This chapter is from the book
This chapter is from the book
This chapter is from the book
Basics
In order to better understand the detailed methods of Lean Sigma process improvement, it is important to first have a clear understanding of the basics involved. This begins with simple clarifications of what a process is, how it is defined, and then how it is improved.
A Process
The first thing to point out here is that Lean Sigma is a process improvement methodology, not a function or an activity improvement methodology. This is a key distinction in framing the project, and it is one that Champions frequently get wrong during project identification, scoping, and selection.
A process is a sequence of activities with a definite beginning and end, including defined deliverables. Also, a “something” travels through the sequence (typical examples include a product, an order, a patient, or an invoice). Resources are used to accomplish the activities along the way.
If you can’t see an obvious, single process in your project, you might have difficulty applying process improvement to it. The start and end points need to be completely agreed upon among the Belt, Champion, and Process Owner (if this is not the Champion). Clearly, if this is not the case, there will be problems later when the end results don’t match expectations.
Entities
In the preceding definition of a process, there is a “something” that travels along it. For want of a better name, I’ll refer to this as an entity. Clearly, this entity can be fundamentally different from process to process, but there seem to be surprisingly few distinct types:
- Human: Employees, customers, patients
- Inanimate: Documents, parts, units, molecules
- Abstract: Email, telephone calls, orders, needs
The trick is to be able to identify the Primary Entity as it flows through the process with value being added to it (for example, a patient or perhaps the physical molecules of a product). There will, of course, be secondary entities moving around the process, but focus should be on identifying the primary.
Belts sometimes find this difficult when the entity changes form, splits, or replicates. For instance, in healthcare (in the ubiquitous medication delivery process), orders are typically entered into the electronic medical record (EMR) by the physician, and so the Primary Entity is the electronic order. The order is then converted to a work order by the system that can be accessed in the pharmacy. The work order is then fulfilled (meds are picked from an inventory), and effectively the Primary Entity changes to the medication itself, which will be sent back to the point of request.
Similarly, in an industrial setting, we might see the Primary Entity change from Customer need to sales order to production order to product.
Deliverables
The last element of the definition of a process is the deliverables. This is often where novice Belts make the biggest mistakes. Simply put, the deliverables are the minimum set of physical entities and outcomes that a process has to yield in order to meet the downstream Customers’ needs.
The single most common mistake Belts make in process improvement is to improve a process based on what Customers say they want versus what they truly need (more about this in the section “Customer Interviewing” in Chapter 8, “Tools”).
The deliverables need to be thoroughly understood and agreed upon in the early stages of the project; otherwise later, during the analysis of exactly what in the process affects performance, the Belt will have the wrong focus.
If your project doesn’t have a start, an end, deliverables, or a Primary Entity, it probably isn’t a process and you will struggle to apply Lean Sigma to it. Table 1.1 gives examples of good and poor projects across varying industries.
Table 1.1 Examples of poor versus good projects
Industry |
Healthcare |
Chemical Manufacturing |
Discrete Manufacturing |
Service/Administrative |
Transportation and Logistics |
Good Projects |
Length of stay
Accuracy
Capacity
Lead Time
Downtime
|
Accuracy
Capacity
Lead Time
Downtime
|
Accuracy
Capacity
Lead Time
Downtime
|
Accuracy
Capacity
Lead Time
Downtime
|
Accuracy
Capacity
Lead Time
Downtime
Damage
Inventory
|
Poor Projects |
Satisfaction3
|
Reduce healthcare costs |
|||
Poor Projects |
Communication4 Sales and marketing Improve forecast accuracy5 Cell phone consolidation Improve employee retention Implement XYZ system |
Reduce office utility costs Improve quality of master data in SAP/Oracle/etc. File all paper documents electronically Electronic product catalog Reduce DSO from 75 days to 306 |
|||
Methodologies
Six Sigma and Lean are both business improvement methodologies—more specifically, they are business process improvement methodologies. Their end goals are similar—better process performance—but they focus on different elements of a process. Unfortunately, both have been victims of bastardization (primarily out of ignorance of their merits) and often have been positioned as competitors when, in fact, they are wholly complementary.
For the purpose of this practical approach to process improvement:
- Six Sigma is a systematic methodology to home in on the key factors that drive the performance of a process, set them at the best levels, and hold them there for all time.
- Lean is a systematic methodology to reduce the complexity and streamline a process by identifying and eliminating sources of waste in the process—waste that typically causes a lack of flow.
In simple terms, Lean looks at what we shouldn’t be doing and aims to remove it; Six Sigma looks at what we should be doing and aims to get it right the first time and every time, so the process flows better and robustly delivers what it should, every time for all time.
Lean Sigma Roadmaps
Lean Sigma is all about linkage of tools, not using tools individually. In fact, none of the tools are new—the strength of the approach is in the sequence of tools. The ability to understand the theory of tools is important, but this book is about how to apply and sequence the tools.
There are many versions of the Six Sigma roadmap, but not so many that fully incorporate Lean in a truly integrated Lean Sigma form. Figure 1.1 shows a robust version of a fully integrated approach developed by the author and the team at Haelan Group over many years.7 The roadmap follows the basic tried and tested DMAIC (Define, Measure, Analyze, Improve, and Control) approach from Six Sigma, but with Lean flow tools as well as Six Sigma statistical tools threaded seamlessly together throughout. As proven across a diverse range of organizations, the roadmap is equally at home in service industries, manufacturing industries of all types, and healthcare, including sharp-end hospital processes, even though at first glance some tools may lean toward only one of these. For example, despite being considered most at home in manufacturing, the best Pull Systems I’ve seen were for controlling replenishment in office supplies. Similarly, Workstation Design applies equally to a triage nurse as it does to an assembly worker.
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The roadmap is a long way removed from its Six Sigma predecessors and is structured into three layers:
- Major phases
- Subphases or steps (the goals or the “what”)
- Tools (the “how” to achieve the “what”)
With this layered structure in place, the roadmap is goal-driven, depicts the critical-thinking sequence involved, and is completely generic as it relates to process performance improvement. The tools vary project by project, but these goals are consistent for all process improvement projects. The Lean and Six Sigma tools (and any others interchangeably for that matter) can be selected to meet the goals of any step.
This is done purposefully to ensure that the problem-solving approach isn’t just a list of tools in some order. It has meaning inherent to its structure. This is a crucial point to practitioners. Throughout this book, I’ll explain not only which tool to use, but also why it is used, so that Belts move from blind tool use to truly thinking about what they are doing and focusing on the end goal of improving the process.
The best Belts I’ve found were the most practical thinkers, not the theorists. This is a practical roadmap, and the user should try to focus on the underlying principle of “I’ll apply the minimum practical sequence of tools to understand enough about my process to robustly make dramatic improvement for once and for all in my process.”