M1 Refresher Training Master Final Version non client linkedin
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This document provides an overview of Lean Six Sigma training concepts. It discusses: 1) The importance of continuous improvement and why it is a focus for the organization. Continuous improvement aims to make incremental process enhancements over time. 2) An example of defining a Lean Six Sigma project to reduce late invoice payments. The example outlines defining the problem, measuring key metrics, analyzing root causes through tools like fishbone diagrams, and improving the process. 3) Control mechanisms that were implemented as part of the daily process like action logs and control charts to standardize and monitor the improved process.
M1 Refresher Training Master Final Version non client linkedin
- 1. Training- 6 Sigma Lean Training Global Procurement Michele Levasseur Procurement Operations Management June 2015
- 2. Virtual Training Ground Rules 2 • Please mute your phone • Submit your questions through the WebEx chat function or contact me at: • Please send us your feedback • A copy of this presentation will be placed in the Continuous Improvement Journey Folder on the Launch Page
- 3. Why Continuous Improvement? • What is Continuous Improvement and Why is it so important? – Continuous Improvement is the on-going effort to improve products, services and processes by making incremental improvements. It is based on the belief that these incremental changes will add up to major improvements over time and it is as much about tactics (i.e. specific improvements) as it is about changing the culture of the organization to focus on opportunities for improvement, rather than problems. It must be continuous so that opportunities for growth can be highlighted, improved, measured and evaluated. • Provides colleagues with an infrastructure needed to succeed • Participation in Lean Six Sigma projects is career enhancing – include it your Individual Development Plan • Creates a proactive work environment – Colleagues can Own It and direct how their work process is structured 3
- 4. Why The purpose of today’s session is to review the basic concepts of Lean/Six Sigma and encourage you to take a formal Training class (if you haven’t already done so) to deliver a project, achieving Yellow Belt certification • Basic Root Cause Analysis tools are required to be part of our current way of working and Method 1 is the baseline to applying Lean and Six Sigma (LSS) • Procurement’s objective is to embed CI mind set as part of our daily work • Procurement has developed a 3 Year LSS Training Plan for all colleagues 4
- 5. What is the process to obtain a Yellow Belt? 5 Stop and think as you work. Is there a better way? List from SIFI repository Think of the 8 areas of waste Is there a return on investment (ROI)? Projects can be broken down into smaller projects making it easier to manage Attend Formal M1 Training Improvement Idea Improvement Idea Confirm Project with Sponsor Project Execution Project Execution
- 6. What are the 8 Wastes? 6
- 7. Recent example of a CI effort Other Ideas: 7
- 8. Problem Solving Pillars “Value Stream Mapping” Assessments M1 M2 M4 Process Assessments OpEx contribution to Agile Operations Six Sigma Tool Box Lean Tool Box M3 8 Eliminate Special Cause
- 9. Lean Six Sigma Tools Overview M2 & M3 are built on M1 Use same methodoloy DMAIC 9
- 10. D M A I C 10 Define the opportunity from both business and customer perspectivesDefine Understand the process and its performance Search for the key factors that have the largest impact on process performance and determine root causes Develop improvement solutions Implement the solution and control plan Measure Analyze Improve Control
- 11. Define 11 Define the opportunity from both business and customer perspectivesDefine Understand the process and its performance Search for the key factors that have the largest impact on process performance and determine root causes Develop improvement solutions Implement the solution and control plan Measure Analyze Improve Control
- 12. Define • What is wrong? • When and Where is it occurring? • Define Scope via High Level Process Map • Define Team (Who) – Project Lead, Project Sponsor, Process Owner, Subject Matter Expert DEFINE Process: M1 Leader: Date: What? When? Where? Who needs to be involved? Who works on this process? Significance? Desired State? Is a process map required?* This can be: - Description of the process or what occurred - Sequence of events leading to an incident Make sure to look at the symptoms, not the causes 12
- 13. Let’s look at an example of Define What Debt collection fees, interest fees, and invoice reminders When On a weekly basis Where Oracle, Market, Exchange European Procurement Transaction Center (EPTC), Supplier and Accounts Payable Who Market, EPTC, Supplier and Accounts Payable Desired State Reduce amount of invoices paid late by finding root causes Eliminate non-value added steps with a new defined process Why it’s worth solving the problem? To save money and time and also to keep good relations with suppliers D M A I C 13
