Shingo Prize Model and Application

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GUIDELINES
Model & Application
Dear Shingo Associates, ank you for taking time to study our model for operational excellence and considering the bene ts 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 e orts. 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 e Shingo Prize, this booklet will introduce you to the process of applying and preparing your achievement report. You will learn how our examiners, your peers from other companies, will evaluate, score and provide feedback to your facility. is booklet is di erent from past issues. Based on our decades of experience in searching for, evaluating and recognizing some of the worlds very best companies, we have come to understand how truly di cult 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 which the organization had successfully deployed the tools and techniques o en 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 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. ose guiding principles become the bedrock of a corporate mind-set and the foundation for the design of systems that reinforce these principles in every action of every associate. is relationship between guiding principles, management systems and improvement tools is the basis for e 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. en contact us at www.shingoprize.org and we will be eager to share with you more of the details behind the model and assessment methodology.
Robert D. Miller Executive Director e Shingo Prize for Operational Excellence Jon M. Huntsman School of Business
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THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Model & Application
GUIDELINES
THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCE JON M. HUNTSMAN SCHOOL OF BUSINESS UTAH STATE UNIVERSITY
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LOGAN, UTAH USA WWW.SHINGOPRIZE.ORG VERSION 7.1 MAY 2012

COPYRIGHT 2012 THE SHINGO PRIZE FOR OPERATIONAL EXCELLENCE. ALL RIGHTS RESERVED
Shingo Mission
The mission of The Shingo Prize is to create excellence in organizations through the application of timeless, universal, and self-evident principles of operational excellence; alignment of management systems; and the wise application of improvement techniques across the entire organizational enterprise.
Shingo Vision
Our vision is to be the Standard of Excellence for every organization.
Board of Governors
Paul A. Brent Retired General Director Global Supply Mgt. Restructuring Delphi Jerry Bussell Executive Advisor Underwriters Laboratories Knowledge Services Arthur P. Byrne Operating Partner J.W. Childs Associates Douglas F. Carlberg President & CEO M2 Global Technology, Ltd. Gary Convis COO Bloom Energy Corporation Carolyn Corvi Vice President, General Manager, Airplanes Programs The Boeing Company Timothy A. Costello Chairman & Chief Executive Officer Builder Homesite, Inc. Michael N. DaPrile Executive Vice President SW Manufacturing, Inc. Bruce E. Hamilton President Greater Boston Manufacturing Partnership, Inc. Thomas G. Hartman Director of Operations AutoLiv North America Jack Helmboldt Senior Vice President Denso Manufacturing Tennessee, Inc. Luis Izquierdo Vice President, Corporate Operations Raytheon Company Michael Joyce Senior Vice President, Operations and Program Managment Lockheed Martin Bill Kessler Professor & Director of Executive Programs Georgia Tech Tennenbaum Institute George J. Koenigsaecker President Lean Investments, LLC Julie Madigan Chief Executive The Manufacturing Institute Mike Martyn Principal SISU Consulting Group John E. Marushin Chief Operating Officer Clear Path Solutions Robert D. Miller Executive Director The Shingo Prize for Operational Excellence R. David Nelson Chairman Quality Analytics Rusty Patterson Chairman & CEO NCFAM Dennis K. Pawley President & CEO Pawley Enterprises Gary Peterson Executive Vice President Supply Chain O.C. Tanner Company Clifford F. Ransom II President Ransom Research, Inc. Peter N. Riley EVP Integrated Operations Bell Helicopter Textron Inc. Don Ronchi Chief Human Resource Officer Ceberus Operational and Advisory Company, LLC David Rowlands CEO Gold Pride Pass Richard J. Schonberger President Schonberger & Associates, Inc. John Shook President & CEO Lean Enterprise Institute Kenneth Snyder Executive Dean & Chief Administrative Officer Jon M. Huntsman School of Business, Utah State University Carl G. Thor President JarrettThor International John J. Van Gels Vice President Operations & Supplier Management The Boeing Company Alejandro von Rossum Sr. Chief Executive Officer, Chemical Division Cydsa Corporation S.A. de C.V. Helen Zak President & COO ThedaCare Center for Healthcare Value
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: Robert Miller, Jacob Raymer, Randall Cook, 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.
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Shingo Academy
James F. Albaugh Executive Vice President The Boeing Company Joji Arai Secretary General International Productivity Service Stan A. Askren Chairman, President & CEO HNI Corporation J. T. Battenberg Chairman & Chief Executive Officer Delphi Corporation Warren Batts Chairman NAM Tupperware Corporation Norman Bodek Former President Productivity, Inc. Guy D. Briggs Vice President, General Motors General Manager, GM North America Vehicle Manufacturing Gifford M. Brown Plant Manager Cleveland Engine Plants, Ford Motor Company Vernon M. Buehler Professor Emeritus Utah State University Jerry Bussell Executive Advisor UL Knowledge Services Arthur P. Byrne Operating Partner J.W. Childs Associates Timothy A. Costello Chairman & Chief Executive Officer Builder Homesite, Inc. Stephen R. Covey Co-founder/Co-chairman Franklin/Covey Company H. Lawrence Culp, Jr. President & CEO Danaher Corporation Michael N. DaPrile Executive Vice President SW Manufacturing, Inc. Joseph C. Day CEO & President Freudenberg, NOK Earnest W. Deavenport, Jr. Former Chairman Eastman Chemical Mark DeLuzio President Lean Horizons Consulting, LLC Andy Eichfeld Senior Partner McKinsey & Company Frank J. Ewasyshyn Executive Vice President Manufacturing Chrysler Group Orest J. Fiume Former Vice President, Finance The Wiremold Company Louise L. Francesconi President Raytheon Missile Systems Eliyahu M. Goldratt Founder Goldratt Institute Benjamin S. Griffin Commanding General, Retired US Army Materiel Command Andrew M. Guarriello Former Vice President & CEO AT&T Microelectronics Power Systems Bruce Hamilton President Greater Boston Manufacturing Partnership, Inc. Thomas G. Hartman President & Managing Director AutoLiv do Brasil Ltda Masaaki Imai Chairman KAIZEN Institute of Japan Jerry J. Jasinowski President National Association of Manufacturers Brian S. Jones President & CEO Nypro, Inc. Daniel T. Jones Founder & Chairman Lean Enterprise Academy Michael Joyce Senior Vice President, Operations and Program Management Lockheed Martin James H. Keyes Chairman & CEO Johnson Controls Inc. George J. Koenigsaecker President Lean Investments, LLC Peter Lawson Vice President, Manufacturing Ford Motor Company of Australia Hank Lenox Director, Ford Production System Ford Motor Company David J. Logozzo President, LE Partners Lean Enterprise Institute Jack Michaels Chairman, President & CEO Snap-On Incorporated R. David Nelson Chairman Quality Analytics Inc. Rodney ONeal President & Chief Operating Officer Delphi Corporation Paul ONeill Former Secretary, US Treasury Former Chairman and CEO, Alcoa, Inc. Hajime Ohba President, TSSC, Inc. Toyota Suppler Support Center James J. Padilla Chief Operating Officer Ford Motor Company Dennis K. Pawley President & CEO Pawley Enterprises Clifford F. Ransom II President Ransom Research, Inc. Ross E. Robson President & CEO DnR Lean LLC Donald L. Runkle Former Vice Chairman, Enterprise Technologies Delphi Corporation Russell Scaffede Owner Lean Manufacturing Systems Group, LLC Richard J. Schonberger President Schonberger & Associates, Inc. Anand Sharma President & CEO TBM Consulting Group Ritsuo Shingo Former President Toyota China and Hino Motors China John Shook President & CEO Lean Enterprise Institute Harold M. Simons Executive Vice President, Manufacturing O.C. Tanner Company Art Smalley President Art of Lean, Inc. Mohsen Sohi President & Chief Executive Officer Freudenberg-NOK General Partnership James L. Solberg Executive Director, Manufacturing, North American Powertrains Operations Ford Motor Company Anne Stevens Chairman, President & CEO Carpenter Technology Corporation Carl G. Thor President JarrettThor International John S. Toussaint CEO ThedaCare Center for Healthcare Value Robert H. Transon Group Vice President Manufacturing Executive Office Ford Motor Company Nickolas Vande Steeg President & COO Parker Hannifin Corporation Alejandro von Rossum, Sr. CEO-Chemical Division Cydsa Corporativo S.A. de C.V. Michael J. Ward President Autoliv Americas Donald J. Wetekam President Aircraft Services AAR Corporation David Wohleen President, Electrical, Electronics, Safety & Interior Sector Delphi Corporation James Womack Founder & President Lean Enterprise Institute
Table of Contents
THE SHINGO MODEL FOR OPERATIONAL EXCELLENCE
8 9 The House - The Shingo Principles of Operational Excellence The Diamond - The Shingo Transformational Process
Dimension 1: Cultural Enablers
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12 13 14
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Principle - Respect Every Individual Principle - Lead with Humility Table 1 - Examples of Ideal Behavior for Cultural Enablers
Dimension 2: Continuous Process Improvement
16 17 17 17 17 18
Principle - Focus on Process Principle - Embrace Scientific Thinking Principle - Flow and Pull Value Principle - Assure Quality at the Source Principle - Seek Perfection Table 2 - Examples of Ideal Behavior for Continuous Process Improvement
Dimension 3: Enterprise Alignment
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22 23 24
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Principle - Create Constancy of Purpose Principle - Think Systemically Table 3 Examples of Ideal Behavior for Enterprise Alignment
Dimension 4: Results
26 27
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Principle - Create Value for the Customer Table 4 - Examples of Ideal Behavior for Results
Scope of Transformation
28 32 34 37 38 40 41
Business and Management Systems The Shingo Model Assessment Criteria Dimension 1 - Cultural Enablers Dimension 2 - Continuous Process Improvement Dimension 3 - Enterprise Alignment Dimension 4 - Results
Assessment and Scoring
30 Summary
ASSESSMENT CRITERIA
44
45 Table 5: Scoring Matrix 47 Table 6: Behavior - Assessment Scale 48 Table 7: Results - Assessment Scale
APPLICATION PROCESS
50 Application Process
56 Writing the Achievement Report
58 Dimension Framework 60 Recipients

