Six Sigma and Lean Model of Project Management

In the cooperative world, it has been been most speculated and debated issue and today’s too, that which methodology would be more productive and efficient for organizations. It would we ex-aggregation if I declared that specific one model is more vibrant in comparison to others. Because we can’t undermine capability of any one of them. The methodology that enterprise chooses strictly depends on shape, size, and function or projects they do. And different organizations have their different needs to achieve goals and to full-fill these needs they opt methodology that suited them most.

Here we’ll see differences between both and that may help you to go with best one for your organization.

Lean and Six Sigma has common motive :

Both wants to eliminate waste and increase productivity & efficiency of organizational

operations but methodology to beat goal of both model is distinct (means they identify root cause of problem in different manner).

1. Six Sigma Model :

Six Sigma was developed for a very specific goal to achieve, It includes an special approach to handle the organizational challenges by reduce the variation, risks, waste and defect rates in production processes through the well organized statistical method of analysis. To do this, Six Sigma uses one of two the approaches – either the DMAIC or the DMADV method.

Here DMAIC stands for Define, Measure, Analyze, Improve, and Control while DMADV stands for Define, Measure, Analyze, Design, Verify. DMAIC is mostly used method which we’re explaining here.

DMAIC :

1. Define –

In the first step, you will define problem and how it is disturbing current process.

2. Measure –

During this step, you will measure current data. By examining process that is already in place and identifying what isn’t working you can begin finding ways to make improvements.

3. Analysis –

Now after collecting concerned data, you start analyzing to get to root cause of problem.

4. Improvement –

This is the step where you will come up with possible solutions, test your solutions, and applies which suited best.

5. Control –

Once you have implemented new process you must continue to make improvements over time in searching of most favorable solution. These changes will only last if employees continue to refine and maintain process.

Here, are some certifications of Six Sigma :

1. Black Belt –

Leads problem-solving projects. Trains and coaches project teams.

2. Green Belt –

Assists with data collection and analysis for Black Belt projects. Leads Green Belt projects or teams.

3. Master Black Belt –

Trains and coaches Black Belts and Green Belts. Functions more at Six Sigma program level by developing key metrics and strategic direction. Acts as organization’s Six Sigma technologist and internal consultant.

4. Yellow Belt –

Participates as project team member. Reviews process improvements that support project.

5. White Belt –

Can work on local problem-solving teams that support overall projects, but may not be part of Six Sigma project team. Understands basic Six Sigma concepts from awareness perspective.

Six Sigma is majorly applied in various fields like functional areas, such as engineering, manufacturing, plant operations, planning as well as sales/marketing and customer support service, but it’s not suitable for small enterprises projects or process.

Because many small companies can not afford resources that this model requires. Six Sigma deployed at each and every level within organization, with distinct roles and responsibilities these roles and responsibilities are borne by concerned employees.

2. Lean Model :

Lean method, is completely focused on eliminating waste by eliminating bottlenecks and improving quality of your products providing maximum profit value to customers with lowest possible amount of investment and risks. The term Lean was first coined by Toyota to describe Toyota Business System in 1980’s, business philosophy that helped company run at maximum efficiency. Prime motive of Lean model is Customer satisfaction.

If we use DMAIC method with principle of Lean model then it’ll give more favorable output.

Lean identifies deadly areas of waste that are common in most production systems :

1. Defects –

Products that don’t meet quality standards.

2. Overproduction –

Exceeding demand or producing more than was ordered.

3. Waiting –

Waiting is lag time in between each step in production. When employees are left waiting no value is being added.

4. Non-Utilized Talent –

Ineffectively using or miscalculating human resources.

5. Transportation –

Inefficient shipping methods.

6. Inventory –

Holding on to surplus of product or raw material.

7. Motion –

Unnecessary moving of product, material, or people.

8. Extra Processing –

Doing more work than is needed in very inefficient manner.

Differences between Six Sigma and Lean :

Six Sigma	Lean
Focuses on reducing variation, risks, waste and defects.	Focuses on eliminating waste by eliminating bottlenecks.
Improves quality of products, performance & services.	Improves flow.
Reduce variation at each remaining steps.	Remove non-value added process steps.
Improves Accuracy.	Improves speed of processes.
Customer-centric.	Customer-centric.

Source: geeksforgeeks.org

Continue reading

Top 10 Tips for Successful Implementation of Lean and Six Sigma

Today, everywhere in the world Six Sigma is making its mark by being one of the best process improvement methodologies. In fact, effective Lean and Six Sigma implementation has increased the efficiency of enterprises across industry verticals. And many companies across the globe are hoping to emulate the Six Sigma success of industry big wigs such as GE, Motorola, Toyota and more.

More Info: Lean Six Sigma Academy Certified Lean Six Sigma Yellow Belt (LSSA-YB)

But how do you come to conclusion whether Six Sigma is right for your business or not. To understand that you need to know the steps involved during Six Sigma implementation and ensure your organization and its key personnel are able to carry out properly even before you make the decision.  Without understanding what is being done and why it is being done, the Lean and Six Sigma will have a very limited scope to improve. So, let us take a look at top 10 tips for successful implementation of Lean and Six Sigma.

1. Change of behavior is as important as the tools:

Industry experts believe that change in behavior is mandatory for effective implementation of change. People have this tendency to work around a problem rather than fixing it, and this is where Lean and Six Sigma inculcates willingness to constantly address problems that arise in business processes. When people are committed to change their behavior even tools will be incorporated seamlessly. Training your workforce in Lean and Six Sigma is one thing, but without change in behavior the whole process will be just academic without any practical implications.

2. Lean and Six Sigma should be part of organization’s goals and core strategy:

Incorporating Lean and Six Sigma as a part of organization’s goals and core strategy is one of the key ingredients for its successful implementation. And without that the whole initiative will have a short-term life where people discard the methodology even before it is properly established in the organization. Moreover, when an organization has a core methodology to the central of everything, then integrating Lean and Six Sigma into that will increases the chances of success.

