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Lean Six Sigma Green Belt Training. A. Workshop Goals. This Workshop will help you learn to: Implement a systematic approach to identify, map and control existing processes.

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Presentation Transcript
workshop goals
Workshop Goals

This Workshop will help you learn to:

  • Implement a systematic approach to identify, map and control existing processes.
  • Develop upstream and outcome metrics and targets that track process performance in satisfying critical customer requirements.
  • Utilize methodologies for collecting, displaying, and interpreting data.
  • Apply proven approaches for continuously improving processes, including DMAIC problem solving, and Tollgate reviews.

Ref Intro-1a

administrative information
Administrative Information
  • Safety (room, building)
  • Breaks and lunch
  • Facilities (bathrooms, services)
  • Courtesy (mobile phones, blackberries etc)
  • ?

Ref Intro-2

introductions activity
Introduce a colleague covering the following information:

Name

Work location

Job responsibilities

Experience prior to working at ING

Experience with Lean Six Sigma

Expectations of this workshop

Something interesting about you

Introductions Activity

Ref Intro-3

ground rules
Ground Rules
  • Be on time
  • Follow an agenda
  • Listen constructively
  • Defer items to Parking Lot
  • Ask Questions
  • Have fun!
slide8

Overview of

Lean Six Sigma

ing strategy and lean six sigma
ING Strategy and Lean Six Sigma

Customer Centric

Economic Value

Lean Six Sigma

Improve Persistency

Reduce Operational Costs

Increase Sales

Improve Mix of Business

Reduce Risk and Economic Capital

Identify Critical Customer Requirements

Define Gaps to Customer Requirements

Establish Baseline Metrics

Execute Improvements to Close Gaps

RESULTS

Lean Six Sigma Is “How” to Achieve Strategic Objectives

Ref Overview-1

ing strategy and lean six sigma1

Set the standard in helping our customers manage their financial future

Mission

Positioning Statement

ING is dedicated to deliver financial services

solutions valued by the customer

Brand Attributes

Delivers on

Promises

Customer- Centric

Is Easy to Deal with

Treats Me Fairly

ING Strategy and Lean Six Sigma
executing strategy with lean six sigma
Executing Strategy with Lean Six Sigma

Strategy Deployment

  • Voice of Customer
  • Voice of Process
  • Voice of Business
  • Market Factors
  • Competition/ Benchmarks
  • SWOT

BusinessStrategic Objectives

BusinessLine Strategies

BusinessLineTactics

METRICS

METRICS

METRICS

PROJECTS

Review Process

METRICS

Ref Overview-2

sources of lean six sigma projects
Sources of Lean Six Sigma Projects

Lean Six Sigma projects may be generated from a number of sources, examples include…

  • VOC – Improve timeliness, accuracy, satisfaction, control compliance risks, reduce fines
  • VOP – Reduce the gap between current performance and customer specifications
  • VOB – Increase sales, reduce expenses, improve productivity, includes VOE (Voice of the Employee) Increase employee retention, improve employee satisfaction

METRICS

Ref Overview-3a

lean six sigma project selection
Lean Six Sigma Project Selection

Inputs

  • Voice of the customer
  • Voice of the business
  • Voice of process

Prioritize

Projects

Known

solution with

supporting data?

YES

Translate into project opportunities

  • Strategic Fit
  • Economic Value
  • Time/Effort

NO

Implement solution, follow lean six sigma principles

Process Not Capable – use DFSS methodology

Process Capable – use DMAIC methodology

Ref Overview-3b

lean six sigma success factors

Business Process Framework

Customer & Market Network

Quantifiable Measures & Results

Committed Leadership

Strategy Integration

Full Time Six Sigma Leaders

Incentives & Accountability

Lean Six Sigma Success Factors
  • Establishing these factors provides the seeds of success.
  • They need to be integrated uniquely to fit each business.
  • They are all necessary for the best result.
  • The most powerful success factor is “committed leadership”

Ref Overview-5

lean six sigma failure factors
Lean Six Sigma Failure Factors
  • Leaping to the fix – faulty assumptions; not data based
  • Serving the wrong customer – not focusing on the voice of the “next” customer
  • Selecting the wrong projects – not linked to strategy
  • Solution-caused problems – poor sequencing; stakeholder under-involvement; ineffective resource planning; absence of change management; no project closure

Adapted from Six Sigma’s Seven Deadly Sins by James P. Zimmerman and Dr. Jamie Weiss of Kepner Tregoe

Ref Overview-6

the evolution of lean six sigma
The Evolution of Lean Six Sigma

Today: American Express, JP Morgan, Merrill Lynch, Wells Fargo, B of A , Caterpillar Financial …..

