The Lean Enterprise
Vital Links: Lean, Six Sigma and Change Management
Lean Foundations
Continuous Improvement Training
Learning Objectives
Explore the component parts of a Continuous
Improvement Process (CIP) and how Six Sigma,
Change Management and Lean methodologies work
together within the DMAIC problem solving process.
Examine the importance, benefits and integration of
‘Lean Thinking’ to help achieve Company objectives
and operational strategies.
Explain the need for providing more detailed Lean
tools.
Provide additional resources for self study.
What is the Importance of doing better (CIP)?
Need for
Improvement
N:
(Need)
?
• Achieve Process Excellence
• Address Process Summary Analysis
(Most operations exhibit 15% - 30% waste!)
• Differentiate brand/ market/ service/ value
(i.e. John Crane, Wal-Mart, Maytag, Costco …)
• Economic Benefits (reduce costs)
• Enhance Safety, Improve Quality
• Speed to Market (Total Cycle Time reduction)
• Employee Satisfaction
• Customer Delight !
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What are some more benefits?
- Ability to attain Better Caliber, High Profit Customers
- Identification of “Shining Stars” within the Organization
- Less Safety related Incidents, Accidents and Downtime
- Through Safer Operations and incorporation of workplace
organization (6S) a Reduction of Liability Insurance
Premiums FY20xx (5% to 15%)
- Reduction of COPQ - rework and scrap
(labor and material savings and associated benefits)
- Trained Team Leaders: 6S, Green/ Lean Belts, Black Belts
- Generation of ‘Mistake Proofing’ Ideas/ Processes
- Realization of $15,000 to $150,000 (or more) cost
savings per Black Belt/ Green/ Lean Belt project
What are some more benefits?
- Better response to ever increasing Customer Demands
- Shorter Lead times, Less Inventory
- Less Debt/ reduced carrying charges/ COGS
- Continually decreasing Set-up times (increased capacity)
- More floor space for production
- Better reliability, maintainability and utilization
of equipment
- Longer equipment life
- Reduction of Supply Partners and reduction in
associated SCM administrative costs
- More satisfied employees
- Less tardiness, absenteeism, turnover
What are some developmental elements?
Metrics focused on results
important to the customer
and with the highest
potential
for adding hard
dollars
to the bottom line
Executive Sponsorship
Quality
Project Reviews
Disciplined systematic
approach designed to
maximize results
Safety
6s
$
Lean
“Lean Belt’s”
Speed
“Green Belt’s”
Safety First !
Proactive
Workforce
(DMAIC)
6S
Project
Leaders
Change
Management
CAP
Prevention is
the Key
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Safety and 5S together:
Integrated and aligned
people and processes
Trained “Champions”
What are the 3 components comprising CIP?
I
P
O
Voice of the Customer
Quality
Policy Deployment/ SOX / ISO
Supplier Quality
y
First Pass Yield
Six Sigma
Process Capability
Cost
SOPs/Standard Work
Product Assurance (SPC, RCCA)
Communication
Change
Management
Cellularization
One Piece Flow
Manpower
Setup SOPs/ SMED
Maintenance SOPs (TPM)
Lean
Delivery
Cell Cleanliness (6S)
Total Employee Involvement (TEI)
Measurement Systems
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Storage
Turnover Rate
In-Process
Team Dynamics
Process Excellence
S
Visual Management
How do the 3 components come together?
The Lean Enterprise (including 6S)
Methodology (philosophy and rich tool set) that is particularly focused
on identifying and eliminating waste and improving workflows
WIP, Lead Time, Waste & Wasted Motions
Change Management
Methodology for assuring that change is sustained within organization
“Positively affecting the Continuous Improvement culture”
Six Sigma
Methodology for reducing variation and driving solutions of any
existing process (using data with graphical and statistical analysis)
Yield, Cycle Time, Re-Work
“Six Sigma / Change Management/ Lean L-I-N-K”
When done in concert - freeleansite.com
powerful combination
What is the presentation ratio of Topics/
Subject Matter within typical CIP training?
(% material content)
Green Belt, 2 weeks
Black Belt, 4 weeks
Six Sigma
Lean
(40%)
(40%)
Change
Management
(20%)
Other subjects touched on:
Project Management, Facilitation/ Communication/ Presentation Skills,
Report Writing and use of statistical software packages: i.e. Excel, Mini-Tab
What are some CIP training topics?
(A sampling of techniques/ tools taught)
Addressed in typical
GB/ BB curriculum:
Some topics are
addressed in
both:
Project Charter
Decision Making
XY Matrix
Process Capability
SPC/ FMEA/ DoE etc
Change Management
6S
Kaizen
Takt Time
Mistake Proofing
Process Mapping
TPM
Quick Change-over
Kanban
Value Stream Mapping
Visual Management
Standard Work
Others addressed in ‘Lean Enterprise’
modules only:
(single point lessons, more detailed)
What is Six Sigma about?
Six Sigma …
-
Measure defects in a process and …
(with rigor and discipline) systematically figure out
ways to reduce them to zero.
“Puts practical tools to work to reduce variation at all levels
achieving tangible results of cost savings, employee,
customer and stakeholder satisfaction.”
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What is the “DISCIPLINE” of Six Sigma?
Quantify
Define
Measure
Project Selection
Team Formation
Identify CTXs
Analyze
Define Defects
Baseline
Set Goals
Identify x’s
Improve
Ensure Solution
is Sustainable
Y
Find and Confirm
vital few x’s
Pilot Solution
Define Process Capability
Validate Measurement System
Y = f (x)
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Control
What is the focus of Six Sigma?
Variation reduction:
 Six Sigma attacks process variation
 Six Sigma creates capable and
predictable processes
 Six Sigma is about measuring and
improving how close we come to
delivering on what we planned to do
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What are some Six Sigma Tools?
•Process Map
•X - Y Matrix
•Measurement System Analysis
•Capability Analysis
•Descriptive Statistics
•Graphical Techniques
Box Plots
Histograms
Scatter plots
Time Series Plots
Run Charts
Pareto Charts
Check Sheets
•Analysis of Variance
•Correlation
•Regression
•Inferential Statistics
Central Limit theorem
Confidence Intervals
•Failure Modes and Effects Analysis
•Multi - vari Studies
•Design of Experiments
Fractional Experiments
Full Experiments
Response Surface Methods
•Analysis of Means
•Transformations
•Sample Size Selection
•Fishbone Diagrams
•Hypothesis Testing
•F - test. T - test
•Chi - square test
•Tests for Normality
•Tests for Equal Variances
•SPC Charts
•Control Plans
•DFSS
•Statistical Tolerancing
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What is Change Management about?
Change Management …
- Change acceleration is a process to ease acceptance
of new ideas. Effective Change Management assures
that improvement initiatives remain in force and that
organizations don’t revert back to the old ways
(methods).
“Ensures that process and system improvements are permanent, gains
are realized, proven effective and continuously improved.”
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What is the Change Acceleration Process?
Leading Change
Share Need
Shape Vision
Get Buy-in
Current State
Transition State
Make it last
Monitor Progress
Changing Systems & Structures
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Improved State
What are the steps for Managing Change?

