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Lean Six Sigma - An Introduction

Study notes in Prezi form. Completed during the Masters Certificate of Lean Six Sigma at the Schulich School of Business.
by

Michon Williams

on 21 February 2016

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Transcript of Lean Six Sigma - An Introduction

Lean Six Sigma
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
Lean...
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
Six Sigma
- 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!!
DMAIC
- 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
Right amount
Right order
To specification
Lowest cost
1. Define Value
From the
Customer's Perspective
2. Identify
and Map
the Value
Stream
3. Reduce Waste
and Improve Flow
4. Move from
"Push" to
"Pull" from Customer
Improved Business Results!
Increased Productivity and Efficiency
Increased job satisfaction
Reduced stress
Reduce time for process
Improve asset utilization
Reduce cost
Improve customer satisfaction
Principles of Lean
Lean vs. Six Sigma
Performance
Excellence!!
Common Sense
Structured Methodology
Qualitative
Operational
More Applicable to
Service Industries
About
making changes
over time
Flow of the process
Eliminating Waste
Quantitative
Reducing Variation!
Statistics
About
making Larger Scale /
High Impact Changes
Efficient
High Value
Low Cost
Predictable
Capable
In Control
Six Sigma...

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
perfection...


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...
Other "Hidden"
Costs of Poor Quality
Reduced
Revenue
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
Staff Implications
Lower morale

Higher turnover

More difficult to train staff

Harder to outsource

Legal and Other
Implications
Potential Lawsuits

More required audits and inspections
Wasted Products
Returns
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

"Reduce Variability"
A
low average
(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
Objective:
Define project purpose and scope
Understand customer and process

Outputs:
Measure
Analyze
Objective:

Identify, validate and select root cause for elimination
Outputs:
4. Improve
Objective:

Identify, validate and select root cause(s) to eliminate issue, improve performance

(Note: for a new product, this is the design phase)

Outputs:
Pick the best solution
Planned activities that should reduce or remove the root causes of issues with the process (i.e. result in variability)
5. Control
Objective:
Maintain improvements through documentation, standardization and monitoring

Output:
Monitoring system
Control Plan
Documentation (Lessons, Results)

1. Define
2. Measure
3. Analyze
4. Improve
5. Control
The problem, project targets or goal
The customer(s)
Voice of the customer (VOC) and Critical to Quality (CTQs)
Target process subject to other steps in DMAIC
Project boundaries or scope
Project charter

Objective:
Collect Data, Establish Baseline, to Enable Goal setting and compare after project

Outputs:
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.
Business Case
Charter
SIPOC
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
...FLOW!
Deliver exactly what the customer wants, when they want it.

Demands and amounts can change!


"JUST-IN-TIME"
5. Pursue
Perfection
MUDA
Activities using
resources
but don't add
value
MURA
Uneveness
Irregularity
Inconsistency
MURI
Overburden,
unreasonable
stress on
system
(Supplier-Input-Process-Output-Customer)
Increased
Revenue
by making what the customer
values
the centre of your process
Reduced Cost... By Reducing Waste!
Transportation
Inventory
Motion
Waiting
Overproduction
Overprocessing
Defects and Rework
Skills
Energy
Total Cost of Quality =

COG (Preventative) +

COPQ (Reactive / Defects)


Lean Six Sigma
Reducing waste and variability for client & enterprise value
Gauge R&R
Baseline Data
Sampling
Patterns, Process Capability
Process Analysis
Organize Causes
Hypothesis Testing
Design of Experiment
Regression
(assess measurement system)
Implementation
Failure mode and effects analysis
Pilots
FMEA
Solution Options
Monitoring Reports
Control Objectives
Standards
Making
waste visible
Spaghetti
Charts
Cause and
Effect
Pareto
Visual
Workplace
Audits,
Assessments
Full transcript