Introducing Lean Six Sigma 2014...


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Lean Six Sigma ... A Viable Alternative

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Introducing Lean Six Sigma 2014...

  1. 1. Introducing Lean Six Sigma 1
  2. 2. “We don’t know what we don’t know. We can’t act on what we don’t know. We won’t know until we search. We won’t search for what we don’t question. We don’t question what we don’t measure. Hence, we just don’t know.” - Dr. Mikel Harry (Six Sigma Co- Founder) 2
  3. 3. ⁻ Every company must improve its operations in order to survive and be profitable in the current economic and hypercompetitive market. ⁻ This is critical to delivering a high quality product/service at the lowest cost possible. ⁻ Today many companies looking at how they can deliver agile operations needed to both improve their performance and also support continuous improvement. ⁻ But, delivering this “change environment” has proven to be difficult The Challenge: 3
  4. 4. Product Cost, Pricing and Profitability Pricing is largely determined by the Customer, so to remain profitable, organizations NEED TO REDUCE OR CONTROL COST 4
  5. 5. Are You Confident in Your Cost- Cutting Scheme? For many companies, the challenge is to continually find ways to rebalance capacity to match demand and eliminate unnecessary operating cost in order to maintain or increase profitability. In trying to achieve this, some organizations have undertaken severe measures such as:  Undercut services.  Across-the-board layoffs/ Down-sizing/ Rationalization.  Outsourcing.  Eliminate some features in our Products/Services  Employ sharp practices/cut corners.  Consolidation.  Closing operations 5
  6. 6. Traditional cost-cutting has its challenges … Much of the cost-cutting tactics have come in the form of poorly planned, ad hoc measures. Without careful analysis and understanding of the drivers of cost, the outcomes can be hit and miss. Some may do more harm than good by eroding customer loyalty, market share and brand perception through lower service levels, inattention to customer priorities and poor execution. These mistakes might not show up as disasters, as some ad hoc cost-cutting measures yield some small savings. Yet organizations often miss 10 to 50 times the potential savings. By succumbing to traditional cost-cutting tactics or copying the latest improvement fad, these tactics typically fail to build in flexibility and speed, which are critical capabilities in today’s dynamic markets. 6
  7. 7. There is Need for Change An objective review of our performance over the years will show us there are things we would change given the chance(if we just knew exactly how): - Things that would make life better for our Customers and ourselves; - Things that would make us easy to do business with (competitive advantage) High-performing companies excel in part because they execute day-to- day business processes better than their competitors. Creating and defending operational advantage is both more important and more difficult to achieve than ever. It requires mastering repetitive processes that deliver value to customers, the organization itself and shareholders. 7
  8. 8. Lean Six Sigma: A Viable Strategy! Lean Six Sigma: the most effective methodology for improving business and organizational performance. It gives you the balanced approach to improve profitability and service quality! 8
  9. 9. It Is A Robust Combination - Lean is a way to do more with less while providing Customers with exactly what they want without accumulating unnecessary inventory - Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process. It empowers us to have less than 4 defects in every 1,000,000 Opportunities! With Lean Six Sigma, we are able to eliminate Waste (Cost of Poor Quality) embedded in our processes which makes up between 10% and 50% of our Operational costs. 9
  10. 10. With Simple and Compelling Objectives Benefits are: 1. High Quality Customer Focused Products/ Services 2. Superior & Consistent Customer Experience 3. Reduced Operating Costs 4. Increased Revenue and Market Share 5. Empowered, Motivated & Highly Proactive Staff 6. Improved Organization Goodwill & Reputation Lean Six Sigma will help satisfy the explicit and implicit customer needs with the lowest consumption of resources by continuously eliminating: Waste, Variability and Inflexibility! 10
