Lean Six Sigma Students

Business Improvement Methodologies: TQM, Lean, Six Sigma and Lean Six Sigma

Henriqueta Sampaio da Nóvoa

Department of Industrial Engineering and Management

University of Porto

14th November 2014

Outline

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TQM, Lean and Six Sigma1

Integration of Lean and Six Sigma2

3 The future1

1993

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TQM, Lean and Six Sigma

Philip Crosby

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What are the roots of TQM (Total Quality Management)?

Japanese Quality Evolution between 1950 and 1980;

50’s: Feigenbaum published “Total Quality Control”:

“TQC is an effective system for integrating the quality development, quality maintenance

and quality improvement efforts of the various groups in an organization so as to enable

production and service at the most economical levels which allow for customer

satisfaction.”

80’s: TQM holistic management philosophy

“If Japan Can... Why Can't We?”

(the name of an American television episode broadcast by NBC News on June

24, 1980)

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“If Japan Can... Why Can't We? (excerpts 1980)

Dr Deming: They realized that the gains that you get by statistical methods are

gains that you get without new machinery, without new people. Anybody can

produce quality if he lowers his production rate. That is not what I am talking

about. Statistical thinking and statistical methods are to Japanese production

workers, foremen, and all the way through the company, a second language. In

statistical control you have a reproducible product hour after hour, day after

day. And see how comforting that is to management: they now know what they

can produce, they know what their costs are going to be.

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What is TQM (Total Quality Management)?

“…as a continuously evolving management system consisting of values, methodologies and tools, the aim of which is to increase external and internal customer satisfaction with a reduced amount of resources”

Hellsten and Klefsjo (2000)

“... a corporate culture characterized by increased customer satisfactionthrough continuous improvement, in which all employees in the firm actively

participate” Shiba et al. (1993)

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What is TQM (Total Quality Management)?

“A core definition of total quality management (TQM) describes a

management approach to long–term success through customer satisfaction.

In a TQM effort, all members of an organization participate in improving

processes, products, services, and the culture in which they work. The

methods for implementing this approach come from the teachings of such

quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V.

Feigenbaum, Kauro Ishikawa, and Joseph M. Juran.”

ASQ (2014)

http://asq.org/learn-about-quality/total-quality-management/overview/overview.html

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Primary Elements of TQM:

Customer-focused;

Total employee involvement;

Process-centered;

Integrated system (…although an organization may consist of many different functional

specialities often organized into vertically structured departments, it is the horizontal

processes interconnecting these functions that are the focus of TQM)

Strategic and systematic approach;

Continuous improvement;

Fact-based decision making;

Communications.

ASQ (2014)


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Outline

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3 The future1


17Américo Azevedo, “Lean Fundamentals”, Total Lean Days, September 2014


What is Lean?

“A systematic approach to identifying and eliminating waste through continuous

improvement, flowing the product at the pull of the customer in pursuit of

perfection (NIST, 2000).

ASQ (2014)


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What is Lean?

Womack and Jones identify five key principles of the lean organization:

(1) the elimination of waste (or muda);

(2) the identification of the value stream;

(3) the achievement of flow through the process;

(4) pacing by a pull (or kanban) signal; and

(5) the continuous pursuit of perfection.

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What is Lean?



Lean Tools and Techniques




Outline

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3 The future1


What is Six Sigma?Why 99% is not good enough?

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For 300.000 letters delivered, 3.000 will never arrive at their destination (six sigma= 1 letter)

1,68 hours of dead air experience per week (six sigma= 1,8 seconds),68

More than 3000 newborns accidentally falling from the hands of nurses or doctors each year

A brief history of Six Sigma

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Six Sigma began at Motorola in 1987 (Motorola reduced defectivity on its products by approximately 1300%)

Response to Japanese competition

Very different from previous TQM initiatives in the US

Provided tangible deployment strategy;

MAIC;

Standardized on tools.

AlliedSignal and Honeywell were early adopters;

Six Sigma became “front page news” when Jack Welch publicly promoted it at

GE in 1996;

GE added “Define” to create DMAIC;

GE also expanded Honeywell’s design (DFSS) efforts

Created DMADV approach to DFSS

Began major push in GE Capital and service operations – “Commercial Quality”.

Roger W. Hoerl, “Lean Six Sigma: Yesterday, Today, and Tomorrow” , 5th Int. Conf. LSS Edinburgh 2014 - Keynote

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“Six Sigma will be the biggest initiative that GE has ever launched. It will be my personal number one priority for the

next five years.”

