Leading with Lean Six Sigma
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Leading with Lean Six Sigma

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  • This slide uses a Six Sigma tool known as an “L map.” You will learn about L maps in greater detail later in the course. However, L maps are very easy to understand. For this lesson, think of the “L” as standing for Learning. THE SIX SIGMA process for projects begins with defining the project. NEXT YOU VALIDATE the measurement system and establish the current state baseline. THEN YOU IDENTIFY the key levers responsible for producing the outcomes our project will address. ONCE YOU KNOW what the key levers are, YOU Choose The strategy you will use to improve then. FINALLY, YOU MAKE changes to the process that will result in lasting improvement. Now let’s look at each of these major steps a little deeper. DEFINING THE PROJECT starts by recognizing an opportunity. THESE OPPORTUNITIES NEED to be just the right size to be a good Black Belt project candidate. ONCE A RIGHT-SIZED project has been identified, you will develop a detailed project plan. THEN YOU WILL map the process at a high level. THE LAST STEP in defining the project is to obtain the voice of the customer, or VOC, and identifying the drivers of the VOC. In Six Sigma you say these drivers are critical to quality and refer to them as CTQs. MEASUREMENT VALIDATION requires an understanding of the principles of variation. ONCE THE MEASUREMENT system has been proven, you use it to establish the process baseline so you can rigorously demonstrate that your project made an improvement. STRATIFYING THE BASELINE data helps you understand what is driving the top level metrics of your project. THE FINAL STEP in this phase of your project will be to set realistic goals for your project’s outputs. IDENTIFYING KEY LEVERS begins with focusing you problem statement. THEN YOU WILL explore ideas regarding the root causes of the problem. ONE OF SIX sigma’s big differentiators is that it doesn’t settle for unproven theories. You will learn how to collect data to test your theories. SIX SIGMA ALSO involves creating rigorous models that show precisely how the causes create the effect. OF COURSE, NOT all improvements are viable. You will learn how to perform a rigorous cost-benefit analysis. YOUR IMPROVEMENT STRATEGY begins with improvement goals for the drivers. PLANS MUST BE developed to show how you will achieve your goals. PLANS ARE RISKY, and you must assess these risks and prepare CONTINGENCY PLANS TO minimize the risks. MAKING IMPROVEMENTS PERMANENT begins with new standard operating procedures. FULL SCALE IMPLEMENTATION involves rolling out the new SOPs. YOU ARE NOW ready to hand the improved process over to the process owner. FINALLY, YOU WILL follow up to see if the predicted results occurred. Pause the presentation at this point and take a look at this process. This is the L1 map of the process used to execute a Six Sigma project. Everything you’ll learn in this course is designed to help you understand and execute this process. If you find yourself lost in the details, return to this slide to find out where you are in your project.

Leading with Lean Six Sigma Leading with Lean Six Sigma Presentation Transcript

  • Leading with Lean Six Sigma Thomas Pyzdek Copyright © 2005-2009 by Thomas Pyzdek
  • What You’ll Learn Today
    • How to understand stakeholder demands
    • How to make strategies meaningful by using balanced scorecards
    • How to select the critical few strategic metrics
    • How to handle the “important many” metrics
    • How to use the dashboard identify strategic plans
    • How to use strategic plans to select Leading with Six Sigma projects
    • How to use feedback to update and improve strategy
    Copyright © 2009 by Thomas Pyzdek Leading with Lean 6 
  • What is Quality? Lean? 6  ?
    • Quality is identifying the right things and assuring that they are done right.
    • Lean minimizes waste in value streams.
    • Six Sigma develops models for improving complex business processes.
    Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  These methodologies help you work better, faster, and smarter. View slide
    • Quality
      • What are the right things for the enterprise?
      • Are we doing them right?
    • Lean
      • Is there waste in the strategy deployment value stream?
    • Six Sigma
      • What is our enterprise model for strategic change?
