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A Lean Six Sigma Green Belt Training. ING Business School Ref Intro-1a Workshop Goals This Workshop will help you learn to: Implement a systematic approach.

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Presentation on theme: "A Lean Six Sigma Green Belt Training. ING Business School Ref Intro-1a Workshop Goals This Workshop will help you learn to: Implement a systematic approach."— Presentation transcript:

1 A Lean Six Sigma Green Belt Training

2 ING Business School Ref Intro-1a Workshop Goals This Workshop will help you learn to: Implement a systematic approach to identify, map and control existing processes. Develop upstream and outcome metrics and targets that track process performance in satisfying critical customer requirements. Utilize methodologies for collecting, displaying, and interpreting data. Apply proven approaches for continuously improving processes, including DMAIC problem solving, and Tollgate reviews.

3 ING Business School Day 1Day 2Day 3Day 4 09:00-10:45 Introductions / LSS Overview 10:45-11:00 Break 11:00-12:30 LSS Overview / Define Phase 12:30-13:30 Lunch 13:30-15:30 Define Phase 15:30-15:45 Break 15:45-17:30 Define / Measure Phase 17:30 Close Day 1 and Homework assignment 09:00-10:45 Measure Phase 10:45-11:00 Break 11:00-12:30 Measure Phase 12:30-13:30 Lunch 13:30-15:30 Measure Phase 15:30-15:45 Break 15:45-17:30 Analyse Phase 17:30 Close Day 2 and Homework assignment 09:00-10:45 Analyse Phase 10:45-11:00 Break 11:00-12:30 Improve Phase 12:30-13:30 Lunch 13:30-15:30 Improve Phase 15:30-15:45 Break 15:45-17:30 Control Phase 17:30 Close Day 3 and Homework assignment 09:00-10:45 Control Phase 10:45-11:00 Break 11:00-12:30 Control Phase 12:30-13:30 Lunch 13:30-15:30 Project Presentations 15:30-16:30 Wrap-Up & Evaluation 16:00 Close Programme 19:00 Dinner Agenda

4 ING Business School Ref Intro-2 Administrative Information Safety (room, building) Breaks and lunch Facilities (bathrooms, services) Courtesy (mobile phones, blackberries etc) ?

5 ING Business School Ref Intro-3 Introductions Activity Introduce a colleague covering the following information: Name Work location Job responsibilities Experience prior to working at ING Experience with Lean Six Sigma Expectations of this workshop Something interesting about you

6 ING Business School Ground Rules Be on time Follow an agenda Listen constructively Defer items to Parking Lot Ask Questions Have fun!

7 ING Business School Have you completed the Pre-work? Ref Intro-1b

8 ING Business School Overview of Lean Six Sigma Overview of Lean Six Sigma

9 ING Business School Identify Critical Customer Requirements Define Gaps to Customer Requirements Establish Baseline Metrics Execute Improvements to Close Gaps Improve Persistency Reduce Operational Costs Increase Sales Improve Mix of Business Reduce Risk and Economic Capital Lean Six Sigma Is “How” to Achieve Strategic Objectives Customer CentricEconomic Value Lean Six Sigma RESULTS Ref Overview-1 ING Strategy and Lean Six Sigma

10 ING Business School MissionMission Positioning Statement Delivers on Promises Is Easy to Deal with Treats Me Fairly Customer- Centric ING is dedicated to deliver financial services solutions valued by the customer ING is dedicated to deliver financial services solutions valued by the customer Brand Attributes Set the standard in helping our customers manage their financial future ING Strategy and Lean Six Sigma

11 ING Business School  Voice of Customer  Voice of Process  Voice of Business  Market Factors  Competition/ Benchmarks  SWOT Business Strategic Objectives Business Line Strategies Business Line Tactics Strategy Deployment Review Process METRICS PROJECTS METRICS Ref Overview-2 Executing Strategy with Lean Six Sigma

12 ING Business School METRICS Ref Overview-3a Sources of Lean Six Sigma Projects Lean Six Sigma projects may be generated from a number of sources, examples include… VOC – Improve timeliness, accuracy, satisfaction, control compliance risks, reduce fines VOP – Reduce the gap between current performance and customer specifications VOB – Increase sales, reduce expenses, improve productivity, includes VOE (Voice of the Employee) Increase employee retention, improve employee satisfaction

13 ING Business School Inputs  Voice of the customer  Voice of the business  Voice of process Known solution with supporting data? Translate into project opportunities YES NO Implement solution, follow lean six sigma principles Process Capable – use DMAIC methodology Process Not Capable – use DFSS methodology Prioritize Projects  Strategic Fit  Economic Value  Time/Effort Ref Overview-3b Lean Six Sigma Project Selection

