© 2005 trissential. All Rights Reserved. 1 PMI-MN Breakfast Meeting Tuesday, February 14 th, 2006...

© 2005 trissential. All Rights Reserved.1

PMI-MN Breakfast MeetingTuesday, February 14th, 2006

Show Me The Business Value Discover Lean Six Sigma “Best Bets”

for Tangible Improvements

Presented by: Michelle Goodman

[email protected]


• What Exactly is Lean Six Sigma?• Corporate Deployments• Big is Not Always Better

• Individual Execution– Project Selection and Scoping– Resource Utilization– Comprehensive Communication– Metrics & Results– Personal Corporate Citizenship Contributions

3 Part Series Agenda


What What ExactlyExactly is Lean Six Sigma? is Lean Six Sigma?


Lean Six Sigma Is the Integration of Two Powerful Business Improvement Approaches...

• Goal – Reduce waste and increase process speed

• Focus – Bias for action/ Implementing known solutions

• Method – Kaizen events

• Goal – Improve performance on Customer CTQs

• Focus – Root Cause Analysis/ Developing Solutions

• Method – Black Belts dedicated to projects

Six SigmaCulture+Quality

LeanSpeed+Low Cost

Six Sigma Quality Enables Six Sigma Quality Enables Lean SpeedLean Speed

(Fewer Defects Means(Fewer Defects Means Less Time Spent on Rework)Less Time Spent on Rework)

Lean Speed Enables Lean Speed Enables Six Sigma Quality Six Sigma Quality

(Faster Cycles of (Faster Cycles of Experimentation/learning)Experimentation/learning)


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


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.

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.

Statistically Speaking


2

3

4

5

6

308,537

66,807

6,210

233

3.4

69.2%

93.32%

99.379%

99.977%

99.9997%

Yield

Defects per Million Opportunities

DPMO

Statistically Speaking


2

3

4

5

6

308,537

66,807

6,210

233

3.4

69.2%

93.32%

99.379%

99.977%

99.9997%

Yield

Defects per Million Opportunities

DPMO

Everyday Occurrences

Plane Landings

Baggage Handling

Postal System

Medical Services

What are you willing to pay for?What are you willing to pay for?


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


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.


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.


DMAICSix Sigma project lifecycle

PMI’s 5 Process GroupsStandard project lifecycle

How do the Lifecycles Work Together?

Initiating

Planning

Define(includes initial charter

creation by sponsor)

Executing MeasureAnalyzeImprove

Closing ControlRealization

Monito

ring


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


Corporate DeploymentsCorporate Deployments

What are the common characteristics?


• Six Sigma Black Belt methodology began in late 80’s/early 90’s– Motorola popularized corporate use of methodologyNext 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– Caterpillar – across enterprise and into dealer / supplier– Xerox– Home Depot– Ecolab– Thrivent

History


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


What’s the difference from past improvement initiatives?

• 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


Lean Six Sigma is a System

DMAIC improves existing processes, products, services, designs, plants, etc.

DFSS generates new processes, products, services, plants, etc.

Deployment & Infrastructure Management is the system that: Prioritizes organizational action on the right things Drives effective action Ensures sustainability and consistency

Improvement MethodologyImprovement Methodology

Design/Redesign

Methodology

Design/Redesign

Methodology

Deployment & InfrastructureManagement

Deployment & InfrastructureManagement

Define &Define &MeasureMeasureDefine &Define &MeasureMeasure Analyze Analyze Analyze Analyze ImproveImproveImproveImprove Control Control Control Control

Initiate &Initiate &DefineDefine

Initiate &Initiate &DefineDefine DesignDesignDesignDesign OptimizeOptimizeOptimizeOptimize VerifyVerifyVerifyVerify

DMAIC Methodology for Process Improvement

DFSS Methodology for Process/Product Design


AnalyzeAnalyze ControlControlImproveImproveMeasureMeasureDefineDefine

• 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

• 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

• Cp & Cpk

• SupplyChainAccelerator

SM

Time Trap Analysis• Analytical Batch Sizing• Multi-Vari• Box Plots• Interaction Plots• Regression• ANOVA• C&E Matrices• FMEA

• 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

• Check Sheets• Run Charts• Histograms• Scatter Diagrams• Control Charts• Visual Control Tools

• Poka-Yoke• Pareto Charts• Interactive Reviews

Lean tools highlighted in red

Lean & Six Sigma Tools


All Employees • Understand vision

• Apply concepts to their job and work area

• Owns vision, direct, integration, results

• Leads change

• Project owner

• Implements solutions

• Owns financial results

• Part time as part of job

• Trains and coaches Black Belts and Six Sigma Green Belts

• Leads large/complex projects

• Full time • Leads and Facilitates problem solving

• Trains and coaches Project Teams

• Full-time

• Participate on Black Belts teams and/or lead small projects

• Part time on projects

• Provide project-specific support

• Part time

• Leads business unit performance improvement

• Full time

DeploymentDeploymentChampionsChampions

ProjectProjectSponsorsSponsors

MasterMasterBlack BeltsBlack Belts

Project TeamProject TeamMembersMembers

Executives /Executives /BU LeadershipBU Leadership

Green BeltsGreen Belts Black BeltsBlack Belts

Lean Six Sigma Commitment Required at Every Level


Deployment Must Haves1. 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 Stuff8. Use A -Team for deployment (consultants, program managers, 1st

wave belts)


Big is not always Better!Big is not always Better!

Why the Change in Focus?


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?)


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


Big is Not Always Better

• Today’s business results are mostly measured in quarterly increments– 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


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


Back to the Basics

• 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


Desirable Characteristics…….Desirable Characteristics…….Not just for Black Belts

• 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


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


Michelle Goodman, MBA, PMPMichelle Goodman, MBA, PMP

Senior Process ConsultantSenior Process Consultant

O 952-595-7970 O 952-595-7970 C 651-261-9422C 651-261-9422

[email protected] [email protected]

www.trissential.comwww.trissential.com

Conclusion

© 2005 trissential. All Rights Reserved. 1 PMI-MN Breakfast Meeting Tuesday, February 14 th, 2006...

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