- 14. Debt Collection Letter Scanned Debt Letter SIPOC | High level process map Payment of Invoices & Debt Fines (from Late Invoices) Inputs Process Step – (changes the input and adds values) Collection letter sent Local Market Scan Collection Letter Process Invoice and Investigate Pay Invoice and Fines Late Payment Approves Invoice Approves Tranaction Payment Authorities Supplier Procurement Manager Original InvoiceLocal Market EPTC Debt Collection Agency Scanning Dept. Genpact Supplier Process Outputs Customers D M A I C 14
- 15. Measure 15 Define the opportunity from both business and customer perspectivesDefine Understand the process and its performance Search for the key factors that have the largest impact on process performance and determine root causes Develop improvement solutions Implement the solution and control plan Measure Analyze Improve Control
- 16. Measure • What is the current process telling us? – Map the process with data that includes process time, wait time and total lead time as well as areas of rework • Create a data collection plan – Identify inputs and outputs to process variables – Make sure inputs and outputs relate to project goals • Identify special and common cause variation – Time series plots and control charts • This may cause you to loop back to the Define phase D M A I C 16
- 17. Walk the Process & Map It Out D M A I C Determine what makes that process happen: inputs, outputs, steps and process time. A process map takes that information and diagrams it visually. 17 Before State
- 18. What is the data telling you? Time Series Plot Reveal patterns over time Highlight abnormal process behavior 40 45 50 55 60 65 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Process has a sudden shift 40 45 50 55 60 65 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 4 points look very different from the others 18 Could there be an increase in PPV due to large design changes in art work?
- 19. How can we tell if we have Special Cause? • Processes with only random variation have a natural limit to the amount of variation you are likely to see − This control limit is determined by the process, not the specification! • By calculating and plotting this limit, we can detect special causes easily D M A I C 19
- 20. Where is the problem happening? Category or sources of problems Frequency 20 Pareto Chart D M A I C
- 21. Analyze 21 Define the opportunity from both business and customer perspectivesDefine Understand the process and its performance Search for the key factors that have the largest impact on process performance and determine root causes Develop improvement solutions Implement the solution and control plan Measure Analyze Improve Control
- 22. Analyze • Perform process analysis – Identify bottle necks and constraints – Identify areas of rework – “Are we meeting the customer’s requirement?” • Determine Root Cause of problem – Ask “5 Why’s” to get to root cause – Target root causes for Improve phase 22
- 23. Are we meeting the customer’s requirement? • Bottlenecks can be found when process steps are timed – The debt collection letter was not picked up by the scanning team as a priority, demonstrated by significantly high wait time D M A I C 23 • Know and engage your stakeholders – make sure everyone is involved in developing the process map
- 24. What is causing the problem? Fishbone / Cause & Effect Diagram D M A I C 24 No process defined Colleagues unaware of process Root Causes Invoices issues; being cancelled, missing on system, wrong information Payment terms in system incorrect1 2 3 4
- 25. Top Root Causes 25 No process defined Colleagues unaware of process Root Causes Invoices issues; being cancelled, missing on system, wrong information Payment terms in system incorrect1 2 3 4 D M A I C
- 26. Improve 26 Define the opportunity from both business and customer perspectivesDefine Understand the process and its performance Search for the key factors that have the largest impact on process performance and determine root causes Develop improvement solutions Implement the solution and control plan Measure Analyze Improve Control
- 27. Improve How do we prevent this problem from happening again? • Select and prioritize solutions – Remember higher frequency items may not have the largest impact • Lean out steps that do not add value – Especially when they increase cycle time • Be careful not to add items to this phase – if you find additional improvements that are not within scope, add them to a new project 27
