Lean Six Sigma 101


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Lean Six Sigma and Project Prioritization

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Lean Six Sigma 101

  1. 1. Lean Six Sigma Shail Sood
  2. 2. Agenda:  Lean Six Sigma Overview  Six Sigma Method  Lean Method  Summary  To-do’s Lean Six Sigma 2 Shail Sood
  3. 3. Lean Six Sigma Overview Lean Six Sigma 3 Shail Sood
  4. 4. What is Lean Six Sigma? Lean Six Sigma is the combination of two distinct and complimentary methodologies with an Enterprise-level perspective LEAN SIX SIGMA ENTERPRISE VIEW SIX SIGMA LEAN (Reliability) (Simplicity) Lean Six Sigma 4 Shail Sood
  5. 5. Comparing Six Sigma and Lean for process improvement Six Sigma (Reliability) Lean (Simplicity) “The relentless effort to systematically “The relentless effort to systematically reduce waste while improving the flow of reduce variation” value to the customer” Call Center Example:  Six Sigma would help identify a customer  Lean would reduce the length and volume requirement to answer calls within 19s of calls, decreasing FTE and facility and ensure 95% of calls are answered requirements between 0s and 19s Lean Six Sigma 5 Shail Sood
  6. 6. What is “Value-Added”? Any activity in a process that is essential to deliver the service/product to the customer. • Must be performed to meet customer needs • Adds feature to the service • Enhances service quality, enables on-time or more competitive delivery, or has a positive impact on price competition • Customers would pay for this work if they knew you were doing it Tip: If it’s not clear whether a task is value-added to your customers, imagine what would happen if you STOP doing it – would your external or end-customer complain? If so, then it is likely a value-added activity Lean Six Sigma 6 Shail Sood
  7. 7. What is “Business-Value-Added”? Activities that are required by the business to execute Value-Added work but do not add value from an external end customer viewpoint. Examples: Order entry/processing, entering G/L transactions, etc. Tip: If you STOPPED doing an activity would your internal customers complain? If yes, then it is probably Business-Value-Added Lean Six Sigma 7 Shail Sood
  8. 8. What is “Non-Value-Added” or Waste? Activities that add no value from either the external end customer’s perspective and are not required for financial, legal, or other business reasons. Tip: If you STOPPED doing an activity would any customers (internal or external) know the difference? If not, the work is probably Non-Value-Added Lean Six Sigma 8 Shail Sood
  9. 9. Six Sigma Method Lean Six Sigma 9 Shail Sood
  10. 10. Six Sigma aids in eliminating defects by reducing variability The objective of a Six Sigma program is to reduce process variation to such a degree that six sigmas of variation (99.9997% yield) will fit within the specification limits defined by customers. Lower Upper Specification Limit Specification Limit (LSL) (USL) Reduce Variation Losses or delivered defects  2 6 Lean Six Sigma 10 Shail Sood
  11. 11. Six Sigma DMAIC Approach Define the Problem ? 1 DEFINE Maintain gains through Focus the improvement standardization effort by gathering info on current situation 5 CONTROL 2 MEASURE 4 IMPROVE 3 ANALYZE Develop and Implement Identify the Root Solutions Causes Lean Six Sigma 11 Shail Sood
  12. 12. Six Sigma principles and techniques Customer Centric Standardized & Repeatable Focus on customer needs and Reduce variation in products and requirements processes Process Focused Training & Change Management Think process, not function Empower employees Data Driven Reduce Defects Focus on facts, not perceptions Seek first pass success Six Sigma provides methods for reducing process variability Lean Six Sigma 12 Shail Sood
  13. 13. Factors directly impacting the customer’s perception of service quality are called “Critical-to-Quality” (CTQ) Requirements Timeliness Responsiveness Accuracy Completeness Quality Consistency Accessibility & Convenience Courtesy Lean Six Sigma 13 Shail Sood
  14. 14. What impact does variation have on a series of dependent events? Organization / Process E A B Y X X X Inputs F Products Y X Y C D X – Input or Process Variable Y – Output Variable Y = f(x) Each step (operation) in the process (A, B, C, etc.) don’t always take same amount of time: variability. E.g., step A takes on average 5 hours +/- 1 hr to complete, step B takes on average 4 hrs +/- 1.5 hrs to complete, etc. Variability in steps (operations) builds up, variation does NOT balance out, it is amplified! Time to receive output will have greater variation then the average of each individual steps variation. E.g., the total process time will be much greater than the average of each step, with a much greater overall variability in time than the individual steps. Lesson: Internal variation does not “average out” and will result in poor output to the customer. Lean Six Sigma 14 Shail Sood
  15. 15. Lean Method Lean Six Sigma 15 Shail Sood
  16. 16. The “Seven Deadly Wastes” Seven Deadly Wastes Excessive motion  “Chasing” approvals  “Searching” for information Service Environment Waiting time  Waiting for approvals  Meetings and conference calls Over-engineering  Poorly defined or communicated customer product requirements Other Searching for  Excess resources lacking clear work activities information Unnecessary  Corporate policies getting in the way of accomplishing processing time the tasks at hand Value-Added Approval Project Work Wait Time  Redundant or unnecessary paper work  Transcribing information multiple times Meetings and Conference ~35% Calls Errors  Rework  Failing to meet customer requirements Rework Excessive resources  Poor resource leveling to meet demand  Minimal understanding of bottlenecks Unnecessary  Unnecessary approvals handoffs  Verification loops Lean Six Sigma 16 Shail Sood
