01 overview of lean six sigma

Part 01 of 09
Overview to Lean Six Sigma

Overview to Lean Six Sigma | LASSIB | http://www.lassib.org/
Release date: 8th Feb, 2011 Version: 1.0

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LASSIB Team
2

Enterprise-wide View

History of Value and Value and Integration of lean Business Six sigma and lean
continuous foundations of six foundations of and six sigma processes and applications
improvement sigma lean •The relationship systems •How these tools are
•The origins of •The value of six •The value of lean, its between lean and six •The relationship among applied to processes in
continuous sigma, its philosophy, history, sigma. various business all types of enterprises:
improvement and its philosophy, history, an and goals. processes manufacturing, service,
impact on other d goals. (design, production, pu transactional, product
improvement models. rchasing, accounting, sa and process
les, etc.) and the impact design, innovation, etc.
these relationships can
have on business
systems.

3

The origins of continuous improvement and its impact on other improvement

HISTORY OF CONTINUOUS IMPROVEMENT
models

4

History of continuous Improvement

WESTERN MODELS EASTERN MODELS

• W Edwards • 7 QC Tools
Deming • New 7 Tools
• Joseph M Juran • Quality Circles
• Phil Crosby • Kaizen
• Walter Shewhart • Poka Yoke
• Value Engineering •5S
• IDEAL Model • TPM
• Just-In Time

5

W Edwards Deming – The Deming Wheel

Source:
http://www.aacc.org/SiteCollectionDocuments
/hall_of_fame/Deming_W_Edwards_200.gif

Source: http://upload.wikimedia.org/wikipedia/commons/7/7c/PDCA-Cycle.png

6

W Edwards Deming – Deming’s 14 principles
Deming offered fourteen key principles for management for transforming business effectiveness. The
points were first presented in his book Out of the Crisis.

1. Create constancy of purpose toward improvement of product and service, with the aim to become
competitive and stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to
the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass
basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move
towards a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and
productivity, and thus constantly decrease cost.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to
do a better job. Supervision of management is in need of overhaul, as well as supervision of
production workers.

7

W Edwards Deming – Deming’s 14 principles
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales, and production must work
as a team, to foresee problems of production and in use that may be encountered with the product or
service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of
productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low
quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by
objective. Eliminate management by numbers, numerical goals. Substitute workmanship.
12. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of
supervisors must be changed from sheer numbers to quality. Remove barriers that rob people in
management and in engineering of their right to pride of workmanship. This means, inter
alia, abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everyone in the company to work to accomplish the transformation. The transformation is everyone's
work. "Massive training is required to instill the courage to break with tradition. Every activity and every
job is a part of the process."

8

W Edwards Deming – Seven Deadly Diseases

The Seven Deadly Diseases (also known as the "Seven Wastes"):
1. Lack of constancy of purpose
2. Emphasis on short-term profits
3. Evaluation by performance, merit rating, or annual review of performance
4. Mobility of management
5. Running a company on visible figures alone
6. Excessive medical costs
7. Excessive costs of warranty, fueled by lawyers who work for contingency fees

A Lesser Category of Obstacles:
Neglecting long-range planning
Relying on technology to solve problems
•

Seeking examples to follow rather than developing solutions
•

Excuses, such as "Our problems are different”
•
•

9

Joseph M Juran – The Pareto Principle

It was in 1941 that Juran The Pareto principle of Time vs. Results

discovered the work of
Vilfredo Pareto
•

20% of
Juran expanded the Pareto results
principle applying it to
quality issues (for
•

80% of time
example, 80% of a problem expended
is caused by 20% of the
Source:
http://img.freebase.com/api/trans/imag

causes)
e_thumb/en/joseph_m_juran?pad=1&ma

80% of
xheight=110&mode=fillcropmid&maxwi

results
dth=110

This is also known as "the
vital few and the trivial
many". In later years Juran
•

20% of time
has preferred "the vital few
and the useful many" to
signal that the remaining
80% of the causes should not
be totally ignored

10

Joseph M Juran – The Management Thoery
When Juran began his career in the 1920s the principal focus in quality management was on the quality of
the end, or finished, product
•

The tools then used were from the Bell system of acceptance sampling, inspection plans, and control
charts. The ideas of Frederick Winslow Taylor dominated
•

Juran is widely credited for adding the human dimension to quality management. He pushed for the
education and training of managers
•

For Juran, human relations problems were the ones to isolate. Resistance to change—or, in his
terms, cultural resistance—was the root cause of quality issues. Juran credits Margaret Mead's book
Cultural Patterns and Technical Change for illuminating the core problem in reforming business quality.
•

He wrote Managerial Breakthrough, which was published in 1964, outlining the issue
Juran's vision of quality management extended well outside the walls of the factory to encompass non-
manufacturing processes, especially those that might be thought of as service related. For example, in an
interview published in 1997 he observed:
•

“The key issues facing managers in sales are no different than those faced by managers in other
disciplines. Sales managers say they face problems such as "It takes us too long or we need to reduce
the error rate." They want to know, "How do customers perceive us?" These issues are no different
than those facing managers trying to improve in other fields. The systematic approaches to
improvement are identical…
There should be no reason our familiar principles of quality and process engineering would not work
in the sales process…”

11

Joseph M Juran – The Quality Trilogy

QUALITY PLANNING QUALITY CONTROL (DURING OPERATIONS)

Sporadic
zone
40 -
(as a % of operating budget)
Cost of poor quality

Original zone of
quality control

20 - Chronic waste
(an opportunity

Savings
for improvement)
New zone of
quality control

QUALITY IMPROVEMENT

0 Time

Lessons learnt

12

Philip Crosby
Philip Crosby started the management consulting company Philip Crosby
Association, Inc
•

This consulting group provided educational courses in quality
management both at their headquarters in Winter Park, Florida, and at
eight foreign locations. In 1979 Crosby published his first business book,
•

Quality Is Free. This book became popular at the time because of the crisis
in North American quality
During the late 1970s and into the 1980s North American manufacturers
were losing market share to Japanese products largely due to the
superiority of quality of the Japanese products.
•

