equable lean six sigma boe english presentation

Copyright © 2009 Equable All rights reserved

Business Operations Excellence®


Lean Six Sigma Transformation

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Reaching operational excellence with Lean Six Sigma transformation

Franck Strub January 2009

Business Operations Excellence® Copyright © 2009 Equable All rights reserved

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Who are we?


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Who are we?

>  Equable is a global provider of Lean Six Sigma deployment and training services to diverse Clients in US and in Europe.

>  Equable was founded in 2004 by Franck Strub, a former GE Lean Six Sigma certified Master Black Belt & expert in business process re-engineering

>  With the best Lean Six Sigma talents in Europe, we offer all the services to plan, execute and manage your strategy in Lean Six Sigma transformation


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Our Clients


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Our talent network

>  Our consultants are passionate by excellence >  Our consultants are experienced & certified:

>  they worked in significant high positions in prestigious companies >  they coached hundreds of Lean Six Sigma completed projects,

resulting in several $M productivity and savings >  they taught hundreds of Lean Six Sigma classes >  they certified hundreds of Master Black Belts, Black Belts and Green

Belts >  Our consultants are pragmatic and “hands-on” oriented >  They are expert in change management >  They have a solid background in finance >  They share common values: intellectual growth, people respect,

challenging mind, culture of result, quest of excellence


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Our partners

www.crystalball.com

Minitab Inc. is the US editor of a six sigma statistical software called MINITAB®. Equable is a reference partner of Minitab Inc. and promotes its usage

Crystal Ball® is a Six Sigma Statistical Simulation software tool that Equable selected. It is published by Oracle, a US Company with whom EQUABLE has a partner agreement


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Our services


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Our services From strategy alignment to project governance, our know-how includes: >  Efficiency program definition, deployment and management >  Project selection, definition, execution and management >  People selection and development >  Lean Six Sigma coaching >  Lean Six Sigma training >  Design For Lean Six Sigma >  Lean Six Sigma certification of Master Black Belts, Black Belts and

Green Belts >  Talent recruitment >  Change management


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Our end to end process approach

Select, train & coach people

Lean 6 Sigma program

Select Lean 6 Sigma projects

Execute Lean 6 Sigma projects $$

Market /Customer

expectations Company strategy

Performance indicators

Delay

Customer

Quality

Cost

Processes

Voice of Customer

Continuous Improvement Loop

Business response


PEOPLE PROJECTS

• Select –  Who ? –  For which project ? –  When ?

METHODS/TOOLS

• Choose the relevant projects

• Estimate the ROIs

• Train • Certify

• Implement the projects

• Guarantee acceptance and alignment

• Review the projects

• Review of skills • Project Ranking • Planification

• Lean Six Sigma (DMAIC & DFSS)

• Change Management

• Promote Talents • Report the output of the projects

• Communication • Performance review

• Change Management • Milestone Reviews

Business Operations Excellence® our method for Lean Six Sigma deployment

BOE®

Report

BOE®

Manage

BOE®

Execute

BOE® Plan

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2

3

4


Team selection

 Estimate each project against a benefits/cost matrix

 Define the adequate methodology for each project

 Retain crucial projects

 Define a flight plan

 Define project charter draft including the business case

Identification of all the potential pojects

b

Initial sort of the potential project

list

c

Project definition

d

 Define teams and roles and responsibilities

 Define training plan  Define support plan  Define PMO

 Voice of customers  Voice of employees

 Voice of enterprise  Voice of competition

 Voice of shareholders

 Organization assessment

 Operational program deployment strategy

a

BOE® Plan services:

BOE®

Report

BOE®

Manage

BOE®

Execute

BOE® Plan

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3

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BOE® Execute services: Implementation of Lean Six Sigma Projects in the perspective of training and rolling out the organization

Training programs •  Master Black Belt : 5 weeks

•  Black Belt : 4 weeks

•  Green Belt : 2 weeks

•  Yellow Belt : 2,5 days

•  Champion & Steering Committee members : 1 day

Coaching : support of Black Belts and Green Belts while implementing the projects, PMO, support of Management Certification:

