the classic economic models. The classic models left out the human component. In searching for why this human element had been left out, the team at ISEOR identified that it was due to an overreliance on scientific management. They saw this particularly in the elements of scientific management as put forth by Frederick Taylor, Henri Fayol and Max Weber. ISEOR observed scientific management had an ideological flaw.

Acknowledging that scientific management had an ideology was important to understanding the TFW virus. Ideology “... describes the system of beliefs, values, and practices that reflects and reproduces existing social structures, systems and relations (Brookfield, 2005, p. 68).” An ideology is put forth as the true system of belief within the dominant group and is propagated as the one true way. Savall and his contemporaries at ISEOR observed that what was at the core of the scientific management was an ideology. That ideology was based on the work Taylor, Fayol, Weber.

When the Academy of Management was asked to update their list of the top 10 outstanding contributors to American business management thought and practice Taylor was named number one, Weber two, and Fayol five (Heames 2009).

The concept that setting goals is a management task is found in Fayol’s work and that element of strategic planning is found also in Porter and Kotter.

 Savall first put forth the metaphor of the virus in 1973 (Cristallini, 2012). He used the metaphor of a virus for three reasons:
• The virus was ideological in nature, contaminating decision making and analysis at a foundational level
• The virus caused changes in organizational structures and behavior
• The virus was continually transmitted within and to other organizations through training, practice, and management education

In his article “The role of governance in the fight against the global pandemic of the techno-economic virus,” Cristallini (2011) wrote extensively about the TFW virus as the root cause for the hidden costs and dysfunctions that ISEOR finds in organizations. He asserted that organizations are carrying this hidden virus. It is going undiagnosed, and current organizational change efforts are treating symptoms of the virus rather than the core problems of the organization which is the presence of the virus.

 Cristallini (2012) made the case that the proponents of the TFW virus view individuals as untrustworthy, and not intelligent or responsible. The individual is not free. In contrast to this, SEAM sees the individual as creative, and able to grow, change, and be trusted to do what helpful to the organization given the chance.

The virus promotes the view of individuals as untrustworthy with the health of the organization and even the protection of their own interests. This baseline belief about the individual leads to the conclusion that individuals must be controlled in order to do what is in their best interest and the best interest of the organization. The effect of this view of individuals is manifested in the symptoms of the TFW virus.

Manifestations of the Virus.

(Cristallini, 2011):
• Depersonalization and Submission
• An aristocratic view of the organization
• Apathy
• Separation

Cristillani (2011) argued two concepts promoted by the founders of the TFW Virus are depersonalization and submission. Cristallini (2011) explained depersonalization as the individual giving way to the needs of the organization. “Submission assumes that the individual complies with the requirements, because it accepts the principle of subordination, it is docile and waives his freedom and his aspirations” (p. 3). Depersonalization at its core is looking at the worker as a machine. The individual is unimportant; another resource to be used that is replaceable and interchangeable with any other worker (or possibly a machine).

Cristallini used the word massification to explain the concepts of depersonalization and submission. One image that Cristallini (2011) gave for massification was herding cattle. In the workplace that exhibits evidence of the virus there is a herder, and then there are the workers, who are the cattle who must be pushed along. No cow is different, and the job of management is simply to get the cattle to move in the right direction.

As defined by Cristallini (2011), submission occurs when individual aspirations and preferences give way to organizational good. More than just existing as a second consideration, individual aspirations and preferences must be in some ways suppressed in order to achieve organizational goals. Massification is also the result of the technocratic nature of organizations where the virus is present. Organizations are governed by rules and systems that are inflexible. Organizational rules, procedures, and standards, replace dialogue between understanding and intelligent individuals, unable to handle the unexpected and complexity because of their structure.

 “The TFW virus is profoundly marked by an aristocratic view of organizational life” (Conbere, Heorhiadi & Cristallini, 2014, p. 4) Cristallini (2011) argued that the separation of menial and noble tasks within an organization is evidence of the virus. Since some tasks are considered more important, the people who have the more important tasks are considered more important. This leads to artificial hierarchies. Time and energy are spent on the management of the hierarchy rather than on tasks related to the mission of the organization.

Apathy, or a lack of interest in work, results from a lack of hope. Conbere, Heorhiadi & Cristallini, (2014) used a similar concept in the term “blindness,” noting, “Our blindness prevents us from seeing, and thus we become unable to hope that it is possible to implement organizations which are flexible, cooperative and more livable” (p. 8). Socioeconomic approach tries to develop more livable organizations.

 In his original work Cristallini (2011) explained apathy partly as non-cooperation, “The virus has the effect of encouraging individuals and groups to withdraw their known world and not to open outwards” (p. 6). This non-cooperation is the workers way of disengaging essentially because the organization does not incent workers to cooperate. Apathy is a key to the virus because apathy means people are resigned to whatever happens, who do not feel that they can or even should affect change in the organization (Cristallini, 2011).

