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Galileo Galilei(1564-1642)
Nashville
using
Fundamentals
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The Oregon Productivity Matrix (OPM in short) takes multiple metrics, uses a eight step process* and subjective weighting system to rank/prioritize the metrics. The metrics are then added up to give a cumulative composite score This single index indicates how well the company/organization/team is doing against the performance metrics
Theme
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Preamble - on Productivity Productivity in Support Teams -Really? Background The team which implemented OPM OPM as a solution OPM History - and advantages The OPM Grid - What is OPM? The Eight steps to Implementation The core details Avenues to improving OPM Lessons Learned Q&A
Preamble
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Productivity is a major concern in an IT industry, especially so for support teams (or non-coding jobs)
z z z
PPQAs (Process and product Quality Assurance) Project Management Office Administration
Productivity by definition
z
"Goods and services produced per unit of labor and expense The relationship between the inputs required to produce a product or service, and the value of the output produced
or
z
In a software development activity, this is relatively easy to calculate. We could measure code productivity as Function points or lines of code developed per unit effort or cost 4
An accounts department, for instance, will produce a variety of reports, some regular and some adhoc They work on several tasks simultaneously, with constant interruptions, and its impossible to apportion the total input to each
Can Productivity for a support team be clearly established? Is it possible to measure the value driven by all these activities and deliverables? Is it possible to measure improvement collectively?
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Its Possible!!!
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ing s U
Changes up and down can be monitored allowing managerial action to be taken to ensure that improvement takes place
The Hypothesis:
Anything that increases the quantity and/or quality of output, without a corresponding increase in the utilization of resources, creates a gain in productivity *
This presentation covers an experience of implementing a research based methodology called Oregon Productivity Matrix with a Process and Product Quality Assurance (PPQA) team in a leading automobile company in North America
*Productivity by the Objectives Matrix Oregon Productivity Center
Background
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The PPQA group at an IT division of a leading Automobile company assisted projects in process verification and validation activities The teams key activities included
z z z z z z
QA
Process validation, Issue of phase approvals, Conducting configuration management audits, Reviewing work products, Mentoring projects, Facilitating root cause analysis meetings with Project teams
The Challenge:
z
With multiple type of activities and multiple measurement parameters, the teams challenge lay ahead in identifying a single indicator for measuring teams productivity, showing continual improvement, and establishing a performance measurement system
The Solution
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The team agreed that the solution was to establish a concrete method for measuring the PPQA teams productivity, particularly as it relates to the team's continuous improvement indicators Based on a thorough literature search we evaluated that Oregon Productivity Matrix (OPM) best fits this scenario In addition, we had experiences in the team of successfully implementing OPM in an operations management area to indicate a single performance indicator of all operations
OPM History
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Developed by the Oregon Productivity Center at Oregon State University in 1986, (Productivity By the Objectives Matrix (OMX) Handbook-1986)
z
the OPM was first introduced at Boeing with a pilot team in 1990 (Defense and Space facility, Corinth)
Similar to Balanced score card* with an exception that the OPM can be implemented at a shop floor level without getting into strategic perspectives of the organization Has been applied in various industries. Is immensely versatile and adaptable to various applications in any setting like:
z z z z z z z z z z z
Hardware Network productivity IT Office productivity (administration)- Service Sales productivity - Fabrication Production control- Food Processing Purchase-Fabrication Accounting -Electronics Human Resources Bottling Planning and Development- Government Police Government Team productivity- Aircraft Foreclosures- Mortgage Company
*Balanced Scorecard is method developed by Kaplan and Norton that enables organizations to clarify their vision and strategy and translate them into action
Advantages of OPM
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Flexible
z z
Goals can be agreed to be adjusted based on continuous improvement Allows for multiple measurement categories where baseline and current performance levels are depicted A valuable method for standardizing team performance by the use of an index that can be uniformly interpreted throughout the organization Can be used in a variety of work environments to establish a performance measurement system Weights are established for each of the performance areas, thus focusing the team on the most important areas to improve Goals are set by the teams Teams are the users and take ownership May be rolled up to an organizational level with multiple OPMs OPM graphically displays team performance against goals
Standardized
z
Versatile
z
Prioritizes
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Team oriented
z z
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Rolled-Up
