What Is Six Sigma? - New Jersey IIBA Chapter

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Six Sigma and
Business Analysis
Side – By Side Comparison
Beverly A Place
Certified Six Sigma Black Belt
Quest Diagnostics
[email protected]
1
Presention Objectives
• Introductions
• Provide an overview of the process methodologies
• Lean and Six Sigma
• Lean Group Exercise
• Side by Side Comparison with BABOK
2
About the Instructor
• Education and Experience
–
–
–
–
–
Bloomfield College – Computer Science
Project Management for More than 20 Years
Six Sigma for More than 9 Years
Certified Black Belt Since 2004
Employed with Quest Diagnostics since 1997
• Personal
– Married 20 Years
– Two Boys age 13 and 21
– Active Member of BDPA
3
Six Sigma Way: Look Beneath The Surface
Doing
Things
Differently
4
Why Six Sigma?
Our Strategic Intent:
To Be The Gold Standard in Healthcare Services
From a Survey by RW Johnson Foundation:
95% of physicians have witnessed a serious medical error…61%
of health care providers surveyed…say they accept common
errors as routine practice...
...“We want to see a Toyota in health care. That’s been one of the
barriers in health care. No one can point to a health system and
say ‘That’s how it ought to be done’...”
USA Today May 9, 2001
Virtual Perfection
Is Demanded In Healthcare
5
Six Sigma Delivers Bottom Line Results
Not Just Dramatic Defect Reduction…
Cost Savings:
Motorola: Saved $2.2 Billion From 1987 - 1991.
$14 Billion From 1987 – 1997.
GE: Plant & Equipment Expense/Depreciation Dropped
From 1.2x To .8x (hidden factory)
Revenue Growth: GE Capital - Over 50% Of Benefit Is Revenue Growth
Versus Cost Reduction
Net Income:
GE - Operating Margins Up From 13.6% to 19.6% from
1995 - 2001
Mount Carmel Health System - Net Income increased
144% to $35 million in first 24 months
A Proven Approach
6
Why Six Sigma? – Customer Focus
Example: Draw to Test Report Process (data is for illustration and is not actual)
Physician
collects
specimen
Specimen
Transported
by Courier
Specimen
accessioned at
lab
Six Sigma’s focus on
the Customer
broadens
perspective.
Specimen is
tested and
result is
generated
Report is
created
Report is sent
to physician
Courier or
Post
Office
delivers
report
Physician
receives
report
Internal View:
Application on system - average time to
test a specimen - 68 minutes
Client’s View:
“ I fill out a requisition & collect the
specimen - 1 to 4 days later
(sometimes more than 1 week) I
receive the test results”
7
What Is Six Sigma?
What is Six Sigma? It Is More Than A Goal…
s
DPMO
Target
Metric
Methodologies
DMAI2C
DFSS
Process Mgmt
Total Business Commitment
1s
2s
3s
4s
2 308,537
3 66,807
4
6,210
5
233
6
3.4
5s
6s
Deployment Strategy
Typically deployed to achieve a cultural
transformation
8
Focus on Process Improvement
If we accepted the goal of 99.9%, then we would
have:
– One hour of unsafe drinking water every month
– Two unsafe plane landings per day at O’Hare airport in
Chicago
– 16,000 pieces of mail lost by the U.S. Postal Service
every hour
– 500 incorrect surgical operations each week
– 50 newborn babies dropped at birth by doctors each day
– 22,000 checks deducted from the wrong bank accounts
each hour
– 32,000 missed heartbeats per person, per year
9
The Methodologies: Process Focused
Process Management
• “Big Y” metrics for core processes
• Operating mechanisms to identify
gaps between “Big Ys” and
Customer CTQs
• Identifies need for either process
improvement or process design
work
Process Improvement (DMAI2C)
• Improves existing processes
Six
Sigma
Process
Methodologies
Process Design (DMADV)
• Fundamental re-design or
development of new process
Process Management is the base of the Six
Sigma methodologies
10
Our Six Sigma Model: 3 Process Methodologies
DMAIIC
• Lean tools
• Change Leadership
tools
• Design of
Experiments
methods
• Business Analysis
• Etc.
DMADV
Six
Sigma
Process
Methodologies
• Lean tools
• Change
Leadership tools
• Quality Systems
• Lean tools
• Change Leadership
tools
• Design of
Experiments
methods
• Business Analysis
• Etc.
• Business Analysis
• Hoshin Planning
(Policy Deployment)
• Behavior Assessment
• Etc.
