a world standard...

for a global economy

Model &
Application
GUIDELINES
Dear Shingo Associates,

Thank you for taking time to study our model for operational excellence and considering the
benefits of using the model within your organization. Many of our associates have indicated that
the model and assessment can assist in better understanding where you are on your journey
toward operational excellence and how to accelerate your efforts. We sincerely hope that this
document will enable you to become more keenly aware of not only your strengths, but also your
greatest opportunities for improvement.

If your intentions are to eventually challenge for The Shingo Prize, this booklet will introduce you
to the process of applying and preparing your achievement report. You will learn how our exam-
iners, your peers from other companies, will evaluate, score and provide feedback to your facility.

This booklet is different from past issues. Based on our decades of experience in searching for,
evaluating and recognizing some of the world’s very best companies, we have come to understand
how truly difficult it is for even the best to create sustainable transformation and build lasting
cultures of operational excellence.

In the past, our search for great companies focused primarily on determining “the degree to

Model &
which” the organization had successfully deployed the tools and techniques often associated with
most of the business improvement programs conceived over the past few decades. Based on our
long-term association with these companies and thought-leaders, we have come to understand

Application
that the focus on tools and techniques must be led by a thorough understanding of key concepts –
or guiding principles around which the tools have been developed. Those guiding principles
become the bedrock of a corporate mind-set and the foundation for the design of systems that

GUIDELINES
reinforce these principles in every action of every associate.

This relationship between guiding principles, management systems and improvement tools is the
basis for The Shingo Prize model and our approach to organizational assessment. We invite all to
review and engage in critical dialogue with your peers around the ideas presented here. Then
contact us at www.shingoprize.org and we will be eager to share with you more of the details
CONTACT INFORMATION
behind the model and assessment methodology.
The Shingo Prize for Operational Excellence
Jon M. Huntsman School of Business

Utah State University

3521 Old Main Hill
Logan, UT 84322-3521
(435) 797-2279
(435) 797-3440 FAX
www.ShingoPrize.org
Robert D. Miller
For questions or comments contact:
Executive Director
Shaun D. Barker
The Shingo Prize for Operational Excellence
Director of Operations and Assessment
Jon M. Huntsman School of Business THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCE
JON M. HUNTSMAN SCHOOLshaun.barker@usu.edu
OF BUSINESS
UTAH STATE UNIVERSITY
Application forms
LOGAN, areUSA
UTAH available online at www.ShingoPrize.org
WWW.SHINGOPRIZE.ORG

VERSION 7 — MAY 2012

COPY RIGHT © 2012 THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCE. ALL RIGHTS RESERVED
 Shingo Mission Board of Governors
Paul A. Brent Bruce E. Hamilton Mike Martyn David Rowlands
Retired General Director President Principal CEO
Global Supply Mgt. Greater Boston SISU Consulting Group Gold Pride Pass
The mission of The Shingo Prize is to create excellence Restructuring Manufacturing
John E. Marushin Richard J. Schonberger
Delphi Partnership, Inc.
in organizations through the application of timeless, Chief Operating Officer President
Jerry Bussell Thomas G. Hartman Clear Path Solutions Schonberger & Associates,
universal, and self-evident principles of operational Executive Advisor President & Managing Inc.
Robert D. Miller
Underwriters Laboratories Director
Executive Director John Shook
excellence; alignment of management systems; and the Knowledge Services AutoLiv do Brasil Ltda
The Shingo Prize for President & CEO
Arthur P. Byrne Jack Helmboldt Operational Excellence Lean Enterprise Institute
wise application of improvement techniques across the Operating Partner Senior Vice President
R. David Nelson Kenneth Snyder
J.W. Childs Associates Denso Manufacturing
Chairman Executive Dean & Chief
entire organizational enterprise. Douglas F. Carlberg
Tennessee, Inc.
Quality Analytics Administrative Officer
President & CEO Luis Izquierdo Jon M. Huntsman School
Rusty Patterson
M2 Global Technology, Vice President, Corporate of Business, Utah State
Chairman & CEO
Ltd. Operations University
NCFAM
Raytheon Company
Gary Convis Carl G. Thor
Dennis K. Pawley
COO Michael Joyce President
President & CEO
Bloom Energy Senior Vice President, JarrettThor International
Pawley Enterprises
Corporation Operations and Program
John J. Van Gels
Managment Gary Peterson
Shingo Vision Carolyn Corvi
Vice President, General
Manager, Airplanes
Lockheed Martin
Bill Kessler
Executive Vice President–
Supply Chain
Vice President Operations
& Supplier Management
The Boeing Company
O.C. Tanner Company
Programs Professor & Director of
Alejandro von Rossum Sr.
The Boeing Company Executive Programs Clifford F. Ransom II Chief Executive Officer,
Georgia Tech Tennenbaum President
Timothy A. Costello Chemical Division
Institute Ransom Research, Inc.
Chairman & Chief Cydsa Corporation S.A.
Our vision is to be the Standard of Executive Officer George J. Koenigsaecker Peter N. Riley de C.V.
Builder Homesite, Inc. President EVP Integrated Operations
Excellence for every organization. Lean Investments, LLC Bell Helicopter Textron
Helen Zak
Michael N. DaPrile President & COO
Inc.
Executive Vice President Julie Madigan ThedaCare Center for
SW Manufacturing, Inc. Chief Executive Don Ronchi Healthcare Value
The Manufacturing Chief Human Resource
Institute Officer
Ceberus Operational and
Advisory Company, LLC

Acknowledgements
We wish to thank various people at The Shingo Prize for Operational Excellence and The Jon M. Hunstman
School of Business who made up the team that provided scholarly work, ideas that significantly enhanced
the clarity of the model and guidelines, and content editing. Those most closely involved with the project
include: Randall Cook, Robert Miller, Jacob Raymer, and Shaun Barker. A special thanks to Brian Atwater
for his contribution regarding systemic thinking, especially the idea to create a systemic process model.
We would also like to thank the members of our Board of Governors who provided practical insights and
critical feedback through the years as the Shingo model evolved. Finally, each time we teach a course we
receive valued input and ideas from our Shingo affiliates, whose expertise and friendship we truly value.

4 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 5
 Shingo Academy THE SHINGO MODEL FOR OPERATIONAL EXCELLENCE
8 The House - The Shingo Principles of Operational Excellence
9 The Diamond - The Shingo Transformational Process
12 Dimension 1: Cultural Enablers
James F. Albaugh Mark DeLuzio Hank Lenox Harold M. Simons
Executive Vice President President Director, Ford Production System Ford Executive Vice President,
12 Principle - Respect Every Individual
The Boeing Company Lean Horizons Consulting, LLC Motor Company Manufacturing 13 Principle - Lead with Humility
O.C. Tanner Company
Joji Arai Frank J. Ewasyshyn David J. Logozzo 14 Table One - Examples of Ideal Behavior for Cultural Enablers
Secretary General International Executive Vice President - President, LE Partners Art Smalley
Productivity Service Manufacturing Lean Enterprise Institute President 16 Dimension 2: Continuous Process Improvement
Chrysler Group Art of Lean, Inc. 16 Principle - Focus on Process
Stan A. Askren Jack Michaels
Chairman, President & CEO Orest J. Fiume Chairman, President & CEO Mohsen Sohi 17 Principle - Embrace Scientific Thinking
HNI Corporation Former Vice President, Finance The Snap-On Incorporated President & Chief Executive
Wiremold Company Officer 17 Principle - Flow and Pull Value
J. T. Battenberg R. David Nelson Freudenberg-NOK General
Chairman & Chief Louise L. Francesconi Chairman Partnership
17 Principle - Assure Quality at the Source
Executive Officer President Quality Analytics Inc.
Delphi Corporation Raytheon Missile Systems James L. Solberg
17 Principle - Seek Perfection
Rodney O’Neal
Warren Batts Eliyahu M. Goldratt President & Chief Operating Officer
Executive Director, Manufacturing, 18 Table Two - Examples of Ideal Behavior for Continuous Process Improvement
North American Powertrain’s
Chairman NAM Founder Goldratt Institute Delphi Corporation 22 Dimension 3: Enterprise Alignment
Operations
Tupperware Corporation
Benjamin S. Griffin Paul O’Neill Ford Motor Company 22 Principle - Create Constancy of Purpose
Norman Bodek Commanding General, Retired US Former Secretary, US Treasury Anne Stevens 23 Principle - Think Systemically
Former President Army Materiel Command Former Chairman and CEO, Alcoa, Chairman, President & CEO
Productivity, Inc. Inc. 23 Systemic Thinking Chart
Andrew M. Guarriello Carpenter Technology Corporation
Guy D. Briggs Former Vice President & CEO Hajime Ohba 25 Table Three – Examples of Ideal Behavior for Enterprise Alignment
Carl G. Thor
Vice President, General Motors AT&T Microelectronics’ Power President, TSSC, Inc. President
General Manager, GM North America Systems Toyota Suppler Support Center JarrettThor International 28 Dimension 4: Results
Vehicle Manufacturing
Bruce Hamilton James J. Padilla John S. Toussaint 28 Principle - Create Value for the Customer
Gifford M. Brown President Chief Operating Officer CEO 29 Table Four - Examples of Ideal Behavior for Results
Plant Manager Greater Boston Manufacturing Ford Motor Company ThedaCare Center for Healthcare
Cleveland Engine Plants, Ford Motor Partnership, Inc.
Company Dennis K. Pawley Value 30 Scope of Transformation
Thomas G. Hartman President & CEO
Vernon M. Buehler President & Managing Director Pawley Enterprises
Robert H. Transon 30 Business & Management Systems
Group Vice President Manufacturing -
Professor Emeritus AutoLiv do Brasil Ltda 32 Summary
Clifford F. Ransom II Executive Office
Utah State University
Masaaki Imai President Ford Motor Company 34 The Shingo Model
Jerry Bussell Chairman Ransom Research, Inc. Nickolas Vande Steeg
Executive Advisor KAIZEN Institute of Japan
UL Knowledge Services Ross E. Robson President & COO ASSESSMENT GUIDELINES
Jerry J. Jasinowski President & CEO Parker Hannifin Corporation
Arthur P. Byrne President DnR Lean LLC Alejandro von Rossum, Sr.
38 Assessment Criteria
Operating Partner National Association of Manufacturers
J.W. Childs Associates Donald L. Runkle CEO-Chemical Division 39 Dimension 1 - Cultural Enablers
Brian S. Jones Former Vice Chairman, Enterprise Cydsa Corporativo S.A. de C.V.
Timothy A. Costello President & CEO Technologies
40 Dimension 2 - Continuous Process Improvement
Michael J. Ward
Chairman & Chief Nypro, Inc. Delphi Corporation President 42 Dimension 3 - Enterprise Alignment
Executive Officer
Builder Homesite, Inc. Daniel T. Jones Russell Scaffede Autoliv Americas 43 Dimension 4 - Results
Founder & Chairman Owner Lean Manufacturing Systems Donald J. Wetekam 46 Assessment and Scoring
Stephen R. Covey Lean Enterprise Academy Group, LLC President
Co-founder/Co-chairman 46 Assessment Areas
Michael Joyce Richard J. Schonberger Aircraft Services AAR Corporation
Franklin/Covey Company
Senior Vice President, Operations and President 49 Behavior - Assessment Scale
David Wohleen
H. Lawrence Culp, Jr. Program Management Lockheed Schonberger & Associates, Inc. President, Electrical, Electronics,
President & CEO Martin Safety & Interior Sector
50 Results - Assessment Scale
Anand Sharma
Danaher Corporation
James H. Keyes President & CEO Delphi Corporation
Michael N. DaPrile Chairman & CEO TBM Consulting Group APPLICATION GUIDELINES
James Womack
Executive Vice President Johnson Controls Inc.
SW Manufacturing, Inc. Ritsuo Shingo Founder & President 52 Application Process
George J. Koenigsaecker Former President Lean Enterprise Institute
Joseph C. Day President Toyota China and Hino Motors China 58 Writing the Achievement Report
CEO & President Lean Investments, LLC 59 Introduction
John Shook
Freudenberg, NOK
Peters Lawson President & CEO 59 Achievement Report Format
Earnest W. Deavenport, Jr. Vice President, Manufacturing Lean Enterprise Institute
Former Chairman Ford Motor Company of Australia 60 Dimension 1 - Cultural Enablers
Eastman Chemical
60 Dimension 2 - Continuous Process Improvement
60 Dimension 3 - Enterprise Alignment
60 Dimension 4 - Results

6 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 7

THE SHINGO Principles of Operational Excellence
The search for improvement is instinctive. For
businesses and indeed any organization to
MODEL FOR be successful in the long term, they must be
engaged in a relentless quest to make things
better. Failure to make this an organizational
OPERATIONAL priority will inevitably result in organizational
decline. Excellence must be the pursuit of all
great leaders. In fact, the passionate pursuit of
EXCELLENCE perfection, even knowing it is fundamentally
impossible to achieve, brings out the very best
in every human being.
Why So Many Fail
Improvement is hard work! It requires great
leaders, smart managers, and empowered
people. Improvement cannot be delegated
down, organized into a program, or trained into
the people. Improvement requires more than
the application of a new tool set or the power
of a charismatic personality. Improvement
requires the transformation of a culture to one
where every single person is engaged every day,
in most often small, but from time to time, large
change.
In reality, every organization is naturally in
some state of transformation. The critical
question is, to what end is the organization
being transformed and who are the architects
of the transformation? The Shingo model of
operational excellence asserts that successful
organizational transformation occurs when
leaders understand and take personal
responsibility for architecting a deep and
abiding culture of continuous improvement.
This is not something that can be delegated
to others. As the CEO of a very successful
organization recently said, “Leaders lead
culture!”
A Culture Built on Correct Principles
Stephen R. Covey describes principles as
fundamental truths. He defines a principle as
a natural law that is universally understood,
timeless in its meaning and fundamentally
8 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
inarguable because it is self-evident. Dr.
Covey teaches that values govern our actions
and principles govern the consequence of our
actions.
Values are cultural, personal, interpretable, and
variable. Our personal values influence how
we see the world and ultimately our choices for
how to behave. Principles govern the outcomes
of our choices. In other words, the values of an
unprincipled person will very likely lead to
behaviors that have negative consequences.
Principles govern everything that happens
in the natural world. Scientists the world-
over continually search to understand more
of the principles that govern the universe.
They do not invent them; they only discover
their existence and seek to do good by taking
purposeful action based on knowledge of the
guiding principle. Principles govern the laws
of science; they determine the consequences
of human relationships, and ultimately,
principles influence the successful outcome of
every business endeavor.
Principles Predict Performance
One of the most powerful aspects of principles
is their ability to predict outcomes. Principles
govern the outcome or consequence of the
behavioral choices we each make. The closer
our actual behavior aligns with the ideal
behavior that is linked to the principle, the
greater the likelihood that the outcomes of
our behavior will be positive. This is profound
given that very few things in any business can
be predicted with a high degree of certainty.
A culture where every employee understands
and is committed to principle-based behavior
will be a culture with a very high likelihood of
achieving great business results.
Similarly, a corporation not grounded in
principles, will result in a wide variety of
personal interpretations of how to apply their
values in work situations.
Why Operational Excellence?
For decades we have watched, and all too
often experienced, the disappointing efforts
of programmatic improvement initiatives,
leaving in their wake a trail of unintended
negative consequences rarely resulting in
For organizations to be successful
over the long term, leaders must
deeply and personally understand
MODEL
the principles that govern their
success. Further, they must ensure
the behaviors of every person who
contributes to the business are in
harmony with these principles. In
short, the organizational culture
they build must be grounded in
correct principles.
lasting improvement. Quality Circles, Just-in-
Time, Total Quality Management, Business
Process Re-engineering, Six Sigma, and most
recently, Lean are a few illustrations of well-
intentioned initiatives that have far under-
delivered on their promised benefits. Our study
of these programs over the last 25 years has led
us to believe that the problem has nothing to
do with the concepts and everything to do with
the programmatic, tool-oriented deployment
of them.
The Shingo model for operational excellence
is based on a systematic study of each of
these improvement initiatives. Our approach
bi-passes the tools that each program has
engendered and focuses rather on the
underlying/guiding principles and supporting
key concepts behind them. We recognize the
necessity of good improvement tools but focus
on them only within the context of enabling
a system to better drive ideal, principle-based
behaviors. The Shingo “House” provides a
summary and categorization of this collection
of guiding principles and supporting concepts.
When taken in their totality, these timeless
principles become the basis for building a
lasting culture of excellence in the execution
of one’s mission statement. We call this
relationship between business results and
principle-based behavior, “operational
excellence.” Operational excellence cannot be
a program, another new set of tools, or a new
management fad. Operational excellence is the
consequence of an enterprise-wide practice of
ideal behaviors, based on correct principles.
9
 As long as improvement is seen as something each category are also listed many important The dimensions are the result of “thinking some kind of order. Finally, they create tools
outside the core work of the business, as supporting concepts. categorically about the principles.” It is clear to better enable the systems to accomplish the
long as it is viewed as “something else to do,” that all four dimensions of the model require purpose for which they were created.

