1 Part III Speeding Up Deployment Returns: Strategies for Getting More, Faster, from a lean Six Sigma

Deployment

Hello my name is patrick J. Zamora, and im going to discuss about Part 3 Speeding up deployment
returns: strategies for getting more, faster, from a lean six sigma deployment. From the book the lean six
sigma guide to doing more with less by mark George.

2 Create a Pipeline of Cost Improvement Projects: The Secret to Protecting the Heart of Your Business

Developing Rigor In Project Identification and Selection

The only way you can identify Lean Six Sigma projects that will contribute significant value to your
company is to understand your organizational needs, not just look for problems you think could be
addressed with Lean Six Sigma.

A simple way to depict activities that will raise the odds of picking the best ideas is to use the four-
step project identification and selection process shown in the next slide

3 (insert figure 12.1)

The process includes everything from identifying, translating, and screening the opportunities to
qualifying the projects to prioritizing the top 20 to 25 percent projects and, finally, to developing an
improvement roadmap.

4 Step 1: Conduct a Rapid Assessment and Validation (insert figure 12.1)

The purpose of the assessment is to establish a baseline understanding of hypotheses that have
received preliminary validation: You end up with a list of opportunities, validated and quantified
based on rigorous analysis. Many of the insights generated are new, or quantified for the first time.

 Strategic objectives and focus of operational improvements (cost, capacity, inventory,

quality, delivery).
 Financials (buckets of cost/inventory, raw materials, etc.).
 Product mix and economic profit by product line/offering group.
 Planning, scheduling, and forecasting policies, procedures, and systems.
 Return on equipment and resources: utilization, work management, labor profiles,
overtime, downtime/overall equipment effectiveness (OEE), space utilization.
 Production or service delivery performance evaluation, including cycle time, capacity,
throughput, process capability, and stability.
 Primary workflow.
 What leaders believe the organization's or their unit's main priorities are, and the biggest
barriers to improved performance.
5 Step 2: Screen Initial List

One of the fastest and easiest ways to screen ideas is by performing a benefit/effort analysis, and
plotting the results on a matrix like that shown in the figure

(insert figure 12.3)

A matrix like this can be used to evaluate anywhere from a handful to 30, 40, or even 100
improvement opportunities. In general, you would pursue the ideas in the following sequence:

[Link]-effort/low-impact opportunities: Look at this area (shown in very light gray) just to see if
any could be quick hits that solve a nagging problem. If not, it may not be worth expending any
effort since the payback would be small.
[Link]-effort/high-impact opportunities: This area (in medium gray) is where you get the biggest
bang for your buck and on which you should focus your Kaizen and initial LSS projects.
[Link]- to high-effort opportunities, with high impact: Impact is the more important criteria,
so look next at these opportunities (in dark gray). Many are either more strategic or complex,
which will require either a case team approach or a better trained LSS project leader, such as a
Black Belt.
[Link]-effort, low-impact opportunities: The only reason to bother with projects in this category
(shown in black) would be because they are required for legal compliance of some sort, or lay the
groundwork for a subsequent project.

6. Step 3: Scope and Define Projects (Insert figure 2.1)

After the initial screening, you need more information about each opportunity so you can make a
better comparison about which ones to pursue first. The charter is a living document, begun during
the project selection process, then refined as more is learned about the project opportunity. It is
important to do charters at this stage because, up to this point, the only basis of comparison has
been the pain associated with each opportunity and the perceived benefits of improving the
process.

7 Step 4: Prioritize List and Select Projects (insert figure 2.1)

You will be coming in to step 4 with draft charters for all the project opportunities that made it
through the screening step. You can now use different sections of the project charter to better
evaluate these opportunities.

8 SPOTLIGHT #5 Link Projects to Value Drivers

As described in the previous chapter, a lot of considerations go into selecting projects. One of the
most important factors, especially when you are relying on Lean Six Sigma projects to improve your
cost position, is to have a deep understanding of what drives value for your company.
9 Option 1: Value Driver Trees

To understand what will create or drive value for your company, you need to have a clear strategy
and recent and reliable information on what customers need, and you need to know how well your
processes are operating and which factors have the biggest effect on the financial metrics of your
company.

A tool called a value driver tree is a good way to use financial information to feed into your project
identification and selection processes.

(insert figure SP5.2)

10 Option 2: Financial Analysis Decision Tree (insert figure SP5.3)

One variation on the value driver tree format is called a financial analysis decision tree. It follows
the flow of a value driver tree and asks “why” until a level is reached to identify potential projects. A
financial analysis decision tree is a more focused tool than the value driver tree, and helps generate
more fruitful discussions around achieving strategic planning line items.

11 Option 3: Economic Profit ( insert SP5.5)

many companies today are taking it a step further and adopting Economic Profit (EP) as the final
financial reporting metric. Economic Value or Profit relates to the return on an investment after
deducting the cost of capital. This has three contexts for continuous improvement:

•Identifying where to look for opportunities: By understanding what drives value, a business
is more likely to identify where to find high-value projects.
•Selecting opportunities: Increasing productivity through process improvement enhances the
return on investment (ROIC), whether it is a piece of equipment or a group of people.
Therefore, projects that create the greatest improvement in Economic Profit (increase in
ROIC × the amount of invested capital) should, all other things being equal, be given
priority. This is supported by how companies often develop their project prioritization
criteria.
•Allocating resources: Increasing the return on the organization's investment in continuous
improvement. All initiatives need to justify their existence and deliver value for the
organization. By working on the highest-value projects, the impact of the initiative is greater,
and this builds support within the organization and leadership, which then enables even more
rapid and widespread improvements in performance.
12 Option 4: EP Sensitivity Analyses (insert figure SP5.6 and SP5.7)

To perform an EP sensitivity analysis, first create a table of P&L and balance sheet items and
calculate how a 1 percent change in each line item affects EP If you graph the results, you can see
the impact of each lever.

13 CHAPTER 13 Smooth the Path through Change

Change management is a huge subject well beyond the scope of any one chapter. What we want to
focus on here are four aspects of change management that are especially critical if your company is
launching major cost reduction efforts tied to Lean Six Sigma:

[Link] a change readiness assessment at various times during the journey.

[Link] the difference between leading and managing change.
[Link] your communication plan.
[Link] process ownership and cost accountability, especially during transitions.

14
Change Readiness Assessments- Managing change is important at every step of the journey
but you first must understand where the organization's mental headset is before you can
develop a plan to manage it. A focus on cost savings or cost reduction activities is sure to
invoke some anxiety in the organization. Therefore, irrespective of the magnitude of the
change your organization is facing, it's important to understand how ready people are for
change, how able they are to perform work in a new way, and how willing they are to do so.

Leading Versus Managing the Change- After the assessment has been conducted, the next step
is to use the findings to develop detailed plans, interventions, events, communications, and
so on, that will enable employees to be ready, willing, and able to carry out the change.
There are, in fact, two distinct roles for executives: leading the change and managing the
change

Upgrading Your Communication Plan- The basics of designing an effective communication

plan are well known. Odds are you've run across descriptions that go something like this:

 •Communications will be most effective if they're context-specific (shaped for the audience
and their needs, and considering the forum for the communication, the business needs).
 •Messages need to be stated clearly and crisply.
 •Communications must be delivered frequently.

Rather than rehash these details, we want to focus here on two secrets that will help you
make better choices when shaping your communication plan:
 [Link] “feedback feasibility” when determining which methods to use.
 [Link] both logic and emotion.
Process Ownership and Cost Accountability- One thing that differentiates an improvement
initiative focused on cost reduction is the very real possibility that work will be done very
differently after the change, as compared to before. Major chunks of work will, hopefully,
disappear. At the very least, job roles and responsibilities may be very different afterward,
and if your company is linking improvement to job cuts, there may be a major reshuffling of
job duties and responsibilities.

15 Chapter 14 Establishing a Center of Excellence

What Is a CoE and What Does It Do?

