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Ina Gjikondi & Sheryl Vogt: Lean Six Sigma & the Balanced Scorecard


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2015 Strategy Execution Summit Presentation - Ina Gjikondi & Sheryl Vogt: Lean Six Sigma & the Balanced Scorecard

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Ina Gjikondi & Sheryl Vogt: Lean Six Sigma & the Balanced Scorecard

  1. 1. Ina Gjikondi, Director, Executive Education & Coaching Sheryl Vogt, Adjunct Faculty & Master Black Belt Lean Six Sigma & the Balanced Scorecard
  2. 2. THE PRESENTERS Sheryl Vogt, Master Black Belt Ina Gjikondi, Executive Education Director
  3. 3.  About the Center & Our Program Offerings  Our Approach to Lean Six Sigma in the Government  LSS contribution for the BSC  A few examples of our work  Identifying projects in your organization  Questions AGENDA
  4. 4.  Part of the College of Professional Studies  Our Mission: The Center for Excellence in Public Leadership develops public leaders who make a positive difference in their organizations and the lives of people they serve.”. The Center partners with the Balance Scorecard Institute to offer certification programs. THE GWU-CEPL:
  5. 5.  Founded in 1997  Celebrated 15 years in 2012  Evolutionary Development • Municipal Leadership Development Programs i. Program for Excellence in Municipal Management (PEMM) - 1999 ii. Regional Executive Development Program (REDP) – 2000 • Federal Executive Development Programs – 2000 • Agency-Centered Leadership Development Programs – 2003 ABOUT THE CENTER
  6. 6. • Agency-Centered Leadership Development Programs i. Internal Revenue Service ii. Food and Drug Administration iii. National Institutes of Health iv. Defense Information Systems Agency v. U.S. Department of Agriculture vi. U.S. Customs and Border Protection • Incorporated Lean Six Sigma Green Belt Training Certification in the CPM Program(Cohort 22) in partnership with Beauchamp Consulting in 2010 • Master of Professional Studies in Public Leadership with a Specialization in Multi-Sector Management – 2012 • Graduate Certificate Program in Organizational Performance Improvement – 2013 • Lean Six Sigma Certification-2013
  7. 7. • Lean Six Sigma Consulting (Program Design, Delivery and Culture Change Integration) • Lean Six Sigma Champion Training Certification • Lean Six Sigma Green Belt Certification • Lean Six Sigma Black Belt Certification NOW THE CENTER OFFERS:
  9. 9. • A Vision & Philosophy – Processes with no waste, empowered employees who know what to do, a continuous improvement culture, focus on the customer, lean principles in action • A Program – The method and strategy used to begin moving the organization toward the vision • A Set of Tools – The actual tools and methods applied to specific projects within the organization What is Lean Six Sigma?
  10. 10. • W Edwards Deming PhD • American Mathematical Physicist & Statistician sent to Japan after WWII to study and assess post-war problems (1946 & 47) • Asked by the Japanese to help train engineers in statistical methods in quality (1950s) • Begins working with US companies on Quality (1980s) • Manufacturers Adapt Principles • Motorola coins the phrase “six sigma” to define close to zero defects by variation reduction(mid 1980’s) • Toyota continues their drive for efficiency and quality through “TPS” and waste elimination which gets branded as Lean in the late 1980’s. • Principles Embraced by Non-Manufacturing Organizations • Service • Healthcare • Government A Little History Japan adapts Statistical Quality Tools US asks “Why Can’t We?” Toyota Productio n System Motorola Focus on Quality Method evolve to become Lean Six Sigma
  11. 11. Another Application
  12. 12. • A perfectly efficient method of delivering customer value with no waste Lean Vision Lean Method A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement
  13. 13. • Only value adding steps and time • No scrap or rework – every output meets customer expectation while using minimum inputs • Balanced, continuous flow exactly to the pulse of customer demand What would the perfect flow of value look like?
  14. 14. Ideal state: Allow value we’re adding to flow without interruptions Value Customer Functional depts with inadequate resources, policies Batch processes Excessive inventory Unnecessary documents & approvals, waiting Inspections, defects, and rework Many obstacles to flow of value!