The foundation for Lean Six Sigma has

been effectively applied in a wide variety of companies

worldwide

over many decades

Design for Six Sigma: GE

Six Sigma: AlliedSignal, GE

Six Sigma: Motorola

Reengineering: Michael Hammer

Quality Circles

1970: Zero Defects: Philip Crosby

Japanese Quality methods: Ishikawa, Taguchi

Applied Lean Concepts: Toyota Production System

Statistical methods for business: Juran, Figenbaum

Late 1940s; Statistical methods in Japan; W. Edwards Deming

Statistical Sampling; Walter A. Shewhart

1920 Time and motion studies; Frederick Taylor

Ref Overview-7

what is sigma
What is Sigma?
  • The Greek letter σ (sigma) is used in statistics to describe variation.
  • Sigma (σ) represents the standard deviation in a population.
  • Standard deviation is derived from calculating the average difference between all data points of a population and the average of that population.

Ref Overview-9a

lean and six sigma thinking
Lean Thinking:

Customer focused

Identify waste

Improve process speed/cycle time

Specific speed tools – Value-add analysis; Kaizen events

Six Sigma Thinking:

Critical Customer Requirement (CCR) focused

Culture and infrastructure to sustain results

Focus on variation

Methodology driven – DMAIC, DFSS

Lean and Six Sigma Thinking

Lean Six Sigma - Blended to Optimize Results

Ref Overview-8

what is lean six sigma
What is Lean Six Sigma?

(cont’d.)

  • Measurement
    • Measures the variation and defect level in a process or product
    • Allows different processes to be compared
    • 3.4 defects per million opportunities

Ref Overview-9b

what is lean six sigma1
What is Lean Six Sigma?

(cont’d.)

  • Measurement
    • Measures the variation and defect level in a process or product
    • Allows different processes to be compared
    • 3.4 defects per million opportunities
  • Improvement Methodology
    • Customer-focused
    • Data and measurement-driven
    • Focused on reducing defect levels
    • Results-oriented

Ref Overview-9c

what is lean six sigma2
What is Lean Six Sigma?

(cont’d.)

  • Measurement
    • Measures the variation and defect level in a process or product
    • Allows different processes to be compared
    • 3.4 defects per million opportunities
  • Improvement Methodology
    • Customer-focused
    • Data and measurement-driven
    • Focused on reducing defect levels
    • Results-oriented
  • Catalyst for Organizational Change
    • Large-scale fundamental change in culture
    • Move to a data-driven, customer-centric mindset

Ref Overview-9d

who is the customer
Who is the Customer?
  • External
    • Purchasers of products and services
    • Distributors
    • Regulatory entities

Ref Overview-10a

who is the customer1
Who is the Customer?

(cont’d.)

  • External
    • Purchasers of products and services
    • Distributors
    • Regulatory entities
  • Internal
    • Other departments
    • Management / Shareholders

Ref Overview-10b

who is the customer2
Who is the Customer?
  • External
    • Purchasers of products and services
    • Distributors
    • Regulatory entities
  • Internal
    • Other departments
    • Management / Shareholders
  • Voice of Customer(VOC)
    • Information that can be collected from external/internal customers

Ref Overview-10

what is variation
What is Variation?

Process

Average

Customer

Requirement

  • Variation is the normal, measured difference in process outputs
  • Many process measurements focus on averages… averages don’t tell the whole story

Same Process

Average

15

25

30

20

5

1

10

Days to close loan

Ref Overview-11a

what is variation1
What is Variation?

(cont’d.)

Process

Average

Customer

Requirement

  • Knowledge of process variation and defect levels provides more insight into process performance
  • Less variation reduces costs, increases reliability, and customer satisfaction

Same Process

Average

Much Different

Customer Defects

15

25

30

20

5

1

10

Days to close loan

Ref Overview-11b

sources of variation

Process Outputs

Sources of Variation

Market

Critical Customer Requirements

Inputs

Process Activities

Suppliers

Defects

In-process variation may lead to defects in process output

Variation occurs in both process inputs and process activities – people, methods, materials, equipment, and environment

The output (Y) is determined by performance of inputs and processes (x)…. Y=f(x)

Ref Overview-12

goal of lean six sigma
Using Lean Six Sigma, we work to reduce variation and permanently move product or service outputs inside customer requirements. (Curve A to B)Goal of Lean Six Sigma

Critical Customer Requirement (CCR)

B

A

Defects: Process output that does not meet Customer Requirements

Product or Service Output

Ref Overview-13

improve process yield
Improve Process Yield

We use Lean Six Sigma to improve process yield. Process Yield is the proportion of process output that meets customer requirements.

Critical Customer Requirement (CCR)

Proportion of process output (B) that meets customer requirements = 100%

B

A

Proportion of process output (A) that meets customer requirements ≈ 70%

Produce or Service Output

Ref Overview-14

slide31

The ‘Hidden’ Factory (Lean Thinking)

.

  • The hidden factory corresponds to the resources that today are directed at creating waste, while they could be focused on generating high quality products and services.
  • For the typical organization, about 25% to 40% of all work activities consists of hunting for mistakes, unnecessary audits, rework, duplication of efforts and the performance of unneeded tasks.
rolled throughput yield
Rolled Throughput Yield

Rolled Throughput Yield (RTY)represents a combined yield for each step or sub-process.

