LEAN SIX SIGMA WIKI

23/02/2010












Hi-Tech<IP/ SP>
Aakriti Vig
aakriti.vig@tcs.com














WHAT IS SIX SIGMA:-

Six Sigma is essentially a comprehensive yet flexible system for achieving,
supporting, and maximizing business profits. It is a methodology driven by
understanding customer needs, and the disciplined use of data, facts, and statistical
analysis to improve and reinvent organizational processes.
Six Sigma simply means a measure of quality that strives for near perfection. The
term now applies to a disciplined, data-driven approach and methodology for
eliminating defects (driving towards six standard deviations between the mean and the
nearest specification limit) in any process - from manufacturing to
transactional/services and from product to service.

A process that has reached the "Six Sigma Level" operates with so little variation that
99.9997% of the time it is defect free. Or in other words, only results in 3.4 defects in
one million opportunities. (It should be noted that not all processes need to perform to
a Six Sigma level. In most cases, it is simply not cost-effective to be that accurate.



ORIGIN OF SIX SIGMA:-
Six Sigma methods started in the early 1980s at the Motorola Corporation when it was
discovered that products making it through the production process with a high first-
pass yield performed better in the field. With this knowledge, Motorola Corporation
focused on creating strategies to reduce defects in their processes.
In the mid-1980s, Motorola joined forces with other companies, including IBM, to
form the Six Sigma Research Institute. Since then, Six Sigma has been proven by
many companies as a robust method to provide productivity, quality, customer
satisfaction, and other process improvements.
Six Sigma has a very strong base in statistics. The chart below indicates the "Bell
Curve" that could be drawn based on Mean and standard deviation. It is a statistical
phenomenon, where any randomly occurring event, will tend to form a pattern,
typically they will cluster around the mean. Without getting deeper into statistics, a
curve of that nature is depicted below :


ADVANTAGE OF SIX SIGMA:-
One of the key advantages to Six Sigma is that it provides a measurable way to track
process performance. The performance accuracy of a process is measured with a
metric known as the "Sigma Level". The Sigma Level is based upon a comparison of
the variability of the outputs versus the performance specifications of the process.
GOAL OF SIX SIGMA:-
The goal of Six Sigma approaches is to reduce variability, improve predictability and
quality, by systematically eliminating defects, that is, defects as viewed by customers'
eyes.





LEAN SIX SIGMA:-

Lean refers to a set of processes and improvement techniques that are most effective
at delivering greater client value. Lean is about figuring out what the client considers
as value and designing the system to meet that - no more, no less.
Lean does not mean delivering less, or working harder; it is working smarter by
avoiding any activities unrelated to delivering client value. In other words, it is the
precise matching of our capabilities to the client's needs or wants.
Lean is an industry-proven methodology, that when executed, results in the ability to
deliver more value to clients through operational excellence. This is possible through
the relentless identification and elimination of "Muda" (loosely translated from
J apanese meaning operational inefficiencies or WASTE) from our operating
environment. In contrast to Lean, Six Sigma focuses on reducing variability in a
process to improve quality, i.e. to ensure quality at source.
Lean and Six Sigma are both based on over 50 years of process-improvement
experience based on the renowned Toyota Production System from the 1960's, which
was developed by Taichi Ohno, the Toyota Executive. Since then, it has evolved
through several quality revolutions such as J ust-In-Time Production, Lean
Manufacturing, Total Quality Management and finally Six Sigma - which was
popularized by Motorola and GE.












THE ORIGINS OF LEAN SIX SIGMA:-













THE FIVE PRINCIPLES OF LEAN THINKING





OBJECTIVES O F LEAN THINKING:-
Delivering more value to clients faster, with less waste
The objective of Lean is to deliver exactly what the customers need, when and
where they need it. Everything else that does not add any value (in the
customer's eyes) should be eliminated from the process. Lean does this by
focusing on the operating system, management system, and mindsets and
behaviors.
Typically, there are seven "Wastes" associated with Lean and these are as
applicable in services as they are in product value chains :