Centers of Excellence are typically small teams of 5 to 10 employees consisting of the CoE director,
a business analyst, and process improvement experts—all full-time roles. Together, these staff
members provide support to the business unit champions, project sponsors and the project leaders.

What a CoE Does

A CoE typically has five primary objectives:
[Link] focus on LSS cost reduction within the organization.
[Link] faster returns on the invested resources (via improved project selection).
[Link] a critical mass of capabilities and resources.
[Link] organizational capability for sustained cost reduction.
[Link] the LSS deployment across the organization.

16 CHAPTER 15 Gaining New Perspectives on Deployment Cost and Speed Opportunities

Flexibility in Building Skills

Focusing a deployment on a limited number of specific business issues is one way to speed up
deployment and results. Other alternatives to the traditional Lean Six Sigma deployment model for
training resources and generating results include:

 •The “I do-we do-you do” skill development system

 •Hiring a master consultant (sensei)
 •Augmenting internal staff with outside resources
 •Applied learning (“rapid path to results”)
 •Blended e-learning

17 Rapid Development of Internal Expertise: The I Do-We Do-You Do Approach

The plan is for Black Belts to complete their first projects in six months’ time and Green Belts in four.
The training not only can be out of sync with the project timelines, but the participants are often in
different phases of their respective projects during the classroom training. The overarching desire of
this deployment design is to build the necessary critical mass to push a continuous improvement
culture throughout the organization. This approach has proven effective in many situations, but it is
not always the best fit for the individual organization.
The principle behind this approach is the truism “learn by doing.” The approach begins with
traditional classroom training, either via a brief overview (one week) or the more robust Belt
training (two to five weeks) on the LSS tools. As implied by the name, three phases follow this
kickoff:

 Phase I: “I do” Here, the expert LSS practitioner (from inside or outside the company)
serves the primary role in leading a team, while the person in training is primarily an observer.
The practitioner takes the lead role in facilitation and guides the counterpart's team through all the
project's steps, from inception to successful implementation. The counterpart acts, primarily, as a
“shadow,” observing, learning, and becoming knowledgeable and more comfortable with the LSS
tools.
 Phase II: “We do” In this phase, the roles are reversed from phase I. The LSS expert
becomes the shadow while the counterpart is now thrust into the lead role. Though in the
shadows, the expert is very active in ensuring the project's success: meeting with the new team
leader one-on-one, anticipating problems, helping to work through barriers. Part of the expert's
role is to ensure that the counterpart is always viewed in the lead role, whether it be facilitating
discussions, problem solving, assigning team roles, and so on. The expert watches for unplanned
occurrences and any barriers to the project's success that the new lead might not be thoroughly
competent to address.
 Phase III: “You do” This phase is a replication of phase II except the expert is no longer
acting as a shadow (and may not even be at the client site, if the expert was an outside consultant).
The new team leader is flying solo, so to speak, to lead a new project and deploy the necessary
Lean Six Sigma tools without an LSS Master Black Belt or Lean Master on-site.

18 CHAPTER 16 Reenergizing a Legacy Program

Building a Steam Engine: Performance Management

the absolute primary purpose for launching Lean Six Sigma and chartering projects in the first place
is to create value that is important to the company. The best way to do that is by establishing a
formal performance management system.

A performance management system defines:

 •Metrics at every level of management, which are cascaded down from layer to layer.
 •Specific responsibilities for each level of management for tracking, summarizing, and
reporting performance at their level.
 •Daily, weekly, and monthly review schedules: what should be looked at, when.
19 How to Reenergize a Deployment

Establishing a formal performance management system and clear process ownership are two of the
best ways you can reenergize a Lean Six Sigma deployment. But there may be other underlying
problems that are holding you back. So another dimension to putting the steam back in the value
engine of your Lean Six Sigma deployment is doing an analysis of what is going well and what needs
attention.

20 How Can my Topic Enable a Company to Reap the Benefits of Outsourcing

By implementing Lean Six sigma, we can make a strategy or plan so that Outsourcing can be better
delivered to the company and by six sigma, task will be finish more and faster.