1 An Introduction to Lean and Six Sigma for AHQ by ASQ Kelly Roggenkamp April 22, 2010

2 Objectives  Understand what Six Sigma and LEAN mean  Understand why both are important to an organization  Introduce the Six Sigma DMAIC and LEAN methodologies  Introduce you to tools you can apply today

3 What is Six Sigma? PeopleProcessTechnology Improved Outcomes

4 Goals of Six Sigma Improve Performance Service reduce defects stabilize processes customer satisfaction Reduce Costs improve efficiency eliminate waste reduce cost of poor quality

5 Six Sigma Applications Motorola Saved $17 Billion from 1986 to 2004 GE Saved $750 million by the end of 1998 Allied Signal/Honeywell Initiated in 1992, saved more then $600 million a year by 1999 Ford Added $300 million to the bottom line in 2001 American Standard Saved $35 million in 2001 through increased quality and efficiency

6 Six Sigma DMAIC Methodology Define Measure AnalyzeImprove Control

7 Why is a structured methodology needed ? Examples:  Ready…Fire….Aim  Who is to blame?  Treating the Symptoms (the Whack-a-Mole Game) The Six Sigma, data-driven approach is designed to help prevent... …jumping to conclusions!

8 Define Concept: CTQs Critical to Quality or a CTQ Customer’s Voice CTQ “I want an efficient process” “I want it to be easy to use” cycle time (hours) Number of clicks, Time, others CTQs must be related to the customer’s voice and be measurable

9 Define Concept: Process and Y= f(x) Definition of Process : a series of actions or operations conducing to an end THE PROCESS: The Series of Actions The OUTPUT(s): Ys CTQs Dependent Effects Response The INTPUT(s): Xs Independent Causes Explanation Processes are Everywhere !

10 Measure Concept: Gathering Process Knowledge Gather Subjective Knowledge of the Team Gather Objective Knowledge of the Process TIME PROCESS KNOWLEDGE Initial Subjective Knowledge Proved some wrong Proved some correct +

11 Measure Concept: Measurement Systems INPUTS Actual Process OUTPUTS INPUTS Measurement Process OUTPUTS This is what we WANT to see This is what we DO see What happens when we try to measure something ?

12 Measure Concept: Measurement Systems Do we measure the process the same way as our customers ? Examples : –Airline Arrival and Departure –Full cup of coffee Does the measurement consider the customer?

13 Measure Concept: Measurement Systems  Variation is real!  Will you always get the same answer measuring the same output a 2 nd, 3 rd, 4 th time ?  Examples : –Timing a recorded 100 meter dash with a hand held stop watch –3 different individuals interviewing a candidate Is the measurement consistent?

14 Analyze Concept: Using Data to Make Decisions Processing Times CenterAvg. Time (hrs) North20.5 South12.7 East17.5 West18.5 In 15 seconds : Identify and mark the best and worst

15 Analyze Concept: Averages Only – A Re-Look North shows NO defects out of 1000 data points THE BEST ! South shows MANY defects out of 1000 data points (Approx. 10 %) THE WORST !

16 Analyze Concept: Averages Only – A Re-Look East shows a FEW defects out of 1000 data points (Approx. 1%) West shows a FEW defects out of 1000 data points (Approx. 2%)

17 Analyze Concept: Ask Why 5+ Times! Complaints about Room Service WHY ? Cold Food delivered by Room Service Delivery Process was taking too long Long Delays Waiting for Service Elevator Heavier elevator use by housekeeping Housekeeping was frequently restocking towels Laundry’s washing process was not completed on time Necessary supplies not available Vendor shipment was late again WHY ? … etc. WHY ?

18 Improve Concept: Testing Solutions  England, Late 1800s  Frequent stork sightings on roofs of homes with newborn children  Do storks deliver babies?  No, homes with newborns were significantly warmer attracting the storks to the roofs  Research consistently shows as hospital size increases, patient death rate dramatically increases.  Should we avoid large hospitals ?  Might we have missed a large factor (X) … the more severe cases are taken to the large hospitals.

19 Improve Concept: What Makes a Good Solution? Consider the 7 Aspects of Good Solutions  Takes the root cause out of the process  Cost effective  Minimum negative impact on any part of the system  Innovative “Upstream” fix  Employs “Poka-yoke”*  Involves the Customer/Next in Process Recipient  Allows you to meet your performance target *Poka-yoke – The concept of designing a process so it cannot fail. An example would be “required screens” when entering data in a system. If the fields are not completed, the system will not accept the “enter” command.

20 Control Concept : Ensure ongoing success What measurements are in place to monitor ongoing performance?

21 What is LEAN? Making the process flow, waste, and results visible What It Actually Is… So they can be improved easily

22 Goals of LEAN Improve Efficiency Reduce Waste and Costs

23 LEAN Concept: Value vs. Waste Value Added Activity Non-Value Added Activity An activity that directly achieves customer requirements. Something the customer is willing to pay for or perceives as value Those activities that take time or resources, but do not directly achieve customer requirements Non-Value Added but Required Activity Let’s start to determine what’s valuable to the customer to help identify waste in the system.

24 LEAN Concept: Waste Categories

25 LEAN Concept: Value Stream Maps Why do we it this way? Use 5 Why’s. 1. Why do we it this way? Use 5 Why’s. 2. Why do we it this way? Use 5 Why’s. 3.

26 LEAN Concept: 5S

27 What you can do right now …  Learn more about the Six Sigma and LEAN  Apply concepts to your daily encounters - Identify measurable improvements - Collect “good” data for yourself, and your department - Analyze more deeply - Identify / implement “good” solutions - Develop stronger controls and measures