lean six sigma leadership 062507

Lean-Six Sigma Lean-Six Sigma Leadership Leadership

LARRY E. PENNINGTON, PE, CSSBBLARRY E. PENNINGTON, PE, CSSBB

L. Pennington www.AQSN.com 2

What Is Six Sigma?What Is Six Sigma?

Six Sigma is a problem solving Six Sigma is a problem solving methodology and collection of tools to methodology and collection of tools to analyze and remove sources of process analyze and remove sources of process variationvariation

DefineDefineMeasureMeasureAnalyzeAnalyzeImprove Improve ControlControl

Measurement / Goal Measurement / Goal

Vision / PhilosophyVision / Philosophy

Problem Solving Problem Solving ProcessProcess

Measurement / Goal Measurement / Goal

Vision / PhilosophyVision / Philosophy

Problem Solving Problem Solving ProcessProcess


Six Sigma (cont’d)Six Sigma (cont’d)

6σ denotes a process that has six 6σ denotes a process that has six standard deviations between the standard deviations between the mean and either specification limits.mean and either specification limits.

6σ denotes a process that has only 6σ denotes a process that has only 3.4 defects per million.3.4 defects per million.

6σ is a process improvement 6σ is a process improvement methodologymethodology


What Is Lean?What Is Lean?

Lean is a collection of tools and methods Lean is a collection of tools and methods designed to eliminate waste, reduce delays, designed to eliminate waste, reduce delays, improve performance and reduce costsimprove performance and reduce costs

Lean focuses on eliminating non-valued add; Lean focuses on eliminating non-valued add; where traditional cost down focuses on where traditional cost down focuses on reducing the time in value added steps.reducing the time in value added steps.

Lean should achieve sustainable business Lean should achieve sustainable business improvements with emphasis on verifiable improvements with emphasis on verifiable financial results.financial results.


Eliminating The Seven Eliminating The Seven WastesWastes

Predefined methodology to identify and eliminate waste.Predefined methodology to identify and eliminate waste.

1. OverProduction

2. Inventory

3. Motion

4. Waiting5.

Transportation

6. OverProcessing

7. Defects

Material Shortages, Un-level Demand, Build tostock, Economic Lot Sizes, Batching, Bottleneck

processes, Unbalanced capacities, Qualityproblems, Long change-over times, Building Earlier

than needed, Poor logistics, Poor layout, Poormachine reliability, Emphasis on keeping machines

busy opposed to keeping material busy.

Buffers , Excess WIP, Supplierinventories for long lead time,

Stock, Production Schedule noteven, inaccurate forecasting,excessive downtime / setup.

Materials Shortages, Un-level Demand,Startup, Vendor Predictability, SchedulingConflicts, Lack of flexibility in personnel or

equipment, Downtime/Breakdown,Ineffective planning, Design or Qualityissues, Transportation, Unnecessary

material handling

Poor work design, ErgonomicDesign, Travel time, Tool &Material access, InadequateOperating Procedure, PoorHousekeeping, Inadequate

Training

Movement between buildings/sites,Premium, Freight, Distribution,

Network, Plant Layout, Unnecessarymaterial handling

Excessive testing, Install,Reconfiguration, Material

variability/over design,Lack of operating

procedures

Internal, Rework, Supplier,Final Test, Inspection, Out of

Control Process, Lack of skill,training and on the job support,

Inaccurate design andengineering, Machine

inaccuracy


Why Lean Sigma?Why Lean Sigma?

Provides a consistent, quantitative, Provides a consistent, quantitative, problem solving methodologyproblem solving methodology

Helps Improve financial strength Helps Improve financial strength thereby helping the company, the thereby helping the company, the customer, and the employeecustomer, and the employee

Need to build into our cultureNeed to build into our culture


The Focus Of Six SigmaThe Focus Of Six Sigma

Y Dependent Output Effect Symptom Monitor

X1 . . . XN

Independent Input Cause Problem Control

f (X)f (X)Y=Y=

Y = f(X)

Focus on X’s (process inputs) to improve the Y (process output)


Why Apply Six SigmaWhy Apply Six Sigma

““Best in Class” have demonstrated Best in Class” have demonstrated 6σ6σ

A 4σ company spends >10% of A 4σ company spends >10% of revenue on internal and external revenue on internal and external repairrepair

A 6σ company spends <1% of A 6σ company spends <1% of revenue on internal and external revenue on internal and external repairrepair


Key to Achieving Six Sigma Key to Achieving Six Sigma QualityQuality

Focus on the customer & listen to Focus on the customer & listen to the voice of the customerthe voice of the customer

Select process that affect Select process that affect customer satisfactioncustomer satisfactionReduce variability in all processesReduce variability in all processesCenter all processes on the targetCenter all processes on the targetGather data to reduce defect levelsGather data to reduce defect levelsControl the inputs and monitor the Control the inputs and monitor the

outputsoutputs


Characteristics of Six Sigma Characteristics of Six Sigma ProgramsPrograms

Goal of reducing variation, COPQ, and Goal of reducing variation, COPQ, and waste in all processes.waste in all processes.

Includes transactional processes as well as Includes transactional processes as well as manufacturing processes.manufacturing processes.

Uses the best talent in the organization, Uses the best talent in the organization, provide intensive training, deploy them on provide intensive training, deploy them on biggest projects.biggest projects.

Structured problem solving project Structured problem solving project approach.approach.

Emphasis on measurable results that are Emphasis on measurable results that are maintained over time.maintained over time.


How Lean Sigma Programs DifferHow Lean Sigma Programs Differ

Top management support & participation Top management support & participation essential for success.essential for success.