  11. 11. What is Lean? Lean is employing minimum resources to realize maximum output and provide customers with exactly what they want (Value) without accumulating unnecessary inventory It is simply doing More with Less It is a systematic approach for identifying and eliminating waste (Muda) in a system through continuous improvement 11
  12. 12. Lean Philosophy The objective of Lean is to incorporate less effort, less inventory, less time to develop products, and less space in order to become highly responsive to actual customer demand and to produce high quality product/ service in the most timely, efficient and economical manner possible Lean focusses on Value which is defined by the ultimate customer (from Customer view). It is more than just Cost! 12
  13. 13. Path To Lean 13
  14. 14. SOME OF OUR ACTIVITIES ARE WASTE! Waste Value Enabling/ Incidental Activity Value Added Activity Split of our daily work Waste Consume resources but creates no value for the customer Could be stopped and it would be invisible to the customer Value Added Activity Transforms or shapes material or information Customer wants it Done right the first time Value Enabling Activity No value created but required by current technology No value created but required by current thinking No value created but required by process limitations No value created but required by current process 14
  15. 15. Lean and Wastes Reducing Waste Drives Profits Traditional Approach Cost + Margin = Price Oper. Cost Margin Oper. CostOper. Cost Margin Margin Lean Approach Price - Cost = Margin Oper. Cost Margin Oper. Cost Margin Oper. Cost Our Past Our Future CosttoCustomer Margin 15
  16. 16. 8 Classic Types of Waste • Defects • Overproduction • Waiting • Non utilized talent • Transportation • Inventory • Motion • Excess processing 16
  17. 17. Defects • All processing required in creating a defect and the additional work required to correct a defect or error. • Defective or scrap materials • Cost of inspecting defects • Responding to customer complaints • Rework or re-inspection of questionable materials 17
  18. 18. Overproduction • Supplying the process with more than is needed to meet order requirements, sooner and faster than it is needed, causes almost all other types of waste • This is the worst waste of all, because it helps cause all the others 18
  19. 19. Waiting • The excess time waiting for anything (people, signatures, information, etc.) • Waiting for decisions, instructions, approval, information, parts, maintenance, … • Operator waiting for machines to run or cycle or Machine waiting for operator 19
  20. 20. Non Utilized Skills/Talents • PEOPLE’S SKILLS waste is a result of not placing people where they can (and will) use their knowledge, skills, and abilities to their fullest in providing value-added work and services. • Employees are seen as a source of labor only, not seen as true process experts • People are told what to do, and asked not to think • Employees are not involved in finding solutions, opportunities to improve our process are missed 20
  21. 21. Transportation • Excess movement of materials, documents, information, etc. within an organization • This movement adds no value to the customer/ end user and is often used to get the extra inventory out of the way • Double or triple handling, moving in and out of storage areas and warehouses 21
  22. 22. Inventory This is excess piles of materials, parts, paperwork, computer files, supplies, etc. • Requires people, equipment and space to count, transport, store and maintain it • If we do not get orders the material will become obsolete, and be thrown away • Inventory is often used to help hide other wastes 22
  23. 23. Motion • Movement of people, material, products, and/or electronic exchanges that does not add value • Walking without working (away from workstation) • Searching for Information, Materials or tools, • Reaching, bending or unnecessary motion due to poor housekeeping or workplace layout • Company Process is not designed with employees in mind 23
  24. 24. Excess or Over Processing • Putting more effort into the work than what is required by internal or external customer. • Doing more than is necessary to produce an effectively functioning product • Extra setup steps, over-specification of the process, extra processing steps 24
