lean six sigma - fmi.ca · lean six sigma infrastructure in house or external training to build...

Lean Six Sigma

2© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative

(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks o f KPMG International.

PresenterDale Schattenkirk

Director in KPMG’s Advisory Services practice. He is a Certified Human Resource Professional and a Lean Six Sigma Master Black Belt. Dale has 18 years of experience in the effective application of the Lean Six Sigma process improvement methodology with numerous environments.

Over the past 18 years Dale has supported organizations across Canada to achieve their goals. He has published over 70 articles on Lean Six Sigma in the public and private sector. Through the years Dale has received several independent awards such as an IPAC Lieutenant Governors Award for provincial transformation and three Industry Week Top Ten Plant Awards.



What is Lean Thinking?

What LEAN Is What LEAN is Not

Solutions to a customer’s needs Focused solely on provider needs

Identification and removal of process waste Just writing new policies or procedures

Redeployment of resources into value added activities Job reduction

Reduction or elimination of defects Measuring quality into service

Improving process flow Batch and queue

About doing necessary tasks About doing a lot of non-value added work

Continual improvement One time random improvement

Focusing on value added activities Busy work that fills your day

Quality at point of service Speeding up poor processes

Lean thinking is the belief that there is a simpler, better way through a

continuous drive to identify and eliminate waste, or inefficiencies and

errors, in our day-to-day work.



The History of Lean

1

1920s-

1930s

• Hawthorne Effect at Western

Electric’s factory, Chicago under

Elton Mayo

• Purpose: to determine effect of

physical work conditions on

productivity

• Changes were made to lighting, #

of hours worked, length of breaks,

etc.

• The researchers found that it was

not the actual changes in the

workplace that made the difference,

but rather the concern about the

employee’s workplace and

opportunity for employees to

discuss the changes that took place

2

1950s

4

1980s

3

19

70

s

• William Edward Deming was an

electrical engineer working at the

Hawthorne Factory

• He identified 14 points/guidelines to

create a more efficient workplace,

which would result in higher profits

and increased profitability

• His work was branded as “continual

quality improvement”

• The Lean philosophy is based on

Deming’s work

• Taiichi Ohno was the father of the

Toyota Production System and

devised the 7 wastes (“muda”)

20

00s

65

1990s

• There is an energy crisis, US oil

production starts to decline

• OPEC Oil embargo against

Canada, Japan, the Netherlands,

the UK and the US

• Major impact on automobile

industry and there’s a shift from

larger vehicles to more fuel efficient

vehicles

• The focus was on reducing wastes

and non-value add activities and

creating more efficient and effective

work environments to increase

productivity and profit

• Lean is primarily applied in the

manufacturing industry

• MIT (John Krafcik) rebrands ‘TPS’

to Lean

• TQM, JIT, and many other methods

start to arise

• Team concept starts to become a

buzz word

• Lean is adopted by the Service

Industry

• Need for cost reduction creates

many methods to be applied

• Lean principles are applied to

the healthcare sector in the

US

• In 2005, five hospitals begin

to apply Lean in Canada

• 2009 other Canadian

government organizations

start using Lean.

• Today every province is using

Lean in some capacity in

public sector



Five Principles of Lean

How do we currently

do the work to meet

the VOC

Flow is developed so that the

products or services move

fluently and without interruptions

through the system– The steps to

create value

Make or process only what

the customer needs when

they need it, by reacting to

a trigger – How can we

respond to customer

demand?

Constantly seek out

new ways of improving

and perfecting your

process

Value

Value Stream

Pull

Un

de

rsta

nd

yo

u p

roce

ss

Value

Value is defined by the customer



The Eight Types of Waste: DOWNTIME

Excess processing

Adding value to a deliverable

based on the suppliers

perception of need.

Non-Utilized Talent

Not maximizing the

capabilities of the staff.

People doing work that

should be completed by

others or not done at all

Defects

Defects are defined by the

customer. Incorrect data

entry, anything that is not

completed correctly the first

time, lost files or records

Over-production

Producing things too early,

Making too many copies,

reports no one needs,

focusing on internal work and

batching tasks

Waiting time

Waiting in a queue, waiting for

approval, waiting to receive a

document, waiting for IT

systems to refresh

Inventory

Files awaiting signature or

approval, excessive office

materials, files awaiting

completion by others, servers

storing data, unprocessed

emails

Motion

Searching for files on

desktop, pens, staplers,

looking for documents,

carrying paper work to

another process/department

Transportation

Physically moving paper

between departments,

transporting reports,

equipment, materials of any

kind from one area to another



The DMAIC Process

Define Measure Analyze Improve Control

Start up a

project

• To establish the

necessary

conditions for the

success of the

improvement

initiatives

• To define the

current state

• Engage the team

Determine the

current state

• To measure the

current state

through

quantitative and

qualitative fact

gathering

• Create a baseline

of current state

Identify the root

cause

• Identify, statistically

the key opportunity

areas

• Decide what is “on”

and “off” the table

• Gain organizational

support to move

forward

Improve the

process

• To identify and

develop solutions

for the top priority

opportunities

• To test if a change

idea or solution will

be successful in

practice

• To utilize a

structured and

efficient method for

putting new

solution ideas into

practice

Monitor and

retain

• To transition to the

‘new way’ of doing

things

• Validate that the

changes will be

sustained

• To foster a continuous

improvement

environment



What is Lean Transformation?



