Transcript Title Slide Is Arial Regular

Process Improvement:
Which Methodology is Best for
Your Project?
PMI Skyline Luncheon
Sharon Valencia, PMP
Agenda
• Definitions
• Business Improvement Methodologies
• Methodology Comparison
• Process Management
• Process Mapping
• Enabling Project Success
© 2006 Process Improvers, LLC
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What is a Process?
• Any set of activities that when taken together, transform a series of inputs
into an output, producing a result of value to a customer
Process
Output
Customer
Suppliers
Input
SIPOC
© 2006 Process Improvers, LLC
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What is a Business Improvement Methodology?
• A documented set of procedures, guidelines, and tools intended to
develop better processes
• Business improvement methodologies covered in this presentation:
– Kaizen
– Lean
– Six Sigma
– Lean Six Sigma
– Design for Six Sigma (DFSS)
© 2006 Process Improvers, LLC
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Kaizen
• Defined: Philosophy of gradual, incremental, and orderly continuous
improvement, creating more value and less waste; emphasis on
process improvement and process control; Japanese word meaning
“ongoing improvement”
• Objective: Small improvements by optimizing existing systems
• Requires:
– Taking action on obvious problems and deviations to maintain process
control
– Establishing control through Standard Operating Procedures (SOPs)
– 1-10 days
© 2006 Process Improvers, LLC
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Kaizen’s Deming/ Shewhart PDCA Cycle
Plan
Start with an
idea for doing
the job better;
study the
current
situation;
identify the
problem and
formulate a plan
Do
Conduct
experiments
to investigate
the idea;
implement the
plan on a
small scale
Check
Observe and
evaluate results
to determine if
the idea
produced the
desired results
Act
If desired results
were achieved,
implement the
change into the
SOP
* It is also acceptable to use the DMAIC framework for Kaizen events
© 2006 Process Improvers, LLC
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Lean
• Defined: Focus on speed, efficiency, and elimination of waste
• Objective: Maximizing process speed (cycle time) by reducing waste
• Requires:
– Elimination of waste (muda): Defects, overproduction, inventories,
unnecessary processing, unnecessary movement of people, unnecessary
transport of goods, waiting, designing goods and services that don’t meet
customers’ needs
– Value stream mapping: Map process and focus on elimination of nonvalue add activities
• Ask what activities the customer is willing to pay for
– Focus on process standardization
© 2006 Process Improvers, LLC
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Lean’s 5s Approach
Sort
Determine what
is necessary to
perform the job;
Eliminate
unnecessary
items from the
workplace
© 2006 Process Improvers, LLC
Straighten
Arrange all
essential
items so that
they are
clearly
marked and
easily
retrieved
Scrub
Keep clutter
out of the
workplace;
Scrub all
machines and
the work
environment to
maintain
cleanliness
Systematize Sustain
Make cleaning
and organizing
routine; promote
an orderly work
environment;
perform work
the same way
every time
(standardize)
Sustain the
other steps
and
continually
improve the
process
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Six Sigma
• Defined: Data-driven methodology focusing on reducing defects and
variability
– 6 σ = 3.4 defects per million (Motorola Shift)
– σ = Sigma = Standard deviation
• Objective: Reduce variability through continuous process
improvement
• Requires:
– Processes must be in place
– The processes must be predictable (in statistical control with normal
distribution)
– The processes must be improved by reducing variation (continuous
improvement)
– Data availability
– Focus on understanding customer requirements
© 2006 Process Improvers, LLC
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Six Sigma Distribution
Lower Control Limit/
Specification
Upper Control Limit/
Specification
Normal, Bell-Shaped Curve/
Distribution of Values
Defects
© 2006 Process Improvers, LLC
Defects
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The Importance of Six Sigma
• Traditional Quality (3 σ: 66,807 DPMO) • 6 σ Quality (No Motorola Shift)
– 54,000 incorrect drug prescriptions
– One incorrect drug prescription every
per year
25 years
– 40,500 newborn babies dropped each
– 3 newborn babies dropped each
year
century
– Unsafe drinking water two hours each
– Unsafe drinking water one second
month
every 16 years
Source: Institute of Industrial Engineers
© 2006 Process Improvers, LLC
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DMAIC Framework for Six Sigma
Define
Define the goals
of the
improvement
activity;
determine
project’s