14 ING Business School Ref Overview-4 More detailed approach than Pre- work Project Prioritization Matrix

15 ING Business School Ref Overview-5 Lean Six Sigma Success Factors Establishing these factors provides the seeds of success. They need to be integrated uniquely to fit each business. They are all necessary for the best result. The most powerful success factor is “committed leadership” Business Process Framework Customer & Market Network Strategy Integration Quantifiable Measures & Results Incentives & Accountability Full Time Six Sigma Leaders Committed Leadership

16 ING Business School Adapted from Six Sigma’s Seven Deadly Sins by James P. Zimmerman and Dr. Jamie Weiss of Kepner Tregoe Ref Overview-6 Lean Six Sigma Failure Factors Leaping to the fix – faulty assumptions; not data based Serving the wrong customer – not focusing on the voice of the “next” customer Selecting the wrong projects – not linked to strategy Solution-caused problems – poor sequencing; stakeholder under-involvement; ineffective resource planning; absence of change management; no project closure

17 ING Business School 1920 Time and motion studies; Frederick Taylor Statistical Sampling; Walter A. Shewhart Late 1940s; Statistical methods in Japan; W. Edwards Deming Statistical methods for business: Juran, Figenbaum Japanese Quality methods: Ishikawa, Taguchi 1970: Zero Defects: Philip Crosby Quality Circles Reengineering: Michael Hammer Six Sigma: Motorola Six Sigma: AlliedSignal, GE Design for Six Sigma: GE Today: American Express, JP Morgan, Merrill Lynch, Wells Fargo, B of A, Caterpillar Financial ….. The foundation for Lean Six Sigma has been effectively applied in a wide variety of companies worldwide over many decades Applied Lean Concepts: Toyota Production System Ref Overview-7 The Evolution of Lean Six Sigma

18 ING Business School Ref Overview-9a What is Sigma? The Greek letter σ (sigma) is used in statistics to describe variation. Sigma (σ) represents the standard deviation in a population. Standard deviation is derived from calculating the average difference between all data points of a population and the average of that population.

19 ING Business School Lean Six Sigma - Blended to Optimize Results Ref Overview-8 Lean and Six Sigma Thinking Lean Thinking: Customer focused Identify waste Improve process speed/cycle time Specific speed tools – Value-add analysis; Kaizen events Six Sigma Thinking: Critical Customer Requirement (CCR) focused Culture and infrastructure to sustain results Focus on variation Methodology driven – DMAIC, DFSS

20 ING Business School Ref Overview-9b What is Lean Six Sigma? Measurement Measures the variation and defect level in a process or product Allows different processes to be compared 3.4 defects per million opportunities (cont’d.)

21 ING Business School Ref Overview-9c What is Lean Six Sigma? Measurement Measures the variation and defect level in a process or product Allows different processes to be compared 3.4 defects per million opportunities Improvement Methodology Customer-focused Data and measurement-driven Focused on reducing defect levels Results-oriented (cont’d.)

22 ING Business School What is Lean Six Sigma? Ref Overview-9d Measurement Measures the variation and defect level in a process or product Allows different processes to be compared 3.4 defects per million opportunities Improvement Methodology Customer-focused Data and measurement-driven Focused on reducing defect levels Results-oriented Catalyst for Organizational Change Large-scale fundamental change in culture Move to a data-driven, customer-centric mindset (cont’d.)

23 ING Business School Who is the Customer? Ref Overview-10a External Purchasers of products and services Distributors Regulatory entities

24 ING Business School Ref Overview-10b Who is the Customer? External Purchasers of products and services Distributors Regulatory entities Internal Other departments Management / Shareholders (cont’d.)

25 ING Business School Ref Overview-10 Who is the Customer? External Purchasers of products and services Distributors Regulatory entities Internal Other departments Management / Shareholders Voice of Customer(VOC) Information that can be collected from external/internal customers

26 ING Business School Process Average Customer Requirement Same Process Average Days to close loan Ref Overview-11a What is Variation? Variation is the normal, measured difference in process outputs Many process measurements focus on averages… averages don’t tell the whole story

27 ING Business School Process Average Much Different Customer Defects Customer Requirement Same Process Average Days to close loan Ref Overview-11b What is Variation? Knowledge of process variation and defect levels provides more insight into process performance Less variation reduces costs, increases reliability, and customer satisfaction (cont’d.)

