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Lean Six Sigma
The root of both Lean and Six Sigma reach back to the time when the greatest pressure for quality and speed were on manufacturing. Lean rose as a method for optimizing automotive manufacturing; Six Sigma evolved as a quality initiative to eliminate defects by reducing variation in processes in the semiconductor industry. It is not surprising that the earliest adopters of Lean Six Sigma arose in the service support functions of manufacturing organizations like GE Capital, Caterpillar Finance, and Lockheed Martin.
Lean Six Sigma for services is a business improvement methodology (details on DMAIC) that maximizes shareholder value by achieving the fastest rate of improvement in customer satisfaction, cost, quality, process speed, and invested capital. The fusion of Lean and Six Sigma improvement methods is required because:
Ironically, Six Sigma and Lean have often been regarded as rival initiatives. Lean enthusiasts note that Six Sigma pays little attention to anything related to speed and flow, while Six Sigma supporters point out that Lean fails to address key concepts like customer needs and variation. Both sides are right. Yet these arguments are more often used to advocate choosing one over the other, rather than to support the more logical conclusion that we blend Lean and Six Sigma. How is it that Six Sigma and Lean are complementary? Here’s a quick overviewSix Sigma:
Lean:
The two methodologies interact and reinforce one another, such that percentage gains in Return on Investment Capital (ROIC%) are much faster if Lean and Six Sigma are implemented together. In short, what sets Lean Six Sigma apart from its individual components is the recognition that you cannot do "just quality" or "just speed," you need a balanced process that can help an organization focus on improving service quality, as defined by the customer within a set time limit. DMAIC (Define-Measure-Analyze-Improve-Control)Using DMAIC to Improve Service ProcessesNo matter how you approach deploying improvement teams in your organization, they will all need to know what is expected of them. That is where having a standard improvement model such as DMAIC (Define-Measure-Analyze-Improve-Control) is extremely helpful. It provides teams with a roadmap. DMAIC is a structured, disciplined, rigorous approach to process improvement consisting of the five phases mentioned, where each phase is linked logically to the previous phase as well as to the next phase. There are many resources that describe the DMAIC process. Our purpose here is to focus on special considerations for using the Lean Six Sigma DMAIC process in a service environment, including both methods and tools that are particularly helpful as well as hints on how to model the people side of each phase.
Elements of Define (DMAIC)
The first phase is Define. During the Define phase, a team and its sponsors reach agreement on what the project is and what it should accomplish. Presuming that a draft of the Project Charter is already in place, the main work in the Define phase is for the project team to complete an analysis of what the project should accomplish and confirm understanding with the sponsor(s). They should agree on the problem, which customers are affected, and how the current process or outcomes fail to meet their customers’ needs through "Voice of the Customer or Critical-To-Quality (CTQ)." The outcome of the Define phase is:
The tools most commonly used in the Define phase are:
The following sections provide a brief description of the above tools and techniques. Project CharterThe charter is a contract between the organization’s leadership and the project team created at the outset of the project. Its purpose is:
Stakeholder AnalysisA DMAIC project will require a fundamental change in the process. In an effort to mitigate the resistance to change when the improvement is implemented, it is crucial to identify the stakeholders early on, and to develop a communication plan for each of them. Typical stakeholders include managers, people who work in the process under study, upstream and downstream departments, customers, suppliers and finance. Regular communication can create more buy-in, identify better solutions, and avoid pitfalls. SIPOC Process MapA SIPOC is a high-level process map that includes Suppliers, Inputs, Process, Output, and Customers. Quality is judged based on the output of a process. The quality is improved by analyzing inputs and process variables. An example of a SIPOC Process Map is provided below.
Voice of the CustomerThe "Voice of the Customer" is a process used to capture the requirements/feedback from the customer (internal or external) to provide them with best-in-class service/product quality. This process is all about responsiveness and constantly innovating to capture the changing requirements of the customers over time. The "Voice of the Customer" is the term used to describe the stated and unstated needs or requirements of the customer. The “Voice of the Customer” can be captured in a variety of ways: Direct discussion or interviews, surveys, focus groups, customer specifications, observation, warranty data, field reports, complaint logs, etc. This data is used to identify the quality attributes needed for a supplied component or material to incorporate in the process or product. The VOC is critical for an organization to:
The following is a list of typical outputs of the VOC process:
Affinity DiagramAn Affinity Diagram (sometimes referred to as a "KJ", after the initials of the person who created this technique, Kawakita Jiro) is a special kind of brainstorming tool. You use an Affinity Diagram to:
An Affinity Diagram is especially useful when:
Building an Affinity Diagram is a creative rather than a logical process that encourages participation because everyone's ideas find their way into the exercise. Kano ModelDeveloped in the 80's by Professor Noriaki Kano, the Kano model is based on the concepts of customer quality and provides a simple ranking scheme which distinguishes between essential and differentiating attributes. The model is a powerful way of visualizing product characteristics and stimulating debate within the design team. Kano also produced a rigorous methodology for mapping consumer responses into the model. Product characteristics can be classified as:
An example of Kano Model is provided below.