CEO, Jack Welch 1995


A brief history of Six Sigma

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Commonwealth Health Corporation became an early adopted

in healthcare in 1998

Savings in radiology alone were $1.6 million within a year;

Quality of care and safety improved.

Bank of America became first major bank to launch a Six

Sigma initiative in 2001 - Reported billions in gains by 2003

Volvo Cars in Sweden claims that the six sigma programme as

contributed with over €55M to the bottom line during 2000-

2002.

Adapted from Roger W. Hoerl, “Lean Six Sigma: Yesterday, Today, and Tomorrow” , 5th Int. Conf. LSS Edinburgh 2014 - Keynote


What is Six Sigma?

“A method that provides organizations with tools to improve the capability of

their business processes. This increase in performance and decrease in process

variation lead to defect reduction and improvement in profits, employee morale,

and quality of products or services.

Six Sigma quality is a term generally used to indicate a process is well controlled

(within process limits ±3s from the center line in a control chart, and

requirements/tolerance limits ±6s from the center line).

ASQ (2014)


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What is Six Sigma?

Different definitions have been proposed for Six Sigma, but they all share some common threads:

Use of teams that are assigned well-defined projects that have direct impact on the organization's bottom line.

Training in "statistical thinking" at all levels and providing key people with extensive training in advanced statistics and project management. These key people are designated “Black Belts”.

Emphasis on the DMAIC approach to problem solving: define, measure, analyze, improve, and control.

A management environment that supports these initiatives as a business strategy.

ASQ (2014)


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TQM, Lean and Six SigmaDiffering opinions on the definition of Six Sigma:

Philosophy - The philosophical perspective views all work as processes that can be defined, measured, analyzed, improved and controlled. Processes require inputs (x) and produce outputs (y). If you control the inputs, you will control the

outputs. This is generally expressed as y = f(x).

Set of tools - The Six Sigma expert uses qualitative and quantitative techniques to drive process improvement. A few such tools include statistical process control (SPC), control charts, failure mode and effects analysis, and process mapping. Six Sigma professionals do not totally agree as to exactly which tools constitute the set.

Methodology - This view of Six Sigma recognizes the underlying and rigorous approach known as

DMAIC (Define Measure, Analyze, Improve, Control).

Metrics - In simple terms, Six Sigma quality performance means 3.4 defects per million opportunities (accounting for a 1.5-sigma shift in the mean).

Excerpted from T. M. Kubiak and Donald W. Benbow, The Certified Six Sigma Black Belt Handbook, 2nd edition, ASQ Quality Press, 2009, pages 6-7.

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http://asq.org/quality-press/display-item/?item=H1325


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Six Sigma: Set of Tools (A glimpse on Quality Companion)


Quality Companion: DMAIC

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Six Sigma: Set of ToolsDMAIC Project


Quality Companion: ANALYSE 1 PHASE (isolate key inputs)

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Six Sigma: Set of Tools

TQM, Lean and Six SigmaQuality Companion: Tools proposed in the ANALYSE 1 PHASE

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Six Sigma Methodology – DMAIC: Tollgate review at each step

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Six Sigma as a Metric

“the goal of six sigma is that only 3,4 of a million customers should be unsatisfied”

Magnusson et al. (2003)

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The Impact of Six Sigma

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Billions of dollars delivered to bottom lines at GE, Bank of

America, and many others around the globe

Significant enhancements to theory and body of knowledge of

continuous improvement

Best integration to date of multiple statistical methods into an overall

approach to scientific inquiry – “statistical engineering”

Clearly The Most Successful Improvement Initiative in History


Why Has Six Sigma Been So Successful?Some Important Attributes

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Zealous leadership from the top;

Focuses on improving the process (addresses root cause versus symptoms);

Quantitative approach utilizing metrics;

Forces understanding of variation;

Provides practitioners an overall road map, versus a miscellaneous collection

of tools;

Uses a proven set of tools in the road map;

Is being applied to all processes, not just operations;

Provides a supporting infrastructure (defined roles, project selection, reviews,

included in budgets, reporting of results, etc.).

A More Holistic Improvement System Must Maintain These Attributes



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Similarities and differences between TQM, six sigma and lean

Andersson, R., Eriksson, H., & Torstensson, H. (2006). Similarities and differences between TQM, six sigma and lean. The TQM Magazine, 18(3), 282–296.