28 ING Business School Market Inputs Process Activities Suppliers Critical Customer Requirements Process Outputs Defects In-process variation may lead to defects in process output Variation occurs in both process inputs and process activities – people, methods, materials, equipment, and environment The output (Y) is determined by performance of inputs and processes (x)…. Y=f(x) Ref Overview-12 Sources of Variation

29 ING Business School Using Lean Six Sigma, we work to reduce variation and permanently move product or service outputs inside customer requirements. (Curve A to B) Product or Service Output Critical Customer Requirement (CCR) Defects: Process output that does not meet Customer Requirements BA Ref Overview-13 Goal of Lean Six Sigma

30 ING Business School We use Lean Six Sigma to improve process yield. Process Yield is the proportion of process output that meets customer requirements. Produce or Service Output Critical Customer Requirement (CCR) BA Proportion of process output (B) that meets customer requirements = 100% Proportion of process output (A) that meets customer requirements ≈ 70% Ref Overview-14 Improve Process Yield

31 ING Business School The hidden factory corresponds to the resources that today are directed at creating waste, while they could be focused on generating high quality products and services. For the typical organization, about 25% to 40% of all work activities consists of hunting for mistakes, unnecessary audits, rework, duplication of efforts and the performance of unneeded tasks.. The ‘Hidden’ Factory (Lean Thinking)

32 ING Business School Rolled Throughput Yield (RTY) represents a combined yield for each step or sub-process. Obtain RTY by multiplying the yield for each step or sub-process. STEP 4 STEP 1 STEP 2 STEP 3 Ref Overview-15a Rolled Throughput Yield

33 ING Business School Loan Documentation Yield = 95% Loan Application Yield = 91% Loan Processing Yield = 96% Loan Review Yield = 96% Rolled throughput Yield = 0.95 x 0.91 x 0.96 x 0.96 x 0.97 = 77.2% Loan Servicing Yield = 97% Rolled Throughput Yield (cont’d.)

34 ING Business School Ref Overview-16 First Time Right = Number of items that make it through error- free without corrections Final Yield = Number of items that are defect-free AFTER errors are corrected Process Step 1 Errors Reworked Correct? No RTY can be calculated on either the number of items that make it through defect-free the “first time right” or on the final number of items that are defect-free once errors are corrected In most situations, it makes sense to base sigma calculations on First Time Right (cont’d.) Rolled Throughput Yield (cont’d.)

35 ING Business School Rolled-Throughput-Yield - Activity 1.Appoint a facilitator in your project team to manage the time and the discussion. 2.Map your selected improvement process high-level (e.g. 6-8 process steps) on a flip chart 3.Make an estimate of the yield rate at each individual process step  You may have to first consider the criteria for defects and what the definition is for a defect free step! This may include establishing a target level for a step (e.g. this step must be finished in 2 hours) 4.Calculate the RTY % of the overall process 5.What is your conclusion? 6.Be ready to share your results in a short presentation.

36 ING Business School σDPMOYield 3.066,807 93% 3.522,750 98% 4.06,210 99% 4.51, % % % Sigma Improvement Requires Enormous Defect Reduction Distribution shifted +/- 1.5 sigma DPMO = Defects per million opportunities Ref Overview-17 Process Sigma is a Great Metric Focus is on defects, even one is a failure for a customer Universal measure that can be applied to any product or service Difficult to motivate people to improve quality from 99% to %

37 ING Business School Is the Airline Industry Focused on the Right Processes? DPMO Process Sigma IRS answers 21% of calls On-time flight arrivals (all carriers) Mishandled baggage (all carriers) Overnight delivery of 1st Class Mail Correct legal advice from IRS Wire transfers Restaurant bills Payroll processing Domestic airline fatality rate (0.43ppm) Soft drink quality in N. America Ref Overview-18a Is Six Sigma Performance Necessary?

38 ING Business School Source: The Six Sigma Handbook 2003, page 61, T. Pyzdek Ref Overview-18c Is Six Sigma Performance Necessary? At 3σ, or 93% Yield, there would be: >90% of computers would not function 10.8 million mishandled healthcare claims annually 54,000 checks lost each night by a single large bank 270 million erroneous credit card transactions each year in the US (cont’d.)

39 ING Business School Ref Overview-18b Is Six Sigma Performance Necessary? At 4.5 σ, or 99.9% Yield, there would be: At least 20,000 wrong drug prescriptions per year Unsafe drinking water almost 1 hour each month No telephone service for nearly 10 minutes each week Two short or long landings at O’Hare airport each day 25,000 lost or incorrectly delivered articles of mail per hour Over 9,000 wrong felony convictions per year 50 Newborn babies dropped at birth by doctors each day (cont’d.)

40 ING Business School Ref Overview-19 Setting Sigma Performance Targets If the current Process Sigma is greater than 3.0, a two times defect improvement goal is set, e.g., improve from 1,000 DPMO to 500. If the current Process Sigma is 2.9 or less, a ten times defect improvement goal is established, e.g., 300,000 DPMO to 30,000.

