How to implement daily work management system for business sustenance – (Nichijo Kanri) Part 2

Demystifying the Elephant Called Daily Management (Nichijo Kanri) Part 2

Steps of implementing Daily Management

“Begin with the end in mind”

– Stephen Covey

In Part 1 of this article, we suggested 7 questions to all functions.

Part 1– Demystifying the Elephant Called Daily Management (Nichijo Kanri)

In this part, we explain seven steps method of implementing daily management answering all 7 questions

7 questions to all functions

These questions are related to daily management implementation

Related Article– How to create an effective Lean Daily Work Management System

1. Do you know your Dept Mission, Goals, KPIs and established Key processes to achieve Mission. ( there should be clear linkage between organization Vision , Mission, Goals and Dept Goals)
2. Is organization structure available and roles and responsibilities of each position is clearly defined. Resources like competent team members and infrastructure is available?
3. Is Standard Operating Procedures (SOP) available to implement each process effectively and efficiently?
4. Is everyone in the dept knows about their Job Description, SOP, Goals , KPIs, abnormal conditions and response mechanism
5. Do you established the frequency and monitor the same? – Dash Boards / SPC Charts
   
6. Do you take actions when you are not meeting targets (abnormal conditions)
7. Are you working on continual improvements

7 Steps to implement Daily Management Systems in any Industry

These 7steps are developed applying PDCA principles.

Step 1-3 is Planning 

Step 4 is doing and Step 5 is Checking and

Step 6-7 are Actions

Step 1: Establish department Mission, Goals, KPIs and Processes

Mission defines the purpose of a function. It is the starting point for any function.  Let us take a few examples to understand the mission

Goals are required to make mission Measurable and KPIs are the metrics to measure the performance

Processes are the vehicles to achieve Goals

Let us understand the linkage between Mission, Goals, KPIs, and Processes by taking a specific function – Human Resources

Mission of Human Resource Function is to ensure the required number of competent and motivated employees available in all functions.

Goal 1: Ensure zero difference between required Vs actual employees

KPI for Goal 1:   100 % competent employee availability as per Organization Chart   in all functions

Goal 2:  Ensure 100 % employee engagement

KPI for Goal 2:   Percentage of employee engagement in each function

Processes to achieve the above goal is

1. Recruitment
2. Training and Development
3. Employee engagement

Each process can have its own KPIs and owners

Similarly,

The mission of Purchase function is to ensure the availability of right materials at the right time and the right price

The mission of Maintenance function is to maintain equipment in good condition at optimum cost to ensure availability of equipment whenever required

Managing point and Checkpoints – MPCP

As we are aware each function has several processes and process owners.  As an extension to the organization structure, each employee who is part of these processes should have authority, responsibility, and accountability.  Authority to take timely decisions.

Competence is the prerequisite for authority. Responsibility is performing the tasks as per the procedures.  Accountability is ownership for results.  Goals of Function Head are called Managing Points for which he or she is accountable. To achieve these goals each of his/her subordinates will have their respective goals which are checkpoints for the function head. Depending on the hierarchy or levels, this relationship continues till the last person in the chain.  The checking point of the boss is the managing point of a subordinate.

In the following example, the Manager has a goal of improving profit which is his Managing point. To achieve this he has to focus on the components contributing to profit i.e. Material cost, Labour cost etc.. They become his checkpoints. For one of his subordinates material cost becomes managing point and he will identify its components and delegate to the next level if required.

Step 2: Establish organization structure, roles and responsibilities

This is one of the critical steps most organizations fail to implement. In today’s competitive environment, identifying the right people for the right job is a tough task. The human resource team will be always in firefighting mode to fill open positions. Most Organizations suffer either from a shortage of staff or the right staff.  To avoid this failure, organizations need to be proactive and keep searching for the right people and developing existing people. The second important point in this step is, developing and sharing roles, responsibilities, and KPIs. Clear communication of expectations from each role is very important.

