293312230-Lean-Six-Sigma-Students.pdf

BusinessImprovementMethodologies:
TQM,Lean,SixSigmaandLeanSixSigma
Henriqueta Sampaio da Nóvoa
Department of Industrial Engineering and Management
University of Porto
14th November 2014

Outline
8
TQM, Lean and Six Sigma
1
Integration of Lean and Six Sigma
2
3 The future
1

1993
9
Philip Crosby

What are the roots of TQM (Total Quality Management)?
 Japanese Quality Evolution between 1950 and 1980;
 50’s: Feigenbaum published “Total Quality Control”:
“TQC is an effective system for integrating the quality development, quality maintenance
and quality improvement efforts of the various groups in an organization so as to enable
production and service at the most economical levels which allow for customer
satisfaction.”
 80’s: TQM holistic management philosophy
“If Japan Can... Why Can't We?”
(the name of an American television episode broadcast by NBC News on June
24, 1980)
11

“If Japan Can... Why Can't We? (excerpts 1980)
Dr Deming: They realized that the gains that you get by statistical methods are
gains that you get without new machinery, without new people. Anybody can
produce quality if he lowers his production rate. That is not what I am talking
about. Statistical thinking and statistical methods are to Japanese production
workers, foremen, and all the way through the company, a second language. In
statistical control you have a reproducible product hour after hour, day after
day. And see how comforting that is to management: they now know what they
can produce, they know what their costs are going to be.
12

What is TQM (Total Quality Management)?
“…as a continuously evolving management system consisting of values,
methodologies and tools, the aim of which is to increase external and internal
customer satisfaction with a reduced amount of resources”
Hellsten and Klefsjo (2000)
“... a corporate culture characterized by increased customer satisfaction
through continuous improvement, in which all employees in the firm actively
participate” Shiba et al. (1993)
13

What is TQM (Total Quality Management)?
“A core definition of total quality management (TQM) describes a
management approach to long–term success through customer satisfaction.
In a TQM effort, all members of an organization participate in improving
processes, products, services, and the culture in which they work. The
methods for implementing this approach come from the teachings of such
quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V.
Feigenbaum, Kauro Ishikawa, and Joseph M. Juran.”
ASQ (2014)
http://asq.org/learn-about-quality/total-quality-management/overview/overview.html
14

Primary Elements of TQM:
 Customer-focused;
 Total employee involvement;
 Process-centered;
 Integrated system (…although an organization may consist of many different functional
specialities often organized into vertically structured departments, it is the horizontal
processes interconnecting these functions that are the focus of TQM)
 Strategic and systematic approach;
 Continuous improvement;
 Fact-based decision making;
 Communications.
ASQ (2014)
15

Outline
16
1
2
3 The future
1

17
Américo Azevedo, “Lean Fundamentals”, Total Lean Days, September 2014

What is Lean?
“A systematic approach to identifying and eliminating waste through continuous
improvement, flowing the product at the pull of the customer in pursuit of
perfection (NIST, 2000).
ASQ (2014)
18

What is Lean?
Womack and Jones identify five key principles of the lean organization:
(1) the elimination of waste (or muda);
(2) the identification of the value stream;
(3) the achievement of flow through the process;
(4) pacing by a pull (or kanban) signal; and
(5) the continuous pursuit of perfection.
19

What is Lean?
20

Lean Tools and Techniques
21

22

Outline
23
1
2
3 The future
1

What is Six Sigma?
Why 99% is not good enough?
24
For 300.000 letters delivered, 3.000 will never arrive at their
destination (six sigma= 1 letter)
1,68 hours of dead air experience per week (six sigma= 1,8 seconds)
,68
More than 3000 newborns accidentally falling from the
hands of nurses or doctors each year

A brief history of Six Sigma
25
Six Sigma began at Motorola in 1987 (Motorola reduced defectivity on its
products by approximately 1300%)
 Response to Japanese competition
 Very different from previous TQM initiatives in the US
 Provided tangible deployment strategy;
 MAIC;
 Standardized on tools.
 AlliedSignal and Honeywell were early adopters;
 Six Sigma became “front page news” when Jack Welch publicly promoted it at
GE in 1996;
 GE added “Define” to create DMAIC;
 GE also expanded Honeywell’s design (DFSS) efforts
 Created DMADV approach to DFSS
 Began major push in GE Capital and service operations – “Commercial Quality”.
Roger W. Hoerl, “Lean Six Sigma: Yesterday, Today, and Tomorrow” , 5th Int. Conf. LSS Edinburgh 2014 - Keynote

