Lean Six Sigma Overview: Improving Business Processes for Increased Efficiency and Customer Satisfaction

1. Overview of Lean Six Sigma Presented By The University of Texas-School of Public Health This material was produced under grant number SH-22316-SH-1 from the Occupational Safety and Health Administration, U.S. Department of Labor. It does not necessarily reflect the views or policies of the U.S. Department of Labor, nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. Government.

2. Learning Objectives Upon completion of this course, the participant will be able to: • Define Lean Six Sigma • Compare Lean with Six Sigma to process improvement • Select appropriate phases to apply Six Sigma DMAIC • Methodology • Outline the integration of Lean and Six Sigma to process improvement

3. How Will Lean Six Sigma Affect You? • Enables each of us to lead change by challenging what we do and how we work • Why am I doing what I am doing? • Is it adding value to my client and Fannie Mae? • Gives us practical metrics to evaluate success • Involves you and your team members in creating solutions • How does my work affect my customer? • How does my work affect other teams (up and down stream)? • How can I do it better? • Provides new skills for life! The Lean Six Sigma methodology will lead to more meaningful jobs (that bring value to our patients) in a better team environment!

4. What is Lean Six Sigma? Lean Six Sigma is • A common improvement methodology to impact the overall business • Fact-based decision making • Focused on minimizing waste and variation • Focused on strategic business priorities, including the voice of the customer • Works best for narrowly scoped projects • Dedicated resources with clear accountability • Quantified project benefits • Emphasis on sustaining the gains! • Demonstrated track record of success across industries

5. Lean VS. Six Sigma to process improvement Lean Defined… Six Sigma Defined… VS • Six Sigma is a process improvement methodology addressing defects which arise due to variability in process execution • A defect can be any missed target or • nonconformance to standard • Six Sigma seeks the causes of • variability • Six Sigma projects often apply deep • analysis • Solutions are not readily apparent • Lean optimizes the process design • Came from process efficiency practices at Toyota • Addresses the fundamental flow of a process • Is a philosophy of continuous improvement that finds and reduces • Wasteful or unnecessary activities • Illogical or inefficient process sequencing • Rework • Excessive cycle times • Lean improvements are typically logical and easy to understand • Lean addresses problems that are • a “mile wide and an inch deep”

6. “Lean Six Sigma” Defined • Lean= efficient process design • Six Sigma= defect-free process execution • “Six Sigma” is a metric used to evaluate the process • Example: • A “defect” is the failure of any process to deliver the intended result • 3.4 defects per million opportunities for defects (99.9997% good)

7. The 5 Principles Of Lean Elimination of waste . . . Including unnecessary process steps Lean techniques are used to reduce unnecessary steps, eliminate rework, save time, save cost and extend capacity of valuable resources by: • Specifying the value of the process • Identifying the value stream for each process • Allowing value to flow without interruptions • Letting the customer pull value from the process • Continuously pursuing perfection Identifying waste and making it visible is the first step

8. Output Dependent on input Effect Monitor Process Y = f(x) X Y Process Focus Of Lean Six Sigma Inputs (X1, X2 . . Xn) Independent Cause Control Lean focuses on optimizing process design

9. 30 – 50 Xs (or more!) Business Need Dynamics Of Execution Strategy 10 – 15 Xs Y The Funnel Effect 8 – 10 Critical Xs X Define Phase Measure Phase Analyze Phase Improve Phase Control Phase 4 – 8 Critical Xs Y = f(X) 3 – 6 Critical Xs Sustain! Optimized Process KPIV = Key Process Input Variable

10. Business Need Define Measure Y Analyze X Improve Y = f(X) Control Sustain! DMAIC Process

11. 2 1 DEFINE MEasure The DMAIC Process Improvement Model Who are the customers And what are their priorities? 5 How is the process performing and how is it measured? CONTROL 3 4 improve Analyze How do we remove the causes of the defect? What are the important causes of the defect?

12. 1. Define Phase Confirm Process Requirements (voice of customer) Validate the definition of a “defect” High level process mapping Charter the project using metrics aligned with business objectives Execute “quick wins” when possible Confirm the business case for working the project

13. 2. Measure Phase Collect baseline data on project metrics (from the Define phase) Verify integrity of baseline data for project metrics Look for patterns in the data Quantify the historical performance Begin detailed process mapping Before trying to “fix” the problem, confirm that you can measure the process

14. 3. Analyze Phase Apply non-statistical techniques to brainstorm potentially critical Xs which may be driving variability in the project metrics (again from the Define phase) Apply statistical techniques to investigate the potentially critical Xs Only after completing Define and Measure do you begin the detailed investigation into Critical Xs

15. 4. Improve Phase Develop potential solutions based on Critical Xs from the Analyze phase Pilot the “best fit” solution Plan for full-scale implementation Solutions are based on findings from the Analyze phase

16. 5. Control Phase Final solution is robust and becomes ingrained in the operation. Develop Control Plan Implement full-scale improvement Implement controls Train personnel and hand-off control plan to Management

17. DAY 1 1&2 Phase Define The DMAIC Process with Tools • Tools: • Voice of Customer (VOC) Analysis • Process Mapping • Value Stream Mapping Measure Analyze Improve Control

18. DAY 2 3&4 Phase Define The DMAIC Process with Tools • Tools: • FMEA • Quick Wins 5S • The 8 Wastes Measure Analyze Improve Control

19. DAY 3 5 Phase Define The DMAIC Process with Tools • Tools: • Controls Plans • Lean Visual Controls • Mistake Proofing (Poke Yoke) Measure Analyze Improve Control

20. Define Integrating Lean And Six Sigma Measure Analyze Lean Tools Six Sigma tools No matter the nature of a project, value and objectives must be understood No matter the nature of a project, the process must be measurable Depending on the nature of a project, Lean tools, Six Sigma tools, or a combination may be best to solve the problem No matter the nature of a project, the final solution must be controlled. Improve Control

21. Summary • Lean Six Sigma gives you practical metrics to evaluate success in the context of corporate objectives. • Lean Six Sigma is used to reduce unnecessary steps, eliminate rework, save time, save cost and extend capacity of valuable resources. • Five phases of DMAIC process is define, measure, improve, analyze, and control.

22. Thank You