LSS Process Improvement Benefits of Lean Six Sigma (LSS) for all Organizations Justin Anderson [email protected]
LSS Process Improvement
Benefits of Lean Six Sigma (LSS) for all Organizations
Justin [email protected]
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
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
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
Organizational Barriers
Need for LSS
6Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
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
Better Organizations
History of LSS
9Enterprise Business Process Excellence
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
10Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
Implementation
LSS Methodology
12Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
13Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
14Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
15Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
16Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
17Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
Staffing
LSS Organization
19Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
20Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
Backup Slides
Additional LSS Mechanics
22Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
23Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
24Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
25Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
26Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
• 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
27Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
Practical Problem
StatisticalProblem
Statistical Solution
Practical Solution
The Approach
28Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
29Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
30Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
31Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
Understand statistical problem
Baseline current process capability
Define statistical improvement goal
Identify drivers of variation (significant factors)
DDefine
MMeasure
AAnalyze
IImprove
CControl
Analyze
32Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
33Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
34Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
35Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
36Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
37Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
Map improved process
Pilot solution
Identify operating tolerance on significant factors
DDefine
MMeasure
AAnalyze
IImprove
CControl
Improve
38Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
39Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
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
Six Sigma Organization
41Enterprise Business Process Excellence
Justin Anderson | April 11, 2023
• 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