z z
Visual
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Categories
Goal
10.00 Performance Category 1 Performance Category 2 Performance Category 3 Performance Category 4 Performance Category 5
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Limits
Point
Weight
Total
100.0
99
98
97
96
95
93
91
87
83
82
94%
25
100.0
98
96
94
92
90
88
86
84
82
80
100%
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100.0
99.5
99
98
97
96
94
92
90
88
85
98%
10
100.0
99
98
98
97
96
95
94
93
92
90
97%
30
100.0
99.5
99.0
98.5
98
97
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95
94
92
90
98%
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1 2 3 4
OPM may be seen as a grid in which the different Performance categories (which are monitored using quantitative metrics data) are depicted vertically along the grid. Goal Limits are identified for each category. Weights each of the Performance Category are established to identify importance. A Point Score table is used to earn points of performance. 11
8 7
OPM
6 5
2 3
8 7 1
OPM
5 4 3
Identification of the team goals is the first activity towards establishing any performance measurement system
Understand expectations from management Align the goals with Business goals and objectives Brainstorm with team
G1 G2 G3
Achieve consistency in PPQA team performance Change perception of PPQA from inspectors to mentors Improve process compliance performance in projects
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8 7 1
OPM
5 4 3
Use the Team goals to arrive at performance categories for monitoring The PPQA team used the Goal Question Metric (GQM) paradigm * as a method to identify the measurement categories or performance categories Identify Performance categories that indicate what the team does
Team Goals
G1
G2
G3
Questions derived from goals that must be answered in order to determine if the goals are achieved Measurement Categories that provide the most appropriate information for answering the questions
Q1
Q2
Q3
Q4
Q5
Q6
Q7
A family of measures thus created can reflect the work of the team in a way no single measure can.
*GQM method was originated by V.Basili and D.Weis
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8 7 1
OPM
5 4 3
Performance Category
Validate that these categories encompass the range of inputs used: labor, materials, capital and equipment, and the output factors of quantity, quality, timeliness and cost Validate that each performance category is positive driven and is measured in percentage
z
QA Report Quality
i.e. each metric is measured for compliance and not defects or non compliance
Improvement Effectiveness
Meeting Compliance
*Note: these are samples and do not cover all categories for a PPQA function
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8 7 1
OPM
5 4 3
1 2
Goal Limits
Performance Categories
Phase approvals On-Time CM Audits On-Time PPQA verification Run Quality Improvement Effectiveness Meeting Compliance 94% 100% 98% 97% 100%
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Review and analyze with team Establish the goal limits for each performance category with team consensus
This step is useful in itself, as people and work groups should have targets for quality of service so that they know the standards of work that they are expected to achieve.
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8 7 1
OPM
5 4 3
1 2 3
Assigning importance weights (iw) for each Performance Category based on the value of the output summing up to 100 How to assign weights for a performance Category?
z
Performance Categories
Phase approvals On-Time CM Audits On-Time PPQA verification Run Quality Improvement Effectiveness Meeting Compliance
Weight
25 15 10 30 20
z z
Take expert judgment based on experiences and alignment to business objective Take an simple average based on a survey May be jointly established with the team and management representatives to ensure alignment to the Business value.
100
(Analysis of the following for each category provides the key to decide the weight ) o Who uses the services or deliverable ? o What is value of this delivery? o How is performance of each of the services/ deliverable affected? o What is impact of wrong service or deliverable?
Aligning the teams service more closely to business goals and objectives will promote significant productivity gains by eliminating unnecessary work.
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OPM
5 4 3
1 2 3 4
0.00 82 80 85 90 90
May be achieved by establishing a point score table Point score table as seen in the figure is a range of values fragmented horizontally in varying percentage fragments between two limits and each percentage indicating a certain point earned in a scale of 0 and 10 The lower limit of this target range is the minimum level of service that can be permitted or expected called as the minimum expected performance score (meps). The maximum range or the upper limit is fixed at 100% (Optionally, the maximum scale can be the goal score also) Intermediate values are determined for scores between these ranges based on past experiences and adjusted based on pilots
The targets goals levels may be set for each performance area either in terms of in terms of percentage or point score values.
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Categories
OPM
5 4 3
Goal
Weight Total
Phase approvals On Time CM Audits On-Time PPQA Verification run Quality Improvement Effectiveness Meeting Compliance Performance Category Performance Category Performance Category Performance Category
5 10 7 6 6 6 6 6 6
5 5 10 35 20 1 2 2 20 100 (iw)
GOAL INDEX
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Establish a grid with performance categories, point score table goal limits and assigned weights The goal limits of each performance category corresponds to a point score. The product of point score and weight gives the total goal scores.