Critical-To-Quality (CTQ) treeThe purpose of Critical-To-Quality trees is to convert customer needs/wants to measurable requirements for the business to implement. For example: A retail merchant was receiving a significant number of complaints regarding their homeowner warranty policies from their customers. By analyzing customer survey data and developing the CTQ tree, the business was able to identify critical-to-satisfaction requirements. These requirements became the focus for improving customer satisfaction. The business eliminated mandatory warranty visits and made all warranty visits optional. Eliminating mandatory visits satisfied the customers who thought there were too many visits and adding an extra optional visit satisfied customers who thought there were too few visits. Expanding the time frame for scheduling warranty visits from two weeks to three months eliminated the inconvenience for customers who had busy schedules and found the time frame difficult to manage. The business took a general, difficult-to-measure need (to improve homeowner warranty satisfaction) and developed specific, measurable, and actionable requirements to drive improvements in customer satisfaction.
ReferenceElements of Measure (DMAIC)
One of the major benefits of Six Sigma is its demand for a fact-based and data-driven analytical approach. Most other improvement methodologies, including Lean, tend to attempt process improvement without sufficient data to understand the underlying causes of the problem. The result is typically many quick-hit projects with short-lived or disappointing results. Combining data with knowledge and experience is what separates true improvement from mere process tinkering. One of the goals of the Measure phase is to pin-point the location or source of a problem as precisely as possible by building a factual understanding of existing process conditions. That knowledge helps you narrow the range of potential causes requiring investigation in the Analyze phase. An important part of Measure is to establish a baseline capability level. The tools most commonly used in the Measure phase are:
The following sections provide a brief description of the above tools and techniques: Prioritization MatrixThe Prioritization Matrix provides a way of sorting a diverse set of items into an order of importance. It also enables their relative importance to be identified by deriving a numerical value of the importance of each item. Thus an item with a score of 223 is clearly far more important than one with a score of 23, but is not much more important than one with a score of 219. Items are compared, scored against a set of key criteria, and the scores for each item are then summed.
ReferenceProcess Cycle EfficiencyA calculation that relates the amount of value-added time to total cycle time in a process. Time Value AnalysisA chart that visually separates value-added from non-value-added time in a process. Pareto ChartsVilfredo Pareto, a turn-of-the-century Italian economist, studied the distributions of wealth in different countries, concluding that a fairly consistent minority – about 20% – of people controlled the large majority – about 80% – of a society's wealth. This same distribution has been observed in other areas and has been termed the Pareto effect.
The Pareto effect even operates in quality improvement: 80% of problems usually stem from 20% of the causes. Pareto charts are used to display the Pareto principle in action, arranging data so that the few vital factors that are causing most of the problems reveal themselves. Concentrating improvement efforts on these few issues will have a greater impact and be more cost-effective than undirected efforts. Control ChartsEvery process varies. If you write your name ten times, your signatures will all be similar, but no two signatures will be exactly alike. There is an inherent variation, but it varies between predictable limits. If, as you are signing your name, someone bumps your elbow, you get an unusual variation due to what is called a "special cause". If you are cutting diamonds, and someone bumps your elbow, the special cause can be expensive. For many processes, it is important to notice special causes of variation as soon as they occur.
There's also "common cause" variation. Consider a baseball pitcher. If he has good control, most of his pitches are going to be where he wants them. There will be some variation, but not too much. If he is "wild", his pitches aren't going where he wants them; there's more variation. There may not be any special causes - no wind, no change in the ball - just more "common cause" variation. The result: more walks are issued, and there are unintended pitches over the plate where batters can hit them. In baseball, control wins ballgames. Likewise, in most processes, reducing common cause variation saves money. All control charts have three basic components:
Run ChartsRun charts (often known as line graphs outside the quality management field) display process performance over time. Upward and downward trends, cycles, and large aberrations may be spotted and investigated further. In a run chart, events, shown on the y axis, are graphed against a time period on the x axis. For example, a run chart in a hospital might plot the number of patient transfer delays against the time of day or day of the week. The results might show that there are more delays at noon than at 3 p.m. Investigating this phenomenon could unearth potential improvement needs. Run charts can also be used to track improvements that have been put into place, checking to determine their success. Also, an average line can be added to a run chart to clarify movement of the data away from the average.