  25. 25. Sources of Waste  Work Area Layout  Incapable/ Cumbersome processes  Poor maintenance  Poor work methods  Lack of training  Lack of adherence  Poor supervisory skills  Inconsistent performance measures  Ineffective scheduling  Excessive controls  No back-up/cross-training  Unbalanced workload  No decision rules  No visual control  Lack of workplace organization  Supplier quality All of the Lean tools are designed to Identify amd Remove Waste! 25
  26. 26. Six Sigma Philosophy Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process. It is the single most effective problem solving methodology for improving business and organizational performance. 26
  27. 27. Let us Understand “X” in this journey to Improve on “Y”  Y  Dependent  Output  Effect  Symptom  Monitor  X1 . . . XN  Independent  Input-Process  Cause  Problem  Control Six Sigma focusses on the X (causes) to improve or correct the behavior of the Y( problem ) f (X)Y= The focus of Six Sigma
  28. 28. Six Sigma Employs DMAIC METHODOLOGY DEFINE – describe the problem quantifiably and the underlying process to determine how performance will be measured MEASURE – use measures or metrics to understand performance and the improvement opportunity ANALYZE – identify the true root cause(s) of the underlying problem IMPROVE – identify and test the best improvements that address the root causes CONTROL – identify sustainment strategies that ensure process performance maintains the improved state 28
  29. 29. Problem Solving Steps: DMAIC METHODOLOGY Let us draw an analogy of you reporting sick to the doctor and understand what DMAIC is all about •The doctor says what brings you here , understands “what is happening to you” •Looks for symptoms and asks to produce last prescriptions if any •The doctor might use instruments like Stethoscope, thermometer etc. to measure pulse rate, temperature etc. •Takes down notes •May prescribe more tests like X-ray, Ultra Sound, Cat Scan to understand how various processes inside the body are behaving…now he knows root cause..!! •Prescribes medicines for betterment or improvement •Asks the patient to maintain a chart of Body output measure…eg. Temperature, to reflect variation over a period of time. •Asks the patient to revisit after one week •May provide long term medication during revisit. Define Measure Analyze Improve Control 29
  30. 30. Is “Six Sigma” Overkill? • 20,000 lost articles of mail per hour • 15 minutes of unsafe drinking water each day • 5,000 incorrect surgical operations per week • 2 short or long landings at most major airports each day • 11 hours of no electricity per month • 7 lost articles of mail per hour • 1 minute of unsafe drinking water per 7 months • 1.7 incorrect surgical operations per week • 1 short or long landing every 5 years • 1 hour of no electricity every 34 years 99.99966% (6s)99% (≈3.8s) 30
  31. 31. Lean and Six Sigma Differentiation Lean Six Sigma Primary Interest Remove Waste Reduce Variation The way they look at the world Flow/Waste Problem/Defect Primary Effects Reduce waste and smooth flow Reduce variation to reduce defects Secondary Effects Less inventory, fast throughput, better performance, more uniform output, less variation, improved quality Improved quality, better performance, reduced waste, less inventory, faster throughput, uniform process output Format Typically Kaizen event format. Concentrated resources in short timeframe Project format. Resources spread over months Scope and Scale Quick and initial gains, ongoing improvements. Suitable for everyone and every part of the business Complex problems that require in-depth analysis; Cross- functional. Specialists 31
  32. 32. Lean Six Sigma Process Improvement identifying and removing the causes of defects (errors) and variation Identifying and removing sources of waste within the process Focusing on outputs that are critical to customers acceltage consulting | 08022220341 , 08033204608
  33. 33. Lean and Six Sigma Tools for DMAIC METHODOLOGY Phase Define SixSigma&leanTools VOC , Kano , COPQ, Problem Statement, Develop Charter, Process Map, Takt Demand, Production Plan, Output Charter SIPOC Process Map acceltage consulting | 08022220341 , 08033204608
