Transcript Presentation

Introduction to Lean Six Sigma
A Human Resources Perspective
Agenda
 Short Biography
 History of Lean Six Sigma (LSS)
 LSS Methodology
 Success Factors
 Application to HR
 Examples of project ideas
 New York ISO case study
About the Presenter
David Duda
 Over twelve years of LSS experience
 Delta Airlines, Inc. 1998-2008
 Production based application of LSS
 New York Independent System Operator 2008--Present
 Service/transactional based application of LSS
 Certified Six Sigma Black Belt
 Contact Info: [email protected]
The History of Lean Six Sigma
A New Approach to Quality
History of Lean Six Sigma
 What is in a name?
 Lean -- Focuses on removing waste (muda) from processes
 Six Sigma – Focuses on understanding and reducing variation in
processes
 Lean Six Sigma (LSS) – Combines both approaches
 What is the Concept behind LSS?
 As wasteful activities are removed overall process variation is
reduced
 Lean Six Sigma is one of many methodologies developed
through the Quality Revolution
History—Evolution of Quality
 Craft Production
 Each item is unique
 Individual parts made to fit
 Quality through craftsmanship
 Mass Production
 High volume
 Interchangeable parts
 Quality through inspection
 Better Production
 Understanding of process variation
 Quality through process
Evolution of Quality--Timeline
1798
Interchangeable
Parts
Eli Whitney
1920s
Statistical
Process
Control
Walter
Shewhart
1950
Reconstruction
of Japan
Deming &
Juran
1960
1980
Toyoda
Production
System
Six Sigma
Eiji Toyoda
Motorola
Expanding Application of LSS
 Initially applied in production environments
 Manufacturing
 Supply Chain
 Maintenance Repair and Overhaul (MRO)
 Rapidly grew into transactional applications
 Financial Institutions
 Insurers
 Continued to expand to services
 Hospitals and Health Care
A Couple of Questions
What does “Six Sigma” mean?
1.
a.
A process that has a six sigma level of quality experiences only
three defects per one million opportunities.
Is it Important to have a six sigma level of quality?
2.
a)
It depends on the customers perception of quality. If you are
landing airplanes, it is critical to obtain at least a six sigma
level of quality. If you are manufacturing coffee stirrers, lower
levels of quality may be completely acceptable.
Sigma Level
DPMO
6 Sigma
5 Sigma
4 Sigma
3 Sigma
2 Sigma
1 Sigma
3.4
233
6210
66,810
308,770
697,672
How Good
is Good
Enough?
Sigma
Level
Improvements
3 Sigma
93.3193% Accurate
4 Sigma
99.379% Accurate
• 133,600 lost letters per hour
• 12,420 lost letters per hour
week
• 13 short or long landings at most major
airports each day
• 1,336,000 wrong prescriptions each year
week
• 1 short or long landing at most major
airports each day
• 124,200 wrong prescriptions each year
• 33,400 incorrect surgical operations per
5 Sigma
99.9767% Accurate
• 3,100 incorrect surgical operations per
6 Sigma
99.99966% Accurate
• 466 lost letters per hour
• 6.8 lost letters per hour
most major airports
• 4,660 wrong prescriptions each year
most major airports
• 68 wrong prescriptions each year
• 117 incorrect surgical operations per week
• 17 short or long landings every year at
• 1.7 incorrect surgical operations per week
• 1 short or long landing every 5 years at
11
Lean Six Sigma Methodology
What is Lean Six Sigma?
LSS Methodology
 DMAIC Process
 Key Concepts
 Understanding Variation
 Voice of the Customer
 Voice of the Process
 LSS Organizational Roles
 Champion
 Master Black Belt
 Black Belt
 Green Belt
 Yellow Belt
DMAIC Process
Define
• What is the problem?
• What is the goal?
Measure
• What is the current performance?
• What is the defect rate?
Analyze
• What are the sources of process variation?
• What are the root causes of defects?
Improve
• How do we change the process?
• How do we verify our changes will improve the process?
Control
• Are the improvements to the process consistent over time?
• How do we maintain the improvement into the future?
Key Concepts of LSS
 Understanding of Variation
 Two types of variation
 Controlled variation (Common Causes)
 Uncontrolled variation (Assignable/Special Causes)
 Improvement strategy based on type of variation
 Controlled variation = Change the process
 Uncontrolled variation = Deal with the special events
 Voice of the Customer (VOC)
 How does the customer describe quality
 What is the customers tolerance for defects
 VOC is often expressed as specification limits
 Goals should align with the voice of the customer
Key Concepts of LSS
 Voice of the Process (VOP)
 What is the current process capability
 How much variation is in the process
 How many defects does it produce
 What is the process average
 What process inputs are important to final quality
Conceptual Summary of Lean Six Sigma
Y=ƒ(x)
The Output (Y) is a function (ƒ) of the inputs (x)
LSS Organizational Roles
Champions
Master Black
Belts
Black Belts
Green Belts
Yellow Belts
Lean Six Sigma Success Factors
What are the building blocks for successful LSS programs?
Considerations for LSS Success
 Organizational Factors
 Commitment of Senior Management
 Clear organizational vision and goals
 Effective LSS training strategy
 LSS Team Factors
 Flexibility
 Practicality
 Focus on Customers (Internal and external)
 Strengths of LSS Methodology
 Data Based
 Scalable
 Structured
Considerations for LSS Success
 LSS Challenges
 It is not a quick win approach to continuous improvement
 It requires an investment
 It requires a degree of organizational humility
Applying LSS in Human Resources
Can I apply LSS to my processes?
Questions for Consideration
You have mentioned that LSS is an organizational approach.
Can I learn LSS concepts and apply them to my area of
expertise?
2. What are the challenges faced when trying to apply LSS to
HR processes when the larger organization hasn’t
embraced the methodology?
3. What are the unique challenges for HR in the application
of LSS?
4. What types of process are idea for LSS application?
1.
Effective LSS Application In HR
A Case Study: The New York Independent Operator (NYISO)
NYISO Success Factors
 Well-defined corporate mission and goals
 Executive commitment to LSS
 Established infrastructure to support LSS
 Systematic approach to LSS training
 Focus on core processes (affecting multiple value streams)
 Supportive corporate goal structure
Background -- The Roles of the NYISO
 Reliable operation of the bulk electricity grid