business case;
identify
customer; map
current & future
state processes;
determine scope
© 2006 Process Improvers, LLC
Measure
Analyze
Improve
Control
Measure the
existing
system or
process;
determine
metrics;
define project
success
factors
Analyze the
system to
eliminate gap
between
current system
or process and
the desired
goal;
determine and
reduce
obstacles to
achievement
Improve and
implement the
system or
process;
determine
necessary
activities to
achieve goals
Control the
system or
process,
including
risk, quality,
cost, scope,
change
management;
determine
reporting
needs
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Lean Six Sigma
• Defined: Approach to eliminating waste and variation
• Objective: Increase quality and reduce defects/variation while
increasing process speed and efficiency
• Requires: The combination of both Lean and Six Sigma methods and
tools
© 2006 Process Improvers, LLC
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DMAIC for Lean Six Sigma
Define
Measure
Analyze
Improve
Control
• Integrate the methodologies and tools of both Lean and Six Sigma at
each phase
© 2006 Process Improvers, LLC
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Design For Six Sigma (DFSS)
• Defined: DFSS uses tools, training, and measurements to enable the
design and development of products, services, and processes that
meet customer expectations at Six Sigma quality levels
• Objective: Optimize the design and development processes to achieve
Six Sigma quality levels from the beginning
• Requires: A new product, service, or process to design and develop
© 2006 Process Improvers, LLC
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DMADV Framework for DFSS
Define
Define the goals
of the design
act; determine
critical to
quality (CTQ)
characteristics
and their
relative
importance
© 2006 Process Improvers, LLC
Measure
Identify CTQs
to be
addressed;
establish
metrics for
CTQs;
determine how
customer
satisfaction
will be
measured
Analyze
Link CTQs to
features &
determine
importance;
perform
process
benchmarking;
develop,
evaluate, and
select designs
Design
Detain selected
design; simulate
process; ensure
design meets
CTQs; develop
implementation
plan
Verify
Standardize;
establish
control
metrics;
develop
transition
plan
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Methodology Analogy
Lean
Six
Sigma
Six
Sigma
Lean
Kaizen
© 2006 Process Improvers, LLC
Design
For
Six
Sigma
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Methodology Comparison
Kaizen
Lean
Six Sigma
Lean Six Sigma
Defined
Philosophy of gradual,
incremental, and
orderly continuous
improvement, creating
more value and less
waste; emphasis on
process improvement
and process control
Focus on speed,
efficiency, and
elimination of waste
Data-driven
methodology focusing
on reducing defects and
variability
Approach to
eliminating waste and
variation; combines
both Lean and Six
Sigma tactics
Objective
Small improvements by
optimizing existing
systems
Maximizing process
speed by reducing
waste
Reduce variability
through continuous
process improvement
Requirement(s)
 Taking action on
deviations to
maintain process
control
 Establishing control
through Standard
Operating
Procedures (SOPs)
Increase quality and
reduce defects/variation
while increasing
process speed and
efficiency
 The combination of
both Lean and Six
Sigma tools and
methods
Approach
Kaizen’s DemingShewhart PDCA Cycle
 Plan
 Do
 Check
 Act
DMAIC is acceptable
© 2006 Process Improvers, LLC
 Taking action on
deviations to
maintain process
control
 Elimination of waste
(muda)
 Value stream
mapping
5S
 Sort
 Straighten
 Scrub
 Systematize
 Sustain
 Processes must be in
place
 The processes must
be predictable (in
statistical control
with normal
distribution)
 The processes must
be improved by
reducing variation
(continuous
improvement)
 Data availability
DMAIC
 Define
 Measure
 Analyze
 Improve
 Control
DMAIC; Integrate the
methodologies and
tools of both Lean and
Six Sigma at each
phase
DFSS
DFSS uses tools,
training, and
measurements to enable
the design and
development of
products, services, and
processes that meet
customer expectations
at Six Sigma quality
levels
Optimize the design
and development
process to achieve Six
Sigma quality levels
from the beginning
 A new product,
service, or process to
design and develop
DMADV
 Define
 Measure
 Analyze
 Design
 Verify
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Lean and Six Sigma
• Lean cannot bring a process under statistical control
• Six Sigma does not dramatically improve process speed or reduce
invested resources
• Combining Lean and Six Sigma maximizes advantages and reduces the
disadvantages of each individual approach
© 2006 Process Improvers, LLC
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Which Methodology is Best?
