Lean Six Sigma and Project Prioritization

1. Lean Six Sigma
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2. Agenda:
 Lean Six Sigma Overview
 Six Sigma Method
 Lean Method
 Summary
 To-do’s
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3. Lean Six Sigma Overview
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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)
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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
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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
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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
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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
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9. Six Sigma Method
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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
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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
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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
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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
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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.
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15. Lean Method
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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
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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
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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
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19. Summary
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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
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CA DS S
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Reliability
(Six Sigma)
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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
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22. To-do's
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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
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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)
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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
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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
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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
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28. Goals & Objective
……….
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29. Roles & Responsibilities
……….
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30. Cross functional concerns & interdependencies
……….
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31. Key milestones and measures
……….
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32. Milestones workplan & critical path
……….
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33. Initial review of initiatives, processes, and technologies
……….
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34. Appendix
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35. Program Resources
# Name Org Job Title
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