MODEL
operational excellence will remain elusive. The principles are categorized into four focus in order to achieve excellence. In the
dimensions: cultural enablers, continuous same way that we need to comprehend objects Learning and Teaching the Principles
When leaders anchor the corporate mission, process improvement, enterprise alignment, in three dimensions to truly appreciate all of The first step a leader must take in leading
vision, and values to principles of operational and results – the ultimate end of all business their characteristics, operational excellence cultural transformation is a personal journey
excellence and help associates to connect and initiatives. These four dimensions overlay must be viewed in these four dimensions to understand what each of these guiding
anchor their own values to the same principles, five core business systems: product/service in order to fully appreciate the power of the principles mean conceptually and then what
they enable a shift in the way people think and development, customer relations, operations, principles to affect business outcomes. they mean personally. It is impossible for a
behave. Changing the collective behavior of the supply and a variety of management or leader to lead the development of a principle-
group changes the culture. This is leadership administrative support systems. Transforming a Culture based culture until he or she has gone through
responsibility that cannot be delegated. (Shingo Transformation Process) the deep reflection required to begin a
Guiding Principles Many organizations and their leaders are personal transformation. This is no trivial
Principles of Operational Excellence The Shingo Prize for Operational Excellence coming to understand that sustainability task. For many and perhaps most, fully
(The Shingo House) did not create the 10 guiding principles of requires focusing on the culture; that’s the embracing these principles requires
In his book Key Strategies for Plant Improvement, operational excellence but rather they have easy part. The difficult part is in knowing a fundamental re-thinking of the
Shigeo Shingo said, “Think in terms of always existed. In truth, there is ample evidence how to really affect a change. rules of engagement used to
categorical principles.” The Shingo House that these principles have been well understood, get to where they are.
is a categorization of the guiding principles more or less, at different time for thousands of The Shingo transformation
of operational excellence. Associated with years. As the world has gone through cycles process is a methodology for At a minimum,
of advancement and decline, it seems these accelerating a personal leaders must be
principles are routinely lost and forgotten and and enterprise-wide curious enough
must be re-discovered. Emerging from the transformation to experiment
dark ages into a period of enlightenment and to a culture of with the
industrialization, the impact of these principles operational
are only now beginning to be understood excellence.
again. The process
Measure what Matters
is based
Align Behaviors with Performance Certainly, and even surprisingly, on the
Results Identify Cause & Effect Relationships
business schools do not emphasize
Create Value for the Customer
teaching
these principles even though they of Dr.
Create Constancy of Purpose
Think Systemically
Enterprise Alignment See Reality
Focus on Long-term
are the driver for business execution Shigeo Shingo
Align Systems excellence. The cause for this may be that these who recognized
Align Strategy
Standardized Daily Managment fundamental business principles have been that business principle.
lost in management fads and tool boxes that improvement came John Shook
SUPPLY MANAGEMENT become programs or “flavors of the month.” through understanding at the Lean
the relationship between Enterprise Institute
OPERATIONS
CUSTOMER
RELATIONS The Shingo Prize for Operational Excellence principles, systems, and tools. taught us that it is
PRODUCT
& SERVICE
has made a diligent search of thought leaders often impossible to
DEVELOPMENT Stabilize Processes over the last 100 years. Their work has been Dr. Shingo understood that “think our way into a new
Rely Facts & Data
Standardize Processes carefully analyzed and dissected and the operational excellence is not achieved way of acting.” Rather, guided
Insist on Direct Observation
Focus on Value Stream
unique concepts or principles from each by superficial imitation or the isolated by correct principles, one may
Focus on Process Continuous Process have been extracted. Compiling, distilling, do, observe, learn, and then do
Embrace Scientific Thinking
Improvement
Keep it Simple & Visual and random use of tools and techniques
Flow & Pull Value
Assure Quality at the Source
Identify and Eliminate Waste
No Defects Passed Forward and prioritizing the list led to the 10 guiding (“know how’”). Instead, achieving operational something else until we “act our way
Seek Perfection Integrate Improvement with Work principles on the left side of the house and the excellence requires people to “know why” — into a new way of thinking.” By carefully
supporting concepts for each dimension i.e., an understanding of underlying principles. analyzing the cause-and-effect relationship
Assure a Safe Environment
Lead with Humility
Respect Every Individual
Cultural Enablers Develop People on the right side. Supporting concepts between principles and results, a leader will
Empower & Involve Everyone
are critical to pay attention to but In the 1940s, the work of French social begin to shift their own beliefs about what
may not stand up to the rigor of being scientist, Piaget, led us to understand that drives optimal business performance. After
universal, timeless, and self-evident like gaining this new insight it becomes the effective
™ The Shingo Prize

learning occurs when people come to

GUIDING PRINCIPLES SUPPORTING CONCEPTS the principles. deeply understand the meaning behind the leader’s primary responsibility to see that others
methodology. People naturally search first in his/her organization have experiences where
for meaning, the principle, and then attempt they can gain the same insight.
to organize them somehow into a system, or
10 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 11
 Leaders who choose to disregard the principles The Shingo transformation process illustrates Experiment with the Principle
that govern business outcomes do so at great the critical need to align every business, One of the principles of operational excellence
peril. Whether we acknowledge them or not, management, and work system of the is scientific thinking, which is intended

MODEL
the principles of operational excellence always organization with the principles of operational to foster a culture of experimentation and
govern the consequence of our leadership and excellence. When systems are properly aligned deep learning. People must be able to put
management behaviors. An example may help. with principles, they strategically influence to the test each of the principles espoused
people’s behavior toward the ideal. by the principle-based leader. Only when
If we encourage, enable, or simply allow a people see for themselves the cause-and-
culture to emerge where employees are thought Dr. Shingo also taught that the primary effect relationship of results relative to the
of merely as an unfortunate cost burden or that principle, will they come to deeply understand
the smartest people are those that rise to the role of managers must shift from fire- the value of the principle to them personally.
top, the consequence will be a workforce that fighting to designing, aligning, and Repetition through many cycles of learning in
is not fully engaged, ideas for improvement improving systems. the experiment gives people a personal insight
are never articulated and acted on, people feel about the principle and empowers them to
unfulfilled in their work, and turnover is very make personal judgments about its validity.
The Enabling Role of Improvement Tools
high. Labor costs become excessively high,
A tool is nothing more than a point solution or
business systems stagnate, and innovation
a specific means to a specific end. Dr. Shingo
is not fast enough to compete in a rapidly
referred to tools as techniques for problem-
changing business climate. Unwise leaders see
solving, necessary but not sufficient. He taught
this as a validation of what they believed rather
that tools should be selected to enable a system
than the sad end of a self-fulfilling prophesy.
to perform its intended purpose. In many ways,
a system may be thought of as a collection
When people understand principles for
of tools working together to accomplish an
themselves, the “why,” they become empowered
intended outcome. A successful enterprise is
to take personal initiative. Leaders who teach
usually made up of complex business systems
associates the principles behind the tactics
that can be further divided into layers of
or the tools can be confident that innovation
sub-systems, each having embedded in them
from each individual will be pointed in the
the necessary tools to enable the successful
right direction. It is not necessary for a leader
purpose of the system.
to define ideal behaviors for others. If the
principle is truly a principle, diverse people
Perhaps the largest mistake made by
with different values will readily be able to
corporations over the last three or four decades
define ideal behavior for themselves and be
has been the inappropriate focus on a specific
very consistent with others.
tool-set as the basis for their improvement
efforts. Tools do not answer the question of
Dr. Shingo understood this and taught “why,” only the question of “how.” Knowing the
that the primary role of a leader is to “how” without understanding fully the “why,”
leaves people waiting for instructions and are
drive the principles of operational powerless to act on their own. Organizations
excellence into the culture. can never sufficiently release the full potential
of their people by creating a tool-oriented
Aligning the Systems with Principles culture.
All work in organizations is the outcome of a
system. Systems are either designed to produce
a specific end goal or they evolve on their own.
Systems drive the behavior of people or rather
they create the conditions that cause people to
behave in a certain way. One of the outcomes of
poorly designed systems is enormous variation
in behavior or even consistently bad behavior.
Variation in behavior leads to variation in
results. Operational excellence requires ideal
behavior that translates into consistent and
ideal results.

12 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 13

Cultural enablers make it possible for people
within the organization to engage in the
transformation journey, progress in their
understanding, and ultimately build a culture
of operational excellence.
Operational excellence cannot be achieved
through top-down directives or piecemeal
implementation of tools. It requires a
widespread commitment throughout the
organization to execute according to the
principles of operational excellence. A culture
must be developed where every person in
the organization demonstrates a high level of
DIMENSION ONE: respect for every other person. Developing a
culture of mutual respect and humility takes
CULTURAL a consistent commitment over a sustained
period of time.
ENABLERS Principle - Respect Every Individual
Respect is a principle that enables the
development of people and creates an
environment for empowered associates to
improve the processes that they “own.” This
principle is stated in the context of “every
individual” rather than “for people” as a group.
Respect must become something that is deeply
felt for and by every person in the organization.
Respect for every individual naturally includes
respect for individuals representing customers,
suppliers, the community, and society in
general. Individuals are energized when
this type of respect is demonstrated. Most
associates will say that to be respected is the
most important thing they want from their
employment. When people feel respected they
give far more than their hands; they give their
minds and hearts.
Respect for every individual becomes a
powerful “why” for many of the values
espoused by great organizations. For example,
simply stating important values such as safety
first, empowerment, or open communications
often fails to create uniform ideal behaviors
14 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Cultural Enablers (People)
throughout the enterprise. This is because I Lead with Humility (the principle);
these values are “what’s” that fail to answer therefore, I accept responsibility and
for people the question of “why.” A principle
enable change (the value). Because
MODEL
answers the question of “why.”
I possess humility (the principle);
Here is a way to think about the alignment of therefore I seek, trust, and follow the
principles with these kinds of values.
direction of those with a responsibility
Because we respect every individual to lead (the value).
(the principle); therefore, we always
The following table provides examples of ideal
place safety first (the value). Because behavior for leaders, managers, and associates.
we have respect for every individual (the The list is intended to provide examples of
ideal behavior that comes from these two
principle); therefore, we empower people guiding principles and should not in any way
to act independently (the value). be considered as an exhaustive list.
Because we have respect for every
individual (the principle); therefore, we
make all of our communications open
and transparent (the value). When
people understand the “why,” they
are far more capable of consistently
interpreting the correct behavioral
implications of the value, the “what.”
Principle - Lead with Humility
One common trait among leading practitioners
of operational excellence is a sense of humility.
Humility is an enabling principle that precedes
learning and improvement. A leader’s
willingness to seek input, listen carefully, and
continuously learn creates an environment
where associates feel respected and energized
and give freely of their creative abilities. There
is also a need for humility on the part of all
members of an organization. Ideas can come
from anywhere. One can learn something new
from anyone. Improvement is only possible
when people are willing to abandon ownership,
bias, and prejudice in their pursuit of a better
way.
Because I Lead with Humility (the
principle); therefore, I am open to good
ideas and innovation from anywhere in
the organization (the value). Because
15

Category Examples of Ideal Principle-Based Behavior
Leaders All leaders routinely spend time at the actual work locations where the actual
work is performed.
 eaders continuously seek the input of others, listen to their input, and adapt
L that promotes both the health and safety of
their actions based on what they learn.
 eaders in all areas demonstrate a willingness to learn and publicly acknowl-
L
edge important insights they have gained.
Leaders take responsibility for applying principles of operational excellence in
their own lives and ensure these principles become the foundation of organi-
zational culture.
Leaders engage people at all levels in defining ideal, principle-based behav-
iors and support managers in the alignment of all business and management
systems.
Leaders develop systems to ensure they remain publicly accountable for their
own principle-based behavior seeking feedback from all levels and across the
entire enterprise.
Leaders ensure products and services do not have an unintended negative
impact on the sustainability of communities and the planet.
Managers All managers constantly work with others to better align systems with ideal
behaviors as defined by the guiding principles.
Managers act as coaches and mentors to others in the execution of principle-
based systems and are constantly receiving personal and organizational
feedback for improvement.
All managers are visible in the work space and demonstrate an openness
to listen and learn from others.
Managers across the enterprise ensure associates have the information they
need to be successful in their work and push decisions out and down to the
appropriate levels.
Managers create a safe and productive work environment- keeping the safety
of all associates as the highest of all priorities.
Managers regularly review the skills and competencies required of all associ-
ates and work with each one to provide appropriate opportunities for associ-
ates to gain new insight.
Managers ensure appropriate systems are in place to protect the environment
and support for the communities where they are located.
Associates All associates, every day, demonstrate a commitment to the policies, prin-
ciples, and standards developed for the areas in which they work.
Associates seek out and learn from others in the organization including leaders,
managers, and peers.
All associates take full responsibility for their own personal development in
relation to their contribution to the enterprise.
Associates demonstrate a strong commitment to providing the greatest value
for customers with the least amount of non-value-added resource.
All associates seek to understand issues from the customer’s point of view
and strive to maximize the uninterrupted flow of value to them.
Associates demonstrate an eagerness to learn new skills, take initiative and
share their learning and success with others.
Table One: Examples of Ideal Behavior for Cultural Enablers
16 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Supporting Concept –
Assure a Safe Environment
There is no greater measure of respect for the
individual than creating a work environment
employees and the protection of the environ-
ment and the community. Environmental and
safety systems embody a philosophical and
cultural commitment that begins with leader-
ship. When leadership is committed, then the
organization creates and supports appropriate
systems and behaviors.
In short, safety is first!
Supporting Concept –
Develop People
People development has emerged as an
important and powerful cultural enabler and
goes hand-in-hand with principles of op-
erational excellence. Through people devel-
opment, the organization creates the “new
scientists” that will drive future improvement.
People development is far greater than just
classroom training. It includes hands-on
experiences where people can experience new
ideas in a way that creates personal insight
and a shift in mindsets and behavior.
An organization’s leaders must be commit-
ted to developing people and expanding the
knowledge base. Leaders come to realize
that expenses for education and training are
necessary investments for long-term health;
as such, the commitment to this investment
does not waver.
Cultural Enablers
Supporting Concept –
Empower & Involve Everyone
For an organization to be competitive, the full
MODEL
potential of every single individual must be re-
alized. People are the only organizational asset
that has an infinite capacity to appreciate in
value. The challenges of competing in global
markets are so great that success can only be
achieved when every person at every level of
the organization is able to continuously in-
novate and improve. Elimination of barriers to
that innovation becomes the responsibility of
management.
Fundamental to the Shingo model is the con-
cept of teaching people the key principles (the
why) behind everything they do. When people
understand why, they become empowered to
take personal initiative. Managing a team of
people who share a deep understanding and
commitment to the key concepts and prin-
ciples is much easier than managing the work
of those who are only doing what they are
told. Empowered employees who understand
relevant principles are far more likely to make
good decisions about the direction and appro-
priateness of their ideas for improvement.
Similarly, when employees have a clear sense
of direction and strategy and have a real-
time measure of contribution, they become a
powerful force for propelling the organization
forward.
17

