Lean Six Sigma Group

Lean Six Sigma Case Study Executive Overview

International Standards for Lean Six Sigma (ISLSS)

0 10 20 30 40

LSL USL

USL

Target

LSL

Mean

Sample N

StDev (ST)

StDev (LT)

Cp

CPU

CPL

Cpk

Cpm

Pp

PPU

PPL

Ppk

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

20.0000

*

0.0000

14.7929

169

3.38716

4.61648

0.98

0.51

1.46

0.51

*

0.72

0.38

1.07

0.38

0.00

130177.51

130177.51

6.29

62109.19

62115.48

676.79

129673.00

130349.79

Process Data

Potential (ST) Capability

Overall (LT) Capability Observed Performance Expected ST Performance Expected LT Performance

STLT

-100 0 100 200 300 400

LSLUSL

Process Capability Analysis for Average Spee

USL

Target

LSL

Mean

Sample N

StDev (ST)

StDev (LT)

Cp

CPU

CPL

Cpk

Cpm

Pp

PPU

PPL

Ppk

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

20.0000

*

0.0000

71.4444

117

38.9880

50.6272

0.09

-0.44

0.61

-0.44

*

0.07

-0.34

0.47

-0.34

0.00

948717.95

948717.95

33440.39

906498.25

939938.64

79094.94

845218.98

924313.92

Process Data

Potential (ST) Capability

Overall (LT) Capability Observed Performance Expected ST Performance Expected LT Performance

STLT

Business Problem & Impact:Average speed to answer (ASA) was 1 minute. As call volumes increased 30% with a recent acquisition, end user downtime was costing the company US$500K annually. The target average speed to answer was under 30 seconds.

“Descriptive Project Title”

Results/BenefitsAfter the 3 month project, the customer saved US$150K, or 30%, as a result of reduced end user downtime.

Measure & Analyze:Data Collection: Speed to answer on all calls was measured. The existing process sigma was 2.4.

Root Causes: Nature of problem and time of call were identified as root causes.

Customer Profile: 28,000 Retail Business

Improve & Control:Cross-training on call types was performed and staffing was arranged around peak call times. Metrics are reviewed weekly and posted to an IT dashboard.

Process Capability– Before

Process Capability – After

A Savings of US $150k in 20XX

2International Standards for Lean Six Sigma (ISLSS)

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Project “Storyboard” Example

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Lean Six Sigma Group

Lean Six Sigma Case Study Backup Slides

International Standards for Lean Six Sigma (ISLSS)

Project Charter

Problem: Describe problem in non-technical terms Statement should explain why project is important; why

working on it is a priorityGoal: Goals communicate “before” and “after” conditions

Shift mean, variance, or both? Should impact cost, time, quality dimensions

Express goals using SMART criteria Specific, Measurable, Attainable, Resource

Requirements, Time Boundaries Explain leverage and strategic implications (if any)

Problem/Goal Statement

Tollgate Review Schedule

Financial Impact

Team

Scope: In-Scope/Out-of-Scope (Process Start/Stop

State financial impact of project Expenses Investments (inventory, capital, A/R) Revenues

Separate “hard” from “soft” dollars State financial impact of leverage opportunities (future

projects, replication opportunities, project iterations)

PES Name Project Executive Sponsor (if different from PS) PS Name Project Sponsor/Process Owner DC Name Deployment Champion GB/BB Name Green Belt/Black Belt MBB Name Master Black BeltCore Team Role % Contrib. LSS Training Team Member 1 SME XX YB Team Member 2 TM XX GB Team Member 3 SME XX PSExtended Team Team Member 1 BFM XX Not Trained Team Member 2 IT XX Not Trained

Review high-level schedule milestones here: Phase Completions Tollgate Reviews

Tollgate Scheduled Revised CompleteDefine: XX/XX/XX - XX/XX/XXMeasure: XX/XX/XX XX/XX/XX XX/XX/XXAnalyze: XX/XX/XX XX/XX/XX XX/XX/XXImprove: XX/XX/XX XX/XX/XX XX/XX/XXControl: XX/XX/XX XX/XX/XX XX/XX/XX