41 ING Business School Activity: Brainstorm some costs that you incur as a result of defects. Activity: Brainstorm some costs that you incur as a result of defects. Ref Overview-20 The Cost of Defects

42 ING Business School Ref Overview-21 Cost of Defects - Examples Hidden Factories Re-work of defects in processes or products Complex workarounds Excessive phone calls, s, faxes and other correspondence as a result of poor performance Inspections and Audits Back-end audits and approvals Multiple approval steps Lost Sales and Market Share Market product requirements not met Service or delivery requirements not met Fines and Other Penalties

43 ING Business School Ref Overview-22 Lean Six Sigma Business System MTP Planning – the steering mechanism of the Business System Process Management – documenting and measuring process performance Problem Solving – using lean, DMAIC, DFSS, and other methodologies to close process performance gaps People – recognizing and harnessing the exceptional potential of employees, suppliers, customers, and experts

44 ING Business School Lean Six Sigma DMAICLean Six Sigma DFSS Define Business Improvement Opportunity Does Process Currently Exist? Measure Current Performance Analyze Root Cause of Current Performance Is Current Process Capable of Meeting Customer Reqts? Improve Performance Measure Market Requirements Analyze Design Alternatives Develop New Process Control Performance Yes No Ref Overview-23 DMAIC vs. DFSS

45 ING Business School  D efine customer requirements and project goals  M easure the process to determine current performance  A nalyze to identify and validate root causes of defects  I mprove process by eliminating causes of defects  C ontrol and monitor on-going process performance Control  D efine customer requirements and project goals  M easure customer needs and specifications  A nalyze design options to meet customer requirements  D esign a detailed process that meets customer requirements  V erify that current and future process meets customer requirements Design Improve Analyze Measure Define D M A I CD F S S Verify Ref Overview-24a DMAIC vs. DFSS (cont’d.)

46 ING Business School DEFINE20+ Many variables MEASURE5-8 Important variables ANALYZE3-5 Confirmed problematic variables IMPROVE3-5 Focus of improvement activities CONTROL1-3Focus of ongoing control Variables Ref Overview-24b Funneling the Focus of Process Work

47 ING Business School Establish Roles & Stakeholder Expectations Identify Critical Customer Requirements (CCRs) Clarify Project Boundaries, Financial Benefit, and Preliminary Problem Statement Charter & Schedule Project, Select Resources Identify Outcome Metric(s) and Target Overall objective: Clarify the Improvement Opportunity Identify Business Opportunity/Problem Valid CCR Critical Customer Requirement Service Attribute Outcome Metric Target To Measure Step Ref Overview-25a Project Components: DEFINE

48 ING Business School Calculate Performance Stratify Data Frequency Plots Run Chart Plot Outcome Defect Data Develop Data Collection Plan Data Collection Plan Project ________________________ What questions do you want to answer? Data Operational Definition and Procedures What Measure type/ Data type How Measured 1 Related conditions to record 2 Sampling notes How/where recorded (attach form) Create Detailed Process Map F 1 F 3 F 4 F 2 Assess Financial Impact (COPQ) Revise Problem Statement Control Chart Check Sheet Collect Upstream Data Overall objective: Narrow the improvement opportunity to a specific problem statement. DPMO_____ Yield _____ Sigma _____ Goal _____ Understand Variation Pareto Chart To Analyze Step From Define Step Ref Overview-25b Project Components: MEASURE

49 ING Business School Customer Identify Value Added & Non-Value Added Steps Brainstorm and Organize Potential Causes Confirm Root Causes with Data Overall objective: Identify and confirm the root causes of the problem statement. To Improve Step Scatter Plots Y X Contingency Table Sub Cause YesNo Present Not Present Defect Made the Sale Did Not Make the Sale Time With Customer (in minutes) > >60 Made the Sale Did Not Make the Sale > >60 Time With Customer (in minutes) > > > >60 Stratified Frequency Plots From Measure Step Root Cause 1 Root Cause 2 Level 1 Cause Level 2 Cause Cause and Effect Diagram Revised Problem Statement Level 1 Cause Level 2 Cause Level 3 Cause Level 1 Cause Level 2 Cause Continuous Data Mixed Data Attribute Data Ref Overview-25c Project Components: ANALYZE