Crosby's response to the quality crisis was the principle of "doing it right
the first time" (DIRFT). He would also include four major principles:
•

– the definition of quality is conformance to requirements
– the system of quality is prevention
– the performance standard is zero defects
– the measurement of quality is the price of nonconformance
Source:
http://www.wppl.org/wphistory/phili
pcrosby/PhilipCrosby.jpg

13

Philip Crosby’s Quality Improvement Program

1. Management is Committed to Quality 8. Train supervisors in quality
2. Create Quality Improvement Teams improvement
3. Measure processes to determine 9. Hold zero defects days
current and potential quality issues 10. Encourage employees to create their
4. Calculate Cost of (poor) Quality own quality improvement goals
5. Raise Quality Awareness of all 11. Encourage employee communication
Employees with management about obstacles to
6. Take Actions to Correct Quality quality (Error-Cause Removal)
Issues 12. Recognise participants’ effort
7. Monitor progress of quality 13. Create quality councils
improvement – establish a zero 14. Do it all over again – quality
defects committee improvement does not end

14

Philip Crosby’s Stages

Uncertainty Awakening Enlightenment Wisdom Certainty

• COPQ : 20% • COPQ : 18% • COPQ : 12% • COPQ : 8% • COPQ : 2.5%
• Blame QD • QM begins • CA • DP is routine • QI is normal

Crosby's name is best known in relation to concepts of “Do it Right, First time” and
“Zero Defect”.

COPQ - Cost of Poor Quality
Quality is defined as
conformance to requirements,
QD – Quality Deployment

not as “goodness” or “elegance”. QM –Quality Management
CA – Cost Acceptance
DP – Defect Prevention
QI – Quality Improvement

15

Walter Shewhart
Statistical Process Control (SPC) is an
effective method of monitoring a process
through the use of control charts.
•

Control charts enable the use of objective
criteria for distinguishing background
variation from events of significance based
•

on statistical techniques. Much of its power
lies in the ability to monitor both process
center and its variation about that center.
By collecting data from samples at various
points within the process, variations in the
Source:

process that may affect the quality of the end
http://www.firstmetre.co.uk/image.php?
•

product or service can be detected and
w=250&h=334&f=/UserFiles/Image/Oc
tober+Images/Shewhart-c1926.jpg

corrected, thus reducing waste as well as the
likelihood that problems will be passed on to
the customer.
Because of its emphasis on early detection
and prevention of problems, SPC has a
distinct advantage over quality
•

methods, such as inspection, that apply
resources to detecting and correcting
problems in the end product or service.

16

Walter Shewhart – Father of Statistical Process Control

Statistical Process Control is the application of statistical techniques in the
Control of processes
Define
Problem

Implement Define
Solution Process

Analyze List Possible
Data Reasons

Collect Data

17

Value Engineering
Value Engineering objective:
To develop the best solution to meet the project objective

Step 1: Information gathering
Define project objective
Develop terms of reference
Identify assumptions and facts
Gather information (physical parameters, cost, schedule)

Step 2:Function analysis
Analyze functions required to deliver project objectives
Describe each identified functions
Classify functions: Basic functions

Step 3:Value analysis
Creatively identify options and alternatives to perform functions
Research options
Identify cost and cost benefits Idea roots identified for
Identify risks (barriers and uncertainties) further analysis
Alternative solutions to
perform functions

Step 4:Option evaluation
Evaluate idea roots developed in Step 3 and identify those for further analysis
Compare solutions and screen out unfeasible / least valuable alternatives
Identify solutions for further analysis (iterate) Screen out unsuitable
options

Step 5:Judgment
Use judgment to identify the best value solution

18

IDEAL Model
Analyze and Learning
validate
Implement Propose future
solution actions

Acting

Build Set Stimulus for
change
Charter
Refine solution
infrastructure sponsorship Content

Initiation

Characterize
Pilot / test solution desired & current
state

Develop
Create solutions
recommendations
Diagnosis

Plan actions Set priorities

Develop approach

Establishing

19

Seven QC tools
Check sheets

Process behavior / Control charts
Pareto diagram

Graphs
Fish bone diagram

Histograms
Scatter diagrams
Source: http://media.texample.net/tikz/examples/PNG/pie-chart.png

Source: http://farm3.static.flickr.com/2671/4235318918_15e2a8feaf.jpg
Source: http://upload.wikimedia.org/wikipedia/commons/c/c7/Histograma_pisuaktom.JPG

20

Matrix diagrams

Arrow diagrams
New Seven QC Tools

Matrix data analysis
Affinity Diagrams

program chart
Process decision
Relationship Diagrams

Tree Diagrams

Source:
Affinity Diagram: http://farm4.static.flickr.com/3136/2583400109_7c57ff718c_o.png
Relationship Diagram: http://upload.wikimedia.org/wikipedia/commons/b/b7/Typical_dependency_relations_between_AIS_services.JPG
Tree Diagram: http://farm1.static.flickr.com/14/15276524_45307f082d.jpg
Process decision program chart: http://1.bp.blogspot.com/_5ieXw28ZUpg/SULVbS2LvxI/AAAAAAAAAwI/SPYcwibZkfE/s1600-h/obap2.PNG
Matrix data analysis: http://upload.wikimedia.org/wikipedia/commons/7/76/Folio_Plot_BCG_Matrix_Example.png
21

Matrix diagrams: http://farm3.static.flickr.com/2182/2040911590_f6f946e72a_o.png
Arrow diagrams: http://upload.wikimedia.org/wikipedia/commons/a/af/Linalg_map_change_basis_3.png

Quality Circle Concept

S.No. Particulars What they mean?

