Transcript Slide 1

PMI-MN Breakfast Meeting
Tuesday, February 14th, 2006
Show Me The Business Value
Discover Lean Six Sigma “Best Bets”
for Tangible Improvements
Presented by: Michelle Goodman
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© 2005 trissential. All Rights Reserved.
[email protected]
3 Part Series Agenda
• What Exactly is Lean Six Sigma?
• Corporate Deployments
• Big is Not Always Better
• Individual Execution
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Project Selection and Scoping
Resource Utilization
Comprehensive Communication
Metrics & Results
Personal Corporate Citizenship Contributions
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What Exactly is Lean Six Sigma?
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© 2005 trissential. All Rights Reserved.
Lean Six Sigma Is the Integration of Two
Powerful Business Improvement Approaches...
Six Sigma
Culture+Quality
Lean
Speed+Low Cost
• Goal – Reduce waste and
increase process speed
• Goal – Improve performance on
Customer CTQs
• Focus – Bias for action/
Implementing known solutions
• Focus – Root Cause Analysis/
Developing Solutions
• Method – Kaizen events
• Method – Black Belts dedicated
to projects
Lean Speed Enables
Six Sigma Quality
Six Sigma Quality Enables
Lean Speed
(Faster Cycles of
Experimentation/learning)
(Fewer Defects Means
Less Time Spent on Rework)
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What is Six Sigma?
– Methodology that helps companies
reduce costs and accelerate growth
through discipline and long-term culture change
– Improves business processes companywide, by
using tools to build process capability, by reducing
variation, and improving quality
– Focus is on delighting the customer (voice of the
customer) & providing excellent service in all
business functions, not just manufacturing
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Statistically Speaking
Sigma is the Greek letter that is a statistical
unit of measurement used to define the
standard deviation of a population. It measures
the variability or spread of the data.
Six Sigma is also a measure of variability. It is a name given to
indicate how much of the data falls within the customers’ requirements.
The higher the process sigma, the more of the process outputs,
products and services, meet customers’ requirements – or, the fewer
the defects.
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Statistically Speaking
Defects per
Million Opportunities
DPMO
s
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69.2%
308,537
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93.32%
66,807
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99.379%
6,210
5
99.977%
233
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99.9997%
3.4
Yield
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Defects per
Million Opportunities
DPMO
s
Yield
2
69.2%
308,537
3
93.32%
66,807
4
99.379%
6,210
5
99.977%
233
Baggage Handling
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99.9997%
3.4
Postal System
Everyday
Occurrences
Plane Landings
Medical Services
What are you willing to pay for?
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What does Lean Add?
• LEAN focuses on the elimination of waste. It
pushes for faster, more efficient processes
that require less effort, less inventory, less
time, and less space while also being highly
responsive to the voice of the customer
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What is the Role of Project Management?
• Work is completed in a Project Team
– Led by a company’s employee who is a
trained Lean Six Sigma expert. These
project managers have titles related to their
level of Lean Six Sigma training, such as
Black Belt or Green Belt.
– The team is populated with members who
also have some basic Lean Six Sigma
training, such as yellow or white belts. LSS
projects have very specific charters,
timelines, and goals and specifically target
repeatable, established processes.
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What is the Project Lifecycle?
• The DMAIC (pronounced duh-May-ick)
methodology is the cornerstone of Lean Six
Sigma, providing discipline and structure to
specific project teams.
• DMAIC stands for Define - Measure Analyze - Improve - Control, which
represent the major phases or gates of the
project lifecycle.
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How do the Lifecycles Work Together?
PMI’s 5 Process Groups
Standard project lifecycle
DMAIC
Six Sigma project lifecycle
Initiating
Define
Monitoring
Planning
(includes initial charter
creation by sponsor)
Measure
Executing
Analyze
Improve
Closing
Control
Realization
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In Total: Lean Six Sigma
When Lean speed and Six Sigma quality are integrated,
the result is a methodology that operates with these basic
principles at its core:
• Focus on the customers’ point of view
• Solve problems in teams
• Create and use data to drive decisions
• Eliminate waste and increase speed
• Reduce variation and increase quality
• Replicate best practices
• Maintain gains over time
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Corporate Deployments
What are the common
characteristics?
