An Introduction to Lean and Six Sigma for AHQ by ASQ

1. An Introduction to Lean and Six Sigmafor AHQ by ASQ Kelly RoggenkampApril 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? People Process Technology Improved Outcomes

4. Goals of Six Sigma Improve PerformanceService ReduceCosts • reduce defects • stabilize processes • customer satisfaction • 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 Control Measure Improve Analyze

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 ora CTQ Customer’s Voice CTQ “I want an efficient process” cycle time (hours) “I want it to be easy to use” 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 OUTPUT(s): Ys CTQs Dependent Effects Response The INTPUT(s): Xs Independent Causes Explanation THE PROCESS: The Series of Actions Processes are Everywhere !

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

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

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 2nd, 3rd, 4th 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) North 20.5 South 12.7 East 17.5 West 18.5 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 WHY ? Long Delays Waiting for Service Elevator Heavier elevator use by housekeeping WHY ? Housekeeping was frequently restocking towels Laundry’s washing process was not completed on time WHY ? Necessary supplies not available Vendor shipment was late again WHY ? … etc.

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 placeto monitor ongoing performance?

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

22. Goals of LEAN Improve Efficiency ReduceWaste and Costs

23. LEAN Concept: Value vs. Waste Let’s start to determine what’s valuable to the customer to help identify waste in the system. Non-Value Added Activity Value Added Activity Non-Value Addedbut Required 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

24. LEAN Concept: Waste Categories

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

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