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LSS Process Improvement Benefits of Lean Six Sigma (LSS) for all Organizations Justin Anderson [email protected]
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Lean Six Sigma Naval Reserve Presentation

May 06, 2015

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Page 1: Lean Six Sigma Naval Reserve Presentation

LSS Process Improvement

Benefits of Lean Six Sigma (LSS) for all Organizations

Justin [email protected]

Page 2: Lean Six Sigma Naval Reserve Presentation

2Enterprise Business Process Excellence

Justin Anderson | April 11, 2023

Central Thesis

1. No individual can routinely make best decisions– Complex world– All stakeholders needed

2. Lean Six Sigma (LSS) Focuses on Culture– Too much attention given to use statistics– Primary goal to provide:

• Collaborative culture of improvement• Objective decision making framework• Consistent approach to problem solving

Page 3: Lean Six Sigma Naval Reserve Presentation

3Enterprise Business Process Excellence

Justin Anderson | April 11, 2023

Agenda• My background

– Build credibility on subject• Why LSS is needed• History

– Lean & Toyota– Six Sigma & Motorola

• Methodology– Program Management– DMAIC

• Summary

For today,

T-test free zone

Page 4: Lean Six Sigma Naval Reserve Presentation

4Enterprise Business Process Excellence

Justin Anderson | April 11, 2023

Justin Anderson• BS in Materials Engineering at UF (2000)

– “How to make a bridge as safely & cheaply as possible”• Process engineer at Texas Instruments (2001-2006)

– Enabling cost effective computer chips• MBA at UNC (2006 – 2008)

– Understanding organizations and customer needs• Internal Consultant at BCBSNC (2008 – present)

– Improving healthcare business processes

• I’ve done the same thing the entire time• Understanding organizational problems• Figuring out how to improve performance

Page 5: Lean Six Sigma Naval Reserve Presentation

Organizational Barriers

Need for LSS

Page 6: Lean Six Sigma Naval Reserve Presentation

6Enterprise Business Process Excellence

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Why is LSS Needed?• Why can’t good leaders always make the best decisions?

– Apparent Reasons• Time• Informational barriers

– Unapparent Reasons• Urgency verse Importance• Cognitive Biases• Personal Paradigms• Dunbar’s Number• Static vs. Adaptive efficiencies

LSS provides a framework

Impo

rtan

ce

Urgency

Hig

hL

ow

HighLow

“Fire Fighting”

• Customer complaints

• People issues• System downs• Stock outs

“Fire Proofing”

• Strategic planning• Process mapping• Mentoring others• Cleaning desk

“Chasing Smoke”

• Making reports• Weekly updates• Projects without

resources

“Poking Coals”

• Meetings• Chatting w/ co-

workers• Web Surfing

Covey’s Time Priorization Matrix

Page 7: Lean Six Sigma Naval Reserve Presentation

7Enterprise Business Process Excellence

Justin Anderson | April 11, 2023

Monkey Business & DunbarG

roup

Siz

e

Neocortex RatioRedrawn from Dubar, “Neocortex size as a constraint on group size in primates”, Journal of Human Evolution (1992) 20, 469-493

Primate Group Size vs. Primate Neocortex

Homo Sapiens

• Large company response?– Layered Management

• Problems?– One direction information flow– Silos and loss of customer focus

• Dunbar’s Number– Physiological limits to groups– Only ~150 relationship– Number re-occurs in real world

• Tribal societies, military, Gortex

Page 8: Lean Six Sigma Naval Reserve Presentation

Better Organizations

History of LSS

Page 9: Lean Six Sigma Naval Reserve Presentation

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Justin Anderson | April 11, 2023

Toyota & Lean• World War II left Toyota in bad shape

– Could not afford waste• No managers who only managed• No large inventories of parts / unsold products• No large batch processing equipment

– Customer only got what they wanted• Intensive focus on customer needs• Ability to quickly change products

– Scarcity created self sustaining culture & mission• Lean methodology was born

• Well what about recent issues???1. Lean difficult if you can’t simplify (ex., electronics)2. (Toyota’s manufacturing system) != (All Toyota’s business processes)

• Some adoption, but growth allowed for waste3. Can’t discount overall success – industry was transformed

