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An Introduction to Lean and Six Sigmafor AHQ by ASQ

Kelly Roggenkamp

April 22, 2010

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Objectives

Understand what Six Sigma and LEAN mean

Understand why both are important to an organization

Introduce the Six Sigma DMAIC and LEAN methodologies

Introduce you to tools you can apply today

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What is Six Sigma?

Gallup 25th

3.58Gallup 25th

3.58

Gallup 50th

3.93Gallup 50th

3.93 Gallup 75th

4.27Gallup 75th

4.27

People Process Technology

Improved Outcomes

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Goals of Six Sigma

Improve Performance

Service

• reduce defects• stabilize processes• customer satisfaction

ReduceCosts

• improve efficiency• eliminate waste• reduce cost of poor quality

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Six Sigma Applications

MotorolaSaved $17 Billion from 1986 to 2004

GESaved $750 million by the end of 1998

Allied Signal/HoneywellInitiated in 1992, saved more then $600 million a year by 1999

FordAdded $300 million to the bottom line in 2001

American StandardSaved $35 million in 2001 through increased quality and efficiency

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Six Sigma DMAIC Methodology

Define

Measure

AnalyzeImprove

Control

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Why is a structured methodology needed ?

Examples:

Ready…Fire….Aim Who is to blame? Treating the Symptoms (the Whack-a-Mole Game)

The Six Sigma, data-driven approach is designed to help prevent ...

…jumping to conclusions!

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Define Concept: CTQs

Critical to Quality or a CTQ

Customer’s Voice CTQ

“I want an efficient process”

“I want it to be easy to use”

cycle time (hours)

Number of clicks, Time, others

CTQs must be related to the customer’s voice and be measurable

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Define Concept: Process and Y= f(x)

Definition of Process : a series of actions or operations conducing to an end

THE PROCESS:The Series of Actions

The OUTPUT(s):Ys

CTQsDependent

EffectsResponse

The INTPUT(s):Xs

IndependentCauses

Explanation

Processes are Everywhere !

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Measure Concept: Gathering Process Knowledge

Gather Subjective Knowledge of the

Team

Gather Objective Knowledge of the

ProcessTIME

PR

OC

ES

S K

NO

WLE

DG

EInitial Subjective

Knowledge

Proved some wrong

Proved some correct

+

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Measure Concept: Measurement Systems

INPUTS Actual Process OUTPUTS INPUTSMeasurement

ProcessOUTPUTS

This is what we WANT to seeThis is what we DO see

What happens when we try to measure something ?What happens when we try to measure something ?

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Measure Concept: Measurement Systems

Do we measure the process the same way as our customers ?

Examples :

– Airline Arrival and Departure

– Full cup of coffee

Does the measurement consider the customer?

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Measure Concept: Measurement Systems

Variation is real!

Will you always get the same answer measuring the same output a 2nd, 3rd, 4th time ?

Examples :– Timing a recorded 100 meter

dash with a hand held stop watch

– 3 different individuals interviewing a candidate

Is the measurement consistent?

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Analyze Concept: Using Data to Make Decisions

Processing TimesCenter Avg. Time (hrs)

North 20.5

South 12.7

East 17.5

West 18.5

In 15 seconds : Identify and mark the best and worst

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Analyze Concept: Averages Only – A Re-Look

North

Frequency

232221201918

90

80

70

60

50

40

30

20

10

0

Mean 20.47StDev 1.028N 1000

Histogram of NorthNormal

USL = 24

South

Frequency

4032241680

100

80

60

40

20

0

Mean 13.99StDev 8.718N 1000

Histogram of SouthNormal

USL = 24

North shows NO defects out of 1000 data points

THE BEST !

South shows MANY defects out of 1000 data points

(Approx. 10 %) THE WORST !

