How to save ourselves from process problems and make a saving from process problems
LEAN SIX SIGMA: PRACTICAL APPLICATION
One of the most widely spread and proven process improvement approaches is the combination of Lean and Six Sigma methods. Both Lean and Six Sigma are methods for quality improvement that have been applied to service and production processes all around the world already for decades. The roadmap for improvement through the application of these methods follows a structured approach and implementation logic, so that we achieve the desired results. There are multiple benefits of applying Lean Six Sigma in any organisation – from solving complex process problems to building a continuous improvement organisational culture in the long run. In addition, specific benefits of solving process problems are related to decreasing costs, mininizing number of defects and errors, better alignment between teams, more satisfied customers, and from there – increased sales and more revenue.
INTRODUCTION: STRUCTURED APPROACH TO PROBLEM SOLVING
The roots of Lean lie in the Toyota Production System. Minimizing wastes and improving the process flow are the heart of Lean. The objective of Lean Methodology is to reduce wastes so that we add more value for the customer – this is done by minimizing or eliminating the process steps that do not add value.
We do this by:
Eliminating the wastes that block the flow of the process
Using pull system that facilitates the process elements to move smoothly through the process
SIX SIGMA METHOD
Six Sigma method originated in Motorola in 1980s. It is a process improvement approach based on data analysis and aiming at increasing levels of quality. The main metric is sigma level or the so called defects per million opportunities (DPMO - defects per million opportunities). Achieving six sigma level of process performance means that the process has 3.4 defects per million. The Six Sigma method determines to what extent a particular characteristic (of a product or service) achieves customer specifications. The focus is on defects prevention and having controls in place that help prevention, rather that on defects detection.
COMBINED LEAN SIX SIGMA METHOD
Lean and Six Sigma methods both being process improvement methods, work exceptionally well in combination and provide a great opportunity to effectively resolve complex process problems. The Lean Six Sigma combination uses the Lean strength for optimizing and smoothing the process flow, i.e. increasing process speed. Six Sigma provides better precision and accuracy. This combination of Lean Six Sigma is a globally recognised approach for successfully improving processes.
THE FIVE-PHASE ROADMAP FOR PROCESS IMPROVEMENT
The application of the Lean Six Sigma approach is done systematically and following the logic and rules of the roadmap, i.e. the five phases for improvement (DMAIC). The five phases are: Define, Measure, Analyse, Improve and Control. These five phases are used for setting up and running improvement projects that are implemented for solving process problems.
SELECTING THE RIGHT PROJECTS
Lean Six Sigma is a method for solving process issues – we need a process that is not working well and that we wish to improve, as well as a problem that is highly complex and can not be resolved with applying traditional measures. If the solution is known, this method will not help. Its strength is in analysing the problem in depth with the objective to discover its key root causes for which we will find solutions. Before launching a process improvement project, we need to make a good selection. Here are some key requirements for project selection:
- To observe issues in the process
- To be able to process collect data and analyse it
- To have the support of key stakeholders and the topic to be a priority for the organisation
Below we will go through each of the phases of the improvement roadmap.
PHASE 1: DEFINE
The objective of Define is to define a problem that we wish to resolve. This is the first phase of the improvement roadmap. Defining the problem in greater detail increases the chances of finding the right solutions.
DEFINING THE PROBLEM
Coming up with a problem definition is the first step to resolving it. What does that mean? We need to start with initial investigation of the problem and collect more information about it. What is it that indicates a process problem? – customer complaints, large number of defective products, warranty losses, unhappy suppliers and partners, revenue decrease, indicators that are getting worse, etc.
As a first step, we determine process boundaries, i.e. which is the process that we wish to improve, where it starts and where it finishes. In which part of the process we notice issues? What indicates a problem exactly in these process steps? What losses does this bring as a result, i.e. how severe is the issue for the organisation, what departments are affected? What would be the benefits of solving it? This initial assessment provides a solid starting position for the upcoming project phases where this analysis will be done in greater depth.
The project charter includes a problem definition together with other important project information: project objectives, key process indicators and desired target levels, stakeholders, key stages and timelines, project sponsor, project team members.
For successfully implementing the project we need a team of experts that contribute with their expertise and knowledge for resolving the problem. Who are the people closest to the problem? How many and which teams and departments are affected? Who are the employees most interested in solving the issue? Who is the leader that can be at the forefront of driving the change and become a project sponsor? We need a qualified project lead (yellow belt, green belt or black belt), who has the knowledge and experience to skilfully handle Lean Six Sigma methodology. It is important to have experts assigned to the project who can practically contribute to it and are willing to do so, and who also recognize the need for change. It is a good practice that the core team is made of 5 – 6 key experts, so that we achieve focused discussions and effective time management for meetings. One of the tasks of the project lead is to ensure that the project team will be able to spend sufficient time on project work and confirm this commitment with the respective managers.
A key tool to understand the process is process mapping. This is a tool that visualizes the process elements, helps understand the flow, the link and sequence of process steps, as well as the interaction between the different functions. There are a few process mapping techniques that can be used. One is the so called process flowchart with detailed process steps. Another tool that is recommended to be used is the SIPOC diagram, listing the major process steps on a high level, the inputs and outputs at process step level, as well as the functions at each process step. Building this picture of the process as it currently works, helps build the image of the initial process baseline.
VOICE OF THE CUSTOMER
Customer stands at the heart of process improvements – with his specific needs and requirements. We define ‘customer’ as the beneficiary of the product or services at the end of the process. Customers can be ‘internal’ or ‘external’ to the organisation. During Define phase the team looks for feedback from the customer with the purpose to clarify customer needs, and from there – to define specific requirements. With the help of some tools, these requirements are translated into specific indicators and suggestions that are then included in the project scope.
PHASE 2: MEASURE
Measure phase is an opportunity to learn more about how the process currently works by collecting and analysing process data that gives us more information about this.
HOW THE PROCESS CURRENTLY WORKS
By understanding how the process currently works, we mark the starting point of measuring the process. We collect data on a few key indicators identified during Define phase. The purpose is to track how these indicators change over time, and at the end of the project to compare the status before and after the change; by noticing change in these key indicators we check to what extent we have managed to improve the process. The Lean Six Sigma method is based on data analysis and evidence based on data, and Measure phase marks the beginning of collecting and analyising data.
WHERE TO COLLECT DATA
During the first phase of Define we complete the initial analysis of the problem and the process steps where this problem occurs. Based on these, we take process measurements not only on the overall work of the process (e.g. number of defects at the end of the process, total lead time, etc.), but also on specific process steps for which we have an indication for occurring issues. In this way we perform focused measurements on problematic steps that will be analysed in the next DMAIC phase.
DATA COLLECTION PLAN
To be able to complete Measure phase we need data. One key requirement before starting the project is to ensure we have process data available. For some indicators we may need to initiate additional data collection during the course of the project. The data collection plan states a few critical aspects: for which indicators we collect data, how the data is to be collected (system source or manually), types of data, who is responsible for data collection, how the data is to be analysed and for what purpose.
DATA QUALITY CHECK
In order to achieve reliable analysis results, the data we collect must meet a few key criteria: to be collected according to a clear definition and method, to be collected at regular intervals, measurement method to be clearly stated and observed, etc. The method for checking data quality is part of the Lean Six Sigma trainings where it is studied in greater detail.
PHASE 3: ANALYZE
The main objective of Analyse phase is to uncover the problems and from there – to analyze and confirm possible root causes. By treating the root causes the team is working on preventing their re-occurence with the purpose of systematic and long term resolution.
STUDYING THE PROCESS
At the start of the project we perform research of issues. In Analyse phase this research goes deeper aiming for a more holistic view on the problem analysis. Additional information, data, feedback are collected from clients and stekeholders.
The logical classification of issues is an important step to their resolution. We determine clusters according to key characteristics. One of the tools that we use is the so called Affinity diagram.
Root-cause analysis dates back to Toyota Production System and is one of the oldest and most successful analysis tools. The Ishikawa diagram, also known as Fishbone, provides an opportunity to reach to the essence of any problem and discover its root causes. Engaging the right experst and skilfully facilitating the discussion are of critical importance for successfully applying this tool. In the Lean Six Sigma trainings participants receive detailed guidance on the tool usage and also practise in learning environment.
PRIORITISATION AND CONFIRMATION OF ROOT CAUSES
The next step is prioritizing the root causes in line with the project objectives, assessing their impact on problem resolution, as well as searching for data evidence that these are the real root causes for the problem to appear. At this stage we look for evidence through data analysis, testing hypothesis, possible correlations and other analysis tools from the wide range of Six Sigma methods.
PHASE 4: IMPROVE
Improve Phase is the stage of finding feasible solutions and their implementation. From addressing the confirmed root causes the team generates solutions that remove process problems in the long term.
SOLUTIONS THAT ADDRESS ROOT CAUSES
Based on confirmed root causes the team starts work on identifying feasible solutions. Creative thinking techniques are used together with practising group facilitation and using decision making tools. Improve phase is when feasible solutions are found and implemented. From addressing the confirmed root causes the team generates solutions that remove process problems in the long term.
The proposed solutions are further analysed and a prioritization and selection of the best ones is made focusing on those that will have highest positive impact. Key criteria are selected and the solutions are prioritized using relevant prioritization tools.
Implementation plan for solution realization is completed. The plan contains a detailed list of activities, deadlines, owners, etc. In addition, there is traking of how key indicators change over time and monitoring is established for possible issues.
REPORTING INITIAL RESULTS FROM SOLUTION IMPLEMENTATION
After completing the implementation the team reports the first set of results. This gives us an initial indication about the operation of the new process shortly after the change. We can compare the baseline data at the start of the project with the data right after the solution implementation.
PHASE 5: CONTROL
Control phase is the final phase of the improvement project. During this phase we report the final results and stability of the improved process; we also complete activities that ensure sustainable performance after the process change.
REPORTING FINAL PROJECT RESULTS
After implementation is completed, we continue to collect and report data on key indicators that we have identified in the Project charter and for which we have collected baseline data. This is done with the purpose to track change in indicators over time and to prove through data that the process has been changed, by comparing data at the start of the project before the change to data at the end of the project and after the defined monitoring period is closed. This is the way to demonstrate that the project has resulted in a process change and this change is positive.
SETTING UP CONTROLS
Setting up controls is done with the purpose to achieve sustainability of the change over time. The suitable control levers ‘catch’ potential problems on time and prevent the occurence of new issues.
After achieving and proving positive change, we need to work towards making it sustainable over time. Apart from setting up controls, we need other mechanisms: training, updating SOP (standard operating procedures) documentation, communication, maintenance plan, control plan, etc. depending on the process. If a process is left without proper controls, it tends to go back to its initial condition after a period of time.