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Lean Six Sigma

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  • 1. Lean Six Sigma A Methodology for Cultural Change and Continuous Process Improvement (CPI) Kent Cunningham Voice: 615-491-7454
  • 2. Topics > What is Lean? > What is Six Sigma? > Lean Six Sigma is… > Key Roles & Responsibilities 2
  • 3. Why Lean and Six Sigma > Six Sigma will eliminate defects but it will not address the question of how to optimize process flow > Lean principles exclude the advanced statistical tools often required to achieve the process capabilities needed to be truly 'lean‗ > Each approach can result in dramatic improvement, while utilizing both methods simultaneously holds the promise of being able to address all types of process problems with the most appropriate toolkit. • For example, inventory reduction not only requires reducing batch sizes and linking operations by using Lean, but also minimizing process variation by utilizing Six Sigma tools. 3
  • 4. Lean is: • A way to understand Value from the viewpoint of the customer and eliminate waste — activities that don‘t add value • A methodology to increase velocity and create a continuous flow of value-adding activities, pulled by the customer • A set of tools to continuously improve this flow LEAN Recommended reading: Lean Thinking, Womack and Jones (1996) 4 Source: Rath & Strong
  • 5. Six Sigma: Measure of Process Capability > Sigma (―‖) is a measure… 6 Process output SIGMA DPMO * YIELD = 3.4 Defects per Million Opportunities 1.0 691,462 30.8538% 6 2.0 308,538 69.1462% 3.0 66,807 93.3193% 5 4.0 6,210 99.3790% 4 Defective 5.0 233 99.9767% 6.0 3.4 99.9997% 3 * DPMO = Defects per million opportunities 2 Process Output (Variation) 1 Customer Expectation …that focuses on the variation of the process output 5
  • 6. DMAIC The Six Sigma Problem-Solving Model Define Measure Analyze Improve Control > What does > How do we > What is going > What can we > Maintain the Customer measure our wrong? change to more improve- want? success? > What is the completely ments by > What are we > How well data telling satisfy the measuring doing wrong are we us about our Customer? process right now? meeting the process > Test and performance Customer‘s variation? implement needs right process now? changes... 6
  • 7. What is Lean Six Sigma? Combination of two powerful methodologies LEAN Six Sigma > A way to understand > The goal of 3.4 defects value from the per 1 million operations customer‘s perspective > A data-driven approach and eliminate waste – to understanding activities that don‘t add process variation and value defect reduction > A methodology to > A problem-solving increase the velocity of methodology value-added activities to the customer Eliminate Waste Reduce Variance & Increase Velocity & Defects 7
  • 8. Lean and Six Sigma Together SIX SIGMA ISSUES LEAN ISSUES Variation ISSUES THAT Waste & Flow MAY REQUIRE BOTH LEAN Process varies too much and SIX SIGMA Long internal lead times Too much rework Poor delivery Changeover time too long Poor quality Long customer Inventories too high Process not in control lead times Frequent bottlenecks Unexplainable shifts Capacity problems Process doesn’t add value Ineffective inspection Too much downtime 8 Source: Rath & Strong
  • 9. Three Dimensions of Lean Six Sigma Initial area of Focus Process Management DMAIC supports and maintains incrementally improves the projects‘ solutions existing processes by once they are fully systematically removing implemented. It is a root causes of variation. source for new improvement and design projects. Design For Six Sigma Design For Six Sigma Services & R&D is used when a new product or service is needed or an Opportunities existing process requires such significant change that the DMAIC improvement process is inadequate. 9
  • 10. Lean Six Sigma and Change Management Six-pronged approach … HR Evolution / BTO Lean Six Own It! New Leadership Finance Sigma Operating Values Transformation Rhythm Providing an Six teams A continuous A common > Chart Sessions 1-4 winning efficient, focused on long-term problem- large-scale improvement solving course SAP-based > People foundation for transformational process and approach and > Strategy > Are decisive core wins that will culture that will program of > Products > Inspire others functions dramatically dramatically employee- > Budget > Meet simplify our improve the generated commitments business, expand quality of the projects, putting > Live the our operating company‘s Lean Six Sigma Values margins ($1.5B), processes and concepts to > Act as one and generate new products. work everyday, revenues. at all levels. Strong base Largest Top Down Bottom Up Say / Do! Consistent Opportunities Measure Initiatives to Re-Create a Great Company ! 10
  • 11. Alignment to 6-Point Plan 6-Point Plan for Building Shareholder Value 1. World-class management team, culture and processes 2. Aggressive 3. Drive to world- 4. Target strong 5. Invest for 6. Increase focus on the class cost market share for profitable growth emphasis on balance sheet, structure and all activities (R&D, NPI, service and corporate quality levels software software governance and (and mid teens applications, solutions (2x business/ operating superior CSAT, current revenue financial controls margin) and brand) mix) Cash – DSO Cost of Poor Business CSAT - Delivery Time-to-Market and Inventory Quality (CoPQ) Transformation Performance (TTM) and Response Time to Issues Lean Six Sigma (full DMAIC toolset) Quick-win …OR, team Idea is large, spans improvements concludes… other functions or capable of being requires full analysis implemented within a as a LSS project functional team 11 Own It! (partial DMAIC toolset)
  • 12. Lean Six Sigma Requires Behavioral Change > Lean Six Sigma Challenges Us to: • Think Differently • Work Differently • Ask Questions and Challenge the Status Quo • Make Decisions With Facts and Data • Use New Principles, Tools and Methodologies “Early-on, when culture and change compete, culture wins.” - Tom Quan, GlaxoSmithKline
  • 13. Basic Questions > What are the customer needs? > Do our products or services • answer the Voice of the Customer • at a price he is willing to pay? > How do we know? 13
  • 14. Lean Six Sigma Principles • Specify value in the eyes of the customer • Identify the value stream and eliminate waste / variation • Make value flow smoothly at the pull of the customer • Involve, align and empower employees • Continuously improve knowledge in pursuit of perfection 14
  • 15. Definition of a Value Stream The VALUE STREAM is the entire set of processes or activities performed to transform the products and services into what is required by the customer. The VALUE STREAM Suppliers Design Procure Make Sell Customers A Primary Focus is TIME, Product and / or Service Flow Information Flow: Quickly In All Directions 15
  • 16. Understanding the Value Stream Their Supplier Our Supplier Our Happy Piece Our Customer Customer Their Service > We are often part of a value creating stream > Ultimately, the intent of the stream is to answer the end-user’s needs > Knowing who our customers are is the first step in understanding the stream; our primary customer may not be the end-user > Knowing how the stream and our piece works or doesn’t work in meeting customer needs is what Lean Six Sigma is about 16
  • 17. Summarizing the Power of Lean Six Sigma • Provides a world class business strategy • Encourages a common vision and common language shared by all • Promotes teamwork and REWARDS success • Combines aggressive goals with a method and a set of tools • Requires the application of tools throughout entire lifecycle of a product or service • Produces knowledge for improved cycle time, reduced defects, and lower cost Better products and services delivered faster and at lower cost = Improved Customer Value 17