Lean Six-Sigma 101

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Introduction to Lean Six-Sigma. Presentation from my 1-Day Workshop

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<ul><li><p>WHAT is lean six-sigma? </p><p>(And what is it not?) </p></li><li><p> Six-Sigma is process-focused </p><p> Fix the process, and the outcome shall take care of itself. </p><p> A process has measurable outcomes </p><p> Measurement is a prerequisite to improvement </p><p> The outcomes follow the laws of statistics </p><p> Normal Distribution </p></li><li><p>Tightening the bell-curve means reducing the spread </p><p>to make a process reliable </p><p>When acceptable variation is within 6 of the mean, the no. of defects is only 3.4 per million opportunities. </p></li><li><p>ALWAYS ALWAYS ALWAYS ALWAYS ALWAYS </p><p>Tackle variation before adjusting the mean </p></li><li><p>LEAN SIX-SIGMA </p></li><li><p>Lean Six-Sigma is a </p><p>framework that provides a structured approach to </p><p>eliminate waste and improve customer satisfaction </p></li><li><p>framework </p><p>structure </p><p>waste </p><p>customer </p><p>IS </p><p>IS NOT </p><p>IS </p><p>IS NOT </p><p>IS </p><p>IS NOT </p><p>IS </p><p>IS NOT </p><p>Generic architecture that can be customized to the needs of a specific problem </p><p>An opportunity for to knock oneself out with statistics </p><p>A series of logical steps with a quantifiable business outcome </p><p>A substitute for work! </p><p>A defect, a.k.a. customer pain </p><p>Second-guessing the customer </p><p>The consumer of a process output </p><p>Only the consumer of the companys product or service </p></li><li><p>WHERE is lean six-</p><p>sigma applicable? </p></li><li><p>SIX-SIGMA HAS A BAD REP! </p></li><li><p>NO PAIN NO GAIN </p><p>NO PAIN NO PAIN </p><p>Employees set their own goals based on team goals </p><p>Employees are the source of ideas and managers facilitate successful </p><p>outcomes Employees are responsible for their career path and managers provide development feedback to set them up for success </p><p>Managers set goals for employees </p><p>Managers hand out report-cards to employees judging past performance </p><p>Culture of Empowerment Six-Sigma likely to succeed </p><p>Culture of Dependency Six-Sigma likely to fail </p><p>An employee must take managers permission when stepping outside </p><p>the scope of assigned tasks </p></li><li><p>HOW DOES LEAN SIX-SIGMA APPLY TO SERVICES AS FOR MANUFACTURING? </p></li><li><p>MANUFACTURING OR SERVICES </p><p>OUTCOMES ARE PRODUCED BY A </p><p>LEAN PRINCIPLES CAN BE APPLIED TO: </p><p>Suitcases lost at an airport Rooms not available in time for check-in at a hotel </p><p>When acceptable variation is within 6 of the mean, the no. of defects is only 3.4 per million opportunities. </p></li><li><p>Development Testing Deployment Launch App Support Engineering </p><p>Constructs products </p><p>Assures fitness for use </p><p>Unpacks and installs </p><p>Imparts training </p><p>Help-desk </p><p>Maintenance </p></li><li><p>BEFORE Lean Six-Sigma </p><p>Each department has its own </p><p>view of success </p><p>Firmly rooted in its specialization </p><p>The success of one has very little to do with that </p><p>of </p></li><li><p>AFTER Lean Six-Sigma [mythological interlude] </p></li><li><p>BRAHMA [God of Creation] SHIVA [God of Destruction] </p><p>VISHNU [God of Sustenance] </p></li><li><p>D </p><p>T </p><p>S T </p><p>D </p><p>S Creates new products Assures fitness for use </p><p>Ramps-up users quickly </p><p>Channels change-requests </p><p>Refines and improves product </p><p>Assures system integrity T </p><p>D </p><p>S Ramps-down usage Retires old product </p><p>BUILD PRODUCT SUSTAIN PRODUCT RETIRE PRODUCT </p><p>Development Testing Support Helpdesk D T S </p></li><li><p>AFTER Lean Six-Sigma </p><p>Mindset spills-over departmental lines as Functions participate in acts of creation, sustenance and destruction </p><p>to serve a customer through the IT product lifecycle </p></li><li><p>HOW shall I apply lean six-sigma? </p></li><li><p>BUSINESS