Page 10: Lean Six Sigma Naval Reserve Presentation

10Enterprise Business Process Excellence

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Motorola & Six Sigma

• Semiconductors are tough– Difficult to directly observe what happens (Black Box)– Numerous complex steps

• TI example• Motorola developed Six Sigma

– Identify customer requirements in measurable terms (Y’s)– Map process inputs to outcomes (X’s)

• Average output and variation• Sub-process steps then broken into these terms

– Organization mirrors relationship• Ownership driven down• Reporting driven up

– Heavy focus on control and response• Complexity created self sustaining culture & mission

– Six Sigma methodology was born

Page 11: Lean Six Sigma Naval Reserve Presentation

Implementation

LSS Methodology

Page 12: Lean Six Sigma Naval Reserve Presentation

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Lean – Applied Concepts

Goals

Specify value

Identify value stream

Value flows without

interruption

Customer pull value

Pursuit of perfection

Remove Barriers

Kaizen

Continuous Flow

Pull & Kanban

Layout

Quick Change

Simplify Process

Value Stream Mapping

Takt Time &

Work Balancing

Visual Controls

Standard Work

Mistake Proofing

Focus

Culture

Continuous Improvement

Empowered Teams

Quality at Source

Total Productive Maintenance

5S

Lean process maximizing value delivery and minimizing waste

Page 13: Lean Six Sigma Naval Reserve Presentation

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Six Sigma – Defined Process

Define

CTQ Tree

FMEA

Project

Chartering

Measure

Value Stream Mapping

Cause and Effect Diagram

Data Collection Planning

Analyze

ANOVA

Simulation & Modeling

Significance Testing

Measurement System Analysis

Improve

Supply Chain Management

Triz

Error Proofing

Prioritization Matrix

DOE

Pilots

Control

Statistical Process

Control Charts

Dashboards

Response Plans

Highly controlled process where variation has been minimized

Page 14: Lean Six Sigma Naval Reserve Presentation

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LSS –Lean Concepts & Six Sigma Process

• Lean focus on shortening process to essential steps

• Six Sigma identifies opportunities within process

Customer Request

Customer Fulfillment

Initial State Post LeanCustomer Request

Customer Fulfillment

Customer Request

Customer Fulfillment

Post Six Sigma

Page 15: Lean Six Sigma Naval Reserve Presentation

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FS6FS4

FS3FS2

FS1

LSS – Improvement Attitude

• You will never “Fix” a process– Environment is NOT static– Why strive for static efficiency?

• Goal: Incremental improvement– Small change = fast change– Adoptive efficiency has higher yields

Effi

cien

cy

Time

Actual “Delivery”

“Fix”

Current

Project

Time

Actual “Improvement”

“Fix”

Current

Project

SituationChanges

Tra

ditio

nal A

ppro

ach

Time

“Fix”

Planned Improvement

Current

Project

FS5

FS7

Change

Change

Time

Effi

cien

cy

Continuous Improvement

Current

LSS

App

roac

h

Page 16: Lean Six Sigma Naval Reserve Presentation

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Key Point – Change Acceptance

• Success of cultural and process changes dependent on:

• How to do this?– Clear mission– Full engagement of organization– Objective, data driven methodology (LSS)

–Effective change management

EEffectiveness

= QQuality

Improvement

x AAcceptance

Page 17: Lean Six Sigma Naval Reserve Presentation

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Four Methodologies of LSS

•Application of a consistent improvement methodology

•Cross functional teams close quality gaps based on data driven recommendations

•Creation of on new processes•Design directly tied to customer requirements and organizational capabilities

•Translate VOC into Critical To Quality (CTQ) metrics

•Maintain and audit VSMs•Identify quality gaps•Manage improvement efforts

• Define / Review purpose of process, goals, & boundaries

• Perform interviews to establish voice of customer (VOC)

• Identify streams delivering value to customers

• Identify input, output, measures, controls VSM

Value

Stream Mapping BPMSBusiness Process

Management System

DMAICDefine,

Measure, Analyze,

Implement, Control

DFSSDesign For

Six Sigma

Page 18: Lean Six Sigma Naval Reserve Presentation

Staffing

LSS Organization

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The Quality Team Structure

Master Black Belt• Executive thought leadership• Manages continuous improvement (CI)

program• Belt Training and Mentoring

Black Belt• Dedicated to continuous improvement • Six Sigma Expert• Oversees multiple projects• CI initiatives for a value stream