•  Define the Lean Six Sigma certification criteria of the client

•  Assess and Validate the projects carried out by the Master Black Belts, Black Belts and Green Belts

•  Set up the Lean Six Sigma tests and test the Master Black Belts, the Black Belts and the Green Belts

BOE®

Report

BOE®

Manage

BOE® Execute

BOE® Plan

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3

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Control (3 weeks +)

Define (3 weeks)

•  Identify the issues and the scope of the project, the objectives and the business plan • Set up the macro-planning and the project team • Map the macro-process (SIPOC) • Voice of the Customer • Formalize and validate the Project Chart

Measure (5 weeks)

•  Define the data collection program •  Collect the data for each indicator for all the end to end processes •  Analyze and validate the proposed measurement system •  Measure the “as is” process performance

Analyze (6 weeks)

•  Analyze the statistic data •  Analyze the detailed process mapping •  Analyze the process added value •  Identify the inefficiency root causes

•  Identify improvement solutions addressing the root causes •  Plan, develop and implement pilot solutions •  Roll out the solutions

• Monitoring of the output • Control and audit the

sustainability of the output • Standardize and transfer the

output to the process owner • Close the project

Month 3 Month 1 Month 2 Month 5 Month 4

BOE® Execute - Each individual Lean Six Sigma project respects a common framework & timeframe

1

2

3

Improve (5 weeks) 1 2 3


BOE® Manage and Report

Manage •  Customization of the Lean Six Sigma referential •  Change Management – People acceptance •  Lean Six Sigma project review by their sponsors

Report •  Performance review of the Master Black Belts, the

Black Belts and the Green Belts •  Promotion of the Master Black Belts, the Black Belts

and the Green Belts •  Communication of the plan and the vision •  Communication of the output & benefits

Support of the individual Lean Six Sigma projects and monitoring of the global flight plan

BOE® Report

BOE® Manage

BOE® Execute

BOE® Plan

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BOE® - typical timeframe & approach

• 12 Black Belts • 12 Pilot projects (proof of concept) + 12 projects in first year

2010-2011 2009 2012

Pilot Phase

Roll Out

•  60 additional Black Belts •  120 projects per year with 60 Black Belts (acceleration pace) •  Executive training • Sponsor & stakeholders trainings • Green Belt trainings Knowledge Transfer

• 60 additional Black Belts • 240 projects per year with 120 Black Belts (cruise pace) • Training of Client’s Master Black Belt • Lean Six Sigma License transfer

In a decentralized environment a regional entity can volunteer for the Pilot Phase and provide a positive background of internal competition

To be adapted according to the resource availability and the change management culture


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Lean Six Sigma benefits >  Revenue growth through:

–  increased customer satisfaction –  introduction of quality products & services

> Margin increase through: –  less non quality costs (reduction of defects, wastes and manual

rework) –  more productivity and capacity (reduced cycle times)

>  Potential Gains per project*: –  Cycle time : 30%-70% –  Defects : 70% –  Costs : 30%-50% –  Capacity : 20% –  Productivity : 20% –  Project ROI : 4 in one year –  Project benefits : 400 K€

*non contractual values depending on projects


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Who is doing what in Lean Six Sigma?

Top Management

Quality Manager/ Champion Master Black Belt/Expert

Black Belt/Project Leader

Green Belt/Team member

Engage and promote Lean 6 sigma

Select processes, projects & people. Make plan. Change Agent

Lean Six Sigma expert. Train and coach Black Belts and Green Belts

Deliver Lean 6 Sigma projects. Full time project leader.