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Synergies between lean and six sigma

Pepper, M.P.J., and T.a. Spedding. 2010. “The Evolution of Lean Six Sigma.” International Journal of Quality & Reliability Management 27 (2): 138–55.

TQM, Lean, Six Sigma and Lean Six Sigma

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Clarification of concepts: TQM, Lean and Six Sigma1


3 The future1

Integration of Lean and Six Sigma

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George promoted a combined effort, Lean Six Sigma, in 2003

GE quickly adopted LSS versus SS

LSS expanded into Europe and Asia


Integration of Lean and Six Sigma

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Conjecture: the “next big thing” in statistics and quality will be built on the

limitations of Six Sigma;

What are the limitations of Six Sigma?

Contrary to popular opinion, Six Sigma is not a holistic system for managing

quality;

Also contrary to popular opinion, there are many problems and projects for

which Six Sigma is not the best approach.


Specific Limitations of Lean Six Sigma

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Requires extensive investment (e.g., training)

Project “sweet spot” is narrow (4-6 months)

Doesn’t address routine problem solving.

Not a comprehensive quality management system:

Project oriented, not day-to-day management oriented;

Doesn’t replace ISO 9000 or country-specific quality systems (e.g.,

Baldrige Award in the US).


Six Sigma is Excellent at What it Was Designed to Do

There Are Opportunities Within and Between Process:A three step process

Step A

Step B

Step C

Customer

Lean Six Sigma

Value-Adding Transformations

Occur Within Process Steps

Material and Information Flow Between Process Steps

Snee, R. D. (2010). Lean Six Sigma – getting better all the time. International Journal of Lean Six Sigma, 1(1), 9–29. 45

Lean Six Sigma

In short, the integration of Lean and Six Sigma

aims to target every type of opportunity for

improvement within an organization.

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Improvement Objectives

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Shift Process Average Reduce Process

Variation

Six Sigma Objectives Lean Objectives

Lean Six Sigma Improves Quality, Cost and Delivery

Improve Process Flow Reduce Process

Complexity

Reduce: Waste Non-Value Added

Work Cycle Time

Snee, R. D. (2010). Lean Six Sigma – getting better all the time. International Journal of Lean Six Sigma, 1(1), 9–29.

The Example of Lean and Six Sigma

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Complexity

Improve

Process

Flow

Improve

Process

Flow

Past

Present

The Future

Reduce

Variation

Reduce

Variation

Lean Six Sigma

Lean Six Sigma

Our

Improvement

Methodology

TQM, Lean, Six Sigma and Lean Six Sigma

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Clarification of concepts: TQM, Lean and Six Sigma1


3 The future1

The Future: Project Improvement System

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Complexity

Has our success in continuous improvement been limited?

Have we “left money on the table”?

Do we need to go beyond integrating Six Sigma and Lean?


A Broader View

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Are improvement efforts integrated or disjoint?


Can We “Connect the Dots” Between Improvement Efforts?

ISO Certification

Lean Projects

Six Sigma Projects

Business Process

Improvement

Innovation Projects

Quality Management

Projects

How Do We Get Started?

Start Small – Think Big ….. Evolution vs. Revolution Migrate a Six Sigma initiative towards Holistic Improvement

Integrate potentially competing improvement groups, such as ISO Certification, Lean, Six Sigma, and Business Process Improvement.

Migrate all improvement projects to a common project portfolio.

• All projects compete for the same pool of resources.

• Typical project types: process improvement, capital based, and infrastructure enhancement.

• Project selection decisions made from a common prioritized list are most effective.

Start With Where You Are – Add With a Goal in Mind

52Roger W. Hoerl, “Lean Six Sigma: Yesterday, Today, and Tomorrow” , 5th Int. Conf. LSS Edinburgh 2014 - Keynote

Summary

Improvement must become a keen focus of organizations looking to

compete effectively in the 21st century;

A holistic approach puts diverse improvement efforts “under one

umbrella”;

The creation of Lean Six Sigma is one positive example, but we must

go further;

Integration of improvement efforts enables proper allocation of

resources and synergy;

One improvement system is easier to manage and enhance over

time than three or four separate systems.

53Roger W. Hoerl, “Lean Six Sigma: Yesterday, Today, and Tomorrow” , 5th Int. Conf. LSS Edinburgh 2014 - Keynote

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