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Measure Overview

CTQ: ? Unit (d) or Mean (c): ? Defect (d) or St. Dev. (c): ? PCE%: ? DPMO (d): ? Sigma (Short Term): ? Sigma (Long Term):? MSA Results: show the percentage result of the GR&R,

AR&R or other MSA carried out in the project

Root cause: Quick Win #1

Root cause: Quick Win #2

Root cause: Quick Win #3

Observation

Indiv

idual Valu

e

2442171901631361098255281

40

35

30

25

20

_X=29.13

UCL=37.70

LCL=20.56

Observation

Movin

g R

ange

2442171901631361098255281

10.0

7.5

5.0

2.5

0.0

__MR=3.22

UCL=10.53

LCL=0

I-MR Chart of Delivery Time

Detailed process mapping MSA Value Stream Mapping Data Collection Planning Basic Statistics Process Capability Histograms

Time Series Plot Probability Plot Pareto Analysis Operational Def. 5s Pull Control Charts

Enter Key Slide Take Away (Key Point) Here

6

Process Capability Graphical Analysis

Tools UsedRoot Cause / Quick Win

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Gemba Training Video by Gemba Academy

Analyze Overview

Value Add Analysis - Current State

0

20

40

60

80

1 2 3 4 5 6 7 8 9 10Task #

Task T

ime (

seco

nd

s)

CVA Time BVA Time NVA Time

Takt Time = 55

Root cause:Effect

Root cause:Effect

Root cause:Effect

Value Add Analysis One-Way ANOVA Two-Way ANOVA Pareto Plots Simple Linear Regression Multiple Regression Test for Equal Variance Scatter Plots

C&E Matrix Complexity Cause & Effect Diagram Kaizen/Quick Wins FMEA Control/Impact Chart T-Test Other

Hypothesis Test (ANOVA, 1 or 2 sample t - test, Chi Squared,

Regression, Test of Equal Variance, etc)

Factor (x) Tested

p Value Observations/Conclusion

Example: ANOVA Location 0.030Significant factor - 1 hour driving time from DC to Baltimore office causes ticket cycle time to generally be longer for the Baltimore site

Example: ANOVA Part vs. No Part 0.004Significant factor - on average, calls requiring parts have double the cycle time (22 vs 43 hours)

Example: Chi Squared Department 0.000Significant factor - Department 4 has digitized addition of customer info to ticket and less human intervention, resulting in fewer errors

Example: Pareto Region n/aSouth region accounted for 59% of the defects due to their manual process and distance from the parts warehouse

Describe any other observations about the root cause (x) data     

Enter Key Slide Take Away (Key Point) Here

7

Hypothesis Tests Value-Add Analysis

Tools UsedRoot Cause / Effect

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Vital X (root cause) Proof of CausationPractical Solution (process change

to address X)Operating

Tolerances for XClient IT need to reverify all exit data received from Client HR

Average delay between reception of information from Client HR until it reaches NT Admin or general admin

Eliminate process - Place accountability on Client HR for information placed into new database.

n/a

E-mail vendor's contract with Client

The SLA has a range of 3-5 business days for the completion of a delete request

E-mail vendor instituted new web interface for all add/delete requests, vastly improving request processing time.

1 - 2 days

E-mail vendor's contract with Client

The SLA has a range of 3-5 business days for the completion of a delete request

E-mail vendor instituted new web interface for all add/delete requests, vastly improving request processing time.

1 - 2 days

How the solution was determined: What was the solution selection tool used? What project management tools were used? Cost/benefit analysis? Include any other tools or methods used

1. ?

2. ?

3. ?

4. ?

5. ?

Improve Summary

Enter Key Slide Take Away (Key Point) Here

8

Solution Selection Criteria Pilot and Implementation Plan

International Standards for Lean Six Sigma (ISLSS)

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Control Summary

? ? ? ? ?

Documentation Provide any necessary training

Translation project within/ outside of region/function: Any resulting spin-off projects initiated Any Replication in other locations?