Contributes to Lean 6 Sigma projects


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Our Lean Six Sigma Trainings


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Lean 6 σ for Executives training agenda

Lean Six Sigma for Executives: 1 day Introduction to Lean Six Sigma Change Management of Lean Six Sigma Process Optimization with Lean Six Sigma Lean Process Analysis and Improvement tools Methodology DMAIC 6 Sigma Methodology DMADV 6 Sigma (DFSS) Project Governance Roles in Lean Six Sigma:

•  Champion •  Black Belt •  Green Belt •  Sponsor •  Stakeholders

Lean Six Sigma deployment (theory) Lean Six Sigma deployment (exercise)


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Lean 6 σ Black Belt training agenda Week 1: Introduction to Lean 6 σ with focus on Lean Introduction to Lean Six Sigma Process Optimization with Lean Six sigma Lean Process Analysis and Improvement tools:

•  Process Mapping •  8 wastes identification •  Value Stream mapping •  Notions of 5S •  Setup time reduction •  Total Productive Maintenance •  Standard operations & Continuous flow •  Kaizen event

VOC, CTQ selection, measurement and monitoring Customer Business Process Review + Projects Selection and Project definition and plan for Week 2

Week 3: Lean Six Sigma DMAIC Recap of week 2 Measure Six sigma tools

•  MSA (Gage R&R) •  Performance measurement

Analyze (Statistical Analysis) Improve Six Sigma tools (Regression, ANOVA, DOE introduction) Control (SPC) Project Leader Guide Follow up on all the real projects : Review of trainee projects, interactive coaching, Plan to close projects

Week 2: Lean Six Sigma DMAIC Recapitulation of week 1 Define Measure Introduction to Minitab™ Analyze (Process Analysis & Data Analysis) Improve Control Use of DMAIC template & Storyboard Work on real projects: Review of trainee projects, Interactive coaching, plan


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Week 1*: Introduction to Lean 6 σ with focus on Lean Introduction to Lean Six Sigma Process Optimization with Lean Six sigma Lean Process Analysis and Improvement tools:

•  Process Mapping •  8 wastes identification •  Value Stream mapping •  Notions of 5S •  Setup time reduction •  Total Productive Maintenance •  Standard operations & Continuous flow •  Kaizen event

VOC, CTQ selection, measurement and monitoring Customer Business Process Review + Projects Selection Project definition and plan for Week 2

Week 2*: Lean Six Sigma DMAIC Recapitulation of week 1 Define Measure Introduction to Minitab™ Analyze (Process Analysis & Data Analysis) Improve Control Use of DMAIC template & Storyboard Work on real projects: Review, Interactive coaching, plan

Lean 6 σ Green Belt training agenda

*Note : week 1 and week 2 of green Belts are similar to week 1 and week 2 of Black Belts. This allows trained Green Belts to become Black Belts by taking only a Black Belt Week 3 incremental training


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Lean 6 σ Yellow Belt training agenda

Day 2: MEASURE Phase :

•  Measurement system validation •  Data sampling and data collection •  Graphical display of data •  Performance measurement

ANALYZE Phase : •  Process analysis and mapping •  7 types of wastes (Mudas) •  Value Stream Mapping

Day 1: Introduction to Lean Six Sigma Process Optimisation with Lean Six Sigma DMAIC project framework DEFINE phase

•  Project charter •  Business Case •  Project plan •  Voice of Customer

Day 3 (half day): ANALYZE Phase (cont.):

•  Cause analysis •  Data analysis

Kaizen events IIMPROVE phase CONTROL Phase Lean Six Sigma project closure


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Change management training agenda

Change Management Objective: be able to implement and to manage efficiently a fast change by working on its acceptance

Introduction to efficient change process Change profile Prepare teams for success Define change project The need for change Setup a vision and communicate Motivate and engage people on change Lead the change Follow up the change Changing Systems and Structures Questions and answers


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Meeting facilitation skills training agenda

Meeting facilitation skills Objective : be able to facilitate efficiently a productive working meeting/workshop by following a timely process

Introduction Principles of facilitation

•  Content versus Process •  Diversity in teams •  Exercise •  Basic facilitation principles (diagnostic and reaction) •  “Bloody meeting” video •  Preventions and interventions •  Conflict management

