Assessing Process Maturity to Make Lean Six Sigma More Effective

Copyright 2005 Northrop Grumman Corporation

Assessing Process Maturity to Make Lean Six Sigma More Effective

Hung Le, Ph.D.Master Black [email protected]

Northrop Grumman Corporation

2nd Annual WCBF Lean Six Sigma SummitNovember 16-18, 2005Dallas, Texas

Copyright 2005 Northrop Grumman Corporation 2

Overview

Lean Six Sigma is very effective for process improvement when you have “matured” processes

Lean Six Sigma tools are not as effective at addressing systemic problems resulting from an undisciplined process

Understanding process maturity will allow for more proactive management of critical processes

Significant gains can be achieved by taking ill-defined processes to a more defined level of process maturity


Discussion Topics

Introduction & Motivation Capability Maturity Model

Integrated (CMMI) Using Lean Six Sigma to

Improve Engineering Process Maturity (i.e. CMMI Levels 4 & 5)

Adopting CMMI Capability Maturity Model to Improve the Effectiveness of Lean Six Sigma Deployment

Summary & Concluding Remarks


Process Variables orProcess Variables orInternal Knobs (Xs)Internal Knobs (Xs)

InputInputVariablesVariables

(Xs)(Xs)

OutputsOutputs (Ys) (Ys)

MeasurementsStart Here

Y = f ( Xi )

Lean Six Sigma Approach To Process Improvement

Lean Six Sigma focuses on the measurement Y and its relationships with the process inputs Xs to drive real improvement


Variations Resulting from Lack of Process Discipline

Effect(Ys)

Effect(Ys)

Measurement

Methods

People

Machinery

Materials

Mother Nature

All the Causes of Variation (Xs) Get Listed on the

Cause & Effect Diagram

Wide VariationsInstability andNon-Predictability

•Internal conflicts•Lack of skills / resources•Ad hoc training

•Processes are improvised•No process discipline

•Tools & technology are not standardized•Equipment is acquired on an ad hoc basis

•Demand shifts•Market turbulence

•Measurement is faulty and/or incomplete•Measurement inconsistency

•Lack of skills•Ad hoc training

No vital few sources of variations can be isolated. Wide variations exist due to an un-disciplined process

Effect(Ys)


Three Aspects of a Disciplined Process

Process

Definition

Activities

Document Specifying the Process

People with the Knowledge to Drive

Their Behavior

Achieved Business Results

Without a disciplined process, work tends to fixate on finding and fixing defects at the risk of ignoring important customer’s concerns


What is the Capability Maturity Model Integrated (CMMI)?

The CMMI is a collection of industry best-practices for engineering and management

Developed under the sponsorship of DoD Consistent with DoD and commercial standards Addresses both software and systems engineering

Project Management Project Planning Project Monitoring

and Control Supplier

Agreement Management

Integrated Project Management)

Risk Management Quantitative

Project Management

Engineering Requirements

Development Requirements

Management Technical Solution Product

Integration Verification Validation

Support Configuration

Management Process and

Product Quality Assurance

Measurement and Analysis

Organizational Environment for Integration

Decision Analysis and Resolution

Causal Analysis and Resolution

Process Management Organizational

Process Focus Organizational

Process Definition Organizational

Training Organizational

Process Performance

Organizational Innovation and Deployment


How was the CMMI Created?

DoD sponsored effort 50+ defense and commercial companies contributed for

over 2 years CMMI 1.0 released in 2000, version 1.1 in March 2002

ADP, Inc.AT& T Labs

BAEBoeing

CSCEER Systems

Ericsson CanadaErnst and Young

FAAGeneral DynamicsHarris Corporation

HoneywellKPMGLitton

Lockheed MartinMotorola

National Security AgencyNorthrop Grumman

Pacific BellQ- Labs

RaytheonRockwell Collins

Software Engineering InstituteSverdrup Corporation

Thomson CSFU.S. ArmyU.S. Navy

U.S. Air Force


CMMI Capability Maturity Model

Minimal or no processes in place

Disciplined project management

Standard organizational processes tailored by projects

Selected organizational and projectprocesses managed quantitatively

Processes continuously improvedusing quantitative measures

Level 4QuantitativelyManaged

Level 1Initial

Level 2Managed

Level 5Optimizing

Level 3Defined

More Maturity Implies Greater

Capability in Meeting Quality,

Cost, and Schedule

High MaturityRequires

QuantitativeMethods

Process unpredictable, poorly controlled and reactive

Process characterized for projects and is often reactive

Process characterized for the organization and is proactive

Process measured and controlled

Focus on process improvement


How is Organizational Maturity Determined?