E.g. : z in the first row: 94% goal limit corresponds to 5points z Point score (5) X assigned weight (5) = 25 ( Total goal limit score for category Phase approvals On time)
The sum of point scores based on the individual goal limits gives a single number that is an aggregate, weighted index called Goal Index 19
8 7 1
OPM
5 4 3
Actual Scores
Goal
Categories
10.00 Phase approvals On Time CM Audits On-Time PPQA Verification run Quality Improvement Effectiveness Meeting Compliance Performance Category Performance Category Performance Category Performance Category 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 9.00 99 98 99.5 99 99.5 98 98 98 99.5 8.00 98 96 99 97 99.0 97 97 97 99 7.00 97 94 98 96 98.5 96 96 96 98
Point Score
6.00 96 92 97 95 98 95 95 95 97 5.00 94 90 96 93 97 94 94 94 96 4.00 93 88 94 91 96 93 93 93 95 3.00 91 86 92 89 95 91 91 91 94 2.00 87 84 90 86 94 89 89 89 93 1.00 83 82 88 83 92 87 87 87 92 0.00 82 80 85 80 90 85 85 85 90 meps
Goal Limits Point
Actual
Total
Weight
Actual 83% 98% 97% 95% 91% 97% 98% 95% 88%
Points 1 9 6 4 1 8 9 6 0
5 10 7 6 6 6 6 6 6
5 5 10 35 20 1 2 2 20 100 (iw)
308
The actual measurement scores for each of the performance categories are recorded and translated as points earned from the point score table
z
OPM INDEX
This was done using a specific reporting and consolidation template in a spreadsheet designed to do the number crunching of all the measurement attributes and arrive this table.
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The Performance score for each performance category is then a weighted score of the point The sum of all performance category point scores gives a single number that is an aggregate, weighted index called OPM index
E.g. : z in the first row: 83% Actual score of Phase approvals On-Time corresponds to 1 point earned from the table z Point score (1) X assigned weight (5) = 5 (Total performance score for the category Phase approvals On time) z Sum of all performance scores = 308 = OPM Index for the Month 1
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OPM
5 4 3
Calibrate
(yearly)
(Optional)
635 485 395 308 318 285 410 415 515 515
645
685
GOAL LINE
Calibrate
(initial)
Oct-04 Nov04
Dec05
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The OPM index trend indicates the Productivity line and Goal index gives the Goal Line. The OPM indices (productivity line) may be compared to the Goal line to measure performance and demonstrate improvement in productivity
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Analyze OPM
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OPM
5 4 3
Calibrate OPM based on pilot Adjust goal limits, point scores or weights Team analyses to measure productivity improvements Causal Analysis and discussion on improvement areas Elimination of assignable causes Root cause analysis to identify process improvements Calibration and Program corrections
Monthly
z z z
Yearly
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Questions/Symptoms
Change in scope of activities? Do we have the right measures? Performance goal is consistently not achieved Consistent 100-percent-of-goal performance on a performance category (or becomes the current level of performance)
Actions Recommended
Perform GQM Review performance categories Review Goal limits Review Goal Limits, Point Score, Weights Re evaluate performance category
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OPM is a process completely driven by the team from selecting the performance measurement areas to actually improving them. Implementation successes may be replicated at other teams in the organization The point score table may be embellished with more objective sub- criteria of performance (0-10 levels) It is possible to combine all the team OPMs into a single OPM for the entire organization Once piloted and proven, build it as a part of your quality system
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Lessons Learned
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Increases team ownership for improvement (Process, Product, Productivity) Leave it to the practicing team to analyze and improve Initially coming to consensus with goals and getting acceptance from all team members may be slow, but its worth the time. The process accelerates upon team agreement and involvement Use it as a process to improve the performance areas and not as a end in itself Be open to continuous improvement based on root cause analysis Productivity is better measured by overall value delivered per unit effort/cost than by quantity delivered per unit effort/cost
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CAUTION !
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DO NOT use OPM to tie the results to any form of reward system (or worse penalize system)
z z
This does not yield good results in long term The team may not necessarily focus on the right performance categories for improvement
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References
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OMX Handbook
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Productivity by Objectives : By James L. Riggs, Glenn H. Felix The Use of Performance Metrics as a Strategic Management Tool Terry R. Collins, Manuel D. Rossetti and Julie A. Watson paper, University of Arkansas Rose, K. (1995) A Performance Measurement Model.. Quality Progress, V28, N2, 63-6 R.Solingen, E.Berghout: "The Goal/Question/Metric Method" McGrawHill Publishing Company, 1999
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The primary objective of any process improvement activity is to improve and not just prove
Thank you
srinath.ramasesh@wipro.com 586-354-4813