Business Improvement Overview

All Rights ReservedAll Rights Reserved

Business Excellence Methodologies

An Overview

All Rights Reserved

Overview

• Lean and Six Sigma History• Lean and Six Sigma Business Impact• Requirements For A Successful Business Excellence Program• Available Business Excellence (BE) Methods• Which Method Is Appropriate• Implementation Strategy• Who Are The Drivers For BE• What Is LEAN• What Is Six Sigma• What Is Lean Six Sigma• What Is Design For Six Sigma

1

All Rights Reserved

History

• Business excellence methodologies are not quality initiatives• Business excellence is about the quality of the business, not about

the business of quality• Two big methods have emerged over the last 50 years

• Total quality management (TQM)• Lean manufacturing = Toyota Production System (TPS)

• These methods have evolved to become what is currently called• Six Sigma• Lean

• Six Sigma has been used successfully by Motorola, GE, BHPBilliton, Textron, Honeywell and others to increase business performance by reducing defects

• Lean has been used successfully by Toyota, GE, Honeywell, and many others to increase business performance by eliminating waste

2

Business Improvement Methods Are Of All Times

All Rights Reserved

History

3

Total Quality Management

(TQM)

Lean ManufacturingToyota Production

System (TPS)

Six Sigma LEAN

Lean Six Sigma

SynergyMotorola, GE, BHPBilliton,

Textron, Honeywell, …Toyota, GE, Honeywell,…

Defect Reduction

Waste Elimination

The Best Of Both Worlds

Motorola, GE, BHPBilliton, Textron, Honeywell, …

All Rights Reserved

Results

• Without going into the details of each successful implementation of the business improvement methods it can be shown that all lead to Cost reduction Increased customer satisfaction Engaged work force Use of a common ‘language’ across the business functions

• Depending on the size of the company Black Belts deliver between 3 to 6 projects each year Each project generates between $25k and $2.5M savings Black Belt training expenses are largely offset by the project benefits

• Green Belts deliver 2 to 4 projects each year Each project generates between $10k and $100k savings

4

Business Improvement Methods Deliver Tangible Business Results

All Rights Reserved 5


Results

All Rights Reserved 6


Results

Black Belt Projects

3 – 6 Projects/Year

Project Value$25k - $2.5M

Minimum $75k/Year/Black

Belt

Typical $500k/Year/

Black Belt

Green Belt Projects

2 – 4 Projects/Year

Project Value$10k - $100k

Minimum $20k/Year/Green

Belt

Typical $150k/Year/

Green Belt

All Rights Reserved

Requirements

• In order to be successful at business improvements certain requirements need to be satisfied Management engagement and support at all levels Properly selected project leaders, also called change agents Properly trained project leaders and team members Execution of the method as a team driven effort Selection of projects that will gain momentum for the initiative Screening of the business needs to create a pool of potential projects

7

Business Improvement Require Planning And Support

All Rights Reserved

Requirements

8

Business Improvement Require Planning And Support

Success

Management Engagement& Support Top Notch Project Leaders

Quality Training

Team Driven Effort

Selection Of High Impact Projects

Projects Aligned WithBusiness Needs

All Rights Reserved

Which Method Are Available?

• Methods available Six Sigma also know as the acronym DMAIC (Define Measure Analyze

Improve Control) Lean Lean Six Sigma Design for Six Sigma also known as DMADV (Define Measure Analyze

Develop Validate)

9

Improvement Methods Come In Different Flavors But Have The Same Objective

All Rights Reserved

Available Methods

10

Six Sigma(DMAIC)

LEAN(TPS)

Lean Six Sigma

Synergy

Defect ReductionQuality Level Of

Individual Process Steps

Waste EliminationSpeed Of Execution

Cycle Time Reduction

Design For Six Sigma(DMADV)

Maturity

Waste EliminationFollowed By Process

OptimizationNew Process Or

Product Development

All Rights Reserved

Which Method To Use?

• Lean Focuses on the complete process and aims at reducing sources of

waste for existing processes• Six Sigma Focuses on ‘troublesome’ parts of the process and aims at improving

defects (services or products that do not meet customer requirements) for existing services or products

• Lean Six Sigma Encompasses both approaches, usually waste reduction followed by

process improvement for the remaining process steps (for existing processes and products)

• Design for Six Sigma Used for the development of new processes or products in order to

avoid having to use the above methods

11

Guidance Will Help You To Select The Right Method For You

All Rights Reserved

What Method Is Right?

• Lean tends to generate results somewhat faster than Six Sigma but often does not consider full process optimization

• Six Sigma generates more stable process steps but does not necessarily look at the overall business

• Lean Six Sigma is the preferred method, leading to the best improvements but requires more upfront investment

• Design for Six Sigma is typically used by companies that have used Lean Six Sigma for several years and that have optimized the existing business It is very unusual to start with Design for Six Sigma because in general

one wants to ‘clean up’ existing processes first Starting a process over from scratch could be disruptive for the

existing business

12

Different Approaches For Different Goals

All Rights Reserved

Which Method To Use?

