Lean Six Sigma Project

Working in the business

odt-graphLook, I know you have heard this many times over: if you want to improve the results of the business you should not only work IN it (meaning: completing your day-to-day tasks), but also ON it (meaning: improving the quality and profitability by re-designing your processes).

But how can you work ON the business?

You might say: “I have no time for this.”  You’re right, you probably already have a long to-do list. But, if you do not make time to work on your processes, you will keep having a long to-do list and the results will still not completely satisfy you.

The Lean Six Sigma process improvement method is an outstanding way to work ON the business. This method becomes much easier when making use of a facilitating tool, like HerkuLess®. Either way, I’ll explain to you in a few steps how to use this to work ON the business.

Follow these steps:

  1.      Identify your biggest, most important goal

It could be anything, increased sales, reduced material cost, shortened lead times, drastic reduction of scrap or even faster employee on-boarding.

It should be important enough for you to invest 1 or 2 hours per week to work on it together with your team. I know you have very little time as it is, but it could save you a lot of time in the long run.

Recommended reading: http://peterherku.com/2016/08/30/5-ways-to-identify-your-best-lean-six-sigma-project/

  1.      Get your team together

Choose people for your team who are most familiar with the challenge or those who encounter your chosen problem daily and are therefore motivated to work on it and spend some extra time to find a solution.

The more diverse your team, the better, because the problem will be viewed from different perspectives.

My approach is to have everybody who is part of the process to be represented in the team. For example, if you want to improve on-time delivery, you should have team members from the production department, from the inventory handling group, from logistics and from quality control. I would make the Production Planner the leader of this team, because it is his most important performance indicator to deliver on time.

  1.      Define the problem and the goal

Setting SMART goals is not always easy because we tend to mention solutions, wishes and ways we would like to improve the situation.

Instead, describe the problem first as if it were a time-series chart (run-chart or individual chart) stating: average value of what you want to improve, the time period that you have measured, the high and low values in the data indicating the variation and finally the goal or the required level.

Continuing from our previous example, we take a problem statement for improving on-time-delivery performance. It should look something like this (the values might be different of course):

“Our average on-time-delivery performance (OTD) is 42%, measured in the period of January though September, ranging between 20% to 65%. Our long term goal is to achieve 90%.” This statement is reflected in the following chart:

odt-graph-before

From this problem statement it is quite easy to derive a SMART objective for this stage:

“Increase our on-time-delivery from average 42% to at least 60% by 31st of December this year.”

In my Lean Six Sigma career I have wasted lots of meetings on discussing problem statement and objectives. This is now solved and automated in HerkuLess®.

  1.      Find the most important reasons for the current performance

Using the cumulated knowledge of your team, a whiteboard and the findings of a  Ishikawa brainstorm session you can select the most important causes of why you are not performing at the required level.

In our case you brainstorm about “Why current OTD is 42% instead of 60%?”

There will be many, many causes but only 20% of those will be important to help you and your team to improve OTD by 80% (called Pareto-law or 80/20 rule).

  1.      Action!

Based on the main causes found in the prior step, discuss with your team what counter measures you can take to remove the causes.

For example, one of the main reasons that cause low OTD is that the planner does not take packaging and shipping time into account in his planning.

What can we do to change this? Your team would come up with actions like:

         The planner should investigate the time it requires to arrange packing and shipping

         The planner includes 2 days extra in the planning for packaging and shipping

Do not forget to include the name of the person that needs to take action and also the deadline for taking the action.

  1.      Measure and Control

You will not know if your countermeasures are effective until you see it in your results. Like that, the OTD should be increasing as a result of the Planner taking Packaging and Shipping activities into account. Also, other actions are usually taken as well; therefore it is often not one single activity that is responsible for the improvement but a combination of activities. The chart below shows the increased OTD in the improve phase:

odt-graph

As soon as your data show significant improvement, administrate what you and your team has done to achieve the result and what needs to be done in the future to ensure this new way of working.

You can start on working ON the business processes free for 14 days. Click here and start your free trial.

5 ways to identify your best Lean Six Sigma project

5 wa

5 wa

Choosing the right project is the main influencing factor in achieving success with Lean Six Sigma. In my career as Lean Six Sigma coach I have made many mistakes in choosing the right project using time pressure or learning as a fake excuse.