50 ING Business School Overall objective: To identify/implement countermeasures that will eliminate or reduce the confirmed root causes. Selection Matrix Select Countermeasures Cost/Benefit Analysis FMEA Item or Process Step Potential Failure Mode Potential Effect (s) of Failure Potential Cause(s) Current Controls RPN Recommended Action Responsibility and Target DateAction Taken Severity Occurrence Detection RPN “After” Severity Occurrence Detection Total Risk Priority Number =“After”Risk Priority Number = Develop Action Plan Risk Analysis Develop Pilot Plan Updated Pareto Chart Quantify Pilot Results Update Metrics Cost/Benefit Analysis Approval from Finance Cost Benefit Solution (s) / Specific Task (s) ____________________________ Problem Statement ________________________________________ : Task / Project WhoDue Date Status Gantt Chart Cost Action Problem Root Causes Solutions Effectiveness Ease to Implement Total Score Specific Tasks BeforeAfter 1.3  A1A2 A3A4 } Improvement A2A1A3A4 3.1  50% 25% 75% 100 % 50% 25% 75% 100 % Identify Breakthrough Ideas Lean Thinking From Analyze Step To Control Step BeforeAfter Good Time Before IMPROVE changes implemented } Improvement 3.2 Process Sigma 3.6 Process Sigma Ref Overview-25d Project Components: IMPROVE

51 ING Business School Overall objective: To maintain the gains. Standardize the Process Process Control Plan Close Project Standard Practices Cost/Benefit Analysis Approval from Finance “X” Upstream Metrics UCL LCL UCL LCL “Y” Outcome Metrics Good Trai n Communicate Results Celebrate! From Improve Step Ref Overview-25e Project Components: CONTROL

52 ING Business School Understand vision Apply concepts to their job and work area Owns vision, Leads change Full-time Train and coach Black Belts and Six Sigma Green Belts Full-time Facilitate problem solving Train and coach Project Teams Help Black Belts as team member Experienced Green Belts lead some projects Provide project-specific support SMEs (subject matter experts) provide support as needed Directs, integrates project w/in business Creates business deployment plan Supports Black Belts and Local Champion Sustains and leverage gains Project Sponsor Master Black Belts Process Owner Project Team Members / SME Executive Champion Green Belts Black Belts All Employees Ref Overview-26 Lean Six Sigma Involves Cultural Shift

53 ING Business School Ref Overview-27a Lean Six Sigma Roles/Responsibilities Executive Champion Creates the vision and aligns Lean Six Sigma with business strategy Defines strategic goals and measures Establishes business targets Promotes Lean Six Sigma tools and methodology Helps to remove barriers to success Reviews project and team progress Attends tollgates during initial roll-out

54 ING Business School Ref Overview-27b Lean Six Sigma Roles/Responsibilities Project Sponsor Positions project within business environment Identifies process owner of improvement projects Develops preliminary project charter Defines improvement areas, goals and financial targets Identifies key SME resources for project team Positions and kicks off improvement project Reviews project and team progress Helps gain organizational support and removes barriers Helps gain organizational support for solution Recognizes team and contributing members Ensures access to data from existing databases Establishes and certifies savings (cont’d.)

55 ING Business School Ref Overview-28a Lean Six Sigma Roles/Responsibilities Process Owner Participates in tollgates Identifies resources and team members for project team Ensures sufficient implementation resources Ensures organization support of solution deployment Evaluates sufficiency of project “controls” designed to hold gains upon solution implementation Owns process, Responsible for sustaining project gains Removes barriers for the team (cont’d.)

56 ING Business School Ref Overview-28b Lean Six Sigma Roles/Responsibilities Master Black Belt Expert on Six Sigma tools and concepts Trains Black Belts and ensures they are properly applying the methodology and tools Coaches and mentors Black Belts and Green Belts Works high-level projects, many of which are across divisions or business units Assists Champions and Process Owners with project selection, project management and Lean Six Sigma deployment and administration Removes barriers for the team (cont’d.)

57 ING Business School Ref Overview-29a Lean Six Sigma Roles/Responsibilities Black Belt Responsible for leading, executing, and completing Lean Six Sigma projects Teaches team members the Lean Six Sigma methodology and tools Assists in identifying project opportunities and refining project details and scope Reports progress to MBB, Process Owners and Champions Mentors Green Belts and team members (cont’d.)

58 ING Business School Ref Overview-29b Lean Six Sigma Roles/Responsibilities Green Belt Assists Black Belt as team member Can lead smaller scope projects Reports progress to MBB or BB, Process Owners and Sponsors Project Team Members/Subject Matter Experts (SMEs) Provide process knowledge and understanding Participate in identifying and gathering data Identify gaps Help analyze data and identify solutions (cont’d.)

59 ING Business School What is a Tollgate Review? Tollgate reviews ensure projects deliver desired results. Ref Overview-30a A milestone that the project must pass through at each step (D-M-A-I-C) Formal presentation(s) followed by questions and discussion Assess status of project – project control Review activities and accomplishments prior to proceeding to the next phase – alignment with plan Revisit Project Charter assumptions A tollgate review ends with a Go/No-Go decision

60 ING Business School Ref Overview-30b Who Attends Tollgate Reviews? Black Belt/Green Belt Project Sponsor Process Owner Project Team (Key Members) Quality Champion Senior Mgmt. Stakeholders Other Stakeholders Master Black Belt Required Recommended As Appropriate Required

61 ING Business School 1.Brainstorm reasons why Tollgate Reviews are important. 2. At what intervals should Tollgate Reviews be scheduled? Why? Discuss ideas Ref Overview-31 Why Are Tollgate Reviews Critical?