    Lean Six Sigma at the Enterprise Level Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Leading with Lean Six Sigma provides answers to these questions View slide
  • Six Sigma and Strategic Planning: Two Powerful Business Tools
    • Lean Six Sigma
    • DMAIC applied to existing problems
    • DFSS used to design new products and processes
    • Value streams identified and optimized
    • For many, low–hanging fruit has been picked
    • Strategic Planning
    • Long–term problems and challenges
    • Strategic planning: long on promise, short on results
    • No way to program the strategy
    Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Leading with Six Sigma provides the bridge between two powerful methodologies LS 
  • Vision / Dream
    • STAKEHOLDERS
    • Visionary: has the dream
    • Shareholders: finance the dream
    • Employees: create the dream
    • Customers: buy the dream
    Strategies Balanced Scorecard Key Requirements Differentiators Big Gaps Strategic change plans and projects Dashboard Critical few metrics that must be the best in class Metrics that must be competitive Broad outline of how we’ll make dreams reality Framework for measuring progress for each stakeholder What we’ll do to deploy our strategies Leading with Six Sigma from 10,000 feet Feedback Loop
  • In the beginning there is a dreamer Henry Ford's vision was to offer honest, reliable and affordable transportation for the masses. Bill had a vision as a teenager that every business and household should have a computer
  • Six Sigma “Visioning” Tools Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  We can’t create visionaries, but Lean Six Sigma can help inspire them Inspiration Determination Passion Background Other qualities
  • Looking Out for #1 Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  “ It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love, and never talk to them of our own necessities but of their advantages. ” Leading with L6S doesn’t fight human nature, it embraces it Adam Smith (1723-1790)
  • The Stakeholders
    • Six Sigma Tools to Link Stakeholder Interests
    • QFD / Matrix diagrams
    • Survey development and validation tools
    • Conflict resolution techniques
    There is a harmony of interests among stakeholders. Six Sigma helps identify it. Shareholders: finance the dream Employees: create the dream Customers: buy the dream
  • Linking Strategies to “Voices” Balanced Scorecard Shareholder perceived value Voice of shareholder Productivity strategy Revenue growth strategy Financial performance Voice of employee Employee perceived value Innovation Customer management processes Operations & logistics Regulatory compliance Employee competencies Technology Corp. Culture Internal process excellence Learning and growth Voice of customer Customer perceived value Customer value proposition Customer intimacy Operational excellence Product or service attributes Excel in one customer value proposition, maintain threshold levels for the other two Harmony of interests
  • Operationalizing Strategies It isn’t real until we know how we’ll measure it Cost per unit Asset utilization Revenue from new sources Profit per customer Price, time, quality, selection Service relationship Speedy service, functionality New product revenues Key customer variables Inventory delivery costs Audit results Skills gaps Research deployment time Employee feedback Shareholder perceived value Voice of shareholder Productivity strategy Revenue growth strategy Financial performance Voice of customer Voice of employee Customer perceived value Employee perceived value Customer value proposition Customer intimacy Operational excellence Product or service attributes Innovation Customer management processes Operations & logistics Regulatory compliance Employee competencies Technology Corp. Culture Internal process excellence Learning and growth
  • Dashboards Shareholder perceived value Voice of shareholder Productivity strategy Revenue growth strategy Financial performance Voice of customer Voice of employee Customer perceived value Employee perceived value Customer value proposition Customer intimacy Operational excellence Product or service attributes Innovation Customer management processes Operations & logistics Regulatory compliance Employee competencies Technology Corp. Culture Internal process excellence Learning and growth Asset utilization Profit per customer Price, time, quality, selection Speedy service, functionality Key customer variables Inventory delivery costs Audit results Skills gaps Employee feedback Key requirements Revenue from new sources Service relationship New product revenues Research deployment time Differentiators Cost per unit Requirement gaps Dashboard
  • Focus on Critical Few Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Shareholder perceived value Voice of shareholder Revenue growth strategy Financial performance Voice of customer Voice of employee Customer perceived value Employee perceived value Customer value proposition Customer intimacy Innovation Technology Internal process excellence Learning and growth Revenue from new sources Service relationship New product revenues Research deployment time
  • Operations Strategy Deployment Matrix From Dashboard metrics to departmental action plans
  • Project Strategy Deployment Matrix From departmental action plans to 6  projects DMAIC, DFSS or other project frameworks ? ?
  • Leading with Six Sigma Y What we’re solving for X 1 X 2 X n . . . Drivers (Root causes) Use results to update our models of reality Learning Leadership “transfer function” f(x)
  • Summary
    • Leading with Six Sigma shows how you will…
      • Identify and operationally define stakeholder voices
      • Develop and use models to guide management action
      • Focus on the critical few metrics and strategies
      • Rigorously link activities and Six Sigma projects to strategies
      • Use data to assess the validity of the strategy
    Copyright © 2009 by Thomas Pyzdek Leading with Lean 6 
  • Why is This New?
    • It provides an end–to–end solution to business planning
    • It adds a new tool, the Strategy Deployment Map to show a picture of the leadership transfer function
    • It combines the best elements of strategic planning, Balanced Scorecards, Lean and Six Sigma into a comprehensive methodology
    Copyright © 2009 by Thomas Pyzdek Leading with Lean 6 
  • Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Organize for process excellence Determine key outcomes, metrics Identify processes, process owners, drivers Plan for improvement Improve A Framework for Achieving Leadership Excellence
    • Establish PELT membership
    • Conduct PELT workshop
    • Schedule PELT meetings
    • Initiate dashboard reviews
    • Initiate project reviews
    • List organizational goals, strategies
    • Use list to determine differentiators for your business; plot over time; benchmark
    • Use list to determine key requirements for your business; plot over time; identify gaps
    • Create scorecard, dashboard
    • Identify core and enabling processes
    • Assign owners
    • Link processes to scorecard, dashboard
    • Map to actionable level (L maps)
    • COPIS maps
    • Determine CTQ metrics
    • Identify priority projects, sponsors
    • Create problem statements, business cases, draft charters
    • Select team leaders
    • Kick off projects
    • Establish project review schedule
    • Establish dashboard review schedule
    • Establish strategy review schedule
    The Quality 2.0 Leadership Process
    • Generate CTQ improvement plans
    • Validate plans (map to dashboard metrics)
    • Get shared vision
    • Identify just-do-it, Six Sigma improvement projects
  • Lean Six Sigma Project Process (L1) Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Define the Project Validate Measurement System, Get Baseline ID Key Levers (Xs) that Drive Outcomes Determine Improvement Strategy Make Permanent Improvements A Framework for Achieving Process Excellence
    • Recognize an opportunity
    • Get to “Goldilocks” size
    • Develop the project plan
    • Map the high level process
    • Obtain VOC and identify drivers (CTQs).