Continuous improvement begins by clearly
defining value through the eyes of customers.
Expectations must be clearly communicated
so systems can be designed to meet customer
needs. Every employee must know “what good
is,” whether his or her process is creating good
product or service, and they must know what
to do if it is not.
As associates learn to identify and eliminate
waste, they will by necessity follow Dr. Shingo’s
advice: “Improvement means the elimination
of waste, and the most essential precondition
DIMENSION TWO: for improvement is the proper pursuit of goals.
We must not be mistaken, first of all, about
what improvement means. The four goals of
CONTINUOUS improvement must be to make things: Easier,
better, faster, and cheaper.” Particular emphasis
is placed on a quicker, more flexible response
PROCESS
throughout the system.
IMPROVEMENT
The focus for continuous improvement cannot
be only quality or cost but instead must
incorporate all aspects of value as perceived
by the customer, including innovation,
quality, cost, flexibility, quick delivery, and a
comprehensive view of environmental health
and safety.
Continuous improvement focused on flow of
value requires both scientific thinking and the
capacity to identify and eliminate waste (things
that interrupt the continuous flow of value).
Principle – Focus on Process
A process focus recognizes that all outputs,
whether product or service are created by
processes acting upon inputs. This simple
truth is often overlooked: Good processes will
produce the intended output, as long as proper
inputs are provided.
Process focus also helps focus problem-solving
efforts on process rather than people. A
complete shift to process focus eliminates the
tendency to find the culprit (person) who made
18 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
the mistake but rather leads to a pursuit of the
real culprit (process) that allowed the mistake
to be made. Thus, process focus also supports
the cultural enablers, creating an environment
where learning from mistakes can become a
powerful element of continuous improvement.
Principle – Embrace Scientific Thinking
A focus on process lends itself to scientific
thinking, a natural method for learning and
the most effective approach to improvement.
All associates can be trained to use scientific
thinking to improve the processes with which
they work creating a culture that provides
common understanding, approach, and
language regarding improvement. Scientific
thinking is also results-based, placing a
premium on defining and communicating
desired outcomes throughout the organization.
There are a variety of models for scientific
thinking, such as PDCA (plan, do, check,
and adjust), the QI Story, A3 thinking, and
DMAIC (define, measure, analyze, improve,
and control).
Principle – Flow and Pull Value
Flow thinking is the focus on shortening lead-
time from the beginning of the value stream to
the end of the value stream and on removing
all barriers (waste) that impede the creation of
value and its delivery to the customer. Flow is
the best driver to make processes faster, easier,
cheaper, and better. Other potential drivers
such as unit cost or process variability are too
narrowly focused, distorting priorities and
delivering suboptimal results. A cost focus
is particularly dangerous, when it creates
perverse incentives and budget manipulations
incidental to actual improvement.
Pull is the concept of matching the rate of
production to the level of demand, the goal
in any environment. Yet pull is not feasible or
cost-effective without the flexibility and short
lead times that result from flow.
Flow and pull create enormous positive
benefits in all aspects in any business. Focusing
on flow will lead to improvements, including
better safety and morale, more consistent
quality with fewer defects, increases in on-
time delivery and flexibility, and lower costs,
CONTINUOUS PROCESS IMPROVEMENT
without running into the traditional trade-offs.
In addition, daily and weekly results become
more consistent and predictable.
MODEL
Principle – Assure Quality at the Source
Assuring quality at the source is the
combination of three important concepts: (1)
do not pass defects forward, (2) stop and fix
problems, and (3) respect the individual in the
process. Defects are a source of instability and
waste, so assuring quality at the source requires
the establishment of processes for recognizing
errors in the process itself. Organizations
must commit to stopping and fixing processes
that are creating defects, rather than keeping
product or services moving while planning
to fix the issue later. Proper use of the human
element in the process for thinking, analysis,
problem solving, and the implementation
of countermeasures is vital to continuous
improvement.
Principle – Seek Perfection
It is important to understand that the
continuous process improvement journey has
no end. This explains Dr. Shingo’s philosophy
that one should always look for problems
where there doesn’t appear to be any. This is
contrary to the traditional belief: “If it isn’t
broken, don’t fix it.” The pursuit of perfection
reveals that there are always opportunities for
improvement. There is always waste, and the
more a process is observed the more waste will
be seen.
While focus on process guides and directs the
improvement efforts, seeking for perfection is
the engine that keeps improvement energized
and moving forward at an aggressive pace. The
term problem-solving may imply that after a
solution is implemented, improvement is done.
Seeking perfection and scientific thinking
combine to find countermeasures, not game-
ending solutions, and then revisits the issue
again and again, pursuing perfection without
really expecting to find it.
The following table provides examples of ideal
behavior for leaders, managers, and associates.
The list is intended to provide examples of
ideal behavior that come from these five
guiding principles and should not in any way
be considered as an exhaustive list.
19

Category Examples of Ideal Principle-Based Behavior
Leaders Every leader devotes a significant amount of his/her time (up to 80 percent)
ensuring the principles of continuous improvement are deeply embedded into
every facet of the organizational culture.
Every leader consistently evaluates their own behavior related to each of the
principles.
Leaders ensure continuous improvement is a part of their daily standard work
and are accountable to others for their improvement.
Leaders in all areas create a healthy tension between celebrating accomplish-
ments and setting goals to move to the next level.
All leaders in every area of the organization encourage the establishment of
stretch goals and encourage managers and associates to push themselves to
levels of performance that do not seem possible.
Leaders consistently ask for and expect to see the application of appropriate
tools to understand root cause prior to implementing countermeasures.
Leaders expect and support the role of managers in designing and constantly
improving systems at the business, management, improvement, and work
levels as the first course of action when results are less than expected.
Every leader understands and balances the organizational focus on both be-
haviors and results, holding themselves and others accountable for both.
Managers Every leader understands and balances the organizational focus on both be-
haviors and results, holding themselves and others accountable for both.
All managers participate with associates as required on improvement initiatives.
Managers demonstrate knowledge of appropriate tools and use them regu-
larly to solve problems related to their areas of responsibility.
Managers ensure the necessary resources are always available to support
continuous improvement and help associates to understand the reasons why
a particular idea may not be implementable, empowering them to create even
better ideas the next time.
All managers watch for and appropriately recognize associates for both dem-
onstrating ideal behavior and for achieving business goals.
Associates Every associate in every part of the organization is engaged every day in us-
ing the appropriate tools of continuous improvement to eliminate waste and
maximize value creation.
Associates everywhere seek to understand the principles (the why) behind the
tools (the how); they learn and use that knowledge to continuously improve the
application of the tools.
All associates demonstrate the courage and integrity to tell the truth, stop pro-
duction, and be accountable for defects they observe or create themselves.
Associates share their expertise in developing best practice standard work and
demonstrate the discipline to follow it until a better way has been developed.
Table Two: Examples of Ideal Behavior for Continuous Process Improvement
20 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Supporting Concept –
Stabilize Processes
Stability in processes is the bedrock foundation
of any improvement system, creating
consistency and repeatability. Stability is a
prerequisite for improvement, providing a
basis for problem identification and continuous
improvement. Almost all of the continuous
improvement principles rely on stability.
Stability is the precursor to achieving flow.
Many of the rationalizations for waste are based
on the instability of processes, as if they are
beyond our control. Instead, we should apply
the basic tools available to reduce or eliminate
instability and create processes that enable the
identification and elimination of waste.
Supporting Concept –
Rely on Data & Facts
Shingo emphasized the importance of being
data-driven in the pursuit of continuous
improvement. He frequently shared examples
of specific situations where data was collected,
but it was not the correct data or the data
wasn’t actually being used in the improvement
process. Finally, he was adamant that the
understanding of the actual process be so
detailed that when implementing a change in
the process the improvement in the data could
be predicted. Thus, reconciliation is required
between the predicted results and the actual
results, making the improvement process
truly data-driven. The principle is that when
data is treated loosely or imprecisely, there is
a tendency to leave potential improvement on
the table or, even worse, to not achieve any
improvement at all.
Supporting Concept –
Standardize Processes
While stability is a necessary precondition
for creating flow and improvement,
standardization builds control into the process
itself. Standardization is the supporting
principle behind maintaining improvement,
CONTINUOUS PROCESS IMPROVEMENT
rather than springing back to preceding
practices and results. Standardization also
eliminates the need to control operations
MODEL
through cost standards, production targets, or
other traditional supervisory methods. When
standardization is in place, the work itself
serves as the management control mechanism.
Supervisors are freed up for other tasks, when
they are not “required” to monitor and control
the output and costs.
Supporting Concept –
Insist on Direct Observation
Direct observation is a supporting principle tied
to scientific thinking. It is in fact the first step
of the scientific method. Direct observation is
necessary to truly understand the process or
phenomenon being studied. All too frequently,
perceptions, past experience, instincts, and
inaccurate standards are misconstrued as
reality. Through direct observation, reality
can be seen, confirmed, and established as the
consensus.
Supporting Concept –
Focus on Value Stream
Flow and pull value combined with focus on
process lead to the necessity of defining value
streams and focusing organizational attention
on them. A value stream is the collection of all
of the necessary steps required to deliver value
to the customer. Defining what customers value
is an essential step to focus on the value stream.
Clearly understanding the entire value stream,
however, is the only way for an organization to
improve the value delivered and/or improve
the process by which it is delivered.
21

Supporting Concept –
Keep it Simple & Visual
“Everything should be made as
simple as possible, but not simpler.”
~Albert Einstein
“Simplicity is the ultimate
sophistication.”
~Leonardo DaVinci
In society today, there is frequently a bias
toward complex solutions and a premium
paid to those who seem to manage complexity
well. However, it is usually the case that better
results at a lower cost can be achieved by
simplification. Dr. Shingo’s life work in mistake
proofing is centered on this principle.
Many of the seven forms of waste are in fact
the result of information deficits. Making
information visual is the supporting principle
that when combined with simplification solves
the information deficits.
Supporting Concept –
Identify and Eliminate Waste
Identification and elimination of waste is
a practical concept for making processes
flow, thus it becomes a primary focus of
continuous improvement. Waste elimination
is a powerful supporting principle because it
is easily understood by everyone associated
with a value stream, compared to the complex
concepts and computations often associated
with cost per unit, cost variances, statistical
variability, and other complex metrics.
Focusing on the elimination of waste will
22 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
consistently drive appropriate behavior, while
the wrong focus can frequently become a
barrier to improvement, large inventory
write-downs, fire sales, or scrap. In the end,
identifying and eliminating waste is a concept
that effectively engages the entire organization
in the continuous improvement effort.
Supporting Concept –
No Defect Passed Forward
This concept is essential for operational
excellence from many different points of view.
From a leader’s perspective, it requires great
courage to stop the process long enough to
understand the root cause and take counter-
measures that prevent the process from
reoccurring. For the leader, this often means
trading any short-term loss for substantial
long-term gain.
From a manager’s perspective, systems must
be in place to ensure that any result that varies
from the standard, even slightly, creates an
expectation of and support for immediate
action. We often call this “swarming.”
From an associate’s point of view, “no defect
passed forward” requires a mindset of
ownership and accountability. If standards are
clearly defined, every person should know what
good is. Leaders and managers should role
model then create the conditions for associates
to develop the mindset of personal integrity;
meaning, that no one would ever knowingly
or willingly forward the outcome of their value
contribution to someone else if it contained the
slightest variation from the standard.
This supporting concept feeds the mindset and
tools of continuous improvement and creates
the conditions for seeking perfection. It is
possible to achieve perfection in the application
of this concept.
CONTINUOUS PROCESS IMPROVEMENT
Supporting Concept –
Integrate Improvement with Work
MODEL
As the migration toward a principle-based
culture occurs, the activities and approaches
for continuous improvement become a part
of the everyday work of every employee in an
organization. Associates become “scientists”
who continually assess the current state of
their processes and pursue a better future state
that will enhance the value (or eliminate the
waste) and thus pursue perfection.
Each person in an organization performs
daily work. When improvement is integrated
with work, each person accepts responsibility
for improvement of the daily work processes.
Executives are responsible for improving
strategy setting processes or perhaps resource
alignment processes. They are primarily
responsible to deploy mission-critical strategy
and metrics down into the organization such
that every person not only has a clear line of
sight to what matters the most but are also
motivated by the mission in a way that creates
a compelling case for improvement.
Managers are responsible for improving
quality systems, or performance development
systems, or value stream flow. Line workers
are responsible for improving their cycle
times, or quality of work, or yields. Integrating
improvement with work is more than
assigning responsibility. It entails the creation
of standardized work that defines procedures
for improvement.
Implications of this concept are that
improvement initiatives that require
organization, the definition of projects,
assignment of full-time personnel, or the use of
special titles should be seen as transitional. As
long as improvement largely depends on these
things, the culture of operational excellence
will remain elusive.
23