Related Article- Hoshin Kanri – The Secret Behind Visionary Organizations

Step 3: Establish Standard Operating Procedures (SOP) for each process

For organizations certified for ISO or similar systems, this step will be part of it. However, loosely defined or inadequate procedures will create more problems. Fig 2 illustrates, the relationship between Process, Procedure, and Product or Service.  In the Human Resource function example, Recruitment is one of the processes and we should write step by step procedure from Recruitment request to person coming on board.  The outcome (Product /Service) of this process will be selection of a good or bad candidate. Good process & procedure when followed produces good outcomes and vice-versa

It is also important to understand definitions of Effectiveness and Efficiency

Step 4:  Create awareness on Goals, Roles, KPIs

A beautifully defined process and the procedure are useless unless the users understand and implement it.

This step is closely related to Step 2.  People should be competent enough to understand the process, procedures, and KPIs.

The role of function heads is to educate his team on the roles, responsibilities, authorities, and accountability.  Any gaps in competency need to be identified as training needs and to be addressed.  Some organizations create skill or competency matrices to map the current state and fix targets.  Most jobs today need technical, soft and analytical skills.  Many organizations Daily Management reports not updated because the employee does not know 5W1H of the report. Even skills like the use of Microsoft excel to be considered if the job needs it.

Step 5:  Establish dashboards, introduce audit systems to monitor the effectiveness and efficiency of the processes

“What gets measured, gets managed”

– Peter Drucker

Dashboards required at all levels to measure and monitor the performance.  At this stage,  Daily Management sheets introduced and people need to track their activities.  Dashboards can take many forms.  The most popular categories tracked in Industries are PQCDMSE Boards (Productivity, Quality, Cost, Delivery, Morale, Safety, and Environment). Some organizations set up War rooms and display all the performance trends.  How Vital signs are important for the human body, top management will be interested to know a few key health indicators like Sales, Profitability, Customer rating, Net promoter Score, etc.. at regular intervals.

The Control Levels or Limits should be established for each parameter to understand if the process is stable or unstable

The most important point to remember in this step is the frequency of monitoring.  Critical processes to be monitored more frequently. Also, front line employees need to monitor their performance more frequently like every hour, shift, etc…  Sooner the gaps identified, better chance to avoid more damages

Gemba Walks, Layered Process Audits are the other important tools for monitoring the performance and identifying abnormalities

Application of Statistical Process Control (SPC) is very useful to identify special causes

More on the above tools will be discussed in subsequent parts of this article.

Step 6:  Implement corrective actions for performance gaps and abnormalities

Collecting data, creating trend charts is of no use if timely corrective actions are not taken.  The definition of corrective action is “Actions taken to avoid recurrence of a problem” – ISO 9000.  Means actions are taken on the root causes of the problem.  This is another critical step mostly ineffective in many organizations.  Actions taken on symptoms will not solve the problem permanently.  That is the reason we experience repeated problems. Example: Repeated customer complaints, repeated machine breakdowns, etc…

Corrective actions when horizontally deployed to other areas become Preventive actions.  We should not wait until we face a similar problem in other process or area

Step 7:  Keep improving

There is no sustenance without improvement. According to Mike Rother, author of the book Toyota Kata “A process is either slipping back or being improved”.  Improvement meaning here is ongoing continual improvements also called Kaizens.

Points to Ponder

1. Daily Management Fails means Firefighting prevails. Take an example of your own organization or any organization where daily management is not effective and analyze which step is not followed.
2. Take examples of a Hospital, IT, and a Manufacturing organization and list activities related to daily management and examples of policy deployment.

For Example; Cab aggregator like Uber, the daily management points are

1. Maintenance of Website –  Site reliability
2. Ensuring minimum vehicle availability in each city
3. Drivers education 
4. Customer Satisfaction tracking

Whereas Example of Policy deployment or Breakthrough improvement goal is

a) Start Food distribution business leveraging on the Cab service

Overall Daily Management is an essential tool irrespective of Industries.

More details of Daily Management tools in Part 3

Seven Steps Academy of excellence is offering in-house training, Public training and consultancy on Policy Deployment and Daily Management.  Visit our website www.sevenstepsglobal.com for more details