- 28. Evaluating Solutions Some types of solutions are inherently more effective than others… The more solutions rely on human effort, the more prone they are to human error 1 32 Design out the problem – make mistakes impossiblePhysical and procedural safeguards Training Supervision Communication 28
- 29. Brainstorm Solutions and Match to the Root Causes D M A I C No process defined Colleagues unaware of process Lack of Understanding of Terminology Root Causes Solutions Draw current state, build log, align tasks to functions Create another project to handle all of the invoice issues Invoices issues; being cancelled, missing on system, wrong information Payment terms in system incorrect Correct payment terms in system Train colleagues in scanning process Train Genpact on the new processes via written procedures 1 2 3 4 29
- 30. Prioritizing Solutions • Identify and prioritize innovative solutions to eliminate key root causes • Focus on simplest and easiest to implement − Size of benefit − Difficulty or cost to implement Low High LowHigh Extra effort needed Quick wins Benefit Difficulty
- 31. Align Tasks to Proper Resources When the process was documented based on cross functional responsibility, it was then clear that tasks were in the wrong location and payment tasks should be in the Genpact area D M A I C 31 Before State
- 32. 5S & Visual Process Controls Training and Visual Controls • Scanning location was trained to identify debt collection letter • Once the scanners could identify the document, they were sorted in specific location • Debt letters were escalated relative to other documents which reduced the wait time D M A I C 32 BEFORE AFTER
- 33. Control 33 Define the opportunity from both business and customer perspectivesDefine Understand the process and its performance Search for the key factors that have the largest impact on process performance and determine root causes Develop improvement solutions Implement the solution and control plan Measure Analyze Improve Control
- 34. Control • System for implementing solutions – Training – Documentation, job aids, work procedures • System for monitoring solutions – Control plan, check lists – Control Charts – Log of action items • Lessons learned and further actions or opportunities – Sharing and paying it forward – Provide coaching for other PGS Procurement colleagues D M A I C 34
- 35. Control mechanisms were incorporated as part of the every day process Action log added ongoing communication and control built into the process 35 D M A I C After State
- 36. Indicators can tell us there is a change in the process • Outliers: individual points that are outside the normal range of variation • Process Shift: 8 or more points in a row above or below the centerline • Trends: 6 or more points in a row increasing or decreasing MEASUREMENT Upward Trend Downward Trend MEASUREMENT MEASUREMENT D M A I C 36 Data can tell us what is going on before a fire.
- 37. 0 10 20 30 40 50 60 70 80 90 100 J A S O N D J F M A M J J A S O N D J F M UCL LCL • A Control Chart is a Time Series plot with Control Limits added • These Control Limits show the limits of the expected random variation • Calculation of the positions of the Control Limits is beyond today’s scope − Their position is calculated to minimize ‘false alarms’ while retaining a reasonable chance of picking up real Special Causes − If there are no Special Causes, only one point in 400 will fall outside the Control Limits Control Charts 37
- 38. How should Control Charts be used? Time (Hr/Day/Week/Hr/Sequence) A Special Cause is a cry for help from the process Investigate immediately using Method 1 tools! Upper Control Limit Measurement Average Lower Control Limit Once you have improved the process, you may implement a Control Chart to monitor it in the future • Control Charts help us to stop the process from deteriorating again 38
- 39. Before & After Control Chart D M A I C When improvements and standardization are made, process variation is decreased 39
- 40. Lessons Learned • The process was never documented so no one really knew why invoices were late, for example, payment terms were incorrect so no one knew invoices were actually late. • Since no one knew the process, the problem was always stuck in the middle – “no man’s land” • When the process was documented based on cross functional responsibility, it was then clear that tasks were in the wrong location and payment tasks should be owned by Genpact. • It was clear that in order to have a solution, both Genpact and EPTC had to work together to define the existing process and evaluate solutions. D M A I C 40
- 41. Let’s pay it forward and share ideas Go to Lean Six Sigma and M1 Folder 41 Place your project in the Continuous Improvement Journey folder
- 42. 42
Editor's Notes
- #2: Some aspects for CI Empower your self to lead change and others will follow. Productivity is not doing things efficiently is making sure we do the right things efficiently.
