workharderand harder

Process Improvement:Which Methodology is Best for

Your Project?

PMI Skyline Luncheon

Sharon Valencia, PMP

2© 2006 Process Improvers, LLC

Agenda

• Definitions

• Business Improvement Methodologies

• Methodology Comparison

• Process Management

• Process Mapping

• Enabling Project Success


What is a Process?

• Any set of activities that when taken together, transform a series of inputs into an output, producing a result of value to a customer

Process

Input

Output

Su

pp

liers

Cu

stome

r

SIPOC


What is a Business Improvement Methodology?• A documented set of procedures, guidelines, and tools intended to

develop better processes

• Business improvement methodologies covered in this presentation:– Kaizen– Lean– Six Sigma– Lean Six Sigma– Design for Six Sigma (DFSS)


Kaizen

• Defined: Philosophy of gradual, incremental, and orderly continuous improvement, creating more value and less waste; emphasis on process improvement and process control; Japanese word meaning “ongoing improvement”

• Objective: Small improvements by optimizing existing systems

• Requires:– Taking action on obvious problems and deviations to maintain process

control– Establishing control through Standard Operating Procedures (SOPs)– 1-10 days


Kaizen’s Deming/ Shewhart PDCA Cycle

Plan

Start with an idea for doing the job better; study the current situation; identify the problem and formulate a plan

Conduct experiments to investigate the idea; implement the plan on a small scale

If desired results were achieved, implement the change into the SOP

Observe and evaluate results to determine if the idea produced the desired results

ActDo Check

* It is also acceptable to use the DMAIC framework for Kaizen events


Lean

• Defined: Focus on speed, efficiency, and elimination of waste

• Objective: Maximizing process speed (cycle time) by reducing waste

• Requires:– Elimination of waste (muda): Defects, overproduction, inventories,

unnecessary processing, unnecessary movement of people, unnecessary transport of goods, waiting, designing goods and services that don’t meet customers’ needs

– Value stream mapping: Map process and focus on elimination of non-value add activities• Ask what activities the customer is willing to pay for

– Focus on process standardization


Lean’s 5s Approach

Sort Sustain

Determine what is necessary to perform the job; Eliminate unnecessary items from the workplace

Arrange all essential items so that they are clearly marked and easily retrieved

Sustain the other steps and continually improve the process

Make cleaning and organizing routine; promote an orderly work environment; perform work the same way every time (standardize)

Keep clutter out of the workplace; Scrub all machines and the work environment to maintain cleanliness

SystematizeStraighten Scrub


Six Sigma• Defined: Data-driven methodology focusing on reducing defects and

variability– 6 σ = 3.4 defects per million (Motorola Shift)– σ = Sigma = Standard deviation

• Objective: Reduce variability through continuous process improvement

• Requires:– Processes must be in place– The processes must be predictable (in statistical control with normal

distribution)– The processes must be improved by reducing variation (continuous

improvement)– Data availability– Focus on understanding customer requirements


Six Sigma Distribution

Upper Control Limit/Specification

Lower Control Limit/Specification

Normal, Bell-Shaped Curve/Distribution of Values

DefectsDefects


The Importance of Six Sigma

• Traditional Quality (3 σ: 66,807 DPMO)– 54,000 incorrect drug prescriptions

per year– 40,500 newborn babies dropped each

year– Unsafe drinking water two hours each

month

• 6 σ Quality (No Motorola Shift)– One incorrect drug prescription every

25 years– 3 newborn babies dropped each

century– Unsafe drinking water one second

every 16 years

Source: Institute of Industrial Engineers


DMAIC Framework for Six Sigma

Define Measure Analyze ControlImprove

Define the goals of the improvement activity; determine project’s business case; identify customer; map current & future state processes; determine scope

Measure the existing system or process; determine metrics; define project success factors

Control the system or process, including risk, quality, cost, scope, change management; determine reporting needs

Improve and implement the system or process; determine necessary activities to achieve goals

Analyze the system to eliminate gap between current system or process and the desired goal; determine and reduce obstacles to achievement


Lean Six Sigma

• Defined: Approach to eliminating waste and variation

• Objective: Increase quality and reduce defects/variation while increasing process speed and efficiency

• Requires: The combination of both Lean and Six Sigma methods and tools


DMAIC for Lean Six Sigma

• Integrate the methodologies and tools of both Lean and Six Sigma at each phase

Define Measure Analyze ControlImprove


Design For Six Sigma (DFSS)

• Defined: DFSS uses tools, training, and measurements to enable the design and development of products, services, and processes that meet customer expectations at Six Sigma quality levels

• Objective: Optimize the design and development processes to achieve Six Sigma quality levels from the beginning

• Requires: A new product, service, or process to design and develop


DMADV Framework for DFSS

Define Measure Analyze VerifyDesign

Define the goals of the design act; determine critical to quality (CTQ) characteristics and their relative importance

Identify CTQs to be addressed; establish metrics for CTQs; determine how customer satisfaction will be measured