Three major Process Methodologies. Each uses a wide
variety of tool sets…All incorporate Business Analysis
11
Process Improvement – What is it…what do you get?
Improving Existing Products & Services
Define
Measure
• Project Charter
• Process Map
• Define the Y
• Measurement
System
Assessment
• Data Collection
• Baseline
Performance
• Project Goals
Business Analysis is
incorporated beginning with
the Define Phase in order to
ensure that the proper
requirements are identified
Analyze
Innovative
Improvement
Control
• Key Variables
Identified
• Solution
Selected
• Final Documentation
• Quick Hits
Identified
• Proven Solution
Deployed
• Hand-Off to Process
Owner
• Control Plan
Implemented Sample of DMAIIC Tools Used
•
•
•
•
•
•
•
•
•
•
VOC  CTQs
Process Mapping
Capability Studies
Cause & Effect (Ishikawa)
Graphical Analysis
Statistical Techniques
Standardized Work
Workload Leveling
Process Control Plans
5S
12
‘Voice of the Process’ Versus ‘Voice of the Customer’
LSL
Defects
USL
Acceptable
Defects
Voice of the Customer
Voice of the Process
Inadequate
Process
Capability
Unstable Parts &
Materials
Inadequate
Design
Margin
Voice of the Process is independent of the Voice
of the Customer
13
What are the Limits to Improvement?
Relative Problem Level
Basic Tools Wall
Design Wall
Statistical Tools
to Improve
Process
Clean
Sheet
Designing for
Six Sigma
(DFSS)
Basic Quality
Tools
2 sigma
3 sigma
4 sigma
5 sigma
6 sigma
14
LEAN Methodology
If it’s Not Required
Get Rid of It !
15
What is “Lean”?
Lean is the elimination of anything not absolutely required to deliver a quality
product or service, on time, to our customers.
What Does Lean Do?
Increases Productivity by producing or servicing MORE with the SAME
resources
 Improves Quality
 Reduces Inventory
 Reduces Lead Time
 Improves On-Time performance
 Increases Sales by using freed up resources and capacities to increase
production and invest in new products or services
16
Lean Defined
• A way to understand value from the viewpoint of the
customer and eliminate activities that don’t add value
• A methodology to increase velocity and create a
continuous flow of value-adding activities, pulled by the
customer
• A set of tools to continuously improve this flow
LEAN
Lean principles and tools are important parts of
the three process methodologies (Management,
Improvement, and Design)
17
What is Lean and how does it fit into DMAI2C?
 Lean adds powerful tools and methods to the Six Sigma
toolkit that are focused primarily on the flow and speed of
processes as well as waste reduction
 Lean complements the Six Sigma discipline around variation
(stability) & defect reduction (capability)
 Adding the Lean tools, methods and concepts to the DMAI2C
methodology will boost performance
6s
As a Six Sigma deployment progresses, new tools
are added to the process methodologies.
18
Value Added Defined
• The activity physically changes the work
product (or adds important information)
• The activity must not be rework
• The customer must be willing to pay for it
Business Value
Pure Waste
Value Added
19
Understanding Waste
– Identification of waste should be initiated during
the “Value Stream” process
– Waste should be viewed through the eyes of the
customer
•
Ask: Who’s paying for this?
– The pursuit of waste elimination is never ending
Waste = Lost Profits
20
Wastes (Muda)
There Are Seven Types of Waste...
• Defects
•
Over production
•
Transportation
•
Waiting
•
Inventory
•
Motion
•
Processing
DOTWIMP is a common acronym to capture the
seven types of waste.
21
Continuous Flow
The ideal is continuous flow, like the flow through a pipe:
In traditional processes, work moves in batches or is stuck in queues
Reducing the move quantity and increasing the move
frequency will make the flow “more” continuous:
Continuing to reduce move quantity and increase move
frequency will ultimately result in a one-at-a-time flow:
5S Overview – a Lean tool
The methodology for creating and maintaining an organized, clean,
and safe work environment to deliver and achieve high performance!
• Sort (Seiri)
– Keep only what is required
• Store (Seiton)
– Arrange and identify for ease of use, organize
• Shine (Seiso)
– Clean regularly. Clean up everything that’s left
• Standardize (Seiketsu)
– Eliminate causes to reduce variations, make standards obvious
• Sustain (Shitsuke)
– Set discipline, plan, schedule, Train … AND STICK TO IT!
5S sets the stage for improvement!
