Reduce Costs and Improve Your Customers’ Experience Soar to New Heights! 2013 National Equipment Finance Summit, Albuquerque, NM Process Improvement Using Six Sigma & Lean Methods Tom Allen, David Normandin, Nick Ross & Dave Schaefer

Objectives of this Session o Define Six Sigma / Lean o Demonstrate the benefits of applying Six Sigma / Lean to your business o Share ideas on how you can help make your business a “Lean Organization” o Provide resources for learning more 2

Our Panel ‒ Introductions o David Normandin o Nick Ross o Dave Schaefer o Tom Allen 3

Identify Opportunities o Please note 1 or 2: Major pain points in your work And/or A process that you do ‒ but are not sure is valued by customers And/or An idea for a process that could be improved 4

5 What Is “Six Sigma / Lean” All About? Process Improvement / Process Reengineering LeanSix Sigma Tools that help you systematically look at processes to evaluate what is value- add and what is waste. Customer satisfaction increases as production / processing / servicing costs decrease. Identify and eliminate wasteEliminate errors by controlling the variation of inputs to optimize the outputs Get the overall Process Flow rightMake sure each step of the process is right No waste = less expense, more valueNo errors = less expense, more value Value Stream Mapping: current state, future state DMAIC: Define, Measure, Analyze, Improve, Control Lean Agent, Certified Lean AgentYellow, Green, Black, Master Belts

Maximize Value o The customer will pay for it o It is required to do business o The government requires it; cannot do business legally without it 6

Six Sigma / Lean Methods Help You Recognize & Reduce Waste 7

Don’t Believe It? o How can a profitable business have so much waste in a process? o Here is an example of a business that applied Six Sigma / Lean methodology to improve a process o Video:

How? Apply Lean Methodology & Tools o Every process step has a purpose – adds value (or it goes). o Every thing has a place and it is there, in good working order. o Many methods and tools can be used for Six Sigma / Lean process improvement: 5S 5 Why Analysis 7 Muda DMAIC (Define, Measure, Analyze, Improve, Control) Mapping Flows & Ohno Circle Value Streams 9

7 Deadly Muda (Wastes) With Examples from an Office Environment o Transportation: Unnecessary movement. Extra handling of WIP (work in progress). Examples: Filing documents that will never be used. Unnecessary hand-offs. Needed items are hard to get to. o Inventory: Often comes from unnecessary complexity. Presence is indicated by work that is waiting to be processed. Examples: Excessive icons on desktop. Storage of obsolete files on network as well as in paper form. s that have been read but not deleted. o Motion: Unnecessary steps and actions. Examples: Counting of documents or copies. Using an excessive number of screens or reports to make decisions. o Waiting or Queuing: Idle time for product or service while the needed resource is not available. Examples: Waiting for “sign-off” or approval. Working in batches. Running processes on a really slow system. 10

o Over-Production: Producing more than is needed – results in inventory, extra handling, and other waste. Examples: Unnecessary duplication; preparing reports that are not used; providing unnecessary information; copying users on who do not need the information. o Over-Processing: Extra activity – may be caused by defects. All Rework Examples: Keying in the same data in multiple systems; preparing reports that no one uses. o Defects: All nonconforming product is waste – whether reworked or scrapped. Examples: Includes missing or incorrect information; s that go back and forth too many times; any information-sharing with incorrect data; an error in this presentation that causes confusion, etc Deadly Muda (Wastes) With Examples from an Office Environment

A Simple Example of “Muda” in My Workplace Before: Printer on One Cabinet… Printer Supplies in Another 12

The 5S Way o Sort (Determine what is really needed = open up free space). o Set In Order (A place for everything = smooth flow, improved productivity). o Shine (Everything clean and works well). o Standardize (Monitor the first 3 steps). o Sustain (Awareness, stick to the rules ‒ requires a cultural shift). 13

After applying 5S: Supplies with printer, in user-friendly order, properly labeled What Would a Fully Lean Organization Do? 14

DMAIC o Define the process. We want to have a clear beginning and end. The Process Map will represent exactly. o Measure. After the Process Map has been created, it is time to make sure we understand why we do each step along the way and how long it takes to do each step. o Analyze. The work may also require other tools. For example, at the points where we find loops and rework, we may want to step back and use a tool called the 5 Whys or a Fault Tree Analysis. These tools help us to determine the root causes. o Improve. Typically, there are lots of suggestions for improvement. The team will often create the new workflow Process Map or Value Stream to show the reductions in the process. o Control. Work through all the changes, measure the results, and address what needs to be done to make it stick, including communication, training, etc. 15

Value Stream Map 16

Process Flow Mapping 17 Gemba (Ohno Circle)

18 Panel-Member Experiences Panel members answer questions about their use of Six Sigma & Lean for Process Improvement. Other questions for our panel?

Post-It Ideas: Please turn to the person next to you and share at least one item from your Post-it: o A major pain point in your work o A process that you do but are not sure why o An idea for a process that could be improved Briefly discuss how Six Sigma / Lean tools might help. 19

o Classes: There are many providers of Six Sigma and Lean classes. SixSigma.us, conducts a 4-day Lean Fundamentals class and a variety of Six Sigma classes throughout the U.S. and online. o Online: Videos: Lean Sales & Marketing – also explores value proposition for customers: (16 minutes) Link to Lean Services videos: PEX Network − group dedicated to Process Excellence − free to join, great interviews, articles, podcasts, etc.: A good Lean overview article in PEX: history-and-simplicity-of-lean-process-improve/ history-and-simplicity-of-lean-process-improve/ The simplicity of a Waste Walk – blog post: o Books: There are hundreds of books on Process Improvement. Here are some recommended titles: Process Reengineering: The Key to Achieving Breakthrough Success, by Lon Roberts. The Deming Management Method, by Mary Walton – gives the roots of modern Process Improvement. Lean Six Sigma for Service: How to Use Lean Speed and Six Sigma Quality to Improve Services and Transactions, by Michael L. George – since Lean & Six Sigma began with a manufacturing focus, it is helpful to get service examples. 20 Reference Materials

21 Contact us with questions about Six Sigma / Lean: Tom Allen: David Normandin: Nick Ross: Dave Schaefer: