Lean Six-Sigma Overview White Belt Training

Lean Six
Sigma
Copyright 2005, AIT Group Inc. All rights reserved.
1
Lean Six Sigma
Lean Six Sigma
White Belt Training
White Belt Training
Copyright 2005, AIT Group Inc. All rights reserved.
2
Lean Six
Sigma
Learning Objectives
• Know the origin and aims of Lean, Six Sigma, and Lean
Six Sigma
• Understand the roles and responsibilities within a Lean
Six Sigma Deployment
• Learn the Lean Six Sigma terms and definitions
• Understand many of the tools and methods used in a
Lean Six Sigma project and deployment
Copyright 2005, AIT Group Inc. All rights reserved.
3
Lean Six
Sigma
WIIFM
(What’s In It For Me)
• Get rid of those problems that are taking all of your valuable time!
• Management’s ear
• An effective communication tool and common ‘language’
• A community within the company – your classmates and previous
classes

• Further develop group leadership skills
• Potential career advancement
• Stretch growth – satisfaction!
• Personal growth experience
• Fun!
Copyright 2005, AIT Group Inc. All rights reserved.
4
Lean Six
Sigma
…yah but how will Lean Six Sigma do
that for me???
• It is a problem solving methodology to put recurring problems to bed!
• It will facilitates communication between people with different backgrounds and from
different functions
• Allows you to leverage and build on what you already know!
• Can be applied in all areas of your life and career
• It is built on standard tools and a standard methodology – helps simplify your
discussions!
• Helps drive focus and prevents gaps in logic
• Uses data for sound conclusions
• Focuses on fundamentally solving a problem NOT on adding band-aids and
additional complexity
• Requires team involvement and emphasizes sound communication
• Minimizes emotion and conflict and moves to data-driven process-based solutions
• It is visible to higher levels of the company
• It has been proven successful across many industries, solved countless problems
and saved billions of dollars
Focus on creating opportunities vs. resource constraints
Copyright 2005, AIT Group Inc. All rights reserved.
5

Lean Six
Sigma
What Do Our Clients Want?
Lean Six
Sigma
Copyright 2005, AIT Group Inc. All rights reserved.
6
Lean History
Copyright 2005, AIT Group Inc. All rights reserved.
7
Lean Six
Sigma
Origins of Lean
• Lean has been around a long time:
• Pioneered by Ford in the early 1900’s (33 hrs from iron ore to finished Model T,
almost zero inventory but also zero flexibility!)
• Perfected by Toyota post WWII (multiple models/colours/options, rapid setups,
Kanban, mistake-proofing, almost zero inventory with maximum flexibility!)
• Known by many names:
• Toyota Production System
• Just-In-Time (JIT)
• Continuous Flow
• Outwardly focused on being flexible to meet customer
demand, inwardly focused on reducing/eliminating the
waste and cost in all processes
• Highly applicable to transactional businesses
!
• Whenever flexibility and speed are key: banks, technology firms and customer
service organizations the most recent to adopt Lean practices
Copyright 2005, AIT Group Inc. All rights reserved.

8
Lean Six
Sigma
The Mathematical Foundation for
Lean is Little’s Law
• To reduce Lead time, you have 2 choices:
• Invest dollars of capital in people and equipment to increase Avg.
Completion Rate
• Invest Intellectual capital to reduce number of “Things In Process” using
Lean Tools (Pull Systems, Setup Reduction, etc) and Six Sigma tools
(Variation Reduction)
• Little’s Law: Mathematics of Theory of Constraints (TOC) and
Toyota Production System (TPS)
Rate Completion Avg
Process"In Things" No.of
Time Lead Avg =
Copyright 2005, AIT Group Inc. All rights reserved.
9
Lean Six
Sigma
Sources of Waste
1. Transportation (moving items from one place to another)
2. Inventory (items/paperwork/information waiting to be processed)
3. Motion (excess movement and/or poor ergonomics)
4. Waiting (delays caused by shortages, approvals, downtime)
5. Overproduction (producing more than is needed)
6. Overprocessing (adding more “value” than the customer is paying
for)
7. Defects (rework, scrap, inspection – Costs of poor quality)
Another waste is: People (untapped and/or misused resources)

