Lean Six Sigma Foundations

Table of Contents
The continuous improvement culture .........................................................................................4
1. Introducing Lean Six sigma .................................................................................................4
1.1. Why Six Sigma? .......................................................................................................................4
1.2. Why Lean?...............................................................................................................................6
1.3. Why Lean Six Sigma?...............................................................................................................7
1.4. Question 1 of 4........................................................................................................................8
1.5. Question 2 of 4........................................................................................................................8
1.6. Question 3 of 4........................................................................................................................9
1.7. Question 4 of 4........................................................................................................................9
2. Understanding Six sigma......................................................................................................9
2.1 Define............................................................................................................................................9
2.2 Measure ......................................................................................................................................11
2.3 Analyze........................................................................................................................................13
2.4 Improve.......................................................................................................................................15
2.5 Control ........................................................................................................................................16
2.6 Design for Six Sigma....................................................................................................................17
2.7 Question 1 of 3............................................................................................................................19
2.8 Question 2 of 3............................................................................................................................19
2.9 Question 3 of 3............................................................................................................................19
3. Understanding Lean ...........................................................................................................20
3.1 Lean metrics................................................................................................................................20
3.2 Five Ss..........................................................................................................................................21
3.3 Just in time..................................................................................................................................23
3.4 Total productive maintenance....................................................................................................24
3.5 Quality at the source...................................................................................................................25
3.6 Continuous improvement...........................................................................................................26
3.7 Question 1 of 2............................................................................................................................28
3.8 Question 2 of 2............................................................................................................................28
4. Implementing Lean Six Sigma...........................................................................................29
4.1 Lead the project..........................................................................................................................29
4.2 Control the project......................................................................................................................30
4.3 Apply Lean Six Sigma to services.................................................................................................31
4.4 Lean Six Sigma for supply chain ..................................................................................................33
4.5 Question 1 of 2............................................................................................................................34
4.6 Question 2 of 2............................................................................................................................34

5. Exam.....................................................................................................................................35
5.1 Question 1 of 11:.........................................................................................................................35
5.2 Question 2 of 11:.........................................................................................................................35
5.3 Question 3 of 11:.........................................................................................................................35
5.4 Question 4 of 11:.........................................................................................................................35
5.5 Question 5 of 11:.........................................................................................................................36
5.6 Question 6 of 11:.........................................................................................................................36
5.7 Question 7 of 11:.........................................................................................................................36
5.8 Question 8 of 11:.........................................................................................................................36
5.9 Question 9 of 11:.........................................................................................................................37
5.10 Question 10 of 11:.....................................................................................................................37
5.11 Question 11 of 11:.....................................................................................................................37
6. Glossary ...............................................................................................................................38

The continuous improvement culture
- Every company I know has a continuous improvement culture. Improving business
processes is all about having the right tools in place and knowing how to use them. If you
agree with me, this is a good place to be right now, because we're going to talk about Lean
Six Sigma and how it can provide some structure to your continuous improvement
efforts. My name is Steven Brown, and I have managed business improvement
projects around the world for over 20 years. In this course, I'll teach you how Lean
principles and tools can help reduce waste and speed up processes. I'll show you how the Six
Sigma method can decrease defects and variability in your processes. And, very importantly,
how these two concepts will work together to guide continuous improvement projects in
your company. We strive to make things better each day, every one of us, and by
understanding and implementing Lean Six Sigma tools, you'll be able to significantly
impact your business processes. Let's dive in.
1. Introducing Lean Six sigma
1.1.Why Six Sigma?
- Albert Einstein once said that you can't solve a problem using the same kind of
thinking that created the problem in the first place.
That's a good quote to use here because Six Sigma is all about changing your
thinking about both the problem and its solution. In the early 1980s, Motorola was
struggling with some quality issues and productivity problems and had lost some significant
memory chip business to Japanese competitors. Bob Galvin, Motorola's CEO at that
time, issued some very tough quality goals for his company.
The whole idea of Six Sigma is to provide reliable, consistent, dependable products to your
customers.
The process focuses on three things
1. Defects.
2. Variability.
3. And the customer.
It's important to understand how these three aspects work together.
Six Sigma dries a level of no more than 3.4 defects per million opportunities.
This is not 3.4 defects per million activities, nor process steps, but per million
opportunities. There might be a million or more opportunities to make an error when
building a house, for example, and each opportunity could result in a defect. So a house with
only 3.4 defects upon completion, I think you will agree it's pretty close to perfect. The key to

