Combining Lean, Six Sigma

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<ul><li> 1. Combining Lean, Six Sigma &amp; Agile Why, and How? (c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 1 </li></ul><p> 2. About MeArlen Bankston Director, Lean-Agile ConsultingSix Sigma Master Black Belt Certified ScrumMaster Trainer and Agile Methodology Coach 30+ Lean Six Sigma and Agile projects implemented over past five years(c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 2 3. Agenda I. Introduction (What?) II. The Case for Change (Why?) III. Three Combined Approaches (How?) IV. Discussion(c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 3 4. I. Introduction (What?) (c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 4 5. Introduction Lets take a few moments to set expectations:How many Agile practitioners?How many Lean Six Sigma, BPM or operationsmanagement practitioners?Has anyone previously combined Lean or Six Sigmaprocess improvement techniques with Agile?Are there any particular problems which you hopewill be addressed in this discussion?(c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 5 6. What are Lean Six Sigma and Agile?Define Define Lean Six Sigma is one of a number of business process improvementMeasureMeasure methodologies, which shares rootsAnalyzeAnalyze with approaches such as BPM, TQM, SPC and others. Improve Improve (Process Focused)ControlControlAgile is an iterative and incremental approach to project delivery, encompassing methodologies such as Scrum and eXtreme Programming (XP). (Project Focused)(c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 6 7. Basic Concepts of Lean Six Sigma A 5 step approach founded on asking the right questions: 1. Define: What is important to the customer? What is their target and acceptable limitations; anything else is considered defective 2. Measure: What is the frequency of defects? How many defects? Capability: How is the process performing for the customers? Entitlement: How good can the existing process be? Gage R&amp;R: How good is the data? Is it reliable? 3. Analyze: Why, when and where do the defects occur? Data driven analysis to prove what the root causes are 4. Improve: How can we fix the process/critical defects? How can root causes can be addressed? 5. Control: How can we ensure the process remains fixed? Develop controls to ensure process improvement is sustained(c) 2001, C.C. Pace Systemswww.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 7 8. Basic Concepts of AgileKey Agile principles are: Focus on customer value Employ business-driven prioritization of features.Iterative &amp; Incremental Delivery Create a flow of value to customers by chunkingfeature delivery into small increments.Intense Collaboration Face-to-facecommunication via collocation, etc;diversified roles on integratedteams.Self Organization Team members self-organize to fulfill a shared projectvision.Continuous Improvement Teams reflect, learn and adapt to change; work informs the plan.(c) 2001, C.C. Pace Systemswww.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 8 9. Demonstrated Successes Agile &amp; Lean Six Sigma have both proven their mettle in the respective domains: Agile Project Execution: Improved time-to-market, collaboration and customer satisfactionLean Six Sigma Process Improvement: Better process controls, higher efficiency and effectiveness However, they still tend to operate independently.(c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 9 10. II. The Case for Change (Why?)(c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 10 11. Why Do We Do Projects? Why do we do projects? a) Deliver to Initial Specifications b) Deliver on Time c) Deliver on Budget(Trick Question)(Trick Question) d) Increase Revenue e) Avoid Costs f) Improve Service g) Everything but a To enhance businesses profitability by:Providing Value to external Customers (better service,more revenue generated), andProviding Value to internal Customers (better service,lower cost) (c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 11 12. What is Value? Value is generated by addressing Customers most critical and pressing needs.Value, as defined by the Business Customer (Agile) Customer requirements (PMI) Voice of the Customer/Business, Critical to Quality requirements (Six Sigma) Value, Right Product/Time/Price (Lean) Related, but subtly different perspectives.