Copyright 2005, AIT Group Inc. All rights reserved.
10
Lean Six
Sigma
Toyota Production System –
Waste
Elimination (Applies to Every Process)
“The ability to eliminate waste is developed by
giving up the belief that there is ‘no other way’
to perform a given task. It is useless to say, ‘It
has to be done that way,’ or ‘This can’t be
helped!’
At Toyota, we have found that there is always
another way.”
– Study of the Toyota Production System
Copyright 2005, AIT Group Inc. All rights reserved.
11
Lean Six
Sigma
Lean Defined
• What Lean Is:
• An enabler to business strategy
• A way to remove waste from processes and practices
• Focused on process speed and flexibility
• Driven by quick-hit, high-impact team events to solve
problems
• A way to visualize processes through value-stream mapping
• A way to teach people how to “think” about streamlining
• What Lean Is Not:
• A business strategy

• Only for manufacturing companies
• About headcount reductions
• Only about the tools
Copyright 2005, AIT Group Inc. All rights reserved.
12
Lean Six
Sigma
But Lean Alone Has Holes
• Lacks defined cultural infrastructure
• Top leadership engagement
• Deployment organization (Champions, Black Belts, etc.)
• Sometimes lacks focus on customer
• Lacks a consistent methodology
• Most lean efforts lack focus on variation elimination and
simply “account for” the variability by carrying excess
inventory and resources
• Lean tools do not intrinsically focus on bringing a
process under statistical control and maintaining that
control allowing for unpleasant surprises
Lean Six
Sigma
Copyright 2005, AIT Group Inc. All rights reserved.
13
Six Sigma History
Copyright 2005, AIT Group Inc. All rights reserved.
14
Lean Six
Sigma
Six Sigma History
• Motorola was the first advocate in the 80’s

• Six Sigma Black Belt methodology began in late 80’s/early 90’s
• More recently, other companies have embraced Six Sigma:
• GE
• Allied Signal
• Bombardier
• Sony
• Project implementers names includes “Black Belts”, “Top Guns”, “Change
Agents”, “Trailblazers”, etc.
• Implementers are expected to deliver annual benefits between $500,000
and $1,000,000 through 3-5 projects per year
• Top-down program with Executive and Champion support
• Outwardly focused on Voice of the Customer, inwardly focused on using
statistical tools on projects that yield high return on investment
Copyright 2005, AIT Group Inc. All rights reserved.
15
Lean Six
Sigma
Six Sigma History
• Nobody at GE gets promoted without Six Sigma training.
• GE annual report examples:
• 10-fold increase in life of CT scanner x-ray tubes
• Improved yields of super-abrasives – worth a full decade of
increased capacity despite growing demands
• 62% reduction in turn-around time of railcar leasing repairs
• Plastics business added 300 million pounds of new capacity –
equivalent to “one free plant”
Copyright 2005, AIT Group Inc. All rights reserved.
16
Lean Six
Sigma

How Complex Are Your Products & Services?
(% Shippable without Rework)
# of Part s ±3
σ
±4
σ
±5
σ
±6
σ
or Steps
(Cp=1.00)
*
(Cp=1.33)
*
(Cp=1.67)
*
(Cp=2.00)
*
1 93.32% 99.38% 99.98% 99.9997%
2 87.08% 98.76% 99.95% 99.9993%
3 81.27% 98.15% 99.93% 99.9990%
4 75.84% 97.54% 99.91% 99.9986%
5 70.77% 96.93% 99.88% 99.9983%
10 50.09% 93.96% 99.77% 99.9966%
30 12.56% 82.96% 99.30% 99.9898%
50 3.15% 73.24% 98.84% 99.9830%
100 0.10% 53.64% 97.70% 99.9660%
300 15.43% 93.26% 99.8980%
500 4.44% 89.02% 99.8301%

1,000 0.20% 79.24% 99.6605%
3,000 49.75% 98.9849%
5,000 31.24% 98.3140%
10,000 9.76% 96.6564%
* Distribution shifted by 1.5
σ
Copyright 2005, AIT Group Inc. All rights reserved.
17
Lean Six
Sigma
Why 99% Is Not Good Enough
• The “goodness level” of 99% equates to:
• 20,000 lost articles of mail per hour
• 5,000 incorrect surgical operations per week
• 200,000 wrong drug prescriptions each year
• No electricity for almost 7 hours per month
Copyright 2005, AIT Group Inc. All rights reserved.
18
Lean Six
Sigma
Six Sigma Defined
• What Six Sigma Is:
• An enabler to business strategy
• Places customers at the center of performance improvements
• Fact-based approach for improving business processes and solving business
problems
• A proven methodology and toolset supported by deep training and mentoring
• Focused on reducing variability of processes
• A way to develop highly skilled business leaders
• A means for creating capacity in organizations