  15. 15. • Value Added • Any activity that increases the form or function of the product or service. It moves it closer to being what the customer wants. These are things people would agree that they want to see their tax dollars do. – Examples: Issuing a building permit, providing drinking water, filling potholes, patrolling neighborhoods. • Non-Value Added • Any activity that does not add form or function, doesn’t get their product or service closer to being delivered, or is maybe not even necessary. These are things the people wouldn’t agree their tax dollars should be used for. – Examples: Waiting for a plan review, answering water bill questions, looking for potholes, fixing police vehicle breakdown. Another way to think about value
  16. 16. How Do We Fix This? We attack the Non-Value Added Activities (Waste) Value Customer Functional depts with inadequate resources, policies Batch processes Excessive inventory Unnecessary documents & approvals, waiting Inspections, defects, and rework We chip away at the things that are blocking our flow of value
  17. 17. 8 Wastes in the Office Waste Definition and Examples Defects Work that contains errors or is lacking information and results in rework and delay Overproduction Producing a product, service, or information before the customer (internal & external) needs it Waiting Waiting for people, paper, machines, information, responses, approvals, signatures or supplies Not Fully Utilizing People Not utilizing a person's full mental, creative and physical abilities Transportation Moving materials and information from place to place. Using temporary locations. i.e. handoffs & approvals, poor office layout, server storage; email attachments Inventory Having more information or material on hand than the process needs right now. i.e. extra copies, extra supplies, extra files, etc. Motion Unnecessary work movements (searching, walking, mousing, arranging) that‘s not necessary for successful completion of the task or activity Excess Processing Providing or creating more than the customer wants. i.e. excessive & redundant reviews, sign offs, over checking, cc'ing the world on email "just in case", replying to "all"
  18. 18. • Predictable processes which use the minimum amount of resources and time to create products and services that meet customer expectations Six Sigma Vision Six Sigma Method Systematic approach to efficiently reducing defects and variation in characteristics that are important to the customer - DMAIC
  19. 19. 90807060504030 Number of Days Days to Resolve an Appeal Process After Before How does variation in executing the process feel for the customer? Unpredictability makes customers upset … They don’t know what to expect from you
  20. 20. Who is the better archer?         
  21. 21. • We get variation in outcome (Y) because one or more of the inputs (x) is changing • Most of the variation in our outcomes is likely coming from a few of all the potential sources or x’s • We can identify which ones are really causing most of the trouble • Once we have verified we know which x’s are the culprits, we can make changes to eliminate that source of variation How do We Apply Six Sigma? Focus on Reducing Variation
  22. 22. The Process Inputs Outputs Y = f(x,x,x,x) Yx’s How do We Apply Six Sigma?
  23. 23. We use the Power of Experience and Data Together Subjective Words “Theory” Objective Proof “Data” We’ll circle this loop over and over again
  24. 24. In Lean Six Sigma terms . . . Describe your “Y” in words Describe your “Y” with data Describe your x’s in words Describe your x’s with data Describe your ways to fix the x’s in words Describe your ways to fix the x’s with data Describe your Controls in words Describe your Controls with data Define Measure Analyze Improve Control D M A I C
  25. 25. Culture Changes As We Know More Fire Fighting Problem Solving Problem Prevention Crisis Management Know how to solve problems Design out problems No Understanding of Variation Know how to measure variation Knowledgeable of variation and capabilities No Control (Can’t maintain the gain) Know how to control & manage problems Products and processes in control, have math models of processes & products Rely on peoples’ judgment & experiences Have problem solving experts Have problem prevention and problem solving culture Few or no problem solving process, methods & tools Have problem solving process, methods and tools Have risk management process Customer tells us of problems Catch problems at backdoor Catch problems at source (within process) Don’t understand customer requirements Understand and meet customer requirements Anticipate customer needs, exceed expectations No trust relationship between customer and supplier Moderate trust and building relationships between customer and supplier High level of trust and relationship with customer and suppliers Knowledge
  26. 26. • Lean Six Sigma was first developed by Motorola, and is today used throughout Global Corporations and Governments because it works to drive: – Cost Down – Quality and Customer Satisfaction Up – Better communication across agencies & from suppliers to customers • The methodology focuses a team on customer-centric process improvement methodology using data to make decisions • LSS revealed to the District over $26 Million in savings opportunities since 2009 • Project results have had significant impact upon District’s customers, residents and raise opportunity for World-class leadership WHAT IS LEAN SIX SIGMA AND WHY USE IT?
  27. 27. • Accurate Reporting • Cost Reduction • Reduced Cycle Time • Increased Revenue • Expanded Program Participation • Maximized Return on Investment • Efficient Resource Allocation/Sharing • Manpower/Capital Reduction • Simplified Process Steps • Increased Provider Satisfaction • Increased Employee Satisfaction • Reduced Documentation Errors • Improved Safety • Reduced Appeals Time • Improved Customer Service • Simplified Licensing Processes • Enhanced Compliance GWU-CEPL HAS SUCCESSFULLY USED THE LEAN SIX SIGMA METHODOLOGY TO IMPROVE OUR CLIENTS’ ORGANIZATIONAL EFFORTS IN THE FOLLOWING AREAS:
  28. 28. OUR VISION is to create a culture of continuous process improvement in the organizations that we serve, by fueling in- house consulting practices that will cultivate sustainable solutions in time and resources, to drive ongoing results.