The Five Principles of Lean Thinking
1. In Lean Thinking "Value" is defined from the customer's perspective. Lean
has well developed tools to help capture value.
2. A Value Stream is a sequence of steps taken to create value, and an early
activity in Lean Projects is to set out every step in a process, both value-
adding and non-value-adding
3. Creating flow, allows value to flow smoothly through the value stream without
obstruction
4. Work is pulled by customer and this pull works backwards through the
preceding steps until it activates the initial stage of the process. An example is
a can of soft drink bought from the store shelf, triggering a chain of activities,
up till the manufacturer of the soft drink placing an order for raw materials
with its suppliers, manufacturing the soft drink can and sending a delivery to
replenish the store shelf.
5. Continuously and relentlessly drive for improvement.



COMBINING LEAN AND SIX SIGMA TOOLS AND METHODS:-

Combining Lean and Six Sigma tools and methods provides a complete set of tools to
approach any process problem. By utilizing lean techniques to eliminate non-value
add process steps, (waste), and also applying Six Sigma techniques to reduce variation
and defects, the result is a fast efficient process with high quality and few defects.

HOW DOES LEAN SIX SIGMA BENEFIT THE ORGANIZATION
While Lean is often seen as just another set of tools, true Lean enterprises (for
example, Toyota) recognize that when properly applied, the methodology:
fundamentally changes an organization's culture
can be successfully used in all industries despite varying processes and
functions, and
is built on guiding principles of customer value and waste elimination, which
are fundamental to achieving world-class status.
Its goal is growth, not just productivity. Its aim is effectiveness, not just efficiency.

APPLYING LEAN TO GBS ACCOUNTS:-
Applied to GBS Projects, Lean will not only help us do things better, but it will help
us do better things. It can help our clients discover opportunities beyond operations,
enhance financial performance and create organizations that have an inherent
inclination toward innovation.BS Accounts
Any improvement requires effort and investment. If there is no hard saving or visible
improvement in quality for Customer and an organization, then the investment is not
worthwhile. LSS requires careful assessment and quantifying of the improvement, and
then ensuring that the benefit is realized through structured processes. For this reason,
the Lean CoE needs to review potential Projects and work with you through a series
of selection stages to ensure that there's a sound business case for proceeding with a
Lean Project.




LAUNCHING LEAN DEVELOPMENT:-
Deploying Lean requires a very significant effort from both country management and
the practitioners who will be involved. For this reason, gaining buy-in to Lean and
building energy around how to use it to add value and to do more with less is
critically important. Senior Leaders have an important role to play in espousing Lean
as a vehicle for strategic change and in creating the climate for success.
Lean Deployments in a country start with a deployment Launch Event for Senior
Leaders. The Launch Event aims to build awareness of the approach and the
objectives of Lean Projects at Executive level, create excitement and buy-in. The
Launch Event also has a fun team building element, as we run the Lean Courier
Simulation so leaders have the chance to experience the Lean journey in just one day.
This is usually followed by an account team Lean Project kicking off the following
day.
Is my Project suitable?
Selecting the right project ensures that we are getting maximum benefits out of the
investment that we are making.
Broadly, to be considered for a Lean Project, and in order to make the most impact,
your Project should satisfy the following criteria :
Project has completed transition
There exist some customer / business pain points e.g. low CSAT, not meeting
SLA, higher customer expectation, low or negative profitability, low
Employee satisfaction etc.
Team should not be very fragmented
Total team size of more than 15 people active in the proposed value stream
EXAPMLES OF PROCESS CHANGES BY USING LEAN
METHODOLOGY:-er

Have you the problem of a client complaining about poor service, poor response time,
or perceiving that they are not getting value for money? Is the competition breathing
down your neck and able to offer the same service at a lower price? Have you a desire
to improve your service far beyond the current level?
This page collects together examples of process changes that have emerged through
rigorous application of the GBS Lean Methodology, that we know improve service
efficiencies and deliver measurable benefits. GBS Lean Coaches define these process
improvement best practices as "Benefit Drivers" and have documented the
applicability of each Driver, how to assess the improvement opportunity, and
estimated the performance improvements.