(c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 12 13. Value from Two PerspectivesHow can we improve our capability to deliver Value through projects?Project Execution Improvements: Delivery speed While these areWhile these are criticallycritically Code qualityimportantimportant Business customer satisfactionBusiness-Focused Improvements: Impact on business process performance (cycle time, SLA fulfillment, audit These are more These are more compliance)often neglected...often neglected... And even more And even more Measurable contribution to strategic important. important. initiatives Incremental operational integration &amp; deployment End user satisfaction (c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 13 14. Repercussions of Independence Some common issues include: At the portfolio level:Arbitrary and inconsistent project selection criteriaPoor alignment of projects across value streamsUnfocused approach to risk management Within Agile projects:No quantification of project valueCustomer difficulty in providing grounded requirementsInconsistent alignment with highest-priority process needs Within Lean Six Sigma projects:No incremental delivery of business valueLimited scope of analysis and opportunity for measurementInsufficient linkage to execution of improvement recommendations(c) 2001, C.C. Pace Systemswww.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 14 15. The Big Picture An explicit linkage from Customer to Process to Execution is necessary to ensure that the organization is tightly aligned with the real, changing needs of its users. (c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 15 16. Problem Definition vs. Solution ExecutionLean and Six Sigma, by defining the problem, help to: Define and quantify Value Identify root causes of business problems Avoid suboptimization by providing full business context Align business management with true customer needsDo the right projects. Agile, by crafting the solution, helps to: Deliver incremental Value Provide framework for ongoing measurement of results Ensure effective implementation of improvements Align business management with implementation teamsDo the right projects right.(c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 16 17. Agiles Contributions Agile execution of Lean Six Sigma process improvementrecommendations can yield: Flexibility &amp; SpeedDirect, continuously updated linkage to true needs of business &amp; customersAbility to handle change beyond initial process analyses Minimized RiskIterative developmentIncremental delivery Better SolutionsFocus and refinement of recommended improvements at the implementationlevelIdeal platform for innovation and new product introduction More Versatile TeamsSupport for whole-of-life product maintenance and continuing developmentClose coordination between Business and IT(c) 2001, C.C. Pace Systemswww.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 17 18. Lean Six Sigmas Contributions Lean Six Sigma provides a number of complements to Agile project execution: Grounded project vision and clear focusProduct Backlog items with quantifiable ValueProduct Backlog prioritization criteria Stronger business casesQuantitative assessment of feature valuesClear linkage of IT efforts to business benefits Means to measure successKey metrics identified for a particular processMeasurement and control system in place Directed portfolio designSelect projects by critical customer needs &amp; process constraintsAlign projects within programs &amp; across functional silos(c) 2001, C.C. Pace Systemswww.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 18 19. A Simple ConnectionLean Six Sigma Project Agile Project(s) What are the best ways to improve the customer acquisition process?Reduce time to complete online process by 50%Update ProductEarly Web Backlognotificationcontentof requiredinformation Item 1Time toUpdate completeUI Flow Customer online Fewer Item 2Value processscreensIntegrate systemsItem 3CTQ NyN r4xN Item NrN Identify Value &amp; Waste, Provide RecommendationsDeliver Value Fast &amp; Early (c) 2001, C.C. Pace Systems www.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 19 20. III. The Approach (How?) (c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 20 21. Control Approach: Waterfall Six Sigma Status Quo. Six Sigma Deployment via Waterfall End Users Provide needs Value receivedCustomerBusinessSomething isValuewrong! Help!receivedSigma Analyst Lean Six Here are someNow lets ensureNever fear, we Now, we willNext, lets recommendationsthe process shall Define this Measure to find Analyze to find to Improve theremains underproblem! out how bad it is! the root causes. situation. Control. IT Teams Solution Development:Waterfall SDLC, Design for Six Sigma (DFSS)(c) 2001, C.C. Pace Systems www.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 21 22. Waterfall Approach Basics The Waterfall Six Sigma Approach works like this:Lean Six Sigma projects determine which problems projects should address, and their broad solutions.Waterfall projects are spawned in the Improve phase to tackle these problems, further define their solutions, and establish process control.This has worked for years in some companies but companies there is always room for improvement!