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THE SHINGO MODEL FOR OPERATIONAL EXCELLENCE
Principles of Operational Excellence
The search for improvement is instinctive. For businesses and indeed any organization to be successful in the long term, they must be engaged in a relentless quest to make things better. Failure to make this an organizational priority will inevitably result in organizational decline. Excellence must be the pursuit of all great leaders. In fact, the passionate pursuit of 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
inarguable because it is self-evident. Dr. Covey teaches that values govern our actions but 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 are far from ideal. Principles govern everything that happens in the natural world. Scientists the worldover 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.
For organizations to be successful over the long term, leaders must deeply and personally understand 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-inTime, Total Quality Management, Business Process Re-engineering, Six Sigma, and most recently, Lean are a few illustrations of wellintentioned initiatives that have far underdelivered 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 ones 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 enterprisewide practice of ideal behaviors, based on correct principles. As long as improvement is
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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 the outcomes of our behavior can be predicted. 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 predictably excellent results. Similarly, a corporation not well 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
seen as something outside the core work of the business, as long as it is viewed as something else to do, operational excellence will remain elusive. When leaders anchor the corporate mission, vision, and values to principles of operational excellence and help associates to connect and anchor their own values to the same principles, they enable a shift in the way people think and behave. Changing the collective behavior of the group changes the culture. This is a leadership responsibility that cannot be delegated.
The principles are categorized into four dimensions: cultural enablers, continuous process improvement, enterprise alignment, and results the ultimate end of all business initiatives. These four dimensions overlay five core business systems: product/service development, customer relations, operations, supply, and a variety of management or administrative support systems.
Guiding Principles
Principles of Operational Excellence (The Shingo House)
In his book Key Strategies for Plant Improvement, Shigeo Shingo said, Think in terms of categorical principles. The Shingo House is a categorization of the guiding principles of operational excellence. Associated with each category are also listed many important supporting concepts. Figure 1: The Shingo House
The Shingo Prize for Operational Excellence did not create the 10 guiding principles of operational excellence, but rather they have always existed. In truth, there is ample evidence that these principles have been well understood, more or less, at different times for thousands of years. As the world has gone through cycles of advancement and decline, it seems these principles are routinely lost and forgotten and must be re-discovered. Emerging from the dark ages into a period of enlightenment and industrialization, the impact of these principles are only now beginning to be understood again. Certainly, and even surprisingly, most business schools do not emphasize these principles even though they are the driver for business execution excellence. The cause for this may be that these fundamental business principles have been lost in management fads and tool boxes that become programs or flavors of the month. The Shingo Prize for Operational Excellence has made a diligent search of thought leaders over the last 100 years. Their work has been carefully analyzed and dissected and the unique concepts or principles from each have been extracted. Compiling, distilling, and prioritizing the list led to the 10 guiding principles on the left side of the house and the supporting concepts for each dimension on the right side. Supporting concepts are critical to pay attention to but may not stand up to the rigor of being universal, timeless, and selfevident like the guiding principles. The dimensions are the result of thinking categorically about the principles. It is clear that all four dimensions of the model require focus in order to achieve
Create Value for the Customer
Results Enterprise Alignment
Measure what Matters Align Behaviors with Performance Identify Cause & Effect Relationships
Create Constancy of Purpose Think Systemically
See Reality Focus on Long-term Align Systems Align Strategy Standardize Daily Management
SUPPLY
MANAGEMENT
OPERATIONS
CUSTOMER RELATIONS
PRODUCT & SERVICE DEVELOPMENT
Focus on Process Embrace Scientic Thinking Flow & Pull Value Assure Quality at the Source Seek Perfection
Continuous Process Improvement
Stabilize Processes Rely on Facts & Data Standardize Processes Insist on Direct Observation Focus on Value Stream Keep it Simple & Visual Identify & Eliminate Waste No Defects Passed Forward Integrate Improvement with Work
Lead with Humility Respect Every Individual
Cultural Enablers
Assure a Safe Environment Develop People Empower & Involve Everyone
The Shingo Prize
GUIDING PRINCIPLES
SUPPORTING CONCEPTS
excellence. In the same way that we need to comprehend objects in three dimensions to truly appreciate all of their characteristics, operational excellence must be viewed in these four dimensions in order to fully appreciate the power of the principles to affect business outcomes.
for meaning, the principle, and then attempt to organize them somehow into a system, or some kind of order. Finally, they create tools to better enable the systems to accomplish the purpose for which they were created.
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Learning and Teaching the Principles
Transforming a Culture (Shingo Transformation Process)
Many organizations and their leaders are coming to understand that sustainability requires focusing on the culture; thats the easy part. The difficult part is in knowing how to really affect change.
The Shingo transformation process is a methodology for accelerating a personal and enterprise-wide transformation to a culture of operational excellence. INDIVIDUAL FOCUS The process is based on the teaching of Dr. Shingo who Core Values Anchored to GUIDING PRINCIPLES recognized that business M improvement comes R FI ORGANIZATIONAL FOCUS through understanding AF E IV the relationship DR between principles, systems, and tools.
The first step a leader must take in leading cultural transformation is a personal journey to understand what each of these guiding principles mean conceptually and then what they mean personally. It is impossible for a leader to lead the development of a principlebased culture until he or she has gone through the deep personal reflection required to begin a cultural transformation. This is no trivial task. For many and perhaps most, fully embracing these principles requires a fundamental rethinking of the rules of engagement used to get to where they are.