One of the most significant failures of modern
management is its focus on strategy and planning
without considering execution. To succeed,
organizations must develop management
processes that align work and behaviors with
both philosophy/principles and direction
in ways that are simple, comprehensible,
actionable, and standardized. Individual
leaders cannot develop individual approaches
to management without introducing massive
waste into an organization.
Strategy deployment requires a management
process built around scientific thinking, with
DIMENSION THREE: more emphasis on cycles of learning than
on perfect plans. It is essential to establish
ENTERPRISE effective communication, a process for gaining
consensus, clear accountability, and systems
where execution and countermeasures are
ALIGNMENT planned and tracked, whether through
PDCA or a similar methodology. In essence,
operational excellence is the definition of
successful strategy deployment, when business
strategies are aligned with correct principles.
The sum of individual efforts rarely even
approximates the effective alignment of the
pieces into a single integrated whole. Creating
value for customers is ultimately accomplished
through the effective alignment of every value
stream in an organization.
Principle – Create Constancy of Purpose
Almost every aspect of any organization is in
a constant state of change. Customers change,
customer’s expectations change, competitors
change, markets change, technology changes,
leadership and management changes, processes
change, products change, strategies change,
even values or the implied meaning of those
values change. Even knowing this, the first of
W. Edwards Deming’s “14 Points” is to create
constancy of purpose. How is this possible?
Purpose, at the highest level answers the
question: “Why does this organization exist?”
It is incumbent upon leaders to find agreement
on philosophical and strategic direction that
24 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
provides a unifying vision. This sense of
direction helps people keep their eyes on the
horizon so that when tactical decisions require
a temporary detour, they understand why and
can contribute to getting back on track.
The second category for where constancy of
purpose can be achieved is in the establishment
of the guiding principles upon which the
organization is grounded. Principles are
universal, timeless, and self-evident laws that
govern the consequences of our actions. The
degree to which principles are adhered will
always impact the success of any organization.
Leaders must come to understand which
principles have the greatest impact on results
and then make certain every aspect of the
organization is organized to drive behavior
that is in greatest harmony with the principles.
Having established direction and guiding
principles, a leader must align strategy and
performance metrics broadly and deep into the
organization. A system must be built to ensure
constant communication, both up and down.
Systemic Looking out of things
Looking into things
-take apart thinking -see how things work together
1
Analyze
(Convergent Thinking)
Concept
Tools
Enterprise Alignment
Changes in direction, guiding principles, and
key metrics should be treated like changes in
the national constitution. Organizations that
MODEL
frequently redirect philosophies and strategies
fail to recognize the tremendous waste associated
with instability, fluctuation, and perhaps most
importantly, the loss of human commitment.
Principle – Think Systemically
Systemic thinking is the principle that
unifies all the other principles of operational
excellence and enables organizations to sustain
their culture of continuous improvement and
develop a constancy of purpose.
Systemic thinking requires organizations
to both analyze and synthesize. Analysis, or
convergent thinking is focused on taking
things apart to see what can be learned from
the various components. We call this “looking
into things.” Synthesis, or divergent thinking,
is focused on seeing how things might work
together. We call this “looking out of things.”
Convergent thinking includes being logical
and organized while divergent thinking
embodies being imaginative and interpersonal.
Operational excellence requires both.
2
Synthesize
(Divergent Thinking)
Tools
Concept
25

Leaders realize that the impact of synergy
— how things work together — is far greater
than the sum of the parts. As managers
design and align systems with correct
principles they must shift from thinking
purely analytically to thinking systemically.
Systemic thinking is comprised of three
parts: holistic thinking, dynamic thinking,
and closed-loop thinking.
Holistic thinking is about seeing the “big
picture.” It requires two things. First,
everyone has a common vision concerning
what they are working to achieve. The
second requirement is transparency across
the system.
Dynamic thinking requires recognizing
that all current situations are the result
of interactions between parts of a system
that occur over time, rather than snap-shot
events.
Closed-loop thinking requires under-
standing how changes within the system
ripple across the value stream affecting the
work/behavior of other employees in the
same department, in other departments,
external customers, suppliers, and other
stakeholders.
26 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
As managers move into systemic thinking,
the full value of operational excellence
is realized across the organization, the
enterprise, and ultimately the entire
value chain. As associates adopt systemic
thinking practices, they gain the necessary
perspective to safely initiate improvement
projects on their own. Ultimately, this
understanding is what allows improvement
effort to transition from being solely top-
down to more of a grass roots effort.
The following table provides examples of
ideal behavior for leaders, managers, and
associates. The list is intended to provide
examples of ideal behavior that come from
these two guiding principles and should not
in any way be considered as an exhaustive
list.
Table Three: Examples of Ideal Behavior for Enterprise Alignment
Enterprise Alignment
Category Examples of Ideal Principle-Based Behavior
Leaders All leaders share a common, clear, and compelling vision of the future and talk
about it in a consistent way everywhere they go.
MODEL
Leaders create and consistently execute a system of “catch ball” to present
ideas on strategy down and across the organization, receive feedback, and
build organizational consensus.
Leaders establish a simple system of metrics and accountability that aligns
and prioritizes the work, decision making, and improvement efforts of the
organization.
Leaders focus both on results and behavior, setting targets and accountability
for both.
Managers Managers ensure a continuous flow of information (both horizontally and verti-
cally) to associates, making sure they fully understand the context for their
work and the goals they set.
Managers develop systems to ensure all associates understand strategy, tactics,
and metrics and know how their work contributes.
All managers ensure people have enough information and a broad enough
perspective to know the implications of their recommendations and actions.
Associates Associates ask questions that expand thinking to the broader context beyond
their own jobs.
Associates seek job experiences that broaden their perspective.
All associates know the performance and behavioral metrics for their area, use
them to create personal and team improvement, and connect their work with
company goals.
27
 Enterprise Alignment

Supporting Concept – more likely that decisions will in fact pursue Supporting Concept –
See Reality safety, quality, delivery, and cost rather than Standardized Daily Management
This is a very important concept. Most monthly or quarterly financial targets or The concept of having some level of detailed

managers and leaders consider themselves
quite capable of seeing the world around them
and assessing the current situational realities.
However, Dr. Shingo teaches that people
can have blind spots created by long-held
paradigms, experience, history, expectations,
etc. Thus the practice of “go and see” was
developed based on the principle that reality
needs to be perceived and understood based
upon the five senses.
Most organizations create barriers that make
it very difficult for people to see and tell the
truth about what they see. A recently retired
US senator wrote that having travelled on
numerous trips with other political and
military leaders to areas of serious world
conflict, his greatest disappointment was that
virtually all of their assessments of progress
were greatly distorted from the actual data
they observed.
bonus cut-offs. In conjunction with taking
care of the short- and medium-term priorities,
thinking in terms of 20- to 50-year legacy goals
significantly reduces the tendencies for knee-
jerk reactions to urgent pressures.
Supporting Concept –
Align Systems
From the stakeholders’ perspective, the full
potential is realized only when most critical
aspects of an enterprise share a common
platform of principles of operational
excellence, management systems, and tools.
While it is expected that organizations develop
some unique elements of their local culture,
it is also expected that principles become a
common, uniting part of each locale. Top-level
leadership, staff, and business processes should
exemplify the same principles, systems, and
tools as do the operational components of the
enterprise.
MODEL
work description for how to actually do daily
work applies at all levels of the organization.
Regardless of the perception among many
leaders, their work can and should also be
organized into standard components.
Standard daily management creates a reference
point from which continuous improve can be
based. Standard daily management can also
lead to greater process control, reduction in
variability, improved quality and flexibility,
stability (i.e. predictable outcomes), visibility
of abnormalities, clear expectations, and a
platform for individual and organizational
learning. Standard daily management enables
creativity that is focused and controlled rather
than ad hoc.
Leaders who follow standard work send a clear
message that they are serious and no one is
above continuous improvement.

Further, most organizations unintentionally Supporting Concept –

build cultures that prevent the free flow of
information that communicates an honest
picture of reality. Max De Pree said, “The first
responsibility of a leader is to define reality.”
A leader must establish systems that make
organizational performance and associate
behavior transparent to all.
No leader can effectively lead without having
a firm grasp of the current business realities.
Supporting Concept –
Focus on Long-term
Jeffrey Liker highlights the principle of long-
term focus, which provides a foundation
of stability in the executive suite that can
be achieved in no other way. When an
organization creates a long-term focus, it is
Align Strategy
Policy deployment is a planning and
implementation system, based on scientific
thinking, employee involvement, and respect
for the individual. At the strategy level, policy
deployment provides leadership with the
necessary principles, systems, and tools to
carefully align key objectives and execution
strategies while empowering the organization
through cascading levels of detail to achieve
those objectives. Because so many people are
involved, clarity is critical; the simplicity of
aligning strategy helps keep everyone, literally,
on the same (single) page, pointed in the same
direction.

28 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 29
 Results

Category Examples of Ideal Principle-Based Behavior

Leaders Leaders make sure the company scorecard is balanced between results and

The basic principle of the results dimension
is that businesses must flow value, with value
typically defined as something for which
customers are willing to pay. Therefore, the
definition can include many stakeholders:
Customers willing to pay; investors willing
to invest; communities willing to support;
and employees willing to commit their
trust, confidence, and careers. Operational
excellence creates the flow of value to all
stakeholders, improving customer satisfaction
and stakeholder value, while maintaining a safe
and healthy environment.
MODEL
behavior.
Leaders ensure the voice of the customer is clearly heard throughout the
entire organization.
Leaders systematically discuss all business results with employees,
encouraging questions and discussion.
Managers All managers implement systems that place value creation and waste elimina-
tion at the heart of management and improvement efforts.
Managers routinely discuss with associates the relationship between actual re-
sults and the systems and principles that are creating them.
Managers make sure that established metrics are aligned upward and side-to-
side and are understood and committed to by the people who affect them, so
people can see instantly where they are relative to the targets and they know
how to move the dial.
Associates All associates systematically review results and ask questions to understand
cause-and-effect.

DIMENSION FOUR: Principle – Create Value for the Customer

Associates use results metrics to prioritize and take personal initiative to make
improvements that impact the areas where improvement is needed most.
Every aspect of an organization should be
RESULTS focused on creating value for the customers,
investors, employees, and communities. Again,
Table Four: Examples of Ideal Behavior for Results

it is helpful to consider the true north concept
that should guide decision-making and
continuous improvement. An organization
should drive all aspects of value, including
quality, flexible responsiveness to customers,
and return to stakeholders (e.g., growth,
revenue, profit, safety, and environmental
impact).
The following table provides examples of ideal
behavior for leaders, managers, and associates.
The list is intended to provide examples of
ideal behavior that come from this single
guiding principle and should not in any way be
considered as an exhaustive list.
Supporting Concept –
Measure what Matters
Historically, measurement has been focused
on management – what management needed
to know to be able to plan, organize, and
control. Within a model where widespread
involvement is essential for continuous
improvement and consistent performance, it
is important to define measures that matter
to those who will be using them. Therefore,
line associates need different measures than
leaders responsible for the overall enterprise.
Many thought leaders on measurement have
suggested the new measurements need to: 1)
be directly tied to strategic priorities – move
the dial, 2) be simple and easy to capture, 3)
give timely feedback that is tied to the cycle of
work, and 4) drive improvement.
Measures that matter can be created throughout
the organization to assure that everyone is
focused on the appropriate strategic activities
and driving continuous improvement that
moves the whole enterprise ahead.
Supporting Concept –
Align Behaviors with Performance
Ideal behavior drives long-term results. This
happens when the systems are aligned with
principles of operational excellence. Managers
should help each person anchor their own
personal values with these same principles.
Personal values are what ultimately drive
individual behaviors. Leaders are responsible
for creating the environment and the process
for people to evaluate the correctness of their
own values relative to the performance results
required of the organization.
A business set a goal to reduce customer
complaints only to find that as they did, they
began to lose valuable customers. The measure
was driving behavior that made complaining
such a painful experience that they just
stopped calling. A better measure might have
been to increase the number of complaints so
that every single disappointment is given an
opportunity to be resolved.
Supporting Concept –
Identify Cause & Effect Relationships
When we want to make a car go faster, we
simply press more on the gas pedal. So, the
“dial” is the speedometer. What moves the dial?
Pressing on the gas pedal. Why does this work?
Because there is a physical linkage from the
pedal to the engine to the axle. There is a clear
cause-and-effect relationship.
Organizations must follow the linkages to
determine the cause-and-effect relationships
and how goals can be achieved. This is the same
concept as root-cause analysis but applied to
creating value.

30 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 31

Business & Management Systems
The principles of operational excellence must be
applied across all the business and management
systems. The pie in the center of the House
represents the scope of transformation within
an organization, including all basic customer-
facing business systems and all management
support system. The systems associated with
each of five typical business areas could include:
Customer Relations
• Sales
SCOPE OF
• Advertising/promotion
• Order processing and tracking
TRANSFORMATION
• Responsive/flexible scheduling
• Invoicing and collections
• Warranty
• Product/service development
• Business processes
Product or Service Development
• Market segmentation and selection
• Research
• Development of products or services,
processes, and prototypes
• New product or service launch
32 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
SCOPE OF TRANSFORMATION
Operations Many, if not all, of these management support
• Product or Service Delivery
processes are fundamentally non-value-added
in a pure lean sense; that is the customer
• Materials management
MODEL
would not pay extra for these. However, some
• Process engineering part of each process is “necessary non-value-
• Maintenance
added work” that is currently vital to the
proper functioning of the organization and
• Quality assurance and reliability the eventual effectiveness of the value-added
• Testing processes, (i.e., a company needs to pay taxes),
but the customer doesn’t necessarily get value
from the process. Applying the principles to
Supply these processes will help to make sure that they
• Supplier Selection and Qualification are completed as quickly as possible with the
• Supplier development and partnering fewest possible resources.
• Procurement process
Principles of operational excellence should
• Logistics be applied conscientiously in all of these
business and management support processes.
As understanding deepens and application
Management Support
spreads throughout the entire enterprise,
• Recruiting a consistent culture develops which is self-
• Compensation and benefits perpetuating and self-directing.
• Training and employee development
• Employee relations and satisfaction
• Capital budgeting
• Budgeting
• Financial reporting
• Management accounting reporting
• Accounts receivable and accounts payable
(A/R and A/P)
• Asset management
• Computer systems and support
• Computer application design and/or support
• Networking systems and support
33

SUMMARY Operational excellence is the vision that
many organizations have established to
drive improvement. Programs, names, tools,
projects, and personalities are insufficient
to create lasting change. Real change is
only possible when timeless principles of
operational excellence are understood and
deeply embedded into culture. The focus of
leaders must change to become more oriented
toward driving principles and culture while the
manager’s focus becomes more on designing
and aligning systems to drive ideal principle-
based behavior.
The ultimate mission of The Shingo Prize for
Operational Excellence is to assist organizations
of all kinds in building operational excellence.
The Shingo model may be used as a benchmark
for what excellence at the highest level should
look like. It may be used to align all elements
of an organization around a common set of
guiding principles and a proven methodology
for transformation. Some use the Shingo model
as the basis for organizational assessment and
34 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
improvement planning. A few use the Shingo
model as a way to recognize their associates for
excellent work, and others use it to demonstrate
MODEL
to current and prospective customers that they
can compete with anyone in the world. Some
use the Shingo model for all of the above.
The real Shingo Prize, however, is the business
results that come from the relentless pursuit
of a standard of excellence that is, without
question, the most rigorous in the world. Those
who use the Shingo model will embark on a
journey that will accelerate the transformation
of their organization into powerful, dynamic,
nimble competitors.
No obstacle – affordable healthcare,
efficient transportation, emerging global
environmental concerns – will be beyond
the reach of those who embrace principles of
operational excellence and make certain that
every person in their extended value stream
deeply understands the “why” behind the
“what.”
35
 The Shingo
The Shingo Model Model
The Shingo Principles of Operational Excellence The Shingo Transformational Process