Failure Modes and Effect Analysis (FMEA)Procedures and tools that help to identify every possible failure mode of a process or product, determine its effect on other sub-items and on the required function of the product or process. The FMEA is also used to rank & prioritize the possible causes of failure as well as develop and implement preventive actions, with responsible persons assigned to carry out these actions. Elements of Analyze (DMAIC)
The Measure phase has identified the baseline performance of the process. By stratifying (sequenced in order of ranks or order) the data in the baseline performance, it becomes possible to pinpoint the location or source of problems by building a factual understanding of existing process conditions and problems. That helps to focus the problem statement. In the Analyze phase you will develop theories of root causes, confirm the theories with data, and finally identify the root cause(s) of the problem. The verified cause(s) will then form the basis for solutions in the Improve phase. The tools most commonly used in the Analyze phase are:
5 Whys Analysis
5 Whys Analysis is a problem solving technique that allows you to get at the root cause of a problem fairly quickly. It was made popular as part of the Toyota Production System (1970’s). Application of the strategy involves taking any problem and asking "Why - what caused this problem?" By repeatedly asking the question "Why" (five is a good rule), it is possible to peel away the layers of symptoms to identify the root cause of a problem. Very often the first reason for a problem will lead you to another question and then to another. Although this technique is called "5 Whys," you may find that you will need to ask the question fewer or more times than five before you find the issue related to a problem. An example of a five Why Analysis . . . The "wheel" example.
BrainstormingBrainstorming is simply listing all ideas put forth by a group in response to a given problem or question. In 1939, a team led by advertising executive Alex Osborn coined the term "brainstorm." According to Osborn, "Brainstorm means using the brain to storm a creative problem and to do so "in commando fashion, each stormer audaciously attacking the same objective." Creativity is encouraged by not allowing ideas to be evaluated or discussed until everyone has run dry. Any and all ideas are considered legitimate and often the most far-fetched are the most fertile. Structured brainstorming produces numerous creative ideas about any given "central question". Done right, it taps the human brain's capacity for lateral thinking and free association.
However, a brainstorm cannot help you positively identify causes of problems, rank ideas in a meaningful order, select important ideas, or check solutions. Cause and Effect (C&E) DiagramThe Cause & Effect diagram is the brainchild of Kaoru Ishikawa, who pioneered quality management processes in the Kawasaki shipyards, and in the process became one of the founding fathers of modern management. The C&E diagram is used to explore all the potential or real causes (or inputs) that result in a single effect (or output). Causes are arranged according to their level of importance or detail, resulting in a depiction of relationships and hierarchy of events. This can help you search for root causes, identify areas where there may be problems, and compare the relative importance of different causes. Causes in a C&E diagram are frequently arranged into four major categories. While these categories can be anything, you will often see:
These guidelines can be helpful but should not be used if they limit the diagram or are inappropriate. The categories you use should suit your needs. Often we can create the branches of the cause and effect tree from the titles of the affinity sets in a preceding affinity diagram. The C&E diagram is also known as the fishbone diagram because it is drawn to resemble the skeleton of a fish, with the main causal categories drawn as "bones" attached to the spine of the fish.
Affinity Diagram (covered in the Define phase)Control Charts (covered in the Measure phase)Flow DiagramsFlowcharts are maps or graphical representations of a process. Steps in a process are shown with symbolic shapes, and the flow of the process is indicated with arrows connecting the symbols. Computer programmers popularized flowcharts in the 1960's, using them to map the logic of programs. In quality improvement work, flowcharts are particularly useful for displaying how a process currently functions or could ideally function. Flowcharts can help you see whether the steps of a process are logical, uncover problems or miscommunications, define the boundaries of a process, and develop a common base of knowledge about a process. Flowcharting a process often brings to light redundancies, delays, dead ends, and indirect paths that would otherwise remain unnoticed or ignored. But flowcharts don't work if they aren't accurate, if team members are afraid to describe what actually happens, or if the team is too far removed from the actual workings of the process. There are many varieties of flowcharts and scores of symbols that you can use. Experience has shown that there are three main types that work for almost all situations:
Pareto Charts (covered in the Measure phase)Regression AnalysisRegression analysis is a statistical forecasting model that describes and evaluates the relationship between a given variable, usually called the dependent variable, and one or more other variables, usually known as the independent variables. Regression analysis models are used to help us predict the value of one variable compared to one or more other variables whose values can be predetermined. Scatter PlotsScatter Plots (also called scatter diagrams) are used to investigate the possible relationship between two variables that both relate to the same "event." A straight line of best fit, using the least squares method, is often included.