  29. 29. • 78 certified Lean Six Sigma Green Belts • All led agency-identified projects – $27MM in savings – over half of this amount has been proven as realized – 811 documented days saved from citizen-facing processes – Several projects provided window of data into processes previously not visible … “We didn’t know what we didn’t know.” • 22 more certify in September 2015 • 100% of surveyed participants use their Lean Six Sigma skills in their current jobs • 34% were promoted within 1 year of Green Belt training • Only 16% left District for alternative employment THROUGH THE CPM PROGRAM, GWU IN PARTNERSHIP WITH DCHR, HAS INVESTED IN A CADRE OF HIGH CALIBER PROJECT LEADER/PROBLEM SOLVERS
  30. 30. LSS HELPS RETAIN EMPLOYEES: 84% OF CANDIDATES ARE STILL WITH DISTRICT GOVERNMENT AND 34% HAVE BEEN PROMOTED WITHIN 6 MONTHS OF PROGRAM COMPLETION 84 16 DC Employment Status: May 2015 With District of Columbia Government Left DC Government 34 66 Promotion Status Promoted within 6 months In similar Position or left DC
  31. 31. • World-class expertise • Hands-on training • Highly-interactive simulation component • Public Sector distinction • Project Coaching through completion • Flexible schedule customized to client needs • Change Leadership component • Peer learning experience OUR UNIQUE FEATURES:
  32. 32. Lean Six Sigma support • LSS is a discipline that continually uses data needed to drive projects & action plans • Uncovers & Addresses real “root causes” of performance problems • Uses ongoing performance metrics • Supports the development of the Scorecard • Identifies best improvement opportunities • Makes key issues visible by increasing transparency LSS CONTRIBUTION TO THE BSC:
  33. 33. “The process mapping used in Lean Six Sigma was eye opening to us in identifying where are gaps really are in our process, so we can better address them.″ - Mark Poindexter, Deputy Chief Administrative Law Judge Project Champion PROJECT EXAMPLES:
  34. 34. • Long complicated licensing process deters applicants in US city • The city loses revenue and compromises safety if no inspection/compliance confirmed • The goal was to issue licenses in 30 days EXAMPLES#1: LICENSING LSS SUCCESS STORY
  35. 35. 5 days 7 days 7 days 1 day 16 days 1 day 0 days 3 days 1 day 2 days 1 2 3 4 38 days Total 8 days Total Current Process Proposed Process Application accepted Case entered in Accela Inspection requested Inspection scheduled Inspection Conducted License Issued License Mailed Application accepted Case entered in Accela Inspection requested Inspection scheduled Inspection Conducted License Issued License Mailed 2 days 1 day Licenses can be issued in as few as 8 business days
  36. 36. • Customer Surveys, Process Mapping and 83 actual applications were used to collect data • Surveys showed incorrect information and unreliable staff were the main issues • Applicants say process takes too long and requires multiple agency staff contacts • Process analysis and application review showed that 85% of licenses were late and the inspection request and license issuance took the longest amount of time; 95% of process non-value adding EXAMPLE#1: LICENSING LSS SUCCESS STORY
  37. 37. • Reducing batching and collapsing steps • Clear consistent communications reduced interactions for applicants • Integrating systems and online applications are key to smooth processing • A control plan, SOPs and training are key to making improvements last EXAMPLE#1: RECOMMENDATIONS
  38. 38. Lean Six Sigma: • Uncovered and eliminated batching and redundant process steps to save time Standard Approach: • Add expensive technology to improve throughput and additional personnel to manage quantity of applications LICENSING: LSS DIFFERENCE VERSUS STANDARD APPROACH
  39. 39. • Reduce patient wait time from arrival at ER through both EMS and door to completed “Folder” required for Dr. to see patients • National average is 28 minutes; Facility average 99 minutes Data collected: • Extensive interviews with hospital staff and patients • 60 hours of live observation EXAMPLE#2: HOSPITAL LSS SUCCESS STORY
  40. 40. • Bed Space needed – use 2 recliners for 1 bed to save space where patients not recumbent • Double the triage staff to improve admissions cycle time • Improve workflow by having lead nurses help triage to “pull until full” and do blood work in patient room or bed versus moving • Stop “Batching “ charts so nurses take file folder to “rack” immediately instead of waiting Pilot Results: • Patients in door to folder in rack 169 to 90 minutes average • Patients in EMS to folder in rack 75 to 40 minutes average EXAMPLE#2: MAJOR OPPORTUNITIES IDENTIFIED:
  41. 41. Lean Six Sigma: • Identified space saving alternatives to accommodate more patients • Improved staff workflow by filling beds and doing testing in “bed” space versus moving • Eliminated batching to save time Standard Approach: • Increase existing space and add staff without identifying backlogs and process efficiencies HOSPITAL: LSS DIFFERENCE VERSUS STANDARD APPROACH