INDIVIDUAL FOCUS

Measure what Matters Core Values Anchored to

Create Value for the Customer Results

Align Behaviors with Performance
Identify Cause & Effect Relationships
GUIDING PRINCIPLES
RM

AL
I
FF

IG
ORGANIZATIONAL FOCUS
A

N
Create Constancy of Purpose Enterprise Alignment See Reality
VE

DR
Think Systemically Focus on Long-term
Align Systems RI

IV
D

E
Align Strategy
Standardized Daily Managment

SUPPLY MANAGEMENT

OPERATIONS
CUSTOMER
RELATIONS
RESULTS Culture SYSTEMS
PRODUCT
& SERVICE
(Behavioral Evidence)
DEVELOPMENT Stabilize Processes
Rely Facts & Data
Standardize Processes
Insist on Direct Observation
Focus on Value Stream
Focus on Process Continuous Process Keep it Simple & Visual
LE
Embrace Scientific Thinking
Improvement

RE
Identify and Eliminate Waste
Flow & Pull Value B

FI
NA
No Defects Passed Forward

NE
Assure Quality at the Source
Seek Perfection Integrate Improvement with Work E C T

AC
LE
SE

HI
EV
Assure a Safe Environment
Lead with Humility Cultural Enablers

E
TOOLS
Develop People
Respect Every Individual
Empower & Involve Everyone

™ The Shingo Prize

GUIDING PRINCIPLES SUPPORTING CONCEPTS

ize
Pr
go
in
Sh
e
Th
TM
37
 Shingo Executive Education Courses: Taught Separately

DISCOVER
Principles of Operational Excellence
– Organizational Transformation with Principles, System & Tools

BUILD
Building Systems to Drive the Right Behavior
– Mobilizing Capabilities

LEAD
Leading with Principles
– A Leader’s role in Creating Individual & Organizational Alignment

ALIGN
Behavior-Based Strategy Deployment
– Aligning Performance with Ideal Behavior

Shingo Executive Education Year Long Certificate Track: This 12-month, highly-integrated educational
experience, coaches executives on how to lead their organization through a "Principle-based Cultural Transformation".

LEARNING FLOW: The 4 Disciplines of Operational Excellence

Timeline Approx.
DISCOVER � BUILD � LEAD � ALIGN (weeks)

Participants in the workshops will be able to: (3 Day) 0

DISCOVER the BRIDGE

• Describe the benefits of focusing on principles Discipline 1: Principles of Operational Excellence 4
• Articulate principle-driven behavior
Transformation Process � Principles Behavior � Assessment

GoGo & See Homework

• Identify how tools link to systems & See Team Webinar
Personal Call 8
• See and assess behavior to provide constructive feedback
• Explore what adjustments could be made to improve systems in driving 12
ideal behavior
(3 Day) 16

BUILD the VEHICLE

• Select high impact systems to drive ideal behavior Discipline 2: Building Systems to Drive the Right Behavior
20
Synthesize � Interconnect � Adjust
• Scientifically experiment with adjusting systems Homework
• Re-align systems to eliminate work-a-rounds/ fire-fighting Go See Team Webinar
Personal Coaching 24
• Build system reliability - monitor behavior
28

Construct TSP Map: System - Behavior Alignment

(3 Day) 32

Learning - Observation - Reflection Journal

LEAD the DRIVER

Build Critical Action Plan - Daily Rhythm

• Clarify teaching role: when to mentor, coach, lecture Discipline 3: Leading with Principles
Learning Cycle � Teaching Cycle � Engagement
36
• Unify the learning & teaching cycles Homework
Go See
• Ask questions that inspire & motivate
Team Webinar
Personal Coaching 40
• Unleash talent and passion
• Create a workforce that engages in continuous improvement 44

(3 Day) 48

ALIGN the DIRECTION

• Translate your desired culture into specific behaviors - based Strategy Deployment
Discipline 4: Behavior
52
TSP Mapping � True North Measures� Organizational Alignment
• Monitor behavior (KBI) & performance (KPI) Homework

• Align and measure the execution of YOUR strategy Go & See Team Webinar
Shingo Exchange Blog 56
• Create a visual map to align & adjust your culture

Recognized at International Shingo Prize Conference

Executive Education Certificate – USU/Shingo Prize 60

Copyright © The Shingo Prize
38 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines Administered by the Jon M. Huntsman School of Business at Utah State University 39
 The Shingo Model
The Shingo Principles of Operational Excellence The Shingo Transformational Process

INDIVIDUAL FOCUS

Measure what Matters

Align Behaviors with Performance
Core Values Anchored to
Create Value for the Customer Results Identify Cause & Effect Relationships GUIDING PRINCIPLES
RM

AL
I
FF

IG
Create Constancy of Purpose Enterprise Alignment See Reality
A
ORGANIZATIONAL FOCUS

N
Think Systemically Focus on Long-term
VE

DR
RI
Align Systems

IV
Align Strategy
D

E
Standardized Daily Managment

SUPPLY MANAGEMENT

OPERATIONS

PRODUCT
CUSTOMER
RELATIONS

RESULTS Culture SYSTEMS

Focus on Process
Embrace Scientific Thinking
Flow & Pull Value
& SERVICE
DEVELOPMENT Stabilize Processes (Behavioral Evidence)
Rely Facts & Data
Standardize Processes
Insist on Direct Observation
Focus on Value Stream
Continuous Process Keep it Simple & Visual
Improvement Identify and Eliminate Waste E

RE
L
AB
Assure Quality at the Source No Defects Passed Forward

FI
NE
Integrate Improvement with Work
EN
Seek Perfection
C T

AC
LE
SE

HI
Assure a Safe Environment
Lead with Humility Cultural Enablers

EV
Develop People
Respect Every Individual

E
TOOLS
Empower & Involve Everyone

™ The Shingo Prize

GUIDING PRINCIPLES SUPPORTING CONCEPTS

ize
Pr
go
in
Sh
e
Th
TM
40 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines

ASSESSMENT
The Shingo assessment methodology is being
embraced by organizations all over the world,
without barrier to industry or geography. We
GUIDELINES have seen involvement expand far beyond
its manufacturing roots into healthcare,
government, and financial services. There
are three levels of recognition in place to
encourage organizations to engage and utilize
the Shingo model as early as possible in their
cultural transformation. Organizations can
be awarded The Shingo Prize, Shingo Silver
Medallion, and Shingo Bronze Medallion. A
third party, non-biased assessment of your
organization can provide a benchmark and
eye-opening feedback that will accelerate your
cultural transformation.
The Shingo Prize is awarded to organizations
that demonstrate a culture where principles of
operational excellence are deeply embedded
into the thinking and behavior of all leaders,
managers, and associates. Performance is
measured both in terms of business results and
the degree to which business, management,
improvement, and work systems are driving
appropriate and ideal behavior at all levels.
Leadership is strongly focused on ensuring
that principles of operational excellence are
deeply imbedded into the culture and regularly
assessed for improvement. Managers are
focused on continuously improving systems to
drive behavior that is closely aligned with the
principles of operational excellence. Associates
are taking responsibility for improving not
only their work systems but also other systems
within their value stream. Understanding the
“why” has penetrated the associate level of
the organization. Improvement activity has
begun to focus on the enterprise as a whole.
At The Shingo Prize level, the scorecard has
clearly defined performance measures and is
beginning to include measures of behavior. Key
measures are stable, predictable, and mature
with positive trends and few anomalies. There
are realistic and challenging goals in most
areas with a good understanding of world-class
42 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
performance. Most measures are aligned to
corporate goals and cascade to the lowest level.
Silos are difficult to identify.
The Shingo Silver Medallion is awarded to
organizations who demonstrate strong use of
tools and techniques, have mature systems that
drive improvement, and are beginning to align
thinking and organizational behavior with
correct principles of operational excellence.
Leadership is involved in improvement efforts
and supports the alignment of principles
of operational excellence with systems.
Managers are deeply involved and focused
on driving behaviors through the design
of systems. Associates are involved every
day in using improvement tools to drive
continuous improvement in their areas of
responsibility. Understanding the “why” has
begun to penetrate the associate level of the
organization. Improvement activity is focused
on multiple business systems. At the silver
level the scorecard has a broad spectrum of
measures and is beginning to include behavioral
elements. Key measures are stable with mostly
positive trends, and all levels understand how
to affect the measures appropriately for their
areas. There are goals being set in most business
systems. Alignment is clear and apparent in most
business systems; plans have been set in place to
bring them into alignment where it is not. There
are few silos left.
The Shingo Bronze Medallion is awarded
to organizations that demonstrate strong
use of tools and techniques for business
improvement and are working to develop
effective systems to create continuity and
consistency of tools applied throughout the
business entity. Leadership is setting the
direction for improvement and supports the
efforts of others. Managers are involved in
developing systems and helping others use
tools effectively. Associates are trained and
participate at a high rate on improvement
projects. Understanding the “why” has still
not penetrated down to the associate level of
the organization. Improvement activity is still
heavily focused on operations and has begun
in support areas. At the bronze level measures
are beginning to communicate cause and
effect. Key measures have begun to stabilize
with trends being mostly positive with some
backsliding still evident. There are goals
being set in many areas outside of operations.
Alignment may still be weak in areas other
than operations, but efforts are being made to
improve and work toward aligning the entire
enterprise. Silos are beginning to fall.
The cultural assessment is broken into three
distinct evaluation sections, the achievement
report, the Shingo Cultural Online Performance
Evaluation (SCOPE, new and planned to come
online this year), and the site visit. Each section
is evaluated and may be used to clarify, amplify,
and verify the other sections.
Achievement reports are written by each
applicant and tell the story of their transformation
to operational excellence. The achievement
report covers each dimension of the model and
discusses the principles, systems, and tools that
are evident and the results they have produced.
The achievement report, along with the SCOPE
survey, is used by members of the Shingo Board
ASSESSMENT CRITERIA
of Examiners to evaluate an applicant’s eligibility
to be awarded a site visit. Not all applicants
will be awarded a site visit; furthermore, not all
organizations that receive a site visit will become
recipients. Further instruction on writing the
achievement report will be provided in a later
section of this document.
SCOPE will be administered to each applying
entity. All data received from SCOPE will
populate a Shingo database and be used to
provide feedback to the applicant. Feedback
from SCOPE will be part of a packet, which
will be provided to each applicant regardless of
whether or not they are awarded a site visit.
Site visits that are awarded to applicants follow a
standard format. In summary, they are conducted
by a team of examiners that have been trained
and selected by The Shingo Prize for Operational
Excellence. The team generally spends two days
at the site evaluating the culture of the applicant;
duration of a site visit may be extended depending
on the application. Examiners observe behaviors,
review documentation and measures, and ask
questions of all levels and business systems of
the applying entity. Examiners are provided all
evaluation resources available that pertain to an
applicant. This could include, but is not limited to,
the achievement report, the SCOPE survey results,
and past documentation used to challenge.
43
 This robust assessment process is used for all examples of systems that drive principle-level
entities applying for The Shingo Prize. It is the behavior and tools that support those systems.
most rigorous cultural assessment available The following is not intended to be a check list
because it combines documentation in the for each dimension; it simply provides examples
achievement report (perceived reality) along of principles, systems, and tools in each
with two sources of direct observation, the dimension. The systems and tools observed
SCOPE survey, and the site visit (actual reality). during an assessment are the artifacts of a
This provides the most accurate assessment of culture. The behavior that is observed during
your culture available. an assessment is key to evaluating the level of
cultural transformation that an organization
Assessment Criteria has achieved. Ideal behaviors are characteristic
of the highest level of achievement and are
This section covers the four dimensions of exemplified previously in the model. Examples
the model and serves as a guide and provides of questions in each dimension are also
included for guidance purposes.
It is important to note that every business
system within an organization is assessed to
the entire model, operations, product and
Results
Measure what Matters
Align Behaviors with Performance
Identify Cause & Effect Relationships
service development, customer relations,
management, and supply. Business systems
Create Value for the Customer
Tools:
• Arrangements with educational institutions
• Personal development plans
Dimension 1 – Cultural Enablers
• Lean training curriculum and materials
(250 Points Total)
• Meetings/huddles
Guiding Principles: • Suggestion forms and measures
• Community open house
Lead with humility • Fundraisers
Respect every individual
The following are examples of questions that
examiners would be engaged in answering
Supporting Concepts:
and understanding during an organizational
Empower and involve everyone
assessment. Answers to these and other
questions asked of leaders, managers, and
Develop people associates will provide examiners with an
understanding of the culture of an organization.
Assure a safe environment
This is not intended to be a complete list; it is

Create Constancy of Purpose
Think Systemically
ASSESSMENT CRITERIA
The following are examples of systems that for guidance and learning purposes. Examiners
Enterprise Alignment See Reality
may be characterized differently in any will also evaluate the frequency, duration,
drive behaviors and are aligned to principles
Focus on Long-term
Align Systems
Align Strategy
given organization although the assessment intensity, scope, and role of the behaviors that
as exemplified in the model (the first portion
Standardized Daily Managment

methodology still applies. The following characterize the culture of an organization.

SUPPLY MANAGEMENT
of this document). Some tools are also listed
diagram illustrates the relationship between The behavior assessment scale provided on
OPERATIONS
CUSTOMER
as examples. This is not intended to be a check
the different systems in an organization.
RELATIONS

list, nor is it all inclusive. Not all will be present page 49 of this document provides further
PRODUCT
& SERVICE
DEVELOPMENT Stabilize Processes

understanding of this process.

Continuous Process
Focus on Process
Embrace Scientific Thinking
Flow & Pull Value
Assure Quality at the Source
Seek Perfection
Lead with Humility
Respect Every Individual
Rely Facts & Data
Standardize Processes
Insist on Direct Observation in every organization, and organizations
may have others not listed here. These are
Focus on Value Stream
Keep it Simple & Visual
Improvement Identify and Eliminate Waste
No Defects Passed Forward
Integrate Improvement with Work simply examples and provide organizations Questions:
Cultural Enablers
Assure a Safe Environment
Develop People
some guidance on what an assessment would
evaluate. Open ended questions directed toward leaders,
Empower & Involve Everyone

™ The Shingo Prize

manager, associates, and other observations
GUIDING PRINCIPLES SUPPORTING CONCEPTS

Systems: provide answers to the sample questions below.