An ideal ‘Lean’ Journey

Many organizations view Lean as a series of events rather than utilizing Lean as a way of

working and improving on a daily basis.

Most organizations are struggling

with this transition

Many organizations hit the ‘wall’ when trying to make the transition and see their

return on their Lean investment diminish



Lean Transformation – building a foundation for continuous improvement

Lean

Transformation

Getting over the ‘wall’ requires Lean Transformation building a foundation for continuous

improvement

Aligning the organization on set limited # of objectives across key

dimensions, e.g., Service, Quality, Safety, People, Financials

Providing a rigorous accountability framework with clear areas of

focus and expectations

Equipping Leaders with a robust set of scorecards to track

performance, and the business intelligence and data to support

decision making

Embedding a performance review and committee structure and

cadence at each level

Engaging and empowering frontline staff to make continuous

daily improvements

A relentless focus on standards and sustainability

Having a management system that ‘knits together’ all of the

above



A Lean transformation model for high performance

Capability Building

Management Improvement

System

Strategy

Deployment

Center of Excellence

Improvement Initiatives

4. Capability BuildingFundamental to the system

approach is the capability and

behaviours of staff. We provide

coaching, Lean training, tools and

experiential learning to empower

staff to make improvements.

1. Strategy DeploymentStrategy Deployment focuses on defining ‘True North’ – a set of strategic priorities and cascading them across the organisation, ensuring integrated transformation

support and roadmap for implementation. Key elements include: True North metrics, visual management for performance, standard work for leaders including Leader

Standard Work.

3. Centre of

ExcellenceWe will help you implement a

centre of excellence, that includes

a structured approach for

improvement, a toolkit and the

skilling up of a central team that

will support the organisation to

continue the journey of

improvement.

2. Management

Improvement

SystemProvide support for leadership

to manage and support

continuous daily improvement.

We will work with departments

to create ‘model cells’ which

then act as an internal

reference point for rolling out to

other departments.

5. Improvement InitiativesWe provide implementation support and benefits realization. We will

help deliver improvements through initiatives and rapid improvement

events for key processes to both improve performance, build capability

in staff to support continuous improvement.



Components of a Lean Transformation

Candidate

SelectionProgram Structure

TrainingMentorship

Structure

Assess the

Current StateSet Goals

Creating a

Compelling

Story

Lean Six

Sigma

Infrastructure

In house or external training to

build Lean knowledge and

capacity

Flowing from the strategy, True

North, and current state

assessment design a program

map

As with any training program having

a structure selection process is

important to identify the most

appropriate candidates

Any new trainee must have a

mentor ship support system to

support appropriate learning of

their new skills

For an organization to transform

it needs a reason

True North metrics must match the

organizations strategy

Each Lean transformation is its

own journey, identify your

organizations strengths and

weaknesses

All the tools, templates, quality

boards, procedures to support

the transformation




ReportingProject TrackingProject Selection

Evaluation

Framework

SavingsSenseiNetwork StructureCentre of

Excellence

A standard method to identify

the appropriate projects to work

on

An extension of Lean

infrastructure and project

selection a consistent way to track

projects

There should be a standard and

schedule means of reporting Lean

progress.

As a program develops and

grows it should be evaluated

against the original plan to

ensure it is achieving the desired

outcomes.

Learning from others is

important, creating a network

support system to facilitate

sharing

Whether it is internal or external the

organization should have support

from someone that “has been there

done that”

As part of the infrastructure a

consistent way to measure

savings to the system is

important

An independent department that

has the organization overall

needs in mind




Leadership

Standard

Work

Leadership TrainingCommunication &

Engagement Naming

Within the organization a

strategy must be in place to

ensure information is widely

spread and all staff engaged

Leading a Lean transformation

requires knowledge. The leadership

group should be trained in how to

transform an organization

As part of the Leadership training

standard work must be

developed to lead the

organization to achieve its goals

The program should have a

name, an identity for the

organization (not just “Lean”)



What is THE Dashboard

Takt Time = Demand

Cycle Time = OSE

Quality = DPMO

Satisfaction = Engagement Index

Finance = Budget vs Actual



OSE (Overall Service Effectiveness)

What slows or stops

the work or service

from being

completed?

How quickly we

provide our service

in relation to a

standard or best

practice?

How well we provide

our service in

relation to a

standard or best

practice?

WHAT IT MEASURES

Availability Performance Quality

80% 50% 90% 36%X X =



Lean team

Unusually high rate of overtime

Rapid Improvement Events , PDSA’s etc.

Ensure the work areas

budget is not being

exceeded

Ensure the costs for operating the

organization do not go over budget.

Ensures the divisions budget

is not being exceeded.

Ensure the departments budget

is not being exceeded

Everything ends up being a project

But when done correctly it’s the RIGHT

project

Budget

Deficit

Budget

Deficit

Budget Deficit

Budget Deficit

Budget Deficit



A Plan - Review



Approach

An approach to developing an LMS roadmap is a two phase process with five steps detailed below:



Appro

ach

Thank You

kpmg.ca

© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent

member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular

individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that

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