Green Belt• Portion of time dedicated to CI • Project Management• Data collection for project

Subject Matter Experts• Dedicated to process• Provide knowledge• Implement actions

Executives (C-level & SVP)• Sets strategic direction• Manages overall business• Leadership Mentor

Directors and VPs• Dedicated to continuous improvement • Functional Expert• Oversees multiple business areas• Leads value stream

Manager• Immediate oversight of SME’s• May also directly work in process• Reports to area performance

Subject Matter Experts• Dedicated to process• “Lives” the process

Business Team Quality Team

Overlap

Strategic Direction

Strategic Planning

Tactical Alignment

Tactical Direction

Page 20: Lean Six Sigma Naval Reserve Presentation

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Summary• LSS focused on culture

– Best leaders can’t consistently make best decisions• Ensure right people have right information• Empowering people, Holding people accountable

– LSS methods and tools support the culture• LSS provides problem solving framework

– Standard, data driven approach– Ensures appropriate project prioritization

• Data driven selection• Leaders provided with needed inform

• LSS strives for continuous Improvement– Incremental, fast improvement vs. big “fixes”– Goal of adaptive efficiency vs. static efficiency– E = Q * A

Page 21: Lean Six Sigma Naval Reserve Presentation

Backup Slides

Additional LSS Mechanics

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Six Sigma Defined

1. Understand what customer will and will not except– Upper (UCL) and lower limits (LCL)

2. Understand your process average– Process Average

3. Understand how much your process varies– Process Standard Deviation

4. Determine probability of producing outside of limits5. Center process & identify variation

Page 23: Lean Six Sigma Naval Reserve Presentation

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Six Sigma Y’s and X’s – CTQ Tree & FMEA

FMEAPrioritize & Prevent Errors

CTQ TreeCustomers to Inputs

Ongoing improvement efforts1. Document Process Steps2. Identify failure modes3. Assign Severity, Failure Probability, & Detection4. Multiply #3 to create Risk Priority Number (RPN)5. Prioritize based on RPN

Figuring out what went wrong1. Identify measurable response (Ys)2. Identify sub-process and/or drivers3. Identify measurable inputs (Xs)4. Prioritize either by creating FMEA or other methods

Page 24: Lean Six Sigma Naval Reserve Presentation

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Defects per Million Parts

4 Sigma 6,210 Defects

2 Sigma 308,537 Defects

3 Sigma 66,807 Defects

5 Sigma 233 Defects

6 Sigma 3.4 Defects

Bench Marking by Sigma Level

Page 25: Lean Six Sigma Naval Reserve Presentation

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Is 99% (3.8s) good enough? 99.99966% Good – At 6s

20,000 lost mails per hour 7 lost mails per hour

Unsafe drinking water almost 15 minutes each day

One minute of unsafe drinking water every seven months

5,000 incorrect surgical operations per week

1.7 incorrect surgical operations per week

2 short or long landings at most major airports daily

One short or long landing at major airports every five years

200,000 wrong drug prescriptions each year

68 wrong drug prescriptions each year

Example quoted from GE Book of Knowledge - copyright GE

What it means to be @ Six Sigma

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• To understand the process; it’s mission, flow and scope

• To know the customers and their expectations

• To identify, monitor and improve correct performance measures for the process

The Need of BPMS

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Practical Problem

StatisticalProblem

Statistical Solution

Practical Solution

The Approach

Page 28: Lean Six Sigma Naval Reserve Presentation

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DDefine

MMeasure

AAnalyze

IImprove

CControl

Identify and state the practical problem

Validate the practical problem by collecting data

Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution

Confirm and test the statistical solution

Convert the statistical solution to a practical solution

Methodology

Page 29: Lean Six Sigma Naval Reserve Presentation

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VoC - Who wants the project and why ?

The scope of project / improvement

Key team members / resources for the project

Critical milestones and stakeholder review

Budget allocation

DDefine

MMeasure

AAnalyze

IImprove

CControl

Define

Page 30: Lean Six Sigma Naval Reserve Presentation

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Ensure measurement system reliability

Prepare data collection plan

Collect data

- Is tool used to measure the output variable flawed ?- Do all operators interpret the tool reading in the same way ?