Once behavioral evidence is observed and
collected by examiners, it is rated with the
• Individual development behavioral assessment scale.
• On-the-job training/training within industry
(OJT/TWI) 1. Is on-the-job coaching in lean practices a
• Coaching daily part of the culture?
SUPPLY MANAGEMENT
• Standard daily management 2. 
Is formal lean training and education
• Leadership development ongoing and updated?
BUSINESS • Idea sharing 3. Is there a process flow where suggestions
SYSTEMS
OPERATIONS CUSTOMER • Suggestion and involvement are processed quickly and feedback is
RELATIONS • Reward and recognition received by the originator?
PRODUCT
• Communication 4. 
Is the organization a safe and clean
& SERVICE • Environmental, health, and safety workplace where safety and environmental
DEVELOPMENT
• Education/training standards are continually improving?
• Community involvement 5. 
Does the recognition system focus on
• Recruitment and succession planning performance that encourages ideal behavior
• Accountability and is it frequent, timely, and specific?

44 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 45
 Systems:
• Voice of the customer
• Problem-solving (A3 Thinking,
Dimension 2 –
PDCA,DMAIC)
Continuous Process Improvement
• Value stream analysis
(350 Points Total)
• Total productive maintenance (TPM)
Guiding Principles: • Visual management
• 5S methodology
Focus on process
• Supplier development
Embrace scientific thinking
• Continuous improvement methodology
Flow and pull value
• Production Process Preparation (3P)
Assure quality at the source
• Quick changeover or setup reductions
Seek perfection
(SMED)
Supporting Concepts: • Error proofing/zero defects
• New market development and current
No defects passed forward market exploitation
Stabilize processes • Quality function deployment, concurrent
Rely on data and fact engineering, etc. for product development
Standardize processes • Theory of constraints – managing
Insist on direct observation bottlenecks
Focus on value stream • Systems that make the customer/supplier
Keep it simple and visual linkage visible throughout all stages of the
Identify and eliminate waste process and encourage/require regular
Integrate improvement with work communication
• Design for manufacturability, testing,
The following are examples of systems that
drive behaviors and are aligned to principles maintenance, assembly — i.e. making it
as exemplified in the model (the first portion simpler and easier to deliver best quality
of this document). Some tools are also listed. and quickest, most reliable response to the
This is not intended to be a check list, nor
is it all inclusive. Not all will be present in customer at the lowest cost
every organization, and organizations may • Involve suppliers and customers in
have others not listed here. These are simply product/service design and continuous
examples and provide organizations some
guidance on what an assessment would improvement
evaluate. • Direct observation (go and see) and data-
based decisions and actions
• Cellular design/layout
• Variety reduction
46 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Tools:
• Customer surveys
• Component standardization and modularity
• Standard operating procedures (SOP)
• Tools of quality (i.e. pareto charts,
storyboarding, cause-and-effect diagrams,
5-whys, or similar problem-solving
techniques)
• Benchmarking visit
• Right-sized equipment and facilities
• Production control boards
• Red tags
• Floor tape
The following are examples of questions that
examiners would be engaged in answering
and understanding during an organizational
assessment. Answers to these and other
questions asked of leaders, managers, and
associates will provide examiners with
an understanding of the culture of an
organization. This is not intended to be a
complete list; it is for guidance and learning
purposes. Examiners will also evaluate the
frequency, duration, intensity, scope, and role
of the behaviors that characterize the culture
of an organization. The behavior assessment
scale provided on page 49 of this document
provides further understanding of this process.
Questions:
Open ended questions directed toward leaders,
manager, and associates and other observations
provide answers to the sample questions below.
Once behavioral evidence is observed and
collected by examiners, it is rated with the
behavioral assessment scale.
1. 
Is the current state and future state an
ongoing continuous cycle that is actively
pursued with a visual, detailed action plan
and timeline?
2. Are standards and work instructions simple
and visual for all work processes? Are they
updated with improvements routinely? Are
they followed with regard to timing and
ASSESSMENT CRITERIA
sequence?
3. 
Are managers and supervisors routinely
observing the actual process in order to
gather factual data to understand the
problems and opportunities?
4. 
Are improvements made by following
a scientific method, PDCA, DMAIC, A3
thinking, etc.? Is there a coaching process
in place for problem-solving? Are problems
being addressed at the lowest possible
level of the organization?
5. 
Are problems, defects, and abnormal
conditions signaled and stopped
immediately at the point of occurrence and
the root cause pursued?
47
 Tools: Questions:

• Daily management standard work sheets Open ended questions directed toward leaders,
manager, associates, and other observations
• Surveys provide answers to the sample questions
Dimension 3 – Enterprise Alignment Dimension 4 – Results
(200 Points Total) • Meetings below. Once behavioral evidence is observed
(200 Points)
• X-Matrix and collected by examiners, it is rated with the
behavioral assessment scale.
Guiding Principles: • Mission statement Guiding Principle:
• Vision statement 1. Is there a structured process for aligning
Create constancy of purpose • Goals Create value for the customer
goals and strategic priorities that is simple
Think systemically • Values and visible at all levels of the organization? Supporting Concepts:
• Business models
Supporting Concepts: 2. Do leaders hold to the guiding principles

The following are examples of questions that
See reality examiners would be engaged in answering
Focus on long-term and understanding during an organizational
Align systems
assessment. Answers to these and other
questions asked of leaders, managers, and
Align strategy
through hard times?
3. Are support functions seamlessly integrated
to aid operations in creating value (process-
based versus silo culture)?
Measures that matters
Align behavior with performance
Identify cause and effect relationships
The following are examples of systems that

Standardized daily management
The following are examples of systems that
drive behaviors and are aligned to principles
as exemplified in the model (the first portion
of this document). Some tools are also listed.
This is not intended to be a check list, nor
is it all inclusive. Not all will be present in
every organization, and organizations may
have others not listed here. These are simply
examples and provide organizations some
guidance on what an assessment would
evaluate.
Systems:
• Strategy deployment
• Daily management
• Assessment
• Communication
• Customer relationship management (CRM)
• Information technology
• Accounting/finance
• Measurement/scorecard
• Reporting/accountability
ASSESSMENT CRITERIA
associates will provide examiners with an 4. 
Do information systems provide direct drive behaviors and are aligned to principles
understanding of the culture of an organization. flow of pertinent information that is as exemplified in the model (the first portion
This is not intended to be a complete list; it is of this document). Some tools are also listed.
for guidance and learning purposes. Examiners easily accessible and usable across the
This is not intended to be a check list, nor is
will also evaluate the frequency, duration, extended enterprise (no shadow systems it all inclusive. Not all will be present in every
intensity, scope, and role of the behaviors that or spreadsheets)? organization, and organizations may have oth-
characterize the culture of an organization. ers not listed here. These are simply examples
The behavior assessment scale provided on 5. Do leaders and managers have a standard
and provide organizations some guidance on
page 49 of this document provides further work process that enables them to monitor what an assessment would evaluate.
understanding of this process. and maintain company alignment?
Systems:
• Voice of the customer
• Strategy deployment
• Communications
• Visual management
• Management reporting
Tools:
• Huddles
• Control boards
• Score cards
• All employee meetings
• Surveys

The following are examples of questions that

examiners would be engaged in answering
and understanding during an organizational

48 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 49
 assessment. Answers to these and other
questions asked of leaders, managers, and
associates will provide examiners with an
understanding of the culture of an organiza-
tion. This is not intended to be a complete
list; it is for guidance and learning purposes.
Results will also be evaluated based on stabil-
ity, trend/level, alignment, and improvement
usage. The results assessment scale provided
on page 50 of this document provides further
understanding of this process.
Questions:
Open ended questions directed toward lead-
ers, manager, associates, and other observa-
tions provide answers to the sample questions
below. Once behavioral evidence is observed
and collected by examiners it is rated with the
behavioral assessment scale.
1. Are measures simple? Is there is a com-
mon understanding of what is measured
and why it is measured? Are measures
directly tied to the organization’s overall
objective?
2. Are measures used to drive improvements?
3. Do performance measures drive the right
behaviors?
4. Are tracking boards used routinely for
open discussion and feedback so that ad-
justments can be made, and at what level?
5. Are principles, systems, and tools aligned
in such a way that guiding principles help
align the systems to select appropriate
tools to achieve performance targets?
4.A Quality
Strongly recommended measures:
• Quality to the customer (defect-free delivery)
• Finished product first pass yield and/or rework
50 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Examples of other supporting measures
that could be provided are:
• Internal quality (quality within the plant)
• No disclosures (recalls later)
• Designs that meet customer needs
• Unplanned scrap rate
• Overall cost of quality
• Process variation measures
• Customer returns
• Supplier quality
• Warranty cost
• Other appropriate measures
4.B Cost/Productivity
Strongly recommended measures:
• Productivity of cash (cash flow)
• Key value stream margins
• Turns (of what is produced)
Examples of other supporting measures
that could be provided are:
• Cost per unit
• Labor hours per unit
• Labor productivity – organizational physi-
cal or financial output as compared to labor
quantity
• Asset productivity (organizational output
compared to value of physical assets em-
ployed)
• Inventory turns (organizational raw, work-
ing, and finished inventories compared to
relevant total cost or revenue)
• Cost structure (reduction in key cost cat-
egories)
• Energy productivity (physical or financial
output compared to energy cost or quantity)
• Resource utilization (floor space, vehicles,
etc.) (high utilization without adverse effects
on responsiveness)
• Return on investment
• Revenue per employee hour worked
• Portfolio value (new products and existing)
• Maintenance profiles (percent preventive
for example)
• Other appropriate measures
4.C Delivery
Strongly recommended measures:
• On-time delivery complete to customer
requested date
• Total lead time (the time from customer
order to customer receipt, assuming no
finished goods inventory)
• Processing cycle time (into process to out-
of process)
Examples of other supporting measures
that could be provided are:
• Time from or to supplier to receipt of ma-
terials
• Customer awards, audits, and surveys
• Premium freight as percent of production
costs
• Mis-shipments
• Warranty response and service
• Reorder rate
• Field performance data
• Backorder data
• System availability
• Other appropriate measures
4.D Customer Satisfaction
Strongly recommended measures:
• Market share
• Customer surveys
Examples of other supporting measures
that could be provided are:
• Success of new products
• New contract awards
• Share of category
• Customer retention
• Net promoter score
• Customer engagement in programs
• Measure of customer intent (awareness and
consideration)
• Other appropriate measures
4.E Safety/Environment/Morale
Strongly recommended measures:
ASSESSMENT CRITERIA
• Number of ideas per employee and degree
of employee implementation of them
• Near misses
• Survey (measure of employee trust and confi-
dence in organization and management)
Examples of other supporting measures
that could be provided are:
• Reportables
• Waste to landfill
• Recycling
• Emissions
• Energy consumption
• Utilization of high potential talent
• Talent pipeline strength (succession planning)
• Other appropriate measures
51
 ASSESSMENT
The intent of the assessment is to evaluate the
entire applying entity to determine the degree to
which the principles of operational excellence

AND SCORING are deeply embedded into the culture of the

entire organization. The assessment evaluates
results, as well as behavior. Each business
system will be assessed to the entire model,
all dimensions and principles therein. Three
dimensions of the model are scored based
on the behavioral assessment scale, cultural
enablers, continuous process improvement, and
enterprise alignment. The fourth dimension,
results, is scored using the results assessment

ASSESSMENT CRITERIA
scale. Both scales are presented in the next few
pages. Each dimension of the model will be
scored in the format below, the scoring matrix.
As represented in the scoring matrix below,
behavioral dimensions will be divided into
three main categories for assessment purposes:
Leaders, operations and support. There are
also two sub categories for assessment under
operations and support. They are managers and
associates. Weights have been assigned to each
category. The assessment will provide a gap
analysis that can be used to focus improvement
activities. It will provide a baseline of cultural
reality that will enable an organization to
move forward on its journey toward building a
culture of operational excellence.

The following illustration is representative of

how an organization is assessed, the weights
given and points assigned to each dimension. In
an effort to promote continuous improvement,
the feedback received by an organization
after a site visit will provide a level that the
organization achieved in each area. This level
can be compared with the assessment scales
that are provided in this document.

52 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 53
 Behavior – Assessment Scale Articulating Behavior Behavior Assessment Scale
Operational Excellence (Standard)
Senior leadership, managers, and associates FREQUENCY – 
How often do we see the
at the applying entity in each business system behavior? Level 1 Level 2 Level 3 Level 4 Level 5
will be assessed to determine the degree to Lenses
which their behaviors are in alignment with
0-20% 21-40% 41-60% 61-80% 81-100%
DURATION – Are we seeing the behavior for
the principles of operational excellence. Are the first time, or have we seen
the leaders, managers, and employees doing this behavior for years?
Leadership focused Leadership aware of Leadership sets Leadership involved Leadership focused
mostly on fire- other’s initiatives direction for in improvement on ensuring the
things that will result in the desired culture? fighting and largely to improve but improvement and efforts and supports principles of
Examiners will be looking for behaviors and absent from largely uninvolved supports efforts of the alignment of operational
INTENSITY – Is there a sense of passion and
other indicators that define and describe the improvement others principles of excellence are
importance for the behavior efforts operational driven deeply into
culture of the organization. The difference
(i.e. to deviate would signal excellence with the culture and
between the current culture and the ideal
problems)? systems regularly assessed
culture, the Shingo standard, is the gap that is for improvement
identified for improvement focus.
SCOPE – Do we see the behavior in just a
Understanding the principles, throughout few cells/areas, or is it widespread Management Managers mostly Leaders and Managers focus on Management
orientation toward look to specialists managers involved driving behaviors primarily focused
the organization, establishing and executing throughout the organization? getting results “at to create in developing through the design on continuously
Role
systems that support these principles, and all costs” improvement systems and of systems improving systems
selecting and utilizing appropriate tools and ROLE – Do we see appropriate focus on tools, through project helping others to to drive behavior
orientation use tools more closely aligned
systems, and principles at each level of

ASSESSMENT CRITERIA
techniques guide an organization to achieve effectively with principles of
its business plans and goals. Scoring is based the organization, leaders, managers, operational
on examiners’ observations as they assess and associates? excellence
the facility. Examiners are trained to look for
behaviors and performance. Behaviors and The following list of descriptors is the basis Assoolates focus on Assoolates Assoolates trained Assoolates involved Assoolates
performance are taken into account in the for assessing Cultural Enablers, Continuous doing their jobs occasionally asked and participate in every day in using understand
scoring. Process Improvement, and Enterprise and are largely to participate on improvement tools to drive principles “the why”
Alignment. treated like an an improvement projects continuous behind the tools
expense team usually led improvement in and are leaders
by someone their own areas of for improving not
Statement of Purpose: The purpose of our outside their responsibility only their own work
assessment is to determine the degree to which natural work team systems but also
others within their
the behaviors in an organization are aligned value stream
with the principles of operational excellence.
Ideal behavior (Level 5) is represented as the
standard for operational excellence.
Frequency Infrequent Event-based Frequent Consistent Constant
Business systems that fully match the
Rare Irregular Common Predominant Uniform
descriptors would score at the top of the
indicated range.
Duration Initiated Experimental Repeatable Established Culturally Ingrained
Undeveloped Formative Predictable Stable Mature

Intensity Apathetic Apparent Moderate Persistent Tenacious

Indifferent Individual Local Commitment Wide Commitment Full Commitment
Commitment

Scope Isolated Silos Predominantly Multiple Business Enterprise-wide

Operations Processes
Point Solution Internal Value Stream Functional Value Integrated Value Extended Value
Stream Stream Stream

54 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 55
 Results – Assessment Scale
The following list of descriptors is the basis for Measures that match the descriptors would score at
assessing the measures in the results section. the top of the indicated range.