  34. 34. Lean and Six Sigma Tools for DMAIC METHODOLOGY Phase Measure SixSigma&leanTools CTQ’s , Source Data Validation, Segmentation and stratification Data Collection Basic Statistics Cause and Effect, Value Stream, Capability analysis, Time Study, Output Data Collection on identified factors Process Performance identified major problem area acceltage consulting | 08022220341 , 08033204608
  35. 35. Lean and Six Sigma Tools for DMAIC METHODOLOGY Phase Analyze SixSigma&leanTools Pareto, Fishbone, Cause & Effect Matrix, NGT, 5 why, Control Impact Matrix, Hypothesis Testing, ANOVA, FMEA, Multivari Analysis, DOE, Process cycle, Setup Reduction, TOC Problem Tree Output Identified probable causes , Root cause, Vital and high impacting few causes acceltage consulting | 08022220341 , 08033204608
  36. 36. Lean and Six Sigma Tools for DMAIC METHODOLOGY Phase Improve SixSigma&leanTools Brainstorming, Optimization, Pilot, Automation, FMEA, ANOVA DOE, 5S Line Balancing Kanban Pull, Single Piece Flow, SMED Time & Motion Study, Kaizen Output Best Solution Systemic changes acceltage consulting | 08022220341 , 08033204608
  37. 37. Lean and Six Sigma Tools for DMAIC METHODOLOGY Phase Control SixSigma&leanTools Dashboard, SPC Process Change/Work Instructions/ Procedure Change, Control Plan Process Audit, Visual Control Standard Work, Poka yoke, 5 S, TPM Takt Board, Kaizen Blitz Output Sustained Results/ Improvement acceltage consulting | 08022220341 , 08033204608
  38. 38. Voice of the Customer Voice of the Customer (VOC) 38 A term used in business process to describe the in- depth process of capturing a customer’s expectations, preferences, and aversions. ORGANIZATIONAL BENEFITS:  Develops specific and measurable needs of the customer  Provides a common language for the improvement team  Provides input for new and innovative products and/or services
  39. 39. CustomerWhat does my customer need from our process? How is our process performance from the customer perspective? How does my customer measure my process? How would my customer like for our process to perform? What can we do better? How does my customer view my process? Gather Customer Need: Voice of the Customer (VOC) 39
  40. 40. Insights into Customer Expectations Solve my problem completely Don’t waste my time Provide exactly what I want Deliver value where I want it Supply value when I want it Reduce the number of decisions I must to solve my problems 40 acceltage consulting | 08022220341 , 08033204608
  41. 41. Kano Model There are 3 types of needs of a customer • Basic Needs: Unspoken, taken For granted, Basic; Spoken If Not Met • Performance Needs : Measurable Range of Fulfillment • Excitement Needs : Unspoken Unexpected Unknown 41
  42. 42. Basic Requirements Excitement Requirements Performance Requirements Reversal Characteristics Satisfaction Dissatisfaction SufficiencyInsufficiency 42
  43. 43. • There are tremendous improvement and savings available to companies in their operations if they will mobilize their resources toward reduction of waste and improvement of quality • Six Sigma requires Leadership from the Executive Staff • The roadmap is clear and the methods for improvement are well defined • Development of an implementation and training plan is the next step More on Lean Six Sigma … 43
  44. 44. Lean Six Sigma May Not Deliver Expected Results If… 1. Results are not aggregated; teams work in silos 2. No Senior Management Commitment; efforts not tied to corporate goals 3. We Focus on the knowledge and not the application in the Right Way and Order 4. Lean Six Sigma efforts are applied on areas that will not make a difference on the Organizational Bottom Line. 5. We do not deploy the right resources and create the deliberately enabling environment for success 44
  45. 45. Six Sigma Certifications  Yellow Belt  Green Belt  Black Belt  Master Black Belt Certification Bodies  American Society for Quality (ASQ)  International Association for Six Sigma Certifications (IASSC) 45
  46. 46. How May We Help You? acceltage consulting offers Customized Lean Six Sigma Training and Solutions for Organizations and Their Business Processes. We can help your Business Maximize Value, Minimize Mistakes, Reduce Cost, Eliminate Waste, Do More With Less and Provide Customers With Exactly What They Want! 46
