Business Improvement Overview


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Business Improvement Overview

  1. 1. Business Excellence Methodologies An Overview All Rights Reserved All Rights Reserved
  2. 2. Overview• Lean and Six Sigma History• Lean and Six Sigma Business Impact• Requirements For A Successful Business Excellence Program• Available Business Excellence (BE) Methods• Which Method Is Appropriate• Implementation Strategy• Who Are The Drivers For BE• What Is LEAN• What Is Six Sigma• What Is Lean Six Sigma• What Is Design For Six Sigma All Rights Reserved 1
  3. 3. History• Business excellence methodologies are not quality initiatives• Business excellence is about the quality of the business, not about the business of quality• Two big methods have emerged over the last 50 years • Total quality management (TQM) • Lean manufacturing = Toyota Production System (TPS)• These methods have evolved to become what is currently called • Six Sigma • Lean• Six Sigma has been used successfully by Motorola, GE, BHPBilliton, Textron, Honeywell and others to increase business performance by reducing defects• Lean has been used successfully by Toyota, GE, Honeywell, and many others to increase business performance by eliminating waste Business Improvement Methods Are Of All Times All Rights Reserved 2
  4. 4. History Total Quality Lean Manufacturing Management Toyota Production (TQM) System (TPS) Defect Waste Reduction Six Sigma LEAN Elimination Synergy Motorola, GE, BHPBilliton, Toyota, GE, Honeywell,… Textron, Honeywell, … Lean Six Sigma Motorola, GE, BHPBilliton, The Best Of Textron, Honeywell, … Both Worlds All Rights Reserved 3
  5. 5. Results• Without going into the details of each successful implementation of the business improvement methods it can be shown that all lead to  Cost reduction  Increased customer satisfaction  Engaged work force  Use of a common ‘language’ across the business functions• Depending on the size of the company Black Belts deliver between 3 to 6 projects each year  Each project generates between $25k and $2.5M savings  Black Belt training expenses are largely offset by the project benefits• Green Belts deliver 2 to 4 projects each year  Each project generates between $10k and $100k savings Business Improvement Methods Deliver Tangible Business Results All Rights Reserved 4
  6. 6. Results Business Improvement Methods Deliver Tangible Business Results All Rights Reserved 5
  7. 7. Results Black Belt Green Belt Projects Projects 3–6 2–4 Projects/Year Projects/Year Project Value Project Value $25k - $2.5M $10k - $100k Minimum Typical Typical Minimum$75k/Year/Black $500k/Year/ $150k/Year/ $20k/Year/Green Belt Black Belt Green Belt Belt Business Improvement Methods Deliver Tangible Business Results All Rights Reserved 6
  8. 8. Requirements• In order to be successful at business improvements certain requirements need to be satisfied  Management engagement and support at all levels  Properly selected project leaders, also called change agents  Properly trained project leaders and team members  Execution of the method as a team driven effort  Selection of projects that will gain momentum for the initiative  Screening of the business needs to create a pool of potential projects Business Improvement Require Planning And Support All Rights Reserved 7
  9. 9. Requirements Selection Of Quality Training High Impact Projects Team Driven Effort Success Projects Aligned With Business Needs Management Engagement Top Notch Project Leaders & Support Business Improvement Require Planning And Support All Rights Reserved 8
  10. 10. Which Method Are Available?• Methods available  Six Sigma also know as the acronym DMAIC (Define Measure Analyze Improve Control)  Lean  Lean Six Sigma  Design for Six Sigma also known as DMADV (Define Measure Analyze Develop Validate) Improvement Methods Come In Different Flavors But Have The Same Objective All Rights Reserved 9
  11. 11. Available Methods Six Sigma LEAN (DMAIC) (TPS) Synergy Defect Reduction Waste Elimination Quality Level Of Speed Of ExecutionIndividual Process Steps Cycle Time Reduction Lean Six Sigma Waste Elimination Maturity Followed By Process Optimization New Process Or Product Development Design For Six Sigma (DMADV) All Rights Reserved 10
  12. 12. Which Method To Use?• Lean  Focuses on the complete process and aims at reducing sources of waste for existing processes• Six Sigma  Focuses on ‘troublesome’ parts of the process and aims at improving defects (services or products that do not meet customer requirements) for existing services or products• Lean Six Sigma  Encompasses both approaches, usually waste reduction followed by process improvement for the remaining process steps (for existing processes and products)• Design for Six Sigma  Used for the development of new processes or products in order to avoid having to use the above methods Guidance Will Help You To Select The Right Method For You All Rights Reserved 11
  13. 13. What Method Is Right?• Lean tends to generate results somewhat faster than Six Sigma but often does not consider full process optimization• Six Sigma generates more stable process steps but does not necessarily look at the overall business• Lean Six Sigma is the preferred method, leading to the best improvements but requires more upfront investment• Design for Six Sigma is typically used by companies that have used Lean Six Sigma for several years and that have optimized the existing business  It is very unusual to start with Design for Six Sigma because in general one wants to ‘clean up’ existing processes first  Starting a process over from scratch could be disruptive for the existing business Different Approaches For Different Goals All Rights Reserved 12
  14. 14. Which Method To Use? Six Sigma LEAN (DMAIC) (TPS) Synergy More Stable Individual Somewhat Faster Process Steps Results Does Not Look At The Does Not Consider Full Overall Process Optimization Lean Six Sigma The Preferred Method To Be Used After Lean Maturity Six Sigma Has Reached Full Maturity Design For Six Sigma (DMADV) All Rights Reserved 13
