PMI-MN Breakfast Meeting Tuesday, April 11 th , 2006

1. PMI-MN Breakfast MeetingTuesday, April 11th, 2006 Show Me The Business Value Discover Lean Six Sigma “Best Bets” for Tangible Improvements Part 3 Presented by: Michelle Goodman info@trissential.com

2. 3 Part Series Agenda • Lean Six Sigma and the Big Picture - Part 1 • What Exactly is Lean Six Sigma? • Corporate Deployments • Big is Not Always Better • Individual Execution – Part 2 • Project or Activity Selection and Scoping • Resource Utilization • Comprehensive Communication • Metrics & Results • Personal Corporate Citizenship • Best Bets Beyond the Office Area – Part 3 • Little’s Law • Non-corporate business environments • Working with Small Businesses • Can my community work benefit?

3. Goal – Reduce waste and increase process speed Focus – Bias for action/ Implementing known solutions Method – Kaizen events Goal – Improve performance on Customer CTQs Focus – Root Cause Analysis/ Developing Solutions Method – Black Belts dedicated to projects Lean Six Sigma Is the Integration of Two Powerful Business Improvement Approaches... Lean Speed Enables Six Sigma Quality (Faster Cycles of Experimentation/learning) Six Sigma Quality Enables Lean Speed (Fewer Defects Means Less Time Spent on Rework) Six SigmaCulture+Quality LeanSpeed+Low Cost

4. Lean & Six Sigma Tools Define Measure Analyze Improve Control • Project ID Tools • Project Definition Form • Value of Cycle Time • Net Present Value Analysis • Internal Rate of Return Analysis • Discounted Cash Flow Analysis • PIP Management Process • RACI • Quad Charts • Process Mapping • Value Stream Mapping • Process Cycle Efficiency • Lean Six Sigma Metrics • Process Sizing • Kaizen Events • Multi-Voting Techniques • Pareto Charts • C&E/Fishbone Diagrams • FMEA • Check Sheets • Run Charts • Control Charts • Gage R&R • Subjective Measurement Systems • Cp & Cpk • SupplyChainAcceleratorSM Time Trap Analysis • Analytical Batch Sizing • Multi-Vari • Box Plots • Interaction Plots • Regression • ANOVA • C&E Matrices • FMEA • Brainstorming, Affinity • Benchmarking • Kaizen Events • Pull Systems • Generic • Replenishment • Part Stratification • Setup Reduction • TPM, 5S • Process Flow • Line Balancing • DOE • Hypothesis Testing • Force Field • Tree Diagrams • Gantt Charts • Check Sheets • Run Charts • Histograms • Scatter Diagrams • Control Charts • Visual Control Tools • Poka-Yoke • Pareto Charts • Interactive Reviews

5. Little’s Law and other Favorite Resources

6. Know the Heartbeat • Plan and execute in 90 day cycles • Fewer people on team – better engagement and momentum • SMEs (Subject Matter Experts) – best utilized in small doses • Focused work on fewer subjects (Little’s Law)

7. Little’s Law • Lead Time = Amount of Work-In-Process Average Completion Rate • You can speed up any process – reduce lead time – by reducing the amount of WIP, even if you do nothing to improve the completion rate

8. Pull System - Quote-to-Order Process Improvement Pull System - Moderate Complexity Quotation Work Cell - 2 1 1 1 2 6 6 3 1 1 5 1 3 1 4 1 2 1 1 5 2 1 5 1 1 1 3 4 1 1 WIP limit = 48 Units of Work Exits = 20 Units/Day Queue: Used to manage staffing requirements 2 1 Avg Cycle Time = “Quote WIP”/Exit Rate = 48 units / 20 units per day= 2.4 days 1 5 2 1

9. Favorite Resources • Making Six Sigma Last by George Eckes • What is Six Sigma? by Peter Pande and Larry Holpp • What is Lean Six Sigma? by Mike George, Dave Rowlands, & Bill Kastle • Lean Six Sigma for Service by Michael George • People Styles at Work by Robert Bolton and Dorothy Grover Bolton • Memory Jogger Collection (Black Belt) by Goal QPC

10. Lean Six Sigma “Best Bets” in The Small Business Environment

11. Michelle’s definition of a “Best Bet” • Does not require a LSS program • Does not require LSS certification • Applicable in various business environments • Has merit on individual basis

12. Corporate Environment • Pros: • Knowledgeable in team work / sponsorship roles • Reservoir of resources • Comfortable with standard operating procedures • Established decision making protocol • Skills enhancement such as Lean ix Sigma training • Cons: • Systems that are slow to change • Internal politics and bureaucracy • Risk and change averse • Decentralized structures discourage replication • Lack of passion?