Things to look for in a scatter plot:
Elements of Improve (DMAIC)
The sole purpose of the Improve phase is to demonstrate, with fact and data, that your solutions solve the problem. Your organization will make changes in a process that will eliminate the defects, waste, and unnecessary costs that are linked to the customer need identified during the Define phase. Tools and strategies you will find for the Improve phase will include solution matrices that link brainstormed solution alternatives to customer needs and the project purpose, and methods for implementing desired solutions. The tools most commonly used in the Improve phase are:
Setup Reduction
Setup reduction is the process of reducing changeover time (i.e., from the last good piece of the previous run to the first good piece of the next run). Since setup activities add no marketable form, fit, or function to the product, they are by definition non-value adding. The tool for tackling setup time is the Four-Step Rapid Setup method. The principle of this method is to eliminate anything that interrupts or hinders productivity. The following steps provide a high level description of the Four-Step Rapid Setup method: Step # 1 – Identify and tabulate any process-related activity that fits into one or more of the following categories:
Step #2 – See if any of the interruptive/delaying tasks can be offloaded: Our focus here is to move preparatory work outside of the main process flow so that information or material ends up waiting for you, not the other way around. The goal is to quickly complete value-added work without any non-value-added activity. Step # 3 - Streamline or automate any interruptive/delaying tasks that cannot be offloaded. Step # 4 – Bring the process under statistical control: The setup is not complete until the output of the process is “within specification” and under statistical control, meaning the amount of variation in lead time is within predictable limits of +/- 3 sigma. Queuing Methods for Reducing Congestion and DelaysOften congestion occurs because of variation in demand, much like travel congestion and delays that we all witness during the holiday season. Once identified, there are two principal techniques for reducing congestion that arises from variation in the demand for service.
5S’s Method
5 S’s method/visual is the process of creating workplace cleanliness and organization including visual signals. The 5-S process includes five steps:
By eliminating the unnecessary, establishing a place for what remains, and cleaning up remaining equipment, tools, and storage devices, clutter is reduced and needed items are readily found. Visual management involves the use of visual cues (e.g. road traffic signs and signals) to assure things happen and improve documentation. KaizenKaizen is often translated in the West as ongoing, continuous improvement. Some authors explain Japan's competitive success in the world market place as the result of the implementation of the Kaizen concept in Japanese corporations. In contrast to the usual emphasis on revolutionary, innovative change on an occasional basis, Kaizen looks for uninterrupted, ongoing incremental change. In other words, there is always room for improvement and continuously trying to become better. In practice, Kaizen can be implemented in corporations by improving every aspect of a business process in a step-by-step approach, while gradually developing employee skills through training and increased involvement. Principles in Kaizen implementation are:
Elements of Control (DMAIC)
During the Improve phase, the solution is piloted, and plans are made for full scale implementation. Putting a solution in place can fix a problem for the moment, but the activities in the Control phase are designed to insure that the problem does not reoccur and that the new processes can be further improved over time. The tools most commonly used in Control phase are:
Quality Control Process Chart
A Quality Control (QC) Process Chart is a tool that helps you document Plan-Do-Check-Act (PDCA) activities for the process. The Plan-Do-Check-Act (PDCA) cycle is a well-known model for CPI. It teaches organizations to plan an action, do it, check to see how it conforms to the plan and act on what has been learned. The PDCA cycle is made up of four steps for improvement or change:
If the change was successful, incorporate the learning from the test into wider changes. If not, go through the cycle again with a different plan. StandardizationStandardization enables high quality production of goods and services on a reliable, predictable, and sustainable basis. Standardization is making sure that important elements of a process are performed consistently in the most effective manner. Changes are made only when data shows that a new alternative is better. Use of standard practices will:
Process Simulation and ModelingProcess SimulationOne of the greatest complaints we hear from senior managers is “projects are successfully completed, but I’m not seeing a significant change to the bottom line.” That’s because in the Define stage of DMAIC, Six Sigma experts don’t have enough information to quantify the benefits. They are predicting a bottom line financial benefit without truly understanding how the process behaves, let alone how it would behave after the change. Without seeing the big picture you may complete a successful Six Sigma project and see no impact in dollars for your organization. There is a better way. With Process Modeling you create a simple simulated model of the process. You will visually see which projects will affect the total output and which will sub-optimize the system. Key advantages of integrating Six Sigma phases (DMAIC) with Process Modeling are provided below:
Process ModelingFor details on Process Modeling please refer to "Work process documentation guide." Difference between DMAIC and Design For Six Sigma (DFSS)One of the most confusing issues associated with the phrase "I'm using Six Sigma" has to do with what methodology is actually being used. A majority of the time its the DMAIC methodology, because use of existing processes is causing resources to be wasted (hence the big savings you've heard about at GE, Honeywell and others over the past years). The remaining minority of Six Sigma practitioners are using the Design For Six Sigma (DFSS) approach to design a new product for Six Sigma quality. For details on the DFSS, refer to "Transform Your Organization Into One That’s World Class" by Maurice L. Berryman, Berryman & Associates |
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Transformation Focus - Continuous Process Improvement (CPI)
Key Concept 
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