The Art of Integrating Strategic Planning,

Process Metrics, Risk Mitigation and Auditing

Presented by Janet B. Smith

Hosted by Pablo Baez, ASQ
About J.B. Smith
• Director of Quality & Continuous Improvement, ProTrans Intl
• More than 25 years of experience in quality management
• Developed standards, from zero to sustainable, including:
FDA, ISO, AS, TS, TL, C-TPAT and military certifications
• Implemented Lean Six Sigma culture within organizations to
serve as catalyst for continuous improvement and savings
• Expert in the application of auditing beyond compliance to
ensure alignment with organizational strategies and
initiatives
• Holds ASQ certifications in LSS Black Belt, CQA, CQE,
CQM
• Author of Auditing Beyond Compliance: Using the Portable
Universal Quality Lean Audit Model (ASQ Quality Press)
Objectives

 Share concepts, models and templates on

aligning vision, strategies and risk
assessments.

 Advocate use of simple Lean tools to

measure progress.

 Share auditing beyond compliance methods

to help achieve sustainability.
Agenda

 Vision Model

 Vision and Strategic Planning relationship

 Strategies, Initiatives & Risk Assessment

development – Success factors

 Auditing – Feedback mechanism

Company Vision – Model
Company Vision – Model –
Ideal --Perfect alignment of influencing
elements
Company Vision – Success factors

• Process owners buy in

• Easy translation into strategies

• Translation of strategies into day-to-day

operational initiatives

• Measureable initiatives (not subjective)

How do you ensure the elements are always aligned?

Reference: “Checks and Balances- A technique to sync organizational vision and strategy” – author: Janet Smith –
published by Quality Progress Aug 2014
First ---Break down the elements of Vision for
easy ‘translation’

Strategic Planning

V
I
S
I Verification of
O Compliance
N

Measurement of
Success and
Acceptable Risk
Why choose these three
Ch
an elements?
ge
Ma
n ag
em
en
t

Core elements of vision,

high level
Company Vision – Drill down

The three core elements of vision from the

previous slide can be further broken down to
define the core requirements (like onion layers).
Core Elements of Vision and Strategic Planning

Deployment of
initiatives
Strategic
Planning
V
I BUSINESS
Feedback to DIRECTION
S
Verification of
Auditing Beyond the system
I
Compliance Compliance
O
N

Measurement of
Success and
Acceptable Risk Performance
Metrics

Core elements of vision, Translation into day-to-day activities

high level (must be aligned with the strategies)
Vision and Strategy alignment ---

Let us look at a real-life example on the next

slide.
Real case example: Vision and Strategy alignment
Strategies, Initiatives & Risk Assessment
development – Success factors
Strategic Planning and Initiatives - success
factors

 Selection of initiatives should involve the

process owners’ input to promote buy-in.

 The process owners are the subject

experts of their processes.
Translation of Strategy into Departmental Level
Initiative

 Alignment of strategies to the vision is not

enough to ensure success.

 Strategies, per se, are lifeless as these

elements do not have self supporting
mechanism to sustain existence.

 Measurable initiatives are critical for

sustainability of the strategy
Traditional Compliance Assessment of Initiatives
(sometimes subjective)
Control
Success Factors

sF l
w
e s ve
in place

lo
ne ss

oc Le
(Requirements) (Compliance

Ow roce
rs

Pr igh
P

H
verification)

-Customer Open Order

Order Paperwork
Planners specification log checked
Generation - Quantity daily
-Compliance
with cycle time

-Pick the right Pick list

Material picking product, right versus Bill
Material
from Inventory/ quantity and of
handlers
Release to comply with Materials
Production proper handling
-Compliance with
work instructions Completed
Production Production lot report
Processes and process
parameters

-Compliance
Packaging Packaging list
with packaging
specifications vs procedure
Preparation for requirement
Shipment

-Compliance with Ship list vs

shipping customer
Shipment to specifications requirement
customer
Shipping
Sample template-
Lean-based assessment of Process Metrics, Risk
Assessment (Measurable)
Control
Success Factors Performance

sF l
w
e s ve
in place

lo
ne ss

oc Le
(Requirements) (Compliance Metric

Ow roce
rs

Pr igh
(Measure of

H
verification)
Effectiveness)
· Error rate
-Customer Open Order · Cycle time
Order Paperwork
Planners specification log checked · On time
Generation - Quantity daily release of
-Compliance order
with cycle time

-Pick the right · Accuracy

Pick list
Material picking product, right rate
Material versus Bill
from Inventory/ quantity and · Wait time
handlers of (material
Release to comply with Materials availability)
Production proper handling
-Compliance with · First pass yield
work instructions Completed
Production Production · Error rate
and process lot report · Rework rate
Processes
parameters

-Compliance · Scrapped
Packaging Packaging list
with packaging packaging
specifications vs procedure materials
Preparation for requirement · Packaging error
Shipment
rate

-Compliance with Ship list vs · On time

shipping customer delivery
Shipment to specifications requirement · Expedite
customer freight
Shipping
frequency
Process Metrics Breakdown

How in-depth should each component be

subdivided for an effective process
measurement?

