Innovation and Lean Six Sigma - Performance Institute


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Presentation given on 4 Dec 2009 at The Performance Institute in Washington, D.C. Subject:
Innovation and Six Sigma: Can the two co-exist?
Explores necessary traits of a successful implementation of Six Sigma within a culture that also has high emphasis on innovation.

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Innovation and Lean Six Sigma - Performance Institute

  1. 1. Innovation & Lean Six Sigma<br /> NewgrangeManagementLLC<br />ProgramChangeServiceDelivery<br />℠<br />Can they co-exist?<br />Amanda M. Warfield, PMP<br />Fri 4 Dec 2009, Arlington VA<br />The PerformanceInstitute’s “Lean Six Sigma for IT”<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  2. 2. Process Improvement is always necessary. . .<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  3. 3. Six Sigma vs. Lean – what’s thedifference??<br />“Traditional” Six Sigma<br />Lean Six Sigma<br />Y = f(X) + å: All outcomes and results (the Y) are determined by inputs (the Xs) with some degree of uncertainty (å).<br />Change or improve outputs (Y) by changing your inputs (X).<br />Variation is everywhere. Variation is bad. Find it and get rid of it.<br />Measurements and DATA DATA DATA! Let them be your guide.<br />Identify the few critical inputs to really affect your output.<br />Goals: <br />improve effectiveness and eliminate waste <br />produce increasing customer value and satisfaction. <br />The basic principles of Lean:<br />Focus on the customer.<br />Improve the value stream.<br />Maintain flow.<br />Pull through the system.<br />Strive for perfection.<br />Respect people.<br />Delight your customers with speed, quality, and effectiveness.<br />5S Methods are the cornerstone of all Lean tools.<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  4. 4. Some Common Definitions<br />A value-added activity needs to have the following standards:<br />It must transform the product or service.<br />The customer must be willing to “pay” for it.<br />It must be done correctly the first time.<br />5S method of the workplace – establish your ‘flow’<br />Sort: Get things organized! Dispose of all unnecessary items.<br />Straighten: Everything still standing needs a standard location, and needs to be easily accessed.<br />Scrub: Get things cleaned up! Neat and tidy is the order of the day. This could be your workplace, this could be your software program – this could be anything!<br />Systematize: You need a system to maintain order. This could end up being manual, or an actual system or product that does this work.<br />Standardize: You need discipline to continue implementation while also continuing to find ways to enhance/improve the process.<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  5. 5. Some Common Definitions<br />Speed does not mean crash your schedule…<br />Schedule: when something needs to be done<br />Speed: how fast you get something done within the schedule<br />Eliminate Waste<br />Use the 5S’s over and over again<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  6. 6. Innovation - what is it??<br />Innovation = CHANGE. CREATION.<br />Discipline in Innovation??<br />Innovation is a highly disciplined process when done the right way.<br />You still need data. Otherwise, what is the problem you are trying to solve?<br />Ideas and brainstorming are a starting point only.<br />What happens when your idea needs to become a real product or process?<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  7. 7. Types of Innovation<br />Pre-cycle Innovation:<br />Unknowns are plenty – very little in terms of inputs and outputs have been identified.<br />Usually one or multiple LARGE looming factors driving the activity. <br />Examples: <br />NYSE market behavior + CMBS = a wild ride…<br />Energy Sector + Customer Service + Homeland Security + Environment + Government Surplus = Smart Grid<br />Post-cycle Innovation:<br />Data drives the problem to be solved. There are less unknowns for end result.<br />Those areas that have been identified within normal process improvement cycle as potentials for change are the target. <br />Examples: <br />A new underwriting framework within a commercial bank.<br />A new software development process.<br />A new machine within a manufacturing line.<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  8. 8. A Tale of Two Disciplines<br />Six Sigma-dominated management culture: <br />Inwardly-focused continuous improvement<br />Usually post-cycle innovation<br />Processes, customer service, systems, operations, etc.<br />Still trying to find those few inputs (X) that will add up to positively affecting outputs (Y)<br />Smaller, incremental innovations<br />Lean is a great fit.<br />“Traditional” idea of innovation within the company culture:<br />More entrepreneurial in nature<br />Usually pre-cycle innovation<br />More focus on new markets, technologies, business models or products<br />Find BIG growth. Find NEW growth.<br />More unknowns. <br />DFSS is a logical starting point. Work your way into Lean.<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  9. 9. Innovation Process<br />Regardless of pre- or post-cycle innovation, the process is the same:<br />Identify target.<br />This may be broad strokes or already highly-focused.<br />Brainstorm.<br />Prototype.<br />Verify.<br />Implement.<br />The most important and most overlooked step.<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  10. 10. Innovation Tools – are they really all that different?<br />Six Sigma and Innovation philosophies compliment one another.<br />The tools are the same that you use today.<br />Some of the more recommended tools used in innovative Six Sigma efforts:<br />Ishikawa (Cause-and-Effect) Diagram and 5 Whys<br />Great for those pre-cycle innovation efforts where there are more unknowns.<br />Great for identifying some of the root causes of issues.<br />Can help uncover the process dynamics and the areas that can be addressed easily – these are innovation opportunities that can be explored.<br />Value Stream Mapping<br />Identify not only the non-value adding for removal, but the value-added steps that have potential for innovation to drive increased speed or customer service.<br />Takt Time<br />Identify the cycle times that require improvement, and these have automatic potential for innovation opportunities.<br />Poka Yoke (Mistake Proofing)<br />Commonly used in a ‘Control’ phase of a DMAIC cycle. Use it during Prototyping in an Innovation cycle for verification that things are on the right track.<br />In combination with Pareto analysis, this will help identify major issues plaguing as-is processes. These issues are a major innovation opportunity.<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  11. 11. Innovative Six Sigma Process<br />Pre-Cycle Innovation:<br />(Identify target, brainstorm, prototype, verify).<br />Implement.<br />Post-Cycle Innovation:<br />(Identify target, brainstorm, prototype, verify).<br />Implement.<br />Six Sigma (DFSS)<br />Six Sigma (DMAIC or Lean)<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  12. 12. What have the successful organizations learned?<br />You need to have BOTH pre- and post-cycle disciplines in order to truly excel. Not all innovations have come from things being cut and dry or clearly-defined.<br />Your company should be disciplined in both change management approaches and disciplines (Six Sigma and Innovation).<br />It is highly recommended that you master one approach at a time.(ex: Six Sigma first, Innovation second).<br />Successes must be communicated and celebrated. Individuals should be recognized for their input.<br />Intellectual property that results from innovation must be protected (patents, trademarks, copyrights, etc).<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  13. 13. What have the successful organizations learned?<br />Risks to be Mitigated:<br />You are highly likely to encounter hostility for the latter once the former (Six Sigma or Innovation are interchangeable here) has truly matured. <br />Set the seeds early in implementation of the first program that the latter is coming. <br />Manage expectations with regular communication.<br />Keeping innovation activity “separate” will allow for more ‘free-thinking’. <br />If this is done, it must be brought back into the Six Sigma “mainstream” for the Implementation piece of the puzzle.<br />If this is not done, innovation will need to focus more on post-cycle innovations that can fall within the Six Sigma framework.<br />Once you get to implementation, “regular” Six Sigma disciplines need to be followed through to completion.<br />Management structures at the top are recommended to be responsible for both “regular” process improvement and more ‘pre-cycle’ innovative approaches to ensure continuity.<br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />
  14. 14. Contact Information<br />Amanda M. Warfield, PMP<br />+1 (704) 579.1177<br /><br />™<br />Copyright © 2009 Newgrange Management. All Rights Reserved.<br />