  42. 42. • A city government was experiencing increased demand for Emergency Medical Services (EMS) due mainly to a growing population, an increased reliance on EMS system to provide primary care and a system that transports all calls for service versus on site service for non emergencies • A new ambulance costs $1.2MM to buy, staff and fully stock for one year • Current resources needed to be maximized to increase the availability of medical transport units by examining both transport unit drop times at hospitals and out of service times EXAMPLE#3: FEMS LEAN SIX SIGMA SUCCESS STORY
  43. 43. Out of service time is defined as time that a unit is not available for service due to an Emergency Liaison Officer (ELO) approved activity • Examples are: – Decontamination – Refueling – Mechanical Problems – Personnel Issues – Equipment Problems 43 OUT OF SERVICE TIME
  44. 44. • Transport Unit Drop Time is defined as the time the transport unit arrives at the hospital to the time the transport unit goes back in service after leaving the hospital. • Long Transport drop times mean: – fewer ambulances are available to respond to emergency calls – remaining transports must travel longer distances to emergency calls and other hospitals • Also, if the number of ambulances at each hospital increases, patients get routed to other hospitals to spread the transport load, thus increasing the distance the ambulance travels, further compounding the problem. 44 TRANSPORT UNIT DROP TIME
  45. 45. • Performed over 55 hours of live observation at two high volume hospitals • 800# call center/dispatch data analyzed • Conducted interviews and surveyed various groups involved in the EMS delivery system: – Transport Crews – Triage Nurses and supervisors – Emergency Liaison Officers (ELOs) DATA COLLECTION: Key Problems causing delays identified: • Completing the Electronic Patient Record • Driveway blocked/ER Crowded • Restocking Ambulance and Break
  46. 46. • Improve Electronic Patient Care Report – hardware, software, training for speed • Track Actual Ambulance arrival at door not in driveway – Tighten “halo” on GPS • Give Drivers hourly status updates on hospital ER capacity -- prevent dispatching to overcrowded hospital • Create EMS “Substations” for use by selected units -- Centralize to Decontaminate Unit & Take Break EXAMPLE#3: RECOMMENDATIONS:
  47. 47. Lean Six Sigma: • Improved electronic patient care report to save time • More carefully track ambulance location and hospital capacity • Use “Substations” for much needed stocking and breaks Standard Approach: • Add an extra ambulance and crew for $1.2MM FEMS: LSS DIFFERENCE VERSUS STANDARD APPROACH
  48. 48. Selecting Good Projects 48
  49. 49. • Key Role • Articulate business case for Lean Six Sigma and fit with organizational strategy • Set priorities for improvement • Champion projects • Act as manager, coach, and provider of resources • Responsibilities • Select projects focused on organizational priorities • Ensure project delivers benefits • Provide visibility and recognition to Teams • Control resources required to complete projects • Review project status regularly Champion Role 49
  50. 50. • Our Customers come to us because we provide them something they value. So, let’s start by discussing the idea of customers and value. • Who are your customers? • They can be internal or external, direct or indirect, and you probably have more than one • What do give them of value? • It could be a product, a service, some information. What do they care about concerning that product, service or information? Picking Projects—It’s All About Value! 50
  51. 51. Now that we know customers and what we provide them, we ask the important question: “What are our customers not happy about?” Or “Where are we failing to fully satisfy our customers?” Project Areas These are project areas, but usually too big to be projects! 51
  52. 52. • Now that we have some project areas, we need to scope out good Lean Six Sigma projects • Most of the areas have multiple project opportunities within them Potential Project Areas My Potential Project Areas 52
  53. 53. Moving from a Project Area to a LSS Project ProcessInput Output We Need to Know the Process, What the Process Gives Us, and What We Don’t Like About it Process Output Defect Contract Setup Vendor Information Inaccurate Permitting Permit Too slow Staffing Schedule Information Not visible to the right people (Defect) 53
  54. 54. Potential Projects Pick one of your areas and identify one process, output and defect Process Output (Defect) Input Process Output Defect 54
  55. 55. Criteria for a Good Project: • I can name the process, output and defect • This is something the business, customers, and employees care about fixing • We can change the process either through our own authority or we have the buy in of the stakeholders to make changes • A new output occurs frequently (ideally once per day, at least once per week) • We can collect data on the process but it doesn’t have to be automated • There isn’t another major initiative to fix this (or at least we have agreement to make this project part of that initiative) What Makes a Good Project? 55
  56. 56. Picking a Project from the List Process/ Output/ Defect We Care Change is Possible Frequency Data is Available Other Initiative 56
  57. 57. QUESTIONS Contacts: Ina Gjikondi Sheryl Vogt 202-994-5313 321-890-7479