1 Concept The main objective of Quality Circles is “self” and mutual
development, cohesive team work and to be engaged in continuous
improvement activities, thus improving their quality of work life
2 Identification of problem QC Members with the help of Round Robin Method, try to identify
their own day to day work related problems
3 Problem selection Identified problems are segregated into three categories based on
difficulty of their solution
4 Meetings QCs have periodic meetings to discuss, analyze and find solutions to
the problems on a pre-fixed schedule
5 Various problem solving steps QCs follow a 12 step methodology, starting from identification of
problems to solution, implementation, follow up and review.
6 Approval of project Project has to be approved by the Steering Committee or the
executives nominated by the Steering Committee.
7 Gains The aim of QC is to “develop people”. In other words, self and mutual
development through QC activities. Hence, the focus is not on gains in
terms of money

22

Kaizen

• Japanese term that means continuous improvement, taken from words:
– ‘kai' which means continuous
– 'zen' which means improvement
• Kaizen, or rapid improvement processes, are the building block of all Lean
production methods. Kaizen philosophy implies that all, incremental
changes routinely applied and sustained over a long period result in
significant improvements
• The kaizen strategy aims to involve workers from multiple functions and
levels in the organization in working together to address a problem or
improve a particular process
• The team uses analytical techniques, such as Value Stream Mapping, to
quickly identify opportunities to eliminate waste in a targeted process.
The team works to rapidly implement chosen improvements

23

Kaizen – Continuous improvement
Do it again

Document
Celebrate
reality

Identify Start
Standardize here
waste

Measure Eliminate
results waste

Verify Reality For counter
changes check measures

Make
changes

24

Poka Yoke / Mistake Proofing - Overview
• A technique for eliminating errors
• Making it impossible to make mistakes

Elimination
Best
Eliminate the possibility of error
Replacement
–

Use the highest level
Substitute a more reliable process

possible for the
Facilitation
–

Better
application.
Make work simpler to perform
Detection
–

Detect the error at the defect source
Good Mitigation
–

– Minimize the effect

It is good to do it right the first time; it is even better to make it impossible to do it wrong the first time.

25

Poka Yoke / Mistake Proofing - Examples

• While closing a word document, one is asked
whether to save the file or not
• Spelling check option in a word document

Source: http://upload.wikimedia.org/wikipedia/commons/0/04/DIN_lang_-_Letter_Window.JPG
• In three pin plugs / socket, the earth pin / socket
is larger in length and diameter so that one
doesn’t mistakenly insert it otherwise
• The window in a envelop ensures that right
content reaches the right person
• The fuse box in a house is meant to prevent fire in
electrical systems

26

5S – A Framework to create and maintain your workplace

•Means SORT -
SEITON •Means SHINE -
SEIKETSU •Means SUSTAIN – Self
Organization Cleanliness discipline
•Distinguish between •Means SET IN ORDER •Cleaning and looking •Means STANDARDIZE •Stick to the
what is and is not - Orderliness for ways to keep it – Adherence rules, scrupulously
needed •A place for everything clean •Clearly define tasks
and everything in its and procedures

SEIRI SEISO SHITSUKE
place

Implementing the 5S is often the first step in Lean Transformation

27

TPM - Total Productive Maintenance

• TPM (Total Productive Maintenance) seeks to engage all levels and
functions in an organization in maximizing the overall effectiveness of the
process
• TPM's goal is the total elimination of all losses
• TPM focuses on preventing:
– Breakdowns (preventive maintenance)
– “Mistake-proofing" the equipment (or poka-yoke) to prevent
breakdowns
– Make maintenance easier (corrective maintenance)
– Designing and installing equipment that needs little or no
maintenance (maintenance prevention)
– Quickly repairing equipment after breakdowns occur (breakdown
maintenance).

28

Release date: 8th Feb, 2011
Autonomous Maintenance

Version: 1.0
Focus Improvement

Planned Maintenance

Quality Maintenance
TPM - Total Productive Maintenance

8 Pillars of TPM

Initial Flow Control

Education & Training

Safety, Health &Environment

TPM in office
29

Just in Time (JIT)

• Just In Time (JIT) is a manufacturing philosophy which leads to
"Producing the necessary units, in the necessary quantities at the
necessary time with the required quality”
• It is an approach to achieving excellence in the reduction or total
elimination of waste (Non-Value Added Activities)
• Examples of waste according to JIT:
– Overproduction
– Unneeded Inventory
– Defective Products
– Transport and Waiting Time

30

The value of six sigma, its philosophy, history, and goals
VALUE AND FOUNDATION OF SIX SIGMA

31

Evolution of Quality
LEAN ENTERPRISE

ROBUST PROCESS BUSINESS INTELLIGENCE
DESIGN

DOE
BUSINESS RESULTS

ECONOMETRICS
BUSINESS PROCESS MANAGEMENT

DMAIC

RCM

DFSS
TPM

TEAM BUILDING
5S FMEA

SPC
CONCURRENT ENGINEERING

ZD
QFD
VE
TQM
DF(X)

KAIZEN CQI PROBLEM SOLVING
STRATEGY
7 QCT PDCA

32

INDUSTRY SNIPPETS

'No matter which level of Six Sigma training the respondents completed, their average salaries
are higher than the respondents who didn't complete any Six Sigma training.’

'During the past 10 years Six Sigma has become one of the most widely practiced process
improvement methodologies in both service and manufacturing industries.’

'GE produces annual benefits of over $2.5 billion across the organization from Six Sigma.’

'The savings as a percentage of revenue for a company can vary from 1.2% to 4.5%.’

'Lean Six Sigma techniques implemented throughout the Army continue to prove successful, and
leaders anticipate reaching a $2 billion-savings mark this year.’

33

What is Lean Six Sigma?

A Set of Proven Tools and A set of proven tools and technique
Techniques used to achieve used to solve business problems
Business growth and goals Control
Define

Improve
A framework that builds A mechanics to develop

Measure
a Customer centric approach leadership talent within
with a focus on delivering an organization
business results Analyze

34

Lean Six Sigma – Why is it so successful?