Tools and Process •  Tools for idea generation •  Tools for problem cause analysis •  Tools for solutions (generation and selection)

Real case study: •  Idea generation •  Problem cause analysis •  Solution generation and selection

Questions and Answers

= Video recorded exercise


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Business Operations Excellence® Lean Six Sigma Transformation

www.equable.fr www.equable-us.com

email: [email protected] cell phone: +33 (0)6 89 06 13 98


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Appendixes


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Lean Six Sigma

Lean Six Sigma is the integration of Lean and Six Sigma

  Increase speed of processes

  Eliminate the Wastes

  Improve quality

  Reduce defects and variation

An operational excellence methodology centered on Customers

A pragmatic, disciplined and results oriented approach

Lean Six Sigma

Resulting into


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Lean origins

1900-1940 1945-1990 1996 2002-Present

“Mass production of inexpensive cars using

the assembly line”

“Toyota Production

System”

“Lean Thinking Five

Principles”

“Lean and Six Sigma

Integration”

Womack & Jones Michael George


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Toyota Production System House

JIDOKA: Hilighting/

Visualization of problems

Quality must be built in during the manufacturing

process!

JIT: Just In Time

Productivity Improvement

Making only "what is needed, when t is needed,

and in the amount needed!"

Superior Quality Reduce Costs & Delays

Improve Safety & Morale

+

Heijunka (Sequence plan) Standard Work Kaizen Operational Stability

The TPS House was developed by Taiichi Ohno and Eiji Toyoda to make it easy to explain Toyota's continuous improvement system to employees and suppliers. The aim of TPS is to eliminate all muri, mura, muda

(overburden, unevenness, waste) from the operations.


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Lean five principles

Specify Value… from the customer’s point of view Identify Value Stream… map process & see wastes Flow… move one piece at a time continuously Pull… let the customer pull your product Perfection… always improve the process

From Lean Thinking by James P. Womack and Daniel T. Jones, Free Press


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Lean tools Lean designates a set of tools which has been first used in Manufacturing in the 60’s (coming mainly from the Toyota Production System) and now used in the service industry (business transactional processes). The Lean tools allow the optimization of production and transactional processes flow. The Lean tools are : >  7 forms of wastes (Mudas) >  5 S (Clean, order and optimize its workplace) >  Kaizen (Change to become good) >  Jidoka (Highlighting/Visualization of problems) >  Value Stream Mapping (Process value analysis) >  Just in Time, Pulling systems & Kanban refurbishing systems >  Quick Changeover (Setup time optimization) >  TPM (Total Productive Maintenance) >  Process Standardization: alignment of production with demand (Takt time,

Heijunka), Standard Work


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Six Sigma origins

1989- 1990- 1994- 1995-Present

“Premise of Six Sigma”

“Adopters of 6

sigma”

“1st Six Sigma Consulting company”

“Six Sigma expanded to non manufacturing

functions”


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Assumptions: • Long term observed data

• Normal distribution Probability of defects = 0.00034%

or 3.4 defects per million of opportunities

Z Long Term = 4.5 (I can place 4.5 sigma between my specification limit

and my mean µ) Z Short Term =Z Long Term + 1.5

Z Short Term = 6

Expected performance=6 Sigma

6 sigma

Characteristic

frequency

0 defects

3

10

1 2

50

σ

µ

Histogram

Contractual specification

limit

>  Sigma is a Greek letter which represents the standard deviation in statistics.

>  Having a six sigma performance (or process capability) means that we are producing only 3.4 defects per million of operations!!