3. There needs to be a strong platform:

Enterprises should have a strong platform or a compelling reason to implement Lean and Six Sigma. Below mentioned are few examples of having a strong platform:

◉ “We are receiving a lot of customer complaints who are facing quality issues.”

◉ “Our inability to finish projects on time is helping our competition to gain better market share.”Without a strong platform, there is very less motivation to implement a continuous improvement initiative such as Lean and Six Sigma. Senior management and leadership in an organization should be familiar with the compelling reasons, and understand how process improvement methodologies such as Lean and Six Sigma can address those problems. It is not like without a strong platform or compelling reasons Lean and Six Sigma cannot be implemented; it is just that there will be more impetus towards achieving high standards to provide services of highest quality.

4. Make sure there is top-down approach towards Lean Six Sigma implementation:

Organizations around the world may be tempted to apply Lean and Six Sigma in a bottom-up approach, but industry experts believe it is worth an effort to engage senior and middle managers first in these process improvement methodologies. Their engagement in the implementation of Lean and Six Sigma towards improving critical business processes will strengthen other associated behaviors which will help in increased adoption by others as well. Without the engagement of senior and middle managers, successful adoption of Lean and Six Sigma across the organization is a difficult task to achieve.

5. You are better off to start with Lean and Six Sigma Champions to show the way:

Most of the time, implementation of any new methodology or a framework’s success depends on how and with whom it starts with. In organizations around the world, there will be few who are keener on trying out new ideas and ways to work than others. Rather than spending your precious time and energy on skeptics or disbelievers, it is best to start with only a handful of people who will lead and take charge of Lean and Six Sigma implementation and show how it can add value to their work. When people around them become curious of their day-to-day routine, the word will spread in a positive manner through internal champions’ networks.

6. Identify high profile and quick win projects to implement Lean and Six Sigma:

Not only you have to go with a top-down approach by starting with only a handful of senior and middle managers who can be champions, but also to pick the right projects that support organizational business strategies. In fact, you need to pick projects that are endorsed by senior and middle management that addresses what people care passionately about bring quick results. This increases the overall confidence in Lean and Six Sigma approach and will find widespread acceptance in the organization.

7. Acknowledge the fact that there will be cultural differences while adopting Lean and Six Sigma:

Every organization has its own unique culture, and experts believe that cultures differ between various geographical regions and different kinds of organizations such as MNC, local, corporate, small or medium, public, private and government so on. It is better to avoid assumptions towards how Lean and Six Sigma needs to be adopted and also the use of jargons unless that is what the organization wants. By doing this, there will be seamless implementation and integration of Lean and Six Sigma methodology between both the entities.

8. Having a right measurement system in place:

Organizations first need to understand that things which cannot be measured cannot be improved. By having proper measurement system in place, practitioners can decide on baseline performance and use the data to make informed decisions. And when people understand the potential of Lean and Six Sigma, there will be rapid improvement of projects. Also by encouraging participants to define both tangible and intangible measures one can monitor the impact of their improvements and keep a database which will help in communicating the success to the organization.

9. Having continual communication to engage wider audience:

In an organization there can never by enough communication. There should be varied communication channels to – receive information and comprehend it in a way that the recipient will be able to reflect and act upon it. Having open communication channels in an organization is an important aspect to complete Lean and Six Sigma projects on time. On many occasion addressing a small group or having a face-to-face communication for discussion of important things is more effective than mass e-mail communications. In fact, many organizations today are using local displays with regular updates on work progress and visual summaries of future plans or targets will help in better engagement of workforce.

10. Creation of communities or forums to sustain progress of Lean and Six Sigma in an organization:

In today’s organization, knowledge management plays a key role in sustaining the development / improvement of critical business processes through Lean and Six Sigma methodologies. Knowledge management techniques play a vital role in ensuring Lean and Six Sigma practitioners learn from each other’s experience, regularly improve their skills with regards to Lean and Six Sigma principles and tools used in an organization.

Source: invensislearning.com

Continue reading

Comparing Agile Project Management Frameworks

Agile methodology started gaining popularity around 2014-15. It was initially designed for projects that required speed, agility & flexibility. It breaks down delivery cycles into short, iterative bursts, known as Sprints. Agile is highly interactive, and it allows rapid adjustments throughout a project. Agile offers repeatable processes, lesser risks, allows for immediate feedback, provides fast turnaround, and reduces complexity.

This article covers the key considerations and vital assessment criteria when choosing a methodology out of multiple Agile frameworks or methodology. Now let's have a closer look at the three most popular Agile Frameworks and their comparison, which can help all of you make the right decision for your project.

Comparison of Scrum, Lean & Kanban:

CRITERIA	SCRUM	LEAN	KANBAN
Definition	To expedite the higher quality products, recurring and predefined rules, roles, and processes are being used	To reduce waste and to increase learning and integrity, the manufacturing and technology principles are being used	It is a visual framework used for continuous improvements, and it involves the visual workflow to limit work in progress and match requirements.
Industries	Initially, it applied to software development, but now it's been applied to many other industries	Initially applied to the manufacturing industry but now it has been applied to many other industries	Initially applied to manufacturing supply chain process, but now many other industries are using it.
Primary Focus	The primary focus is to expedite product turnaround and to improve the quality	The primary focus is to eliminate waste, learning, Process integrity, and system improvements	The primary focus is always on tasks and process improvements.
Need to determine by push or pull system	Based on the Customer pull system. Customer pulls when there is need exists.	Based on the customer pull system. Customer pulls when there the need exists.	Based on the customer pull system. Customer pulls when there the need exists.
Prioritizing work & WIP (Work in progress)	Scrum framework uses Product Backlog to determine and prioritize the future work in progress	When a customer need is determined, then the Work in Progress prioritization is triggered.	Work in progress is matched to the team's ability to deliver the product.
Collaboration	Scrum required a highly self-organized team	Lean required advanced processes and detailed team collaboration	Kanban required minimal management oversight and highly self-organized teams
Development Process	Scrum uses formal sprints with specific roles assigned.	Lean uses formal processes and team roles	Kanban doesn't require any formal Sprints or roles
Flexibility	Scrum is more formal and less flexible	Lean is the more precise process	Kanban is highly flexible
Timelines	Each Sprint duration is of 2-4 weeks of Sprint	There are no specific timelines, but the process should be streamlined	Work is broken down and displayed visually, but there are no timelines.
Meetings	Limited to 15 minutes per day	Prompt meeting and required as in when the issues crop up	Meetings are as in when required.
Changes to the requirements	During the Sprint progress, changes to the requirements are usually avoided	Changes are usually identified and resolved when they arise within the process	Throughout the process, the changes are allowed
Roles	Roles played a vital role and are the only key to success	Teamwork closely together and are aligned based on the common goals	There are no specific roles defined
Success Measures	Success measures depend on improved quality and speed of the delivery	Success measures are based on the fast turnaround and depend on the use of Just-in-time flow	Success measures depend on the process duration

