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An Introduction to Lean and Six Sigma

for AHQ by ASQ
Kelly Roggenkamp

April 22, 2010

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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

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What is Six Sigma?
Gallup 25
th
3.58
Gallup 25
th
3.58
Gallup 50
th
3.93
Gallup 50
th
3.93 Gallup 75
th
4.27
Gallup 75
th
4.27
People Process Technology
Improved Outcomes
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Goals of Six Sigma
Improve
Performance
Service
reduce defects
stabilize processes
customer satisfaction
Reduce
Costs
improve efficiency
eliminate waste
reduce cost of poor quality
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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
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Six Sigma DMAIC Methodology
Define
Measure
Analyze Improve
Control
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Why is a structured methodology needed ?
Examples:

ReadyFire.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!
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Define Concept: CTQs

Critical to Quality or a CTQ

Customers 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 customers voice and be measurable
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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 !
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Measure Concept: Gathering Process Knowledge
Gather Subjective
Knowledge of the
Team
Gather Objective
Knowledge of the
Process
TIME
P
R
O
C
E
S
S

K
N
O
W
L
E
D
G
E

Initial Subjective
Knowledge
Proved some
wrong
Proved some
correct

+
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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 ?
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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?
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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?
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Analyze Concept: Using Data to Make Decisions
Processing Times
Center Avg. Time (hrs)
North 20.5

South 12.7

East 17.5

West 18.5
In 15 seconds : Identify and mark the best and worst
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Analyze Concept: Averages Only A Re-Look
North
F
r
e
q
u
e
n
c
y
23 22 21 20 19 18
90
80
70
60
50
40
30
20
10
0
Mean 20.47
StDev 1.028
N 1000
Histogram of North
Normal
USL = 24
South
F
r
e
q
u
e
n
c
y
40 32 24 16 8 0
100
80
60
40
20
0
Mean 13.99
StDev 8.718
N 1000
Histogram of South
Normal
USL = 24
North shows NO defects
out of 1000 data points
THE BEST !
South shows MANY defects
out of 1000 data points
(Approx. 10 %) THE WORST !
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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%)
East
F
r
e
q
u
e
n
c
y
24 21 18 15 12 9
90
80
70
60
50
40
30
20
10
0
Mean 17.43
StDev 3.026
N 1000
Histogram of East
Normal
USL = 24
West
F
r
e
q
u
e
n
c
y
25.0 22.5 20.0 17.5 15.0 12.5 10.0
80
70
60
50
40
30
20
10
0
Mean 18.47
StDev 2.958
N 1000
Histogram of West
Normal
USL = 24
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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
Laundrys washing process was not completed on time
Necessary supplies not available
Vendor shipment was late again
WHY ?
WHY ?
WHY ?
etc.
WHY ?
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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.
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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.
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Control Concept : Ensure ongoing success
What measurements are in place
to monitor ongoing performance?
Week beginning
I
n
d
i
v
i
d
u
a
l

V
a
l
u
e
1
2
/
1
7
/
2
0
0
6
1
1
/
1
2
/
2
0
0
6
1
0
/
8
/
2
0
0
6
9
/
3
/
2
0
0
6
7
/
3
0
/
2
0
0
6
6
/
2
5
/
2
0
0
6
5
/
2
1
/
2
0
0
6
4
/
1
6
/
2
0
0
6
3
/
1
2
/
2
0
0
6
2
/
5
/
2
0
0
6
1
/
1
/
2
0
0
6
250
200
150
100
50
_
X=82.2
UCL=130.6
LCL=33.9
1/1/2006 7/23/2006
5
3
5
1
2
2 2
5
5
5
1
Process Performance Over Time
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What is LEAN?
Making the process flow, waste, and results visible
What It Actually Is
So they can be improved easily
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Goals of LEAN
Improve
Efficiency
Reduce
Waste and
Costs
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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
Lets start to determine whats valuable to the customer to
help identify waste in the system.
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LEAN Concept: Waste Categories
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LEAN Concept: Value Stream Maps
Why do we it this way?
Use 5 Whys.
1.
Why do we it this way?
Use 5 Whys.
2.
Why do we it this way?
Use 5 Whys.
3.
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LEAN Concept: 5S
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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