- #3: Summary Comments of Refresher training: This was a virtual training preformed over 13 sessions from June 8th to June 22nd 2015. It was attended by 170 PGS procurement colleagues. Here is what some colleagues said about the training: Chris Lettini, Procurement Senior Associate, from our Pfizer office in New York City, commented “I took the M1 refresher as a crash course before going for my Green Belt. It was a great summation of the lean six sigma methodology, specifically the DMAIC framework. I recommend this refresher training to anyone interested in continuous improvement.” Eduardo De La Fuente, Procurement Manager from Buenos Aires, noted, “using the M1 tools every day is a way to be more assertive and effective in our working day. It allows us to find and capture new savings opportunities early and be successful in implementing them. Although I have already received a Yellow and Green Belt certificate, it was very interesting to attend this refresher and hear about new projects outside my region. This experience encouraged me to double our effort to use more of these tools.” Sanjay Bandivdekar, Assistant Director of Production Planning from India, commented, “the presentation focused on essentials of M1 and Michele explained how Stop it/ Fix it (SIFI) projects could qualify as M1 projects depending on the definition and scope of the project. This was encouraging because we had about a dozen SIFI projects completed last year. This will encourage more colleagues to go through the one day M1 Training program and take up and complete M1 projects.”
- #4: Individual Development Plan is the opportunity for colleagues to empower their personnel growth. Take the opportunity to think through possible projects and express it there.
- #5: Method 1 is the base for solving all problems. This is a methodology that will keep all colleagues on track and provide a working platform that we all understand. CI is always important to stay competitive. It allows for organic growth and growth with new products as well as large increases in supporting functions when we purchase an entire organization through acquisition.
- #6: If you have a hunch or if you are not sure why you are doing a task ask your self the 5 Why’s Why Why Why Why Why Until we investigate you will never know. Always go upstream from the customer to the beginning of the process to answers. Once we find an idea we need to confirm it with the sponsor so that resources are allocated for team throughout the course of the project. If work load has high peaks take notes because this is the time problems and opportunities surface but we may not have the time to execute.
- #7: Excess Inventory Having old data in the system that can clog. Example is that old sku’s were left in the system which sent false alarms that the item was out of stock and needed to be reordered. False stock outs had to do work around to remove stock outs This also caused forecast errors as much as 24%. Overproduction Multiple purchase orders were being created for one, Replaced with one order and allowed to go to different locations Drastic reduction in the no. of P.O.’s ; schedules can be given as & when required Only one P.O. needs to be monitored for receipts, approvals. Elimination of amendments for quantity from One P.O. to another. Drastic reduction in the no. of P.O.’s ; schedules can be given as & when required Only one P.O. needs to be monitored for receipts, approvals. Elimination of amendments for quantity from One P.O. to another. Removed possible defects by not having to repeat the same information on another PO Excess motion and unnecessary items do not add value clutter much like excess inventory. Remove yellow copy on three part form that is no longer being used less motion clearing in clearing unwanted document.
- #8: Example of looking at the physical end at the site. In procurement don’t forget the manufacturing area is our customer. The site looked at alternative to receiving vials at the Puerto Rico site to larger container to mold packs. This eliminated all the small packages and decreased the amount of packages in receiving. Having a much easier time in receiving with less packages to check in and less handling. This also was less processing of purchase orders. They also increase the size of the shipping container to handle more materials…..going from a 40’ to a 53” container. The configuration of the pallet was changed to an additional 2 pallets optimizing on the warehouse real estate. Remember the application of warehouse off loading to stack cardboard. The third was green initiative was with pallets. The site was throwing away the pallets once they were used. Instead they reused the pallets eliminating the need to reorder pallets and took less warehouse space (did not need space for new pallets or staging area for old pallets. Link for video from Omar Sanchez, Senior Sourcing Specialist, Puerto Rico: http://ecf.pfizer.com/sites/GPMfgLaunchPage/Objectives%20%20Management%20Cycle/PGS%20Procurement%20Town%20Hall/Apr%2013%20and%2014%202015%20PGS%20Procurement%20Town%20Hall%20-%20NonTraditional%20Savings.wmv
- #9: This is Pfizer’s house of improvements. At the base we have the assessment of the process and look at each level of improvements with applying lean tools and evaluating the value in each step of the process. A process needs to be stable before going into creating a robust system. This is why we have M1 as a first pillar. Here we eliminate special cause and then we can move into M2 (green belt) and M3(Black Belt) where we look at the capability of the process and narrow the common variation so process are more predictable.