62 ING Business School Companies across all regions and industries Services: Manufacturing: Financial Services: Who is Using Lean Six Sigma?

63 ING Business School UNIT 1 Define UNIT 1 Define

64 ING Business School Ref Unit 1-1 Define – Learning Objectives At the conclusion of this unit, you will be able to: Describe actions for launching a Lean Six Sigma project. Identify project stakeholders and expectations. Clarify project scope. Define Critical Customer Requirements (CCRs) to measure a process performance metric and establish a target for improvement. Develop a project charter and schedule.

65 ING Business School DEFINEMEASUREANALYZEIMPROVECONTROL Identify Stakeholder Expectations Clarify Project Scope Develop Project Charter and Schedule Overall objective: Clarify the Improvement Opportunity Measure Customer CCRs Ref Unit 1-2a Launch the Project Define – Major Activities

66 ING Business School Key Deliverables: Commonly Used Tools: Ref Unit 1-2b Define – Key Deliverables/Commonly Used Tools Stakeholder Analysis Preliminary Financial Benefit Preliminary Problem Statement Project CCR’s Process Outcome Metric/Target Team Charter Risk Analysis Project Schedule Surveys Focus Groups Interviews Stakeholder Analysis SIPOC In and Out of Scope Analysis Risk Analysis Pert Chart

67 ING Business School DEFINEMEASUREANALYZEIMPROVECONTROL Launch the Project Identify Stakeholder Expectations Clarify Project Scope Develop Project Charter and Schedule Measure Customer CCRs Ref Unit 1-3a Define – Major Activities

68 ING Business School DEPLOY  Launch projects that focus on priorities.  Coordinate activities in an action plan that defines who will be doing what by when. REVIEW  Monitor progress during Tollgates.  Offer Feedback, both positive and constructive, to keep people informed.  Share Thoughts, Feelings and Rationale so others can learn from a leader’s knowledge and experience. REPORT  Inform Senior Management of progress.  Recommend improvements. GROW  Continuously improve both results and the approach taken to achieve them. PLAN  Analyze current operations, competitive environment, customer input, employee surveys, benchmark information.  Identify priorities that align with MTP, and that address local priorities.  Establish metrics with targets for improvement to measure performance. Ref Unit 1-3b Lead Team Identifies Lean Six Sigma Projects

69 ING Business School Approach Options Ref Unit 1-4a Lead Team Identifies Lean Six Sigma Projects Management Action Individual Assignment Form a Project Team Process Management DMAIC DFSS (cont’d.) Methodology Options

70 ING Business School DEFINE ANALYZE CONTROL Define the project’s purpose, scope and major milestones “clarify the opportunity” Measure the current process performance “narrow the problem area” Control the process “maintain the gains & transition to full implementation” Improve the process “develop & pilot solutions” Analyze potential root causes “confirm with data” Ref Unit1-4b MEASURE IMPROVE DMAIC for Existing Process Improvement

71 ING Business School Ref Unit1-5 Lead Team Fills Lean Six Sigma Roles Project Roles Executive Champion Project Sponsor Process Owner Master BlackBelt BlackBelt GreenBelt SMEs (cont’d.)

72 ING Business School Launch the Project Identify Stakeholder Expectations Clarify Project Scope Develop Project Charter and Schedule A stakeholder is someone with an interest in, and/or who may be effected by outcomes of the project. Measure Customer CCRs Ref Unit 1-6a Define – Major Activities

73 ING Business School Ref Unit 1-6b Stakeholder Expectations The Project Sponsor communicates: The need for change Desired outcomes Where performance is now and targets How performance will be measured Level of urgency Related issues to be addressed

74 ING Business School Project Sponsor Lead Team Internal/External Customers Project Team Other Project Teams Process Owner Other Employees SMEs Suppliers Internal/External Ref Unit 1-7 Stakeholder Expectations (cont’d.)

75 ING Business School Ref Unit1-8a Stakeholder Expectations What stakeholders typically expect: On-time delivery Resource management Accurate cost forecast and control Risk Management / Security Measurable results / ROI Easy to understand /implement (cont’d.)

76 ING Business School Ref Unit1-8b Stakeholder Expectations What Project Teams typically expect : Clear goals and deliverables Resource availability Time to work on the project Clear idea as to how performance will be evaluated Positive and constructive feedback Support, as needed (cont’d.)