The scope of the organizational unit is identified

Department, site, division, company, etc. A formal appraisal is conducted

Appraisers evaluate the organizational infrastructure and projects against all practices and process areas in the CMMI

SCAMPI (Standard CMMI Appraisal for Process Improvement) is the standard appraisal used for benchmarking

Northrop Grumman has conducted more SCAMPI appraisals than any other organization in the world

Must be led by a qualified Lead Appraiser


10:1 Defect

Reduction

10:1 Defect

Reduction

Less Defects

Delivered

Less Defects

Delivered

50%Productivity

Increase

More Accurate Estimates

More Accurate Estimates

ReworkDrops From54% to 4%

Industry Industry Results Results Show Show

OverwhelOverwhelming ming

BenefitsBenefits

Industry Industry Results Results Show Show

OverwhelOverwhelming ming

BenefitsBenefits

A Direct Correlation Between Process Maturity and Performance


Level 5Improving Capability


Problems

Root Causes

Improved Processes

Improved Capability



Problems

Root Causes

Improved Processes

Improved Capability

Objectives

Data

Baselines

Models

Level 4Establishing Capability


Objectives

Data

Baselines

Models



Define

Measure

Analyze

Improve

Control Define

Measure

Analyze

Improve

Control

How Has Lean Six Sigma Aligned with CMMI?


Level 41) Understand project’s process capabilities

based on process performance baselines

2) Control process variation (remove “assignable causes”)

3) Predict results using process performance models

4) Manage to achieve goals

Level 51) Base improvement goals on

future business needs

2) Eliminate problem and defect causes (“common causes”)

3) Select, predict, and measure improvements to change the process performance baselines

- Shift the mean; tighten the variance

4) Manage change

Side effects ofregister usage

Can’t keep track

Poordocumentation

Registerallocation

defect

Incorrect processorregister usage

Lack ofprocessorknowledge

Can’t isolate

Pass 1architecture

Process knowledge

UCL 1

LCL 1

UCL 2

LCL 21 2 3 4 5 6 7 7C 8B 8B 8C 8D 8F 20 21 22 23

0

2

4

6

8

10

12

14

16Actual

Expected

95% limits

UCL

_X

Process variation Process performance

0

2

4

6

8

10

12

Projects Audited in First Quarter

Nu

mb

er o

f N

on

com

pli

ance

s

Improve & ControlStabilize Predict

Lean Six Sigma Provides the Tools

Level 41) Understand project’s process capabilities

based on process performance baselines

2) Control process variation (remove “assignable causes”)

3) Predict results using process performance models

4) Manage to achieve goals

Level 51) Base improvement goals on

future business needs

2) Eliminate problem and defect causes (“common causes”)

3) Select, predict, and measure improvements to change the process performance baselines

- Shift the mean; tighten the variance

4) Manage change


Initi

al (

1)

Man

age

d (2

)

Def

ine

d (3

)

Qua

ntita

tivel

y M

anag

ed

(4)

CliffChasm

Lean Six Sigma bridges the chasm

Lean Six Sigma keeps it going

Opt

imiz

ed (

5)

Statistical ManagementManage VariationIs it a good process to follow?

Deterministic ManagementManage ConformanceAre you following the process?

Adopt the CMMI Framework for Organizational Process Improvement

How Can We Leverage CMMI to Make Lean Six Sigma More Effective?