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Analyze Concept: Averages Only – A Re-Look

East shows a FEW defects out of 1000 data points

(Approx. 1%)

West shows a FEW defects out of 1000 data points

(Approx. 2%)

East

Frequency

24211815129

90

80

70

60

50

40

30

20

10

0

Mean 17.43StDev 3.026N 1000

Histogram of EastNormal

USL = 24

West

Frequency

25.022.520.017.515.012.510.0

80

70

60

50

40

30

20

10

0

Mean 18.47StDev 2.958N 1000

Histogram of WestNormal

USL = 24

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Analyze Concept: Ask Why 5+ Times!

Complaints about Room ServiceWHY ?

Cold Food delivered by Room Service

Delivery Process was taking too long

Long Delays Waiting for Service Elevator

Heavier elevator use by housekeeping

Housekeeping was frequently restocking towels

Laundry’s washing process was not completed on time

Necessary supplies not available

Vendor shipment was late again

WHY ?

WHY ?

WHY ?

… etc.WHY ?

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Improve Concept: Testing Solutions

England, Late 1800s Frequent stork sightings on roofs of homes with newborn

children Do storks deliver babies? No, homes with newborns were significantly warmer

attracting the storks to the roofs

Research consistently shows as hospital size increases, patient death rate dramatically increases.

Should we avoid large hospitals ?

Might we have missed a large factor (X) … the more severe cases are taken to the large hospitals.

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Improve Concept: What Makes a Good Solution?

Consider the 7 Aspects of Good Solutions

Takes the root cause out of the process

Cost effective

Minimum negative impact on any part of the system

Innovative “Upstream” fix

Employs “Poka-yoke”*

Involves the Customer/Next in Process Recipient

Allows you to meet your performance target

*Poka-yoke – The concept of designing a process so it cannot fail. An example would be “required screens” when entering data in a system. If the fields are not completed, the system will not accept the “enter” command.

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Control Concept : Ensure ongoing success

What measurements are in placeto monitor ongoing performance?

Week beginning

Individual Value

12/17/20

06

11/12/20

06

10/8/200

6

9/3/20

06

7/30

/200

6

6/25

/200

6

5/21

/200

6

4/16

/200

6

3/12

/200

6

2/5/20

06

1/1/20

06

250

200

150

100

50

_X=82.2

UCL=130.6

LCL=33.9

1/1/2006 7/23/2006

5

3

51

222

55

5

1

Process Performance Over Time

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What is LEAN?

Making the process flow, waste, and results visible

What It Actually Is…

So they can be improved easily

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Goals of LEAN

Improve Efficiency

ReduceWaste and

Costs

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LEAN Concept: Value vs. Waste

Value Added ActivityValue Added Activity Non-Value Added Activity

An activity that directly achieves customer requirements.

Something the customer is willing to pay for or perceives as value

Those activities that take time or resources, but do

not directly achieve customer requirements

Non-Value Addedbut Required Activity

Let’s start to determine what’s valuable to the customer to help identify waste in the system.

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LEAN Concept: Waste Categories

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LEAN Concept: Value Stream Maps

1. Mail arrives at mail room

2. Invoices are sorted and

delivered to the processing area

3. Process areas re-sort the mail

and batch invoices

4. Invoices sent to queues

5. Invoice is processed

6. Invoice sent to peer review queue

and reviewed

7. Approval request sent to final approver

8. Final approver approves approval request and sends to processing area

9. Payment sent to vendor

10. Payment waits in posting file

11. Payment posted. Totals

NVA 72 hrs

VE 1 hr

VA 2 hrs

NVA 1 hrs

VE 1 hr

NVA 1.5 hrs

VE 1 hr

VE 24 hrs

VA 4 hrs

NVA 72 hrs

VA 1 hr

NVA 146.5 hrs

VE 27 hrs

VA 7 hrs

Why do we it this way?

Use 5 Why’s.1.

Why do we it this way?

Use 5 Why’s.

2.

Why do we it this way?

Use 5 Why’s.3.

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LEAN Concept: 5S

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What you can do right now …

Learn more about the Six Sigma and LEAN

Apply concepts to your daily encounters

- Identify measurable improvements

- Collect “good” data for yourself, and your department

- Analyze more deeply

- Identify / implement “good” solutions

- Develop stronger controls and measures