26
“Six Sigma will be the biggest initiative that GE has ever
launched. It will be my personal number one priority for the
next five years.”
CEO, Jack Welch 1995

A brief history of Six Sigma
27
 Commonwealth Health Corporation became an early adopted
in healthcare in 1998
 Savings in radiology alone were $1.6 million within a year;
 Quality of care and safety improved.
 Bank of America became first major bank to launch a Six
Sigma initiative in 2001 - Reported billions in gains by 2003
 Volvo Cars in Sweden claims that the six sigma programme as
contributed with over €55M to the bottom line during 2000-
2002.
Adapted from Roger W. Hoerl, “Lean Six Sigma: Yesterday, Today, and Tomorrow” , 5th Int. Conf. LSS Edinburgh
2014 - Keynote

What is Six Sigma?
“A method that provides organizations with tools to improve the capability of
their business processes. This increase in performance and decrease in process
variation lead to defect reduction and improvement in profits, employee morale,
and quality of products or services.
Six Sigma quality is a term generally used to indicate a process is well controlled
(within process limits ±3s from the center line in a control chart, and
requirements/tolerance limits ±6s from the center line).
ASQ (2014)
28

What is Six Sigma?
Different definitions have been proposed for Six Sigma, but they all share some
common threads:
 Use of teams that are assigned well-defined projects that have direct impact
on the organization's bottom line.
 Training in "statistical thinking" at all levels and providing key people with
extensive training in advanced statistics and project management. These key
people are designated “Black Belts”.
 Emphasis on the DMAIC approach to problem solving: define, measure,
analyze, improve, and control.
 A management environment that supports these initiatives as a business
strategy.
ASQ (2014)
29

Differing opinions on the definition of Six Sigma:
 Philosophy - The philosophical perspective views all work as processes that can be defined,
measured, analyzed, improved and controlled.
Processes require inputs (x) and produce outputs (y). If you control the inputs, you will control the
outputs. This is generally expressed as y = f(x).
 Set of tools - The Six Sigma expert uses qualitative and quantitative techniques to drive process
improvement. A few such tools include statistical process control (SPC), control charts, failure
mode and effects analysis, and process mapping. Six Sigma professionals do not totally agree
as to exactly which tools constitute the set.
 Methodology - This view of Six Sigma recognizes the underlying and rigorous approach known as
DMAIC (Define Measure, Analyze, Improve, Control).
 Metrics - In simple terms, Six Sigma quality performance means 3.4 defects per million
opportunities (accounting for a 1.5-sigma shift in the mean).
Excerpted from T. M. Kubiak and Donald W. Benbow, The Certified Six Sigma Black Belt Handbook, 2nd edition, ASQ
Quality Press, 2009, pages 6-7.
30

31
Six Sigma: Set of Tools (A glimpse on Quality Companion)

Quality Companion: DMAIC
32
Six Sigma: Set of Tools
DMAIC Project

Quality Companion: ANALYSE 1 PHASE (isolate key inputs)
33
Six Sigma: Set of Tools

Quality Companion: Tools proposed in the ANALYSE 1 PHASE
34

Six Sigma Methodology – DMAIC: Tollgate review at each step
35

Six Sigma as a Metric
“the goal of six sigma is that
only 3,4 of a million
customers should be
unsatisfied”
Magnusson et al. (2003)
36

The Impact of Six Sigma
37
 Billions of dollars delivered to bottom lines at GE, Bank of
America, and many others around the globe
 Significant enhancements to theory and body of knowledge of
continuous improvement
 Best integration to date of multiple statistical methods into an overall
approach to scientific inquiry – “statistical engineering”
Clearly The Most Successful Improvement Initiative in History

Why Has Six Sigma Been So Successful?
Some Important Attributes
38
 Zealous leadership from the top;
 Focuses on improving the process (addresses root cause versus symptoms);
 Quantitative approach utilizing metrics;
 Forces understanding of variation;
 Provides practitioners an overall road map, versus a miscellaneous collection
of tools;
 Uses a proven set of tools in the road map;
 Is being applied to all processes, not just operations;
 Provides a supporting infrastructure (defined roles, project selection, reviews,
included in budgets, reporting of results, etc.).
A More Holistic Improvement System Must Maintain These Attributes

39
Similarities and differences between TQM, six sigma and lean
Andersson, R., Eriksson, H., & Torstensson, H. (2006). Similarities and differences between TQM, six sigma and lean. The TQM Magazine,
18(3), 282–296.