Starting with the wrong project will have several negative consequences. I am sure you’ll recognize some of them:

  • Low or insufficient project results
  • Project does not solve a major issue
  • Insufficient attention for the project from the management
  • Project team members having difficulties to stay motivated
  • Project lead time is 2 or 3 times longer than expected (and the costs higher!)
  • Project gets cancelled (if you are lucky)

It is better to spend more time on identifying your next best Lean Six Sigma project before you get started with the wrong one.

Here are 5 different ways to identify Lean Six Sigma projects. They are presented in the order of increasing difficulty as well as effectiveness for long-term process improvement efforts.

  1. Ask the people

This is the way I use most often when starting with a Lean Six Sigma program for the first time. It is handy to ask operators, employees of the work floor about their biggest problems, bottlenecks or irritations in their daily work and take those as the first improvement projects. It helps to strengthen employee involvement in the continuous improvement program.

Disadvantage is the lower level of project alignment resulting in a scattered effort of improvements. Local improvements will be achieved but the overall effect is low due to lack of focus.

Using this method for project identification, it is difficult to estimate the size of the problem: is it only a few employees having this problem or is it a major issue that needs to be solved.

You also need to be experienced in order to translate the problems people talk about into a SMART problem definition.

Lean Six Sigma project examples: Reducing workload, Improving accuracy and timeliness of time-registration, Reduction of administrative tasks of direct employees.

  1. Operational Performance Indicators

This is more of a structured, process driven approach to analyze indicators like lead times (too long), mistakes (too many), claims and irritations, incidents (injury, medical faults).

Identifying projects where indicators show bad performance helps creating alignment between Lean Six Sigma projects and gives them also their proper place in the company’s priority list.

Disadvantage of this approach is that employees feel unheard and not sufficiently involved in identifying improvement projects. Also the indicators are not always available and/or reliable due to unclear measurement processes and organizational inability to take countermeasures in the past when indicators show underperformance.

Project examples based on my experience: Reduction of fall incidents, Reduction of lead times of client onboarding, Improving claim handling.

  1. Performance to Plan

In this way you look at the monthly financial and operational reports to find areas with the biggest deviation from the plan or budget. Areas such as personnel costs, maintenance or IT investments are often higher than the budgeted.

This has the advantage that resulting projects are focused directly on measurable improvement of the results: when the project has success, you can see the result in the monthly reports.

The disadvantage of such an approach to find new projects is that you still have to analyze the root cause of the deviations: is it due to bad budgeting practices, is it underperformance of the management or wrong accounting; is it a temporary or a permanent excess of budgets?

Lean Six Sigma project examples: Lowering transportation costs, Improving resource planning, Reducing energy consumption.

  1. Benchmarking

You can compare your performance – operational and financial – to given industry norms – if they are available. In areas where you underperform you should start your next Lean Six Sigma project.

Think about projects like Reducing sickness rate, Increasing customer satisfaction rate or Reducing employee turnover rate.

The difficulty with this approach is that you don’t always know the benchmark and if you do, you can easily find several reasons (or excuses) why they do not apply in your specific situation. Besides, psychologists say you should not compare yourself with others but only with yourself 😉

  1. Strategic flow down

Finally, here is the 5th, most effective but most difficult way to find your best Lean Six Sigma projects.

In this case, you look at the vision, mission and the long-term (5 years) goals of the company. If you are responsible for a part (division, business unit, product group or department), you translate those to your area of responsibility.

You determine how those long-term goals are going to be measured and you express those goals in a measurable way.

For example: Increase customer satisfaction from 7.6 to 8.4

After that you determine what the short-term goals should be (for next year) to achieve those long-term goals.

Based on the short-term goals, you identify the obstacles and challenges you have to face to achieve those short-term goals.

For example: if you want to increase customer satisfaction with 10% in 5 years, you would like to achieve the first 4% increase already next year going from 7.6 to 7.9 on scale from 1 to 10.

You identify that the major challenge is that you want to have your own, continuous measurement of customer satisfaction instead of hiring an external company for 40.000 EUR once in 2 years, leaving a big pile of paper with nice colored graphs behind and a lot of questions from your managers not knowing where to start.

Shortly your challenge for next year is 1) to develop an own measurement system 2) to improve customer satisfaction at each department.