Where the Benefit Drivers can help you - typical project challenges:
Typical challenges.... Actions that can be taken...
There are many and varied types of
work in the project that take away
from productive time

Rationalize different meetings and reports to
reduce non-value-adding effort


There are differences in work loads
across various applications at any
time that are causing overload in
some teams and idle time in others

Cross-skill team members so they can be
utilized in other applications during their times
of lower activity


Sometimes additional work flows in
which could better be handled in
earlier stages or which could be
prevented entirely

Develop a knowledge database so that tickets
can be resolved by the helpdesk. Eliminate the
root causes of repetitive tickets through
mistake-proofing, user training or permanent
solutions

Productive time is lost due to
insufficient detail on tickets or
through new requirements

Provide comprehensive templates to users to
ensure all required detail about a problem is
captured

Team members lose time and effort
due to misallocation of tickets to the
wrong queue or person

Strengthen ticket dispatch by instituting a
dedicated dispatcher role, enabled by the team's
skills/ responsibility/ availability information

There is over-reliance on repetitive
manual testing

Introduce test automation tools or scripts, so
that repetitive manual testing can be avoided

During the test cycle, defects from
critical modules are found late,
reducing the time available for fixing
and re-testing

Perform test case sequencing so that critical or
risky requirements are tested early, to allow
sufficient time for the team to fix the defect
comfortably

Significant rework is caused due to
many defects introduced during
design and development
Conduct causal analysis of defects to
understand the root causes and standardize
development processes to prevent them

DELIVERING LEAN PROJECTS:-Methods
Lean is applied to Value Streams through structured methodologies and using a
carefully selected toolset.
We apply a very robust multi-stage approach to identifying and qualifying suitable
Value Streams, and selecting the specific Lean Method that will be used for each
Value Stream. (Method selection is done in the Initialization & Mobilization phase).
Whilst in general, our proven Lean Value Stream Improvement method will be
applicable, the business need should always drive selection of the appropriate method.
The diagram below shows the nature and scope of the GBS Lean Methods portfolio :



Roles & Responsibilities on Lean Projects
Building Lean Capability and delivering benefits requires continuous (and rigorous)
cooperation and coordination. There are some key roles that need to be in place to
drive a Lean Program :
Executive and country leadership - promote the use of Lean so that it
becomes the preferred method for improving business processes
Executive Sponsor - implement Lean thinking in an Account/ Department so
that it is used to deliver benefits and becomes an integral part of business
planning and operating
Lean Deployment Champion - remove barriers for the use of Lean so that it
becomes the preferred method for improving business processes
Account Value Stream Owner - control the performance of an end-to-end
process that delivers value to a customer
Value Stream Manager - deliver rapid and effective improvements in
business processes using Lean that realize benefits
Stakeholder - liaise with the Value Stream Manager, Sponsor and others on
matters that may enhance or threaten the benefits of Lean improvements
Change Team Member - support the Value Stream Manager to create
solutions that deliver high benefit and are adopted rapidly as the new way of
working (generally about 5-8 Change Team Members participate in a Lean
Project)
Team Member - support the Value Stream Manager to create solutions that
deliver high benefit and adopt those rapidly as the new way of working
Lean Coach - accelerate the business benefits of using Lean by developing
the capability of Sponsors and Value Stream Managers to a point of
proficiency




Within the Lean CoE, additional roles support the global deployment :



LEAN METHODOLOGY AND TOOLS: INITIALIZATION &
MOBILIZATION
The final step is Mobilization of each Value Stream.
Certain key roles need to be identified at this stage, such as Deployment Champion,
Value Stream Owner, Value Stream Manager, Change Team Members and the Lean
Coach.
So the objectives of this phase are to:
Confirm the Value Streams with the parties involved
Agree teams and sponsors
Agree Project scope
Agree launch launch date








LEAN METHODOLOGY AND TOOLS: VALUE STREAM ASSESSMENT:-
Materials for Lean Coaches: Value Stream Assessment Training
The Lean Value Stream Improvement Method Assessment phase objective is to assess
the flow of services or products. A Value Stream is a block of activities (Value
Stream Steps) which starts and ends with the Customer. After designing a new and
improved future state, the assessment phase delivers around 10 - 15 "Future State
Components" (FSCs) or key actions, which are subsequently implemented in the
DEDIC/DMAIC phase. (A further essential component of implementation is setting
up a Test Cell to test the new process in a ring-fenced environment).


