Lean Six Sigma Green Belt Training

1. Lean Six Sigma Green Belt Training

2. UNIT 3 Analyze

3. Analyze – Learning Objectives • At the conclusion of this unit, you will be able to: • “Peel back” the layers of the causal chain to identify potential causes of process problems. • Complete a fishbone diagram to identify potential root causes. • Confirm root causes with data. Ref Unit 3-1

4. Analyze – Major Activities DEFINE MEASURE ANALYZE IMPROVE CONTROL Identify Potential Root Causes Collect Data to Confirm Root Causes Identify Potential Causes Overall objective: Identify and confirm the root causes of the revised problem statement. Ref Unit 3-2a

5. Analyze –Key Deliverables and Commonly Used Tools Ref Unit 3-2b

6. Identify Potential Causes Analyze – Major Activities DEFINE MEASURE ANALYZE IMPROVE CONTROL Identify Potential Root Causes Collect Data to Confirm Root Causes Ref Unit 3-3a

7. Identify Potential Causes • Analysis is a search for causes • Many causes may be identified • The objective is to identify those causes that most significantly contribute to the problem - root cause Cause and effect analysis begins with experience‑based guesses and progresses toward data-based proof. Ref Unit 3-3b

8. Cycle Time Process Customers Suppliers Outputs Inputs Cycle Time Analysis Cycle time is the total time required to perform all process activities, including both value-add and non-value-add time. Ref Unit 3-4a

9. NET WORK WASTE ALL WORK AUXILIARY WORK Cycle Time Analysis Waste vs. Work Eliminate Non-Value-Added Actions Increase Value-Added Work Typically 50-75% of work in manufacturing and 60%-75% of work in transactional processes is non-value add. Minimize Non-Value-Added But Necessary Work Ref Unit 3-4b

10. Cycle Time Analysis (cont’d.) Lean Thinking • Identify waste • Define what is value-add and not • Measure cycle time Ref Unit 3-5a

11. Cycle Time Analysis (cont’d.) Seven Types of Waste • Processing • Waiting • Motion • Inventory • Transportation • Overproduction • Correction Ref Unit 3-5b

12. Cycle Time Analysis (cont’d.) Processing Waste • Information is requested but not actually required, e.g. application forms • Exception processing / rework required by defects in the process • Activities no longer needed, but still a part of the process Inventory Ref Unit 3-5c

13. Cycle Time Analysis (cont’d.) Waiting Waste • Colleagues not being able to perform work, e.g., IT system is down • Only one fax available for department – often in use • Bottlenecks • Delays waiting for decisions to be taken before being able to continue work Inventory Ref Unit 3-5d

14. Cycle Time Analysis (cont’d.) Motion Waste • Inefficient office layout, requiring frequent movement for colleagues to collaborate • Redundant activities – more than one person doing the same thing • Client files move to storage while still requiring consultation Inventory Ref Unit 3-5e

15. Cycle Time Analysis (cont’d.) Inventory Waste • Extra brochures are printed ‘just in case’ • Stationary is ordered annually requiring storage space • Piles of ‘Work In Progress’ exist between process steps • Physical files are stored on department floor Inventory Ref Unit 3-5f

16. Cycle Time Analysis (cont’d.) Transportation Waste • Unnecessary movement of paperwork and equipment • Often linked to poor office lay-out • Using Internal Mail / Fax to hand over work to colleagues Inventory Ref Unit 3-5g

17. Cycle Time Analysis (cont’d.) Overproduction Waste • We produce more or earlier than required • Process output is increased to ensure enough quality items are produced • Multiple data entries for same information • Manual work - not taking advantage of system capability Inventory Ref Unit 3-5h

18. Cycle Time Analysis (cont’d.) Correction Waste • Process errors are allowed to move to the next process step without finding preventive solution • Orders are checked 5 times before sending to customer • All orders are checked on quality vs. sampling Inventory Ref Unit 3-5i

19. Value-Added Time Customers care about it; they are willing to pay for it The process activity physically changes the product/service Re-work is not involved; the work is done right the first time Non-Value-Added Time Processing Waiting Motion Inventory Transportation Overproduction Correction Cycle Time Analysis (cont’d.) • Do not get too hung up on what type of waste it is • Focus on finding a sustainable way to remove it Ref Unit 3-5/6

20. Cycle Time Analysis (cont’d.) Measuring Cycle Time • Decide whether to measure cycle time on the entire process or a sub-process • Use a flowchart/process map • Develop operational definitions for the starting and ending points of each activity • Develop consensus about what is value-added and what is non-value-added time • Create a data collection form to identify which activities will yield the most process improvement Ref Unit 3-7a