Available Options

It is always necessary to remember that all these Agile frameworks can be combined to provide hybrid solutions. The combination of the best of two frameworks always increases the chances of success. Here I proposed some of the framework integrations that can help anyone ensure successful delivery, depending on their organization culture and other external factors.

Scrumban

This integration or combination uses Scrum as a method to do the actual work, whereas it uses the flexibility of Kanban to seek and gain in the way of continuous improvements.

Leanban

This integration or combination uses Lean as a way to combine the components of Kanban and Scrum framework to deliver the most sustainable values within a short span of time.

Source: novelvista.com

Continue reading

Solving Decreasing Sales With Lean Six Sigma

Online retailer ABC sells books, DVDs, CDs, MP3 downloads, software, video games, apparel, furniture, food, toys and jewelry. ABC has a strong market research unit and a seamless feedback loop for enhancing the customer experience. In the last few years, however, sales had dropped significantly contributing to a slip in the overall market share of ABC.

The CEO of ABC asked his executives, “If we are constantly collecting market and customer feedback, why are our sales so low? Especially given that we have highly productive teams and that our market research team was recognized as the best in the industry last year.”

An Outside Eye

John Smith, an independent Lean Six Sigma (LSS) consultant was invited by the CEO to guide ABC in improving their declining sales. Smith spent some time talking to key personnel from different teams; a few of the teams shared statistics around the productivity of their individual teams as well.

The consultant’s first observation was that each of the teams within the company operated in a silo. Each team reported their capacity, productivity and output individually. This meant that the end-to-end process of translating customer feedback to a better online customer experience was not being seen as an enterprise-level process. For example, e-Strategy responded to the findings from Market Research in isolation of the Product and Service teams.

One of the company’s executives asked Smith, “Is isolation really an issue? What does it have to do with low sales?”

Smith explained that when the teams respond independently, they don’t have an opportunity to review each other’s data and weigh in before a recommendation is sent directly to Solution and Delivery to get implemented. It is possible that a solution devised by one team could impact the work of another team. Without coordination among teams, their isolated efforts could lead to rework, overproduction or other wasted work – thereby contributing to a decrease in the percentage of customer feedback items being translated into features.

Outputs vs. Outcomes

Prioritizing customer feedback with respect to multiple parameters such as value, risk, cost of implementation and speed to market is only possible when there is a single, organizational framework to manage improvement activity. Smith proposed that the productivity of the teams should be measured based not only on output but also on outcomes.

Consider two of ABC’s website issues: 1) inconsistent branding and 2) performance issues due to an increased number of concurrent users (leading to people dropping out before finishing a transaction). Imagine also that it is four weeks before the Christmas shopping season begins – a time when the number of concurrent users increases by at least 50 percent.

The Marketing team’s priority is to get the branding correct and may be able to get those requirements to Solution and Delivery quickly without talking to Operations. But why worry about online branding if the website is already unable to cope with the existing customer traffic? Parallel processing generally focuses on individual team outputs; with an overarching improvement framework, priorities become clearer and the focus can be shifted to customer outcomes.

The Big Y

Smith described a hypothetical situation in which LSS governed at the enterprise level the overall process of translating customer feedback to a better customer experience. The big business Y in this enterprise-level process is decline in sales figures.

Figure 1: Market Research Feedback Loop (Click to Enlarge)

There are likely multiple causes contributing to the Y, Smith noted. Without having performed detailed analysis, he suggested looking at productivity and output. Various ABC teams had spoken to Smith about their individual team’s productivity as a positive metric; they were delivering a significant amount of output. The incongruity between the perceived high productivity and the declining sales led Smith to want to investigate further.

Smith shared Figure 1 with the executive team. The process shown is that of the information technology (IT) division, which helps translate feedback from online customers into product features. There are multiple stakeholders involved in this process, ranging from the survey company (external to ABC) to the internal marketing team, and from operations to the IT teams. Smith noted, “This process cuts across 10 separate teams. I have assumed productivity of about 90 percent for each team. This – in Six Sigma terminology – is the unit yield for a team. That means, irrespective of the total capacity of the team, 90 percent of the customer feedback that a team receives is incorporated into website enhancements or some process change.”

Unit Yield Versus Final Yield

Smith directed his next comments to the CEO: “This is what you see in all performance dashboards. The usual misconception is that if all the teams have a productivity of 90 percent, the average productivity for the entire process should be about 90 percent. In effect, what that should mean is that 90 percent of the feedback captured during market research translates tangibly into improvements that reach your customers. So if that was the case, why are the sales so low? The reality, however, is that only 35 percent of the feedback captured by market research translates into some tangible action. And in most cases the feedback is outdated by the time any action has been taken. Look at what happens with a mathematical model when all of the contributing teams have the same productivity.”