Obtain RTY by multiplying the yield for each step or sub-process.

STEP 1

STEP 1

STEP 1

STEP 2

STEP 2

STEP 2

STEP 3

STEP 3

STEP 3

STEP 4

STEP 4

Ref Overview-15a

slide33

Rolled Throughput Yield (cont’d.)

Loan

Documentation

Yield = 95%

Loan

Application

Yield = 91%

Loan

Processing

Yield = 96%

Loan

Review

Yield = 96%

Rolled throughput Yield =

0.95 x 0.91 x 0.96 x 0.96 x 0.97 = 77.2%

Loan

Servicing

Yield = 97%

slide34

Rolled Throughput Yield (cont’d.)

(cont’d.)

  • RTY can be calculated on either the number of items that make it through defect-free the “first time right” or on the final number of items that are defect-free once errors are corrected
  • In most situations, it makes sense to base sigma calculations on First Time Right

Process Step 1

Correct?

No

Errors Reworked

First Time Right =

Number of items that make it through error-free without corrections

Final Yield =

Number of items that are defect-free AFTER errors are corrected

Ref Overview-16

rolled throughput yield activity
Rolled-Throughput-Yield - Activity
  • Appoint a facilitator in your project team to manage the time and the discussion.
  • Map your selected improvement process high-level (e.g. 6-8 process steps) on a flip chart
  • Make an estimate of the yield rate at each individual process step
      • You may have to first consider the criteria for defects and what the definition is for a defect free step! This may include establishing a target level for a step (e.g. this step must be finished in 2 hours)
  • Calculate the RTY % of the overall process
  • What is your conclusion?
  • Be ready to share your results in a short presentation.
process sigma is a great metric
Process Sigma is a Great Metric
  • Focus is on defects, even one is a failure for a customer
  • Universal measure that can be applied to any product or service
  • Difficult to motivate people to improve quality from 99% to 99.9997%

Distribution shifted +/- 1.5 sigma

DPMO = Defects per million opportunities

Sigma Improvement Requires Enormous Defect Reduction

Ref Overview-17

is six sigma performance necessary
Is Six Sigma Performance Necessary?

flight arrivals (all carriers)

IRS answers 21% of calls

Overnight delivery of 1st Class Mail

Correct legal advice from IRS

Soft drink quality in N. America

1000000

On-time

Mishandled baggage (all carriers)

Restaurant bills

Payroll processing

100000

Wire transfers

10000

1000

100

DPMO

Domestic airline fatality rate

10

(0.43ppm)

1

0

1

2

3

4

5

6

7

Process Sigma

Is the Airline Industry Focused on the Right Processes?

Ref Overview-18a

is six sigma performance necessary1
Is Six Sigma Performance Necessary?

(cont’d.)

At 3σ, or 93% Yield, there would be:

  • >90% of computers would not function
  • 10.8 million mishandled healthcare claims annually
  • 54,000 checks lost each night by a single large bank
  • 270 million erroneous credit card transactions each year in the US

Source: The Six Sigma Handbook 2003, page 61, T. Pyzdek

Ref Overview-18c

is six sigma performance necessary2
Is Six Sigma Performance Necessary?

(cont’d.)

At 4.5 σ, or 99.9% Yield, there would be:

  • At least 20,000 wrong drug prescriptions per year
  • Unsafe drinking water almost 1 hour each month
  • No telephone service for nearly 10 minutes each week
  • Two short or long landings at O’Hare airport each day
  • 25,000 lost or incorrectly delivered articles of mail per hour
  • Over 9,000 wrong felony convictions per year
  • 50 Newborn babies dropped at birth by doctors each day

Ref Overview-18b

setting sigma performance targets
Setting Sigma Performance Targets
  • If the current Process Sigma is greater than 3.0, a two times defect improvement goal is set, e.g., improve from 1,000 DPMO to 500.
  • If the current Process Sigma is 2.9 or less, a ten times defect improvement goal is established, e.g., 300,000 DPMO to 30,000.

Ref Overview-19

the cost of defects
The Cost of Defects

Activity:

Brainstorm some costs that you incur as a result of defects.

Ref Overview-20

cost of defects examples
Cost of Defects - Examples
  • Hidden Factories
    • Re-work of defects in processes or products
    • Complex workarounds
    • Excessive phone calls, emails, faxes and other correspondence as a result of poor performance
  • Inspections and Audits
    • Back-end audits and approvals
    • Multiple approval steps
  • Lost Sales and Market Share
    • Market product requirements not met
    • Service or delivery requirements not met
  • Fines and Other Penalties

Ref Overview-21

lean six sigma business system
Lean Six Sigma Business System
  • MTP Planning– the steering mechanism of the Business System
  • Process Management–documenting and measuring process performance
  • Problem Solving – using lean, DMAIC, DFSS, and other methodologies to close process performance gaps
  • People – recognizing and harnessing the exceptional potential of employees, suppliers, customers, and experts

Ref Overview-22

dmaic vs dfss

Define Business

Improvement Opportunity

Does Process

Currently Exist?

