Lean Six Sigma

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  • 1. Lean Six Sigma A Methodology for Cultural Change and Continuous Process Improvement (CPI)Kent Cunningham Voice: 615-491-7454

2. Topics> What is Lean? > What is Six Sigma? > Lean Six Sigma is > Key Roles & Responsibilities 2 3. Why Lean and Six Sigma > Six Sigma will eliminate defects but it will not address the question of how to optimize process flow > Lean principles exclude the advanced statistical tools often required to achieve the process capabilities needed to be truly 'lean > Each approach can result in dramatic improvement, while utilizing both methods simultaneously holds the promise of being able to address all types of process problems with the most appropriate toolkit. For example, inventory reduction not only requires reducing batch sizes and linking operations by using Lean, but also minimizing process variation by utilizing Six Sigma tools. 3 4. Lean is: A way to understand Value from the viewpoint of the customer and eliminate waste activities that dont add value A methodology to increase velocity and create a continuous flow of value-adding activities, pulled by the customer A set of tools to continuously improve this flowLEANRecommended reading: Lean Thinking, Womack and Jones (1996) 4Source: Rath & Strong 5. Six Sigma: Measure of Process Capability > Sigma () is a measure6 Process output SIGMA DPMO *YIELD= 3.4 Defects perMillion Opportunities 1.0691,46230.8538% 6 2.0308,53869.1462% 3.0 66,80793.3193% 5 4.06,21099.3790% 4Defective 5.023399.9767% 6.0 3.4 99.9997% 3 * DPMO = Defects per million opportunities2Process Output(Variation) 1 CustomerExpectation that focuses on the variation of the process output 5 6. DMAICThe Six Sigma Problem-Solving Model Define MeasureAnalyzeImproveControl> What does> How do we > What is going > What can we > Maintain the Customer measure our wrong?change to more improve- want?success?> What is the completelyments by > What are we> How welldata tellingsatisfy the measuring doing wrongare weus about ourCustomer? process right now? meeting the process > Test andperformanceCustomersvariation?implementneeds right processnow?changes... 6 7. What is Lean Six Sigma? Combination of two powerful methodologies LEANSix Sigma> A way to understand > The goal of 3.4 defectsvalue from theper 1 million operationscustomers perspective> A data-driven approachand eliminate waste to understandingactivities that dont add process variation andvalue defect reduction> A methodology to> A problem-solvingincrease the velocity ofmethodologyvalue-added activitiesto the customer Eliminate Waste Reduce Variance& Increase Velocity& Defects 7 8. Lean and Six Sigma Together SIX SIGMA ISSUESLEAN ISSUESVariation ISSUES THAT Waste & Flow MAY REQUIRE BOTH LEAN Process varies too much and SIX SIGMALong internal lead times Too much reworkPoor delivery Changeover time too long Poor quality Long customerInventories too high Process not in controllead times Frequent bottlenecks Unexplainable shifts Capacity problems Process doesnt add value Ineffective inspection Too muchdowntime 8 Source: Rath & Strong 9. Three Dimensions of Lean Six SigmaInitial area of Focus Process ManagementDMAIC supports and maintainsincrementally improves the projects solutions existing processes by once they are fully systematically removing implemented. It is aroot causes of variation. source for new improvement and design projects. Design For Six Sigma Design For Six Sigma Services & R&Dis used when a new product or service is needed or an Opportunitiesexisting process requires such significant change thatthe DMAIC improvement process is inadequate.9 10. Lean Six Sigma and Change ManagementSix-pronged approach HR Evolution / BTOLean SixOwn It!New LeadershipFinance Sigma Operating Values TransformationRhythmProviding an Six teamsA continuousA common> ChartSessions 1-4winningefficient, focused on long-term problem- large-scaleimprovement solving courseSAP-based >Peoplefoundation for transformational process and approach and>Strategy > Are decisivecore wins that will culture that will program of>Products > Inspire othersfunctionsdramatically dramaticallyemployee- >Budget > Meet simplify our improve the generated commitments business, expand quality of theprojects, putting > Live the our operatingcompanys Lean Six SigmaValues margins ($1.5B), processes and concepts to > Act as one and generate new products. work everyday, revenues.at all levels. Strong baseLargestTop Down Bottom UpSay / Do!ConsistentOpportunitiesMeasure Initiatives to Re-Create a Great Company ! 10 11. Alignment to 6-Point Plan 6-Point Plan for Building Shareholder Value 1. World-class management team, culture and processes2. Aggressive3. Drive to world- 4. Target strong 5. Invest for6. Increase focus on the class cost market share for profitable growthemphasis on balance sheet, structure andall activities (R&D, NPI, service and corporatequality levelssoftware software governance and (and mid teensapplications,solutions (2x business/operating superior CSAT, current revenue financial controls margin) and brand) mix) Cash DSO Cost of Poor Business CSAT - DeliveryTime-to-Market and InventoryQuality (CoPQ) Transformation Performance(TTM)and ResponseTime to Issues Lean Six Sigma (full DMAIC toolset)Quick-win OR, teamIdea is large, spansimprovementsconcludesother functions orcapable of beingrequires full analysisimplemented within a as a LSS projectfunctional team 11 Own It! (partial DMAIC toolset) 12. Lean Six Sigma Requires Behavioral Change> Lean Six Sigma Challenges Us to: Think Differently Work Differently Ask Questions and Challenge the Status Quo Make Decisions With Facts and Data Use New Principles, Tools and MethodologiesEarly-on, when culture and change compete, culture wins.- Tom Quan, GlaxoSmithKline 13. Basic Questions > What are the customerneeds?> Do our products orservices answer the Voice of theCustomer at a price he is willing topay?> How do we know?13 14. Lean Six Sigma Principles Specify value in the eyes of the customer Identify the value stream and eliminate waste /variation Make value flow smoothly at the pull of thecustomer Involve, align and empower employees Continuously improve knowledge in pursuitof perfection 14 15. Definition of a Value Stream The VALUE STREAM is the entire set of processes or activities performed to transform the products and services into what is required by the customer.The VALUE STREAM Suppliers DesignProcure Make Sell CustomersA Primary Focus is TIME, Product and / or Service Flow Information Flow: Quickly In All Directions15 16. Understanding the Value StreamTheir SupplierOur SupplierOurHappy Piece Our Customer Customer Their Service> We are often part of a value creating stream> Ultimately, the intent of the stream is to answer theend-users needs> Knowing who our customers are is the first step inunderstanding the stream; our primary customer may not bethe end-user> Knowing how the stream and our piece works or doesntwork in meeting customer needs is what Lean Six Sigma isabout 16 17. Summarizing the Power of Lean Six Sigma Provides a world class business strategy Encourages a common vision and common languageshared by all Promotes teamwork and REWARDS success Combines aggressive goals with a method and a set oftools Requires the application of tools throughout entirelifecycle of a product or service Produces knowledge for improved cycle time, reduceddefects, and lower cost Better products and services delivered faster and at lower cost= Improved Customer Value17