Download - Lean Six Sigman for Service
Lean Six Sigma for Serviceby Michael L. George
Using Lean Six Sigma for Strategic Advantage in Service
• Services have 30-80% waste– Activities that have no value to the customer
• Service activities are not used to collecting and using data about their processes
• Focus on how the customer perceives value instead of how we are arranged internally
• Shift resources to where their impact is maximized
What is Lean?
• Lean focuses on speed of execution– Velocity of a process is proportional to its flexibility
• Maximize process velocity– Speed acceleration tools
• Optimize work flow– Rapid action Kaizen teams
• Eliminate delays• Quantify and eliminate complexity
– The complexity of the service generally adds more nonvalue added costs than both poor quality or slow speed process problems
• Eliminate non value added steps• 80% delays caused by 20% of the process steps
Indications of Fat
• WIP backlog• Slow processes are expensive processes• Chasing information• Decision loops• Interruptions• Expediting necessary• Work lost in cracks• No visibility of overall process
Little’s Law
• Backlog ties up resources• Lead time= Work in Process/average
completion rate– To increase efficiency, limit the amount of
work you allow into the process– This works for materials, but not for face time
with the customer– Pull system is good control mechanism
• Cap at maximum WIP, create buffer, triage work coming out of the buffer as a pull
Process Efficiency
• Process efficiency = value-add time/ total lead time
• It qualifies how much opportunity exists• Track work items through system and create a
time value map – Does that part of the process add value recognized by
the customer?
• Work to eliminate non value added sections– Less required waste for accounting, legal, or
regulatory requirements
What is Six Sigma?
• Six sigma focuses on accuracy• Recognize opportunities and eliminate
defects based on customer’s value • Eliminate variation• Use statistical tools• Seek documented, repeatable processes
– Infrastructure to support continued progress– Identification of customer critical to quality
needs
Core Elements of Six Sigma
• Management must be engaged
• Allocate resources to high priority projects
• Train everyone
• Eliminate variation– Drives narrower bell curves– 99.9997% +/- 6 standard deviation from the
mean
Invisible Work Cannot be Improved
• Use a value stream analysis to diagram the process flow– Find time traps
• Get agreement on areas of waste.• Establish ownership and create priorities.• Display priorities• Track and display daily performance• Manage expectations
– Communicate– Provide feedback
Customer
Post Solicitation on FBO
Address Inquires
Receive Questions
Post Q&As
OBuyer
OBuyer
Amend Solicitation
Respond to Protests
OBuyer
Receive ProtestValidate protest
Amend if required
Review questions
Draft Notice
Chart6
Upload tech drawings
Refresh bidlibrary
Develop answers
Post notice
Determine need for amendment
Issue CO determination
PCO OBuyer
Solicit Offers
Issue Solicitation
Determine need for amendment
Value is in the Eyes of the Customer
• Customer critical to quality “must haves” are the highest priority for improvement– Next are ROIC and Net present value
Value Based Management
• Price paid is a reflection of value to the customer– How well do your services meet the
customer’s needs– What customer needs are you not meeting– What offerings have no value to customers– How do you compare to your competition– What are world-class levels of performance
Use VOC to Transform
• Align your priorities to your customer’s• Transform customer needs into functional
requirements and then into design requirements– Quality Function Deployment– Segment market, research market, analyze data– Repeat to refine understanding of customer needs
• Define, measure, analyze, improve, control
The goal of VOC
• Contribute at such a high level of service that our work promotes and fosters to continued advancement of the organization’s mission
Lockheed Martin
• Understand value from the customer’s prospective
• Understand where product and service value are created in the organization (value stream)
• Optimize for flow to get to optimal performance• Focus on cycle time and pull
– Shrink process time to the minimum to speed response to customer changing needs
• Achieve Six Sigma quality at lean speed
Rollout Challenges
• Convince folks to devote time to LSS• Understand need for changes in layout• Sometimes lean changes required are
counterintuitive to services– Reduce WIP
• Translate LSS into lingo understood within workplace
• Build an awareness of what waste looks like
Rollout hints
• Give business units the credit • Tailor models to fit• Use a pace that fits organizational readiness• Don’t force it on people– generate pull• Solve problems cross functionally• Speed creates more noticeable improvements
and quicker results• Data gathering and analysis takes time
Identifying Burning Platforms
• Burning Platforms are your biggest competitive or strategic challenges– Here you will create shareholder (taxpayer)
value– Represents your competitive advantage– Compare against world class– Do a value stream and compare value
creation vs value destruction– Measure growth potential also
• Compare investment required vs EV of payoff
Possible Actions
• Shut down processes that destroy value, are unprofitable in the market, where competitors are advantaged
• Invest to improve position of processes where you are competitively advantaged, even though you are currently destroying value and not getting a profit– Should be close to breakeven re economic
profit
Comparing Opportunities
• If you are value neutral, at economic breakeven, yet competitively disadvantaged, weigh the costs of removing waste to the potential EV of being more responsive to the customer
• If you are competitively advantaged and creating value, just monitor to maintain market. – Not as critical to invest– Better opportunities in other value streams
Value added
• The task adds a function or feature that the customer will pay for
• The task provides you a competitive advantage (reduced price, faster delivery, better quality)
• The customer prefers what we will produce over our competitors
Business Non Value Added
• Gotta do these even though the customer will not pay for it
• Required by law or regulation
• Reduces financial risk
• Financial reporting requirements
• Critical to process stability
Non value Added
• Rework, expediting. Multiple signatures, counting, handling, inspecting, setup, downtime, transporting, moving, delaying, storing
• Create congestion, variation, complexity
• Does not consume existing capacity while producing higher revenue
Create Time Delay Diagrams
• Look for time traps• Look for build up in WIP• Consider what are the cost drivers/ failure
modes• Evaluate cost to remove impediment vs
expected value of improvement• Pareto chart is a good tool for comparing
contributions of process corrections toward error rates
DMAIC
• Use these tools to • Define: Value stream map, non value added
analysis • Measure: Process cycle efficiency, process
sizing • Analyze: Constraint identification, Time trap
analysis, Queuing theory • Improve: Kaizen, Process flow improvement• Control: Visual control process
5S = Improve
• Sort
• Straighten
• Shine
• Standardize
• Sustain
• Plus one Safety
• CLEAN UP YOUR DESK
Questions?