Six Sigma Overview for business process improvement

Lean Six Sigma overiew

1. Performance Excellence Methodologies – An Overview 1 Recognize a Problem Process Management Is the Solution Known? Are Solutions Obvious? Is It a New Product or Process? Is the Cycle time Reduction the Objective? Is an Invention Required? Is the Time Bottleneck Defect Driven? Does a Process Management System Exist ? Just Do It Obvious root cause, obvious solution Work Out Obvious root cause, non-data driven solution DFSS (DMADV) Innovation / R&D Lean DMAIC N N N N N N N Y Y Y Y Y Y Y

2. 2 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - “Sweetest Fruits” at the top DFSS, Innovation/R&D Bulk of Fruit DMAIC (LSS) Low Hanging Fruit Work Outs, Kaizen Ground Fruit Just Do It , Process Establishment - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zone 1 Zone 3 Zone 2 Zone 4 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Entitlement Breakthrough Harvesting the Fruit

3. 3 Lean Six Sigma is a project-based approach for improving effectiveness and efficiency. It is a disciplined, customer-focused, data-driven approach for improving the performance of processes, products, or services. As philosophy , LSS strives for perfection in achieving effectiveness and efficiency in meeting customer and business requirements. Six Sigma is proactive and prevention-based instead of reactive and detection-based . As performance metric, LSS refers to a level of quality that is near perfection. It strives for a defect level that is no more than 3.4 parts per million. As a methodology, LSS refers to DMAIC, a methodology for improvement named after its five phases of D efine , M easure , A nalyze , I mprove , and C ontrol . Lean Six Sigma

4. 4 What Is There In For Me? The tools and methodologies in Lean Six Sigma are useful not only in LSS projects, but in everyday tasks. These include : Understanding Customer and Stakeholder Needs Identifying, Analyzing and Presenting Key Business Information Brainstorming on, Deciding upon, and Solving Complex Issues Revising and Simplifying Business Processes Streamlining Administrative Processes and Support Tasks Understanding Variation Managing Cross-Functional Projects The more you understand what this methodology & tools are and the underlying philosophy behind them, the better you will be as problem solver for sustained improvement . As team leader or as champion of a project, you will be better equipped to ask the right questions and provide better guidance to the team.

5. 5 Lean – Key Aspects Lean is Not New Popularized by Toyota more than 30 years ago. Many of its tools and concepts have been around for decades. Lean is Both Methodology and Philosophy Lean aims to eliminate ‘waste’ (in Japanese, “ muda ”) in every area of a business, including production, customer relations, product design, supplier networks, and factory and business administration. Its goal is to incorporate less effort , less resources , and less time to develop products in order to become highly responsive to actual customer demand and to produce top-quality product in the most timely, efficient and economical manner possible. Lean Focuses on Customer-Defined Value A process step ‘adds value’ if the activity adds form , fit or function to the product that is desired by the customer, and the customer is willing to pay you to conduct that activity.

6. 6 Lean – 8 Types of Waste D efective Products : Items that fail to meet customer specifications are pure waste, e.g., returns, rework, scrap, and warranty costs. O verproduction : Producing more than demanded or before it is needed, e.g., stored materials or inventories. W aiting : Long changeover times, slow processing times, and materials handling tasks limit opportunities to make on-time deliveries . N on-Utilization of Human Potential : T ransportation : Material movements, by definition, add no value to products, as they do not affect form, fit or function. I nventory or Work-in-Process (WIP) : Material between operations due to large lot sizes or long process cycle times . M otion : Unnecessary movements and Effort of workers. E xtra Processing : Unnecessary or inefficient process steps simply add cost and time. D O W N T I M E

7. 7 Lean – Tool Kit Value Stream Mapping Building a Lean process Pull Flow / Kanban Total Productive Maintenance Mistake Proofing Kaizen Quick Changeover Standardized Work Batch Reduction Waste Reduction 5S Visual Management Cellular Layout Value Steam Mapping is the entrance into building of a Lean process

8. 8 Six Sigma – Key Aspects Six Sigma is also Not New Many of its tools and concepts have been around for decades. Six Sigma packages the tools and concepts into a clear and systematic roadmap for process improvement . Six Sigma is Both Methodology and Philosophy The ‘DMAIC’ problem-solving methodology is a disciplined thought process and tool guide used to solve business issues. D efine / M easure / A nalyze / I mprove / C ontrol Variation is Bad (‘Evil’) For most processes, a repeatable and predictable result is crucial. Six Sigma is designed to identify the key sources of variation and drive them out of the process, by understanding the key inputs , processes and outputs of business activities. “Fix the process to get good results.”

9. 9 Six Sigma – Objective (Statistical) Reduce Variation and Center Process – Customers feel the variation more than mean μ 1 μ 2 LSL U SL Target Before Improvement After Improvement

10. 10 Six Sigma – Process Variation Specification Limit % With Specifications (Centered Distribution) Defects Per Million (Centered Distribution) ± 3 σ 99.73 2700 ± 4 σ 99.9937 63 ± 5 σ 99.99994 0.6 ± 6 σ 99.999999999 0.002

11. 11 Six Sigma – Process Variation

12. 12 Six Sigma – Tool Kit Building a Six Sigma process Measurement System Analysis Multi- vari Study Process Mapping Graphic Tools, Pareto, Run Charts Teams, Project Management Descriptive Statistics, SPC, T-Test Capability, Cpk , Sigma C&E Matrix, Fishbone FMEA, Control Plan ANOVA DOE-Simple, Fractional Factorial Advanced Specialized DOE Regression – Simple, Multiple Fundamentals – Identify Special Causes Process Understanding – Reduce Variation Optimizing the process

13. 13 The Intersection of Lean and Six Sigma Six Sigma and Lean are not Mutually Exclusive. While, Lean tackles waste, Six Sigma tackles variation into the processes. When coupled together, both are more effective. Lean Six Sigma Focus Eliminate Waste Improve Flow Reduce Variation Improve Process Capability Measures Time Defects Drivers Customer Satisfaction Value-add Profitability Customer Satisfaction Critical-to-quality Profitability Culture Empowerment Top down Application All Processes All Processes Underlying Science Industrial Engineering Statistics

14. 14 DMAIC Methodology 10-20 Suspect X’s 8-10 Important X’s 4-8 Critical X’s 2-5 Key Leverage X’s All Possible X (50+) Funnel Effect Practical Problem Statistical Problem Statistical Solution Practical Solution Focus of Lean Six Sigma Methodology : Y = f (X)

15. 15 Sample Equations Call Centre: Total Call Quality = 4.18 + 0.611*(Listening Skills) + 0.993*(Trouble Shooting) + 1.23*(Job Knowledge) + 0.897*(Communication) + 1.06*(SOP Adherence) (R- sq = 99.5%) Carbon Black Manufacturing: Production Yield = 130.13 + 1.37*(Airflow) + 1.08*( AirTemp ) + 8.08*(Nozzle Angle) – 0.25*(AF*AT) (R- sq = 99.28%) Software Development: Defect Density = 59.4 – 23.4*(Competency Match) + 17.3*(Automation) + 12.2*(Reuse) + 11.2*(Guidelines) – 1.61*(Supervision) + 25.9* (Timeline Crunched) (R- sq = 95%)

16. 16 Thank You