Highest
Leaders
Lean and Six Sigma (6σ)

Skill

Medium
Managers
Larger % of Skill

Lower
employees in
need of skills to

Associates
Skill
deliver
customer value
and Business
Value

35

Historical Perspective

1979:
Motorola 1995: Jack 2000: GE
Starts Six Welch Saves ~$2
Sigma Initiates Six Billion
Initiative Sigma in GE Annually

1986: 1998: Allied
Motorola Signal Saves
Saves ~$16 ~$1.2
Billion Billion

36

Mean vs. Variation

Archer A Archer B

Mean of Archer A is zero and that of Archer B is significantly higher. But which one would you choose?
One that had inconsistent performance (Archer A, high variation) or one that was very consistent (Archer B, very low variation)

37

Statistical Perspective

Mean = 20

(Lower Specification)
σ = 0.5 (Upper Specification)

σ σ

A defect is any value that falls outside Customer Specifications

23
17

20

38

Quantitative Perspective
99% Right (3.8 Sigma) 99.99966% Right (6 Sigma)

No electricity for 7 hours per month No electricity for 1 hour every 34 years

5,000 incorrect operations per week 1.7 incorrect operations per week

20,000 wrong prescriptions per year 68 wrong prescriptions per year

Defects per Million
σ
Opportunities
1 697,672.15
2 308,770.21
3 66,810.63
4 6,209.70
5 232.67
6 3.40

39

Quantitative Perspective
Airline fatality rate 0.52 PPM
Sigma (σ)
World Class, Six Sigma 3.4 PPM

1:1,000,000

Five Sigma 233 PPM

Motorola 1990
Four Sigma 6,209 PPM

Hospital fatality rate due to mistakes
Restaurant bills
1:100 Doctor prescriptions
Payroll processing
Airline baggage handling

Three Sigma 66,810 PPM

Two Sigma
308,770 PPM

40

Customers Perspective

Six Sigma Starts and Ends with Customers

What is my
customers view
of the process?
Are my What do the
customers customers expect
referring and out of the
buying again? process?

CUSTOMERS

How do my
Is my customer
customers
satisfaction
measure the
increasing?
process?
What is my
customers
definition of a
defect?

41

Operational Perspective

Control
Define

Improve

Measure

Analyze

42

The value of lean, its philosophy, history, and goals
VALUE AND FOUNDATION OF LEAN

43

LEAN History

Toyota
Production System

People
People
• Single Piece Flow • Automation

Just-in-Time
• Pull Production • Built-In Quality

People

Jidoka
• TAKT Time Production • Stopping at Abnormalities

Heijunka

• Level Loading
• Sequencing
• Stability

Some Key Lean Concepts developed at Toyota

44

LEAN Thinking

A principle driven, tool based philosophy that focuses on eliminating waste so that
all activities/steps add value from the customers perspective.

Lean Thinking is all about continuous waste elimination !

Imagine Office Processes with:

• Higher Customer Satisfaction
• Shorter Lead Time
• Higher Flexibility
• Higher Quality
• Lower Costs
• Higher Employee Satisfaction

45

LEAN Explained

A strategy, philosophy, process and leadership approach for operating in a
superior way. Results include:
•

– Reduced cycle times (product development and production)

– Increased quality

– Reduced costs and inventory

– Increased capacity potential

– Improved customer service

– High levels of worker involvement, ownership and commitment

– Improved financial returns

Lean concepts apply across all processes and industries

46

LEAN Explained

Earlier: Price = Cost + Profit Now: Profit = Price - Cost

Increase Profit by Price increase Increase Profit by cost reduction
Price to sell
1.5
1.5

Some profit Bigger profit
Bigger profit
Price to sell
1 1
Cost of production
Some profit

0.5 0.5
Cost of production

0 0

47

Where are We going?
Advanced tools

Tool
• Creating Continuous Flow
• Pull production

Basic tools Challenge
• More waste reduction
Tool • Real continuous flow
• Value Stream • Flexible workforce
Mapping, other lean • Less variance
tools, etc. • Less waste
Old situation
Results
• Reduction of waste
Issues • Learned to ‘see the flow’
• Inventory • Couple of improvements
• Waiting
• Defects Remaining Issues
•… • No real continuous flow
• Still significant amount of
No flow in the value waste.
stream.

Processes full of waste

48

Lean Toolkit

Level 1 Level 2

Reduce Variability, Control the Process

Expose the Waste • Value Stream Mapping
• Standardized Work
• Intro to Continuous Flow
• 5S • Intro to Pull Production
• MUDA
Tool Sophistication

• Mistake proofing
• Intro to Value Stream Mapping
• Visual Management

Time / Cultural Maturity

Applying the right tools at the right stage

49

Lean Tools Overview

A number of Lean Tools and Techniques are available

Bring Organization &
5S Framework
Cleanliness to work
area
Understand Value Value Stream Mapping

Tools and Techniques
Implement pull-based flow Kanban, Just-in Time
Action

Reconfigure work areas U-Shaped Cells

Institute continuous improvement philosophy Kaizen Events

Appropriate Tools and Techniques are to be used depending on the need

50

The relationship between LEAN and Six Sigma
INTEGRATION OF LEAN AND SIX SIGMA

51

LEAN vs. Six Sigma

Methodology
Strengths

Define Measure Analyze Improve Control
Lean Six Sigma

Six Sigma • VOC is Powerful • Confirms Data • Data Driven • Few Tools to • Few Tools or
Quality Analysis Create Change in Direction
Critical X’s

• Value Stream • Standard Work • Observation and • Many Tools for • Communicative
Lean
Mapping . . . & Target Intuition Based Driving Change • Centered on
Boundary less & Sheets . . . Analysis . . . Stable, Repeatable
• Mixed Model
Multi-Generational Assumes Data PQ, PR, TAKT Process
Plan, Kan Ban, Visual
is Good Time
Management • Automation
Apply Any Tool from your Quality Tool Box

52

When do I use LEAN?

Six Sigma Action
Hybrid
Project Workout
Effort

Effort

Effort
Time Time Time

Average ~ 4 Months Average ~ 1½ Months
Average ~ 4 Months

Lean For Quick Fixes….Six Sigma For Complex Processes !!

53

LEAN vs. Six Sigma

LEAN
Simple / Wing
Spans breadth Spans Complex and
Six Sigma

X X
depth
to Wing focused
Lean: Strengthens journey to Excellence

Lean Lean Six Sigma Six Sigma/Lean
Helps identify steps that Identifies problems in the Improves the capability of steps Improving the capability can
do not add value and flow that do add value eliminate additional steps
provides tools to
eliminate them

Lean success
Six Sigma
•Energizing

•Team work,
factors /
Values
•Empowering

•Boundary less / Open mindset
Impact •Passion for improvement
•Intuition / Action
•Customer focus

54

LEAN or Six Sigma – When to use?