CONNECT </p></li><li><p>DEFINE </p><p>Effort must </p><p>connect with the business of the organization. </p><p>1. Customer Requirements </p><p>Voice of Customer (Voc) State the customers pain area Starting point for </p><p>launching an effort Speak the customers </p><p>language </p><p>Return on Investment (RoI) Build the Business Case </p><p>E.g. An initiative to reduce the volume of customer support </p><p>requests may use a template for RoI as </p><p>Cost to support tickets on recurring basis </p><p>v. Cost to implement </p><p>application-fix </p></li><li><p>DEFINE </p><p>Effort must </p><p>connect with the business of the organization. </p><p>2. Process Flow </p><p>Value-stream mapping with SIPOC </p></li><li><p>SUBWAY MAP </p><p>The focus is on getting a passenger from Point A to Point B </p></li><li><p>S </p><p>I </p><p>P </p><p>O </p><p>C </p><p>1. A process is a series of steps </p><p>2. Each step is a verb representing an action taken, such as </p><p> Define Plan Analyze Submit Summarize </p><p>3. The action adds value or it should be eliminated </p></li><li><p>S </p><p>I </p><p>C </p><p>1. Each step in a process produces an outcome </p><p>2. The outcome is a noun, representing output delivered, such as: </p><p> Product Definition Forecast of Sales </p><p>3. The outcome is associated with Critical to Quality metrics (CTQs) </p><p>P </p><p>O </p></li><li><p>S </p><p>I </p><p>O </p><p>1. Each output has an intended recipient called customer </p><p>2. The customer signs-off on the output based on its CTQs. S/he may: Accept </p><p>unconditionally Accept conditionally, </p><p>with left-on-table items clearly listed </p><p> Reject </p><p>P </p><p>C </p></li><li><p>P </p><p>I </p><p>O </p><p>C </p><p>1. A process consumes inputs </p><p>2. Each input is a noun, representing an input consumed, which could be the output of a previous step </p><p>3. Each input may be qualified by CTQs and require the sign-off of process owner </p><p>S </p></li><li><p>P </p><p>S </p><p>O </p><p>C </p><p>1. The provider of an input is called supplier </p><p>2. The supplier of an input is accountable for satisfying CTQs and negotiating sign-off by customer </p><p>I </p></li><li><p>DEFINE </p><p>Effort must </p><p>connect with the business of the organization. </p><p>3. Potential </p><p> 1. Project Title &amp; </p><p>Description What is the project? </p><p> 2. Project Manager &amp; </p><p>Authority Level Who is given authority to lead the project and can he/she determine, manage and approve changes to budget, staffing, schedule, etc. </p><p> 3. Business Need </p><p>Why is the project being done </p><p> 4. Business Case </p><p>Financial or other basis that justifies the project </p><p> 5. Resource Pre-</p><p>Assignment Men &amp; Materials </p><p> 6. Stakeholder Analysis </p><p>Who will affect or be affected by the project as known to date. </p><p>PROJECT CHARTER </p></li><li><p>DEFINE </p><p>Effort must </p><p>connect with the business of the organization. </p><p>3. Potential </p><p> SMART Goals </p><p> Specific Measurable Attainable Realistic Time-bound </p><p> 7. Deliverables </p><p>End-result of the project in terms of specific outcomes and the tangible form in which they will be delivered. </p><p> 8. Constraints &amp; </p><p>Assumptions A constraint is any limiting factor and an assumption is something taken to be true but which may not be true. </p><p> 6. Stakeholder Analysis Stakeholder </p><p>Requirements as known </p><p> Triple Constraints Model (Pentagon) </p><p> Sponsor </p><p>Authorizes the project. </p><p>PROJECT CHARTER </p><p>Risk </p></li><li><p>DEFINE establishes there is a problem. </p><p>MEASURE sizes the problem, and VALIDATES some of the assumptions. Is it as big as we thought? BIGGER? </p></li><li><p>4. Refined Project Definition </p><p>Measurement Plan To collect data to corroborate the business case made in DEFINE phase. </p><p>Run Chart </p><p>5. Capable Measurement System </p><p>6. Data Collection </p><p>MEASURE </p><p>Cast the objective in measurable </p><p>terms. </p><p>Data