Infrastructure includes: Steering Committee, Infrastructure includes: Steering Committee, Executive Committee, Finance Dept, Program Executive Committee, Finance Dept, Program Office.Office.

Intensive Training and CoachingIntensive Training and Coaching Measurement and tracking of financial Measurement and tracking of financial

metrics.metrics. Projects chosen for 3-6 month time frame.Projects chosen for 3-6 month time frame. Control plans done to hold gains.Control plans done to hold gains.


Executive Leader Roles:Executive Leader Roles:

High Level Executive committed to Six High Level Executive committed to Six Sigma SuccessSigma Success

Knowledgeable in Six Sigma ProcessKnowledgeable in Six Sigma Process Assign key individuals to the Assign key individuals to the

Champion/Sponsor Position.Champion/Sponsor Position.


Champion/Sponsor RolesChampion/Sponsor Roles::

High Level Executive High Level Executive Oversee the Black Belt positionsOversee the Black Belt positions Provide resources to complete the jobProvide resources to complete the job Assist Black Belts to select projectsAssist Black Belts to select projects Benchmark with other organizationsBenchmark with other organizations


Major Players and RolesMajor Players and Roles

Executive Committee - Executive must Executive Committee - Executive must announce and support the roll-out of Six announce and support the roll-out of Six Sigma and put resources in place.Sigma and put resources in place.

Steering Committee - Operations Steering Committee - Operations Managers/VPs and representatives from Managers/VPs and representatives from all functional areas who meet regularly all functional areas who meet regularly to review progress of projects after to review progress of projects after selection of projects and peopleselection of projects and people..


Major Players and Roles Major Players and Roles (cont’d)(cont’d)

Process Owners: People (usually Process Owners: People (usually managers) responsible for the area where managers) responsible for the area where the improvement project is taking place. the improvement project is taking place. Set goals and objectives for the project Set goals and objectives for the project leaders.leaders.

Green Belts: Typically receive at least 1 Green Belts: Typically receive at least 1 week of training. They do data collection, week of training. They do data collection, simple data analysis under direction of simple data analysis under direction of Black Belts. May do projects of limited Black Belts. May do projects of limited scope.scope.


Major Players and Roles Major Players and Roles (cont’d)(cont’d)

Black Belts: Project leaders, project team Black Belts: Project leaders, project team coaches, change agents. Typically receive 4 coaches, change agents. Typically receive 4 weeks of training spread over four months. weeks of training spread over four months. Responsible for the financial outcome of their Responsible for the financial outcome of their projects.projects.

Master Black Belts: Primary trainer and coach Master Black Belts: Primary trainer and coach of Black Belts and Green Belts. A resource to of Black Belts and Green Belts. A resource to provide technical guidance in the proper provide technical guidance in the proper application of the tools during project application of the tools during project execution.execution.


Methodology: D-M-A-I-CMethodology: D-M-A-I-C

A 5 step approachA 5 step approach Customer driven quality focusCustomer driven quality focus A project-based infrastructure as A project-based infrastructure as

previously describedpreviously described Emphasis on providing extensive Emphasis on providing extensive

training in statistical quality toolstraining in statistical quality tools


Next Step - Six Sigma for Next Step - Six Sigma for Champions Champions

FIVE OBJECTIVES (DMAIC)FIVE OBJECTIVES (DMAIC)Define - Select the right project & Define - Select the right project & state it in objective termsstate it in objective termsMeasure - Identify the key characteristics & Measure - Identify the key characteristics &

measure performance of products/processmeasure performance of products/processAnalyze - Identify the key process Analyze - Identify the key process

determinants to determinants to root causeroot cause Improve - Model process, change process & Improve - Model process, change process &

optimize performance/reducing variationoptimize performance/reducing variationControl - Hold the gains to insure Control - Hold the gains to insure permanentpermanent


Stakeholder AnalysisStakeholder Analysis

Identification of stakeholders involved Identification of stakeholders involved Identification and removal of resistance Identification and removal of resistance

by involving stakeholders in change by involving stakeholders in change process to provide for:process to provide for:Needed buy-inNeeded buy-inAlternate solutionsAlternate solutionsRemoval of pitfallsRemoval of pitfalls

Stakeholders can be:Stakeholders can be:Managers-employees-customers-suppliers-Managers-employees-customers-suppliers-

financefinance


Selecting ProjectsSelecting Projects

Projects can be submitted by any Projects can be submitted by any management member, and are management member, and are usually submitted to a Steering usually submitted to a Steering Committee.Committee.

The role of the Committee is to The role of the Committee is to review the proposed projects and review the proposed projects and select those that will be actioned.select those that will be actioned.


Define Phase DeliverablesDefine Phase Deliverables

ManagementManagementProjects prioritized with Project ChartersProjects prioritized with Project ChartersPersonnel assigned to lead and participatePersonnel assigned to lead and participateFinance representation to validate savingsFinance representation to validate savings

Project LeaderProject LeaderClear project mission and goals acceptedClear project mission and goals acceptedCost of Poor Quality study within scope of Cost of Poor Quality study within scope of

project boundaries.project boundaries.


Summary:Summary:

Management philosophy of qualityManagement philosophy of quality Statistical target of six sigma or 3.4 defects in Statistical target of six sigma or 3.4 defects in

one million opportunitiesone million opportunities Components of Six Sigma are people power Components of Six Sigma are people power

and process powerand process power Executive Leader, Champion, Master Black Executive Leader, Champion, Master Black

Belt, Black Belt, and Green BeltBelt, Black Belt, and Green Belt Define, Measure, Analyze, Improve, ControlDefine, Measure, Analyze, Improve, Control

Customer focusCustomer focus

lean six sigma leadership 062507

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