Communication: Communicate project results with customer Communicate results with the business

Baseline Improved

Units ? ?

Defects ? ?

DPMO ? ?

Mean* ? ?

PCE% ? ?

Std. Deviation* ? ?

Sigma (ST) ? ?

Sigma (LT) ? ?

Include text here to explain highlights of the plan to monitor and respond to variation in y’s and x’s

? ? ? ? ?

Summarize benefits to the internal/external customers here.Start tracking benefits from date

of implementation of Improve Phase Improvements.

Enter Key Slide Take Away (Key Point) Here

9

Benefits of ProjectControl/Response Plan Highlights

Sigma Levels/Improvements Communication & Translation

International Standards for Lean Six Sigma (ISLSS)

Standard Work Training Video by Gemba Academy

Business Impact

State financial impact of future project leverage opportunities Separate “hard or Type 1” from “soft Type 2 or 3” dollars

Annual Estimate Replicated Estimate

Revenue Enhancement

• Type 1: ?• Type 2: ?• Type 3: ?

• Type 1: ?• Type 2: ?• Type 3: ?

Expenses Reduction

• Type 1: ?• Type 2: ?• Type 3: ?

• Type 1: ?• Type 2: ?• Type 3: ?

Loss Reduction • Type 1: ?• Type 2: ?• Type 3: ?

• Type 1: ?• Type 2: ?• Type 3: ?

Cost Avoidance • Type 1: ?• Type 2: ?• Type 3: ?

• Type 1: ?• Type 2: ?• Type 3: ?

Total Savings • Type 1: ?• Type 2: ?• Type 3: ?

• Type 1: ?• Type 2: ?• Type 3: ?

10

Enter Key Slide Take Away (Key Point) Here

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Business Impact Details

Type 1: Describe the chain of causality that shows how you determined the Direct Cash Flow. Tell the story with cause & effect relationships, on how the proposed change should create the desired financial result ($) in your project.

Show the financial calculation savings and assumptions used. Assumption #1 (i.e. source of data, clear Operational Definitions?) Assumption #2 (i.e. hourly rate + incremental benefit cost + travel)

Type 2: Describe the chain of causality that shows how you determined the Labor Efficiency savings. Tell the story with cause & effect relationships on how the change should create the desired financial result ($).

Show the financial calculation savings and assumptions used. Assumption #1 (i.e. Labor rate used, period of time, etc…) Assumption #2 (i.e. contractor hrs or FTE, source of data, etc…)

Describe the Type 3 Business Impact(s) areas and how these were measured (i.e. Cost/Risk Avoidance) Assumption #1 (i.e. project is driven by the Business strategy?) Assumption #2 (i.e. Customer service rating, employee moral, etc…)

Other Questions Stakeholders agree on the project’s impact and how it will be measured in financial terms? What steps were taken to ensure the integrity & accuracy of the data? Has the project tracking worksheet been updated?

11

Enter Key Slide Take Away (Key Point) Here

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Lessons Learned

1. ?

2. ?

3. ?

4. ?

5. ?

6. ?

7. ?

8. ?

9. ?

10.?

Enter Key Slide Take Away (Key Point) Here

12International Standards for Lean Six Sigma (ISLSS)

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Project Contributors

Steering Team Support Team

Project Ownership Team Deployment Team

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Enter Key Slide Take Away (Key Point) Here

13International Standards for Lean Six Sigma (ISLSS)

What does a good Leader or Coach do? (Jeff Liker) Video by George Trachilis

Lean Six Sigma Group

Lean Six Sigma Additional Resources

International Standards for Lean Six Sigma (ISLSS)

How to Upgrade to SigmaXL Video by SigmaXL Inc.

Lean Six Sigma Tollgate Template Notes

The Lean Six Sigma Tollgate Templates are: Free and intended as a guide in documenting a Lean Six Sigma

Project. I grant permission for you to modify these templates to meet the specific needs of your process improvement project.

