Creating Lean Six Sigma organizations

CREATING LEAN SIX SIGMA
ORGANIZATIONS
DR. GAIL FERREIRA, DM, PMP, CSPO, LEAN
SIX SIGMA BLACK BELT
Copyright ©2014 – Dr. Gail Ferreira – All rights reserved

Introduction
Dr. Gail Ferreira is an Agilist who
incorporates a variety of lean
practices into organizations using
Lean Six Sigma Black Belt tools
and techniques.

Teaching:
Agile Management
Doctoral Research Methods
Multivariate Research
Systems Analysis
Doctoral Chair / Committee
University Reviewer

Learning Objectives
 Discuss: Five Main Principles of Lean Thinking
 Overview of Lean Six Sigma
 Discuss: Lean Six Sigma tools and practices
 Hoshin Kanri
 Kaizen events
 Discuss: How these practices can be used in
a variety of industries.

Five Main Principles of Lean Thinking
 Value
 The Value Stream
 Flow
 Pull
 Perfection

Value
 Value of the product from the eyes of the
customer.
 Also known as the “Voice of the Customer” VOC.
 Lean thinking always looks at the customers point
of view.

The Value Stream
 In the value stream (process flow), one can easily
determine which areas to add or subtract first by
deciding which items are adding value to the
customer and which are not.

Flow
 The next key principle in lean manufacturing is to
ensure that all of the remaining steps in the process
flow together.
 This principle can be interpreted as a
recommendation to arrange the process steps in such
a way that makes the most sense.
 The key to flow is to focus on the product and not on
the methods for making the product.

Pull
 Do not make a product until a customer orders it.
 The customer pulls the product from the
manufacturer when they want it.

Perfection
 The process is never entirely complete and that is
essential that companies continuously work to
improve processes.
 Because customer wants and needs are
continuously changing, processes, can never be
perfect, and companies must continuously improve
the process so it is as perfect as possible.

Quiz
 What are the five principles of lean thinking?

Overview of Lean Six Sigma
 Lean manufacturing originated with the Toyota
Production System - developed by Taiichi Ohno in the
early 1960’s to reduce waste (muda) at Toyota
 Goal was to reduce inventory and improve the quality
and cost of Toyota automobiles
 Lean practices analyze all aspects of manufacturing
cycle and find areas for improvement to reduce waste.
 Six Sigma reduces variation of processes.

Key Tenets of Six Sigma
 Define
 Measure
 Analyze
 Improve
 Control

Key Tenets of Six Sigma
The DMAIC Improvement Process
 DMAIC refers to a data-driven improvement cycle used for
improving, optimizing and stabilizing business processes and
designs.
 DMAIC is not exclusive to Six Sigma and can be used as the
framework for other improvement applications. In many cases a
much simplified DMAIC approach is more productive that a
complex long term six sigma project, especially if it going to be
used as part of a business leadership plan.

Define
 Write down what you currently know. Clarify facts, set objectives
and form the project team. Define the following:
– A problem statement
- The customer(s) involved
- Critical to Quality, what are the critical process outputs?
- The target process and other related business processes
- Project targets
- Project boundaries
 A project charter or a project plan is often created and agreed
during the Define step.

Measure
 This is the data collection step. The team decides on what should
be measured and how to measure it. This forms a data collection
plan. It is usual for teams to invest a lot of effort into assessing the
suitability of the proposed measurement systems. Good data is
critical to the DMAIC process:
- Define the process critical (inputs & outputs)
- Define the measurement plan
- Test the measurement system
- Collect the data
 A measurement system is performed at this stage.

Analyze
 The data collected in the Measure step is analyzed to determine root
causes of defects. Within Six Sigma, often complex tools are used.
However, it is acceptable to use basic tools if these are appropriate:
- Identify gaps between current performance and goal performance
- Identify how the process inputs affect the process outputs
- List and prioritize potential opportunities to improve
- Identify sources of variation
 Data is analyzed to understand the location or distribution of the
data collected. Histograms and box plots are often used to do this.

Improve
 Identify creative solutions to fix and prevent process problems. Some projects
can utilize complex analysis tools like DOE (Design of Experiments), but try to
focus on obvious solutions if these are apparent:
- Create innovative solutions
- Focus on the simplest and easiest solutions
- Test solutions using Failure Mode Effects Analysis (FMEA)
- Create a detailed implementation plan
- Deploy improvements
 Fishbone type Diagrams can be used throughout all DMAIC stages. Within
the Improve step, we can use these to help brainstorm potential solutions.

Control
 Monitor the improvements to ensure continued success.
 Create a control plan.
 Update documents, business process and training records as
required.
Control charts can be useful during the control stage.

Lean Six Sigma Application for
Software Products and Services
 Lean Six Sigma can achieve combined benefits
of cycle time reduction and defects reduction.
 Six Sigma focuses on defect reduction by
reducing process variations.
 Identifying vision (VOC), problems, defining
goals, and conducting root cause analysis.

Lean Six Sigma Application for
Software Products and Services
 Overproduction in manufacturing = development of
additional software features.
 Wait in assembly line production = waiting for code
integration from multiple teams.
 Non value items in software deployment could be approval
delays, rework efforts, and over engineering of the software
product.
 Muda (waste) in software development: Misunderstanding of
software product requirements from the customer can result in
software defects.

Case Study: Global Physician Polling
Application
 Define
 Draft a project charter
 Identify the voice of the customer
 Translate voice of the customer into measurable
components

Application
 Measure
 Create a data collection plan
 Construct a current state value stream map
 Construct a future state value stream map
 Develop a detailed process map

Application
 Analyze
 Construct data and process analysis
 Determine the root cause of non value added steps
 Determine the significant root causes

Application
 Improve
 Eliminate the significant root causes
 Develop a pull system

Application
 Control
 Develop the control plan
 Implement the control plan

Application

Application – Value Stream Map

Case Study: Global Physician Billing
System

Defining Value and Vision- Hoshin Kanri

Hoshin Kanri

Hoshin Kanri
Improve Margin by 5% points by 4Q: Increase of $250 k

Hoshin Kanri
Improve Margin by 5% points by 4Q, Increase of $250k.

Strategic X Matrix Example

Kaizen
 Companies move closer to
perfection by continuous
improvement, also known as
Kaizen.
 Kaizen is the Japanese idea that
great improvement comes from a
series of small incremental gains.

Kaizen - Keys to Success
 Need commitment from leadership (Chief Executives)
 Lean champion and a governing committee
 Need Lean SME to lead Kaizen events

Types of Kaizen
 Kaizen events (can last for weeks)
 Kaizen Blitz (short focused workshop)

Kaizen Blitz – Process to Improve

Conclusion
 Lean Six Sigma Tools can be used to
optimize software lifecycles.
 Creating vision and strategy by using Hoshin
Kanri can be used to start a Kaizen event.
 Kaizen events can be modified to provide
short bursts of productivity by evaluating
current states of value stream maps.

Creating Lean Six Sigma organizations

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