• What Six Sigma Is Not:
• A business strategy
• A way to develop statisticians and engineers
• Only for manufacturing companies
• Only about “cost reductions”
• A “flavor of the month” approach
• An approach that slows decision making and business outcomes
Copyright 2005, AIT Group Inc. All rights reserved.
19
Lean Six
Sigma
But Six Sigma Alone Has Holes
• Six Sigma lacks many concepts and tools lean is strong in
• Set-up reduction
• Waste elimination
• Mistake Proofing
• Cycle-time improvement
• Process simplification
• Work in process control and reduction
• Six Sigma has long time-lines for projects (4-18 months)
compared to Lean (1-4 months)
• Six Sigma specialists (Black Belts) are often less productive
than Lean specialists
• Six Sigma Black Belts do 3-5 projects a year
• Dedicated Lean project leaders do 10-20 projects a year
• Six Sigma is often seen as being “too slow”
Lean Six
Sigma
Copyright 2005, AIT Group Inc. All rights reserved.
20

Lean and Six Sigma Integration
Copyright 2005, AIT Group Inc. All rights reserved.
21
Lean Six
Sigma
Why Integrate?
“We knew we wanted to have Six Sigma Tools, that was clear.
But we also decided that what really makes change in a factory
are some of the Lean tools. Putting in a pull system, reducing
batch sizes, significantly changing setup times, all of a sudden
everything starts to flow.
Those are the types of things we saw over time that really
made a difference in our factories and so we said that has to
be a part of this training.”
– Lou Guiliano, ITT Industries CEO
on integrating lean techniques into
ITT’s Six Sigma Rollout
Six Sigma & Lean Integration
Copyright 2005, AIT Group Inc. All rights reserved.
22
Lean Six
Sigma
Lean and Six Sigma Together
• Goal – Reduce waste and
increase process speed
• Focus – Bias for action/
Utilize existing, proven Lean
Tools
• Method – Kaizen events,
Value Stream Mapping

• Goal – Improve performance
on Critical Customer
Requirements
• Focus – Use repeatable
DMAIC approach for sustained
results
• Method – Intense focus on
projects, performance
improvement a key
leadership activity
Six Sigma
Quality, Cost +
Explicit Approach
Lean
Speed + Waste +
Implicit Approach
X
Lean
Six
Sigma
Six Sigma Quality Enables
Six Sigma Quality Enables
Lean Speed
Lean Speed
(Fewer Defects Means
(Fewer Defects Means
Less Rework)
Less Rework)
Lean Speed Enables
Lean Speed Enables

Six Sigma Quality
Six Sigma Quality
(Faster Cycles of
(Faster Cycles of
Experimentation/Learning)
Experimentation/Learning)
Copyright 2005, AIT Group Inc. All rights reserved.
23
Lean Six
Sigma
Six Sigma with Lean Is the Integration of Two
Powerful Business Improvement Approaches
• Lean
• Value stream mapping
• Bottleneck identification and
removal
• “Pull” from the Customer
• Setup and queue reduction
• Process flow improvement
• Kaizen
• Supply Chain Strategy
• 5S
• S&OP
• Six Sigma
• Voice of the Customer (VOC)
• Statistical Process Control
• Design of Experiment
• Error-proofing
• Measurement Systems Analysis
• Failure Modes Effect Analysis

• Cause and Effect Analysis
• Hypothesis Testing
Precision + Accuracy + VOC Speed + Low Cost + Flexibility
Copyright 2005, AIT Group Inc. All rights reserved.
24
Lean Six
Sigma
Integrating Lean and
Six Sigma Initiatives
• Lean and Six Sigma can co-exist independently,
but the benefits of integration are tremendous...
• Single channel for employing limited resources
• One improvement strategy for the organization
• Highly productive and profitable synergy
…while the pitfalls of not integrating them are
formidable
• Divided focus of the organization
• Separate and unequal messages for improvement
• Destructive competition for resources and projects
Copyright 2005, AIT Group Inc. All rights reserved.
25
Lean Six
Sigma
Six Sigma and Lean
• Six Sigma is the “Unifying Framework”
• Six Sigma provides the improvement infrastructure
• CEO Engagement
• Deployment Champions
• Green Belts, Black Belts, Master Black Belts
• Over-riding methodology: DMAIC, DMEDI, DMADV

• Lean provides additional tools and approaches to
“turbo-charge” improvement efforts
• Tools: Set-up reduction, 5S, Kanban, Waste Reduction
• Approaches: Kaizen, Mistake-proofing