Another way the virus manifests itself is in separations or divisions in the workplace, marked by borders, walls and fences. One reason for these walls is hyperspecialization or the separation of functions based on faulty logic. Cristallini (2011) saw a linkage between the separation of tasks and an increase in egotism and selfishness. He said the virus is observed when group effort is not recognized; instead individual tasks in very specialized areas are encouraged and promoted. People are not rewarded for teamwork and cooperation, but rather excellence in their own small task. Therefore the focus is not on making the whole better, but rather on making oneself look better. This non-cooperation is evidence of the virus as well, as hyperspecialization is rewarded over teamwork and the effect on others is not considered. The virus encourages the building of walls between areas of the organization.


Becoming Agile: How the SEAM Approach to Management Builds Adaptability

Christopher G. Worley, Veronique Zardet, Marc Bonnet, Amandine Savall
John Wiley & Sons, 15-Sep-2015 - Business & Economics - 192 pages

Becoming Agile: How the SEAM Approach to Management Builds Adaptability illustrates the process of becoming an agile organization. Reflecting the principles presented in The Agility Factor, readers are taken on a real-world journey of transformation and change. This short-format case study of the French company Brioche Pasquier highlights how one organization successfully implemented the principles of agility using the socio-economic approach to management, detailing each step of the process and describing how every decision brought the goal closer within reach. Readers get inside the heads of decision makers to gain insight into how tough decisions were made, how new, important, and flexible management tools were implemented, and how the necessary changes ultimately benefitted both the organization and the people who made it work. From overarching policy to day-to-day procedure, the story provides a clear example of how an agile organization is developed, giving readers a foundation upon which to implement similar changes in their own organization.

 This case study allows readers to learn from an organization that got through the inertia and put the principles of agility into action, with incredible results.

Understand how the principles of agility can be implemented using a specific intervention strategy
Tailor those principles to suit any organization
Calculate and convert the "hidden costs" of traditional organizational design into flexible, value added activities
Formulate and execute an actionable agility strategy
Big changes require a deep understanding of the problem at hand, and a viable plan for steering the organization in a better direction. By seeing how it's been done before, organizations can take a proven approach and tailor it to their specific needs. For those tasked with formulating the agility strategy, Becoming Agile: How the SEAM Approach to Management Builds Adaptability provides invaluable insight.


Mastering Hidden Costs and Socio-economic Performance

Henri Savall, Véronique Zardet
IAP, 2008 - Business & Economics - 346 pages

 As research and theory building in management consulting have grown rapidly during the past several years, the series is dedicated to capturing the latest thinking from applied scholars and scholarly practitioners in this field.  This volume is a translation and modest updating of Henri Savall and Veronique Zardet's original work on mastering "hidden costs," initially published in French in 1987.


Socio-economic Interventions in Organizations: The Intervener-researcher and the SEAM Approach to Organizational Analysis

Anthony F. Buono, Henri Savall
IAP, 2007 - Business & Economics - 441 pages

The volume begins with a chapter by Henri Savall, founder and director of the ISEOR Institute and creator of the SEAM methodology, that presents an overview of the development of the socio-economic approach to management, and its guiding frameworks and methodology. The chapter's detailed explanation of the underlying thinking, tools, and techniques of socio-economic management serves as the primer for the remainder of the volume. The book is then divided into three sections. The first part presents illustrations of SEAM interventions in different types of organizations, including industrial and service companies, and not-for-profit organizations, including cultural institutions and sports clubs. The next section looks at cross-cultural applications and assessments of SEAM experiments in Africa, Asia, Mexico, and the United States, with a concluding chapter on intervening in multinational corporations in general. The volume concludes with a section that examines different issues and challenges in SEAM intervention, ranging from the impact on and role of middle managers in the SEAM process, intervening in small organizations, SEAM's facilitative role in operationalizing and institutionalizing information technology, conceptualizing, and implementing organizational change, facilitating merger and acquisition integration, and the application of socio-economic management in sales and marketing. The book also contains a combined glossary and chapter index that provides a definition of key terms and concepts in the SEAM methodology and where they appear in the volume. These key terms are highlighted in bold italics throughout the volume, illustrating their application in different contexts.


Work and People: An Economic Evaluation of Job-enrichment

Henri Savall
Originally published in 1974 in French - based on phd thesis of Savall
IAP, 2010 - Business & Economics - 268 pages

This is a reprint of Henri Savall's classic Work and People, originally published in French in 1974.

Savall's insights into the complexity of organizational life were groundbreaking, articulating the need to examine both economic and social factors as part of the same analysis, assessing technical and behavioral patterns through the lens of an integrated framework. As he has argued, there is a double-loop interaction between "the quality of functioning and economic performance," and underestimating this socio-economic "tension" leads inevitably to reduced performance and losses, which he refers to as "hidden costs." This approach, referred to as the socio-economic approach to management (SEAM), has significant potential for our thinking about organizational diagnosis and intervention. As Savall emphasizes, the North American tendency to cast people as human "resources" misses the essential point that human beings cannot be considered as simply another resource at the organization's disposal. People are free to give or withhold their energy as they desire, depending on the quality of formal and informal contracts and interactions they have with their organizations. As such, the SEAM approach focuses on human "potential," underscoring the need for managers and their organizations to create the conditions under which people will want to maximize their talents on behalf of the organization. Work and People focuses on the ramifications of this reality, as dysfunctions - the difference between planned and emergent activities and functions - can quickly lead to a series of costs that are "hidden" from an organization's formal information systems (e.g., income statements, balance sheets, budgets). As his insightful work underscores, as organizations begin to accumulate dysfunction upon dysfunction, they inadvertently undermine their performance and create excessive operating costs, with lower productivity and less efficiency than they could achieve. As readers will discover, the frameworks, tools and ways of thinking about organizations, people and management in this volume - in essence the background to the socio-economic approach to organizational diagnosis and intervention - continue to hold great promise for our attempts to create truly integrative approaches to management and organizational improvement efforts.

