The Hagen Methodology – Beyond the Theory of Constraints and Lean Manufacturing

In order to break through the mental barriers, and beliefs that people have about what is possible, we need to teach them how to solve any problem, by themselves, to root cause. People believe problems are unsolvable because their tools are inadequate to achieve success.

In common problem solving methods, we typically see:

• Brainstorming
• Many different tools and techniques
• Experiential-based problem solving
• Workarounds because root cause can't be found
• Time spent on issues that can be easily eliminated
• Critical issues not being considered

These approaches may only partially or never solve the root cause problem. In addition, people get frustrated because these initiatives require so much time, the tools are complex, and they can't be used throughout the organization from shop floor to management. As a result, mental barriers grow and perpetuate.

In order to overcome these drawbacks and to ensure that all problems can be solved, Hagen has developed a methodology that includes Control Factor Analysis (CFA™) process and the Hagen Improvement Cycle.  These processes help organizations identify areas of large profit improvement potential and manage their business to achieve this potential.

Control Factor Analysis

CFA is a process that can be used by everyone in the organization including operators, mechanics, electricians, etc. It can solve any problem and, if applied correctly, always gets to root cause.

CFA™ is based on a rare form of scientific or reflective thinking that Hagen has tailored for use on the shop floor. It goes beyond the Theory of Constraints and Lean Manufacturing and has been used to solve problems that have existed in companies for many years.  Along the way, it’s been responsible for the recovery of millions of dollars of hidden profit opportunity for those companies.

The advantages of CFA™ are:

• Gets to the bottom of any problem in the shortest possible time
• Can be used to break long standing beliefs and "impossible" problems
• Can be used by non-technical people to get great results
• Can get the most from the technical experts
• Forms the basis of a fact-based approach that can be used across the enterprise

The Hagen Methodology provides a process for understanding where all of the opportunity exists in a business and is able to prioritize every problem/opportunity by dollar value across the business. With CFA, we are able to teach people in the business how to solve any problem to root cause.

Hagen Improvement Cycle

The Hagen Improvement Cycle brings everything together to form a system for managing the day to day operations of a business to ensure that the right people are working on the right things and continuous improvement is happening.

The Hagen Improvement Cycle is a control loop on thinking and doing. It ensures that:

• The right data is being collected from the operation and all reasons for lost time or waste are being captured accurately
• Focus is always on the right opportunities, i.e., those that will have the biggest impact on the bottom line
• The right people are being assigned to the right activities and are being held accountable to deliver results
• Problems are being solved to root cause and eliminated permanently

True Potential

In order to determine the top opportunities that should be worked on, we first need to know the true potential of the process or business. Hagen employs a number of proprietary tools and methodologies, including its True Opportunity software, to determine this true potential. Once it has been determined, we can then compare current performance to maximum potential. True potential is a moving target and has to be routinely recalculated as constraints and limits are challenged and then eliminated through the use of the Hagen tools.

Data Collection

In order to determine the current performance versus true potential, we need to collect all of the lost time and waste information from the process. This data needs to be collected in a "problem-centric" manner, so that specific reasons for the losses are captured. Data has to be collected by SKU, by line since the bottleneck and operating conditions could change when making different products on the same process line. It is also important to capture the error in the data collection, so that we are sure that we are capturing all of the data. If not, it is possible that the most important opportunities are in the data not being collected versus the data being collected.

Data Analysis

Data analysis uses the True Opportunity software algorithms to determine the difference between where we are currently running (the profit we are currently making) versus true potential (the profit we could make if everything ran perfectly. The software’s data analysis module breaks down the gap into the specific reasons for loss and prioritizes them by dollar value. It also trends the top problems over time to ensure that they are improving.

Resource Allocation

This is the management process to ensure that people are working on the right things i.e., the opportunities that have the highest value. This module is implemented in the form of daily and weekly meetings in which the teams look at the data from data analysis to determine the top opportunities and assign individuals or groups to work on those opportunities with specific actions and completion dates. This ensures they are worked through to root cause. All meetings and actions are driven by facts, not opinions.
Short term issues are reviewed and corrected within 24 hours and longer term issues are reviewed weekly, as shown in the following diagram.

Problem Solving

This is the use of the problem solving tool to ensure that all problems are solved to their root cause in a uniform, consistent way by all people in the organization. Once solved, this module provides a mechanism for documenting the solution and the results and can be archived for future reference.