Productivityenterprise level = (Productivityteam)number of teams  or

Yieldoverall = (Yieldstep)number of steps

Smith continued to address the executives of ABC: “In this example of a sequential process, the productivity (unit yield) of individual teams is about 90 percent, but you have to multiply them to get an accurate measure of enterprise-level productivity (final yield). They cannot be averaged. Think of the first two teams in this process. The process begins with 100 customer feedback items at the Market Research team and 90 pass. The starting number for the e-Strategy team is then 90, not 100, and 90 percent of them pass, leaving 81. The average team yield is 90 percent but the final team yield is only 81 percent. This is how the full IT process has a predicted final yield of only 35 percent, resulting in customer dissatisfaction and poor sales.

This sequential example highlights the effect of measuring productivity at the team level without having an enterprise-wide view. Of course, the problems that ABC faced were multi-dimensional – there was more than one cause contributing to the Y of declining sales.

Operating Costs

Productivity often does not fully reflect the cost dimension of a problem, Smith explained to the ABC executives. Operating costs also affect a company’s bottom line – even if sales increase. By not having a cross-functional team or enterprise-wide process management, the unnecessarily large number of steps and teams can lead to higher operating costs related to failure, overproduction, rework, etc.

Although increasing sales is pivotal, optimizing operating costs is paramount in order to assure sustained profits. To understand the costs of ABC, it is important to examine the journey of the items leading to the 35 percent final yield.

Consider two teams in an overall process through which 100 items begin with Market Research and then need to pass through Product and e-Strategy. Assume the cost of operations of the Product team is $X per year and $3X per year for the Strategy team. In addition, assume that each team has 10 critical-to-quality characteristics to meet. The individual team yield is 90 percent for both teams so there is the possibility that each team will produce 10 defects in 100 defect opportunities. In terms of their ability to produce defect-free quality characteristics, they are at the same level.

But what is the cost of fixing such defects and the costs of rework or additional handoffs? If the costs are $Z for the Product team, then they are $3Z for the e-Strategy team. In this case, improving the productivity (throughput yield) will help improve the sales numbers, but it is critical to look at optimizing the operations to maintain long-term viability. Having a high number of teams with varied costs of operations combined with the lack of an overarching improvement framework put the company in a losing situation. This situation can be mitigated by having cross-functional teams work on a prioritized set of items delivering incremental value.

High-level Recommendations

Smith suggested that ABC enact an enterprise-wide transformation program to improve sales and profits using LSS. The key areas of focus of this transformation would include team rationalization, review of operating cost bases, a review of the current delivery methodology and reporting. In each of these areas, Smith applied the LSS filters to identify and eliminate waste as well as improve the quality at each stage – all contributing to an increase in the overall throughput.

In the end-to-end value chain of ABC, there were 10 different teams. When looked at with a Lean filter, it was obvious that a significant amount of handoffs, rework and motion contributed to a low throughput. Smith recommended forming cross-functional teams by identifying the groups with similar objectives. Figure 2 shows the value chain before and after this rationalization exercise.

Figure 2a: End-to-end Value Chain of Teams – Before Rationalization (Click to Enlarge)

Figure 2b: End-to-end Value Chain of Teams – After Rationalization (Click to Enlarge)

The rationalization resulted in a 40-percent reduction in the number of individual teams. This was a significant step for ABC as it reduced the number of non-value-added steps in the overall process and facilitated greater collaboration among team members. The reduction in the number of teams resulted in fewer handoffs, leading to a seamless flow of information.

Leaving Behind the Waterfall

The existing delivery approach in the IT department of ABC was a traditional waterfall methodology, a sequential design process used in software development in which progress is seen as flowing steadily downward (like a waterfall) through the phases of conception, initiation, analysis, design, construction, testing, production/implementation and maintenance. In the initial scenario with up to 10 teams, following a waterfall delivery created an issue with the speed to market. Apart from speed to market, most of the supposed value propositions seem to become outdated by the time they were delivered.

With fewer steps and teams in the value chain, the speed to market will improve, but further improvement is still needed. In the ideal state, ABC would deliver against a prioritized set of feedback items (prioritized against such considerations as value, risk, cost of implementation and speed to market) that are not already outdated, using a seamless feedback loop.

A key limitation with the waterfall process is the expectation that all of the best ideas have to occur at the beginning of a project. In reality, good ideas can appear at any time. A rigid, change-resistant process (even if leaner) tends to produce mediocre products, sometimes at a point in time after the customer has moved on to another company. Achieving maximum throughput, even in a Lean organization, requires each step to deliver as much value as possible at regular intervals all along the process.

By adopting an agile delivery approach, which is more flexible than the waterfall approach and follows an iterative process to deliver value quickly, the productivity of each ABC team was further increased. Using agile meant that the cross-functional teams worked collaboratively to prioritize the items that were identified by the market research team and started to deliver upon those priorities in chunks. The teams delivered more value incrementally and were able to respond to market changes dynamically. The other key benefit of this approach was that an item identified in the most recent customer survey could jump onto the priority list if it was deemed to have the potential to deliver greater value than other priority items. Introducing new changes were easier and the products became more relevant to the customers of ABC at a faster pace.

Figure 3: The Combined Power of Lean and Six Sigma (Click to Enlarge)

The recommendations for ABC can be summed up in LSS terminology by the figure in Figure 3. The y-axis is the number of teams that were part of the initial value chain. The rationalization of the teams (the reduction from 10 to six) was achieved by eliminating waste using Lean. The adoption of an agile approach (as opposed to the existing waterfall approach) improved the quality and productivity of each of those steps and teams. Lean and Six Sigma complement each other and tackle problems multi-dimensionally. Lean helps reduce non-value-added steps in a process by eliminating rework, handoffs, motion, etc. Six Sigma works relentlessly to improve the quality of the value-added steps, which contributes to reliability at the enterprise level.