40
Synergies between lean and six sigma
Pepper, M.P.J., and T.a. Spedding. 2010. “The Evolution of Lean Six Sigma.” International Journal of Quality & Reliability Management 27
(2): 138–55.

TQM, Lean, Six Sigma and Lean Six Sigma
41
Clarification of concepts: TQM, Lean and Six Sigma
1
2
3 The future
1

42
 George promoted a combined effort, Lean Six Sigma, in 2003
 GE quickly adopted LSS versus SS
 LSS expanded into Europe and Asia

43
Conjecture: the “next big thing” in statistics and quality will be built on the
limitations of Six Sigma;
What are the limitations of Six Sigma?
 Contrary to popular opinion, Six Sigma is not a holistic system for managing
quality;
 Also contrary to popular opinion, there are many problems and projects for
which Six Sigma is not the best approach.

Specific Limitations of Lean Six Sigma
44
 Requires extensive investment (e.g., training)
 Project “sweet spot” is narrow (4-6 months)
 Doesn’t address routine problem solving.
 Not a comprehensive quality management system:
 Project oriented, not day-to-day management oriented;
 Doesn’t replace ISO 9000 or country-specific quality systems (e.g.,
Baldrige Award in the US).
Six Sigma is Excellent at What it Was Designed to Do

There Are Opportunities Within and Between Process:
A three step process
Step A
Step B
Step C
Customer
Lean Six Sigma
Value-Adding
Transformations
Occur Within
Process Steps
Material and
Information
Flow Between
Process Steps
Snee, R. D. (2010). Lean Six Sigma – getting better all the time. International Journal of Lean Six Sigma, 1(1), 9–29. 45

Lean Six Sigma
 In short, the integration of Lean and Six Sigma
aims to target every type of opportunity for
improvement within an organization.
46

Improvement Objectives
47
 Shift Process Average
 Reduce Process
Variation
Six Sigma Objectives Lean Objectives
Lean Six Sigma Improves Quality, Cost and Delivery
 Improve Process Flow
 Reduce Process
Complexity
Reduce:
 Waste
 Non-Value Added
Work
 Cycle Time
Snee, R. D. (2010). Lean Six Sigma – getting better all the time. International Journal of Lean Six Sigma, 1(1), 9–29.

The Example of Lean and Six Sigma
48
 Reduce Process
Complexity
Improve
Process
Flow
Improve
Process
Flow
Past
Present
The Future
Reduce
Variation
Reduce
Variation
Lean Six Sigma
Lean Six Sigma
Our
Improvement
Methodology

TQM, Lean, Six Sigma and Lean Six Sigma
49
Clarification of concepts: TQM, Lean and Six Sigma
1
2
3 The future
1

The Future: Project Improvement System
50
 Reduce Process
Complexity
Has our success in continuous improvement been limited?
Have we “left money on the table”?
Do we need to go beyond integrating Six Sigma and Lean?

A Broader View
51
Are improvement efforts integrated or disjoint?
Can We “Connect the Dots” Between Improvement Efforts?
ISO
Certification
Lean
Projects
Six Sigma
Projects
Business
Process
Improvement
Innovation
Projects
Quality
Management
Projects

How Do We Get Started?
Start Small – Think Big ….. Evolution vs. Revolution
 Migrate a Six Sigma initiative towards Holistic Improvement
 Integrate potentially competing improvement groups, such as ISO
Certification, Lean, Six Sigma, and Business Process Improvement.
 Migrate all improvement projects to a common project portfolio.
• All projects compete for the same pool of resources.
• Typical project types: process improvement, capital based, and
infrastructure enhancement.
• Project selection decisions made from a common prioritized list
are most effective.
Start With Where You Are – Add With a Goal in Mind
52

Summary
 Improvement must become a keen focus of organizations looking to
compete effectively in the 21st century;
 A holistic approach puts diverse improvement efforts “under one
umbrella”;
 The creation of Lean Six Sigma is one positive example, but we must
go further;
 Integration of improvement efforts enables proper allocation of
resources and synergy;
 One improvement system is easier to manage and enhance over
time than three or four separate systems.
53

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