Leading Change
–

Shared Need
–

Create an imperative to act now. Pass this on to others.
Shape Vision
–

Give people someone to follow – by you and your Champions actions.
Be precise about what you want to achieve and and make sure it is
widely understood and shared.
Get Buy-in
–
You must involve people and pass on your enthusiasm so that once
you start another project the change is sustained.
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Steps for Change (Cont.)

Make it Last
– Ensure that all influences to confound or support change are
controlled.

Monitor Progress
– Ensure that you are measuring effect not effort. Further publish
progress
Finally:
– Changing Systems and Structures
.
• Making sure that management practices (Staffing,
development, rewards, measures, communication and
organizational design) are used to compliment and reinforce
change
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What are the elements to making
change last?
Leading Change
Ability to
adjust
Reflection/
integration
Ongoing support/
commitment
Understanding
Making
change
last
Clear
Continuous
Communication
Changing systems
& structures
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Clear path
forward
Motivation/
energy
What is Lean about ?
The Lean Enterprise …
- Identify and eliminate Waste (Muda)
and
Wasteful Practices
Providing value in the eyes of the customer …
“any part of the process for which the customer is willing
to pay. Value added activities would be those involved in
producing and delivering goods and services.”
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What is the Alignment of Lean w/ DMAIC?
Define
Measure
Analyze
Improve
Control
6S activities
Inventory Accuracy
Takt Time
Value Stream Analysis
Line Balance
Standardized Operations/ Standard Work
Set-up Reduction
Visual Management/ Control
Kanban/ POU
TPM
Poka-Yoke
Lean Approaches Align with D-M-A-I-C
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How does Lean fit under D/M A I(*m) C ?
Define
Measure
Business Case
Lean Assessment
Analyze
Improve
Scope Relevant
Improvement
Opportunities
I.D. Project Areas/Teams
Control
Estimate
New Capability
Mistake Proof
Pilot / Assess
I.D. Waste, CTXs, Cost Savings
Impact (*measure)
Institutionalize
Particularly Applicable to
“Agile” Manufacturing
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What is the focus of Lean?
Identification and elimination of waste
 Lean creates value by eliminating
waste and aligning processes
 Lean creates standardized processes
 A means of revealing other projects which
may require ‘DMAIC’ problem-solving
methodologies
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What are some Lean Tools?