The other key recommendation to ABC was the acknowledgement that each team has a different cost of operation and, therefore, a different associated cost of failure or rework. By creating cross-functional teams with representatives from each of the departments, the total cost of failure was also reduced.

LSS Powers ABC

LSS provided a structured approach to eliminate waste, reduce the cost of failure, and improve the throughput yield and speed to market of the overall processes for ABC, resulting in higher end-customer satisfaction. LSS also helped to deliver products in a manner that optimizes resources and increases value to meet customer expectations. This is exactly how Lean and Six Sigma in combination can drive greater benefits at the enterprise level than either alone.

For ABC, the number of handoffs and rework were significantly reduced and contributed to an increase in individual team yields. The pace and relevance of value delivered by ABC also increased as the teams worked against a prioritized set of feedback items, focusing on producing incremental value. Customer satisfaction increased and so did the sales.

Continue reading

What is Lean Manufacturing?

Want better products, delivered in shorter times and at a lower cost? No, it is not just a dream.

With Lean management, you can have all three.

At its core, the philosophy of Lean management is to maximize customer value while minimizing waste. It is one of the most popular management systems and for good reason – no matter which industry you are in, Lean is a universal tool that can have a positive impact on any company’s performance.

It is not just a quick business hack – it is an entire business philosophy that has been around for decades and can have dramatic impacts on your business, from top to bottom.

In short, it can radically improve your business.

What Is Lean Management?

The foundations of Lean management, often shortened to just Lean, are built upon removing processes that do not bring value to the end product.

This is best described in the three key pillars of Lean (Figure 1):

1. Delivering value from your customers’ perspective

2. Eliminating waste (again, from your customers’ perspective)

3. Continuously improving your processes to better serve customers

Figure 1: 3 Pillars of Lean Management

While they sound simple, these three key pillars of Lean strategy can have staggering results in improving efficiency, productivity and time management. By stripping away everything that does not bring value to the final product or service, you create a business that is 100 percent efficient with absolutely no wastage.

The Roots of Lean

Lean was not born in a classroom. In fact, lean originally comes from the car company Toyota, where Lean was coined to describe the unique business model used by this uber-successful car manufacturing giant. The Lean movement is therefore often referred to as the Toyota Way because it derived from the Toyota Production System.

Leading the team who shared this with the world was Dr. James Womack, who went to Japan. Together with Daniel Jones he wrote The Machine That Changed the World and later with Jones and Daniel Roos, Womack wrote another book about the Toyota Way called Lean Thinking. Both books remain a centerpiece of Lean management education to this day.

Inspired by Toyota’s methodologies, Lean provides a comprehensive framework to help business owners answer the types of questions that matter the most, no matter what stage their business is at. Knowing where best to invest time or money can be critical for future performance: should I invest in new equipment, hire new people or make my staff work longer hours?

The answer lies in shorter lead times, higher quality and lower costs. And Lean management shows us that all that are possible.

While owners often think, “How can I grow my business faster?” under Lean, the real question is: “How I can provide more value to my customer?”

The Four Principles of Lean

To get a good idea of how Lean works, this video from Four Principles shows us more about this revolutionary management style.

As the video highlights, there are four central ideologies at the heart of Lean management:

◈ Pull: Rather than produce as much as possible, customer demand “pulls” goods and services through the manufacturing process, minimizing production, inventory and working capital.

◈ One-piece flow: Focusing on one piece at a time minimizes work in progress, process interruptions as well as lead and wait times, all while increasing quality and flexibility.

◈ Takt: Takt is the heartbeat of a Lean system and is defined as the speed at which you need to manufacture a product in order to meet demand. Takt allows us to balance work content, achieve a continuous flow and respond flexibly to changes in the market place

◈ Zero defects: Mistakes happen, but a Lean company does not pass on defects. Mistakes from previous steps must be corrected before going on.

With these four principles, companies can respond quickly to changing consumer demands at very little cost; with no inventory, a massive shift in product type or service offering will not be a problem for Lean companies. The principles of pull, one-piece flow, takt and zero defects will help your company to stay ahead of the competition in a constantly changing marketplace.

The final piece to the Lean puzzle is vitally important and is the glue that holds the whole system together: continuous improvement.

5 Steps to Lean

Implementing Lean can be tricky. To help, there are five basic steps to achieve maximum efficiency, which can be summarized in the Lean improvement cycle (Figure 2).

Figure 2: Five Steps of Lean Management

1. Identify value: The first step in Lean implementation is to identify value from the standpoint of the end customer. To do this, you need to understand what drives sales. What is it that makes your company so good? What value are consumers getting from your company?

2. Value stream mapping: The second step involves mapping out all the steps for each individual product or service. This includes all the actions your business takes to deliver the identified value to your customer.

3. Create one-piece flow: Now you’ve mapped out your value stream, what improvements can be made? Identify steps that do not create value and if you can, eliminate them. If you can’t eliminate, improve them. Make the value-creating steps occur in a tight sequence so the product flows smoothly to the customer in the fewest number of steps. Make it impossible to pass on defects down the chain.

4. Create pull: As flow is introduced, let customers pull value from the next upstream activity so that work is done only if there is a need for it. This step is key in eliminating waste – both resources and time.

5. Continuous improvement: After one run through of this process it is vital that you go back to the beginning and repeat this same process, again and again. Once flow and pull have been created, begin the cycle again and again, until you reach a state of perfection where every step in the process provides maximum value.

Over time, this continual refinement of production processes will eliminate bottlenecks and interruptions, increasing production speed without sacrificing quality. Information management becomes simpler and problems are more easily removed. Smoothing the process will remove any unwanted waste while giving employees a sense of value.

It is important that every employee feels valuable because you need to ensure that this process works from the ground up. That includes everyone from the receptionist right up to the CEO. By having a tight process line it is clear what everyone is working on and why.

There are various ways you can encourage this type of behavior at your workplace such as daily review sessions and rewards. The idea is to produce a stable production system where every step of the way creates value. This can only be achieved through continuous effort and improvement.