Just Do it Lean
Preference I Preference III

Ask an Expert Six Sigma
Preference II Preference IV

55

The relationship among various business processes
(design, production, purchasing, accounting, sales, etc.) and the impact these
relationships can have on business systems
BUSINESS PROCESSES AND SYSTEMS

56

KINDUZ Business Excellence

Source: http://www.kinduz.com/index.php/research/kinduz-excellence-framework
57

For more information, kindly visit: http://www.kinduz.com

Baldrige Excellence Framework

Source: http://farm3.static.flickr.com/2082/2531423852_895e11268d.jpg

58

European Foundation for Quality – EFQM Excellence model

Enablers Results

People People results

Key Performance Results
Leadership

Policy & Customer

Processes
Strategy results

Partnerships
Society results
& resources

Innovation and Learning

59

How these tools are applied to processes in all types of enterprises:
manufacturing, service, transactional, product and process
design, innovation, etc.
SIX SIGMA AND LEAN APPLICATIONS

60

Value Stream Mapping – A Petrol Station / Gas Station Example

Helpers /
Customers Enters Customer Starts
Customer Fills
Petrol Station Vehicle
Tank

Customer Carefully
Non value added service

Customer Finds
Customer Stops Exits, avoiding
Pump with
Vehicle other Standing
smallest Cue
Traffic
Value added service

Customer Waits in Customer Makes
Customer Exits
a Cue Payment

Goal is to eliminate or make non-value added activities more efficient

61

Value Stream Mapping – Original layout
Existing
Dock

Lay down
Material Lay down areas:
• Deliver to receiving dock
area #1
Receiving

• Queue for receipt
inspection Lay down
area #2 Stock

• Waiting to move to inspection
Lay down room

• Delivered to inspection
area #5
Receiving

Storage
• Queue for inspection
Lay down
area #4

• Waiting to move to stock room
• Queue for put away
Lay down
area #3
Lay down
area #7
Lay down
area #6

62

Value Stream mapping – proposed layout

Existing Dock

New Deck

Roller belt

Receiving

Stock room
Bulk incoming material
New Inspection
(hold for inspection)

63

Case Study: Reduction in the cycle time of issuance of
corporate loans
About the Organization Serviced:
• The Company Serviced is one of the Largest Banking
Organizations in the Kingdom of Saudi Arabia with annual Issue: Getting buy-in for validating data from all the
turnover of 3 Billion $ managers was a big challenge as it would directly impact
• The Bank is catering to the needs of Individuals, Corporate’s their role & reputation of that particular department
and Trade Finance activities across the country with
extensive branch network Resolution: The key was to get the Buy – in from the Senior
most manager and ask him to communicate to the whole
team about the importance and gravity of issue. This
Objective of the Initiative / Business Case: involved extensive people management and Perception
• The process of issuing/ rejecting Corporate Loan application Management
process was consuming an average of 73 days considering all
the regions and types of credit applications which was
leading to customer dissatisfaction and loss of revenue
Issue: Getting the required data from various systems being
used and generating reports on a weekly basis and
Results Delivered: validating the reports of each department with the
• Our Consultant helped reduce the average time consumed respective Manger
from 73 days to 27days considering all regions and types of
credit applications processed involving 14 Departments in 6 Resolution: This was achieved with couple of software
months analysts collating the data with the Black belt, then the
• Helped streamline various sub processes to be aligned with reports were circulated to the respective managers for
the core process them to audit and get their acceptance after which they
• Held extensive training/ mentoring for all the team members were circulated to the EVP
to achieve the desired results

64

Reduction in the Cycle time of Account Opening process
About the Organization Serviced:
Issue: Getting buy-in for changing the systems and work
• The Company Serviced is one of the Largest Banking
scheduling from batch processing to lean processing to
Organizations in the Kingdom of Saudi Arabia with annual
optimize load balancing across the back office
turnover of 3 Billion $
• The Bank is catering to the needs of Individuals, Corporate’s
and Trade Finance activities across the country with Resolution: The issue was solved by conducting a pilot with
extensive branch network the authorization of the concerned manager and validating
the results after which Lean cells were created as an
intermediate step to reduce the cycle time until new
Objective of the Initiative / Business Case: systems are stabilized
• The process of opening an account was consuming an
average of 7 days for the customer signature to be uploaded
Issue: Making a business case to change the systems in sync
into the master database only after which customer will be
with the information architecture of the bank which would
able to use all the services. This was leading to customer
result in investment s and results in significant
dissatisfaction
productivity improvement
Resolution: The process was taken up with the IT team and a
Results Delivered: strong
• Our Consultant helped reduce the average time consumed
from 7 days to 1 day considering applications from all
regions
• Helped optimize various back office processes to be aligned
with the core process
• Held extensive training/ mentoring for all the team members
to achieve the desired results

65

The responsibilities of executive leaders and how they affect the deployment
of six sigma in terms of providing resources, managing
change, communicating ideas, etc.
ENTERPRISE LEADERSHIP RESPONSIBILITIES

66

Leadership

Enterprise leadership Organizational Change management Six sigma projects and Six sigma roles and
responsibilities roadblocks •Use of various techniques for kaizen events responsibilities
•The responsibilities of •The impact an organization’s facilitating and managing •How projects and kaizen •Describe the roles and
executive leaders and how culture and inherent organizational change. events are selected, when to responsibilities of six sigma
they affect the deployment of structure can have on the use six sigma instead of other participants: black belt,
six sigma in terms of success of six sigma, and how problem-solving master black belt, green belt,
providing resources, deployment failure can result approaches, and the champion, process owners,
managing change, from the lack of importance of aligning their and project sponsors.
communicating ideas, etc. resources, management objectives with
support, etc.; identify and organizational goals.
apply various techniques to
overcome these barriers.