Copyright 2005 Northrop Grumman Corporation 04/11/23 16:27

Identify Critical

Process Areas and Align with

Strategic / Tactical Goals

Identify Critical

Process Areas and Align with

Strategic / Tactical Goals

Track & Monitor Progress Against Improvement PlanTrack & Monitor Progress Against Improvement Plan

• Scope of improvement effort is determined

• An unfiltered list of critical process areas is compiled

• Alignment with strategic / tactical goals

• A prioritized list of process areas is established based on assessed gaps

• Prioritization is based on impact vs. process maturity

• Establish goals

• Develop improvement strategy & timeline

CMMI Adoption - Conceptual Framework

Conduct Informal

Assessment & Recommend Strategy and

Timeline

Conduct Informal

Assessment & Recommend Strategy and

Timeline

Develop Improvement Plans Based

On Organizational

Goals

Develop Improvement Plans Based

On Organizational

Goals

Execute Improvement

Plans to Achieve Maturity

Goals

Execute Improvement

Plans to Achieve Maturity

Goals

Conduct Formal

Review To Verify Goals

Conduct Formal

Review To Verify Goals

Develop Org. Plan & Establish Org. InfrastructureDevelop Org. Plan & Establish Org. Infrastructure

• Establish organizational goals

• Develop improvement plans for the critical process areas

• Depending on current level of maturity, use appropriate tools to address process performance gaps

- Address process gaps to achieve level 3

- Use Lean Six Sigma to achieve Levels 4 & 5

• Formal assessment is conducted to verify goals have been achieved

• Address any gaps resulting from assessment

Copyright 2005 Northrop Grumman Corporation 04/11/23 16:27

Performance gap analysis can be summarized by mapping attributes of performance / process maturity versus the criticality of the attribute as shown in the example below:

Watch

De-Emphasize

Focus Improvement Focus Improvement EffortsEfforts

Protect/Optimize

LowLow HighHigh

Pro

cess

Mat

uri

ty /

Per

form

ance

1

2

34

5

6

78

9

1012

13

14

15

Hig

hH

igh

Low

Low

11

Criticality to Operations/Function

In this example, the focus should be on 2 and 9 for process improvement

CMMI Adoption - Conceptual Framework (cont.)

Based on established maturity goals, optimize 3 & 11, and sustain 1, 4, 5 & 14

Using Lean Six Sigma or DFSS

• Conformance• Process Definition / Design• Best Practices


Policies, Processes,Templates & Tools

Best-Practice Libraries

Process Group

Audits & AppraisalsMeasurement RepositoriesPredictive Modeling

Process ImprovementTraining Program

Communications

0

5

10

15

20

25

1 11 21 31 41 51 61 71

UCL

_X

De

fec

ts p

er

co

mp

on

en

t

Component #

0

5

10

15

20

25

1 11 21 31 41 51 61 71

UCL

_X

De

fec

ts p

er

co

mp

on

en

t

Component #

Developing and maintaining mature processes requires significant time and investment in infrastructure

Developing and maintaining mature processes requires significant time and investment in infrastructure

Organizational Infrastructure Required for CMMI Level 3


Lessons Learned from CMMI

Treat the Process Improvement initiative like a project Assign a project leader, staff, budget Demand plans, schedule, measurable progress, periodic status meetings

Get experienced, outside experts to coach the effort Lead initial gap appraisal Help develop strategy, plan, budget, schedule,

and measurable milestones Provide advice along the way

Set goals (Level X in YYYY) after the initial appraisal Compare the gap to the budget available Communicate the goals to everyone involved

Walk the talk – make change a priority Communicate the need for change Expect resistance -- change is hard Demand project managers take responsibility for making the needed changes

Communicate and share policies, processes, template, tools, experience, experts


Summary & Concluding Remarks

Too much emphasis on being reactive to “pain” areas, not enough on process management (proactive vs. reactive, pain vs. opportunities)

Heavy focus is needed on data collection & analysis, and process analysis to break down and solve problems

Not enough emphasis on adoption of best practices with “mini” DFSS to address process gaps quickly

Understanding process maturity can assist an organization in making effective improvement in critical process areas

Documents

Assessing Process Maturity to Make Lean Six Sigma More Effective