At a minimum, leaders must be curious enough to experiment with the principle. John Shook at the Lean Enterprise Institute taught us that it is often impossible to think our way into a RESULTS SYSTEMS new (Behavioral Evidence) Dr. way of Shingo acting. understood Rather, guided that by correct prinoperational LE AB ciples, one may do, excellence is not N E CT observe, learn, and achieved by superficial LE E S then do something else imitation or the isolated until we act our way into and random use of tools TOOLS a new way of thinking. By and techniques (know how). carefully analyzing the cause-andInstead, achieving operational effect relationship between principles excellence requires people to and results, a leader will begin to shift know why (i.e., an understanding of their own beliefs about what drives optiunderlying principles.) mal business performance. After gaining this new insight it becomes the effective leaders In the 1940s, the work of French social primary responsibility to see that others in scientist, Jean Piaget, led us to understand his/her organization have experiences where that learning occurs when people come to they can gain the same insight. deeply understand the meaning behind the methodology. People naturally search first * Figure 2: Shingo Transformation Process
AL IG N DR IV E
Culture
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Leaders who choose to disregard the principles that govern business outcomes do so at great peril. Whether we acknowledge them or not, the principles of operational excellence always govern the consequence of our leadership and management behaviors. An example may help. If we encourage, enable, or simply allow a culture to emerge where employees are thought of merely as an unfortunate cost burden or that the smartest people are those that rise to the top, the consequence will be a workforce that is not fully engaged. Ideas for improvement are never articulated and acted on, people feel unfulfilled in their work, and turnover is very high. Labor costs become excessively high, business systems stagnate, and innovation is not fast enough to compete in a rapidly changing business climate. Unwise leaders see this as a validation of what they believed rather than the disappointing end of a self-fulfilling prophesy. When people understand principles for themselves, the why, they become empowered to take personal initiative. Leaders who teach associates the principles behind the tactics or the tools can be confident that innovation from each individual will be pointed in the right direction. It is not necessary for a leader to define ideal behaviors for others. If the principle is truly a principle, people with different values will readily be able to define ideal behavior for themselves and over time, behaviors become consistent even in a diverse environment.
Aligning the Systems with Principles
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. The Shingo transformation process illustrates the critical need to align every business, management, and work system of the organization with the principles of operational excellence. When systems are properly aligned with principles, they strategically influence peoples behavior toward the ideal.
Dr. Shingo also taught that the primary role of managers must shift from firefighting to designing, aligning, and improving systems. The Enabling Role of Improvement Tools
A tool is nothing more than a point solution or a specific means to a specific end. Dr. Shingo referred to tools as techniques for problemsolving, necessary but not sufficient. He taught that tools should be selected to enable a system to perform its intended purpose. In many ways, a system may be thought of as a collection of tools working together to accomplish an intended outcome. A successful enterprise is usually made up of complex business systems that can be further divided into layers of sub-systems, each having embedded in them the necessary tools to enable the successful outcome of the system.
Dr. Shingo understood this and taught that the primary role of a leader is to drive the principles of operational excellence into the culture.
When leaders precisely define the detailed and expected behaviors for others, resentment builds. It conveys mistrust and makes people feel incompetent.
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Perhaps the largest mistake made by corporations over the last three or four decades has been the inappropriate focus on a specific tool-set as the basis for their improvement efforts. Tools do not answer the question of why, only the question of how. Knowing the how without understanding fully the why, leaves people waiting for instructions and powerless to act on their own.
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Powerful organizations are made up of powerful people who understand the principles that govern their successful contribution.
Organizations can never sufficiently release the full potential of their people by creating a tool-oriented culture.
Experiment with the Principle
One of the principles of operational excellence is scientific thinking, which is intended to foster a culture of experimentation and deep learning. People must be able to put to test each of the principles espoused by the principlebased leader. Only when people see for themselves the cause-and-effect relationship of results relative to the principle, will they come to deeply and personally understand the value of the principle to themselves. Repetition through many cycles of learning in the experiment gives people a personal insight about the principle and empowers them to make personal judgments about its validity.
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The following pages are organized to follow the bottom-up flow of the Shingo House. We begin with the foundation of cultural enablers and end with the principle of creating value for the customer. This flow is only for purposes of explaining the model. We clearly understand that value creation must ultimately be the focus of any great organization and that failure to put the customer first always results in inward facing, unresponsive bureaucracies. 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 respect for every other person. Developing a culture of mutual respect and humility takes a consistent commitment over a sustained period of time.
DIMENSION ONE:
CULTURAL 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, for suppliers, for the community, and for society in general. Individuals are energized when this type of respect is demonstrated. Most associates will say that to be respected is
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Cultural Enablers (People)
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 communication often fails to create uniform ideal behaviors throughout the enterprise. This is because these values are whats that fail to answer for people the question of why. A principle answers the question of why. Here is a way to think about the alignment of principles with these kinds of values.
from anyone. Improvement is only possible when people are willing to abandon ownership, bias, and prejudice in their pursuit of a better way.
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Because I lead with humility (the principle), I am open to good ideas and innovation from anywhere in the organization (the value). Because I lead with humility (the principle), I accept responsibility and enable change (the value). Because I possess humility (the principle), I seek, trust, and follow the direction of those with a responsibility to lead (the value).
The following table (see Table 1) provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that flow from these two guiding principles and should not in any way be considered as an exhaustive list.
Because we respect every individual (the principle), we always place safety first (the value). Because we have respect for every individual (the principle), we empower people to act independently (the value). Because we have respect for every individual (the principle), 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 leaders 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
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Role Leaders
Examples of Ideal Principle-Based Behavior