67

Candidate Selection
Drive Mindset
Willing to APPLY what was covered in class Open and flexible mindset
• •

Drive the solution For both class and project work wants to
• •

Is able to have a focused schedule and keep stay focused on the process and not on
• •

project on time blaming people! “Blame the process not
•

Resolves barriers or gets help resolving the people”
barriers quickly
•

Does not let ‘artificial’ organizational
boundaries get in the way
•

• Communication • Readiness
• High team involvement, collaborative • Open to constructive criticism
• Able to communicate progress frequently • Able to ask the fundamental or tough
questions
• Able to lead a group effort (flip charts &
• Candidate prepared for class and
post-its) completes tools per schedule
• Mentoring time taken seriously • Basic MS Office Computer Skills
• Basic statistics knowledge

68

LEAN Six Sigma drive benefits

• Financial • Cultural:
• Companies embracing Lean • Deliberate and proven-
Six Sigma report payback approach to work
(inclusive of all costs) within • Returns dependent on:
12 months • Selecting and engaging
• Ultimate ROI (Return on the right people
Investment) in range of • Providing the right
25-50 months or over 2-4 Resources
years • Executing the right
projects
• Fully engaging company
leadership

69

Responsibilities of Leadership

Schedule training
Select projects and experts
•

Determine certification requirements and certify experts
•

Provide Resources
•

Develop an expert network to enhance communication
•

Review and improve the Six Sigma process
•

Articulate a vision, and spark others to execute it
•

Don’t manage every excruciating detail
•

Involve everyone and welcome great ideas from everywhere
•
•

70

Two Dimensions of Employee Satisfaction

Hygiene factors(Dissatisfaction) Motivators (Satisfaction)
Company policies Work itself
Supervision Achievement
• •

Salaries Recognition
• •

Interpersonal relations Responsibility
• •

Working conditions Advancement
• •
• •

71

The impact an organization’s culture and inherent structure can have on the
success of six sigma, and how deployment failure can result from the lack of
resources, management support, etc.; identify and apply various techniques
to overcome these barriers
ORGANIZATIONAL ROADBLOCKS

72

Six Sigma failure factors

Lack of visible senior leader sponsorship
Lack of alignment to a clear organization strategy
•

Lack of performance tracking and accountability
•

Failure to link projects to bottom-line impact
•

Insufficient or ineffective allocation of human resources
•

Over-emphasis on rigid approach and technical (statistical) tools
•
•

73

Why does implementation of LEAN and Six Sigma fail?
Applicable to both Individuals and Organization

Lack of
Focus

Associate Projects not
Competence Business
& Attrition Related

Indicative list only
Why they Fail?

Lack of Improper
Mentors Focus

Under
Investment

74

Six Sigma Success Factors
Must be driven by Senior Management (Top Management)
– Executive Training required up front
•

Project Selection is key
– Focus on high priority projects with tangible benefits
•

– Focus within each project
People selection is key
– Choose high potential staff from multiple disciplines
•

– Ensure mix of quantitative versus qualitative skills in trainees
Resource commitment required up front for effective roll-out
– Infrastructure
•

– Champions/MBBs/BBs/GBs/YBs/Team Members
SS methods and tools beneficial and can be applied to strategic business level
(Level One/Top Management), operational process level (Level Two/Process
Owners and Project Sponsors), and project level (Level Three/Black Belts,
•

Green Belts, Yellow Belts and Team Leaders)

75

A Six Sigma organization
•Mission and Shared Vision •Six Sigma Process Capability
•Needs Identification •Six Sigma Product Capability
•Policy •Knowledge and Skills
•Objectives •Best-practice know how
•Six Sigma Management •Resources
System •Measurement & Monitoring
•Information Systems

Purpose Capability

Commitment Learning

•Shared Values •Continuous Improvement
•Alignment Processes
•Accountability and •Self-regulatory Processes
Responsibility •Delivery, Reporting Feedback
•Six Sigma Organizational
Structure

76

Six Sigma organizational structure

Each level drives the team to Breakthrough Six Sigma Project performance

Six Sigma Six Sigma Six Sigma
Management Champions MBBs

Black belts Black belts Black belts

Green belts Green belts Green belts Green belts

Yellow Yellow Yellow Yellow Yellow Yellow
belts belts belts belts belts belts

Six Sigma project team members

77

Use of various techniques for facilitating and managing organizational change
CHANGE MANAGEMENT

78

Change

• “It is not the strongest that survive, nor the fittest, but those most able to
adapt to change.”
– Charles Darwin, The Origin of species
• “Planned change is not the cumulative development of a comprehensive
strategy. Rather it is one damned thing after another.”
– Michael Fullan

79

Failure of Change initiatives
Actions speak louder than words

Two thirds of TQM projects grind to a halt because of lack of results
Seventy percent of re-engineering efforts fail
•

More than 50% of corporate transformation efforts fail
•
•

Change is a journey, not a blueprint.
Why do most change initiatives fail?
“People do not resist change, people resist being changed.” -
Beckhard
•

“Nothing changes without personal transformation.” - Demin
“Ideas acquired with ease are discarded with ease.” - Pascal
•
•

80

Complex Change Lessons

Moral purpose is complex and problematic
• Lesson # 1
– Be inspired by moral purpose, but not naïve
– Top down change doesn’t work, but we need the force of top
down mandates
– The more complex the change the less you can force it

Lesson # 2
– Gain support for program and innovation
•

– Balance needs of individuals and organization
– Provide direction and allow for individual freedom
Theories of improvement and theories of change need each other

81


Conflict and diversity are our friends

Lesson # 3
– Problems are inevitable, but the good news is that you can’t learn or be
•

successful without them
– Smoothness in the early stages of a change effort is a sure sign that
superficial or trivial change is being substituted for substantial change
attempts
– Long lived companies were tolerant of activities on the margin
Lesson # 4
• Really chaotic systems have
•

– no direction
– random communication
– limited purposeful experimentation
• Edge of chaos has
– structure and openness
Understand the meaning of operating on the edge of chaos