  47. 47. About Our Lean Six Sigma Training COURSE AUDIENCE DESCRIPTION Champions Training Senior Management/ Executives who will support projects 2 Days (Lean Six Sigma Appreciation and Projects Identification/Selection) White Belt Training All Staff 2 Days (Lean Six Sigma Appreciation Class) Yellow Belt Training Process Owners/ Officers 3 Days (Participants will carry out Kaizen improvement projects on their functions) Green Belt Training Process Improvement Team/ Change Agents 4 -5 Days (Participants will have a Lean Six Sigma Project to work on with identified Champion) Black Belt Training Six Sigma Team Leads/ Change Managers 2 Weeks (Participants will have a Lean Six Sigma Project to work on with identified Champion) All Courses are customized and facilitated in house at clients or acceltage facility 47
  48. 48. About Our Lean Six Sigma Solutions To Deliver Sustainable Results, We will focus on three areas: 1. Operating System: This involves the Configuration and Optimization of the Organization’s physical assets and resources to create value and minimize losses 2. Employee Mind-set & Behaviours: We understand that your employees are your greatest assets in the successful transformation of the Organization. To ensure that staff are aligned to our collective goals we will work on developing capabilities, fostering understanding and commitment, ensuring role modelling and aligning systems & structures. 3. Management Infrastructure: We will work on your structures, processes and systems to manage and optimise human and organisational resources in achieving our collective goals (Enhanced Performance Management System, KRA, Dashboards, Quality Control e.t.c.) 48
  49. 49. Company Wide Lean Six Sigma Implementation; Our Approach: The Process Improvement Team: Critical to the success of the Lean Six Sigma implementation in our organization is involvement of process participants from strategic units of the company to form the Process Improvement Team. This has proven to be the best practice in all Successful Six Sigma Implementation. These Employee will undergo the Lean Six Sigma Green Belt Program 49
  50. 50. Our Approach (Contd.): 1. Diagnostic Phase (Define/Measure/Analyze): Identify and Determine Requirements and Expectations from All Relevant Stakeholders Perform Value Stream Mapping on the Strategic Units of the Company Identify Projects and Select the Ones with the Highest Impacts Conduct VOC, Determine CTQs/ COPQs, Sigma Level/ Process Capability Map Processes (MIFA), Determine VAs, VEs, NVAs, SIPOC, Time & Motion Collate , Validate and Segment Data Analyze and Determine Root Causes 50
  51. 51. Our Approach (Contd.): 2. Design Phase (Improve): Conduct Kaizen/ Brain Storm for all Possible Solutions Apply the Lean Six Sigma Tools to Determine Ideal Solutions Examine Workability of Solutions & Determine Alternatives Envision The Ideal Process/ “Should Be” Define Organizational Model That Would Align To proposed Improvement Determine Technology Requirements/ Platforms Assess Impact on the Business, Customers and Stakeholders Prepare Justifications and Secure Management Approval Establish Benchmarks and Define Success Metrics 51
  52. 52. 3. Deployment Phase (Improve): Complete Detailed Design of Process and Organization Communicate New Solutions to All Stakeholders Develop and Implement Change Management Plan Develop a Phased Implementation(Pilots) Implement Quick Wins Adjust Process Changes and Apply Kaizen Develop a Training Plan and Train All Stakeholders on New Processes and Systems Measure Progress and Communicate Results Our Approach (Contd.): 52
  53. 53. Our Approach (Contd.): 4. Control Phase (Control): Continued monitoring and assessment of process changes Apply Lean Six Sigma Tools for Control (SPC, Kaizen, PDCA e.t.c) Redeployment and other value securing initiatives Training and Capability building for all staff Measure Progress & Deliver Impressive Results Rollout Lean Six Sigma on All Identified Areas of the Strategic pillars Enhanced Performance Management System Reward System to Reinforce Process Changes 53
  54. 54. Our Clients 54
  55. 55. Wouldn’t You Rather Talk to Us, Before Your Competitors Do? For detailed Lean Six Sigma training and Consulting proposal please contact: abiodun adetula CSSBB, PMP, CQPA T: 08033204608, 08022220341 E: Twitter: @acceltage BB Pin: 25B3FBEA 55