Factors:

 Complexity of the process

 Risk associated with the related activities
 Cost effectiveness of the data collection and
the added value of the data.
Auditing – Feedback mechanism
Auditing & Process Metrics act as Feedback
mechanism to go Beyond Compliance and Beyond
Sustainability---how?

 Early indicators of vision and strategy

alignment

 Feedback mechanism to the system and

should trigger action.
Traditional flow - Detection of Variance as Indicator
of Performance Level
Use of Metrics to Measure Performance Level
VARIANCE – AS INDICATOR of PERFORMANCE LEVEL

Traditional Nonconformance Evaluation

Source: Variance identification
Internal or External
Containment
Identification
Preliminary
Not valid – no further assessment:
action needed variance Risk
valid? Analysis

Implement Action Plan Develop

Action Plan
with metrics
Verification
compliance’s
effectiveness

IAL
O T E NT I T Y
P UN S
Lean-based Nonconformance

Not valid but may Metrics ORT

be a symptom of a No
improved? Yes OPP SAVING
FOR
hidden factory/ (Benchmark vs
waste ? change)
Evaluation

Periodic check for waste/

Continuous
improvement opportunities
Improvement Loop – with metrics should be built
feedback to in the quality plan
Review associated performance level
activities &
performance metric
Traditional Auditing –
Focused mainly on Compliance Verification

INPUT System, OUTPUT

Compliance

Process or Traditional Audit

Phase

Elements of Product being Expected Flow (Compliance

Reference audited Results Verification)
Standard
Auditing Beyond Compliance Model –
Compliance, Risk Assessment & Improvement
Opportunities via Metrics

INPUT System, OUTPUT

Compliance

Process or Traditional Audit Flow

Phase

Elements of Product being Expected (Compliance

Reference audited Results Verification)
Standard

Audit Beyond
Continuous Improvement

Compliance
Excessive Error, (Convert Hidden
Variation/ Waste Non- Factory into
Phase

Risk compliance catalyst for

Improvement)
Auditing Beyond Compliance Model –
How do you quantify compliance, risks and
opportunities for improvement?

Risks or Failure Possible Process Metrics to detect failure modes

modes
“Low Productivity” · Cycle time
· Acceptable quality output quantity (not just a volume measurement)

“Trending customer · Validation of knowledge effectiveness via test score

complaint” · Error rate

“Late delivery”
· Measurement of wastes, non-added value that could be impacting cycle time –

visible during audits (such as excessive material handling, waiting time, over-

processing, rework)
“High rejection rate” · Equipment downtime
· Absenteeism
· Non-reliable suppliers, reflected by failure rate during material receiving
Auditing Beyond Compliance

 Let’s review a real case scenario.

Real case example: Auditing Beyond Compliance

Process 1
Process 2
Planning and Process 3
Material Order Receiving Process Process 4
and Release to Expected
Cycle Manufacturing
Operations Deliverable:
Cycle Packaging /
Shipment and
Success Factor or Success Factor or Ultimate
Success Factor or Delivery at Customer
1st layer of 2nd layer of Metric: metric:
3rd layer of Dock
Metric: metric: Success Factor or
· On Time Arrival, On Time
4th layer of metric:
· Timeliness · Cycle Time Delivery Per
and Accuracy · Supplier metrics (actual vs Customer
· Re-packaging Requirement
of Order (e.g. rejection standard)
rate
rate at receiving · First pass yield
inspection) · ULE (unit level
· Scrap/rework of effort) vs
rate standard
alloted resource

On Time Delivery Components

Each core component should have a performance metric (layered)
or procedural requirement
Lesson Learned:

The integration of strategic planning, process metric,

risk mitigation and auditing beyond compliance
through the use of simple templates offer an added
value in achieving the company vision.

Auditing beyond compliance ties the vision, strategy,

initiatives and process metrics together to provide an
overall feedback to the system.
To learn more about…
About J.B. Smith:
• Email her at smithja@protrans.com
• Find her books on www.asq.org/quality-press/
including: Auditing Beyond Compliance, and The Art
of Integrating Strategic Planning, Process Metrics,
Risk Mitigation, and Auditing

About the topic:

• Go to ASQ’s Learn About Quality area
www.asq.org/learn-about-quality/
• Search ASQ’s Knowledge Center @
www.asq.org/knowledge-center/search/
Thank you.