How Can Lean Benefit My Business?

While Lean seems particularly well suited to manufacturing type companies like Toyota, it doesn’t matter what type of business you run. Lean is a universal management tool that can have a positive impact on any company’s performance, whether you run a PR company, produce high-tech software or run a service business in the healthcare industry.

Lean focuses on the entire business – not just the manufacturing of a product – so it does not matter whether your business has a physical product or not. Unlike other management systems, Lean improves the entire value stream and not just an isolated point in the chain, which makes it easily replicable between business types.

For example, Lean has been instrumental for computing leader Intel to stay ahead of the competitive curve: In 2014, Joe Foley, factory manager at Intel Fab Operations in Ireland, said: “Five years ago, it took us 14 weeks to introduce a new chip to our factory; now it takes 10 days. We were the first Intel factory to achieve these times using Lean principles.”

At Seattle-based healthcare provider Virginia Mason, basic tenants of the Toyota Production System combined with elements of Kaizen and Lean in 2002 to create a unique version of Lean called the Virginia Mason Production System, which is focused on improving patient safety and quality. Erica Cumbee, a faculty member at Virginia Mason Institute, said: “Focusing on the highest quality and safety means pursuing zero defects in health care by removing waste and designing mistake-proofed processes. The tools of the Virginia Mason Production System support this work, but it is the culture that sustains it.”

For John Deere, the agricultural machinery expert, it is a similar story: In 2003 John Deere spent $100 million on transforming its business model using Lean principles. Project manager Kallin Kurtz said: “This project transformed our manufacturing engineering mindset. We have put a great deal of effort into identifying non-value-added activities and eliminating them where possible.”

Transformation Through Lean

Implementing Lean requires a long-term perspective. It won’t happen overnight but can be achieved by a rigorous feedback cycle of constant improvement. The goal is to reach zero waste in the company and thus achieve maximum customer value.

By using the five-step improvement process to implement the key principles of Lean, you can encourage your business to work smarter, not harder. The methodology of Lean focuses on creating value at every level, which builds overall value for your company and when done correctly, can be transformational.

Through Lean, it is possible to have better products, made in a shorter time and at lower costs. It will take time but you must continuously work to improve to bring you closer to your Lean goal. Have trust in everyone throughout your organization and over time, your chances for success will rapidly increase.

Continue reading

How to Turn Resistance into Support for Lean Six Sigma

One phrase in Lean Six Sigma that may be heard more than any other is “culture change.” Most organizations today are undergoing some form of culture change, and 75 percent of all major or cultural changes fail to achieve their goals. Experience shows when strength and culture collide, culture has a higher probability of winning.

Change takes time and commitment. While some resistance to change is inevitable, there are ways to accelerate change through best practices using tactical tools to gain acceptance, change old habits and greatly increase the bottom line.

A Plan for Change

“For new technology to be embraced, people have to believe that it has 10 times the advantages of what people were previously doing,” according to Peter Drucker. Drucker, considered a management guru, has written numerous books on management issues and practices, including Megatrends. What are the implications of his statement?

◈ Management must really sell its ideas/solutions.
◈ People must see the benefit of the solution and that benefit must far outweigh the status quo.
◈ People get ingrained into a way of doing things that is hard to break.

Lean Six Sigma tools provide a technical solution, but what provides organizational acceptance? Successful changes require dual strategies.

The ‘Change Equation’

“Stakeholder” is a word frequently used in continuous improvement programs. However, Lean Six Sigma project teams must keep in mind there are two groups of stakeholders – those who are impacted by the change and those – typically leaders – who can speed or impede progress. Influencing stakeholders can be understood through the change equation:

DxVxP > R

This model implies that to overcome inevitable resistance to most change (R), there must be some level of dissatisfaction with the status quo (D), a clear behavior-based vision of where to go (V) – or the desired state, and a clear path (process or plan) to get there (P). Practically stated, teams will need to answer these questions:

1. Why change?
2. What will change?
3. How will it change?

Need for Change and Dissatisfaction with Status Quo

A comprehensive change acceleration plan includes articulating the need for a particular change. Within DMAIC, project teams identify reasons for the target process in the Define stage – essentially building a business case for the project. As more feedback and process data become available in the Measure and Analyze phases, teams can re-address the dissatisfied component of the change equation, ultimately refining these arguments when solutions become clear (Improve). For example, a stakeholder might support working on a clearly broken process (Define, Measure, Analyze) but may not support the specific proposed change (Improve).

Teams must provide evidence the status quo is not good enough through addressing whether the current process or service is truly broken and articulating the benefits of change. An effective tool to use is a threats and opportunities matrix (Figure 1). Similar to a force field analysis, this version has four columns.

Figure 1: Threats and Opportunities Matrix

The threats and opportunities matrix helps develop a compelling argument by identifying ramifications of not making the change – or all of the bad things that would happen without changing. It also identifies benefits and opportunities of making the change. Many times the opportunities will be the antithesis of the threats; however, teams should go beyond the obvious. Sometimes viewing the issue from a different perspective can lead to additional reasons for making the change.

As a team makes a case for change, it should pay close attention to the matrix headings. If threats for making the change are identified, essentially a case is being made for not changing. With that in mind, a team should be as specific as possible. The more reasons for change the better, as different arguments will compel different stakeholders. The right argument will eventually match with the right stakeholder.

Identifying arguments against change will help the team understand potential pockets of resistance. The key is to externally communicate arguments for making the change and utilize their assessment of arguments against the change to develop rebuttals or enhance the solution.

People Are Influenced in Different Ways

Most studies indicate that influence approaches can be categorized into three strategies – data, sensory or incentive/de-incentive. Stakeholders influenced by data will probably respond well to a detailed, positive cost/benefit analysis. Sensory stakeholders may benefit from a simulation of the new process or a benchmarking visit to an organization that successfully implemented a similar change. Finally, stakeholders most influenced by incentives will most likely respond to an incentive plan rewarding behavioral changes, or the resulting de-incentive for lack of change or support. Leveraging multiple approaches in influencing stakeholders will have a higher probability of success.