- #10: DMAIC structure to the solution is used throughout all pillars. This keeps all colleagues aware of the scope and that we are all know the direction of the team. Globally we speak many different languages but common language through all problems solving is: Define Measure Analyze Improve Control
- #13: Here we define what we are going to in the project at a high level so the team has a general idea of where what gap or improvement target the group can visualize as a success. What will the process look like when we have completed all the steps. The SIPOC (Supplier, Input, Process, Output, Customer) is a high level process map, that will let us know who we need to bring in as vital member to the project. Project sponsor-some one who allocate resources for the project and a person who has most to gain from the project results. Process Owner- some one you is a user of the process and is close to all the details. This person or let the team know if change will work. If you are the leader and process owner pick another colleagues in your area to be the owner. Subject Matter Expert-finance, engineer, Business technology Team members are crucial if you don’t include everyone using the new process we may risks alignment and maintaining the gain.
- #14: This is an example where some of our colleagues from Sweden were having invoices being paid beyond the payment terms such that in that country companies can accrue fines above the cost of the original invoice. So even though this occurred weekly it is still a special cause as goal of the process is to close out the ordering cycle by paying our suppliers for services or products received.
- #15: Helps define what is in scope and defines boundaries of project. By defining this high level helps keep team in the project boundary and away from scope creep. Start with the “Process Step”, think of it a the place where we are changing the input adding value to create an output. This is the large yellow box. The little yellow boxes below are the major steps in the process. Then look at what we are feeding into the process to change and then who is supplying the inputs which are suppliers to our process. Determine the outputs of the process. Customers are the items or people who are benifiting from the process output.
- #18: Remember to get everyone involved in the process flow chart. You may be part of the process but until you walk the whole process you can not see what others can see. Pick one item that is consistent through out the process and see where it travels In this case it was debt collection letter. Notice the type of flow chart was Deployment flowcharts show the steps in a process and which people or groups are involved in each step. They help to highlight the flow of information and material between people or functions - where handoffs can be critical
- #19: 18
- #20: Method 1 Participant Notes
- #21: This tells us which category will give us the biggest gain in solving the problem. 80% of the problem comes from 20% of the sources or factors (x-axis) This is the 80/20 rule. Used for categorical data Height of bar represents relative importance of that aspect of the problem Bars are arranged in descending order from left to right The bar for the biggest problem is always on the left Height of vertical axis represents sum of all occurrences (not just the height of the tallest bar)
- #25: The fish bone is a type of organized brainstorming where all cause are categorized. You can use the category that makes sense for your problem or start with the major category common to many problems: Methods Machines (equipment) People Materials Measurement Environment Keep asking why When you can not ask why anymore you are getting to root cause. The root causes will repeat it within the structure of the diagram.
- #29: Method 1 Participant Notes
- #31: Method 1 Participant Notes
- #32: Remember to get everyone involved in the process flow chart. You may be part of the process but until you walk the whole process you can not see what others can see. It is also good to make sure you walk up and down the process do not just walk in the area that you are familiar with.
- #35: .
- #37: Method 1 Participant Notes
- #38: Method 1 Participant Notes
- #39: Method 1 Participant Notes
- #40: When improvements are in place and items are in place to sustain the change and standardize procedures there will be less variation which can be seen by a tighter upper and lower control limit on the process performance. Note this is not specification or customer specifications this is determined by the process.
- #42: Reach out to others you have done like projects developing portal for all yellow belt projects. PGS procurement operations management team are here to support you. Remember if it is clear what is needed after you walk the process and change is easy than be a leader and bring the team and everyone else on board and “Just do it”