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 their actions based on what they learn. eaders in all areas demonstrate a willingness to learn and publicly L acknowledge 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 organizational culture. Leaders engage people at all levels in defining ideal, principle-based behaviors 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 principlebased 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 associates and work with each one to provide appropriate opportunities for associates 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, principles, 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 customers 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 1: Examples of Ideal Behavior for Cultural Enablers

14 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Cultural Enablers
Supporting Concept Assure a Safe Environment There is no greater measure of respect for the individual than creating a work environment that promotes both the health and safety of employees and the protection of the environment and the community. Environmental and safety systems embody a philosophical and cultural commitment that begins with leadership. 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 operational excellence. Through people development, 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 organizations leaders must be committed 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.
Supporting Concept Empower & Involve Everyone For an organization to be competitive, the full potential of every single individual must be realized. 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 innovate and improve. Elimination of barriers to that innovation becomes the responsibility of management. Fundamental to the Shingo model is the concept 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 principles 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 appropriateness of their ideas for improvement. Similarly, when employees have a clear sense of direction and strategy and have a realtime measure of contribution, they become a powerful force for propelling the organization forward.
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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. Shingos advice: Improvement means the elimination of waste, and the most essential precondition for improvement is the proper pursuit of goals. We must not be mistaken, first of all, about what improvement means. The four goals of improvement must be to make things: easier, better, faster, and cheaper. Particular emphasis is placed on a quicker, more flexible response throughout the system. 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).
DIMENSION TWO:
CONTINUOUS PROCESS IMPROVEMENT
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
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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.
without running into the traditional trade-offs. In addition, daily and weekly results become more consistent and predictable.
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Principle Assure Quality at the Source
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).
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
Principle Flow and Pull Value
Flow thinking is the focus on shortening leadtime 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 ontime delivery and flexibility, and lower costs,
It is important to understand that the continuous process improvement journey has no end. This explains Dr. Shingos philosophy that one should always look for problems where there doesnt appear to be any. This is contrary to the traditional belief: If it isnt broken, dont fix it. The pursuit of perfection reveals that there is 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 gameending solutions, and then revisits the issue again and again, pursuing perfection without really expecting to find it. The following table (see Table 2, pg. 20) provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that flow from these five guiding principles and should not in any way be considered as an exhaustive list.
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Role 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 accomplishments 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 behaviors and results, holding themselves and others accountable for both.
Managers
Managers in all areas devote a significant amount of their time (up to 80 percent) ensuring the management systems of the organization are perfectly aligned to drive ideal principle-based behavior. All managers participate with associates as required on improvement initiatives. Managers demonstrate knowledge of appropriate tools and use them regularly 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 demonstrating ideal behavior and for achieving business goals.
Associates
Every associate in every part of the organization is engaged every day in using 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 production, 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 2: Examples of Ideal Behavior for Continuous Process Improvement
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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 Facts & Data Dr. 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 wasnt 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 as evidenced by 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,
rather than springing back to preceding practices and results. Standardization also eliminates the need to control operations 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 work process. 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.
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Supporting Concept Keep it Simple & Visual
Everything should be made as simple as possible, but not simpler.

~Albert Einstein
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 leaders perspective, it requires great courage to stop the process long enough to understand the root cause and take countermeasures that prevent the process from reoccurring. For the leader, this often means trading any short-term loss for substantial long-term gain. From a managers 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 associates 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.
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. Shingos lifes 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 & 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 consistently drive appropriate behavior,
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Supporting Concept Integrate Improvement with Work 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.
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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 systems that align work and behaviors with principles and direction in ways that are simple, comprehensible, actionable, and standardized. We call this Principlebased Strategy Deployment. Individual leaders cannot develop individual approaches to management without introducing massive waste into an organization.
DIMENSION THREE:
ENTERPRISE ALIGNMENT
Strategy deployment requires a management process built around scientific thinking, with more emphasis on cycles of learning than on perfect plans. It is essential to establish effective communication, a process for gaining consensus, clear accountability, and systems where execution and countermeasures are 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 always in a constant state of change. Customers change, customers 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 Demings 14 Points is to create constancy of purpose. How is this possible?
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Enterprise Alignment
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 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 long-term success of any organization. Leaders must come to understand which principles have the greatest impact on their results and then make certain every aspect of the organization is aligned 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. Changes in direction, guiding principles, and key metrics should be treated like changes in the national constitution. Organizations that frequently redirect philosophies and strategies fail to recognize the tremendous waste associated with instability, fluctuation, and perhaps most importantly, the loss of human commitment.
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. Convergent thinking is what leads us to focus on the how. Synthesis, or divergent thinking, is focused on seeing how things might work together. We call this looking out of things. Divergent thinking is what leads us to focus on the why. Operational excellence requires both. 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. 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 (see Table 3, pg. 26) provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that flow from these two guiding principles and should not in any way be considered as an exhaustive list.
MODEL
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.
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Role Leaders

All leaders share a common, clear, and compelling vision of the future and talk about it in a consistent way everywhere they go. 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 vertically) 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.
Table 3: Examples of Ideal Behavior for Enterprise Alignment
Supporting Concept See Reality This is a very important concept. Most 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. Further, most organizations unintentionally 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 longterm 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 more likely that
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Enterprise Alignment
decisions will in fact pursue safety, quality, delivery, and cost rather than just monthly or quarterly financial targets or 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. Supporting Concept 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. Supporting Concept Standardize Daily Management The concept of having some level of detailed 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 be organized into standard components. Standard daily management creates a reference point from which continuous improvement can be based. Standard daily management can 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.
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DIMENSION FOUR:
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.
RESULTS
Principle Create Value for the Customer
Every aspect of an organization should be focused on creating value for the customers, investors, employees, and communities. Again, 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 (see Table 4, pg. 29) provides examples of ideal behavior for leaders, managers, and associates. The list is intended to provide examples of ideal behavior that flow 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
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Results
Role Leaders

Leaders make sure the company scorecard is balanced between results and 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.
MODEL
Managers
All managers implement systems that place value creation and waste elimination at the heart of management and improvement efforts. Managers routinely discuss with associates the relationship between actual results and the systems and principles that are creating them. Managers make sure that established metrics are aligned upward and side-toside 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. Associates use results metrics to prioritize and take personal initiative to make improvements that impact the areas where improvement is needed most.
Table 4: Examples of Ideal Behavior for Results
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.
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Business & Management Systems
The principles of operational excellence must be applied across all the business and management systems. The center wheel 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
SCOPE OF TRANSFORMATION
Sales Advertising/promotion Order processing and tracking Responsive/flexible scheduling Invoicing and collections Warranty Product/service development Business processes
Product or Service Development

Market segmentation and selection Research D evelopment of products or services, processes, and prototypes New product or service launch
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SCOPE OF TRANSFORMATION
Operations
Product or service delivery Materials management Process engineering Maintenance Quality assurance and reliability Testing
Supply
Supplier selection and qualification Supplier development and partnering Procurement process Logistics
Many, if not all, of these management support processes are fundamentally non-value-added in a pure lean sense; that is the customer would not pay extra for these. However, some part of each process is necessary non-valueadded work that is currently vital to the proper functioning of the organization and the eventual effectiveness of the value-added processes, (i.e., a company needs to pay taxes), but the customer doesnt necessarily get value from the process. Applying the principles to these processes will help to make sure they are completed as quickly as possible with the fewest possible resources. Principles of operational excellence should be applied conscientiously in all of these business and management support processes. As understanding deepens and application spreads throughout the entire enterprise, a consistent culture develops which is selfperpetuating and self-directing.
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Management Support
Recruiting Compensation and benefits 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
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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 managers focus becomes more on designing and aligning systems to drive ideal principlebased 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
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improvement planning. A few use the Shingo model as a way to recognize their associates for excellent work, and others use it to demonstrate to current and prospective customers that they can compete with anyone in the world. Some use the Shingo model for all of the above.
MODEL
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.
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Underwriters Laboritories LLC Northbrook, Illinois Juan Amador +1 847-272-8800 www.ul.com
The Manufacturing Institute London, UK Eilish Henry +44 161 875 2513 info@manufacturinginstitute.co.uk
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ITESM Queretaro, Mexico Abel Gomez Medina +52 442-238-3352 www.shingoprizemexico.org
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GBMP Inc. Boston, Massachusetts Bruce Hamilton +001 617-287-7729 www.neshingoprize.org China Center for Operational Excellence Shanghai, China Chris Deans +86 136-716-0040 info@ccopex.org
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Shingo Executive Education Courses: Taught Separately