  15. 15. How Is Business Improvement Implemented?[1/2]• Starting point is recognizing the need for improvement at the management level• Based on the indentified needs business drivers are quantified and clusters of projects are selected with external guidance• Upper and mid level management is supported with high level training 3-5 days aimed at business metrics and project cluster identification• Middle management is given specific training on project selection, candidate selection and support roles 3-5 days• Projects are selected by upper and middle management and tied to specific candidates for implementation  Start with selecting high impact projects  High impact projects are executed by full time specialists (Black Belts) delivering fast, sustainable results All Rights Reserved 14
  16. 16. How Is Business Improvement Implemented?[2/2|• Black Belts candidates are fully trained and execute their project in synch with the training calendar• Executed improvements gain momentum for the method and smaller project can be selected• Candidates for smaller projects (Green Belts) are trained at a lower level and supported by external resources or experienced in house Black Belts  Green Belt projects take usually longer to execute and generate lesser results than Black Belt projects• When the business has achieved a level of maturity (after 3-7 years) new products and processes are developed based on the Lean Six Sigma methodology All Rights Reserved 15
  17. 17. How Is Business Improvement Implemented? Management Training External Support Identify Project Clusters Candidate External Project Training Support Selection Project Candidate Selection Project Selection Execution Black Belt Candidate Candidate Project Training Selection Execution Green Belt All Rights Reserved 16
  18. 18. Who Are The Actors? [1/2]• Senior management  Initiate and support the business improvement initiative  Make business improvement a way of life  Determine the business objectives• Deployment champion  This person owns the business improvement methodology and is responsible for delivering results  Indentify clusters of projects that support the business objectives  Select Black Belts, Green Belts• Project champions  Identify projects within the project clusters that fall within their area of responsibility  Support Belts throughout their projects  Hold Belts accountable for project results• Master Black Belts (in the beginning often external)  Support the deployment  Train and mentor Black Belts, Green Belts  Help with project identification and selection  Help Thesecandidate selection Depend On Organizational Structure with Are Typical Roles And All Rights Reserved 17
  19. 19. Who Are The Actors? [2/2]• Black Belts  Responsible for the execution of individual projects often across business divisions  Deliver results to the project leader/project champion  Full tim e exclusive role  Change agents, help build momentum for the methodology  Leaders of high impact and complex projects• Green Belts  Responsible for the execution of individual projects located within their own area of expertise  Deliver results to the project leader  P art tim e role that needs to be balance with day to day activities  Change agents, help build momentum for the methodology  Lead less complex projects usually with lower impact• Yellow Belts  Supporting team members to Black Belt and Green Belt projects  Have a limited amount of training that is provided by in house Black Belts and Green Belts These Are Typical Roles And Depend On Organizational Structure All Rights Reserved 18
  20. 20. Who Are The Actors? Drive BE Initiative Provide Support Set Goals Identify Projects In Their Area Owns BE Methodology Support Belts Identifies Project Clusters Hold Belts Accountable Selects Belts Supporting Team Members For Supports Deployment GB/BB Projects Training & Mentoring Of Belts In House Training By GB or BB Support For Project Selection P art - Tim e Resource Full -Tim e Resource Executes Simpler Projects Executes Complex Projects Responsible For Results Responsible For Results These Are Typical Roles And Depend On Organizational Structure All Rights Reserved 19
  21. 21. Lean• Pros • Cons  Requires less technical  Lacks the in depth methods when executed at a understanding of the superficial level processes  Generates results faster  More difficult to sustain due to  Engages the work force more weaknesses in the control of quickly because it is easier the improvements accessible  Requires hands on  Training can be trimmed to 1 involvement of management week work shop training for  Full training on Lean is 3 to 4 simple projects weeks  Investment for software is minimal to nill All Rights Reserved 20
  22. 22. Six Sigma• Pros • Cons  More in depth process  Requires longer training knowledge • Depending on the projects 2  Does result in better (Green Belt) to 4 weeks (Black sustainable results Belts)  Requires management support  Requires specific software (for but not hands on involvement Black Belts)  Forms the foundation for DFSS  Generates results slower  Training is more technical but accessible for everyone with a high school degree All Rights Reserved 21
  23. 23. Lean Six Sigma• Pros • Cons  The most powerful method  Requires longer training 3  Sustainable results weeks (Green Belts), 5 weeks  Management support required (Black Belts) but no hands on involvement  Requires specific software  Use DMAIC as the overarching (Black Belts only) method  Integrates Lean and Six Sigma  Avoids duplication of effort  Fully integrated method avoids segregation of projects All Rights Reserved 22
  24. 24. Design For Six Sigma• Pros • Cons  The indicated method for new  Results are more difficult to process and product quantify development  Requires expertise with Six  Has a 80% overlap in tool Sigma usage with Lean Six Sigma,  Training is 4-5 weeks (Black hence can be thought as an Belts) add-on method  Not indicated to be used at the Green Belt level  Most technical of all the methods  Requires specific software All Rights Reserved 23
  25. 25. Company Information 910 River Branch Court Mount Juliet, TN 37122 All Rights Reserved All Rights Reserved