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History
• Six Sigma Black Belt methodology began in late 80’s/early 90’s
– Motorola popularized corporate use of methodology
Next wave of companies to utilize Six Sigma:
– GE
– Allied Signal
– Bombardier
– Sony
• Lean Methodologies made famous in Japan’s Automotive
Industries over last 30 years
• Current deployments in Six Sigma have added Lean component
and have been broader in application and industry
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Caterpillar – across enterprise and into dealer / supplier
Xerox
Home Depot
Ecolab
Thrivent
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Why is LSS attractive?
• Execution Capability
• Resource Utilization
– Project Selection & Prioritization
• Cost Reduction
• Revenue Growth
– Customer Retention
• Culture Change
– Data-based Decision Making
– Project Management Skills
• Leadership Development
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What’s the difference from
past improvement initiatives?
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Infrastructure and System
Burning Platform
Executive Driven - Visibility
Complete Company Involvement
Full-time Resources (getting most attention)
Project Management Methodology
– Chartering and Scoping
• Measurement and Tracking
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Lean Six Sigma is a System
DMAIC Methodology for Process Improvement
Improvement
Methodology
Design/
Redesign
Methodology
Define &
Measure
Analyze
Improve
Control
DFSS Methodology for Process/Product Design
Deployment &
Infrastructure
Management
Initiate &
Define
Design
Optimize
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DMAIC improves existing processes, products, services, designs, plants, etc.
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DFSS generates new processes, products, services, plants, etc.
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Deployment & Infrastructure Management is the system that:
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Verify
Prioritizes organizational action on the right things
Drives effective action
Ensures sustainability and consistency
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Lean & Six Sigma Tools
Define
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Project ID Tools
Project Definition Form
Value of Cycle Time
Net Present Value
Analysis
Internal Rate of Return
Analysis
Discounted Cash Flow
Analysis
PIP Management Process
RACI
Quad Charts
Measure
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Process Mapping
Value Stream Mapping
Process Cycle Efficiency
Lean Six Sigma Metrics
Process Sizing
Kaizen Events
Multi-Voting Techniques
Pareto Charts
C&E/Fishbone Diagrams
FMEA
Check Sheets
Run Charts
Control Charts
Gage R&R
Subjective Measurement
Systems
Analyze
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Cp & Cpk
SupplyChainAccelerator
Time Trap Analysis
Analytical Batch Sizing
Multi-Vari
Box Plots
Interaction Plots
Regression
ANOVA
C&E Matrices
FMEA
Improve
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Control
Brainstorming, Affinity
Benchmarking
Kaizen Events
Pull Systems
• Generic
• Replenishment
Part Stratification
Setup Reduction
TPM, 5S
Process Flow
Line Balancing
DOE
Hypothesis Testing
Force Field
Tree Diagrams
Gantt Charts
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Check Sheets
Run Charts
Histograms
Scatter Diagrams
Control Charts
Visual Control Tools
Poka-Yoke
Pareto Charts
Interactive Reviews
Lean tools highlighted in red
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Lean Six Sigma Commitment Required at Every Level
Executives /
BU Leadership
• Owns vision, direct,
integration, results
• Leads change
Project Team
Members
• Provide projectspecific support
• Part time
Master
Black Belts
• Trains and coaches
Black Belts and Six
Sigma Green Belts
• Leads large/complex
projects
• Full time
Deployment
Champions
• Leads business unit
performance improvement
All Employees
• Understand vision
• Apply concepts to their
job and work area
• Full time
Project
Sponsors
• Project owner
Black Belts
Green Belts
• Participate on Black
Belts teams and/or lead
small projects
• Part time on projects
• Implements solutions
• Owns financial results
• Part time as part of job
• Leads and Facilitates
problem solving
• Trains and coaches
Project Teams
• Full-time
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Deployment Must Haves
1. Full executive commitment (CEO and direct reports)
2. P&L/Business owners must be accountable for results and
should own and commit resources – typically 1% of population as
Black Belts
3. Select projects to support business needs (strategic, financial
objectives, customers)
4. Broad-based training in Lean Six Sigma tools and team
leadership skills
5. Actively manage PIP (Projects in Process) to keep project cycle
times short and show results quickly
6. Rigorously measure and track results (projects and deployment)
7. Drive culture change from both top-down and bottom-up
perspective – The Soft Stuff is the Hard Stuff
8. Use A -Team for deployment (consultants, program managers, 1st
wave belts)
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Big is not always Better!
