in 25 Books in 2012

#24/25: What is Lean Six Sigma?

General

  • Top-down support is essential for change projects
  • Project scope has to be right

Foundations

–       Find out where the problems are: Missing documents, late delivery, etc.

–       Get all responsible people together

–       Problem solving:

  • Brainstorming
  • Forming hypothesis
  • Collecting data
  • Developing solutions
  • Goals:
    • Delight customers: higher quality in less time
    • Improve processes: less variance & defects, better flow
    • Teamwork: interdisciplinary teams
    • Based on data

Delight customers

–       Quality is defined by the customer

  • internal
  • external

–       Which factors are important in the customer’s decision to buy your solution? (Critical to Quality: CTQ)

–       Voice of Customer

  • Tracking complaints
  • Focus groups
  • Visiting customer sites
  • Interviews
  • Surveys

–       Eliminate defects

  • defects: things that don’t meet the customer need

–       Create consistency

–       Ensure Speed, Quality and low costs

  • Quality only with speed: eliminate waste & delays
  • Speed only with quality: if there are errors, you have to go back
  • Low price only with quality & speed

Improve processes

–       Deming: 85/15 Rule; 85% problems are problems built in processes, 15% are problems by employee’s faults

–       To improve quality, you have to change the system

–       Process management:

  • Documenting how work gets done
  • Examining the flow between people
  • Training people the knowledge & methods they need to constantly improve their work
  • Eliminate variation in quality and speed
    • What do customer want and what do they find acceptable?
    • Everything else is a defect
    • To generate low variation everything before the outcome has to work fine  
  • Improve process flow and speed
    • How many process steps does it take?
    • Ask for every step:
      • Is it necessary?
      • What value does it add to our customer?

–       Think in processes

Team Work

–       Environment where people are encouraged to work together

–       Free sharing of information

–       Meetings are full of energy

–       Skills that need to be trained for effective collaboration:

  • Listening
  • Brainstorming & discussion techniques
  • Organizing ideas
  • Decision making

–       Important steps:

  • Set goals everyone agrees on
  • Assign accountability
  • Conflict handling
  • Decision making metrology
  • Effective meetings
  • Continuous learning
  • Collaboration

Data

–       Foundation of six sigma

–       Rule: People must support their opinions with facts

–       Problems:

  • Lack of available data
  • Little training in collecting & analyzing data
  • Data is not used for making decisions about improvement

–       Result measures

  • Outcome of a process

–       Process measures

  • Internal metrics of a process

–       Typical metrics:

  • Customer satisfaction (result)
  • Financial outcomes (result)
  • Speed or lead time (result / process)
  • Quality or defects (result / process)

–       Collecting data can take 75% of the time

Terms

–       WIP (Work in Process): amount of work in process that isn’t complete yet

–       Lead time: from order to delivery

–       Little’s Law: Lead Time = WIP / Avg. Completion Rate

–       Queue time: work that just sits there = delay time

–       Value added work: customer wants to pay for

–       Non-value added work = waste

–       Complexity: different types of products/options processes have to handle

–       Process Cycle Efficiency = Value-add time / Total lead time; avg about ten percent

–       Flexibility: how easily can people switch between different types tasks

Laws of Lean Six Sigma

–       Law of the Market: Customer needs define quality – highest priority for improvement

–       Law of Flexibility: Speed of a process is proportional to its flexibility

–       Law of Focus: 20% of activities make 80% of the problems

–       Law of Velocity (Little’s Law)

–       Law of Complexity and Cost: Complexity adds more costs and WIP than either poor quality or slow speed

Implementation

–       Infrastructure

  • Champions: Executive Sponsor
  • Black Belts: 4-5 weeks of training on leadership + problem solving; full- or part-time; responsible for leading or coaching project teams and for delivering results on projects
  • Master Black Belts: upper Black Belts, more responsibility and training
  • C-Suite: setting corporate goals
  • Business unit managers: work with Champions, define criteria for selecting projects that support their goals
  • Line managers / process owners: Project sponsor, frees time of people for training and attending meetings, provides support
  • Green Belts/Yellow/White/Team members: Usually normal job but help working on projects in their work areas

–       Training programs

  • For different belts
  • Introduction courses
  • Courses for green belts: leading projects
  • Black Belt: skill building tools/methods
  • Master Black Belt: Some special tools

Common Problems

–       Projects didn’t address important business problems

–       People became “quality commandos”

–       Little or no monitoring of projects

 => Improvement should be done to support business goals not to replace them

Project Selection

–       Which project adds the most value?

–       Start with a burning platform, e.g. reach new customers, reduce overhead cost, speed up deployment, etc.

–       Goals are translated down to business units

–       then down to value streams (specific processes)

–       Maintain the links at each step

Tollgate system

–       Review between each DMAIC phase

–       Purpose

  • Status update
  • Check if project is still critical
  • Adjust project is necessary
  • Inform management about barriers

Rollout

–       A lot happens in the first I00 days – slow results aren’t any better than no results

–       Starts at the top

–       Formal announcement

–       Project selection & training in waves

DMAIC

–       forces team to use data to

  • confirm a problem (nature & extend)
  • identify the true causes
  • find solutions
  • establish procedures

–       Start with project charter

  • up to 2 pages
  • goals of the team
  • team members
  • time lines
  • only a draft => reiterate and communicate with management

DMAIC Phases

Define

  • What is the project?
    • . Discuss project charter => get shared goal
    • . Get customer data => confirm possible opportunity
    • . Review existing data
    • . Drafting a high-level process map
    • . Setting up a plan and guidelines
      • Realistic scope
      • What is success and how is it measured?
      • Get people comfortable working together

Measure

  • Develop / improve measurement system
  • Gather data & improve the process map
  • Find out what’s really important
  • Tools
    • Observe the process
    • Time value map (visualize value-add time and non-value-add time)
    • Pareto chart

 Analyze

  • find the real causes for problems
  • find most critical actions
  • Tools
    • Fishbone diagram
    • Scatterplots

 Improve

  • Find new solutions
  • Check best practices
  • Develop a criteria for selecting solutions
  • Planning the implementation
  • Tools
    • PICK chart (Possible, Implement, Challenge, Kill)
    • Four step rapid setup

 Control

  • Document the new process
  • Train everyone
  • Set up procedures for tracking KPIs
  • Complete project documentation
  • Tools
    • Control charts

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