4.5xσ

6 sigma


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Continuous improvement

CTQ*

ZST DPMO** Methodology Lean 6 σ

*CTQ Critical To Quality **DPMO Defect per Million of opportunities, long term data

***DFSS Design For Six Sigma

Process Lean

DMAIC

DFSS***

Simplify/clean up

Improve Design for 6 σ

3 σ

4 σ

5 σ

6 σ

66807

6210

233

3.4

1

2 3

1

2

3


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Lean 6 Sigma example

Distribution Cycle Time example: >  The cycle time of a distribution company, from customer order to

customer delivery should not exceed 3 days (our contractual terms & conditions)

>  The Customers complain. >  The competitors are better than us. They never exceed 3 days >  The Management says “we are loosing money” >  The team in place says “we dispatch in average the same day we

receive the order and we always use a 24 hours delivery carrier”


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Lean 6 Sigma DMAIC five phases

• Define

• Measure

• Analyze

• Improve

• Control

•  Define your Business problem

•  Measure your actual process performance (Y)

•  Find the main root causes (Xs) of your defects

•  Improve & implement solutions

•  Control that your new performance is sustained

•  Standardize & close the project


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process as felt by the customer

CUSTOMER Order Unit delivery

Definition Specification Performance limit Targets/goal

CTQ* Lead time 3 days 99.99% < 3 days

Procurement Collect Order &

Forward to delivery deptmnt

Ship to Customer & Bill CUSTOMER

Lead time is the measurement

*Critical To Quality

Problem statement: we miss our contractual obligations of delivering in less than 3 days Process in which we have a business problem:

?


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Measure

Measure your problem and your defects Lead time distribution

Time from order to delivery

in days

nb of occurences

0

defects

Contractual/Customer Specification

Limit

3 days

10

1 day 2 days

50

Histogram

Observed probability of defects=12.03%

26/216

Variation

Trend


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Measure conclusion I observed a probability of defect of 12.03%! My performance is 2.67 σST*. We have a problem! 6 sigma goal is to reach 0.00034% of probability of defect!

ZST value*

2 σ

3 σ

4 σ

5 σ

6 σ

Defects per million of opportunities

308537

66807

6210

233

3.4

% defects

30.8537%

6.6807%

0.6210%

0.0233%

0.00034%

12.03% 2.67 σ

* For short term data with ZST=ZLT+1.5


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Analyze Analysis – finding the root causes (Xs)!

>  Pareto chart of the 26 defects

Miss 3 pm carrier for

outside Paris region

20 77%

Incomplete shipping address

4 15%

Other

2 8%

>  2 causes represent 92% of my defects


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Improve

Time from order to delivery

in days

nb of occurences

0 defects

Contractual/Customer Specification

Limit

3 days

10

1 day 2 days

50

Histogram

Short term data Observed probability

of defects=0% Expected performance: 6 σ

I can place 6 σ between µ and the spec. limit and the

distribution is normal!

σ

µ

6xσ

New Cycle time from order to delivery distribution

KAIZEN

2 actions taken: >  Speed cycle by processing “Outside Paris region” orders first & organize an earlier transfer to shipping department by removing some non value added tasks (unnecessary sign offs) >  Change address format and control it at order time (avoid quality issues)


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Control 2003 Delivery time performance


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Lean 6 Sigma financial impact Cost of Failure

(% Sales) 40%

35%

30%

20%

15%

10%

5%

DPMO 3.4 233 6210 66807 308537 500000 Sigma 6 5 4 3 2 1

Budget : •  I sell 10 € every unit •  Operational margin = 25% (2.50 €) •  every defect costs me 24 €! •  at 2,67 σ (12,08% defects) I lost 40 cents every unit I sold!!


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Take orders offline (laptop)

Submit order to Manufacturing

Sales Repr.

Update orders on Intranet

Synchronize orders by email connection

Coordinator

orders

eBook

Production orders

Nb of Manual Human Interactions* Before

4

6

After

1

1

Web

Ord

er B

ook

proj

ect

* averages

st dev 1.6 st dev 1

What could Lean 6 Sigma do for you?

520 K€ of saving

TOTAL 10 2


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% of time spent by 8 persons doing financial manual entries before and after FPA project implementation

27% reduction of time spent by 8 financial analysts …gives 1.75 Full Time Employee proven benefit!