77 ING Business School Ref Unit 1-9 Expectations Activity

78 ING Business School Launch the Project Identify Stakeholder Expectations Clarify Project Scope Develop Project Charter and Schedule Measure Customer CCRs Ref Unit 1-10a Define – Major Activities

79 ING Business School The scope of a project is the sum of activities that a team is committed to complete in a given scheduled timeframe. Sell Policy Review Application Issue Policy Underwrite Policy Begin thinking about scope using the high- level process map you developed in the PreWork… Ref Unit 1-10b Clarify Project Scope

80 ING Business School In and Out of Scope Analysis Ref Unit 1-11 Clarify Project Scope (cont’d.)

81 ING Business School Ref Unit 1-12 Clarify Project Scope Preliminary Problem Statement What is Wrong – state the effect, not why it is wrong, and not the solutions Measurable – how often, how much, and when Specific – avoid broad categories, e.g., poor morale; low customer satisfaction How Customers Are Effected – areas of dissatisfaction Objective – does not imply blame or cause What Is and What Should Be – gap between customer expectations and performance (cont’d.)

82 ING Business School Ref Unit 1-13 Clarify Project Scope Calculate Financial Benefit An initial financial benefit of the project is developed based on the project scope and preliminary problem statement. When determining Financial Impact, calculate annualized benefits. Look for benefits that may accrue from reducing or eliminating defects in the process. (cont’d.)

83 ING Business School Ref Unit 1-14 Clarify Project Scope Activity

84 ING Business School Launch the Project Identify Stakeholder Expectations Clarify Project Scope Develop Project Charter and Schedule Measure Customer CCRs Ref Unit 1-15a Define – Major Activities

85 ING Business School CategoryExplanation QualityFree of errors, defects, and mistakes CostValue exceeds or equals price DeliveryOutput received when needed Integrity Accountable to shareholders and communities served Requirement Categories: Ref Unit 1-15b Customer Requirements Do you remember from the PreWork… What are typical customer requirements? What are customer requirements categories?

86 ING Business School Ref Unit 1-16 Must Haves vs. Like to Have Separate Must Haves from Like to Haves… Ask questions of internal customers Negotiate for win/win reasonable requirements Agree on specific, measurable, attainable and trackable performance levels

87 ING Business School A B C D E Who Caught The Fish?

88 ING Business School SIPOC Analysis Worksheet - Example Process Name: New Business Process Date: 1/04 By: Li Chan Process Suppliers Process Inputs PROCESSPROCESS Process Outputs Process Customers AgentCompleted insurance applicationsUnderwriting approvalAgent Legible insurance applications Timely responseAgent Policy issuedAgent/Policy Holder Process Suppliers Customers Products Services Products Services InputsOutputs Ref Unit1-17 SIPOC Analysis

89 ING Business School Use the 80/20 rule to identify the 20% of customer requirements that are most critical. Ref Unit /20 Rule Review your SIPOC Analysis while considering the following questions: Who is the “next customer” – the direct recipient of our process output? Who are the most critical customers of our process (it may only be one customer)? Who would be most impacted if our process stopped producing an output?

90 ING Business School Ref Unit 1-19 SIPOC Analysis Activity

91 ING Business School A CCR is a description of a product/ service attribute or characteristic that influences a customer’s requirement. Ref Unit 1-20 Critical Customer Requirements (CCR) To identify CCRs for your process… What attribute of my product/service does the next customer (my key customer) most care about? What attribute of my product/service does the business most care about? Work with your Project Sponsor to rectify any conflicts.

92 ING Business School Critical Customer Requirement Service Attribute Outcome Metric “ I want new insurance policies issued quickly. ” Turn Around Time % of Policies not issued on time Ref Unit 1-21 Measure CCRs with Outcome Metrics Outcome metrics are “after the fact” “past tense” measures They always focus on defects They represent the proportion of total process output that is not satisfying the customer requirement over a period of time A typical process has 1-3 outcome metrics

93 ING Business School Ref Unit 1-22 Tips for Defining Outcome Metrics Customer Oriented Cost Effective Controllable Calculable Consistent

94 ING Business School An outcome metric for one process should link to the next higher-level process – see example on next slide Ref Unit 1-23 System of Metrics

95 ING Business School Ref Unit 1-24a Setting Outcome Metric Targets Sources of Targets Critical customer requirement data Specifications Past performance trends Analysis of potential for process improvement (Process Sigma) Benchmark levels of performance attained by competitors, or best in class in your organization

96 ING Business School Ref Unit 1-24b Setting Outcome Metric Targets Tips for Setting Targets Use numbers to clarify desired level of performance Be prepared to change target Establish a time frame for achieving target with intermediate targets With multiple process outputs, set targets for each to realize the overall product or service target (cont’d.)