23
DFSS Methodology
24
Process Design Overview
Six
Sigma
Process
Methodologies
• What is DFSS?
– Design For Six Sigma – a very common
acronym for the Process Design
methodology
– The center of a New Product
Introduction framework: used to design
or re-design a product or service from
the ground up – not for making
improvements
25
Process Design – What is it…what do you get?
Designing new products & services
Define
• Project Charter
Measure
• Prioritized
Customer
Segments
• Prioritized
Customer Needs
• Specified CTQs
Sample of DMADV Tools Used
•
•
•
•
•
•
•
•
•
•
Analyze
• Selected Design
Concept
• High Level
Design
• High Level
Design
Capability
Evaluated
Design
Verify
• Detailed Design
• Verified Design
• Detailed Design
Capability
Evaluated
• Full-Scale
Implementation
• Pilot Plan
• Hand-Off to Process
Owner
Quality Function Deployment
Conjoint Analysis
Value Stream Mapping
Simulation Modeling
Design of Experiments
Failure Modes Effect Analysis
Demand Flow Design
Work Cell Design
Mistake-Proofing (Poka-Yoke)
Visual Controls
When DFSS is systematically deployed, you will
have a culture of innovation which creates delighted
customers.
26
DFSS Methodologies: Additional Examples
DMADOV
• Define project goals
• Measure/determine
customer needs and
specifications;
benchmark competitors
and industry
• Analyze options
• Design process to
meet CTQs
• Optimize selected
process
• Verify design
performance and ability
to meet CTQs
DCCDI
IDOV
• Define project
• Identify the CTQs
goals
• Design: translate
• Customer
CTQs into
analysis
functional
• Concept ideas
requirements and
developed,
reviewed, selected solution
alternatives, select
• Design process to
best solution.
meet CTQs
• Implementation • Optimize selected
process
to develop and
commercialize the • Validate design
product/ service
performance and
ability to meet
CTQs
DMEDI
• Define project
goals
• Measure/
determine
customer needs
and specifications;
benchmark
competitors and
industry
• Explore options
• Develop process
to meet CTQs
• Implementation to
develop and
commercialize the
product/ service
There are many variations in the naming of phases.
Most are similar in practical content. Each implies
Project Management concepts
27
Process Management Overview
Six
Sigma
Process
Methodologies
Process Management – A management system that
integrates process planning, control and improvement into the
daily activities that organizations perform to serve their
customers and stakeholders.
Think
Project
Managemen
t
Through Process Management, opportunities for
process improvement and design are identified,
prioritized, and implemented.
28
Setting the stage for Process Management
Effective Process Management Systems start with good measures…
Assuming that a measure has been defined appropriately, there
are two fundamental questions to answer regarding that measure:
• How is the process performing?
• Has the process performance changed?
Data gathered over time are required to answer the two
questions above!
A Control Chart is typically used to answer the two
questions.
The three methodologies…which one to use?
Identify
Strategic
Needs (part
of Process
Mgmt)
Existing
process,
product,
or
service?
Meet
client
require
ments?
Yes
Yes
No
No
No
Incremental
Improveme
nt
sufficient?
Is the
solution a
new
process,
product, or
service?
Yes
No
Yes
Design For
Six Sigma
DMAIIC
Finish
DMAIIC
Process
Management
Six Sigma summarized:
Process Design
Design new processes / products:
Process Improvement
Improve existing processes:
• Delighted customers
• Customer-focused organization
• Culture of innovation
• Culture of continuous improvement
Three integrated
process
methodologies to
drive performance
Start here
Process Management
Manage our business:
• Aligned and focused Organization
• Exceptional talent
31
Connecting Six Sigma and BABOK
32
‘Shared’ Competencies
• Problem Solving
– Analytical Thinking
– Decision Making
– Systems Thinking
• Business Knowledge
– Business Principles and Practices
– Business Process
– Organization Knowledge
• Communication Skills
– Facilitation
– Negotiation
– Leadership and Influencing
• Application Knowledge
– General (MS Office Suite)
– Specific (Minitab, EngineRoom, BA Software, Modeling Tools)
33
Other ‘Shared’ Techniques
•
•
•
•
•
•
•
•
•
•
Acceptance and Evaluation Criteria
Benchmarking
Brainstorming
Business Rules Analysis
Data Flow Diagrams
Decision Analysis
Document Analysis
Estimation
Lessons Learned
Metrics and KPI’s
34
Measures, Metrics, Project Management, Business
Analysis and Process Methodologies ……………….
Questions…
35
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