No

Yes

Measure Current Performance

Measure Market Requirements

Analyze Root Cause

of Current Performance

Analyze Design Alternatives

Develop New Process

Is Current Process

Capable of Meeting

Customer Reqts?

No

Yes

Control Performance

Improve Performance

DMAIC vs. DFSS

Lean Six Sigma DMAIC

Lean Six Sigma DFSS

Ref Overview-23

dmaic vs dfss1
DMAIC vs. DFSS

(cont’d.)

D M A I C

D F S S

  • Define customer requirements and project goals
  • Measure the process to determine current performance
  • Analyze to identify and validate root causes of defects
  • Improve process by eliminating causes of defects
  • Control and monitor on-going process performance
  • Define customer requirements and project goals
  • Measure customer needs and specifications
  • Analyze design options to meet customer requirements
  • Design a detailed process that meets customer requirements
  • Verify that current and future process meets customer requirements

Define

Measure

Analyze

Design

Improve

Control

Verify

Ref Overview-24a

funneling the focus of process work
Funneling the Focus of Process Work

Variables

Ref Overview-24b

project components define
Project Components: DEFINE

Overall objective:Clarify the Improvement Opportunity

Identify Business

Opportunity/Problem

Identify Outcome Metric(s) and Target

Establish Roles & Stakeholder Expectations

Clarify Project Boundaries, Financial Benefit, and Preliminary Problem Statement

Charter & Schedule Project,

Select Resources

Identify Critical Customer Requirements (CCRs)

To Measure Step

Ref Overview-25a

project components measure

Data Collection Plan

Project ________________________

A

B

C

E

What questions do you want to answer?

Mary

Data

Operational Definition and Procedures

What

Measure

How

Related

How/where

Sampling

John

1

type/ Data

Measured

conditions to

recorded (attach

notes

2

type

record

form)

Sally

Jim

Frequency Plots

Pareto Chart

DPMO_____

Yield _____

Sigma _____

Goal _____

UCL

UCL

LCL

LCL

F

F

2

F

F

1

3

4

Run Chart

Project Components: MEASURE

Overall objective:Narrow the improvement opportunity to a specific problem statement.

Plot Outcome Defect Data

Stratify Data

Revise Problem Statement

From Define Step

Create Detailed

Process Map

Calculate Performance

Collect Upstream Data

Check Sheet

Develop Data Collection Plan

Understand Variation

Assess Financial Impact (COPQ)

Control Chart

To Analyze Step

Ref Overview-25b

project components analyze

Scatter Plots

Customer

Customer

5

10

15

20

25

30

3

5

40

45

50

55

60

>60

5

10

15

20

25

30

3

5

40

45

50

55

60

>60

Y

5

5

10

10

15

15

20

20

25

25

30

30

3

3

5

5

40

40

45

45

50

50

55

55

60

60

>60

>60

Stratified Frequency Plots

Time With Customer

X

(in minutes)

Cause and Effect Diagram

Root

Contingency Table

Sub Cause

Cause

1

Level 2 Cause

Made the Sale

Made the Sale

Level 3 Cause

Level 1 Cause

Level 1 Cause

Yes

No

Revised

ProblemStatement

5

5

Level 2 Cause

5

5

10

10

15

15

20

20

25

25

30

30

3

3

5

5

40

40

45

45

50

50

55

55

60

60

>60

>60

Level 1 Cause

Present

Level 1 Cause

Did Not

Make the Sale

Level 2 Cause

Did Not Make the Sale

Level 1 Cause

Defect

Root

Level 2 Cause

Cause

5

5

2

Not

Present

5

5

10

10

15

15

20

20

25

25

30

30

3

3

5

5

40

40

45

45

50

50

55

55

60

60

>60

>60

Time With Customer

(in minutes)

Project Components: ANALYZE

Overall objective: Identify and confirm the root causes of the problem statement.

From Measure Step

Confirm Root Causes with Data

Identify Value Added & Non-Value Added Steps

Continuous Data

Brainstorm and Organize Potential Causes

Mixed

Data

To Improve Step

Attribute

Data

Ref Overview-25c

project components improve

“After”

Occurrence

Occurrence

Severity

Item or

Potential

Potential

Responsibility

Detection

Severity

Detection

RPN

Process

Failure

Effect (s)

Potential

Current

Recommended

and

RPN

Step

Mode

of Failure

Cause(s)

Controls

Action

Target Date

Action Taken

Ease to Implement

Effectiveness

Root Causes

Solutions

Specific Tasks

Total Score

Problem

Action

Cost

Total Risk Priority Number =

“After”

Risk Priority Number =

Before

Before

After

Good

3.6 Process Sigma

3.2 Process Sigma

:

Problem Statement ________________________________________

Solution (s) / Specific Task (s) ____________________________

IMPROVE changes

Cost/Benefit Analysis

implemented

Before

After

Task / Project

Status

Who

Due Date

}

Improvement

1.3 s

3.1 s

Time

100%

100%

Cost

}

75%

75%

Benefit

Improvement

50%

50%

25%

25%

Approval from Finance

A2

A1

A3

A4

A1

A2

A3

A4

Project Components: IMPROVE

Overall objective: To identify/implement countermeasures that will eliminate or reduce the confirmed root causes.