Instructional - a video has been linked to each Template, I selected a mix of videos from Thought Leaders in the Lean Six Sigma Group. I included reference links to all video’s should you want to learn more information. Also included guidelines in the Note’s section of each slide.

Efficient and Effective – Placeholders for Graphic or Video Examples for various tools and methods across each DMAIC Phase.

How to Use These Templates: Collaboratively – use as a guide, reuse templates independently or

across phases as needed, and change the order as needed to best capture the execution of Lean Six Sigma in each phase, and summarize in the final Case Study.

Use as a Communication tool, and document your findings and results.

15

Replace the content of this slide with images or video’s related to your process improvement project

International Standards for Lean Six Sigma (ISLSS)

My name is Steven Bonacorsi, Author of the Lean Six Sigma Tollgate Templates, President of the International Standard for Lean Six Sigma (ISLSS), and Owner of the LinkedIn Lean Six Sigma Group.

Lean Six Sigma Resources

16

Best Wishes in Continuously Improving Your Business Processes – Steven Bonacorsi, Certified Lean Six Sigma Master Black Belt

International Standards for Lean Six Sigma (ISLSS)

Lean Six Sigma Group: https://www.linkedin.com/groups/Lean-Six-Sigma-37987

Lean Six Sigma Subgroups: https://www.linkedin.com/groups?subgroups=&gid=37987

International Standard for Lean Six Sigma (ISLSS): http://www.islss.com

i-nexus: http://www.i-nexus.com

Strategy Execution Community LinkedIn Group https://www.linkedin.com/groups/Strategy-Execution-Community-3725091

SigmaXL: http://www.sigmaxl.com

SigmaXL LinkedIn Group: https://www.linkedin.com/groups/SigmaXL-1812101?gid=1812101

Gemba Academy http://www.gembaacademy.com Lean CEO Group:

Gemba Academy LinkedIn Group: https://www.linkedin.com/groups/Gemba-Academy-1844998?gid=1844998

PEX Network http://www.processexcellencenetwork.com

PEX Network & IQPC - Lean Six Sigma & Process Excellence for Continuous Improvement

Lean Leadership Institute: http://www.LeanLeadership.guru/books.html The Toyota Way Group

Lean Six Sigma Groups(Click Logo’s to Join Group)

17

Each Week, the Lean Six Sigma Group Grows +1,500 New Members; +2,000 Lean Six Sigma Jobs; +200 Discussions; +500 Comments

+280,000 Members – Come Join the ConversationInternational Standards for Lean Six Sigma (ISLSS)

Lean Six Sigma Group

Lean Six Sigma Resource Blogs(Click Logo’s to Follow Blogs)

18

See Notes Section for Links to Lean Six Sigma Group Contributors

International Standards for Lean Six Sigma (ISLSS)

Floyd Boilanger CFO Lean Six Sigma Interview

National Energy Technology Lab

Lean Six Sigma Executive Overview Video References – Set 22

19

Join the Lean Six Sigma Jobs Group: http://www.linkedin.com/groups?gid=2161051

International Standards for Lean Six Sigma (ISLSS)

Create Candor in the Workplace with Jack Welch

Video by Stanford Graduate School of Business

How a Passionate Lean Thinking Enterprise is Developed by Gemba Academy

How Hoshin Planning helps Organizations Video by

iNexusTV1

Gemba Training Video by Gemba Academy

Analyze Tools using SigmaXL Virtual Menus Video by SigmaXL Inc.

The 3 Key Secrets of Strategy Execution (Paul Docherty) Video

by i-nexus

Standard Work Video by Gemba Academy

Lean Six Sigma Executive Overview Video References – Set 23

20

Join the Careers in Operational Excellence Group: http://www.linkedin.com/groups?gid=3723227

International Standards for Lean Six Sigma (ISLSS)

How to Calculate ROI Training Video

by Mike Turco

Learn the 7 Quality Control Tools

Video by Gemba Academy

What does a good Leader or Coach do? (Jeff Liker) Video by

George Trachilis

How to Upgrade to SigmaXL Video by

SigmaXL Inc.