Why the Change in Focus?
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Big is Not Always Better
• Too many OOOPS in last couple of years
• Trigger points for problems
– Lack of Visible, Tangible, and Transparent Results
• Enron, World Com, Collapse of Retirement Funds
– Downplay of incremental business value and results
in everyday transactions
– Hype and promises of large implementations and
execution strategies as silver bullet
• CRM, ERP, Off-Shoring, (Lean Six Sigma?)
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Criticism of Lean Six Sigma
• Stringent deployment approach discounts other
methodologies and takes on “life of its own”
• Employee backlash against “elitist systems”
– Exclusive versus inclusive due to selection process &
– certification requirement
• Turnover in executives or loss of active support
can change deployment results as LSS is CEO
driven
• Works best when there is a Burning Platform for
change
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© 2005 trissential. All Rights Reserved.
Big is Not Always Better
• Today’s business results are mostly measured in
quarterly increments
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Wall Street Earning Announcements
Board Meetings
Strategy and Budget Reviews
Personnel Changes
Market Fluctuations
Competitor Activities
• Low patience for promises of long-term
improvement without incremental progress
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Back to the Basics
• Cyndi Lesher – President and CEO of Xcel
Energy
– If it’s too good to be true ….. it isn’t
– Incremental, realistic, transparent business
results
– No room for “Pack Mentality” when it comes to
personal and business ethics
– Individual accountability and achievement
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© 2005 trissential. All Rights Reserved.
Back to the Basics
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Federal legislation - Sarbanes Oxley
Corporate governance changes
Push for empowerment at lower levels
Individual accountability
Education on business ethics
Changes in performance reviews
– looking at process and results including 360 degree
component
Ultimately – focus on and opportunity for
individuals to perform and be recognized
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Desirable Characteristics…….
Not just for Black Belts
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Team Facilitation – Strong ability to lead effective teams
Problem Solving – Proven orientation to be a problem solver
Process Orientation – Demonstrated ability to understand and
identify process vs. functions
Change Facilitation – Demonstrated ability to drive change across
functional boundaries
Communication Skills – Ability to engage a wider audience
through a variety of media, but including presentation
Computer Knowledge – Ability to effectively utilize technology,
including Microsoft Office applications, or applicable, and the web
Financial Skills – Ability to understand basic financial documents
(I.e Income statement and balance sheet) and develop project
based cost/benefit analysis
Program and Project Management – Ability to develop a workplan
and actively lead a team through it’s completion
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© 2005 trissential. All Rights Reserved.
Sneak Peak
• What Exactly is Lean Six Sigma?
• Corporate Deployments
• Big is Not Always Better
• Individual Execution LSS “Best Bets”
–
–
–
–
–
Project Selection and Scoping
Resource Utilization
Comprehensive Communication
Metrics & Results
Personal Corporate Citizenship Contributions
29
© 2005 trissential. All Rights Reserved.
Conclusion
Michelle Goodman, MBA, PMP
Senior Process Consultant
O 952-595-7970
C 651-261-9422
[email protected]
www.trissential.com
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© 2005 trissential. All Rights Reserved.