Using the completed threats and opportunities matrix, a team can identify possible strategies to influence resistant stakeholders. For each threat or opportunity, identify one data element and one sensory element that would validate the threat or opportunity. Then, identify an incentive/de-incentive approach that might push stakeholders to make the change.

Creating a Behavior-Based Vision

Teams start shaping the vision for the desired state in the early stages DMAIC, but they will not be able to make that vision behavior-based until solutions are clearly defined in the Improve phase. An effective vision statement will inform stakeholders about what will actually be different in the desired state, and what they will be doing in the new environment. Using a mission/results/actions (MRA) aatrix such as the table below will help craft that vision.

Mission/Results/Actions (MRA) Matrix
Mission	Results	Actions (Behaviors)

A solid vision should include a higher level, strategic mission or objective for the change/solution. This statement should be concise and agreed on by the team.

The vision should not stop there, however. Teams should identify and communicate organizational and individual performance expectations or results. These should be specific, measurable descriptions of what is to come, and should include both organizational goals (e.g., cycle time will be reduced by 50 percent) and individual goals.

Finally, teams should give the stakeholder a line of sight to the desired state by articulating what each stakeholder will be doing differently – their actions or behaviors – in the new environment.

Once the objective or mission of the change is agreed upon, teams should use a T-diagram to compare results and behaviors for both the current and future environments.

Figure 2: Methods for Communicating the Vision

Creating the vision is important, communicating it is more important. Teams should take advantage of a variety of communication vehicles to “paint their picture” of the desired state. Sensory approaches are most effective. These communications tools include process mapping, simulations, models and training.

Communicating the Path to the Desired State

How does anyone move from the current state to the desired state? The path component of the change equation comes into play as solutions take form during the Improve phase. Some stakeholders will be concerned about the ability to get to the desired state or potential roadblocks and disruptions along the way. Incorporating a clear path into the communication plan is essential.

There are a number of familiar project planning, management and communication tools, such as Gantt charts, work breakdown structures, and multi-generational planning, as well as clearly documented roles and responsibilities. These same tools should be leveraged to communicate the change plan to key stakeholders. That leveraging can take the form of asking questions – an excellent way to easily communicate the plan to make the desired state a reality.

Taking Pulses of Levels of Support and Resistance

People resist change for a variety of reasons, including technical, political and cultural reasons.

◈ Technical: They do not know how to do the new stuff; they would have to invest time, money, effort or equipment to make the desired change; they feel they cannot do it; they truly feel the new solution is not as good as the status quo.

◈ Political: Real or perceived fear of losing autonomy, authority, respect, power, etc.

◈ Cultural: The change just does not feel right; stakeholders are used to or comfortable with the status quo; peer pressure, fear of standing out.

Like an iceberg, where only a small portion can been seen above water, most of the resistance that teams actually see is just the tip of the problem. Usually a great amount of resistance remains an undercurrent. Specifically, stakeholders tend to surface their technical reasons for resisting change – “it’ll cost too much” or “we’ll have to spend a lot of time in training.” What they often do not surface are their political and cultural reasons for resisting. Teams can use good, old fashioned interviews and feedback mechanisms to uncover technical reasons for resistance. They will need to use observation and other insights to identify political and cultural reasons for resistance.

Here are a few techniques to assess the level of support (or resistance) for their specific change effort and to identify possible reasons for that support or resistance.

Consider the following important questions:

◈ Who are the key stakeholders?

◈ What is their current level of support for this change?

◈ What level of support is needed from them to ensure success?

◈ Why are they supportive or resistant?

◈ What is the source of their resistance?

The most appropriate tool for this is the stakeholder analysis. This tool takes many forms; however, they all should accomplish the same goal use guidelines similar to the following:

1. Identify key stakeholders

2. Determine their current level of support for the project (on a 1-5 scale)

3. Determine the level of support needed for the project to be successful (on a 1-5 scale)

4. Identify reasons for resistance or any concerns

A typical 1-5 scale would show 1 as strongly resistant, 3 as neutral and 5 as strongly supportive. It is important to gain agreement on what each of these levels means, and keep the assessment behavioral-based. This scale can easily be adapted for more advanced analysis. For example, prioritizing stakeholders in terms of their potential impact on the success of the change effort is often helpful.

Bringing It Together in an Influential Plan

To accelerate change, teams need to focus both on coming up with a solid solution and a plan to gain acceptance. Teams need to answer the why, what and how questions for key stakeholders. In addition, teams need to assess levels of support and/resistance to their proposed change in order to effectively match influence strategies with specific stakeholders.

The goal in developing an acceptance strategy for a proposed change is to turn resistance into support. Teams must develop a detailed communication plan. It comes down to assessing the levels of support or resistance to change, answering critical stakeholder questions and building a solid acceptance strategy.

Continue reading

Six Sigma vs. Lean Six Sigma

What is the real difference between Six Sigma and Lean Six Sigma?

The short answer is that the two methodologies complement one another. However, differences exist between them. When looking at Six Sigma vs. Lean Six Sigma, it’s important to understand the goals and tools used by both.

What is Six Sigma?

Six Sigma is a process improvement methodology that focuses on eliminating defects. The goal is to have only 3.4 defects per one million opportunities in any process.

Motorola first began using the methodology in its manufacturing plants in the 1980s. The data-driven process helped the company earn record profits.