Updated 9 June 2017,  27 May 2017

June 6, 2017

Plant Layout - Efficiency

In 2011, when I wrote this article, there are no articles with titles of layout efficiency. Today, as I search on Google, there are good number of articles with the title layout efficiency. That means the emphasis that I put on efficiency as the important focus of industrial engineering is being recognized by many.

Efficiency Measures of a Layout

Minimum Floor space: Efficient layout engineering can minimize floor space for a specified production output.

Minimum Materials Handling: Efficient layout results in minimum amount and cost of materials handling.

More Efficient Utilization of Machinery and Labor: An efficient layout eliminates general production delays, occasioned by congested aisles, cramped storage areas, crowding of machine layout, and improper materials handling devices, all of which lead to a slowing down of the production process as a whole and in general reduction in the output of goods from a given quantity of production machinery and labor.

Maximum flexibility of production facilities consistent with low cost of production: Production facilities and layout can be designed to attain flexibility and adaptability to meet changing economic and technological conditions.

Reference: John A. Shubin and Huxley Madeheim, Plant Layout: Developing and Improving Manufacturing Plants, Prentice Hall of India, New Delhi, 1965.


Plant Layout Optimization


Clever layout enhances bottling efficiency, 2002

Plant Layout Analysis

The Dynamics of Plant Layouts
Management Science, January 1986. (Interesting paper)

An Interesting Book in NITIE library
John A. Shubib, Ph.d and Huxley Madeheim, Plant Layout: Developing and Improving Manufacturing Plants, Prentice Hall, 1963. (658.23/742)

Review Notes on Plant Layout Design by Operations Managers

PPT of Salah R. Agha, Professor Industrial Engineering, Islamic University of Gaza on Facilities Planning and Materials Handling

Indicates role of IEs.

Facilities Planning

James A. Tompkins, John A. White, Yavuz A. Bozer, J. M .A. Tanchoco
John Wiley & Sons, 19-Jan-2010 - Technology & Engineering - 864 pages

When it comes to facilities planning, engineers turn to this book to explore the most current practices. The new edition continues to guide them through each step in the planning process. The updated material includes more discussions on economics, the supply chain, and ports of entry. It takes a more global perspective while incorporating new case studies to show how the information is applied in the field. Many of the chapters have been streamlined as well to focus on the most relevant topics. All of this will help engineers approach facilities planning with creativity and precision.


Originally posted in Knol number 2800

Updated: 8 June 2017,  7.12.2014, 2 August 2012, 26.11.2011

MBA Core Management Knowledge - One Year Revision Schedule

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June

Planning in the Marketing Process

Marketing Management Revision Article Series

The marketing process consists of analyzing marketing opportunities, developing the marketing strategies, planning marketing programs, and managing the marketing effort. (Kotler)

Developing a marketing plan  (interesting information is in the article)

Planned Revision schedule for marketing chapters is in February and March

Updated on 8 June 2017, 3 December 2011

June 5, 2017

System Improvement Process

The material is adapted from a manual of University of Michigan on ITS Process Improvement

Information Technology Systems/Processes Improvement Processes

Information and Technology Services (ITS) have to deliver value to customers internal or external. Since value is defined by customers, it is crucial that ITS keeps its customers as the central focus in all aspects of service delivery. This ensures a higher likelihood that services are accurately aligned to customers’ needs and expectations so they experience value at the point of consumption. It is prudent for ITS to follow a disciplined approach to process improvement management as a business tactic for responding effectively and rapidly to customers to ensure their best possible experience.


What Exactly Is a Process?

A process is any orchestrated sequence of activities and associated tasks required to meets goals or objectives. Inputs to the process become outputs. Every ITS area uses numerous processes every day whether that area is business, managerial, administrative, human resources, financial, operational, technical, or any other.

A well-defined and designed process commands the flow of work and all its possible paths in meeting the goal or objective. Some of the tasks may be performed manually; some may require computer and system interactions; others may be completely automated. While the process user may be allowed some flexibility and creativity in how and whether they perform some of their tasks, the user never dictates the sequence of the process.

Some processes are formal and large in scale. They are publicly known, documented, supported, and widely used across the organization. A process can also be of a more intermediate size and specific to a particular group or team or role. Others in the organization may be aware the process exists, and it may be documented; but it is mainly understood and performed by a set number of users. Yet other processes are of much smaller scale or are even undocumented, shadow processes hidden from view. These processes are no less important than others and are sometimes critical; but they are conducted by just a few or even only one individual.

In short, a process is a process, no matter how large or small.  It is important to note the following key points.
Many ITS processes exist and they contribute in some way to a service provided to either an internal or external ITS customer.
Processes often have touch points, and there are potential implications for customers when issues with one process impacts the processes that touch it.