(c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 22 23. Three Combined Approaches Were going to briefly examine three possibleapproaches for combining Lean Six Sigma and Agile:Low-Level Combination: Approach 1: Initial ApproachAgile with basic LSS tools Focused Teams: Approach 2: Integrated ApproachLean Six Sigma &amp; AgileApproach 3: Whole of Life Death of the Project: Platform-based operational approach (c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 23 24. Three Approaches, One Set of Goals All approaches share these goals: Align project portfolios with true, grounded strategic value generation Accurately measure value generation and strongly link to strategic operations Improve execution speed of process improvement initiatives Tighten feedback loops in process management and improvement efforts Support incremental improvements with a process designed around iterative delivery (c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 24 25. Process Management Maturity Curve ProcessProcess Business ProcessBusiness ProcessDeliveryDeliveryImprovement Improvement ManagementManagementFocusedFocusedFocused FocusedFocused Focused3. Whole of Life Approach3. Whole of Life Approach Death of Projects Death of Projects 2. Integrated Approach 2. Integrated Approach Lean Six Sigma &amp; Agile Lean Six Sigma &amp; Agile1. Initial Approach1. Initial Approach Agile w/toolsAgile w/tools MaturityTime (c) 2001, C.C. Pace Systemswww.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 25 26. Process Management Maturity Curve ProcessProcess Business ProcessBusiness ProcessDeliveryDeliveryImprovement Improvement ManagementManagementFocusedFocusedFocused FocusedFocused Focused3. Whole of Life Approach3. Whole of Life Approach Death of Projects Death of Projects 2. Integrated Approach 2. Integrated Approach Lean Six Sigma &amp; Agile Lean Six Sigma &amp; Agile1. Initial Approach1. Initial Approach Agile w/toolsAgile w/tools A simple first step when:A simple first step when: MaturityProjects have already been selected and scoped Projects have already been selected and scopedProjects affect loosely defined business processes Projects affect loosely defined business processesProjects live within broader programs Projects live within broader programsQuantification of project value is desired Quantification of project value is desired Time (c) 2001, C.C. Pace Systemswww.ccpace.comCombining Lean, Six Sigma and Agile: Why, and How? Page 26 27. Approach 1: Initial Basics The Initial Approach works like this:Lean Six Sigma analyst facilitates rapid process definition and measurement exercises with Agile team, business customer, process performers and End Users (~1 week)During each Iteration, LSS Analyst: Analyzes current process performance Leads detailed process design work (workflow, business rules, etc.) Quantifies project value based on few key metrics Facilitates feedback from end users and related process owners Acts as customer proxy to team Provides voice of the process for Product Backlog prioritization Assists with operational integration of project improvements LSS Analyst generally works 1-2 iterations ahead of team, gradually ramps down involvement as backlog crystallizes(c) 2001, C.C. Pace Systems www.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 27 28. Approach 1: Initial Details Lean Six Sigma tools, Agile execution.User needsAllows for gradual Lean Six Sigma &amp; Agile: Integrated (VOC) are not integration andstatic! detailed feedbackProvide high- Provide user feedback: level needs Usability test results, surveys etc.Integrate output into operationsValue Commanders IntentreceivedSomething iswrong! Help! Detailed inputFulfill Product Owner Role from user and process perspective Fulfill Customer Proxy Role High-levelMeasure &amp;Analyze process performanceGather user feedback Help to prioritize Backlog Build Controls intoprocess Report Valuedelivered High-leveldataDefine:Measure: CTQs Key metricsValue streamData collection Critical plan constraints Iteration 0:ArchitectureSpikeIteration 1: Develop Measurement System 1. Defines what value meansGives businessfor this project visibility into true2. Places project in context project value to theirwith related business activities processes(c) 2001, C.C. Pace Systemswww.ccpace.com Combining Lean, Six Sigma and Agile: Why, and How? Page 28 29. Process Management Maturity CurveProcess Process Business Process Business ProcessDeliveryDelivery ImprovementImprovement Management ManagementFocusedFocused FocusedFocusedF...</p>