DISCOVER
Principles of Operational Excellence Organizational Transformation with Principles, System & Tools Building Systems to Drive the Right Behavior Mobilizing Capabilities
BUILD
LEAD
Leading with Principles A Leaders role in Creating Individual & Organizational Alignment
ALIGN
Behavior-Based Strategy Deployment Aligning Performance with Ideal Behavior
Shingo Executive Education Year Long Certicate 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

DISCOVER BUILD LEAD ALIGN
Timeline Approx. (weeks)
Participants in the workshops will be able to:

Describe the benefits of focusing on principles Articulate principle-driven behavior Identify how tools link to systems See and assess behavior to provide constructive feedback Explore what adjustments could be made to improve systems in driving ideal behavior Select high impact systems to drive ideal behavior Scientifically Experiment with adjusting systems Re-align systems to eliminate work-a-rounds/ fire-fighting Build system reliability - monitor behavior
DISCOVER the BRIDGE
Discipline 1: Principles of Operational Excellence
Organizational Transformation with Principles, Systems & Tools
(3 Day)
Go See Go && See
Homework Team Webinar Personal Call
12
(3 Day)
16

BUILD the VEHICLE

Mobilizing Capabilities
Discipline 2: Building Systems to Drive the Right Behavior
20
Go
See
Homework Team Webinar Personal Coaching
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Clarify teaching role: when to mentor, coach, lecture Unify the learning and teaching cycles Ask questions that inspire and motivate Unleash talent and passion Create a workforce that engages in continuous improvement
LEAD the DRIVER
Discipline 3: Leading with Principles
A Leaders role in Creating Individual & Organizational Alignment
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Go
See
Homework Team Webinar Personal Coaching
40
44
(3 Day)
48

Translate your desired culture into specific behaviors Monitor behavior (KBI) and performance (KPI) Align and measure the execution of YOUR strategy Create a visual map to align and adjust your culture Identify key roles and responsibility to manage your culture
Discipline 4: Behavior-based Strategy Deployment

Aligning Performance with Ideal Behavior
ALIGN the DIRECTION
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Go & See
Homework Team Webinar Shingo Exchange Blog
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Recognized at International Shingo Prize Conference Executive Education Certificate USU/Shingo Prize
60
Copyright The Shingo Prize
Administered by the Jon M. Huntsman School of Business at Utah State University ii THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model
& Application Guidelines
Build Critical Action Plan - Daily Rhythm
(3 Day)
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Construct TSP Map: System - Behavior Alignment
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Learning - Observation - Re ection Journal
The Shingo
The Shingo Principles of Operational Excellence
SUPPLY
MANAGEMENT
OPERATIONS
CUSTOMER RELATIONS
Cultural Enablers
The Shingo Prize
GUIDING PRINCIPLES
SUPPORTING CONCEPTS
iii
Model
The Shingo Transformational Process
INDIVIDUAL FOCUS
Core Values Anchored to
GUIDING PRINCIPLES
AL IG
ORGANIZATIONAL FOCUS
F AF
IR
M DR I VE
DR IV
N E
RESULTS
Culture
(Behavioral Evidence)
SYSTEMS
EN
L AB
E E EL CT
RE FI NE
Th e Sh in go Pr iz e
iv
AC HI EV E
TOOLS
The Shingo
The Shingo Principles of Operational Excellence
SUPPLY
MANAGEMENT
OPERATIONS
CUSTOMER RELATIONS
Cultural Enablers
The Shingo Prize
GUIDING PRINCIPLES
SUPPORTING CONCEPTS
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Model
The Shingo Transformational Process
INDIVIDUAL FOCUS
Core Values Anchored to
GUIDING PRINCIPLES
AL IG
ORGANIZATIONAL FOCUS
F AF
IR
M I DR VE
DR IV
N E
RESULTS
Culture
(Behavioral Evidence)
SYSTEMS
EN
L AB
E SE C LE T
RE FI NE
Th e Sh in go Pr iz e
AC HI EV E
TOOLS
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ASSESSMENT CRITERIA
The Shingo assessment methodology is being embraced by organizations all over the world, without barrier to industry or geography. We 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
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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.
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 of Examiners to evaluate an applicants 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.
ASSESSMENT CRITERIA
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
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This robust assessment process is used for all entities applying for The Shingo Prize. It is the most rigorous cultural assessment available because it combines documentation in the achievement report (perceived reality) along with two sources of direct observation, the SCOPE survey, and the site visit (actual reality). This provides the most accurate assessment of your culture available.
Assessment Criteria
This section covers the four dimensions of the model and serves as a guide and provides
examples of systems that drive principle-level behavior and tools that support those systems. The following is not intended to be a check list for each dimension; it simply provides examples of principles, systems, and tools in each dimension. The systems and tools observed during an assessment are the artifacts of a culture. The behavior that is observed during an assessment is key to evaluating the level of cultural transformation that an organization has achieved. Ideal behaviors are characteristic of the highest level of achievement and are exemplified previously in the model. Examples 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 service development, customer relations, management, and supply. Business systems may be characterized differently in any given organization although the assessment methodology still applies. The following diagram illustrates the relationship between the different systems in an organization (see Figure 3).
SUPPLY
MANAGEMENT
OPERATIONS
CUSTOMER RELATIONS
Cultural Enablers
The Shingo Prize
GUIDING PRINCIPLES
SUPPORTING CONCEPTS
SUPPLY
MANAGEMENT
OPERATIONS
BUSINESS SYSTEMS
CUSTOMER RELATIONS
Figure 3: Systems Model

36 THE SHINGO PRIZE for OPERATIONAL EXCELLENCE | Model & Application Guidelines
Tools:
Arrangements with educational institutions Personal development plans Lean training curriculum and materials Meetings/huddles Suggestion forms and measures Community open house Fundraisers 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 53 of this document provides further understanding of this process.
Dimension 1 Cultural Enablers (250 Points) Guiding Principles:

Lead with humility Respect every individual
Supporting Concepts:
Assure a safe environment Develop people Empower and involve everyone 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 as examples. 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.
ASSESSMENT CRITERIA
Questions:
Open-ended questions directed toward leaders, manager, 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 behavior assessment scale. 1. Is on-the-job coaching in lean practices a daily part of the culture? 2. Is formal lean training and education ongoing and updated? 3. Is there a process flow where suggestions are processed quickly and feedback is received by the originator? 4. Is the organization a safe and clean workplace where safety and environmental standards are continually improving? 5. Does the recognition system focus on performance that encourages ideal behavior; and is it frequent, timely, and specific?
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Systems:
Individual development On-the-job training/training within industry (OJT/TWI) Coaching Standard daily management Leadership development Idea sharing Suggestion and involvement Reward and recognition Communication Environmental, health, and safety Education/training Community involvement Recruitment and succession planning Accountability
Systems:
Voice of the customer P roblem-solving (A3 Thinking, PDCA, DMAIC) Value stream analysis Total productive maintenance (TPM) Visual management 5S methodology Supplier development Continuous improvement methodology Production Process Preparation (3P) Q uick changeover or setup reductions (SMED) Error proofing/zero defects N ew market development and current market exploitation Q uality function deployment, concurrent engineering, etc. for product development Th eory of constraints managing bottlenecks S ystems that make the customer/supplier linkage visible throughout all stages of the process and encourage/require regular communication D esign for manufacturability, testing, maintenance, assembly i.e. making it simpler and easier to deliver best quality and quickest, most reliable response to the customer at the lowest cost I nvolve suppliers and customers in product/ service design and continuous improvement D irect observation (go and see) and databased decisions and actions Cellular design/layout Variety reduction
Dimension 2 Continuous Process Improvement (350 Points) Guiding Principles:

Focus on process Embrace scientific thinking Flow and pull value Assure quality at the source Seek perfection
Stabilize processes Rely on data and fact Standardize processes Insist on direct observation Focus on value stream Keep it simple and visual Identify and eliminate waste No defects passed forward Integrate improvement with work 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.
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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 53 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 behavior 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 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?
ASSESSMENT CRITERIA
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Tools:
Daily management standard work sheets Surveys Meetings X-Matrix Mission statement Vision statement Goals Values Business models 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 53 of this document provides further understanding of this process.
Dimension 3 Enterprise Alignment (200 Points) Guiding Principles:

Create constancy of purpose Think systemically
See reality Focus on long-term Align systems Align strategy Standardize 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
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Questions:
Open-ended questions directed toward leaders, manager, 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 behavior assessment scale. 1. Is there a structured process for aligning goals and strategic priorities that is simple and visible at all levels of the organization? 2. Do leaders hold to the guiding principles through hard times? 3. Are support functions seamlessly integrated to aid operations in creating value (processbased versus silo culture)? 4. Do information systems provide direct flow of pertinent information that is easily accessible and usable across the extended enterprise (no shadow systems or spreadsheets)? 5. Do leaders and managers have a standard work process that enables them to monitor and maintain company alignment?
Dimension 4 Results (200 Points) Guiding Principle:

Create value for the customer
Measure what matters Align behaviors with performance Identify cause-and-effect relationships 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.
ASSESSMENT CRITERIA
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 assessment. Answers to these and other
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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. Results will also be evaluated based on stability, trend/level, alignment, and improvement usage. The results assessment scale provided on page 54 of this document provides further understanding of this process.
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
Questions:
Open-ended questions directed toward leaders, manager, 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 behavior and results assessment scale. 1. Are measures simple? Is there is a common understanding of what is measured and why it is measured? Are measures directly tied to the organizations 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 adjustments 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.B Cost/Productivity Strongly recommended measures:

Productivity of cash (cash flow) Key value stream margins Turns (of what is produced)

Cost per unit Labor hours per unit L abor productivity organizational physical or financial output as compared to labor quantity A sset productivity (organizational output compared to value of physical assets employed) I nventory turns (organizational raw, working, and finished inventories compared to relevant total cost or revenue) C ost structure (reduction in key cost categories) E nergy productivity (physical or financial output compared to energy cost or quantity) R esource utilization (floor space, vehicles,
4.A Quality Strongly recommended measures:

Quality to the customer (defect-free delivery) Finished product first pass yield and/or rework
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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

Success of new products New contract awards Share of category Customer retention Net promoter score Customer engagement in programs M easure of customer intent (awareness and consideration) 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)
4.E Safety/Environment/Morale Strongly recommended measures:
ASSESSMENT CRITERIA

Time from or to supplier to receipt of materials 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
N umber of ideas per employee and degree of employee implementation of them Near misses Survey (measure of employee trust and confidence in organization and management)

Reportables Waste to landfill Recycling Emissions Energy consumption Utilization of high-potential talent Talent pipeline strength (succession planning) Other appropriate measures
4.D Customer Satisfaction Strongly recommended measures:

Market share Customer surveys
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ASSESSMENT AND SCORING
The intent of the assessment is to evaluate the entire applying entity to determine the degree to which the principles of operational excellence 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 behavior assessment scale, cultural enablers, continuous process improvement, and enterprise alignment. The fourth dimension, results, is scored using the behavior and results assessment 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 on the next page, the first three dimensions will be divided into three main categories for assessment purposes: leaders, operations, and support. There are also two subcategories 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 (see Table 5).
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ASSESSMENT CRITERIA
(20%) (20%) (20%) (20%) (20%)
Table 5: Scoring Matrix
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Behavior Assessment Scale

Senior leadership, managers, and associates at the applying entity in each business system will be assessed to determine the degree to which their behaviors are in alignment with the principles of operational excellence. Are the leaders, managers, and associates doing things that will result in the desired culture? Examiners will be looking for behaviors and other indicators that define and describe the culture of the organization. The difference between the current culture and the ideal culture, the Shingo standard, is the gap that is identified for improvement focus. Understanding the principles throughout the organization, establishing and executing systems that support these principles, and selecting and utilizing appropriate tools and techniques guide an organization to achieve its business plans and goals. Scoring is based on examiners observations as they assess the facility. Examiners are trained to look for behaviors and performance. Behaviors and performance are taken into account in the scoring.
Articulating Behavior FREQUENCY How often do we see the

behavior?
DURATION Are we seeing the behavior for

the first time, or have we seen this behavior for years?
INTENSITY Is there a sense of passion and

importance for the behavior (i.e. to deviate would signal problems)?
SCOPE Do we see the behavior in just a

few cells/areas, or is it widespread throughout the organization?
ROLE Do we see appropriate focus on tools,

systems, and principles at each level of the organization: leaders, managers, and associates?
The following list of descriptors is the basis for assessing Cultural Enablers, Continuous Process Improvement, and Enterprise Alignment. Statement of Purpose: The purpose of our assessment is to determine the degree to which the behaviors in an organization are aligned with the principles of operational excellence. Ideal behavior (Level 5) is represented as the standard for operational excellence. Business systems that fully match the descriptors would score at the top of the indicated range (see Table 6).
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Behavior Assessment Scale

Operational Excellence (Standard)
Lenses
Level 1 0-20%
Leaders are focused mostly on re- ghting and largely absent from improvement efforts
Level 2 21-40%
Leaders are aware of others initiatives to improve but largely uninvolved
Level 3 41-60%
Leaders set direction for improvement and supports efforts of others
Level 4 61-80%
Leaders are involved in improvement efforts and supports the alignment of principles of operational excellence with systems
Level 5 81-100%
Leaders are focused on ensuring the principles of operational excellence are driven deeply into the culture and regularly assessed for improvement
Role
Managers are oriented toward getting results at all costs
Managers mostly look to specialists to create improvement through project orientation
Managers are involved in developing systems and helping others to use tools effectively
Managers focus on driving behaviors through the design of systems
Managers are primarily focused on continuously improving systems to drive behavior more closely aligned with principles of operational excellence Associates understand principles the why behind the tools and are leaders for improving not only their own work systems but also others within their value stream
ASSESSMENT CRITERIA
Associates focus on doing their jobs and are largely treated like an expense
Associates are occasionally asked to participate on an improvement team usually led by someone outside their natural work team
Associates are trained and participate in improvement projects
Associates are involved every day in using tools to drive continuous improvement in their own areas of responsibility
Frequency
Infrequent Rare
Event-based Irregular
Frequent Common
Consistent Predominant
Constant Uniform
Duration
Initiated Undeveloped
Experimental Formative
Repeatable Predictable
Established Stable
Culturally Ingrained Mature
Intensity
Apathetic Indifferent
Apparent Individual Commitment Silos Internal Value Stream
Moderate Local Commitment
Persistent Wide Commitment
Tenacious Full Commitment
Scope
Isolated Point Solution
Predominantly Operations Functional Value Stream
Multiple Business Processes Integrated Value Stream
Enterprise-wide Extended Value Stream
Table 6: Behavior Assessment Scale
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Results Assessment Scale
The following list of descriptors is the basis for assessing the measures in the results section.
Measures that match the descriptors would score at the top of the indicated range (see Table 7).
Results Assessment Scale Lenses Level 1 0-20%