Why Improve a Process?

Process improvement refers to making a process more effective, efficient, or transparent. Process improvement is relevant to all ITS areas because processes naturally degrade over time for any number of reasons. An organization that conducts process improvement focuses on proactive problem resolution in order to avoid operating in crisis management mode when process degradation occurs. 

Process improvement helps an organization:

View process value through the eyes of the customer;
Define, manage, and measure a process in order to regularly evaluate it using data-driven information;
Break down process silos by contributing to an understanding of how processes interact and impact one another and customers;
Reduce unnecessary business costs.

Process improvement at ITS does not place blame for process degradation. The primary goal is to identify and understand issues in order to recognize solutions and implement improvements to stay aligned with customer needs and expectations.

Risks of Not Improving Processes

When key stakeholders are involved in process improvement, they can collectively focus on eliminating waste—money, time, resources, materials, and opportunities. We waste these precious elements when we fail to examine the processes we use to conduct our business. Work can be completed more cost effectively, quickly, and easily.


Objective and Scope

The Process Improvement Methodology provides a set of phased activities for analysis of an existing process for the specific purpose of identifying improvement opportunities. The methodology further guides the user through process improvement implementation in conjunction with use of other ITS methodologies as appropriate. Finally, it provides direction as to appropriate process management and periodic process review and evaluations geared toward ongoing improvement.


The ITS Process Improvement Methodology described in this note is based almost exclusively upon Lean concepts with a hand off to Six Sigma.

What is Lean?
Lean is a management philosophy and practice that originated in the automotive manufacturing industry, specifically in Toyota Motors to implement cost reduction and match American car prices and productivity. Number of efficiency improvement practices were developed and implemented in Toyota Motors. Its practical solutions are logically translated to non-production processes and are now being successfully applied to many other areas including information technology, help desk and customer services, administrative operations, and more. Lean considers the flow of the beginning-to-end actions and all the interactions between them as a process value chain—or the “value stream”. Steps are classified from the customer’s point of view meaning that the value of each action in the stream is determined by whether it adds value from the customer perspective—value adding—or does not add value from the customer perspective—non-value adding. Steps that are required but irrelevant from the customer perspective represent a final classification—non-value adding but required.

Lean applies particular tools and measures to look for common types of process flow waste and then visually illustrates where that waste decreases value and adds unnecessary business cost. Blockages to flow either temporary or for  longer periods are specially targeted to develop lean systems that less work in the system.   Eight areas of waste are explored as opportunities for process improvement. They are commonly known as correction, extra processing, inventory, excess motion, overproduction, transportation, waiting, and underutilized resources. These waste classifications have been redefined and adapted to the different industries as they are applied. Once waste is identified, criteria related to the overall health and maturity of the process are considered in selecting solutions to improve the process by eliminating the waste. The improved process is presented as the new proposed value stream.

Why Lean?

Lean applies practical solutions to practical problems that can exist in any flow of work. Practical solutions are sometimes obvious fixes that can be quickly implemented. However, Lean is not about sudden, major overhauls of a process. Once reasonable quick fixes are made, Lean prefers a planned, managed approach of incremental process changes over time to large one-time changes. The continuous improvement is based on involvement of front line people actually doing the value adding work.  This means a better chance for long-term success.

What Lean is Not
There is a great misconception that Lean means reducing waste by eliminating employees. It is already mentioned that lean focuses  on the amount of work that is flowing in the system. Systems are termed bulk when lot of work is fed into the system but there are lots of delays for individual pieces of work. In a lean system the amount of work in the system is small but flows at a rapid rate without delays. The fallacy that process improvement eliminates employees does a huge disservice to the point of getting rid of waste. To the contrary, an important reason for reducing process waste is to free up staff to develop and use their skills in more meaningful ways that actually increase their income and value. In fact, companies who use process improvement to eliminate headcount historically fail at becoming mature, successful, process-based organizations. Why? Because employees know best where process waste exists and typically come up with the best ideas for improving processes. A wise organization retains these employees and explores opportunities for increasing revenues and provide continued employment. to capable people.

Six Sigma

Six Sigma is a business management strategy that was originally developed by Motorola. Its main focus is to eliminate defects by reducing variation in the process output by redesigning products and processes. As with Lean, many of the same tools can be used to analyze non-production processes. It is important to exhaust the Lean approach first, however, because to begin with Six Sigma may cause missing the obvious. Six Sigma-based process adjustments may seem right at first but over time may prove not permanent or even have inadvertent negative impacts on other connected processes.

Lean is often described as an inch deep and a mile wide. Conversely, Six Sigma is an inch wide and a mile deep. Lean is intended to review the entire process to identify and eliminate waste within the process, whereas Six Sigma focuses on individual sources of defects to determine the root cause and improve the process to reduce or eliminate those defects.

Note:  Lean and Six Sigma concepts are often combined as they share the common goal of delivering and continuously improving business processes. Both Lean and Six Sigma focus on defining success from the customer’s perspective and require a complete understanding of the business process in order implement improvements.