From Analyze Step

Cost/Benefit Analysis

Develop Action Plan

Quantify Pilot Results

Identify Breakthrough Ideas

Updated Pareto Chart

Lean Thinking

Select Countermeasures

Risk Analysis

Develop Pilot Plan

Update Metrics

Selection Matrix

FMEA

Gantt Chart

To Control Step

Ref Overview-25d

project components control

Train

“Y” Outcome Metrics

Good

Cost/Benefit Analysis

Approval from Finance

“X” Upstream Metrics

UCL

UCL

LCL

LCL

Project Components: CONTROL

Overall objective: To maintain the gains.

From Improve Step

Communicate Results

Close Project

Standardize the Process

StandardPractices

Celebrate!

Process Control Plan

Ref Overview-25e

lean six sigma involves cultural shift
Lean Six Sigma Involves Cultural Shift
  • Owns vision,
  • Leads change
  • Provide project-specific support
  • SMEs (subject matter experts) provide support as needed
  • Directs, integrates project w/in business
  • Creates business deployment plan

Executive

Champion

Project Team Members / SME

Project

Sponsor

  • Understand vision
  • Apply concepts to their joband work area

All Employees

Green Belts

Process Owner

  • Help Black Belts as team member
  • Experienced Green Belts lead some projects

Black Belts

  • Supports Black Belts and Local Champion
  • Sustains and leverage gains

Master Black Belts

  • Full-time
  • Facilitate problem solving
  • Train and coach Project Teams
  • Full-time
  • Train and coach Black Belts and Six Sigma Green Belts

Ref Overview-26

lean six sigma roles responsibilities
Lean Six Sigma Roles/Responsibilities

Executive Champion

  • Creates the vision and aligns Lean Six Sigma with business strategy
  • Defines strategic goals and measures
  • Establishes business targets
  • Promotes Lean Six Sigma tools and methodology
  • Helps to remove barriers to success
  • Reviews project and team progress
  • Attends tollgates during initial roll-out

Ref Overview-27a

lean six sigma roles responsibilities1
Lean Six Sigma Roles/Responsibilities

(cont’d.)

Project Sponsor

  • Positions project within business environment
  • Identifies process owner of improvement projects
  • Develops preliminary project charter
  • Defines improvement areas, goals and financial targets Identifies key SME resources for project team
  • Positions and kicks off improvement project
  • Reviews project and team progress
  • Helps gain organizational support and removes barriers
  • Helps gain organizational support for solution
  • Recognizes team and contributing members
  • Ensures access to data from existing databases
  • Establishes and certifies savings

Ref Overview-27b

lean six sigma roles responsibilities2
Lean Six Sigma Roles/Responsibilities

(cont’d.)

Process Owner

  • Participates in tollgates
  • Identifies resources and team members for project team
  • Ensures sufficient implementation resources
  • Ensures organization support of solution deployment
  • Evaluates sufficiency of project “controls” designed to hold gains upon solution implementation
  • Owns process, Responsible for sustaining project gains
  • Removes barriers for the team

Ref Overview-28a

lean six sigma roles responsibilities3
Lean Six Sigma Roles/Responsibilities

(cont’d.)

Master Black Belt

  • Expert on Six Sigma tools and concepts
  • Trains Black Belts and ensures they are properly applying the methodology and tools
  • Coaches and mentors Black Belts and Green Belts
  • Works high-level projects, many of which are across divisions or business units
  • Assists Champions and Process Owners with project selection, project management and Lean Six Sigma deployment and administration
  • Removes barriers for the team

Ref Overview-28b

lean six sigma roles responsibilities4
Lean Six Sigma Roles/Responsibilities

(cont’d.)

Black Belt

  • Responsible for leading, executing, and completing Lean Six Sigma projects
  • Teaches team members the Lean Six Sigma methodology and tools
  • Assists in identifying project opportunities and refining project details and scope
  • Reports progress to MBB, Process Owners and Champions
  • Mentors Green Belts and team members

Ref Overview-29a

lean six sigma roles responsibilities5
Lean Six Sigma Roles/Responsibilities

(cont’d.)

GreenBelt

  • Assists Black Belt as team member
  • Can lead smaller scope projects
  • Reports progress to MBB or BB, Process Owners and Sponsors

Project Team Members/Subject Matter Experts (SMEs)

  • Provide process knowledge and understanding
  • Participate in identifying and gathering data
  • Identify gaps
  • Help analyze data and identify solutions

Ref Overview-29b

what is a tollgate review
What is a Tollgate Review?
  • A milestone that the project must pass through at each step (D-M-A-I-C)
  • Formal presentation(s) followed by questions and discussion
    • Assess status of project – project control
    • Review activities and accomplishments prior to proceeding to the next phase – alignment with plan
    • Revisit Project Charter assumptions
  • A tollgate review ends with a Go/No-Go decision

Tollgate reviews ensure projects deliver desired results.