- How many data points do you need to collect ?- How many days do you need to collect data for ?- What is the sampling strategy ?- Who will collect data and how will data get stored ? - What could the potential drivers of variation be ?

DDefine

MMeasure

AAnalyze

IImprove

CControl

Measure

Page 31: Lean Six Sigma Naval Reserve Presentation

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Understand statistical problem

Baseline current process capability

Define statistical improvement goal

Identify drivers of variation (significant factors)

DDefine

MMeasure

AAnalyze

IImprove

CControl

Analyze

Page 32: Lean Six Sigma Naval Reserve Presentation

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Root Cause Analysis (fish bone)

• A brainstorming tool that helps define and display major causes, sub causes and root causes that influence a process

• Visualize the potential relationship between causes which may be creating problems or defects

Problem

Backbone

Primary Cause Secondary

Cause

Root Cause

Analyze – Identify Drivers of Variation

Page 33: Lean Six Sigma Naval Reserve Presentation

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Control – Impact Matrix

• A visual tool that helps in separating the vital few from the trivial many

Vital FewHigh Control – High

Impact

Cost IneffectiveLow Control – High Impact

Cost IneffectiveHigh Control – Low Impact

Trivial ManyLow Control – Low Impact

Control

Imp

act

Analyze – Identify Drivers of Variation

Page 34: Lean Six Sigma Naval Reserve Presentation

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Pareto Chart

• Pareto principle states that disproportionately large percentage of defects are caused due to relatively fewer factors (generally, 80% defects are caused by 20% factors)

0

5

10

15

20

25

30

35

L K A F B C G R D

0%

20%

40%

60%

80%

100%

Frequency Cumulative Frequency

Analyze – Identify Drivers of Variation

Page 35: Lean Six Sigma Naval Reserve Presentation

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Process Map Analysis

• Visually highlights hand off points / working relationships between people, processes and organizations

• Helps identify rework loops and non value add steps

VendorVendorProcess BProcess BProcess AProcess ACustomerCustomer VendorVendorProcess BProcess BProcess AProcess ACustomerCustomer

Analyze – Identify Drivers of Variation

Page 36: Lean Six Sigma Naval Reserve Presentation

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Hypothesis Testing

• A statistical tool used to validate if two samples are different or whether a sample belongs to a given population

Null Hypothesis (Ho) is the statement of the status quo

Alternate Hypothesis (Ha) is the statement of difference

One way ANOVA

Regression

Homogeneity of Variance Moods Median

Chi-Square

Analyze – Identify Drivers of Variation

Page 37: Lean Six Sigma Naval Reserve Presentation

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Map improved process

Pilot solution

Identify operating tolerance on significant factors

DDefine

MMeasure

AAnalyze

IImprove

CControl

Improve

Page 38: Lean Six Sigma Naval Reserve Presentation

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Ensure measurement system reliability for significant factors

Improved process capability

Sustenance Plan

- Is tool used to measure the input / process variables flawed ?

- Do all operators interpret the tool reading in the same way ?

- Statistical Process Control

- Mistake Proofing

- Control Plan

DDefine

MMeasure

AAnalyze

IImprove

CControl

Control

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Control Plan

• Have the new operating procedures and standards been documented ?

• What Statistical Process Control (SPC) tools will be used to monitor the process performance ?

• Who will review the performance of the output variable and significant factors on closure of the project and how frequently ?

• What is the corrective action or reaction plan if any of the factors were to be out of control ?

Control – Sustenance Plan

Page 40: Lean Six Sigma Naval Reserve Presentation

Six Sigma Organization

Page 41: Lean Six Sigma Naval Reserve Presentation

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• Basic - Six Sigma Awareness• Green Belt Projects• Participate in Black Belt Projects• Assist business functions with day to day

activities

• Mentor/Train Green Belts• Black Belt Projects• Change Agents• Work along with the business owners

• Mentor/ Train Black Belts• Run Strategic projects• More Strategic than tactical role

Green Belt (GB)

Black Belt (BB)

Master Black Belt (MBB)

Six Sigma Titles