Standardize; establish control metrics; develop transition plan

Detain selected design; simulate process; ensure design meets CTQs; develop implementation plan

Link CTQs to features & determine importance; perform process benchmarking; develop, evaluate, and select designs


Methodology Analogy

DesignForSix Sigma

Lean

Six Sigma

Kaizen

Lean Six Sigma


Kaizen Lean Six Sigma Lean Six Sigma DFSS Defined Philosophy of gradual,

incremental, and orderly continuous improvement, creating more value and less waste; emphasis on process improvement and process control

Focus on speed, efficiency, and elimination of waste

Data-driven methodology focusing on reducing defects and variability

Approach to eliminating waste and variation; combines both Lean and Six Sigma tactics

DFSS uses tools, training, and measurements to enable the design and development of products, services, and processes that meet customer expectations at Six Sigma quality levels

Objective Small improvements by optimizing existing systems

Maximizing process speed by reducing waste

Reduce variability through continuous process improvement

Increase quality and reduce defects/variation while increasing process speed and efficiency

Optimize the design and development process to achieve Six Sigma quality levels from the beginning

Requirement(s) Taking action on deviations to maintain process control

Establishing control through Standard Operating Procedures (SOPs)

Taking action on deviations to maintain process control

Elimination of waste (muda)

Value stream mapping

Processes must be in place

The processes must be predictable (in statistical control with normal distribution)

The processes must be improved by reducing variation (continuous improvement)

Data availability

The combination of both Lean and Six Sigma tools and methods

A new product, service, or process to design and develop

Approach Kaizen’s Deming-Shewhart PDCA Cycle Plan Do Check Act

DMAIC is acceptable

5S Sort Straighten Scrub Systematize Sustain

DMAIC Define Measure Analyze Improve Control

DMAIC; Integrate the methodologies and tools of both Lean and Six Sigma at each phase

DMADV Define Measure Analyze Design Verify

Methodology Comparison


Lean and Six Sigma

• Lean cannot bring a process under statistical control

• Six Sigma does not dramatically improve process speed or reduce invested resources

• Combining Lean and Six Sigma maximizes advantages and reduces the disadvantages of each individual approach


Which Methodology is Best?

• “Best” is depends by the needs and current state of your organization

• “Best” may be a combination of methodologies

• An organization ready for Six Sigma is also ready for Lean or other methodologies

• The name of methodology used doesn’t matter; what matters is leadership, commitment, vision, strategy, and follow-through from supplier to customer


Business Process Management

• The future of business processes lies not in one methodology, but in the integration of technologies and methodologies in order to facilitate execution of the process

• Customers are demanding customizations and total solutions

• Innovative business processes can lead to competitive advantage

• Business processes will drive IT


Changing Competitive Environment

• The only thing certain in business is change

• Industry boundaries are evaporating

• The entire value chain is involved in providing total solutions to customers:– Competition– Collaboration– Partners may also be competitors


Process Mapping

• Regardless of the methodology, start with mapping the current processes– Identifies current state, opportunities for improvement, process time– Allows identification of all process steps in order to determine which steps

are value added or bottlenecks– Knowing current state will assist in identifying improvement opportunities

• As-is vs. future process time, number of steps, handoffs, etc.• Determine steps which add value


Benefits of Process Mapping

• Gain understanding of the process and process objectives– Answers who (including suppliers and customers), what, when, where,

how, and duration– Identifies the information or data used in the process, decisions,

bottlenecks

• Identify sources of waste

• Improve supplier and customer relations

• Provides a common language for talking about the process


Sample Process MapMedic Clerk Vendor OtherPatient

Provide Care

Complete PPCR Review PPCR

EMS Supv

Perform Quality Check

Enter Data in System

Review

Batallion Chief

Print & Mail Bills

Sort, Assemble, & Mail Bills

Remit Payment

InsuranceCompany

Need Insurance Info

Receive Bill & Insurance

Authorization

Bill & InsuranceAuthorization

Return Insurance

Authorization

Approved PPCR

Completed PPCR

Rework

Incomplete PPCR

IncompletePPCR

Complete PPCR

Enter Insurance Information

InsuranceInfo On File

InsuranceCompany

Insurance Info On FilePrint & Mail Bills

Payment

Completed InsuranceAuthorization


Indications of Process Improvement Opportunities

Internal

• Non-compliance to Industry Standards

• Scrap

• Rework

• Short Cuts to Beat the System

• Excess Inventory

• Capacity Constraints

• Low Efficiency/ Productivity/Yields

• Employee Symptoms

• Shared Responsibility

External

• Benchmarking– Company vs. World Class Performers

• Market Share Drop

• Negative Publicity

• Pricing Inflexibility

• Warranty Costs


Enabling Project Success

• Management buy in is required from the start

• Align goals with the strategic direction of the organization

• Combine project ownership and accountability

• Manage change – do it early, do it often

• Allocate appropriate staff and time

• Train staff in applicable techniques

• Eliminate process variation

Experience. Results.Sharon Valencia, PMP

Principal

Computer Sciences Corporation

[email protected]

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