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Lean Six Sigma - An Introduction
Transcript of Lean Six Sigma - An Introduction
What is Lean?
All about the flow of a process and eliminating waste in operations / manufacturing
What is Six Sigma?
All about quality and reducing variability
Roots in early days of manufacturing (e.g. Henry Ford, assembly line)
Perfected in Japan, specifically Toyota
Now applied outside manufacturing in many different industries
1. A Metric
- A vision of quality which equates with only:
3.4 defects per million opportunities
for each product or service transaction.
Strives for perfection. 99.9999996%
2. It's an Ideology
Strive for perfection
Prevent defects from occurring
Sustain improvements using statistics / measurability
3. It's a methodology!!
- Data-driven improvement cycle used for improving, optimizing and stabilizing business processes and designs
Lean vs. Six Sigma
How are they alike?
How are they different?
How do they complement?
Lean is a thought process. It's also a discipline of analyzing process flow to optimize:
What is needed
When it's needed
1. Define Value
3. Reduce Waste
and Improve Flow
4. Move from
"Pull" from Customer
Improved Business Results!
Increased Productivity and Efficiency
Increased job satisfaction
Reduce time for process
Improve asset utilization
Improve customer satisfaction
Principles of Lean
Lean vs. Six Sigma
More Applicable to
Flow of the process
making Larger Scale /
High Impact Changes
It's a Metric!
It's an Ideology!
It's a Methodology...
More Applicable to
Manufacturing / Operations Industries
Deviation from perfection measured as:
• 6 Sigma = 3.4 DPMO = 99.99966%
• 5 Sigma = 233 DPMO = 99.98%
• 4 Sigma = 6,210 DPMO = 99.4%
• 3 Sigma = 66,807 DPMO = 93.3%
• 2 sigma = 308,538 DPMO = 69.1%
• 1 Sigma = 691,462 DPMO = 30.9%
Sometimes you don't need near
But sometimes you definitely do!
Newborn babies dropped in hospital
112 per day
Incorrect drug Prescriptions Filled
150 per day
Incorrect Surgical Procedures Completed
1350 per week
Long or Short landing at airport
Cost of Poor Quality is greater than many companies realize...
Costs of Poor Quality
Reduced client loyalty and satisfaction
Fewer repeat customers
Risk of larger reputational threat with Social Media, etc.
Higher Operational Costs
Longer production time / longer time to market
More time spent on "The Hidden Factory" (fixing errors and Rework)
Waste in materials / staff time
More difficult to train staff
Harder to outsource
Legal and Other
More required audits and inspections
Complaints, complaint handling
5 per day
"Understand the process"
End-to-end, you need to understand...
What customers need!
Does the process create what the client needs?
Build them to eliminate waste, eliminate defects
Every step of the way!!!
"The Customer Decides"
Every process, and therefore
every product, or service, HAS VARIATION...
The important thing is that there isn't
variation in the features that are important
to the customer!
"Fix the Process"
"We are going to shift the paradigm from fixing products to fixing and developing processes so that they produce nothing but perfection or close to it..." - Jack Welch
(e.g. average wait time) does not mean quality!
It's about reducing variability as well.
Customers FEEL variability
- one bad product, one really long wait time - So it can't just be about averages, it must be about reducing variation
Define project purpose and scope
Understand customer and process
Identify, validate and select root cause for elimination
Identify, validate and select root cause(s) to eliminate issue, improve performance
(Note: for a new product, this is the design phase)
Pick the best solution
Planned activities that should reduce or remove the root causes of issues with the process (i.e. result in variability)
Maintain improvements through documentation, standardization and monitoring
Documentation (Lessons, Results)
The problem, project targets or goal
Voice of the customer (VOC) and Critical to Quality (CTQs)
Target process subject to other steps in DMAIC
Project boundaries or scope
Collect Data, Establish Baseline, to Enable Goal setting and compare after project
Gap between current and required performance
Process performance capability baseline for the project metric
Assess the measurement system for accuracy and precision
List and potential causes of problem
Prioritize the root causes to pursue in the Improve step
Identify how inputs (Xs) affect the outputs (Ys)
Statistical tests using p-values accompanied by Histograms, Pareto charts, and line plots are often used to do this.
QFD (Quality Function Deployment)
Everything must add value
Think in terms of
service / product lines
Understand what adds value (features client wants) in the process
2 per year
2 per year
2 per year
4 per year
Stop looking at aggregated activities and isolated technologies
Focus on value-creating steps and make them
Deliver exactly what the customer wants, when they want it.
Demands and amounts can change!
but don't add
by making what the customer
the centre of your process
Reduced Cost... By Reducing Waste!
Defects and Rework
Total Cost of Quality =
COG (Preventative) +
COPQ (Reactive / Defects)
Lean Six Sigma
Reducing waste and variability for client & enterprise value
Patterns, Process Capability
Design of Experiment
(assess measurement system)
Failure mode and effects analysis