Toll Gate Review: Define Project has been confirmed as a valid improvement priority and is supported by management. A business case has been prepared, showing the potential business impact of this project in financial terms. A problem statement has been prepared and agreed. Objectives defining the results we are expecting from this project have been stated in the form of measurable targets. A full Project Charter has been prepared including a preliminary plan/schedule. The charter has been reviewed with the project sponsor and their support has been confirmed. The primary customer(s) and their key requirements have been identified. The process concerned has been documented in the form of a SIPOC. The process concerned has been documented in the form of a process map and/or value stream map. © Max Zornada

Toll Gate Review: Measure Determined what we need to know about the process and where in the process we can get the data. Identified the types of measures we want to collect and have a balance of input, process, output and leading indicators. Developed clear operational definitions of the things we want to measure. Clarified stratification factors we need to identify to facilitate data analysis. Identified what data needs to be collected as new data vs utilising data that is already recorded. Identified appropriate sample sizes, subgroup quantities and sampling frequencies to ensure we get an adequate representation of the process. Used our data to establish the process baselines - stability, capability, sigma level and yield. © Max Zornada

Toll Gate Review: Analyse Identified potential root causes and/or sources of variation using analysis phase tools and techniques such as Root Cause Analysis, 5 why’s, Fishbone analysis etc.? Analysed data to look for evidence of events, time based behaviour and understand unique characteristics? Analysed process features and their relationship to potential root causes and sources of variation? Verified root causes/sources of variation using verification tools? Used Lean tools and techniques to identify waste? Constructed a Value Stream Map and conducted a Value Stream Analysis? Explicitly stated what are the root causes and/or sources of variation to be addressed by this project? Have you made any revisions to the charter? In particular, how have the objectives and scope changed? Can you quantify and state the opportunity represented by continuing with this project? addressing the problem? Ie. Impact on customer satisfaction, revenues, costs, COQ etc. © Max Zornada Further reproduction is limited to internal company use only.

Toll Gate Review: Improve Potential solutions have been generated and assessed. A preferred solution has been selected and a back-up solution identified. If the solution implementation timeframe is relatively long, some possible interim countermeasures that can be implemented quickly have been identified. Solution has been verified with and is supported by our sponsor. Approval to proceed has been received. A plan has been developed for piloting and testing the solution, including a pilot strategy, action plan, risk assessment, results assessment and schedule. A test/pilot has been conducted. Results confirm that the proposed solution will be effective. Refinements have been identified and implemented to the solution based on the lessons from the pilot A plan has been developed to expand the solution to full implementation. Potential problems and unintended consequences of the solution have been considered, preventive and contingent actions have been developed to address them. © Max Zornada Further reproduction is limited to internal company use only.

Toll Gate Review: Control Compiled results data confirming that our improvement/design has achieved the goal define in our project charter. Selected ongoing measures to monitor performance of the process and continued effectiveness of our solution/design. Determined key graphs/charts for a process “scorecard” or “ dashboard”. Prepared all required documentation of the revised process including key procedures and process maps. Prepared a full Process Management Control Plan Identified an “owner” of the process who will take over responsibility for the solution/design and ongoing process management. Updated the storyboard and project documentation, recording the team’s work to and key learnings. © Max Zornada Further reproduction is limited to internal company use only.

Toll Gate Review: Control Forwarded to senior management other issues/opportunities which we were not able to address as part of this project. Documented a future plan based on learnings from this project identifying additional opportunities : Identified as part of this project that would be logical extensions (upgraded non-pareto items); To apply the solution/design and learnings of this project to other parts of the organisation experiencing similar problems. Formal project close out and sponsor/process owner acceptance Celebrate the hard work and conclusion of the project. © Max Zornada Further reproduction is limited to internal company use only.

Lean Six Sigma Improvement Project Charter Project Title Process Expected Financial Impact Green Belt Telephone Number Champion Organization/Function Start Date Target Completion Date Problem/Opportunity What is the Problem to be solved or the opportunity this project will exploit. Definition Improvement target, impact on Sigma, COQ/COPQ and Customer Satisfaction. Objective Primary Metric Current: Target: Metrics Secondary Metric Current: Target: Business Case What improvement in business performance is expected. $ impact and by when. Who are the team members and key experts to be consulted. Team Members Project Scope Which part of the process will be investigated Who are the customers.What benefits will they see,what are the most critical requirements. Customer Benefit Define completion Schedule What are key milestone dates for completion of each stage. Measure completion Analyse completion Improve completion Control completion Project Completion © Max Zornada

Gantt Chart Working Plan Development People Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 © Max Zornada

Process Flow Analysis Chart Date Process Name Page of Operation Inspection Transport Estimated Time Quantity Distance Description Delay Store Notes D D D D D D D D D D D D D D D D D D D D © Max Zornada D

Sample Data Collection Plan Format Other data to collect at same time Measure Operational Definition Data Source Sample Size Who will collect When to collect How to Collect How will data be used? How will data be displayed? e.g. Calculate process capability Determine if process is stable Assess if normally distributed Determine Correlations e.g. Box plot Histogram Control chart Scatter plot © Max Zornada

Sample Size Selection – Daily Data Daily Processing Quantity Minimum Daily Sample Size Peter S. Pande, Robert P. Neuman, Roland R. Cavanagh, “The Six Sigma Way: Team Fieldbook” © Max Zornada

Sample Size Selection – Weekly Data Weekly Processing Quantity Minimum Weekly Sample Size Peter S. Pande, Robert P. Neuman, Roland R. Cavanagh, “The Six Sigma Way: Team Fieldbook” © Max Zornada

Sigma Conversion Table Note: Assumes 1 defect = 1 defective with a 1.5 Sigma Shift From Pande et al, “The Six Sigma Way Field Book” © Max Zornada © Max Zornada Slide 13 Further reproduction is limited to internal company use only. Further reproduction is limited to internal company use only.