reducing defects to this level is controlling variability. All processes have some natural
variability. This is why Motorola felt that attaining zero defects, which was a very popular
quality concept at that time, was just not realistic.
Six Sigma is based on the belief that if a variation can be reduced and held close to the
middle of a product specification limits, then there is less chance for defects to occur.
Six Sigma in statistical terms means that the process variation.
➢ Can equal half of the design tolerance, allowing the mean to shift.
➢ As much as 1.5 standard deviations from the target.
In non-statistical terms, this means that your manufacturing processes are very much in
control and your variability is very small. Motorola chose this range because they found that
their typical processes naturally drifted this much. Again, all processes have some natural
variability, and Motorola wanted to be able to control their processes within that natural
range. Now we have talked about defects and variability, so where does the customer come
in? Six Sigma projects have a very strong focus on results.
They also provide a structure for project management through their formal training and
certification of.
➢ Green Belt.
➢ Black Belt.
➢ Master Black Belt experts.
Each having a higher level of knowledge and skills. With that focus on the customer, Six
Sigma projects strive for more of a breakthrough approach to process improvement rather
than a gradual approach. As such, Six Sigma can be considered as a very important and more
structured component of a company's continuous improvement philosophy and strategy. Six
Sigma has evolved from this statistics-based management of manufacturing defects into a
sound business strategy to drive process improvement across the entire organization and its
supply chain.
➢ You can apply these methods to reduce variability in your transportation
department to help improve on-time delivery to your customers.
➢ Working closely with suppliers, Six Sigma can help reduce quality issues with
materials coming into your factory.
Clearly, Six Sigma is designed to guide quality efforts in every part of your business. Most
people today do not work in a Six Sigma company, but the foundation for building a solid
program already exist in most companies. It's called statistical process control, the
acceptable tolerance within each specification that allows that process to be in control and
produce quality output. That's the place to start.

1.2.Why Lean?
We will not put into our establishment anything that is useless.
That's a pretty good definition for what we call today the lean approach. You see, the
principles of lean production were first established at Ford Motor Company, and they were
recorded in several books Mr. Ford wrote in the 1920s. These principles were updated and
refined by Toyota after the Second World War, and they helped Japan to become a
manufacturing powerhouse.
Lean is defined as the elimination of all non-value-added activities, or waste.
Although most people associate lean with the production floor, the principles apply equally
well to all parts of the organization and its supply chain.
Examples of waste within the organization include.
➢ Uunnecessary steps or activities.
➢ Rework.
➢ waiting time.
➢ unnecessary movement of people or material.
➢ and excess inventory.
The goal of lean is to find those areas of waste and to permanently eliminate them. Lean
efforts are greatly enabled by a strong focus on continuous improvements and performance
measurements.
Lean is facilitated by such things as.
➢ Employees who are empowered to make decisions and solve their own problems.
➢ Highly cross-trained workers operating.
➢ Flexible equipment.
➢ Efficient layout or floor space.
➢ Standard processes.
➢ Just-in-time delivery.
➢ And rapid machine setup and changeover.
We see the benefits of lean efficiencies through reduced cycle times, greater production
output, decreased inventories, and higher levels of quality in all aspects of our work. It's not
easy to implement lean, and just-in-time principles into your everyday business operations. It
takes time and a lot of hard work. The focus must be on discipline and attention to
detail. Lean organizations have simple processes that are under continuous review for
improvement opportunities. To permanently eliminate waste, they work towards error-
proofing processes and strategies. They use simple tools and simple methods that can be
applied to any process, whether it's on the office floor or the shop floor. Above all else, lean
depends upon establishing simple processes. In fact, simplicity is at the heart of the Toyota
production system. At Toyota University, managers are trained to seek

What the company calls the elegant solution. At Toyota, the most elegant solution is the
simplest solution. To truly understand lean and how to apply its principles at your
company, you must first understand waste. Do you see any signs of waste in your
organization? Long and complicated processes, for example, that might result in mis-
schedules, or perhaps you find something as straightforward as a high rework rate for one
particular product in your factory. As you prepare for the implementation of Lean Six
Sigma, this is a really good place to start.
1.3. Why Lean Six Sigma?
- If you do what you always did, you get what you always got.
What better reason to always be improving? This saying is from an engineering
textbook, and it explains why we do Lean Six Sigma, we want to do things differently, so we
get better results.
Lean Principle + Six sigma Methodology
Lean Six Sigma is the application of Lean principles and Six Sigma methodology at the same
time. Now that may seem rather simplistic, but it's a very important concept to grasp. There
actually is not a specific Lean Six Sigma methodology or model or set of principles. Few
companies have people who are experts in both Lean and Six Sigma.
How Lean Six Sigma is applied is up to you. You combine leans tools for reducing cycle time
for example and need more emphasis on six sigma. The problem itself and your desired
results will determine the proper mix of skills. The use of Lean and Six Sigma and
combination has in most cases evolve naturally.
Here's an example of what I mean. Let's say you are a first tier supplier to a major
manufacturing company. Perhaps you are supplying car engines to Ford,
Order lead Time = 14 days ± 7
For example, your order lead time, the time from when Ford places an order until the time
they received the engine averages 14 days plus or minus seven. This means that every time
Ford places an order with you, they can expect to receive the engines within one to three
weeks. Not very good news for Ford because this makes it very difficult to efficiently
schedule their automobile assembly line. If you do not improve your delivery
performance Ford most likely will look for another supplier. So you begin a project to reduce
your average lead time and to also reduce that 50% variability level. You need both Lean
expertise and Six Sigma expertise.
Lean will streamline your processes by eliminating non value added steps and waste and
reduce your average order time to four days, let's say.