Managing the flow of power nearly 11,000 circuit-miles of transmission lines
from more than 300 generating units
 Administration of open and competitive wholesale electricity
markets

Bringing together buyers and sellers of energy and related products and services
 Planning for New York’s energy future

Assessing needs over a 10-year horizon and evaluating the feasibility of projects
proposed to meet those needs
 Advancing the technological infrastructure of the electric system

Developing and deploying information technology and tools to make the grid
smarter
Case Study Project
 Title: Reduce Cycle Time to Hire for Open Positions
 Problem
 Project baseline data reviewed from November of ‘05 to
November of ‘06
 Average cycle time to hire was 70 days (Median = 43 days)
 Standard deviation was 70 days
 57 percent of positions filled within 60 days
 Goal
 Fill open positions in 60 days or less 90 percent of the time
 Result
 87 percent of positions were being filled in 60 days or less
(2007)
Overview of Improvements
 Defined and communicated HR Hiring Process / Roles to NYISO




Management
Implemented Kick-Off Meetings for all Openings:
 Review/Define Job Specs and Posting information
 Discuss salary range and position level
 Discuss Pre-Screening questions and timing
 Discuss Recruiting strategy
 Review Hiring Process and HR/Hiring Manager Roles
Standardized Pre-Screening process and questions
Developed standard interview format, questions, evaluation
Created dashboards for HR management and Senior Team
reporting
Controls Overview
Process Step
Control Activity
Strategy Session
Requisition signed by HR and Hiring
Manager before recruiting begins
Job Description
Changes
Legal Review for Fair Labor
Standards Act ramifications
Job Posting
Preparation
Hiring Manager review / signoff
before posting
Offer Preparation
Generalists secure approval signoff
from Management and HR
Appendix
Supplemental Material
Improvement Process Road Map
Define
Measure
Analyze
Improve
Control
Define
Measure
Analyze
Improve
Control
Activity
• Identify Problem
• Complete Charter
• Develop SIPOC Map
• Finalize Project Focus
Activity
• Develop Operational Definitions
• Develop Data Collection Plan
• Collect Baseline Data
• Determine Process
Performance/Capability
• Validate Business Opportunity
• Review EBPM&C process maps to
create ‘As-Is’ Process Map
Activity
• Propose Critical X’s
• Prioritize Critical X’s
• Conduct Root Cause
Analysis on Critical X’s
• Validate Critical X’s
• Prioritize Root Causes
Activity
• Develop Potential Solutions
• Develop Evaluation Criteria &
Select Best Solutions
• Work with EBPM&C to create
Develop ‘To-Be’ Process Map(s)
• Develop High-Level
Implementation Plan
• Develop Pilot Plan & Pilot
Solution
Activity
• Develop SOP’s, Training Plan &
Process Control System
• Implement Process
Changes and Controls
• Monitor & Stabilize Process
• Transition Project to Process
Owner
Tools
• Charter Form
• Multi-Generational Plan
• Stakeholder Analysis
• Communication Plan
• SIPOC Map
• Voice of Customer (VOC)
•Defect definition
•Goal definition
Tools
• Operational Definitions
• Data Collection Plan
• Graphical Analysis
•Pareto Chart
•Histogram
•Box Plot
•Run Chart
• Detailed ‘As-Is’ Process Maps
Tools
• Pareto Charts
• Fishbone Diagrams
• Brainstorming
•5 Why’s
• Non Value-Added Analysis
From: NYISO Green Belt Training Module—Intro to LSS
Tools
• Brainstorming
• Solution Selection Matrix
• ‘To-Be’ Process Maps
• Piloting and Simulation
Tools
• Control Charts
• Standard Operating Procedures
(SOP’s)
• Communication Plan
• Implementation Plan
•Training Plan
• Process Control Plans
Lower Spec
Limit
Upper Spec
Limit
68.26 %
-3
-2
-1
Voice Of
The
Process
2
95.44 %
-3
Why 6 Sigma?
1
-2
-1
1
2
3
99.73 %
-3 -2 -1 1
2
3
  
99.99999975
6s Units from the
mean to nearest
spec. limit
Voice Of The
Customer
3
Sources of Information
The New Economics: W. Edwards Deming
Lean Thinking: James P. Womack and Daniel T. Jones
Understanding Statistical Process Control: Donald J. Wheeler
and David S. Chambers
Lean Production Simplified: Pascal Dennis
Knowledge gained producing training material and
supporting LSS training for the following organizations:







Delta Air Lines, Inc.
New York Independent System Operator
Helpful Links
General Info:
Six Sigma Website: http://www.isixsigma.com
Organizations that provide Six Sigma Training:
ASQ: http://asq.org/certification/index.html
BMGI: http://www.bmgi.com/
Disclaimer
This presentation was not prepared by, with, or for the New York Independent System Operator, Inc., and any
opinions expressed or conclusions reached herein are not the opinions or conclusions of the New York
Independent System Operator, Inc.