Process Improvement Methodology Description


These are the four major supported stages reflected in the Process Improvement Methodology:
1. The first is to Identify the process and its elements. Specific phases involve defining the scope of the process to be analyzed, as well as documenting and analyzing the current state.
2. Next is to Improve the process by identifying and presenting recommendations on specific trouble areas and designing a roadmap to support improvement implementation.
3. It is important to then effectively Manage the improvement implementation and subsequent process operation using a clearly defined, approved approach.
4. Finally, in order to maintain process health and recognize ongoing improvement opportunities, it is essential to Measure key elements.

The stages of process improvement are supported by six methodology phases that are equally important and necessary.

Methodology phases

It is critical to clearly define the reach and impact of the process. Understanding all process stakeholders and customers and where analysis focus must be directed drives the entire process improvement effort. The Scope phase identifies the start and end points of the effort. It includes an assessment of the organization’s readiness to conduct the process improvement action. There are two entry points to the phase. An initial process improvement begins here, or a continual improvement effort enters here from the Review & Evaluate stage.

Identify Process for Analysis
Critical need, priority efforts, and business impact significance determine the selection of a process to be addressed. Analyzing a process enables us to understand activities, their relations, and metric values. If a process occurs often enough to be observed and documented and if the process improvement team can complete at least one improvement cycle within 90 days, it is a viable candidate for analysis. The process must be clearly defined.

Conduct Readiness Assessment
A process improvement project must be backed by stakeholders who bring sufficient energy, cooperation, and resources to the effort. The Readiness Assessment is completed concurrently with the project scoping effort via interviews with the stakeholders who have identified the process of concern.  It is more of an internal, informal assessment as opposed to the more formal Project Charge. At any time during the scope phase, the Readiness Assessment can be evaluated and the determination whether to proceed can be made.

Form Process Improvement Team
A team consisting of five to seven members is ideal. More team members can slow progress, and too few may not provide the input and manpower to complete tasks in a reasonable timeframe. A team leader must be appointed and will schedule and conduct meetings and manage the process improvement effort. Team members must be closely involved in the process and participate in discussions, decisions, data collection, and data analysis activities. Team members are expected to attend meetings and complete preparatory work as assigned. The time requirements of a team member are dependent upon the process being analyzed.

Document Charge & Scope
The Project Charge document contains standard, key elements found in the scoping of a project effort. These include:
Process statement; background, objectives, scope, impacts, dependencies, assumptions and constraints
High-level requirements
High-level deliverables
Level of Effort

Obtain Charge & Scope Approval
Obtaining charge and scope approval starts with providing the charge document to key stakeholders for their review. Provide reviewers with an opportunity to provide feedback. It is beneficial to provide an opportunity for discussion. Be sure there is awareness and consensus on the charge and scope.

Document & Analyze
The Document & Analyze phase involves gathering pertinent information about the process and how it operates in its current state. It includes modeling of the process, identifying roles and organizations involved, and setting baselines measures.

Conduct Project Kickoff
Develop project kickoff meeting material (methodology overview, project approach, timing, etc.). Conduct the project kickoff meeting.

Conduct Process Discovery
This stage reveals why and for whom the process exists, what need it is intended to serve, and how it operates in its current state. Comprehensive process discovery may involve several techniques that lead to scope validation or reveal the need to change scope:
Capture High-Level Process (SIPOC)—A SIPOC is a visual tool used to illustrate the high-level flow of a process, customers of the process, and what the customers expect of the process. Diagram the suppliers, inputs, process, outputs, and customers.
Review Existing Process Documentation—Locate existing documentation about the process for general information purposes. Gather awareness of process detail prior to interviews.
Conduct Interviews & Summarize
o Develop interview questionnaire. This ensures consistent and key points are covered in the interviews. Determine how interview information will be captured and summarized.
o Determine the personnel to interview in conjunction with the assigned Subject Matter Experts (SMEs). Talk with Process Manager(s), other key personnel who perform the process, personnel who integrate with the process, customers of the process (if appropriate), and so on.
o Schedule and conduct the interviews.
o Summarize and analyze the results.
Shadow Process Performers—Observe process personnel as they perform the process (or portions of the process). Validate that the process model contains all the pertinent activities and interfaces. Discover other steps involved, other people involved, other tools or interfaces used that are not captured in the model(s).
Conduct Survey & Summarize—When conducting interviews and modeling the process, keep in mind the RACI matrix. A RACI matrix is a representation of the key activities and decision making authorities occurring in a process, set against all the people or key roles performing the process. Identify the key activities that are being performed. Determine for each activity who is Responsible, Accountable, Consulted and Informed. Much of the information for the RACI matrix can be gathered during the modeling sessions.