Calculating Sigma Level Select the process, unit and requirements: Identify the process you want to evaluate? What is the “thing” produced by the process? What are the customer requirements for the thing? Define what a “defect” is and the number of opportunities: Possible defects: How many defects could be found on a single unit? Collect Data and Calculate DPMO Collect end-of-process data: No. of Units counted Total defects counted Determine total opportunities in data collected: Units counted x Opportunities/Unit = Total Opportunities Calculate DPMO: DPMO = (Defects/Total Opportunities) x 106 = DPMO Convert to a Sigma Level using a conversion table. Estimated Sigma Level = (Process) (Unit) © Max Zornada © Max Zornada Slide 14 Further reproduction is limited to internal company use only. Further reproduction is limited to internal company use only.

Exercise: Yields in Process Operations © Max Zornada © Max Zornada Slide 15

Kepner – Tregoe Methods: Is – Is Not Analysis SO THEN Performance Deviation Closest Logical Comparison What is distinctive about …. Does this suggest a change? Specific Questions Identity Location Timing Magnitude What is the unit with the problem? What is the problem? Where is the problem observed? (geographically) Where is the problem observed on the unit? When was the problem first observed? When has it been observed since? When in the operating cycle of the unit is the problem observed? What is the extent of the problem? How many units are affected? (scope of effect) How much of any one unit affected? WHAT? WHERE? WHEN? HOW MUCH? © Max Zornada

Wastes in a Hospital Environment © Max Zornada

Wastes in a Hospital Environment (cont.) © Max Zornada

© Max Zornada

Value Stream Map: HTLC Case Study © Max Zornada Further reproduction is limited to internal company use only.

© Max Zornada

Practical Problem Solving - A3 Storyboard I. Background V. Proposed Countermeasures Problem statement Background of the problem/ Context for understanding Importance of problem What is your proposal to achieve the future state or target condition. Diagram of proposed new procedures What are the Countermeasures How will the Countermeasures effect the root cause(s) II. Current Conditions Diagram of current situation (or process) Clarify the problem Measure Actions taken to contain the problem Show visually with graphs, charts, proces maps etc. VI. Implementation Plan III. Goals/Targets or Target Condition What activities will be required for implementation? Who, What, When, Where. How? Develop Gantt chart of tabular form. What are the indicators of progress? What will is cost and what will the benefits be? Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 What is the goal or target? What does “good” or “success” look like? What measures to determine whether we got success? What specific outcomes are required? IV. Analysis List potential causes Identify most likely direct (or root) cause Use 5 Why’s Problem Apparent cause Root cause Countermeasure VII. Follow-up Cause and Effect Diagram (Fishbone) Pareto Chart Checksheet How will you check the effects/results? When will you check them? What issues can be anticipated, are they as predicted? Capture and share the learning. P D C A © Max Zornada

Practical Problem Solving - A3 Storyboard I. Background V. Proposed Countermeasures II. Current Conditions VI. Implementation Plan III. Goals/Targets or Target Condition IV. Analysis VII. Follow-up P D C A © Max Zornada

SEFP - Re-imagined using the A3 PPS Storyboard I. Background V. Proposed Countermeasures Cost of Box Packaging operations are too high at $3.09/box vs target of $2.75 and not sustainable in the long term. Potential Solutions Matrix Assessment of potential solutions. Selection of preferred solution. Identification of potential “containment” measures. II. Current Conditions Process Map Customer Requirements Pareto Analysis of Waste VI. Implementation Plan Gantt Chart/Implementation Plan III. Goals/Targets or Target Condition Update Standardise Work Update Visual Management if required Deliver training if required. The objective of this project is to reduce the cost of waste to 50% of the current level, from 25% of total cost to 14% of total cost. IV. Analysis Pareto Analysis Final Pareto Chart VII. Follow-up Fishbone Analysis Verification of Solution Effectiveness Future Plans Document the project to capture learning Post and display completed A3. Root Cause Found © Max Zornada

© Max Zornada

© Max Zornada Process Management & Control System Process Name: Primary Customer of Process: Customer’s CTQs : Outcome Indicators ( Ys ): Outcome Indicators (Ys) Upstream Indicators (Xs) Misc. Information Process Map Capturing Data - Indicator Formula - Procedures - Abbreviations - Comments Name Numerator & Denominator or Description Position Name Numerator & Denominator or Description Indicator Chart Type Physical Item to Check When to check Who performs check Recovery Action Step/ Time Rev # Date Change Log – Describe Revisions By © Max Zornada

© Max Zornada Process Management & Control System Process Name: Primary Customer of Process: Customer’s CTQs : Outcome Indicators ( Ys ): Outcome Indicators (Ys) Upstream Indicators (Xs) Misc. Information Process Map Capturing Data - Indicator Formula - Procedures - Abbreviations - Comments Name Numerator & Denominator or Description Position Name Numerator & Denominator or Description Indicator Chart Type Physical Item to Check When to check Who performs check Recovery Action Step/ Time Rev # Date Change Log – Describe Revisions By © Max Zornada

© Max Zornada

Each data point is based on a sample of 3 The average of each sample – plotted on the x-bar chart The Range of each sample. Plotted on the R-chart ie. Largest value in the sample minus the smallest value 64-43 = 21 Special Cause UCL LCL UCL © Max Zornada LCL = 0

Nomograph of the cumulative binomial distribution © Max Zornada

© Max Zornada

© Max Zornada

© Max Zornada

© Max Zornada