Lean Six Sigma

Overview

Lean Six Sigma is a process improvement methodology. Its origins and development are firmly based in the Manufacturing Sector but its methods equally apply to the Service industry. Think about it, how many of your process steps add real value that the customer requires. Studies in Manufacturing found that only 15% of steps add value to a process and these Added Value steps represent only 1% of the Total Process Time. In my experience, this applies equally to the Service Sector as well. So there is certainly room for improvement in your processes and adopting Lean Six Sigma methodology will help leverage these gains.

Lean Six Sigma focuses on a specific problem and uses a variety of tools to help identify areas for improvement and then systematically analyses the data before implementing improvements. This Improvement Journey follow the Define, Measure, Analyse, Improve and Control process. This is known as DMAIC (pronounced Dee-Make). These steps are wrapped in a Project Management style Gate meetings to ensure the process is moved along in a structured manner. This overview

concentrates on the DMAIC aspects of the process with the project management gates being covered under the Project Management section.

Why has Lean Six Sigma been so successful?Well, the focus is primarily on the Customer and seeks to understand their perception of value. These are known as the Critical To Quality (CTQ’s) requirements which once captured will provide a base measure to measure improvements against. With a tried and test structured approach and ethos of Management by Fact has led Lean Six Sigma to deliver world class solutions.

Toyota’s Taiichi Ohno sums up the approach as ‘All we are doing is looking at the time-line from the moment the Customer Gives us an order to the point when we collect the cash. We are reducing that time-line by removing the Non-Value-Added waste’

Lean Six Sigma has taken attributes from both Lean and Six Sigma methodology. The key principles are:

Focus on the Customer Identify the Value Stream Manage the process flow Remove Non-Value-Added steps where possible Manage by Fact Involve and Equip People involved in the process Undertake improvements systematically

From experience in the Service Sector, Lean Six Sigma projects are initiated for the following reasons:

1. Customer complains you are not meeting Service Levels or2. You wish to take costs out/speed up the overall process

Usually, one interrelates with the other. By speeding up the overall processes or eliminating Non-Value steps usually leads to a drop in customer’s complaints. The following overview keeps these two key objectives in mind.

Define

Key outputs Critical To Quality requirements SIPOC Diagram

Lean Six Sigma projects starts with a problem that needs to be solved. The define stage includes a lot of Project Management controls such as an Improvement Charter; Stakeholder Analysis; Risk Assessment; Storyboard and Communication Plan. Please refer to the Project Management section for more details on these key Outputs.

Critical TO Quality (CTQ)Listen to the ‘Voice of the Customer’ to provide world class Moments of Truth. Take time to find out what the Customer really wants. This includes looking at the process from the Customer’s perceptive. This will be a wider view then your actual process.

Moments of Truth occur when the process comes into contact with the Customer and defines the Customer’s perception of your business. It is important to identify ‘Moments of Truth’ and ensure that you get them right first time.

It is sometimes expensive to identify Moments of Truth as this involves Sampling, Questionnaires; sub-groups; working parties etc. All of which can be subjective. A quick and easy way to capture the Moments of Truth is to ask your staff to be the ‘Customer’ and define the standards from their response.

Use a matrix to convert the Voice of the Customer in to Key Issues and then establish measurable CTQs.

SIPOC SIPOC stands for Supplier, Input, Process, Outputs, Customer and is represented in a visual diagram. This give all involved a clear understanding of where the process under review fits within the organisation and defines the Inputs and Outputs required to meet the Customers’ needs.

Cross check the CTQs against the SIPOC diagram to ensure all Customer requirements are covered and are associated with an Input part of the process.

Measure

Key Outputs Process Stapling Spaghetti Diagram Value Stream Map Baseline Performance

Process StaplingProcess Stapling involves getting out there where the work is done. You literally follow a piece of work through the process. It is a great visual aid if you photograph the process and represent wait, batch or value added steps in a presentation.

Value added steps are defined as: Does the Customer care or is interested in this step? Does the step physically change the Output or is required for Legal reasons? Is the step ‘Right First Time’?

Spaghetti DiagramIn conjunction with Process Stapling a ‘Spaghetti diagram should be produced to show how far the piece of work has to physical be moved on its travel to complete the process. The amount of travel is often under-estimated and more often than not the most ‘down time’ is in the internal post.

Value Stream MapA similar method is the Value Stream Map which sets out all the actions, both Value and Non Value together with the processing and wait time. This will give an overall cycle time.

Baseline PerformanceThere are various techniques for collecting data. The most useful are:

Tally Charts (Five-bar Gates) Check Sheets Concentration Diagrams

In addition, to measuring the actual process, Lean Six Sigma places great emphasis on ensuring the Baseline Performance Measure is accurate and reliable. I suppose in an Industrial environment were millimetres matter then it is important however, is the Service sector it is not as important. Nevertheless, it should be kept in mind to ensure consistent results.

Analyse

Key Outputs Value Added analysis Identification of Waste

Lean Six Sigma uses many tools in the Analyse phase to identify waste or Value Added steps. Some of these techniques will have been used in the previous phases to obtain the data or process. The most common methods are:

Cause and Effect Fishbone diagrams Interrelationship diagrams Root Cause

From all this analyse what you are really trying to do is reduce waste. By doing so, your process is more efficient and in most cases less costly and so has a direct effect on the bottom-line.

There are seven categories of waste: Over-production Waiting Transportation Over-processing Inventory Ergonomics Correction

Lean Six Sigma approaches this phase from two different angles. The first, being to analyse the process flow itself to identify waste such as down-time, checking, re-work etc and the second is to analyse the data for trends, patterns etc. The most useful data analysis tools are Bar or Charts using Pareto to identify 80% of the issue or Scatter diagrams to prove a correlation effect (this does not imply causation).

Improve

Key Outputs New Value Stream Map

The Improve phase is all about using a systematic approach to selecting the best solution taking into account all the data analysis captured in the previous phases. The solution should be documented with a good understanding of the cost benefits involved. The communication plan should be in place and the stakeholders informed. A pilot is recommended in a Controlled Environment to ensure that the proposed solution does not impact on any other processes.

Control

Key Outputs Completed storyboard Key lessons Confirm benefits Recommendation Next Steps Recognition

So you are finally there and the solution is in place. But has it? To avoid the process slipping back to its previous state you need to make sure that Stakeholders have bought in to the new process and have adopted it. A quick checklist should suffice to show you have completed your jouney:

The process is owned and adopted The CTQs are in focus The Value Added Map is present There is a balance of input, in-process and output measures It has been error-proofed

The Benefits Review will help you confirm you achievements and identify the key lessons learnt which should be incorporated in to the next improvement project and if applicable, across the organisation.

That’s it. Congratulations, another successful problem identified, analysed and resolved. Now is the time to celebrate your success.

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