One piece flow
Pull production system
Level loading production
Cycle time reduction/ Set-up reduction
Aligning processes to customer demand (Takt-Time)
Mistake proofing
Elimination of the 7 elements of waste
Visual Management/ Visual Control
6S (5s + safety)
Value vs. Non-value added activities
Kaizen Activities
Best Practice Sharing
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Do all methodologies incorporate DMAIC?
Yes ! … time between phases may vary however.
Define
Six Sigma (GB, BB, MBB project applications)
Lean
Measure
Improve
WASTE
Analyze
VARIATION
6S
Workplace organization
Rapid Implementation of Solution
Control
Problem Solving/ Root Cause
and Corrective Action
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Why the Need for additional Lean material?
Changing business climate …
Increased expectations of performance:

Operate in a higher standard of HS&E requirements.
(Safety)

Produce product and deliver services (processes)
with Six Sigma capability.
(Quality)

Produce in smaller quantities with faster delivery
turnarounds.
(Speed of execution)
When would a team use The Lean
Enterprise information (modules)?
To strengthen already existing CIP vision,
strategies, methodologies, projects …
__________________________________________________________________

Lean Enterprise (LE) is an additional set of
foundational tools and techniques that teams
utilize to identify and eliminate waste and
wasteful practices. They were developed to be
self-taught (facilitated) by a Black Belt.


Adapting LE creates standardized processes
A means of revealing other projects which may
require ‘DMAIC’ problem-solving methodologies
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How does adopting ‘Lean Thinking’ fit
into our Business Strategy?

Lean application opportunities are identified through
baseline assessment efforts (e.g. – CIP assessments,
Quality audits, Internal audits, SOX, ISO audits et al)

Lean enhances understanding of current operating
conditions, and through Value Stream Analysis, helps
determine the areas and sequencing of improvement
initiatives

With its ‘Process Analysis’ mindset - The Lean
Enterprise, as part of CIP - integrates the strategic
Corporate strategies around Process Excellence,
Organizational Capability and Organic Growth
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How does adopting The Lean Enterprise
principles help the Company?

Lean Enterprise (LE) emphasizes prevention of
waste: any extra time, labor or material spent
producing a product or service that doesn’t add
value to it.

LE can help reduce costs, achieve just-in-time
delivery, and shorten lead times.

LE allows production of a wide variety of products
and services, efficient and rapid changeover, efficient
response to fluctuating demand, and increased
quality.
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How does The Lean Enterprise help our
Customers?
 Lean Thinking facilitates streamlining the
front end of the business with transactional
Kaizen events and frictionless e-business
 We add value to customer relationships
through customer-focused process
improvement and joining in our customer’s
process improvement initiatives
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How does The Lean Enterprise help our
Customers?
 Through CIP (Lean, Six Sigma, Change
Management), we strive to deliver the right
product, at the right time, at the right price,
with perfect quality every time.
 We use on-time delivery, lead time and
quality metrics to measure our performance
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How does The Lean Enterprise help our
Suppliers?
Developed to transform key suppliers into our
long-term partners and leverage their capability
___________________________

Going Lean creates standardized processes. Many of
our businesses represent a scorecard to supply
partners – measuring their quality, on-time delivery, and
other metrics

Increased supplier communication pays off in high
efficiency
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How does The Lean Enterprise help our
Suppliers?

Other SCM elements of the overall approach include:
– Supplier Managed Inventory, Kanban and consignment, as
well as long term agreements to realize efficiencies and
reduce cost targeting point-of-use delivery – significantly
improving working capital
– ‘On-site Supplier Development’ (OSD) work with key
suppliers - leading them to become self-directed learning
organizations cognizant of incorporating available
improvement technologies
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Putting It All Together
PEOPLE
Continuous Improvement Process
Driving
Growth
Productivity
Results
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What is the “essence” of CIP?
Applying appropriate problem-solving
tools for maximum Results!

There is no single approach that guarantees project
success. However there are some basics:
–
–
–
–
–
–
–
–
–
–
Developing Objectives using SMART criteria
Developing a good Plan
Applying tried & tested tools (Six Sigma and Lean)
Getting Employee Involvement (collaborating teams)
Trusting Empowered People - who ACT ON FACT
Utilizing Brainstorming techniques
Encouraging Process Mapping and Process Analysis
Assuring control and mistake proofing
Accomplishing more with less
Celebrating success !
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How does Lean & Six Sigma drive results?
By Pursuing Perfection!




Product and Process Improvement
– Direct and indirect cost reductions: COGS
– Process Analysis and Improvements: COPQ
Efficient and effective utilization of Resources
– Labor contribution (Standard Hours)
– Equipment Utilization (OEE)
– Material Consumption (Spend)
– G&A / Overhead Absorption
Employee Satisfaction
– Retainment, Training, Development, Recognition
Stakeholder Delight
– ROI, RONA
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Where can I learn more about
Lean Six Sigma ?
(Call Jay Watson 480 820 0877)
These 2 books are quick reads…
Leaning into Six Sigma
The Gold Mine
(paperback)
-by Freddy Ballé and Michael Ballé
by Barbara Wheat,
Chuck Mills, Mike
Carnell
-The Gold Mine: a Novel of Lean Turnaround deftly
weaves together the technical and human pieces of
implementing lean manufacturing in an engaging story
that readers will find both compelling and instructive.
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The Lean Enterprise
Vital Links: Lean, Six Sigma and Change Management
Lean Foundations
Continuous Improvement Training