Ref Overview-30a

who attends tollgate reviews
Black Belt/Green Belt

Project Sponsor

Process Owner

Project Team (Key Members)

Quality Champion

Senior Mgmt. Stakeholders

Other Stakeholders

Master Black Belt

Required

Required

Required

Required

Recommended

Recommended

As Appropriate

Required

Who Attends Tollgate Reviews?

Ref Overview-30b

why are tollgate reviews critical
Brainstorm reasons why Tollgate Reviews are important. Why Are Tollgate Reviews Critical?

2. At what intervals should Tollgate Reviews be scheduled? Why?

Discuss ideas

Ref Overview-31

who is using lean six sigma
Who is Using Lean Six Sigma?

Financial Services:

Manufacturing:

Services:

Companies across all regions and industries

slide63

UNIT 1

Define

define learning objectives
Define – Learning Objectives

At the conclusion of this unit, you will be able to:

  • Describe actions for launching a Lean Six Sigma project.
  • Identify project stakeholders and expectations.
  • Clarify project scope.
  • Define Critical Customer Requirements (CCRs) to measure a process performance metric and establish a target for improvement.
  • Develop a project charter and schedule.

Ref Unit 1-1

define major activities
Define– Major Activities

DEFINE

MEASURE

ANALYZE

IMPROVE

CONTROL

Develop Project Charter and Schedule

Launch

the

Project

Identify Stakeholder Expectations

Clarify

Project

Scope

Measure Customer CCRs

Overall objective:Clarify the Improvement Opportunity

Ref Unit 1-2a

define key deliverables commonly used tools
Stakeholder Analysis

Preliminary Financial Benefit

Preliminary Problem Statement

Project CCR’s

Process Outcome Metric/Target

Team Charter

Risk Analysis

Project Schedule

Surveys

Focus Groups

Interviews

Stakeholder Analysis

SIPOC

In and Out of Scope Analysis

Risk Analysis

Pert Chart

Define – Key Deliverables/Commonly Used Tools

Key Deliverables:

Commonly Used Tools:

Ref Unit 1-2b

define major activities1
Define – Major Activities

DEFINE

MEASURE

ANALYZE

IMPROVE

CONTROL

Develop Project Charter and Schedule

Launch

the

Project

Identify Stakeholder Expectations

Clarify

Project

Scope

Measure Customer CCRs

Ref Unit 1-3a

lead team identifies lean six sigma projects
Lead Team Identifies Lean Six Sigma Projects

Analyze

current operations, competitive environment,

§

customer input, employee surveys, benchmark information.

Identify

priorities that align with MTP, and that

§

PLAN

address local priorities.

Establish

metrics with targets for improvement to

§

measure performance.

Launch

projects that focus on priorities.

§

DEPLOY

Coordinate

activities in an action plan that defines who

§

will be doing what by when.

Monitor

progress during Tollgates.

§

Offer Feedback,

both positive and constructive, to keep

§

REVI

EW

people informed.

Share Thoughts, Feelings and Rationale

so others

§

can learn from a leader’s knowledge and experience.

Inform

Senior Management of progress.

§

REPORT

Recommend

improvements.

§

Continuously improve

both results and the approach

§

GROW

taken to achieve them.

Ref Unit 1-3b

lead team identifies lean six sigma projects1
Management Action

Individual Assignment

Form a Project Team

Process Management

DMAIC

DFSS

Lead Team Identifies Lean Six Sigma Projects

(cont’d.)

Approach Options

Methodology Options

Ref Unit 1-4a

dmaic for existing process improvement
DMAIC for Existing Process Improvement
  • Control the process “maintain the gains & transition to full implementation”
  • Define the project’s purpose, scope and major milestones “clarify the opportunity”

5

1

CONTROL

DEFINE

  • Improve the process “develop & pilot solutions”
  • Measure the current process performance “narrow the problem area”

IMPROVE

MEASURE

4

2

ANALYZE

3

  • Analyze potential root causes “confirm with data”

Ref Unit1-4b

lead team fills lean six sigma roles
Lead Team Fills Lean Six Sigma Roles

(cont’d.)

Project Roles

  • Executive Champion
  • Project Sponsor
  • Process Owner
  • Master BlackBelt
  • BlackBelt
  • GreenBelt
  • SMEs

Ref Unit1-5

define major activities2
Define – Major Activities

Develop Project Charter and Schedule

Launch

the

Project

Identify Stakeholder Expectations

Clarify

Project

Scope

Measure Customer CCRs

A stakeholder is someone with an interest in, and/or who may be effected by outcomes of the project.