82


Emotional intelligence is anxiety provoking and anxiety containing

Lesson # 5
– Anxiety is necessary, and can be valuable
•

– A tight knit shared culture is not a desired end point

Lesson # 6
– With anxiety firmly contained by bureaucracy, the level of stress
•

drops but the ability to solve complex problems diminishes
– Need to provide a “holding environment”

Collaborative culture is anxiety provoking and anxiety containing

83


Connectedness and knowledge creation are critical

Lesson # 7
– Easy to experience
•

overload, fragmentation, incoherence
– Neither top down nor bottom up strategies can achieve
coherence

Lesson # 8
– There is no silver bullet of change
•

– You will not know exactly how to apply a new program
– Shortcuts lead to superficiality and dependency

There is no single solution: craft your own theories and actions by being a critical consumer

84

Difficulties of Transferability

• Products of other people’s change efforts hide subtleties of change

• Successful application is both the program and understanding the context
the application took place in

• Change depends on building local capability

85

Black Belts as change agent

• As a Black Belt, what are you going to do on Monday morning

– To help promote change
– To not be a road block
– To breakdown resistance and road blocks
– To promote the company’s initiative and team success

86

Accelerating Change
Technical attack

Quality

Excellence Business results

Acceleration

Acceleration implies
Team / Organization / Cultural attack • Change acceleration process
• i.e. Change management for LEAN Six Sigma

87

Change Acceleration Process : CAP

• What CAP is:
– A systematic process to manage change
– A set of tools and checklists used to analyze the elements of change
– An active learning process
– A team-based process

• What CAP does:
– Ensures that all aspects of change management are considered
– Encourages discipline and rigor throughout the process
– Accelerates reaction to change initiative
– Creates a network of change agents

88

CAP-o-Gram

Leading change

Creating a shared need

Shaping a vision

Mobilizing Commitment

Current state Transition state Improved state

Making change last

Monitoring progress

Changing systems and structures

89

CAP-o-Gram
Leading change:
– Having a champion who sponsors the change
•

– The reason to change, whether driven by threat or opportunity, is instilled within the organization
and widely shared through data, demonstration, demand or diagnosis. The need for change must
•

exceed its resistance
Shaping a vision
– The desired outcome of change is clear, legitimate, widely understood and shared
•

Mobilizing commitment
– There is a strong commitment from key constituents to invest in the change, make it work and
demand and receive management attention
•

Making change last:
– Once change is started, it endures, flourishes and learning’s are transferred throughout the
organization
•

Monitoring progress:
– Progress is real; benchmarks set and realized; indicators established to guarantee accountability
•

Changing systems and structures
– Making sure that the management practices are used to complement and reinforce change
•

90


Opportunities Threats The questions you need to ask are:

• Which combination does your
Short term 1 2 business usually use?

• Which combination fits your
project?
Long term 3 4
• Which combination is the best
practice in successful organization

91

Project & Team Startup: GRPI Project Resource Roles
Stakeholder Identification and Involvement (Building an ARMI)
List, on the left-hand side of the page, all the individuals or groups who are the
Key Stakeholders whose commitment is essential for the project success.
•

Use the following Code to define their potential role in the project:

A : Approval of team decisions outside their charter
•

authorities, i.e., sponsor, business leader.
•

R : Resource to the team, one whose expertise, skills, “clout” may be
needed on an ad hoc basis.
•

M : Member of team, with the authorities and boundaries of the
charter.
•

I : Interested party, one who will need to be kept informed on
direction, findings, if later support is to be forthcoming.
•

92

Project & Team Startup: Example

STAKE KEY PROJECT PHASES
HOLDERS DEFINE MEASURE ANALYZE IMPROVE CONTROL

Person A A A R R R

Person B I I M M R

93

Project Definition Tools
In the Frame / Out of the Frame Flip Charts

Draw a large square "picture frame" on a flip chart (or use tape on a wall) and use this metaphor to help
the team identify what falls inside the picture of their project and what falls out.
This may be in terms of type and extent of end results, people impacted, time frame, product
•

lines, sites, etc.
•

94

Change Acceleration Process: GRPI Model of Team Work
DESCRIPTION : A model of successful team work elements

1. When initiating a team and planning the first steps
USES :
2. When the team isn't working well and you're not sure what's wrong.

G
PROCESS :
• GOALS
• Are the mission and goals of the team clear and accepted by all members?
• Are they in tune with the team's environment?

R
• ROLES AND RESPONSIBILITIES
• Are the roles and responsibilities clearly described and understood?
• Do the defined roles support the team goals fully?
• Do the team members have the right competence and resources to fulfill their responsibilities?

P
• PROCESS AND PROCEDURES
• Are there processes and procedures operating in the group (such as problem solving methods, communication procedures, decision making processes, resource
allocations) that are:
• understood and acceptable?
• supportive to the group goals and roles?

I
• INTERPERSONNEL RELATIONSHIPS
• Are the relationships among the team members healthy and support of good team work?
• Is there a healthy level of trust, openness and acceptance in the group?

1. Review the GRPI model and identify the most important area to improve for greater team effectiveness. Often it
REVIEW :
is most productive to take the model in order: effective goals first, then roles, then process and then
interpersonal relationships.
2. Review the GRPI model periodically to monitor team performance.

95

Stakeholder Analysis

Strongly Moderately Moderately Strongly
Names Neutral
Against Against Supportive Supportive
Person W ×
Person Y ×



Steps: 1. Plot where individuals currently are with regard to desired change ( = current)
2. Plot where individuals need to be (× = desired). In order to successfully accomplish desired change identify gaps between current and desired
3. Indicate how individuals are linked to each other, draw lines to indicate an influence link using an arrow (Ù) to indicate who influences whom.
4. Plan action steps for closing gaps.