Document & Analyze Current State

This phase models the current state in detail and establishes its current baseline and measurement with an eye toward showing current process value vs. waste. Analyze current state process against identified issues, concerns, and pain points. Look for areas of inefficiency. Document the findings. Documenting and analyzing a process may involve several techniques:
Create Process Maps & Documents—A process flow diagram or process map is a valuable tool for understanding the process with a visual representation. Value Stream Mapping helps identify opportunities to enhance value, eliminate waste, and improve the flow of a process. Description documents for each of the process maps are beneficial to various target audiences.
o Conduct modeling sessions with the SME(s) (for example white board sessions). The sessions are iterative as process detail is uncovered and modeled, and reviewed for accuracy. Create a Process Description document, one that captures process details that the model does not capture.
o Identify the organizations that perform the process, key activities performed, roles, authorities and people involved in the process (key stakeholders, customers, people who execute the process, etc.), tools used, interfaces with other processes, etc.
o Determine timing/constraints of the process. Identify measures currently used to manage the process.
o Determine process risk areas.
o Determine whether other models would benefit the analysis or communication of the process and its pain point issues.
Validate Process Maps & Documents—Review documentation captured about the process and verify current state evaluation measurements.
Establish & Analyze Initial Baseline (VSM)—See Critical to Quality Trees (CTQs) and Key Performance Indicators (KPIs) for guidance. Focus on areas of inefficiency and pain points for places to measure. Identify and capture baseline measures of the current state process. While conducting interviews, determine whether a survey of process personnel is needed. If a survey is needed: Develop the survey questions; Conduct the survey; and summarize the survey results. Qualtrics, an online survey tool available to all ITS employees, is one option to consider.
Benchmark Current State—Identify points of reference for measurement. This often involves reviewing industry standards to compare current findings with those of similar relevant businesses.

Present Current State Findings
Review, summarize, and document all the analysis findings and share these results with key stakeholders. Share how the existing process really operates and whether the current state is in line with the original goals and objectives of the process. Demonstrate, where feasible to do so, the business cost of conducting the process in the current state. Indicate obvious areas of waste where there may be improvement potential for reducing cost and/or increasing value to process customers.

This phase selects the specific improvements to the process that will be proposed, documents what this process will look like, identifies additional process controls and measures, and outlines a roadmap to move the process to the proposed state. The results of this phase determine whether a process improvement recommendation will be fully undertaken.

Identify Process Improvement Opportunities
Identify a variety of ways to improve the process; big, small, or techniques that overlap others. Brainstorm with colleagues, and consult SMEs. Look at root causes and consider practical applications to the obvious problems (Lean). Recognize where root causes are not understood and whether a final recommendation for more in-depth analysis is warranted (Six Sigma).

Document Future State
Determine the proposed future state process from the set of potential process improvements. Document the proposed future state process in models and related process description documents, as appropriate. Document process control, measurement, and management components.

Conduct Readiness Assessment
Determine whether the participants in the process are ready to implement the proposed changes. Considerations are:
What is the organization’s willingness to adopt the process changes?
Do the recommended improvements require significant change by those performing the process?
What is the organization’s ability to do the work to implement the process?
What is the willingness to assign an active Processes Owner?

Presentation Recommendations
Typically, the Process Analysts would present the final recommendations to the key stakeholders. Keep in mind that stakeholders tend to prefer a high-level view over minute details. Prepare your presentation from a high-level perspective, but be prepared to answer questions in depth.
Scope and Objectives—Include a reminder of the scope and objectives that were agreed-upon earlier to provide context for the rest of the presentation.
Current State Findings—Provide a brief review of the major findings obtained during the Document & Analyze phase. Include a maturity level assessment.
Future State Recommendations—Focus the presentation on future state recommendations, providing rationale for each. Identify those that require approval before continuing to implementation.
Roadmap activities and estimates—Provide clear steps for implementing recommendations. Target maturity level—Indicate the estimated maturity level for the target state using the Process Maturity Assessment. The target level may not necessarily be the optimized level.
Next Steps—List next steps and action items.

Document Lessons Learned
The team may wish to conduct a review of their analysis effort for purposes of honing individual or group skills or for suggesting Process Improvement Methodology refinements. In cases where improvement recommendations will be implemented, use this step to make plans for taking future process improvement cost-savings measurements where possible to do so. Here the purpose is to measure the effectiveness of the methodology itself. Measuring for purposes of evaluating the process in question is not included here but is addressed in the Review & Evaluate phase.

This phase takes an approved process improvement effort through the steps needed to deploy the recommendation. It is a best practice to capture the process as you are implementing it to provide an audit trail, using the following deliverables:
Process Summary—This document, owned by the Process Manager, governs the scope, use, execution, change control, and continual review of an ITS internal process. It provide key information for anyone needing to learn about the process. The Process Summary template guides you through creating this document.
Process Flow—A flow document communicates the sequence of process activities. Flows range in complexity from  simple and high level to technically detailed. Two type of flows are appropriate for accompanying  a process summary. The preferred tool for creating these flows is Microsoft Visio.
o At minimum, a high-level swimlane diagram is required. This is a flow chart using lanes to illustrate who or what is working on a particular subset of a process. It primarily maps the hand-off points and provides a high-level understanding of time to complete the process.
Swimlane Diagram Template
KS Visio Stencil and Shapes

o To  effectively demonstrate the complete workflow and handoffs of activities and tasks—particularly useful for process performers and process analysts—a detailed process model is warranted. The Process Improvement Methodology specifically points to Business Process Modeling Notation (BPMN).  See the Supporting Tools section below for BPMN Visio tool information.

Define Implementation Scope & Obtain Approvals

As with the process analysis effort, the first step of defining the scope is critical. This may have been clearly defined during the redesign phase; however, those closely involved in the process and who have a major stake in its effectiveness must determine what to implement when and how. You may need to take a phased approach.