Little to no evidence of stability Little to no predictability Beginning to implement Unpredictable 2-3 years 0-1 years
Level 2 21-40%
Level 3 41-60%
Has begun to stabilize Initiating predictability
Level 4 61-80%
Level 5 81-100%
Stable Predictable Long-term Mature 4+ years
Stability
Building maturity All levels have become comfortable with the measures
Level is low Trend is poor
Moderate improvement in level Benchmarking is industry-focused Trends are mostly positive to at with some backsliding
High level of attainment considered world-class Benchmarks constantly raise the bar and are a function of process not industry Positive trend with very few anomalies to explain Trend is well above expectations
Trend/Level
Little to no evidence of goals Little evidence to no evidence of benchmarking
Isolated with inconsistent usage of measures
Some areas aligned, other than operations Performance measures aligned in operations Silos are beginning to fall Working toward enterprise-wide alignment
All measures align to corporate goals and down to the lowest level Enterprise-wide extended value stream No silos
Alignment
Little alignment Strong silos
Little to no systematic feedback Sporadic feedback
Regular feedback in some areas All areas do not address feedback systematically Many areas beyond operations have a process to set goals
Routine feedback to appropriate party Evidence of feedback in all areas Almost all areas have goals that are realistic and challenging
Improvement Little evidence of
goal setting some evidence in operations
Table 7: Results Assessment Scale
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ASSESSMENT CRITERIA
49
APPLICATION PROCESS
Application Process
We have developed a three-tier award to 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: Shingo Bronze Medallion, 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 to 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
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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.
A n applying entity may not be under investigation by any government or private entity for malfeasance A n 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 the office of The Shingo Prize for Operational Excellence before preparing the achievement report. Further explanation of measures is provided below in Dimension 4 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 examination teams (see Table 8).
Small Organization
250 people or less in entire enterprise
Large Organization
More than 250 people 250 people or less if part of a larger organization
Eligibility Requirements
An entity interested in challenging for The Shingo Prize must meet the following eligibility requirements: A pplying 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
Not part of a larger organization
Government entities Large organizations may need to be broken up into multiple applications
APPLICATION PROCESS
Table 8: Organization Size
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.
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Re-Applications Re-applications are encouraged for the following circumstances:

N o 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 reapplication 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 should also be accompanied by information pertaining to Dimension 4, 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 graph on the following page (see Figure 4) is an example that might be included in the report. The application, profile sheet, and applying entitys 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 applicants 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 entitys results sections are not analyzed at this point in the process. There are no fees due at this point in the process.
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. 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.
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.
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Finished Product First Pass Yield

50,000
45,000
40,000
35,000
30,000
Units
25,000
20,000
15,000
10,000
5,000
Jan-07 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-08 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-09 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-10 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-11 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-12 Feb Mar
Figure 4: Finished Product First Pass Yield
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 years 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 years 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 examiners. Site visits will be scheduled throughout the year and are dependent on the applicants 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 will be recognized at the following years ceremony.
APPLICATION PROCESS
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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 nondisclosure 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.
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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 Conference, 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 challenge for 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 reapplication 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
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 recipients 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. 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
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 (see Table 9).
APPLICATION PROCESS
Application
Re-Application
Site Visit
Small Organization Small Organization $10,000-$20,000 $3,000 $3,000 Large Organization Large Organization $10,000-$20,000 $6,000
5. The Executive Committee reviews the $6,000 recommendations. Organizations will be notified of their status in approximately Table 9: Fees
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WRITING THE ACHIEVEMENT REPORT
The achievement report is the document for determining whether or not an applicant is awarded a site visit. A Shingo Prize applicant must prepare an achievement report that demonstrates how the organization has transformed its culture based on the principles of operational excellence represented in the Shingo model. The achievement report should 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 4 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 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
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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 and understood by all associates. It is important that results in the achievement report are understandable and have explanations where needed. Please refer to Dimension 4, Results, in the model and guidelines for complete details on measures. 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. 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 (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.
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:
8 x 11-inch paper using a fixed-pitch font Sheets should be double-sided, single The report is generally limited to a The report should be coil bound. The official language of the achievement
report is English. Ten (10) hard copies and one (1) digital copy on 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. maximum length of 50 printed pages. spaced. of 11 characters per inch
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.
APPLICATION PROCESS
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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 organizations 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 organizations 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.
Dimension 3 Enterprise Alignment
In this dimension an organization should describe its lean culture as it relates to the principles in the Shingo model. Care should be taken to sufficiently describe how your organizations systems and activities drive 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.
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Include the following items in the report:

Describe your organizations 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 more detailed than the measures that were submitted with the application. All categories in this section must be addressed either with a measurement and the discussion points below or a full explanation of why a particular category is not measured
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, dont 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. 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.
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
APPLICATION PROCESS
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The Shingo Prize

2012 Rexam Beverage Can, Aguas Claras Cans
Aguas Claras, Rio Grande do Sul/Viamao, Brazil
2009 Autoliv Airbag Module Facility

Ogden, Utah, USA
Autoliv Inflator Facility

Brigham City, Utah, USA
2011 Goodyear do Brasil Produtos de Borracha Ltda

Americana, Sao Paulo, Brazil
E-Z-GO
Augusta, Georgia, USA
US Synthetic
Orem, Utah, USA
Guanajuato Manufacturing Complex North Plant

Silao, Mexico
2010 John Deere, Power Products

Greeneville, Tennessee, USA
Interiores Areos S.A. De C.V. Gulfstream Aerospace

Mexicali, Mexico
Lycoming Engines
Williamsport, Pennsylvania, USA
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, and work systems are driving appropriate and optimum behavior at all levels. Leadership is beginning to focus on ensuring that principles of operational excellence are deeply imbedded into the culture and regularly assessed for improvement.
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Shingo Silver Medallion

2012 Pentair Technical Products
Reynosa, Tamaulipas, Mexico
2010 Autoliv Steering Wheels Mexico AQW S. de R.L. de C.V.

El Marques, Queretaro, Mexico
2011 Autoliv (China) Steering Wheel Co., Ltd.

Shanghai, China
Goodyear Tire & Rubber

Lawton, Oklahoma, USA
Barnes Group Inc. Acting Through Its Barnes Aerospace OEM Strategic Business Unit
Ogden, Utah, USA
Hi-Tech Gears Ltd.
Manesar, Gurgaon, Haryana, India
dj Orthopedics de Mexico S.A. de C.V.