21. Cycle Time Analysis (cont’d.) Useful Cycle Time Data • Estimated cost/activity – total cost, not activity-based cost • Process time – value-add time per unit • Change-over time – time required to change from one type of product/service to another, including learning time • Queue time – time spent waiting to be processed • Takt time – the rate at which output is completed, compared to customer demand • Complexity – the number of different products/services processed at the activity • Uptime – time worked per day minus breaks and interruptions • Defects and rework – time needed to correct defective products/services Ref Unit 3-7b

22. Cycle Time Analysis (cont’d.) Cycle Time Data Collection Ref Unit 3-8

23. Activity Identify cycle time waste in your process. Ref Unit 3-9

24. Identify Potential Causes • Gather Many Causes • Use data from Measure Step • Talk with people • Focus on what you know • Think about sources of variation – people, materials, methods, equipment, environment • Review past records Ref Unit 3-10

25. Brainstorming Identify Potential Causes (cont’d.) • Brainstorming approaches • Brainstorming guidelines Ref Unit 3-11

26. Analyze – Major Activities DEFINE MEASURE ANALYZE IMPROVE CONTROL Identify Potential Root Causes Collect Data to Confirm Root Causes Identify Potential Causes Ref Unit 3-12a

27. Identify Potential Root Causes The search for potential causes evolves to a selection of those causes most likely to be the reason for the revised problem statement. Ref Unit 3-12b

28. Agents not notified on time Twice requirement System error Delivery delay Heavy workload Branch clerk Forget to scan image Identify Potential Root Causes (cont’d.) Cause and Effect Analysis People Equipment Delayed receipt/reply to requirement Requirement expired after deadline Inconvenient Underwriter Not aware of requirement Agent No follow-up/not enough follow-up 77% non-ME cases not issued on time involved missing or unclear information on the policy application Avoidable requirement Underwriter Inconvenient Agent slow to respond Requirement can only be printed in home office Training Agents can only get requirement in branch office Environment Red words are actionable root causes Methods Ref Unit 3-12c

29. Major Bone Major Bone 1st Level Cause 1st Level Cause Revised Problem Statement 3rd Level 2nd Level 2nd Level 1st Level Cause 1st Level Cause 1st Level Cause 3rd Level 2nd Level 2nd Level 3rd Level 2nd Level Major Bone 2nd Level Major Bone 4th Level May be more than one 5th Level Identify Potential Root Causes (cont’d.) Fishbone Diagram Review for Continuity Ref Unit 3-15

30. Identify Potential Root Causes (cont’d.) Affinity Cluster Approach • Brainstorm possible causes for problem statement • Arrange causes into affinity clusters • Label each cluster • Expand causal levels for each major bone Ref Unit 3-16

31. Fish boning tip: Write the causes on post-it notes as you identify them. This facilitates moving them around. Identify Potential Root Causes (cont’d.) Affinity Cluster Approach (cont’d.) • Brainstorm possible causes for the problem statement. • Focus on the problem statement developed in the Measure step and brainstorm causes for it to occur. Ref Unit 3-17

32. Identify Potential Root Causes (cont’d.) Affinity Cluster Approach (cont’d.) • Arrange possible causes into affinity clusters. • Clarify the meaning • Sort into clusters according to affinity. • Adding new items is okay, as is editing. • If a cause seems to fit into two different clusters, make another post-it note and place one in each cluster. Ref Unit 3-18a

33. Duplicated Edited Example Brainstorm list • Data entry error • Not familiar with rules • No system support • Inefficient scanner • Documents not checked • Operations delays • Process not well defined • Different operating systems in use • Manual calculations required • Short-sighted planning for new product • Applicable rules must be checked manually • New product launch was expedited Conversion form delayed Manual calculations required Process not well defined Affinity Clusters Operations delays New product launch was expedited Applicable rules must be checked manually Short-sighted planning for new product Data entry error Applicable rules must be checked manually Not familiar with rules Inefficient scanner No system support Documents not checked System support not available at this time Different operating systems in use Ref Unit 3-18b

34. Identify Potential Root Causes (cont’d.) Affinity Cluster Approach (cont’d.) • Label each cluster. • Focus on one cluster. • Discuss what the listed causes have in common. • Agree on a name for that cluster. • Draw a main bone and label it with cluster name. Ref Unit 3-19a

35. People New Product Launch Process Conversion form delayed Manual calculations required Process not well defined Operations delays New product launch was expedited Applicable rules must be checked manually Short-sighted planning for new product Data entry error Systems Not familiar with rules Applicable rules must be checked manually Add to fishbone where appropriate Documents not checked System support not available at this time Different operating systems in use Inefficient scanner Example Affinity Clusters People Systems Turnaround time for 83% of XYZ product clean cases exceeds seven working days New Product Launch Process Ref Unit 3-19b