Ref Unit 1-6a

stakeholder expectations
Stakeholder Expectations

The Project Sponsor communicates:

  • The need for change
  • Desired outcomes
  • Where performance is now and targets
  • How performance will be measured
  • Level of urgency
  • Related issues to be addressed

Ref Unit 1-6b

stakeholder expectations1
Stakeholder Expectations

(cont’d.)

Project

Sponsor

Process

Lead

Owner

Team

Your team\'s expections of others - Other\'s expectations of your team -

Other

Project

Team

Internal/External

Project

Customers

Teams

Internal/External

SMEs

Suppliers

Other

Employees

Ref Unit 1-7

stakeholder expectations2
Stakeholder Expectations

(cont’d.)

What stakeholders typically expect:

  • On-time delivery
  • Resource management
  • Accurate cost forecast and control
  • Risk Management / Security
  • Measurable results / ROI
  • Easy to understand /implement

Ref Unit1-8a

stakeholder expectations3
Stakeholder Expectations

(cont’d.)

What Project Teams typically expect :

  • Clear goals and deliverables
  • Resource availability
  • Time to work on the project
  • Clear idea as to how performance will be evaluated
  • Positive and constructive feedback
  • Support, as needed

Ref Unit1-8b

activity
Activity

Expectations

Ref Unit 1-9

define major activities3
Define – Major Activities

Develop Project Charter and Schedule

Launch

the

Project

Identify Stakeholder Expectations

Clarify

Project

Scope

Measure Customer CCRs

Ref Unit 1-10a

clarify project scope
Clarify Project Scope

The scope of a project is the sum of activities that a team is committed to complete in a given scheduled timeframe.

Begin thinking about scope using the high-level process map you developed in the PreWork…

Sell Policy

Review Application

Underwrite

Policy

Issue Policy

Ref Unit 1-10b

clarify project scope1
Clarify Project Scope

(cont’d.)

In and Out of Scope Analysis

Ref Unit 1-11

clarify project scope2
Clarify Project Scope

(cont’d.)

Preliminary Problem Statement

  • What is Wrong – state the effect, not why it is wrong, and not the solutions
  • Measurable – how often, how much, and when
  • Specific – avoid broad categories, e.g., poor morale; low customer satisfaction
  • How Customers Are Effected – areas of dissatisfaction
  • Objective – does not imply blame or cause
  • What Is and What Should Be – gap between customer expectations and performance

Ref Unit 1-12

clarify project scope3
Clarify Project Scope

(cont’d.)

Calculate Financial Benefit

  • An initial financial benefit of the project is developed based on the project scope and preliminary problem statement.
  • When determining Financial Impact, calculate annualized benefits.
  • Look for benefits that may accrue from reducing or eliminating defects in the process.

Ref Unit 1-13

activity1
Activity

Clarify Project Scope

Ref Unit 1-14

define major activities4
Define – Major Activities

Develop Project Charter and Schedule

Measure Customer CCRs

Launch

the

Project

Identify Stakeholder Expectations

Clarify

Project

Scope

Ref Unit 1-15a

customer requirements
Customer Requirements

Do you remember from the PreWork…

  • What are typical customer requirements?
  • What are customer requirements categories?

Requirement Categories:

Ref Unit 1-15b

must haves vs like to have
Must Haves vs. Like to Have

Separate Must Haves from Like to Haves…

  • Ask questions of internal customers
  • Negotiate for win/win reasonable requirements
  • Agree on specific, measurable, attainable and trackable performance levels

Ref Unit 1-16

sipoc analysis

Products

Products

Suppliers

Customers

Services

Services

SIPOC Analysis

Inputs

Outputs

Process

Ref Unit1-17

80 20 rule
80/20 Rule

Use the 80/20 rule to identify the 20% of customer requirements that are most critical.

Review your SIPOC Analysis while considering the following questions:

  • Who is the “next customer” – the direct recipient of our process output?
  • Who are the most critical customers of our process (it may only be one customer)?
  • Who would be most impacted if our process stopped producing an output?

Ref Unit 1-18

activity2
Activity

SIPOC Analysis

Ref Unit 1-19

critical customer requirements ccr
Critical Customer Requirements (CCR)

A CCR is a description of a product/ service attribute or characteristic that influences a customer’s requirement.

To identify CCRs for your process…

  • What attribute of my product/service does the next customer (my key customer) most care about?
  • What attribute of my product/service does the business most care about?
  • Work with your Project Sponsor to rectify any conflicts.

