leading with lean six sigma

Leading with Lean Six Sigma

Thomas Pyzdek

Copyright © 2005-2009 by Thomas Pyzdek

Copyright © 2009 by Thomas Pyzdek

Leading with Lean 62

What You’ll Learn Today

• How to understand stakeholder demands• How to make strategies meaningful by using

balanced scorecards• How to select the critical few strategic metrics• How to handle the “important many” metrics• How to use the dashboard identify strategic plans• How to use strategic plans to select Leading with

Six Sigma projects• How to use feedback to update and improve

strategy



What is Quality? Lean? 6?

• Quality is identifying the right things and assuring that they are done right.

• Lean minimizes waste in value streams.

• Six Sigma develops models for improving complex business processes.

These methodologies help you work better, faster, and smarter.These methodologies help you work better, faster, and smarter.



• Quality– What are the right things for the enterprise?

– Are we doing them right?

• Lean– Is there waste in the strategy deployment value stream?

• Six Sigma– What is our enterprise model for strategic change?

Leading with Lean Six Sigma provides answers to these questionsLeading with Lean Six Sigma provides answers to these questions

Lean Six Sigma at the Enterprise Level



Six Sigma and Strategic Planning:Two Powerful Business Tools

Lean Six Sigma

• DMAIC applied to existing problems

• DFSS used to design new products and processes

• Value streams identified and optimized

• For many, low–hanging fruit has been picked

Strategic Planning• Long–term problems

and challenges• Strategic planning:

long on promise, short on results

• No way to program the strategy

Leading with Six Sigma provides the bridge between two powerful methodologiesLeading with Six Sigma provides the bridge between two powerful methodologies

LS

Vision / Dream

STAKEHOLDERS• Visionary: has the dream• Shareholders: finance the dream• Employees: create the dream• Customers: buy the dream

Strategies

Balanced Scorecar

d

Key Requirements

Differentiators

Big Gaps

Strategic change

plans and projects

Dashboard

Critical few metrics that must be the best in class

Metrics that must be

competitive

Broad outline of how we’ll make dreams reality

Framework for measuring progress for each stakeholder

What we’ll do to deploy our strategies

Leading with Six Sigma from 10,000 feet

Leading with Six Sigma from 10,000 feet

FeedbackLoop

In the beginning there is a dreamer

Henry Ford's vision was to offer honest, reliable and affordable transportation for the masses.

Henry Ford's vision was to offer honest, reliable and affordable transportation for the masses.

Bill had a vision as a teenager that every business and household should have a computer

Bill had a vision as a teenager that every business and household should have a computer

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We can’t create visionaries, but Lean Six Sigma can help inspire them

We can’t create visionaries, but Lean Six Sigma can help inspire them

Inspiration

Determination

Passion

Background

Other qualities

Six Sigma “Visioning” Tools



Looking Out for #1

Adam Smith(1723-1790)

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love, and never talk to them of our own necessities but of their advantages.”

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love, and never talk to them of our own necessities but of their advantages.”

Leading with L6S doesn’t fight human nature, it embraces it

Leading with L6S doesn’t fight human nature, it embraces it

The Stakeholders

Shareholders: finance the dream

Shareholders: finance the dream

Employees: create the dreamEmployees: create the dream

Customers: buy the dream

Customers: buy the dream

Six Sigma Tools to Link Stakeholder Interests

• QFD / Matrix diagrams• Survey development and validation tools• Conflict resolution techniques

There is a harmony of interests among stakeholders. Six Sigma helps identify it.

There is a harmony of interests among stakeholders. Six Sigma helps identify it.

Linking Strategies to “Voices”

Shareholder perceived

value

Voice of shareholder

Productivity strategy

Revenue growth strategy

Financial performanc

e

Voice of employee

Employee perceived

value

Innovation

Customer management processes

Operations & logistics

Regulatory compliance

Employee competencies

Technology

Corp. Culture

Internal process

excellence

Learning and growth

Voice of customer

Customer perceived

value

Customer value

proposition

Customer intimacy

Operational excellence

Product or service attributes

Excel in one customer value

proposition, maintain threshold levels for

the other two

Excel in one customer value

proposition, maintain threshold levels for

the other two

Harmony of interests

Balanced Scorecard

Operationalizing StrategiesCost per unit

Asset utilization

Revenue from new sources

Profit per customer

Price, time, quality, selection

Service relationship

Speedy service, functionality

New product revenues

Key customer variables

Inventory delivery costs

Audit results

Skills gaps

Research deployment time

Employee feedback


value





e

Voice of customer

Voice of employee

Customer perceived

value

Employee perceived

value

Customer value

proposition

Customer intimacy



Innovation





Technology

Corp. Culture

Internal process

excellence

Learning and growth It isn’t real until we know how

we’ll measure it

It isn’t real until we know how we’ll measure it


value





e

Voice of customer

Voice of employee

Customer perceived

value

Employee perceived

value

Customer value

proposition

Customer intimacy



Innovation





Technology

Corp. Culture

Internal process

excellence

Learning and growth

Asset utilization

Profit per customer

Price, time, quality, selection

Speedy service, functionality

Key customer variables

Inventory delivery costs

Audit results

Skills gaps

Employee feedback

Key requirements









DifferentiatorsDifferentiators

Cost per unit

Requirement gaps

Dashboard

Dashboards



Focus on Critical Few

Focus on Critical Few


value




e

Voice of customer

Voice of employee

Customer perceived

value

Employee perceived

value

Customer value

proposition

Customer intimacy

Innovation

Technology

Internal process

excellence

Learning and growth









Operations Strategy Deployment Matrix

From Dashboard metrics to

departmental action plans

From Dashboard metrics to

departmental action plans

Project Strategy Deployment Matrix

From departmental action plans to 6 projects

From departmental action plans to 6 projects

DMAIC, DFSS or other project frameworksDMAIC, DFSS or other project frameworks

?

?

Y

What we’re solving for

X1

X2

Xn

.

.

.

Drivers(Root causes)

Use results to update our models of reality

Learning

Leadership “transfer function”

Project Strategy Deployment Matrix

From departmental action plans to Six Sigma projects

From departmental action plans to Six Sigma projects

DMAIC, DFSS or other project frameworksDMAIC, DFSS or other project frameworks

f(x)

Focus on Critical FewFocus on Critical Few


value



Financial performance

Voice of customer

Voice of employee

Customer perceived

value

Employee perceived

value

Customer value

proposition

Customer intimacy

Innovation

Technology

Internal process

excellence

Learning and growth





Leading with Six Sigma



Summary• Leading with Six Sigma shows how you

will…– Identify and operationally define stakeholder

voices– Develop and use models to guide management

action– Focus on the critical few metrics and strategies– Rigorously link activities and Six Sigma

projects to strategies– Use data to assess the validity of the strategy



Why is This New?

• It provides an end–to–end solution to business planning

• It adds a new tool, the Strategy Deployment Map to show a picture of the leadership transfer function

• It combines the best elements of strategic planning, Balanced Scorecards, Lean and Six Sigma into a comprehensive methodology



Organize for process excellence

Determine key outcomes, metrics

Identify processes, process owners,

drivers

Plan for improvement

Improve

A Framework for Achieving Leadership ExcellenceA Framework for Achieving Leadership Excellence

1. Establish PELT membership

2. Conduct PELT workshop

3. Schedule PELT meetings

4. Initiate dashboard reviews

5. Initiate project reviews

1. List organizational goals, strategies

2. Use list to determine differentiators for your business; plot over time; benchmark

3. Use list to determine key requirements for your business; plot over time; identify gaps

4. Create scorecard, dashboard

1. Identify core and enabling processes

2. Assign owners

3. Link processes to scorecard, dashboard

4. Map to actionable level (L maps)

5. COPIS maps6. Determine

CTQ metrics

1. Identify priority projects, sponsors

2. Create problem statements, business cases, draft charters

3. Select team leaders

4. Kick off projects

5. Establish project review schedule

6. Establish dashboard review schedule

7. Establish strategy review schedule

The Quality 2.0 Leadership Process

1. Generate CTQ improvement plans

2. Validate plans (map to dashboard metrics)

3. Get shared vision

4. Identify just-do-it, Six Sigma improvement projects



Define theProject

Validate Measurement

System, GetBaseline

ID KeyLevers (Xs)that Drive Outcomes

Determine Improvement

Strategy

MakePermanent

Improvements

A Framework for Achieving Process ExcellenceA Framework for Achieving Process Excellence

1. Recognize an opportunity

2. Get to “Goldilocks” size

3. Develop the project plan

4. Map the high level process

5. Obtain VOC and identify drivers (CTQs).

1. Understand principles of variation

2. Analyze measurement system

3. Establish process baseline

4. Stratify data5. Set goals for

outputs.

1. Focus problem statement

2. Develop theories of cause and effect

3. Test theories with data

4. Model cause and effect

5. Identify improvements

6. Analyze costs and benefits.

1. Set improvement CTx goals

2. Develop improvement plans

3. Assess improvement plan risks

4. Develop contingency plans.

1. Develop new SOPs

2. Implement full scale changes

3. Transfer ownership

4. Follow up to validate benefits.

Lean Six Sigma Project Process (L1)

Q&A

Questions?

Visit www.SixSigmaTraining.org

leading with lean six sigma

Documents

sigma thomas pyzdek

customer price

sigma tools

strategy copyright

sigma projects

processes value streams

sigma dmaic

strategic metrics