96

Making Change Last – CAP O GRAM

100

75

50

25

0
Leading Creating Shaping Mobilizing Making Monitoring Changing
Change a Shared a Vision Commitment Change Progress Systems &
Need Last Structures

97

How projects and kaizen events are selected, when to use six sigma instead of
other problem-solving approaches, and the importance of aligning their
objectives with organizational goals
SIX SIGMA PROJECTS AND KAIZEN EVENTS

98

Kaizen vs. Lean vs. Six Sigma

Leadership, creativity, innovation
Kaizen LEAN Six Sigma

•One piece flow •DMAIC tools
•Quick Strike •Statistical process
•1-6 days •Visual control •Value stream mapping
•Cells

•Process mapping •Pull systems
•Cause & effect •Cp and Cpk
•PFMEA

•Basic “Blocking and •Setup production •Gage R & R
Knowledge of
•Kanban

tackling” tools •ANOVA, Hypothesis
tools test, DOE, Optimization Closed loop
performance
•TPM

Focus on •Waste, non-value added •Complex problems
improvement •Simple tactical focus •Speed, cycle time •Variation reduction
•Obvious quick fixes •Process capability
•Inventory performance •Defect prevention
•Standardization

•Plug holes in dikes •Logistics cost reduction •Stability, predictability
•Containment

•Variance reduction •Design excellence

Teaming and employee involvement

99

Describe the roles and responsibilities of six sigma participants: black
belt, master black belt, green belt, champion, process owners, and project
sponsors
SIX SIGMA ROLES AND RESPONSIBILITIES

100

Roles and responsibilities
• Owns
vision, direction, integratio
n, results
• Leads change

• Provides day-to-day Executive • Supports Black Belts
by participating on
management and direction
project teams
of Six Sigma Program

Senior Green Belts
Champion • Apply Breakthrough
Strategy to specific

All
projects, lead and
direct teams to

Employees
• Develops deployment and
Strategy execute projects
• Supports cultural change

Deployment
• Understand vision

Black Belts
Champion
• Apply concepts to their
job and work area

Project Master
• Identify and scope projects • Trains and coaches Black

Champion Black Belt
• Identify, coach and develop Belts, Green Belts and
Black Belts leaders

101

Champion
Champions are the Senior executives and managers, such as Vice President or Director of
Manufacturing or Marketing.
•

Champions should be familiar with basic and advanced statistical tools.
Create the Vision of Six Sigma for the Company.
•

Define the path to implement six sigma across the organization
•

Carefully select high-impact project.
•

Develop a comprehensive training plan for implementing the breakthrough strategy
•

Support development of “statistical thinking”
•

Ask black belts many questions to ensure that they are properly focused
•

Hold the ground by implementing black belt recommendations.
•

Make sure that project opportunities are acted upon by the organizations leadership and the
•

finance department.
•

Realize the gain by supporting the six sigma projects through allocation of resources and
removal of road blocks
•

• Recognize people for their efforts.

102

The Champion’s Responsibilities before team is formed

Select the team
Create the business case for the project
•

Formulate the preliminary problem statement
•

Identify the preliminary scope of the project
•

Identify the preliminary goals of the project
•

Allocate the resources for the team to complete its work
•

Identify the team leader (Black Belt Or Green Belt)
•

Communicate the business case to each team member
•

Establish the timeline for the project team to complete its work
•

Establish the milestones along the way for input from the Champion
•

Distinguish decisions requiring Champion input from independent team
•

decisions
•

103

The Champion’s Responsibilities during the Project Team’s
existence
Validate and finalize the Charter.
Monitor and approve all project team tollgate work.
•

Meet regularly with the team leader/facilitator.
•

Remove barriers or roadblocks to the team’s success.
•

Maintain momentum of the team and keep them on task.
•

Deal with resistance among the team.
•

Communicate progress to upper management.
•

Continuing education.
•

Recognize efforts.
•

Re-evaluate Scope during the project.
•
•

104

The Champion’s Responsibilities after the project team existence

• Communication of the new process (and results) to the business Quality
Council
• Capture lessons learned
• Monitor performance of the new process
• Recognize, reward, and celebrate both success and effort

105

Master Black Belt – The Prime Movers

• Master Black Belt might be a Chief Engineer or head of customer service.
• It requires mastery of basic and advanced statistical tools.

Acts as in house experts for disseminating the breakthrough strategy knowledge throughout the organization

106

Master Black Belt - Roles

Partner with the Champions.
Understand the big business picture
•

Take on leadership of major programs
•

Develop and deliver training to various levels of the organization.
•

Assist in the identification of projects
•

Help train and certify black belts
•

Coach and support Black Belts in project work.
•

Participate in project reviews to offer technical expertise
•

Facilitate sharing of best practices across the corporation.
•
•

107

Black Belts – Showing the Way

• Black Belt might be an engineer or billing administrator with five years or
more of experience.

Black Belts, apply the Six Sigma breakthrough strategy tool and knowledge to specific projects

108

Black Belts - Roles
Determine the most effective tools to apply
Get input from knowledgeable operators, first-line supervisors, and team leaders
•

Report progress to appropriate leadership levels
•

Acts as Breakthrough Strategy experts and be Breakthrough Strategy enthusiasts
•

Simulate Champion Thinking
•

Identify the barriers
•

Lead and direct teams in project execution
•

Report progress to appropriate leadership levels
•

Solicit help from champions from needed
•

Influence without direct authority
•

Determine the most effective tools to apply
•

Prepare a detailed project assessment during the measurement phase.
•

Teach and coach breakthrough strategy methods and tools
•

Manage project risk
•

Ensure that the results are sustained
•
•

109

Green Belt

• Their current positions are associated with the problem that needs to be
solved.

• Familiarity with basic statistical tools is required.

110

Green Belt – Roles

Function as Green Belts on a part-time basis, while performing their
regular duties.
•

Participate on Black Belt project teams in the context of their existing
responsibilities.
•

Learn the Six Sigma methodology as it applies to a particular project
Continue to learn and practice the six sigma methods and tools after
•

project completion
•

111

Contact

WEBSITE
http://www.lassib.org/

EMAIL
coordinator@lassib.org

SOCIETY HEADQUARTERS
#5-70, V. V. Nagar, Street No.
8, Habsiguda, Hyderabad, Andhra
Pradesh, India - 500007

PHONE
India Landline: +91-40-40045614
India Fax:+91-40-40045615
India Toll-Free: 1-800-425-1388

112

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