    • Understand principles of variation
    • Analyze measurement system
    • Establish process baseline
    • Stratify data
    • Set goals for outputs.
    • Focus problem statement
    • Develop theories of cause and effect
    • Test theories with data
    • Model cause and effect
    • Identify improvements
    • Analyze costs and benefits.
    • Set improvement CTx goals
    • Develop improvement plans
    • Assess improvement plan risks
    • Develop contingency plans.
    • Develop new SOPs
    • Implement full scale changes
    • Transfer ownership
    • Follow up to validate benefits.
  • Change Execution Excellence Copyright © 2009 by Thomas Pyzdek Leading with Lean 6 
    • Leaders will monitor the status of these activities.
    • Dashboards will display the impact of these activities.
    • Strategies will be updated as required.
    Q2 High Level Change Plans Lean Six Sigma Just-Do Value Stream: Throughput Pull: 1 piece flow Flexible: Flextimers Green Belts: Trainers Black Belts: Training & Support Departments Master Black Belts: Select VOC projects Master Black Belts: Manage project portfolios Work-outs Work simplification Infrastructure Improve phase projects Improve Forever Culture: PE in DNA. Orientation
  • Q&A Questions? Visit www.SixSigmaTraining.org
  • Example Going from VOC to Action in a Technical Support Call Center
  • Customer Loyalty Example Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Tech support survey results 12/4/08 - 2/4/09 q2 Tech Support Rep knew what he was talking about q3 Tech Support Rep was professional q4 Tech Support Rep seemed well trained q5 Phone # easy to find q6 Hold time not too long q7 Reached correct Tech Support Rep the 1st time q8 Calls to resolve issue q9 Tech Support Rep rushed me q10 Tech Support Rep spoke clearly q11 Didn't have to repeat myself q12 Frequency of upgrades about right q13 Cost of upgrades about right q14 Easy to make transitions q15 Few bugs q16 Software easy to use Y q17 Will purchase COMPANY support again if needed Y q18 Will purchase COMPANY software again Y q19 Will recommend COMPANY to others Sample size = 1295 These are potential CTQs These are what leaders are solving for
  • Proposed Loyalty Model Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Y metrics are expressions of a single “loyalty” factor X metrics operationalize a multi-dimensional measurement model
  • Data Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Regression Weights: Estimate S.E. C.R. Label ------------------- -------- ------- ------- ------- Loyalty <----------- Professionalism 0.269 0.117 2.287 Loyalty <---------------------- Easy 0.201 0.099 2.041 Loyalty <----------------- Efficient 0.111 0.116 0.958 Loyalty <------------------- Product 0.504 0.135 3.743 q11 <--------------------- Efficient 1.469 0.371 3.964 q10 <--------------------- Efficient 0.883 0.232 3.808 q9 <---------------------- Efficient 0.521 0.189 2.758 q4 <---------------- Professionalism 1.619 0.392 4.129 q3 <---------------- Professionalism 1.126 0.279 4.034 q2 <---------------- Professionalism 1.624 0.395 4.110 q7 <--------------------------- Easy 1.709 0.311 5.496 q6 <--------------------------- Easy 1.000 {scale reference variable} q5 <--------------------------- Easy 0.825 0.204 4.048 q14 <----------------------- Product 1.482 0.221 6.696 q13 <----------------------- Product 1.000 q12 <----------------------- Product 1.000 q17 <----------------------- Loyalty 1.000 q18 <----------------------- Loyalty 1.110 0.112 9.886 q15 <----------------------- Product 1.597 0.230 6.957 q16 <----------------------- Product 1.060 0.180 5.900 q8 <--------------------------- Easy -1.252 0.242 -5.175 q19 <----------------------- Loyalty 1.640 0.140 11.726 Statistical analysis of our survey results Customers don’t seem to care about efficiency Hypothetical customer loyalty model
  • Using the Model Copyright © 2009 by Thomas Pyzdek Leading with Lean 6  Loyalty Professionalism Easy Product q12 qx q5 qx q2 qx
    • Q2: Tech Support Rep knew what he was talking about.
      • Average: 3.95
      • Sigma: 0.5
      • Goal: 4.2 (+0.5 sigma)
    • CTQs
      • Training: Classroom, OJT
      • Selection of reps.
      • Experience