97 ING Business School Note: “On time” means within 5 working days beginning the day after the policy is received from agent. Valid CCR Critical Customer Requirement Service Attribute Outcome MetricTarget “ I want my new policy issued quickly. ” Turn Around Time % of policies not issued on time <2% not on time Ref Unit 1-25 Valid CCRs

98 ING Business School Valid target for 2005 Valid target for 2006, through 2nd Quarter Valid target for 2006, end of year Policy issued within 5 working days of receipt Policy issued within 4 working days of receipt Policy issued within 3 working days of receipt Promise what you can deliver. Ref Unit 1-26 Valid CCRs

99 ING Business School Ref Unit1-27 Define Valid CCRs Activity

100 ING Business School Launch the Project Identify Stakeholder Expectations Clarify Project Scope Develop Project Charter and Schedule Measure Customer CCRs Ref Unit 1-28a Define – Major Activities

101 ING Business School Business OpportunityBusiness Benefits/Customer Benefits Over 15% of department resources spent on answering agent’s inquiry. Improving the process will enable resource allocation. Better support to agency will improve business and increase customer satisfaction. Business Benefits:  More efficient handling of agent’s enquiry reduce resources, which can be allocated to improve other daily operations Customer Benefits:  Timely service to agent, hence more satisfied customers. Key DeliverablesProcess Scope  Review and improve agency inquiry process by Nov  Answer all agent’s inquiry in less than 5 minutes Turn-Around-Time (KPI/Target).  Process Control Plan  Training plan for revised process  Starts when an agent makes an inquiry (by or by phone).  Ends when reply received and no more follow-up. Services limited to agents only (internal inquiry not included). The communication channels include , phone, internal memo, and agent’s intranet. Ref Unit 1-28b Project Charter Example

102 ING Business School Ref Unit 1-29 Project Charter Elements of a Project Charter Business Opportunity Business Benefits/Customer Benefits Key Deliverables Metric /Target Process Scope Project Schedule and Resources

103 ING Business School Can you think of others? Ref Unit 1-30 Identify and Mitigate Risks People Technology Resources Cost Schedule Environment

104 ING Business School Risk Assessment Table Project Risk Items Potential Impact (1-5) Probability of Occurrence (1-5) Overall Risk (impact x probability) Action Plan Example: Severe storm 515n/a Ref Unit 1-31 Identify and Mitigate Risks (cont’d.)

105 ING Business School Ref Unit 1-32 Project Schedule & Resources Serves as a record of team participation Tracks the number and duration of meetings Clarifies a schedule for completing each of the DMAIC steps Facilitates comparison of the planned schedule with actual time required Includes actions to reduce/mitigate identified risks

106 ING Business School Project Schedule Worksheet Project Theme Team Name Sponsor Team Members/ % Dedicated Meeting Record Team Information DateAttd.Hours DateAttd.HoursDateAttd.Hours DateAttd.Hours Ref Unit 1-33a Project Schedule & Resources (cont’d.)

107 ING Business School Ref Unit 1-33b Project Schedule & Resources (cont’d.)

108 ING Business School Ref Unit 1-35 Develop Project Charter, Schedule and Resource Requirements Activity

109 ING Business School Ref Unit 1-34a Project Tollgates A tollgate occurs at the end of each step in the DMAIC methodology with the purpose of... Monitor team progress Identify additional resource needs Maintain focus Assist in dealing with sensitive issues Ensure coordination among all teams Share best practices Remove organizational barriers “See” the business Check for consistency Reward and recognize

110 ING Business School Ref Unit 1-34b Define Project Tollgate Prepare to answer the following questions during a tollgate review at the end of the Define Step: A.What is the problem or opportunity? B.Why is this project important to the business? C.Who is the project Sponsor D.Does the Project Charter address key stakeholder expectations? E.When does the Project Schedule call for the project to be completed? F.What identified risks most threaten the project? G.Who is working on this project? Why? H.How does the outcome metric measure performance against CCRs? I.How were targets established for each metric?

111 ING Business School Ref Unit 1-38a Unit Summary Having completed this unit, here are some questions you should be able to answer: A.What actions are involved in launching a Lean Six Sigma project? B.Who are typical project stakeholders? What do they typically expect from a project? C.What is a CCR? D.What metric is used to measure overall process performance in satisfying CCRs? E.How are the Project Charter and Schedule helpful?

112 ING Business School Establish Roles & Stakeholder Expectations Identify Critical Customer Requirements (CCRs) Clarify Project Boundaries, Financial Benefit, and Preliminary Problem Statement Charter & Schedule Project, Select Resources Identify Outcome Metric(s) and Target Overall objective: Clarify the Improvement Opportunity Identify Business Opportunity/Problem Valid CCR Critical Customer Requirement Service Attribute Outcome Metric Target To Measure Step Ref Unit 1-38b Project Components: DEFINE


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