Tijuana, Baja California, Mexico
2009 402D Electronics Maintenance Group, Warner Robins Air Logistics Center, Robins Air Force Base
Warner Robins, Georgia, USA
Lundbeck, Supply Operation & Engineering (Valby and Lumsas site)

Valby, Copenhagen, Denmark San Luis Potosi, Mexico
Carestream Health Inc., Rochester Finishing

Rochester, New York, USA Salt Lake City, Utah, USA
Remy Componentes, S. de R.L. de C.V. Rexam Beverage Can South AmericaRecife Ends
Cabo Sto Agostinho, Brazil
EFI Electronics by Schneider Electric HID Global
North Haven, Connecticut, USA
Tobyhanna Army Depot (AN/MST-T1(V)), MiniMutes

Tobyhanna, Pennsylvania, USA
Lockheed Martin Missiles and Fire Control, Camden Operations

East Camden, Arkansas, USA Queretaro, Mexico
Valeo Sylvania Iluminacion
The Shingo Silver Medallion is awarded to organizations that 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. 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.
IN
MEDAL GO LI O N SILVER
EX ERATION E CELLENC
OP
AL
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Shingo Bronze Medallion

2012 Johnson Controls Lerma Plant
Lerma, Mexico
Tobyhanna Army Depot, AIM-9M Sidewinder Missile

Tobyhanna, Pennsylvania, USA
Remy Automotive Brasil Ltda.

Brusque, Santa Catarina, Brazil
2011 Denver Health, Community Health Services

Denver, Colorado, USA
2009 Aviation Center Logistics Command and Army Fleet Support, Lowe Army Heliport
Ft. Rucker, Alabama, USA
BAE Systems - Samlesbury

Blackburn, Lancashire, UK
Letterkenny Army Depot, Aviation Ground Power Unit

Chambersburg, Pennsylvania, USA
Baxter Healthcare
Los Angeles, California, USA
Leyland Trucks Ltd

Leyland, Lancashire, UK
Fleet Readiness Center Southeast, TSRS Shop

Jacksonville, Florida, USA
Rexam Plastic Packaging do Brasil

Jundiai, Sao Paulo, Brazil
US Army Armament Research, Development & Engineering Center

Picatinny Arsenal, New Jersey, USA
Red River Army Depot, Up-Armored High Mobility Multipurpose Wheeled Vehicle (UAH)/HEAT
Texarkana, Texas, USA
2010 Letterkenny Army Depot, Patriot Missile

Chambersburg, Pennsylvania, USA
Ultraframe UK Ltd.
Clitheroe, Lancashire, UK
Visteon Interamerican Plant

Apodaca, N.L., Mexico
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 application throughout the business entity. 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.
IN
MEDAL GO LI O N BRONZE
EX ERATION E CELLENC
OP
AL
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The Shingo Research and Professional Publication Award

2012
The Toyota Way to Lean Leadership Jeffrey K. Liker Gary Convis The Toyota Way to Continuous Improvement Jeffrey K. Liker James K. Franz Lean principles, learning, and knowledge work: Evidence from a software services provider Bradley R. Staats David J. Brunner David M. Upton Building a Lean Fulfillment Stream Robert Martichenko Kevin von Grabe Lean Office and Service Simplified Drew Locher Liquid Lean: Developing Lean Culture in the Process Industries Raymond C. Floyd On The Mend: Revolutionizing Healthcare to Save Lives and Transform the Industry John Toussaint Roger A. Gerard Transforming Health Care: Virginia Mason Medical Centers Pursuit of the Perfect Patient Experience Charles Kenney Work That Makes Sense: Operator-Led Visuality Gwendolyn D. Galsworth The Remedy: Bringing Lean Thinking out of the Factory to Transform the Entire Organization Pascal Dennis Lean Enablers for Systems Engineering Bohdan W.Oppenheim Earll. M. Murrnan Deborah A. Secor Toast Value Stream Mapping Bruce Hamilton Follow the Learner Sami Bahri The Lean Manager Michael Balle Freddy Balle Toyota Under Fire Jeff Liker Toyota Kata Mike Rother Lean IT Mike Orzen Steve Bell Stories From My Sensei Steve Hoeft
2010
2011
Creating Lean Dealers David Vrunt John Kiff Breaking Through to Flow Ian Glenday The Kaizen Event Fieldbook Mark Hamel
The Shingo Research and Professional Publication Award recognizes and promotes research and writing regarding new knowledge and understanding of lean and operational excellence. Awards are given in four categories: (1) books (monographs), (2) published articles, (3) case studies, and (4) applied publications/ multimedia programs. Research or publications submitted should provide new theory or novel application. Reviews, re-statements, textbooks, and/or edited versions will generally not be considered.
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CONTACT INFORMATION
e 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 For questions or comments contact: Shaun D. Barker Director of Operations and Assessment shaun.barker@usu.edu Application forms are available online at www.ShingoPrize.org
III
435-797-2279 www.shingoprize.org

Shingo Prize Model and Application

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Model & Application

Model & Application

LOGAN, UTAH USA WWW.SHINGOPRIZE.ORG VERSION 7.1 MAY 2012

58 Dimension Framework 60 Recipients

THE SHINGO MODEL FOR OPERATIONAL EXCELLENCE

Principles of Operational Excellence

Why So Many Fail

A Culture Built on Correct Principles

Principles Predict Performance

Why Operational Excellence?

Principles of Operational Excellence (The Shingo House)

Create Value for the Customer

Results Enterprise Alignment

Create Constancy of Purpose Think Systemically

PRODUCT & SERVICE DEVELOPMENT

Continuous Process Improvement

Lead with Humility Respect Every Individual

Assure a Safe Environment Develop People Empower & Involve Everyone

The Shingo Prize

Learning and Teaching the Principles

Transforming a Culture (Shingo Transformation Process)

Aligning the Systems with Principles

Experiment with the Principle

Principle - Respect Every Individual

Cultural Enablers (People)

Examples of Ideal Principle-Based Behavior

Table 1: Examples of Ideal Behavior for Cultural Enablers

CONTINUOUS PROCESS IMPROVEMENT

Principle Focus on Process

CONTINUOUS PROCESS IMPROVEMENT

Principle Assure Quality at the Source

Principle Embrace Scientific Thinking

Principle Seek Perfection

Principle Flow and Pull Value

Examples of Ideal Principle-Based Behavior

Table 2: Examples of Ideal Behavior for Continuous Process Improvement

CONTINUOUS PROCESS IMPROVEMENT

Supporting Concept Keep it Simple & Visual

Everything should be made as simple as possible, but not simpler.

Simplicity is the ultimate sophistication.

CONTINUOUS PROCESS IMPROVEMENT

Principle Create Constancy of Purpose

Principle Think Systemically

Examples of Ideal Principle-Based Behavior

Table 3: Examples of Ideal Behavior for Enterprise Alignment

Principle Create Value for the Customer

Examples of Ideal Principle-Based Behavior

Table 4: Examples of Ideal Behavior for Results

Business & Management Systems

Product or Service Development

The real Shingo Prize, however, is the business

Underwriters Laboritories LLC Northbrook, Illinois Juan Amador +1 847-272-8800 www.ul.com

Shingo Executive Education Courses: Taught Separately

Behavior-Based Strategy Deployment Aligning Performance with Ideal Behavior

Shingo Executive Education Year Long Certicate Track: This 12-month,

LEARNING FLOW: The 4 Disciplines of Operational Excellence

Participants in the workshops will be able to:

Go See Go && See

Homework Team Webinar Personal Call

BUILD the VEHICLE

Discipline 2: Building Systems to Drive the Right Behavior

Articulating Behavior FREQUENCY How often do we see the

DURATION Are we seeing the behavior for

INTENSITY Is there a sense of passion and

SCOPE Do we see the behavior in just a

ROLE Do we see appropriate focus on tools,