• “Best” is depends by the needs and current state of your
organization
• “Best” may be a combination of methodologies
• An organization ready for Six Sigma is also ready for Lean or other
methodologies
• The name of methodology used doesn’t matter; what matters is
leadership, commitment, vision, strategy, and follow-through from
supplier to customer
© 2006 Process Improvers, LLC
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Business Process Management
• The future of business processes lies not in one methodology, but in
the integration of technologies and methodologies in order to facilitate
execution of the process
• Customers are demanding customizations and total solutions
• Innovative business processes can lead to competitive advantage
• Business processes will drive IT
© 2006 Process Improvers, LLC
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Changing Competitive Environment
• The only thing certain in business is change
• Industry boundaries are evaporating
• The entire value chain is involved in providing total solutions to
customers:
– Competition
– Collaboration
– Partners may also be competitors
© 2006 Process Improvers, LLC
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Process Mapping
• Regardless of the methodology, start with mapping the current
processes
– Identifies current state, opportunities for improvement, process time
– Allows identification of all process steps in order to determine which steps
are value added or bottlenecks
– Knowing current state will assist in identifying improvement opportunities
• As-is vs. future process time, number of steps, handoffs, etc.
• Determine steps which add value
© 2006 Process Improvers, LLC
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Benefits of Process Mapping
• Gain understanding of the process and process objectives
– Answers who (including suppliers and customers), what, when, where,
how, and duration
– Identifies the information or data used in the process, decisions,
bottlenecks
• Identify sources of waste
• Improve supplier and customer relations
• Provides a common language for talking about the process
© 2006 Process Improvers, LLC
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Sample Process Map
Patient
Medic
Other
Vendor
Clerk
Provide Care
EMS Supv
Rework
Complete PPCR
Review PPCR
Completed PPCR
Approved PPCR
Perform Quality
Check
Incomplete
PPCR
Batallion Chief
Incomplete PPCR
Review
Complete PPCR
Enter Data in
System
Print & Mail Bills
Need
Insurance Info
Receive Bill &
Insurance
Authorization
Return
Insurance
Authorization
© 2006 Process Improvers, LLC
Bill & Insurance
Authorization
Completed Insurance
Authorization
Insurance
Info
On File
Insurance
Company
Remit Payment
Sort, Assemble, &
Mail Bills
Enter Insurance
Information
Print & Mail Bills
Insurance Info On File
Insurance
Company
Payment
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Indications of Process Improvement Opportunities
Internal
External
• Non-compliance to Industry Standards • Benchmarking
– Company vs. World Class Performers
• Scrap
• Market Share Drop
• Rework
• Negative Publicity
• Short Cuts to Beat the System
• Pricing Inflexibility
• Excess Inventory
• Warranty Costs
• Capacity Constraints
• Low Efficiency/ Productivity/Yields
• Employee Symptoms
• Shared Responsibility
© 2006 Process Improvers, LLC
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Enabling Project Success
• Management buy in is required from the start
• Align goals with the strategic direction of the organization
• Combine project ownership and accountability
• Manage change – do it early, do it often
• Allocate appropriate staff and time
• Train staff in applicable techniques
• Eliminate process variation
© 2006 Process Improvers, LLC
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Experience. Results.
Sharon Valencia, PMP
Principal
Computer Sciences Corporation
[email protected]