Results Assessment Scale

Level 1 Level 2 Level 3 Level 4 Level 5

Lenses
0-20% 21-40% 41-60% 61-80% 81-100%
Little to no evidence Has begun to stabilize Stable
of stability
Initiating predictability Predictable
Little to no
predictability Building maturity Long-term
Stability
Beginning to All levels have Mature
implement become comfortable
with the measures 4+ years
Unpredictable
2-3 years

ASSESSMENT CRITERIA
0-1 years

High level of attainment

Level is low Moderate improve-
considered world-class
ment in level
Trend is poor
Benchmarks constantly
Benchmarking is
raise the bar and are a
Little to no evidence industry-focused
Trend/Level function of process not
of goals
industry
Trends are mostly
Little evidence to positive to flat with
Positive trend with very
no evidence of some backsliding
few anomalies to
benchmarking
explain

Trend is well above

expectations

Isolated with Some areas aligned, All measures align to

inconsistent usage of other than operations corporate goals and
measures down to the lowest
Performance level
Little alignment measures aligned in
Alignment
operations Enterprise-wide
Strong silos extended value
Silos are beginning to stream
fall
No silos
Working toward
enterprise-wide
alignment

Little to no Regular feedback in Routine feedback to

systematic feedback some areas appropriate party

Sporadic feedback All areas do not Evidence of feedback

address feedback in all areas
Improvement Little evidence of systematically
goal setting some Almost all areas have
evidence in Many areas beyond goals that are realistic
operations operations have a and challenging
process to set goals

56 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 57

APPLICATION Application Process
We have developed a three-tier award to
GUIDELINES enable organizations to challenge early on in
their transformation journey using the Shingo
assessment process to benchmark and improve
their organizations along the way. The Shingo
assessment provides valuable feedback from
an impartial third party. When utilized, it can
help accelerate the transformation process.
Awards can be achieved at three levels: the
Shingo Bronze Medallion, the Shingo Silver
Medallion, and The Shingo Prize.
We encourage organizations to take the
opportunity to contact the office of The Shingo
Prize for Operational Excellence well in advance
of the date they plan to apply. This enables us
to help with the process, answer questions, and
provide training. Applying early leaves ample
time to execute a plan for the application
process and to budget appropriately.
Because the Shingo model focuses on cultural
transformation, we strongly recommend
as many associates as possible go through
the following training program before an
organization applies. The workshop, Principles
of Operational Excellence and Assessment,
is available to the public, or for maximum
effectiveness and participation, the workshop
can be delivered on-site at your facility. This
workshop has been critical for providing a
common understanding of the Shingo model
and the assessment process. The training
workshop is described below:
Principles of Operational Excellence
Workshop participants will gain an
understanding of the Shingo model and the
underlying principles behind The Shingo Prize
philosophy and approach. Participants will
learn and gain experience in aligning your
organizational principles and core values with
your systems. There will be group activities
58 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
that help develop skills in assessing alignment
and also how to address misalignments by
embedding your principles into your work and
management systems.
In addition, participants will develop a
comprehensive working knowledge of The
Shingo Prize assessment criteria, which
includes methods for assessment of the
progress an organization has made in its lean
transformation. By completing this training,
participants will learn how to use the Shingo
model and assessment criteria to complete
internal self-assessment that will clearly
identify areas for focus and improvement in
the entire organization.
For detailed information on this workshop
and other available training opportunities for
leaders and managers specific to the Shingo
model, please visit our website at www.
ShingoPrize.org or call our office at (435) 797-
2279.
Although we will make every attempt to
accommodate other languages, the official
language of The Shingo Prize for Operational
Excellence is English. This means all training,
materials, feedback, and communications
are performed in English. Exceptions may
be when we have an instructor that speaks a
preferred language.
Eligibility Requirements
An entity interested in challenging for The
Shingo Prize must meet the following eligibility
requirements:
• Applying entities may be from any industry
including, but not limited to: Services,
manufacturing, healthcare, and the public
sector. An entity should have common
ownership throughout the application (e.g. a
manufacturer and supplier, not operated or
owned by the same company) should each
apply as a separate entity
• An entity should be in business long enough
to establish stability
• An applying entity may not be in bankruptcy
proceedings or knowingly considering such.
This would include significant restructuring
or reduction in operations
• An applying entity may not be under
investigation by any government or private
entity for malfeasance
• An applying entity must be able to show
measures that are specific to the applying
entity (divisional or corporate metrics are
not sufficient). A minimum of three full years
of data is required. Most measures should
show trends and levels and be tied to
improvements. Examiners will be evaluating
level, trend, and the correlation between
improvement activities and the reported
results. It is expected that lean initiatives
will have an impact on the bottom line.
Keep in mind that the Shingo assessment
evaluates the entire applying entity to the
model as detailed below. If documentation
of three full years of measures is an issue,
it should be discussed with office of The
Shingo Prize for Operational Excellence
before preparing the achievement report.
Further explanation of measures is
provided below in Dimension Four – Results
-
An applying entity may be eligible to
challenge as a large or small organization.
Achievement qualifications are the same
for each; and since organizations are not
competing against each other, reference
to an organizations size is useful only
for purpose of pricing and planning for
APPLICATION PROCESS
examination teams.
Small Organization Large Organization
250 people or less More than 250 people
250 people or less if part
of a larger organization
Not part of a larger
Government entities
organization
Large organizations may
need to be broken up into
multiple applications
59
 Questions regarding eligibility must be clarified
through the office of The Shingo Prize for
Operational Excellence during the application
process, prior to writing and submitting the
achievement report. The application and
profile sheets help to evaluate eligibility.
Re-Applications
Re-applications are encouraged for the
following circumstances:
• No recipient status was awarded on the last
application
• Bronze or Silver Medallion status was
awarded on the last application, and the
entity wishes to attempt to advance its status
(in general it will take at least two full years
of intense focus and commitment between
challenges to show the improvements
necessary to advance)
• The Shingo Prize was awarded and the
entity is ready to renew its award status,
which expires after five years for The Shingo
Prize recipients and three years for Bronze
and Silver Medallion recipients
Re-applications must relate to substantially
the same entity as the original application. A
new application and achievement report must
be submitted. The achievement report for re-
application should highlight the achievements
made since the last challenge supporting a bid
to re-challenge. Please use the re-application
form that is available at www.ShingoPrize.org.
Application Forms and Profile Sheets
An application form and profile sheet should
be sent to the office of The Shingo Prize for
Operational Excellence as soon as an applicant
decides to pursue an award at any level, even
if the intended achievement report submission
date is up to one year out. The intent of the
application is to help us plan our workload
and assist the applicant through a smooth
process. A two-page (maximum) company
profile sheet should be formatted according to
examples provided at www.ShingoPrize.org.
60 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Please do not include any confidential or
classified information in the profile sheet,
as it may ultimately be posted to the Shingo
website or provided to the media. Sample
forms are available at www.ShingoPrize.org.
The graph on the following page is an example
that might be included in the report.
Application forms should also be
accompanied by information pertaining
to dimension four, results. Results should
be provided in each section, quality, cost/
productivity, delivery, customer satisfaction,
and safety/environment/morale. Please
provide enough data so that an analysis of
stability is possible. Provide as much data
as possible especially if it is data that shows
performance before lean implementation
began. There is a minimum data requirement
of three years. Provide each measure at the
level of aggregation where it is most used by
management (monthly at the least). Charts
representing measurement and improvement
are best displayed with the shortest interval
possible. Averaging over months, quarters,
or years may mask information that could
otherwise be very useful. If acronyms are
used, please explain each along with the
calculation used for each measure.
The application, profile sheet, and applying
entity’s results will be processed as received
and should be approved prior to writing the
achievement report. This ensures there are no
eligibility issues and that we have addressed all
of the applicant’s questions and concerns early
on. A completed and approved application
form is due before the achievement report is
sent. A notice of eligibility confirmation will be
sent to the applying entity. Please note that the
applying entity’s results sections are not being
analyzed at this point in the process.
There are no fees due at this point in the process.
Where to Apply
Applications, profile sheets, and other
documents must be e-mailed to Shaun Barker
at shaun.barker@usu.edu and Ha Chau at
ha.chau@usu.edu. Please contact Shaun with
any questions you may have via email or by
phone at (435) 797-3815.
Achievement Reports
Achievement reports should be written after the
application is approved, ensuring an applying
entity is eligible to proceed. Achievement
reports will be accepted any time throughout
the year. Achievement reports not received in
time to be processed before the Annual Shingo
Prize International Conference and Awards
Ceremony (usually held in April or May) will
be recognized at the following year’s ceremony.
Applicants will be advised of an approximate
process time-table based on the date the
achievement report is received and that the
work is in-process. If an application cannot be
processed in time for the next Conference and
Awards Ceremony the application will become
part of the following year’s applications. Please
submit the achievement report early if you are
concerned about a specific conference date. An
application fee of $6,000 for large organizations
or $3,000 for small organizations must be
submitted with the achievement report. For
payment information, please call the office of
The Shingo Prize for Operational Excellence at
(435) 797-2279.
Site Visit Assessments
Site visit assessments will be scheduled as soon
as possible after a site visit is awarded based
on the achievement report review. Candidates
being considered for any level of recognition
through the office of The Shingo Prize for
Operational Excellence will receive a site visit
assessment by an examination team based on
final review of the achievement report. An
average large facility will require five to eight
APPLICATION PROCESS
examiners.
Site visits will be scheduled throughout the
year and are dependent on the applicant’s
achievement report submission date and
availability of the site and examiners for
an assessment. Site visits not scheduled in
time to process before the Annual Shingo
Prize International Conference and Awards
Ceremony (usually held in April or May) will
be recognized at the following year’s ceremony.
61
 The primary objective of the site visit
assessment is to verify, clarify, and amplify
the information contained in the achievement
report. In terms of clarification, companies
should be prepared with updated measures
reported in their achievement report during
the site visit assessment.
Applicants will be notified whether or not a
site visit will be awarded approximately 30
days after the achievement report is received.
Applicants awarded a site visit will be
contacted to make arrangements. Applicants
awarded a site visit are required to pay an
additional site visit fee. The cost of each site
visit assessment is based in part on the nature,
size, and location of the applying entity and the
number of examiners needed. Fees generally
average between $10,000 and $20,000 for a
single organization utilizing four to eight site
visit examiners. Small organizations may have
lower fees depending on the size of the facility,
the product or service, and the number of
examiners needed to evaluate the facility. The
invoice is for a site visit fee and will not be
broken down in any more detail than the total
fee. International applications will be subject
to additional fees to cover additional expenses.
These fees will be determined during the
application eligibility process. International
applications will be expected to pay the
estimated site visit fee prior to the visit.
Site visit fees within North America will be
invoiced and sent to the applying entity within
30 days of the site visit. Payment is due upon
receipt.
All examiners are required to sign a non-
disclosure agreement that is kept on file at
the office of The Shingo Prize for Operational
Excellence. Examiners are assigned in such a
manner that conflicts of interest are avoided.
Each applicant will receive a list of examiners
who will be involved on a site visit assessment.
The applying organization will be asked
for written authorization for all examiners
that participate on the site visit assessment.
Organizations that have representatives on
The Shingo Prize Board of Governors or Board
of Examiners are allowed to challenge, but
their representative will be disqualified from
participation in the assessment, review, and
selection processes.
62 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Applicants are asked not to divulge proprietary
information regarding products, processes, or
sensitive financial results. Our interest is in
operational excellence, and we do not require
this information. Please do not include any
confidential information in your achievement
report or other documents sent to the office of
The Shingo Prize for Operational Excellence.
Please do send information you feel will be
helpful to examiners in assessing the cultural
transformation of your organization.
Recipient Recognition Opportunities
Once an award level is determined, a recipient
has many opportunities to be recognized for its
achievements. All recipients from around the
world will be recognized officially and publicly
at the Annual Shingo Prize International
Conference and Awards Ceremony (usually held
in April or May). Recipients will be recognized
through press releases and announcements on
social media sites. The Shingo Prize recipients
are posted on The Shingo Prize website for
five years, and Shingo Silver Medallion and
Bronze Medallion recipients are posted for
three years. Recipient companies may tell
their transformational story through potential
speaking opportunities at The Shingo Prize
conferences, and they can also gain exposure
by providing guided tours for The Shingo Prize
for Operational Excellence.
Application Timeline
The Shingo Prize application and assessment
process includes the following six steps:
1. 
An application form, profile sheet, and
results should be sent to the office
of The Shingo Prize for Operational
Excellence as soon as an applicant has
decided to pursue The Shingo Prize.
Preferred timing: One year before intended
achievement report submittal
2. 
Achievement reports are submitted and
reviewed. Achievement reports should be
written according to the instructions found
in the “Writing the Achievement Report”
section (see below). Application and re-
application fees are due along with the
achievement report (see fees section below).
Approximate lead time for achievement report
review: 30 days
3. 
Achievement reports with appropriate
recommendations from examiners
will receive a site visit assessment.
Preferred timing for a site visit: 45 to 60 days
after applicant notification
4. Based on the site visit assessment results,
the Board of Examiners will recommend
the applicant to the Executive Committee
for: no award level, the Shingo Bronze
Medallion, the Shingo Silver Medallion, or
The Shingo Prize. Applicant will be invoiced
a site visit examination fee directly after
the visit (see approximate fees below).
Approximate lead time for the feedback report:
30 days
5. 
The Executive Committee reviews the
recommendations. Organizations will be
notified of their status in approximately
30 days after the site visit assessment.
Decisions made by the committee are final
and not subject to appeal. Applicants will
receive a written feedback report after
status notification.
6. After an award level has been determined,
a recipient may invite, at the recipient’s
expense, a member of the Shingo staff to
present the award at a local celebration.
This is best done after the public
recognition occurs, but if the time between
the recognition and the Shingo Conference
is too great, an organization may schedule
it to suit their purposes. All recipients from
around the world will be recognized publicly
at the Annual Shingo Prize International
Conference and Awards Ceremony. Official
recognition will be given at the Annual
International Conference and Awards
Ceremony.
The times given are approximate and subject to
change depending on many factors, including
workload in the office of The Shingo Prize
for Operational Excellence. Please do not use
these times to estimate whether or not your
application will be completed in time for a
specific Awards Ceremony. The staff at the office
of The Shingo Prize for Operational Excellence
will advise you if timing is in question upon
your application submittal.
Fees
Application Re-Application Site Visit
Small Organization Small Organization $10,000-$20,000
$3,000 $3,000
APPLICATION PROCESS
Large Organization Large Organization $10,000-$20,000
$6,000 $6,000
Fees are due with the achievement report.
Applicants will be invoiced within 30 days after
the site visit. The invoice is for a site visit fee
and will not be broken down in any more detail
than the total fee. International applications
will be subject to additional fees. These fees will
be determined during the application eligibility
process and an estimated fee will be collected
before a site visit occurs.
63

WRITING THE
The achievement report is the document for
determining whether or not an applicant is
awarded a site visit. A Shingo Prize applicant
how the organization selects what to measure
and how measurements are used to drive
improvement. It should also show results of the
lean implementation and where the applicant
stands relative to best-in-class. Include
information that helps examiners understand
how the cause-and-effect relationship
between measures and results is taught to and
understood by all associates. It is important
that results in the achievement report are
The achievement report should include, in the
first pages before the table of contents, a copy
of the application form.
The report must be printed on 8½ x 11-inch
paper using a fixed-pitch font of 11 characters
per inch. Sheets should be double-sided,
single spaced. The report is generally limited
to a maximum length of 50 printed pages.
The report should be coil bound. The official

ACHIEVEMENT must prepare an achievement report that understandable and have explanations where language of the achievement report is English.
demonstrates how the organization has needed. Please refer to dimension four, results,
transformed its culture based on the principles in the model and guidelines for complete Ten (10) hard copies and one (1) digital copy on

REPORT of operational excellence represented in the

Shingo model. The achievement report should
details on measures.