13. The Small Business World • Corporate to Small Business • Small Business to Small Business • Landscaping / Lawn Care • Construction • Real Estate • Financial Services • Educational Services • Seasonal & Holiday-based Initiatives • Professional Services • Maintenance Support • Retail Sales • Catering and Restaurants

14. The Small Business World • Pairing varying business paradigms • Planning Cycles • Process Maturity • Funding and Resource Availability • Business Communication and Administration • Formality and Complexity of Contracts and Service Level Agreements • Ongoing versus Single Interactions Example: Business unit working with small, family-owned catering business for ongoing events and functions

15. Small Business Environment • Pros: • Natural inclination toward VOC • Flexibility and customization • Implementation speed • Willingness to learn and accept best practices • Cons: • Ad hoc process implementation • Business administration less mature • Resource instability – capacity spikes • May need mentoring and training • Implementation speed

16. Best Bet Solutions • Planning Cycles • Provide scope • Adjust to seasonal requirements and industry work cycles rather than corporate quarters (90 days) or budgeting cycle • Tax Season, Holiday Events, School vacations • Get a written plan – move from ad hoc planning to process orientation • Provide templates and examples for contracts and agreements

17. Best Bet Solutions • Process Maturity • Focus is on quality aspect rather than lean improvements • Development of custom solutions rather than improvement of existing ones • Document key components of process • Provide sponsorship, mentoring, training • Establish metrics to review in future evaluations

18. Best Bet Solutions • Funding and Resource Availability • Minimize change requests • Provide longer lead times – fewer available resources • Work with internal accounting practices to accommodate cash flow needs • Establish Risk Mitigation plan, including quality assurance

19. Best Bet Solutions • Business Communications • State expectations explicitly in writing • Provide examples and templates (tools) • Define deliverables and time tables • Give more frequent feedback and create checkpoints early in the delivery cycle • Seek involvement beyond primary contact

20. Community and Volunteer Activities

21. Community and Volunteer Involvement • Corporate Outreach Programs • United Way, Meals on Wheels, Grants • Work sponsored volunteer time and funds • Professional Associations • Neighborhood and Condo Associations • Boy Scouts / School Sports / PTA • Humane Society • Cultural or Church Affiliations • Environmental Efforts and Disaster Relief • Private functions Example: Involvement on a Neighborhood Association Board of Directors

22. Community / Volunteer Environment • Pros: • Ability to choose involvement and time commitment • Sense of purpose • Provides variety and diversification • Ability to influence standard of living other tangible monetary drivers • Cons: • Volunteer Dynamics • Lack of reliable resources • Yearly churn of participants • Lack of established and repetitive processes • Varying degrees of accountability & commitment

23. Best Bet Solutions • Focus on Lean Aspects • Quality is hard to control • Minimal metrics or agreement to define or measure quality • No clear VOC (voice of the customer) • Many volunteers and inputs • No clear decision making • Different levels of knowledge and capabilities • Varying levels of commitment

24. Best Bet Solutions • Reduce time obligation for those involved • Differentiate between value-add and non-value-add • Apply simplified versions of tools such as value stream mapping • Simplify approval and decision process by involving small groups and inform the rest • Reduce routing of information • Automate monthly tasks • Breakdown tasks to 1 person work packets • Work fast and furious for short durations • Schedule meetings longer to include working time

25. Best Bet Solutions • Reduce complexity of tasks • Add efficiency and eliminate waste • Establish simplified documented standard operating procedures (repetitive process) • Use examples and templates from umbrella organizations and work experience (replication) • Introduce role of meeting facilitator and other standard team meeting principles • Provide guidelines for transition work (replication) • Introduce steps for involving SMEs for small, specialized tasks • Reduce use of acronyms, technical terms (VOC)

26. Conclusion Michelle Goodman, MBA, PMP Senior Process Consultant O 952-595-7970 C 651-261-9422 mgoodman@trissential.com www.trissential.com