Ref Unit 1-20

measure ccrs with outcome metrics
Measure CCRs with Outcome Metrics
  • Outcome metrics are “after the fact” “past tense” measures
  • They always focus on defects
  • They represent the proportion of total process output that is not satisfying the customer requirement over a period of time
  • A typical process has 1-3 outcome metrics

Ref Unit 1-21

tips for defining outcome metrics
Tips for Defining Outcome Metrics
  • Customer Oriented
  • Cost Effective
  • Controllable
  • Calculable
  • Consistent

Ref Unit 1-22

system of metrics

Process A

Process A

Region 1

Process B

Process B

Process C

Process C

Region 2

Business Line

Process D

Process D

Process E

Process E

Region 3

Process F

Process F

System of Metrics

An outcome metric for one process should link to the next higher-level process – see example on next slide

Ref Unit 1-23

setting outcome metric targets
Setting Outcome Metric Targets

Sources of Targets

  • Critical customer requirement data
  • Specifications
  • Past performance trends
  • Analysis of potential for process improvement (Process Sigma)
  • Benchmark levels of performance attained by competitors, or best in class in your organization

Ref Unit 1-24a

setting outcome metric targets1
Setting Outcome Metric Targets

(cont’d.)

Tips for Setting Targets

  • Use numbers to clarify desired level of performance
  • Be prepared to change target
  • Establish a time frame for achieving target with intermediate targets
  • With multiple process outputs, set targets for each to realize the overall product or service target

Ref Unit 1-24b

valid ccrs
Valid CCRs

Note: “On time” means within 5 working days beginning the day after the policy is received from agent.

Ref Unit 1-25

valid ccrs1
Valid CCRs

Promise what you can deliver.

Ref Unit 1-26

activity3
Activity

Define Valid CCRs

Ref Unit1-27

define major activities5
Define – Major Activities

Develop Project Charter and Schedule

Launch

the

Project

Identify Stakeholder Expectations

Clarify

Project

Scope

Measure Customer CCRs

Ref Unit 1-28a

project charter
Project Charter

Elements of a Project Charter

  • Business Opportunity
  • Business Benefits/Customer Benefits
  • Key Deliverables
  • Metric /Target
  • Process Scope
  • Project Schedule and Resources

Ref Unit 1-29

identify and mitigate risks
Identify and Mitigate Risks
  • People
  • Technology
  • Resources
  • Cost
  • Schedule
  • Environment

Can you think of others?

Ref Unit 1-30

identify and mitigate risks1
Identify and Mitigate Risks

(cont’d.)

Ref Unit 1-31

project schedule resources
Project Schedule & Resources
  • Serves as a record of team participation
  • Tracks the number and duration of meetings
  • Clarifies a schedule for completing each of the DMAIC steps
  • Facilitates comparison of the planned schedule with actual time required
  • Includes actions to reduce/mitigate identified risks

Ref Unit 1-32

project schedule resources1
Project Schedule & Resources

(cont’d.)

Project Schedule Worksheet

Project Theme

Team Name

Sponsor

Team Information

Team Members/ % Dedicated

Date

Attd.

Hours

Date

Attd.

Hours

Date

Attd.

Hours

Date

Attd.

Hours

Meeting Record

Ref Unit 1-33a

project schedule resources2

Schedule:

Planned

Actual

Project Close

Week/Month

Define

Measure

Analyze

Improve

Control

Project Schedule & Resources

(cont’d.)

1

2

3

4

1

2

3

4

1

2

3

4

1

2

10

10

10

10

11

11

11

11

12

12

12

12

1

1

Ref Unit 1-33b

activity4
Activity

Develop Project Charter, Schedule and Resource Requirements

Ref Unit 1-35

project tollgates
Project Tollgates

A tollgate occurs at the end of each step in the DMAIC methodology with the purpose of...

  • Monitor team progress
  • Identify additional resource needs
  • Maintain focus
  • Assist in dealing with sensitive issues
  • Ensure coordination among all teams
  • Share best practices
  • Remove organizational barriers
  • “See” the business
  • Check for consistency
  • Reward and recognize

Ref Unit 1-34a

define project tollgate
Define Project Tollgate

Prepare to answer the following questions during a tollgate review at the end of the Define Step:

  • What is the problem or opportunity?
  • Why is this project important to the business?
  • Who is the project Sponsor
  • Does the Project Charter address key stakeholder expectations?
  • When does the Project Schedule call for the project to be completed?
  • What identified risks most threaten the project?
  • Who is working on this project? Why?
  • How does the outcome metric measure performance against CCRs?
  • How were targets established for each metric?

Ref Unit 1-34b

unit summary
Unit Summary

Having completed this unit, here are some questions you should be able to answer:

  • What actions are involved in launching a Lean Six Sigma project?
  • Who are typical project stakeholders? What do they typically expect from a project?
  • What is a CCR?
  • What metric is used to measure overall process performance in satisfying CCRs?
  • How are the Project Charter and Schedule helpful?

Ref Unit 1-38a

project components define1
Project Components: DEFINE

Overall objective:Clarify the Improvement Opportunity

Identify Business

Opportunity/Problem

Identify Outcome Metric(s) and Target

Establish Roles & Stakeholder Expectations

Clarify Project Boundaries, Financial Benefit, and Preliminary Problem Statement

Charter & Schedule Project,

Select Resources

Identify Critical Customer Requirements (CCRs)

To Measure Step

Ref Unit 1-38b

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