36. Identify Potential Root Causes (cont’d.) Affinity Cluster Approach (cont’d.) • Expand causal levels for each major bone. • Use the causes listed in each cluster. • Write new ideas on post-it notes. • Modify wording/placement of causes. • Continue with all major bones in same manner. • Check for continuity – Ask, “Does this level cause effect this other level cause?” • You should be able to answer yes at each level. Ref Unit 3-20a

37. Example Ref Unit 3-20b

38. Identify Potential Root Causes (cont’d.) Ask Why 5 Times • Ask, “Why does this (cause) happen?” • Keep asking until answers are not actionable. • Why are 84% of Proposals not sent on time? Answer: Sales Rep. doesn’t make decision in time. • Why isn’t decision made in time? Answer: Sales Rep. busy researching to prepare response. • Why is Sales Rep. busy researching? Answer: Uncertain about products, services, & pricing. • Why is Sales Rep. uncertain? Answer: Does not always have new product information. • Why doesn’t Sales Reps. have information needed? Answer: Didn’t know information was needed. 84% of proposals not prepared on time for manager’s approval involve delays. 1. Cause 2. Cause 3. Cause 4. Cause 5. Cause Ref Unit 3-21

39. Identify Potential Root Causes (cont’d.) Select Root Causes of Revised Problem Statement • Usually the source of other causes. • Occurs several times during analysis. • Is not a symptom. • Trust instincts. • May be more than one root cause. • Focus on causes you can measure/control. Ref Unit 3-22

40. Activity Practice fishbone diagram. Ref Unit 3-23

41. Analysis – Major Activities DEFINE MEASURE ANALYZE IMPROVE CONTROL Collect Data to Confirm Root Causes Identify Potential Root Causes Identify Potential Causes Ref Unit 3-24

42. Collect Data to Confirm Root Cause Testing Theory with Data • The data collected in the Measure step may help. • Collect new data if existing data does not confirm your theory. • Use “paired data” to enable comparison between the potential root cause and the problem statement (effect). • If a positive relationship exists between occurrences of the potential root causes and changes in the problem statement data, your theory is confirmed – you have found a root cause. Ref Unit 3-25a

43. Collect Data to Confirm Root Cause (cont’d.) Cause Data, X Effect Data, Y Ref Unit 3-25b

44. Cause Data, X Attribute X1 X2 X3 Effect Data, Y YData Ya Attribute Yb XData Collect Data to Confirm Root Cause (cont’d.) Ref Unit 3-26

45. Collect Data to Confirm Root Cause (cont’d.) Scatter Plots When both cause and effect data are continuous Scatter plots clarify the relationship between two variables. They help you: • Discover whether two variables are related • Find out if changes in one variable are associated with changes in the other Sale Amount (Y effect) Note: Finding a relationship does not always imply causation Time Spent with Customer (X cause) Ref Unit 3-27

46. Collect Data to Confirm Root Cause (cont’d.) Scatter Plots Positive Correlation Negative Correlation No Correlation Possible Positive Correlation Possible Negative Correlation Ref Unit 3-29

47. Collect Data to Confirm Root Cause (cont’d.) Stratified Frequency Plots Attribute causal data; Continuous problem data Theory: Variation in training, technique, and procedures at different locations accounts for how long it takes to complete insurance application Data: Measure time needed to complete application at different locations Location A Time to Complete Application (all locations) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Location B 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Location C 8 9 10 11 12 13 14 15 16 17 18 19 20 21 7 Minutes 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Ref Unit 3-30a

48. (cont’d.) Made the Sale 5 10 15 20 25 30 3 5 40 45 50 55 60 >60 Time With Customer(in minutes) Did Not Make the Sale 5 10 15 20 25 30 3 5 40 45 50 55 60 >60 Time With Customer(in minutes) Collect Data to Confirm Root Cause Stratified Frequency Plots Continuous causal data; Attribute problem data Theory: More time spent with a customer, the more likely to make a sale Data: Measure time spent with customer and separate into two categories: • Made sale • Did not make sale Ref Unit 3-30b

49. “X” Cause: Poor Legibility Not Present Present 77 23 Present A root cause! “Y” Defect:Data errors 89 11 Not Present n = 200 Collect Data to Confirm Root Cause (cont’d.) Contingency Tables Attribute causal data (x); Attribute problem data (y) Ref Unit 3-32

50. Collect Data to Confirm Root Cause (cont’d.) More Than One Root Cause • What does the data tell you about the contribution each makes to the problem? • Select confirmed root causes that have the greatest impact on the problem statement to conserve resources. Ref Unit 3-34