From these challenges (gaps between where you are now and where you want to be in the near future) you identify SMARTly defined (Lean Six Sigma or Just Do It) projects.

To provide insight in the strategic projects and their relationship to the strategic goals I use the X-matrix from the Hoshin-Kanri planning process.

You can download my example here.

The disadvantage of this process of project identification is that it can take several meetings with your colleagues to arrive at a smart definition of long-term goals based on the vision, mission and plans of the company.

Summary

There are several ways to identify opportunities for a Lean Six Sigma project. In many cases it is the combination of the above-mentioned 5 ways that will provide the best project. If employees are having daily problems with a process/step (#1), the operational indicator should also indicate poor performance (#2), that would lead to deviation from the plan (#3). The magnitude of this would impact the customer or employee satisfaction, causing deviation from the industry benchmark (#4). The company should have a strategic approach for this problem to improve the situation on the short- and long-term (#5).

Bonus

To combine the 5 above-mentioned ways when identifying Lean Six Sigma Green or Black Belt projects, I have developed a questionnaire. Click here if you want to get a copy.

How to improve the results of an ICT Servicedesk with Lean Six Sigma

What if the customers of your ICT Servicedesk are satisfied, but your employees’ ambitions need to increase? Every ICT Servicedesk’s service should be to make sure its customers can be served with more efficient and services of higher quality. To concretize this mission, and to run the project, one could use the method Lean Six Sigma.

This article describes what one could to do improve the efficiency and quality of an ICT Servicedesk, structurally and with a long-term result, with the help of Lean Six Sigma.

The combination of efficiency and quality makes Lean Six Sigma the perfect method for running this project. Lean Six Sigma is actually aimed at optimizing the added value for customers, by reducing waste. By doing so, the quality of the service will increase and costs will go down.

Operator concentrating on client

A Lean Six Sigma Project

A Lean Six Sigma project consists of five phases (DMAIC), which stand for:

  • Define phase: Define the goal
  • Measure phase: Determine the current achievements.
  • Analyze phase: Identify the main causes of the problem
  • Improve phase: Select and Implement the solutions
  • Control phase: Verify and Control the results.

 

Define & Measure

These phases are aimed at determining the goal of the improvement and the current process achievements. In this case, improving customer satisfaction and efficiency will be the goals for the project. However, what’s maybe the most important in running a Lean Six Sigma project is that the employees themselves need to see the need for improvement.

 

Analyze

This phase in the Lean Six Sigma project has the aim of identifying the main causes that could be a bottleneck for increasing customer satisfaction and efficiency. This will all be done on the basis of process- and data information. Process information will be gathered from the chain. In this case, the chain exists of employees of the ICT Servicedesk, chain partners and suppliers. By means of an interactive workshop the main causes will be identified via an Ishikawa diagram.

 

Improve

The aim of this phase would be to select and implement solutions for the problem. Together with the employees of the ICT Servicedesk, a brainstorm to find solutions for the main causes has taken place.

Accordingly, solutions have to be prioritized to select the most effective ones. After selection, the ICT Management should be requested for the ‘GO’ for implementing the solutions.

 

Control

After identification that the solutions are effectivie, ofcourse an ICT department would want to maintain this improved level of customer satisfaction, if not even more increase. To secure the improved level, a coachproces and documentation proces could be developed to let employees extend their improvements and even enlarge them.

 

Are you interested in the methodology? Have a look at my programs!

You can also contact me for some more information on the topic or for informal advice.

Phone: +31 6 55 301094

Email: peter@herku.org

Lean versus Six Sigma

Lean Six Sigma

Which of both improvement methods is the better one?

This article focuses on two of the major business improvemen

t methodologies, namely Lean and Six Sigma. It points out the differences and discusses which method would be best for using today.

The Difference between Lean and Six Sigma

A Lean project can be done when the main causes are known, but the solutions are complex. Lean projects can be completed within 45 days and focus mainly on the elimination of waste. Among the tools that can be used to complete the Lean project are, Poka Yoke and Pareto Analysis. Six Sigma projects on the other hand, are done when the main causes are unknown and the solutions are complex. These projects can range from 3-6 months, while the focus lies on variation reduction. The main structured methodology to carry out a Six Sigma project would be the D-M-A-I-C structure, which stands for Define, Measure, Analyze, Improve and Control. So to wrap up, in a situation where the cause is Unknown and the Solution is complex Six Sigma is supposed to be used, and in a situation where the causes are known but the solution is complex a lean methodology is used.