Speaks! What data is relevant to </p><p>collect .. .. to establish the magnitude </p><p>of the problem? How it shall be collected? How it shall be presented? </p></li><li><p>FIND THE Y AS IN </p><p>Y characterizes the process in a way that the customer cares about </p></li><li><p>)(xfy </p><p>C O P I S </p><p>MEASURE </p><p>Cast the objective in measurable </p><p>terms. </p><p>Data Speaks! </p><p>S I P O C </p><p>Traditional six-sigma treats y as a measurable characteristic of the process output </p><p>Lean Six-Sigma, y is simply something about the process that the customer would care about </p><p>Lean Six-Sigma, y can simply be the number of tickets logged by an IT Helpdesk in a particular category. </p></li><li><p>MEASURE </p><p>Cast the objective in measurable </p><p>terms. </p><p>Data Speaks! </p><p>CASE-STUDY </p><p>Background One wireless company had a 17% (170,000 parts per million) level of rejected service orders. There were over 30,000 errors per month, which, at an average cost of USD 12.50 to fix (wage cost only), cost USD 375,000 per month. Over 50 temporary workers had been hired to deal with the 2-month backlog of unfixed errors. The objective was to cut this level of rejects in half (9%) by the end of the year. </p><p>RUN CHART Defects per week over a 6 month window </p><p>PARETO 80% defects from 6 transaction codes </p></li><li><p>As </p><p>information systems get </p><p>more complicated .. </p></li><li><p>.. there are more moving </p><p>parts and interdependencies </p></li><li><p>The requirements for adding, changing, and deleting data are often too loose, too tight, or nonexistent, which leads to errors and rejected transactions that must be corrected manually by people hunched over </p><p>computer terminals for 8 hours a day. </p></li><li><p>MEASURE </p><p>Cast the objective in measurable </p><p>terms. </p><p>Data Speaks! </p><p>CASE-STUDY </p><p>Outcome Programmers took 4 months to implement the solution. The changes completely eliminated the two top service-affecting errors, and three of the four record-affecting changes. It cut total errors by 77%. This reduction translated to USD 299,426 per month in savingsover USD 3 Million per year. </p><p>Root-cause analysis showed that the top categories could be eliminated by baking appropriate business rules into IT </p></li><li><p>D </p><p>T </p><p>S T </p><p>D </p><p>S Creates new products Assures fitness for use </p><p>Ramps-up users quickly </p><p>Channels change-requests </p><p>Refines and improves product </p><p>Assures system integrity T </p><p>D </p><p>S Ramps-down usage </p><p>Retires old product </p><p>BUILD PRODUCT SUSTAIN PRODUCT RETIRE PRODUCT </p><p>Development Testing Support Helpdesk D T S </p><p>A significant chunk of lean projects can originate in the maintenance phase of the lifecycle Although projects can start in any phase. </p><p>How does the support </p><p>helpdesk see itself? </p><p>(a.) I am here to resolve as many tickets as fast as </p><p>possible (b.) Why do these </p><p>tickets arise in the 1st place? I am here to </p><p>eliminate tickets for good. </p></li><li><p>ANALYZE </p><p>Find the root causes </p><p>and identify the vital few. </p><p> Group Activities Brainstorm Sticky-Notes </p><p> Software Excel QI Macros for SPC Minitab </p><p>8. Ranking &amp; Prioritization </p><p>Statistical Tools Pareto Analysis Ishikawa ANOVA Design of Experiments </p><p>7. Enumeration of Potential X </p></li><li><p>ANALYZE </p><p>Find the root causes </p><p>and identify the vital few. </p><p>And all for the want of a horseshoe nail. </p></li><li><p>IMPROVE </p><p>Focus on the vital few </p><p>to drive business outcomes. </p><p>9. Define focus X 10. Fix X </p><p>Decide which root causes to focus on, and how </p></li><li><p>CONTROL is the counterpart of MEASURE. Measure sizes the problem. CONTROL shows it has gone away or diminished as a result of IMPROVE. </p></li><li><p>BEFORE AFTER </p></li><li><p>Senior Manager Monsanto Bangalore, INDIA sanjay.bhatikar@gmail.com </p><p>Sanjay Bhatikar, PhD </p></li></ul>