Acquire appropriate approvals needed for moving forward.
Follow Appropriate Methodologies to Execute Process Improvement Effort
Select the appropriate methodology to follow based on the project needs.
Project Management—This is the standard methodology adapted for ITS to manage projects. For project management support, contact the ITS Project Management team.
SDLC System Development Lifecycle—This is the process for creating or modifying software or information systems as well as the models used to develop these systems.
Iterative—This is an approach to software developments and updates that has been adapted for ITS. This framework results in frequent deliveries of small amounts of scope over short time frames and requires frequent customer feedback.
Performance Support—Defines the design process for developing instructional support materials, such as job aids, communications, course materials, simulations, and related deliverables.
DR/BC—This is the methodology for maintaining the ITS Disaster Recovery/Business Continuity strategy.
Infrastructure—This is the methodology used to maintain the technical infrastructure that supports the services that ITS provides.
Service Lifecycle Framework— Not a pure methodology, but a framework intended to assist staff involved in planning, deploying, running, and  improving ITS services. The brings together existing ITS documentation, methodologies, and processes to create a general framework for how to approach the aforementioned phases. Principally, it is offered to fill the gaps encountered with transitioning new services into production while extending the concepts into the other service lifecycle phases in order to maintain a holistic view of services.

Set Up Process
The set up process includes:
Secure Process Roles—Confirm commitment of involvement from those who perform roles pertaining to the process including the Process Owner or Process Manager, Business Process Analysis, SMEs, the Service Management Manager, and Process Performers.
Obtain & Prepare Tools—Some process changes may require software or equipment. Obtaining and preparing the tools that are necessary to implement the process may be conducted during the set up process.
Prepare Production Turnover Plan—Establish a plan for expanding the process to production.
Decide Process Verification & Review Schedule—Determine appropriate timing for reviewing the process and verifying its effectiveness. This must be an ongoing effort to enable continual improvement.
Determine Process Change Controls—As needs arise to change the process, it must be done in a managed and deliberate way. The change must be agreed upon by key stakeholders, and the process changes must be documented.
Update Process Maps & Documents—As changes are applied to the process, it is important to update process maps and their companion documents accordingly.
Plan Training & Education—Before implementing the revised or new process, those who perform process activities must learn the new steps, tasks, or operations. Be sure to design training or performance support materials. Performance support refers to just enough information for someone to perform a specific task when needed.
Establish Measurement Criteria
Identify Key Performance Indicators—These are quantifiable measurements that reflect critical success factors. Key Performance Indicators (KPIs) must be determined before the measures are required.
Define Critical Success Factors—A Critical Success Factor (CSF) is a required element for a project to achieve its goals. These may be defined by the Operational Level Agreements used by the Service Level Manager.
Choose Quantifiable Measures (financial, customer priorities, operational)—Careful selection of process metrics enables management of the process.
Identify Soft Measures—Select appropriate aspects to observe and collect related or descriptive feedback. This contributes to the evidence that you collect to evaluate the effectiveness of the process. For example, anecdotal feedback, verbal comments, perceptions, complaints, and concerns.
Establish Process Use Requirements
Identify Required Compliance—Make sure that the process factors in requirements for any policies and regulations that are required by law.
Identify Best Practices—As you implement the process, apply known best practices and communicate them to all involved in process operations.
Identify Task-Level Requirements—Implementation requires detailed task-level instructions and specific requirements for some steps. Be sure that any required steps are clearly defined.
Confirm Measurement Criteria with Stakeholders
Review the strategy for measuring process performance with those who have key roles. Relate these measures to the goals and objectives.
Create Process Verification & Review Plan
Develop an action plan for ongoing review of important aspects of the process.
Deploy Process
Provide the process owner and participants with all the materials needed to implement the redesigned process. This includes training materials, performance support, and communicating the new process changes.
Operate oversees the day-to-day activities of the production process. It generates process verification activities.

Govern & Manage Process

In order for a process to be successful, there must be governing and managing elements in place, such as:
Monitor Process Compliance
Provide Process Production Support
Ensure Appropriate Process User Training
Address Process User Performance Issues
Execute Process Verification Action Plan
Deploy the action plan for ongoing review of important aspects of the process.
Collect & Validate Data
Gather and review data required to measure the process. Review the measures to ensure valid results.
Analyze Data
Analyze and discuss with other process performers and process team members as appropriate.
Summarize Findings
Prepare a summary of findings for purposes of formal process review and evaluation.
Review & Evaluate
Review and evaluate takes the process improvement effort full circle to look at whether the process is meeting goals and objectives and whether additional improvements and/or analysis may be needed.
Review Process Verification Findings against Goals & Objectives
Compare the measurements with the expected results with the goals and objectives for the process. This is completed on a regular basis to be sure the process is meeting the desired outcomes.
Assess Process Maturity
Each process analysis effort requires periodic decisions about the measures, process, storage, analysis, reporting, and feedback. A process may be categorized according to its maturity as initial (chaotic), repeatable, defined, managed, or optimized.
Benchmark Against Baselines
Compare the industry benchmarks to the process baselines to identify gaps and areas for improvement. Now is a good time to create a new Value Stream Mapping and compare it to any original that was created prior to the improvement effort.
Identify Process Needs & Changes
Determine whether the process requires updates, analysis, or additional effort.
Prepare Process Improvement Plan
Collect, consolidate, and summarize review findings. Identify areas that require updates. If the process requires a review for potential analysis, include rationale and objectives.
Communicate Findings & Plan with Process Stakeholders
Provide the process improvement plans to process stakeholders. Indicate whether the process is operating at optimal capacity or if review and analysis is required.
Obtain Approval
If additional process analysis is needed, be sure to get approval from key stakeholders to scope the project. If approval is not obtained, continue process operation until it is again time to conduct process verification for ongoing process review and evaluation.