The Lean Value Stream Method is structured as a series of workshops:
W0: Lean awareness and lean courier simulation experience;
W1: Value Stream kick-off, scope, customer requirements definition;
W2.1: Routing by Walking About;
W2.2: Current State Mapping;
W3: Future State Design;
W4 Implementation Planning.
During the Workshops, a variety of tools are applied to assess the current state and
develop future state components, including SIPOC, Voice of the Customer,
Mississippi charts, fishbone diagrams, seven wastes analysis, value stream mapping
and more! The Value Stream Assessment Method focuses on two key elements:
The Value Stream Team members are employees across the whole value stream -
people who really understand the day to day business.
The Team reports out to key stakeholders during 3 report outs (W2.2, W3, W4) to
provide the end-to-end process understanding and to gain commitment to move ahead.
The 4-5 week assessment is followed by immediate Implementation.
LEAN METHODOLOGY AND TOOLS: IMPLEMENT PHASE:-
Material for Lean Coaches: DEDIC Training
In the Implementation phase, the methodology followed to further develop and
execute the Future State Components differs according to the extent to which we
know the root cause of the performance problem. In most cases, Future State
Components (FSCs) use the DEDIC approach for implementation. However, in
situations which call for an in depth analysis of performance data in order to diagnose
the root cause of the problem, the Six Sigma DMAIC approach should be followed. In
either case, the FSC project requires around 15weeks to complete and reach the
Operational Future State.












DEDIC APPROACH:-
The DEDIC methodology builds on the Lean Value Stream Assessment method and is
used to implement the previously identified Future State Components (FSCs). It ensures
Seamless integration of the lean value stream assessment and implementation of the changes.
This structured improvement project framework is used to quickly and efficiently implement
the best solution to known root causes.
The focus is on change and applying lean tools such as:
Application of 7 Keys
Benefits Tracking
Brainstorming / Solution Selection
Setting up the Test Cell
Controlled Handover

DMAIC APPROACH:-
DMAIC process improvement methodology focuses on using simple data driven tools to
analyze data, identify root causes and determine the ideal solution. DMAIC is best used when
Data is required to identify root causes of a problem i.e when the root cause is unknown.
Some of the key tools to apply are:
Data Collection Plan
Histogram, Pareto Chart
Cause and Effect Diagram
FMEA (Failure, Mode and Effect Analysis)
Run Charts/Control Charts


Phases Define Measure Analyze Improve Control





Activities

Define project
objectives
Validate/Develop
Project Charter
Identify quick
wins and refine
process Identify
performance
measures

Collect the
data
Plot and
analyze data
Determine if
special
cause exists
Determine
Sigma
performance

Stratify
process &
data
Develop
problem
statement
Identify root
causes
Validate root
causes

Generate
Solution Ideas
Determine
solution
impacts :
Benefits
Evaluate and
select solutions
Develop
process maps
and high-level
plan

Develop pilot
plan
Verify Sigma
improvement
Develop
standardization
opportunities
Integrate
lessons learned
Handover to
process owner
(VSM)
Key
Deliverables

FSC Charter
Nominated Team
Definitions of
performance
measures and
benefits
FSC replication
plan

Detailed
process map
Baseline
performance
DPMO
Quantified
project
objectives
Cause &
effect
relationships
Prioritized
risk

Identified
sources of
variation
Updated
process
maps
Potential X's
critical to
process
performance
Identified
improvement
opportunities
Statistical
analysis of
data
Detailed
problem
statement

Solutions
Process maps
documentation
Implementation
milestones
Improvement
impacts and
benefits
Proposed
measures &
targets
Organization
structure
impacts

Handover
Future State
Process
control
systems
Standards,
procedures &
agreed
measures
Training
Team
evaluation
Pilot and
solution results
Success stories
Implemented
organizational
change