  17. 17. Becoming Lean  Make the value-creating steps flow  Maximizing value by producing only what is desired in the shortest time possible with the least resources  Pull to customer demand  Produce at the rate of customer demand only  Pursue perfection  Relentlessly pursue the elimination of waste by empowering employees with waste elimination tools and entrenching a culture of continuous improvement Lean Six Sigma 17 Shail Sood
  18. 18. Pursuing Perfection – Innovation versus Continuous Improvement Innovation Continuous Improvement Innovation involves: Continuous Improvement involves:  great strides, it tends to be abrupt and  small steps, it is typically gradual and volatile constant  the knowledge of a select few individuals  input from everyone and significantly less and requires significant expense expense Lean Six Sigma 18 Shail Sood
  19. 19. Summary Lean Six Sigma 19 Shail Sood
  20. 20. Combining Lean and Six Sigma is a combination that drives greater improvements than either alone Six Sigma Enterprise Lean “The relentless effort to systematically “The relentless effort to systematically reduce variation” reduce waste while improving the flow of value to the customer” EPDMEPDM EPDM Pro Interlink Pro E EPDM EPDM EPDM EPDMEPDM EPDM Pro EPDM Interlink Pro E EPDM MAC EPDM PAC EPDM EPDM EPDM EPDM EPDM MAC EPDM PAC EPDM MAC EPDM PAC EPDM EPDM EPDM MAC EPDM PAC Simplicity (Lean) a Simple, low reliability gm Simple, high reliability Si Complex, high reliability Complex, low reliability ix /S CA DS TS O CA C DS CA OD CA DS S DS CO n ea DS CO C P DS V S A D L R CO C DSA DS e CO DS CA ris DS CO DS CO MD PA PA PA A CS rp C CO DR CA R D D DS TS S te O E n Reliability (Six Sigma) Lean Six Sigma 20 Shail Sood
  21. 21. Lean Six Sigma projects touch all parts of the organization Cost Productivity Reduction Improvement Market-share Growth Customer Retention Cycle-time Reduction Error Culture Reduction Change Product/Service Development Lean Six Sigma 21 Shail Sood
  22. 22. To-do's Lean Six Sigma 22 Shail Sood
  23. 23. Identify Lean Six Sigma projects First filter: <List all projects> • Eliminate inconsistencies • Initial Voice of Customer (VOC), team experience <List filtered projects> Second filter: • Interviews with key stakeholders to identify greatest pain points and opportunity areas • Surveys with key groups in the <List filtered organization to identify pain points and projects> opportunity areas Final filter: • Select representative projects Selected Projects Lean Six Sigma 23 Shail Sood
  24. 24. Document as-is processes of selected projects Process E A B Y X Inputs F Products Y Y C D X – Input or Process Variable Y – Output Variable Y = f(x) Lean Six Sigma 24 Shail Sood
  25. 25. Build high level roadmap and milestones (Sample) Selected Projects Roadmap (2007-08) 1. #Project 1 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 2. #Project 2 3. #Project 3 (1) – Production Ready (1) – Marketing, Selling & Ops Support 4. #Project 4 (2) – Production Ready (2) – Marketing, Selling & Ops Support 5. #Project 5 6. #Project 6 (3)- Production Ready (3) – Marketing, Selling & Ops Support 7. #Project 7 8. … (3) – Production Ready 9. … 10. … (5) – Marketing, Selling & Ops Support (6) – Production Ready (7) – Production Ready Milestone Lean Six Sigma 25 Shail Sood
  26. 26. Organization Redesign • Create a high powered team focused on long-term Concept value optimization • Goals and objectives Team • Roles and responsibilities Charter • Cross-functional concerns and interdependencies • Key milestones and measures • Milestone workplan & critical path Team • Initial review of initiatives, processes, and Blueprint technologies Lean Six Sigma 26 Shail Sood
  27. 27. Make sure your resources get what they need or your customers won’t Hierarchy of Employee Needs You may recall Maslow’s contention that an Company individual’s most fundamental needs must Objectives be met before that individual can focus on higher order concerns. Growth & Career ◊◊◊ Development Affiliation/place in the organization and  Start by addressing basic employee needs so cultural fit they can remain focused on the marketplace Rewards (compensation  Research shows that employee satisfaction is and benefits), performance highly correlated with customer satisfaction measures Security and clarity of employment status, title, role, leadership structure, authority, office location, open and honest communication Lean Six Sigma 27 Shail Sood
  28. 28. Goals & Objective ………. Lean Six Sigma 28 Shail Sood
  29. 29. Roles & Responsibilities ………. Lean Six Sigma 29 Shail Sood
  30. 30. Cross functional concerns & interdependencies ………. Lean Six Sigma 30 Shail Sood
  31. 31. Key milestones and measures ………. Lean Six Sigma 31 Shail Sood
  32. 32. Milestones workplan & critical path ………. Lean Six Sigma 32 Shail Sood
  33. 33. Initial review of initiatives, processes, and technologies ………. Lean Six Sigma 33 Shail Sood
  34. 34. Appendix Lean Six Sigma 34 Shail Sood
  35. 35. Program Resources # Name Org Job Title 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Lean Six Sigma 35 Shail Sood