13

Six Sigma(DMAIC)

LEAN(TPS)

Lean Six SigmaSynergyMore Stable Individual

Process StepsDoes Not Look At The

Overall Process

Somewhat Faster Results

Does Not Consider Full Optimization

Design For Six Sigma(DMADV)

Maturity

The Preferred MethodTo Be Used After Lean

Six Sigma Has Reached Full Maturity

All Rights Reserved

How Is Business Improvement Implemented? [1/2]• Starting point is recognizing the need for improvement at the

management level• Based on the indentified needs business drivers are quantified and

clusters of projects are selected with external guidance• Upper and mid level management is supported with high level

training 3-5 days aimed at business metrics and project cluster identification

• Middle management is given specific training on project selection, candidate selection and support roles 3-5 days

• Projects are selected by upper and middle management and tied to specific candidates for implementation Start with selecting high impact projects High impact projects are executed by full time specialists (Black Belts)

delivering fast, sustainable results

14

All Rights Reserved

How Is Business Improvement Implemented? [2/2|• Black Belts candidates are fully trained and execute their project

in synch with the training calendar• Executed improvements gain momentum for the method and

smaller project can be selected• Candidates for smaller projects (Green Belts) are trained at a

lower level and supported by external resources or experienced in house Black Belts Green Belt projects take usually longer to execute and generate lesser

results than Black Belt projects• When the business has achieved a level of maturity (after 3-7

years) new products and processes are developed based on the Lean Six Sigma methodology

15

All Rights Reserved

How Is Business Improvement Implemented?

16

Identify Project Clusters

ManagementTraining

External Support

Project Selection

Candidate SelectionBlack Belt

Project Execution

Candidate Training

Project Selection

Candidate Selection

Green Belt

Project Execution

Candidate Training

External Support

All Rights Reserved

Who Are The Actors? [1/2]

• Senior management Initiate and support the business improvement initiative Make business improvement a way of life Determine the business objectives

• Deployment champion This person owns the business improvement methodology and is

responsible for delivering results Indentify clusters of projects that support the business objectives Select Black Belts, Green Belts

• Project champions Identify projects within the project clusters that fall within their area of

responsibility Support Belts throughout their projects Hold Belts accountable for project results

• Master Black Belts (in the beginning often external) Support the deployment Train and mentor Black Belts, Green Belts Help with project identification and selection Help with candidate selection

17

These Are Typical Roles And Depend On Organizational Structure

All Rights Reserved

Who Are The Actors? [2/2]

• Black Belts Responsible for the execution of individual projects often across

business divisions Deliver results to the project leader/project champion Full time exclusive role Change agents, help build momentum for the methodology Leaders of high impact and complex projects

• Green Belts Responsible for the execution of individual projects located within

their own area of expertise Deliver results to the project leader Part time role that needs to be balance with day to day activities Change agents, help build momentum for the methodology Lead less complex projects usually with lower impact

• Yellow Belts Supporting team members to Black Belt and Green Belt projects Have a limited amount of training that is provided by in house Black

Belts and Green Belts

18These Are Typical Roles And Depend On Organizational Structure

All Rights Reserved

Who Are The Actors?

19These Are Typical Roles And Depend On Organizational Structure

Drive BE InitiativeProvide Support Set

GoalsIdentify Projects In Their Area

Support BeltsHold Belts Accountable

Owns BE MethodologyIdentifies Project Clusters

Selects Belts

Supports DeploymentTraining & Mentoring Of BeltsSupport For Project Selection

Full -Time ResourceExecutes Complex Projects

Responsible For Results

Part - Time ResourceExecutes Simpler ProjectsResponsible For Results

Supporting Team Members For GB/BB Projects

In House Training By GB or BB

All Rights Reserved

Lean

• Pros Requires less technical

methods when executed at a superficial level Generates results faster Engages the work force more

quickly because it is easier accessible Training can be trimmed to 1

week work shop training for simple projects Investment for software is

minimal to nill

• Cons Lacks the in depth

understanding of the processes More difficult to sustain due to

weaknesses in the control of the improvements Requires hands on

involvement of management Full training on Lean is 3 to 4

weeks

20

All Rights Reserved

Six Sigma

• Pros More in depth process

knowledge Does result in better

sustainable results Requires management support

but not hands on involvement Forms the foundation for DFSS

• Cons Requires longer training

• Depending on the projects 2 (Green Belt) to 4 weeks (Black Belts)

Requires specific software (for Black Belts) Generates results slower Training is more technical but

accessible for everyone with a high school degree

21

All Rights Reserved

Lean Six Sigma

• Pros The most powerful method Sustainable results Management support required

but no hands on involvement Use DMAIC as the overarching

method Integrates Lean and Six Sigma Avoids duplication of effort Fully integrated method

avoids segregation of projects

• Cons Requires longer training 3

weeks (Green Belts), 5 weeks (Black Belts) Requires specific software

(Black Belts only)

22

All Rights Reserved

Design For Six Sigma

• Pros The indicated method for new

process and product development Has a 80% overlap in tool

usage with Lean Six Sigma, hence can be thought as an add-on method

• Cons Results are more difficult to

quantify Requires expertise with Six

Sigma Training is 4-5 weeks (Black

Belts) Not indicated to be used at the

Green Belt level Most technical of all the

methods Requires specific software

23

All Rights ReservedAll Rights Reserved

Company Information

910 River Branch CourtMount Juliet, TN 37122

www.RBC-LeanSigma.com