Applicants are asked not to divulge proprietary

also address frequency, intensity, duration,
scope, and role of the behaviors that are
apparent in the current culture of the applicant.
The achievement report should be written
according to the format below. This format
focuses on each dimension of the model and
should include information about individual
business systems and their achievements. Please
note that if a site visit is conducted, all business
systems will be assessed to all dimensions of
the model in much the same way. The business
systems include senior leadership, customer
relations, product/service development,
operations, supply, and management support
processes.
The achievement report should follow the
outline provided. Each dimension should
address the application of principles, systems
(selection, development, and effectiveness),
and choice and use of tools and techniques.
The required measures under Dimension
Four – Results are considered essential for all
organizations. Results should be addressed in
terms of stability, trend and level, alignment,
and improvement. An applicant should also
information regarding products, processes, or
sensitive financial results. Our interest is in
operational excellence, and we do not require
this information. Please do not include any
confidential information in your achievement
report or other documents sent to the office of
The Shingo Prize for Operational Excellence.
Keep in mind that this report is being reviewed
by a team of examiners from a diverse group
of industries. They are very experienced in
lean but most likely are not experienced with
your organization. Please do not assume that
acronyms and organizational language will be
understood. Flow, clarity, and conciseness of
the report are important; generally, 50 pages
is the maximum length. The intent of this
report is to tell the examiners your cultural
transformation story as simply and efficiently
as possible. Please make sure that if photos are
included in the report, they are high impact,
legible, and of good quality.
The achievement report is about the applying
entity, not the overall organization. Please
limit references to the overall organization
to areas that are applicable and critical
a CD or thumb drive of the achievement report,
meeting all above-stated criteria and format
requirements, can be turned in up to one year
after the application has been approved.
Achievement Report Format
While writing the achievement report,
remember to be specific about the business
system you are referring to (i.e. senior
leadership, customer relations, product/
service development, operations, supply,
and management support processes). The
achievement report should discuss the
assessment criteria detailed earlier in this
document. Principles, systems, and tools have
been clearly defined for each dimension of the
model.
Introduction
The introduction allows an organization to
highlight some of its strengths and share a
brief company overview. The company profile
sheet may be used in this section, see www.
ShingoPrize.org for examples.

include any measurements that assist in
controlling and improving basic business
systems: Senior leadership, customer relations,
product/service development, operations,
supply, and management support processes.
Applicants should explain and support their
choice of measures. It is important that all five
categories of measurements are addressed. The
intent of this dimension is for the applicant to
provide information to the examiners about
APPLICATION PROCESS
(i.e. if you are trying to show alignment of
strategy or constancy of purpose). Measures
should be specific to the applying entity.
Reports with excessive reference to the
overall organization may be returned to the
applicant. Examiners cannot evaluate an
applicant based on information about an
entire organization when the applying entity
is really a sub-set.

64 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 65

Dimension 1 –
Cultural Enablers
In this dimension an organization should
describe its cultural enablers as they relate
to the principles in the Shingo model. Care
should be taken to sufficiently describe how
your organization’s systems and practices
drive principle-based (ideal) behavior in each
subsection. Clearly discuss examples of tools,
systems, and principles in each of the business
system.
Dimension 2 –
Continuous Process Improvement
Describe your organization’s philosophy
toward applying lean principles and concepts.
At Toyota, this would be a description of
the Toyota Production System. Continuous
process improvement will be evaluated in
part based upon how well your organization
implements its philosophy across all the
business systems.
66 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Include the following items in the report:
• Describe your organization’s philosophy
toward creating value as it relates to the
principles in the Shingo model
• Provide the measures used in each
measurement area defined above. Report
anything that is used effectively to drive
improvement in the organization
• The measures will be submitted with the
application and profile sheet. This section in
the achievement report will be significantly
Dimension 3 – more detailed than the measures that were
Enterprise Alignment submitted with the application. All categories
In this dimension an organization should
in this section must be addressed either
describe its lean culture as it relates to the
principles in the Shingo model. Care should with a measurement and the discussion
be taken to sufficiently describe how your points below or a full explanation of why a
organization’s systems and activities drive
particular category is not measured
principle-based behavior in each business
system. Clearly discuss examples of tools,
systems, and principles.
Dimension 4 –
Results
There are five main internal measurement
areas for operational excellence: quality, cost/
productivity, delivery, customer satisfaction,
and safety/environment/morale. Each area
has its own strongly suggested measures and
supporting measures detailed earlier in this
document.
Discussion of each measure should contain:
• A clear definition of the measure and its
computation
• The trend and level of performance in each
area as compared to benchmarks or goals
• Why the measure is the appropriate measure
for that subsection or category
• Any major technical adjustments that have
been made to the measure
• How the measure is used to stimulate
improvement
• What key activities “move the dial” on that
metric
Please provide enough data so that an analysis
of stability is possible. Provide as much data
as possible; especially, if it is data that shows
performance before lean implementation
began. Provide each measure at the level
of aggregation where it is most used by
management (monthly at the least). It is possible
that examiners may ask for a less aggregated
version of specific data. Charts representing
measurement and improvement are best
displayed with the shortest interval possible.
Averaging over months, quarters, or years may
mask information that could otherwise be very
useful. When data is obviously collected and
used weekly, don’t average it into monthly or
annual figures for the purposes of this report.
Please use appropriate scales. Provide the data
as you would normally use it.
All measurement categories must be covered
– quality, cost/productivity, delivery, customer
satisfaction and safety/environment/morale –
and include a minimum of three years of data.
APPLICATION PROCESS
Applicants are asked not to divulge proprietary
information regarding products, processes, or
sensitive financial results. Our interest is in
operational excellence, and we do not require
this information. Please do not include any
confidential information in your achievement
report or other documents sent to the office of
The Shingo Prize for Operational Excellence.
67
 Shingo Silver Medallion
Lundbeck, Supply Operation & 2009
Engineering (Valby and Lumsas site) 402D Electronics Maintenance Group,
Valby, Copenhagen, Denmark Warner Robins Air Logistics Center,

The Shingo Prize

for
Robins Air Force Base
OP L
E X E R AT I O N A E
CELLENC

Remy Components, S. de R.L. de C.V. Warner Robins, GA, USA

2012 San Luis Potosi, Mexico
Pentair Technical Products Carestream Health Inc., Rochester
Reynosa, Tamaulipas, Mexico Rexam Beverage Can South America- Finishing
2012 2009 Recife Ends Rochester, NY, USA
Rexam Beverage Can, Aguas Claras Autoliv Airbag Module Facility 2011 Cabo Sto Agostinho, Brazil
Cans Ogden, UT, USA Autoliv (China) Steering Wheel Co., EFI Electronics by Schneider
Ltd. Tobyhanna Army Depot (AN/MST- Electric
Aguas Claras, Rio Grande do Sul/Viamao,
Shanghai, Shanghai, China T1(V)), MiniMutes Salt Lake City, UT, USA
Brazil Autoliv Inflator Facility
Tobyhanna, PA, USA
Brigham City, UT, USA Barnes Group Inc. Acting Through HID Global
2011 Its Barnes Aerospace OEM Strategic 2010 North Haven, CT, USA
Goodyear do Brasil Produtos de Borracha E-Z-GO Business Unit Autoliv Steering Wheels Mexico AQW
Ogden, UT, USA S. de R.L. de C.V. Lockheed Martin Missiles and Fire
Ltda Augusta, GA, USA
El Marques, Queretaro, Mexico Control, Camden Operations
Americana, Sao Paulo, Brazil DJ Orthopedics de Mexico S.A.de East Camden, AR, USA
Guanajuato Manufacturing Complex North C.V. Goodyear Tire & Rubber
US Synthetic Plant Tijuana, Baja California, Mexico Lawton, OK, USA Valeo Sylvania Iluminacion
Orem, UT, USA Silao, Mexico Queretaro, Mexico
Hi-Tech Gears Ltd.
Manesar, Gurgaon, Haryana, India
2010 Interiores Aéreos S.A. De C.V. Gulfstream
John Deere, Power Products Aerospace
Greeneville, TN, USA Mexicali, Mexico
Shingo Bronze Medallion
Lycoming Engines
Williamsport, PA, USA Rexam Plastic Packaging do Brasil BAE Systems - Samlesbury
Jundiai, Sao Paulo, Brazil Blackburn, Lancashire, UK

OP for L
E X E R AT I O N A E
CELLENC US Army Armament Research, Baxter Healthcare
Development & Engineering Center Los Angeles, CA, USA
2012 Picatinny Arsenal, NJ, USA
Johnson Controls Lerma Plant Fleet Readiness Center Southeast,
The Shingo Prize is awarded to organizations that demonstrate a culture where Lerma, Mexico 2010 TSRS Shop
principles of operational excellence are deeply embedded into the thinking and Letterkenny Army Depot, Patriot Jacksonville, FL, USA
Remy Automotive Brasil Ltda.
behavior of all leaders, managers and associates. Missile
Brusque, Santa Catarina, Brazil
Chambersburg, PA, USA Red River Army Depot, Up-Armored
Performance is measured both in terms of business results and the degree to 2011 High Mobility Multipurpose Wheeled
which business, management and work systems are driving appropriate and Denver Health, Community Health Tobyhanna Army Depot, AIM-9M Vehicle (UAH)/HEAT
optimum behavior at all levels. Leadership is beginning to focus on insuring that Services Sidewinder Missile Texarkana, TX, USA
principles of operational excellence are deeply imbedded into the culture and Denver, CO, USA Tobyhanna, PA, USA
regularly assessed for improvement. Ultraframe UK Ltd.
Letterkenny Army Depot, Aviation 2009 Clitheroe, Lancashire, UK
Ground Power Unit Aviation Center Logistics Command
Chambersburg, PA, USA and Army Fleet Support, Lowe Army Visteon Interamerican Plant
Heliport Apodaca, N.L., Mexico
Leyland Trucks Ltd Ft. Rucker, AL, USA
Leyland, Lancashire, UK

68 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines 69
 The Shingo
Dear Shingo Associates, Research

and
benefits Professional
Thank you for taking time to study our model for operational excellence and considering the
of using the model within your organization. Many of our associates have indicated that

Publication
operational excellence and Award
the model and assessment can assist in better understanding where you are on your journey
toward how to accelerate your efforts. We sincerely hope that this
document will enable you to become more keenly aware of not only your strengths, but also your
greatest opportunities for improvement.
2012 On The Mend Follow the Learner
The Toyota If your
Way to intentions are to eventually
Lean Leadership Johnchallenge
Toussaintfor The Shingo Prize, this booklet will
Dr. Sami introduce you
Bahri
to the process of applying and Roger
Jeffrey K. Liker preparing your achievement report. You will learn how our exam-
A. Gerard
The Lean Manager
Gary Convis iners, your peers from other companies, will evaluate, score and provide feedback to your facility.
Transforming Health Care: Virginia Michael Balle, Freddy Balle
The Toyota This
Way booklet
to Continuous Mason
Im- from past
is different Medical
issues. BasedCenter’s Pursuit of
on our decades of the
experience inUnder
Toyota searching
Firefor,
Perfect Patient Experience
provement evaluating and recognizing some of the world’s very best companies, we Jeff haveLiker
come to understand
how truly difficult it is for evenCharles
Jeffrey K. Liker the bestKenney
to create sustainable transformation and build lasting
cultures of operational excellence. Toyota Kata
James K. Franz
Work That Makes Sense: Operator- Mike Rother
Lean principles, learning, and knowl- Led Visuality
In the past, our search for great companies focused primarily on determining Lean “the
IT degree to
edge work: which”
Evidencethefrom a Software
organization Dr. Gwendolyn
had successfully D. Galsworth
deployed the tools and techniques often associated with
Mike Orzen
Services Provider
most of the business improvement programsBringing
conceived over the past fewSteve
decades.
The Remedy: Lean Thinking BellBased on our
long-term association with these
Bradley R. Staats companies and thought-leaders,
out of the Factory to Transform the
we have come to understand
that the focus on tools and techniques must be led by a thorough understanding
David J. Brunner Stories From
of keyMy Sensei –
concepts
Entire Organization
or
David M. Upton guiding principles around which the tools have been developed. Those guiding
Steve principles
Hoeft
Pascal Dennis
become the bedrock of a corporate mind-set and the foundation for the design of systems that
Building a Lean Fulfillment
reinforce Stream in every action of every associate.
these principles 2010
2011
Robert Martichenko Creating Lean Dealers
Lean Enablers for Systems Engineering
Kevin von Grabe
This relationship between guiding principles, David Vrunt tools is the
management systems and improvement
Bohdan W.Oppenheim
basis for The Shingo Prize model andM.our
Earll. approach to organizational assessment.
Murrnan
John Kiff We invite all to
Lean Office and Service Simplified
review and engage in critical dialogue with your peers around the ideas presented here. Then
Drew Locher Deborah A. Secor
contact us at www.shingoprize.org and we will be eager to share with youBreaking
more of Through
the details
to Flow
CONTACT INFORMATION
behind the model and
Liquid Lean: Developing Lean Cultureassessment
Toastmethodology.
Value Stream Mapping Ian Glenday
The Shingo Prize for Operational Excellence
in the Process Industries Bruce Hamilton Jon M. Huntsman School of Business
Raymond C. Floyd The Kaizen Event Fieldbook
Mark Hamel Utah State University
3521 Old Main Hill
Logan, UT 84322-3521
The Shingo Research and Professional Publication Award recognizes and (435) 797-2279
promotes research and writing regarding new knowledge and understanding (435) 797-3440 FAX
of lean and operational excellence. Awards are given in four categories: (1) www.ShingoPrize.org
Robert D. Miller
books (monographs), (2) published articles, (3) case studies, and (4) applied
For questions or comments contact:
Executive Director
publications/multimedia programs.
Shaun D. Barker
The Shingo Prize for Operational Excellence
Director of Operations and Assessment
Jonpublications
Research or M. Huntsmansubmitted
School of Business
should provide new theory or novel
shaun.barker@usu.edu
application. Reviews, re-statements, textbooks, and/or edited versions will
generally not be considered. Application forms are available online at www.ShingoPrize.org

70 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
 435-797-2279
www.shingoprize.org