How did Lean and Six Sigma come to existence 

During the late 1980s and early 90s Lean and Six Sigma became of great importance. The world had started globalizing. Process automation in all sectors reached its peak and due to globalization, demand was high and supply was comparatively less. As globalization started to evolve, increa

sing economic transactions globally enhanced trade and there was no sign of recession.

So the factors that required the rise of Lean and Six Sigma are:

  • Automations led to an larger output, but also to more waste
  • Therefore, resource optimization was essential and afocus on waste was important
  • So, the focus shifted from ‘output based thinking’ to ‘input based thinking’
  • Also, there was a need for a quick response tot the market
  • But multiple suppliers led to management issues and operational delays
  • So, processes were people dependent and a strong focus on a process oriented approach was required

So what is most important method for today: Lean or Six Sigma?

As mentioned before, Lean normally shouldn’t take more than 45 days, while Six Sigma projects can last for about 3 or 4 months for a successful round up. Therefore, the need for something somewhat faster and more customer-oriented emerged.

This brings us to the new trend nowadays: Lean Six Sigma –

a combination of both Lean and Six Sigma. These projects are completed quickly and the focus lies on innovative thinking. Customer orientation is the only priority of this combination of methods. These kinds of projects can last from about 1 month up to 3 months. A data driven approach is used wherever data is available to the project team and customer value will be identified to the max.

Both Lean and Six Sigma are great methodologies, which make an even greater methodology when combined to serve customer needs.

Are you interested in the methodology? Have a look at my programs!

You can also contact me for some more information on the topic or for some advice.

Phone: +31 6 54 69 40 47

Email: michelle@herku.org

How to Become Customer Oriented with Lean Six Sigma

3 most important elements of customer satisfaction.

Today I will show you how to treat “over-orientation”.

Case Study: Improving Planning

Some weeks ago I started coaching a Lean Six Sigma project team on improving planning efficiency.

This company is a provider of special training and education programs for blind or visual disabled clients. There program consists of more than 35 modules, highly tailor-made, and planned by 11 individual departments.

The current situation:

  1. The planning of the programs is very time consuming work
  2. The customers have lots of waiting time (waste!) before and during the training program,
  3. The trainers have frequently unproductive hours
  4. The program takes almost always longer than expected (bad on-time-delivery performance)

This company was trying everything they could to improve the situation but it went out hand. It was too complex and became even more complex each time they came together to solve the problem.

Customer Oriented…Really?

In their effort to provide their clients a flexible, tailor-made program, they were lost and bound by all the constraints.

I told them that being customer oriented means providing the best possible service not only to the customer in front of you but to all others as well and even to those waiting to be served.

When trying to solve this planning issue the company was mainly focusing on their own point of view: how can we satisfy all the departments, what are the personal requirements of the trainers, what is the best timing for them to provide with training.

Looking inward combined with all the individual requests of the clients made the problem even more difficult to solve.

My advice: Focus

I advised the team to look at this problem from the customers’ point of view.

–          What do they experience?

–          What do they miss?

–          What is their CTS Tree (critical to satisfaction)?

–          Where is the imbalance between quality, time and cost/effort for the clients as they receive their training program?

Concentrating on the output first, trying to quantify its current level (baseline) keeps the team from getting lost right at the beginning.

The team initially had identified 8 metrics to measure the effectiveness of the planning activities. I advised to focus on a maximum of 2 (waiting times and on-time-delivery) to eliminate the overwhelm.

Focusing on only a few but vital issues during the rest of the project execution will ensure quick results within 3 to 5 months and significant reduction of waiting times – normally between 30% to 50% reduction.

Less waiting times, therefore shorter total lead times per customer increases the capacity of this company without investing in resources.

Do you want to achieve more with your current employees and machines?

Is your team looking at the issues from the customers’ point of view?

And are you focused on the on a limited number of vital metrics?

Let me know your stories.  Please share your stories, comments, and questions below.

Peter

        +31 55 737 00 02

Consultation

“Author of Profitable Empowerment”