Process improvement is a specific discipline and requires its own methodology. Some process improvement efforts are significant projects that require project management support.

The ITS Enterprise Project Office can also recommend strategies for managing process improvement efforts where full project management support is not necessary.

Business Process Modeling tools are used to document processes in detail. They are often used in both BPM and Enterprise Business Architecture.  The most sophisticated of these tools provide the ability to incorporate process models with business strategy. An example of a full-fledged Business Process Modeling tool is the ARIS Business Process Analysis Tool by IDS Scheer. The simplest of these tools, which can be used for less complex modeling, is Microsoft Office Visio.
Business Process Management description
Business Process Modeling Notation description
Process Modeler 5 for Microsoft Visio™
Other tools that are used within BPM are event processing, optimization, and simulation tools.

What is Service Management? —March 31, 2010 presentation by Andrea Stevens that describes the service management approach, rationale, and plans.
Business Process Analysis Overview & Key Findings Report—A summary of the research findings and includes long- and short-term recommendations for how process improvement efforts could be accomplished at ITS.
BPM Basics for Dummies—A free book by Software AG that provides core concepts about Business Process Management, and a guide for implementing BPM. It also includes a list of resources for additional details.
The Complete Lean Enterprise—A book by Beau Keyte and Drew Locher on Value Stream Mapping for administrative and office processes.

Lean Six Sigma-Continuous Improvement Roadmap—A visual tool, created by Lean Office instructor Don Lynch, Ph.D., for identifying organizational continuous improvement and process learning stages.
BPMN Method & Style—A book by Bruce Silver that provides a levels-based methodology for BPM process modeling and improvement.
Metrics for IT Service Management—A book by the IT Service Management Forum that considers the design and implementation of metrics in service organizations.
Continual Service Improvement—A book by the Office of Government Commerce that describes best-practice processes for IT Service Management.
Cynthia Karen Swank. The Lean Service Machine. Harvard Business Review. October 2003—Article describing lean operations in Jefferson Pilot Financial.
Guidelines for Using Process Mapping as an aid to Process Improvement

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June

July - August - September - October - November - December

Updated on 7 June 2017, 1 July 2014

June 4, 2017

Digital Products, Services, Operations and Enterprise Innovation




Accenture is becoming a digital-first company,  digital first in two main directions – first, being the leader in providing digital services to our clients and second, making Accenture the most digitalized organization. So digitalization is on both sides, the client-facing side and the Accenture inside.


Leading in an Unpredictable World
MIT SMR -Magazine: Fall 2016
Pierre Nanterme (CEO - Accenture), interviewed by Paul Michelman

Digital disruption has only just begun
Pierre Nanterme
CEO, Accenture
17 Jan 2016


Mastering the Digital Innovation Challenge

Magazine: Spring 2017 Issue Research Highlight March 07, 2017
Fredrik Svahn, Lars Mathiassen, Rikard Lindgren, and Gerald C. Kan


Related Research
F. Svahn, L. Mathiassen, and R. Lindgren, “Embracing Digital Innovation in Incumbent Firms: How Volvo Cars Managed Competing Concerns,” MIS Quarterly 41, no. 1 (March 2017): 239-253.

Digital innovation in Asia: What the world can learn

October 2016

Digital innovation strategy: A framework for diagnosing and improving digital product and service innovation

Daniel Nylén, Jonny Holmström
Business Horizons
Volume 58, Issue 1, January–February 2015, Pages 57–67

When It Comes to Digital Innovation, Less Action, More Thought

Scott Anthony
Narvard Business Review
JANUARY 21, 2015


Before you take your minimal viable product to market, answer the following questions or do the suggested activity.

Identify offerings comparable to what you envision that have struggled commercially and find out why. Avoid the mistakes.

Consider why it is that the large companies that could have gone into the space you’re contemplating haven’t. Is it possible they know something you don’t?

Talk to someone who knows more than you do about the key activities  of your business, such as your target customer, distribution channel partner. Find out  hidden risks?

Plan and document, how you will do your first  transaction. Who is your first customer? How will he hear about your idea? How will she obtain it? How will you support him if he’s not happy?

Devour publicly available financial statements for companies competing in markets related to yours. How do people make money? What big investments are typically required? Are you missing an important ingredient that is necessary to compete? Are you underestimating what it will take to get to market?

Create a plan for how you will make money based on economic hypothesis of the existence of the market for the product you are planning to make and sell, and describe it to a business savvy friend. Ask that friend to poke holes in it.

Updated on 6 June 2017, 28 May 2017