>  140 K€ saving

> Overtime reduced

>  Interim reduced

> More time for analysis (added value task)

What could Lean 6 sigma do for you?

Before After

100%

50%


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Lean 6 Sigma business case examples Cash improvement: Our customer wanted to reduce their current overdue by 80% from 10 M€ (representing more than 10% of one year revenue) down to 2 M€. Potential benefit: 5% (cost of money)*8 M€ = 400K€. Cost of Six Sigma project: 100 K€. Return on investment: 4. After analysing 4 months of receivable aged balance it was found:

>  the receivable aged balance was not measuring the real overdue (revenue recognition issue) 15% deviation

>  20% of the invoices had no payment due date. >  15% of the invoices were not addressed to the right international financial and funding

organisation (special contracts funded by IMF, WB, etc…) >  33% were customer disputes >  17% were real late payments (5% because of invoice sent too late, 12% without a valid

reason but were not chased)

After fixing the main issues and changing the invoice process we reached a stable monthly overdue amount of less than 1.9 M€. Project Sourcing efficiency: Our customer wanted to increase their margin on the projects that they are selling. Due to a tough competition, it was decided to source more efficiently the services and the IT systems. After a first financial analysis, we started one project on Low Cost Country Sourcing. Potential benefits on one year: 620 K€. Cost of Six Sigma project: 120 K€. Return on Investment: >5. For this project, we have redesigned the sourcing processes, introduced a new Purchase Forecast tool and assigned Goals & Objectives to Buyers. As a result of these changes, the amount of purchases made in Low Cost Countries increased from 18% to 24% in 6 months, with a forecast of 30% in the next 6 months.


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Customer order Webification: Our customers wanted to automate and optimize their Customer order process from sales representatives taking orders to Back office logistic persons transmitting orders to manufacturing and/or suppliers: Potential benefits (productivity and capacity gains) : 55% of gains on 11 people *87K€ = 520K€. Cost of Lean Six Sigma project: 120 K€. Return on investment after one years = 4.33 After a Value Stream Analysis and a confirmation meeting with main stakeholders it was decided to:

1.  Simplify the process (suppression of administrative validations (not necessary and ceating delays and errors)

2.  IT « Webification » of the Customer order process (orders taken offline on sales laptops and sent/synchronized with email)

3.  Automatic interface with supplier IT system and only one validation in all the process After a training of involved parties and a 3 months pilot of the new process, the measurements done confirms that only 5 employees can manage and process an identical order volume.

Financial Analysis Optimization: Our customer wanted to use the ORACLE-GL Financial analysis module instead of Excel, to realize all its analytical financial reports. Potential benefits: (productivity) : 3 interims*50 K€ = 150K€. Cost of project Lean Six Sigma : 50 K€. Return on investment after one years = 3 After an exhaustive inventory listing of all the existing analytical reports, their value and the cost to produce them, it was decided to keep 12 standard reports and to model them into Oracle-GL. After 2 months and few tunings, the measurements shows that 98% of all demanded analysis can be answered with the Oracle-GL analytical module.

Lean 6 Sigma business case examples (2)


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Team development training agenda Build and develop efficient teams Objective: become an efficient team

Introduction Individual preferences and diversity in teams

•  Questionnaire Myers Briggs Type Inventory (MBTI) •  Scales and types overview •  Group picture (strengths and weaknesses) •  Exercise and Discussion

Working together: •  Team exercise (Tower building) •  Debrief •  GRPI tool

Team Development: steps and needs: •  Introduction •  Team evaluation •  Discussion

Trusting in each other: •  Team exercise: «Walking together» •  Debrief and discussion

Teamwork: •  Exercise (Survival Challenge) •  Debrief and discussion

Questions and Answers


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Business Operations Excellence® Lean Six Sigma Transformation

www.equable.fr www.equable-us.com

email: [email protected] cell phone: +33 (0)6 89 06 13 98