DMAIC

Standing for define, measure, analyze, improve, control, DMAIC is used to improve existing processes that do not meet an organization’s standards for limited defects and overall efficiency. It works as follows:

◈ Define the nature of a process defect, as well as the goal for the process
◈ Measure every aspect of the process using data from current operations
◈ Analyze to find root causes that are leading to the defect
◈ Improve the process using this information and eliminate the defect
◈ Control the process to maintain and sustain improvements

DMADV

This focuses on steps used to create a process that results in a new product or service. The acronym stands for define, measure, analyze, design, verify. It works as follows:

◈ Define the process goal
◈ Measure every aspect of the proposed new process
◈ Analyze the data to create options for the process, eventually choosing the best one
◈ Design the new process and test its efficiency and quality
◈ Verify the design through pilot projects before the final process is initiated

The overall goal of Six Sigma is to eliminate defects. Too many defects lead to inferior products and services. It also erodes consumer confidence in a product.

What is Lean?

While Six Sigma focuses on eliminating defects, Lean Six Sigma focuses on bringing value to customers. Every aspect of an operation is analyzed through this lens.

Lean also focuses on moving quickly with process improvement, sustaining what works and changing what doesn’t work.

Lean operates under five main principles.

◈ Evaluate every process from the view of whether it provides value to the customer
◈ Identify every step in a process and eliminate those that don’t add value
◈ Create a schedule so that the value-adding activities work smoothly together and within a specified timeframe
◈ Incorporate feedback from customers that adds further value
◈ Focus on continuous improvement to the process, moving it closer to perfection over time with all wasteful activity eliminated

The Eight Wastes

The most important aspect of Lean is identifying waste. Lean organizes wasteful activities into eight categories:

◈ Defects: Process errors
◈ Over-Production: Having more product than needed or producing it before it is needed.
◈ Waiting: Time wasted waiting for the next process step
◈ Non-Utilized Talent: Not properly using employee’s knowledge and skills
◈ Transportation: Unnecessary movement of products and materials
◈ Inventory: Having products or materials that are going unused
◈ Motion: Unnecessary movements by workers
◈ Extra-Processing: Providing a higher standard or larger amount of work than necessary

Lean Six Sigma vs. Six Sigma

Lean and Six Sigma work best when combined, which is why Lean Six Sigma was created.

Lean focuses on creating processes and governing all operations from the standpoint of whether all activities benefit the customer. Six Sigma takes a process and analyzes it to create the most efficient and waste-free operation possible.

Used in tandem, they offer a powerful force. While Six Sigma started in manufacturing, it now is applied to many different operations in a variety of industries, including healthcare, software development, pharmaceutical, manufacturing, nonprofit agencies and government agencies.

Lean has the same track record. With its emphasis on working fast and always focusing on the customer, it has especially taken hold in technology. But it works well across every industry, as well.

Mastery Levels of Lean Six Sigma

The levels of certification in Lean Six Sigma are White, Yellow, Green, Black and Master Black Belt.  White and Yellow provide basic training in the language and strategies involved in Six Sigma. Green Belts typically work as assistants on projects with Black Belts, who act as project leaders.

Master Black Belts have attained mastery over Six Sigma methods and gained the experience of leading many successful projects. They typically work on Six Sigma projects full-time and play a key role in improving an organization’s operations, working directly with top executives.

While differences exist between Six Sigma and Lean, the two work toward the same goals of increased efficiency and better products. Learning the methodology can put an employee in a great position to move into key management roles within an organization.

Continue reading

Six Sigma and Lean: 3 Secrets for Success

Today, we continuously rediscover the power of Six Sigma and Lean in almost every industry, from service industries to software development; mass production to mass customization; and multi-national companies to small and medium enterprises.

What are the secrets of Six Sigma and Lean that make their application as effective today as they were over 30 years ago?

The roots of Six Sigma come from the statistical approaches to production control developed during the explosion of mass production in the beginning of the 1900s. The official Six Sigma System was launched in the 1980s as a data-driven, structured methodology allowing process analysis and improvement with the goal to reduce variability, so that only 3.4 defective parts per million are produced at any process step.

After World War II, Japanese engineers embraced and further built upon these statistical methods to create the basis for what we call today Lean Manufacturing. Lean considers not only the data, but also the management philosophy, focussing on the value chain and creating an environment where waste is unacceptable and must be eliminated. Lean drives for continuous improvement with the active involvement and responsibility of all employees to achieve perfect quality.

The secrets that Six Sigma and Lean hold are broad and far-reaching. They impact companies in three broad areas, highlighted below, which connect the customer values with a company’s strategy and link them with process-based flows and with trained and motivated employees.

1. Focus on Customer Value → Better Products, Delighted Customers

Six Sigma and Lean emphasize the importance of understanding the customer and what the customer sees as value. Designing a product or service which meets or exceeds the customer expectations requires the first step of defining what the customer expects: what features differentiate your product, and what will delight the customer. A focus on customer value creates better products, improved market share, and loyal customers. Understanding these expectations gives us a starting point to reduce waste, in other words, anything that does not contribute to the customer value.

2. Process Mindset → Achieve Company Strategic Goals

A process is a sequence of steps with clearly defined inputs, which consumes resources and time, and produces a defined output. A process view can be taken at every level of a company, to any level of detail. Defined process flows allow a clear measurement of the process performance, and, with this information, the management can prioritize efforts to achieve their strategic goals and to focus and track internal efforts towards these goals. The process mindset challenges process cycle times and can be extended into the supplier base to reach up the supply chain to achieve higher performance.

3. Company Motivation → Increase Productivity and Quality

One of the keys to the success of Lean is the involvement of employees, the understanding that the process flow cannot be understood from a distant office but must be walked, examined with the involvement of those who perform the process daily and whose ideas for improvement can have a significant impact. Bringing this level of active involvement and responsibility to everyone in the company and having clear performance measures, results in company-wide motivation and increased productivity, where all members of the team are working towards a common goal and have a chance to learn and develop.

Effecting the transformation to adopt Six Sigma and Lean requires emphatic commitment from top management, expert guidance from trained Lean Six Sigma Master Black Belts, and project initiation and execution from a trained team of Six Sigma Black, Green, and Yellow Belts.

Continue reading