Although these improvements certainly will help reduce variability to some degree, Lean will
not achieve the significant improvements needed in this case. Six Sigma experts will do
that by applying statistical approaches to reducing defects and bringing the process steps
within control.
Order lead Time = 4 days ± 1
The result is it now your order time is on average, four days plus or minus one. Your order
Cycle Time has shifted from one to three weeks to three to five days, making it much
easier for your customer to schedule their assembly line. As you can see from this
example, these two methods attack different types of problems. And that's why there are so
few experts in Lean Six Sigma. Lean addresses visible problems and processes once they can
easily be seen like inventory or material flow or late deliveries. Six Sigma is concerned with
problems that are less visible, like variability and performance that can be caused by errors
and defects. The tools and models and skills vary widely between Lean experts in Six Sigma
experts. And because of its reliance on statistical analysis, Six Sigma does require some more
advanced training. Most Lean Six Sigma companies place a very high priority on simplifying
every aspect of their business operations as they reduced waste across the organization. I
believe this is the starting point of any successful Lean Six Sigma launch, you must first look
at your operations with the goal of simplification and build your program from there.
1.4.Question 1 of 4
Which statement is true?
o Six Sigma is concerned with things like inventory and material flow, while Lean
focuses on reducing variability in the process.
o Lean Six Sigma is the application of Lean principles and Six Sigma methods at
the same time.
o Most companies have Lean Six Sigma experts on staff.
o There is a specific Lean Six Sigma model applied to solving company
problems.
1.5.Question 2 of 4
The process of Six Sigma focuses on all of the following, except:
o Defects
o Compensation
o the customer
o variability

1.6.Question 3 of 4
Which of the following is an example of waste within an organization?
o Rework
o unnecessary steps or activities
o Waiting time
o All of these answers
1.7.Question 4 of 4
Which of the following quotes best represents "the lean approach?"
o "Amateurs sit and wait for inspiration. The rest of us just get up and go to
work." -Stephen King
o "The most elegant solution is the simplest solution." (Toyota University)
o "Peace cannot be kept by force; it can only be achieved by understanding."
(Albert Einstein)
o We will not put into our establishment anything that is useless." (Henry Ford
Sr.)
2. Understanding Six sigma
2.1 Define
- When an author sits down to write a new book, the first thing he does is to decide what to
write about and what not to write about. He defines his book. As the first step in this
process, this certainly makes sense. But interestingly enough, when Motorola introduced Six
Sigma, they did not include the define step.
MAIC Methodology
They used a four-step methodology of
1. Measure
2. Analyze
3. Improve
4. Control.

The define step was added by General Electric a few years later when they experienced some
basic problems in implementing.
DMAIC Methodology
1. Define
2. Measure
3. Analyze
4. Improve
5. Control.
Six Sigma in their company. In this critical first step, the Six Sigma team determines what the
project is and exactly what it should accomplish. Since Motorola initially applied Six Sigma
only to production problems, perhaps that is why they did not include a define step. They
were dealing with projects that had a very clear focus from the beginning, and the
expectations were pretty straightforward. But when GE and others applied Six Sigma to
support functions and services, the need for a more specific definition became clear. More
than one project get off course before GE introduced the define step.
The Define Stage
1. Conduct process mapping
A key tool applied in the define step is process mapping, done at a pretty high level so that
the team can understand what this project entails, and, equally important, what is not going
to be included in the project.
2. Outline expected accomplishment
You also want to define what you expect to accomplish from this project and the metrics
you'll use. As a friend of mine used to say, when you are successful, how will you know
it? You need to know what indicators you'll use to evaluate that success. It might be a
reduction in defects in a manufacturing process or an improvement in delivery time for your
transportation unit.
3. Develop Financial measurement
Most people agree that a Six Sigma project must include a financial measurement. Success is
measured by the financial outcome of the project. It is really important that, in the define
stage of your project, you calculate the expected financial benefit in terms such as cost
reductions or revenue increases. Once you have done this, I highly recommend that you get
the finance department to sign off on your calculation. In other words, finance is agreeing at
the beginning of your project that, if you accomplish your goal, it will result in this estimated
benefit. If finance has approved your assumptions and formulas in advance, it's much easier
to have them approve your calculated results at the end of the project. This financial aspect

of measuring your success is really important in the Six Sigma world. But you need to go
beyond the project and also define the problem.
4. Define the problem
And, again, you want to do that at a high level here. The project usually focuses on a
symptom, such as a particular product defect. The idea here is to drill down until you
agree that the problem is likely process variability in a particular machine at the factory. This
is the problem your project will initially address. In defining your project and problem, you
always want to keep the customer in mind. In prioritizing Six Sigma projects, you want to
first consider problems that are critical to quality from the customer's perspective. CTQ
means anything that's impacting the relationship with the customer should come first in
determining Six Sigma projects. If you have an improvement that is not really important to
your customer, it should be put aside for now while you concentrate on things that are. So,
in a sense, in the define step of the DMAIC process, you have established the strategy of
your Six Sigma project. I think you'll agree that GE made a very valuable enhancement to the
process when they added this step.
2.2 Measure
- If you can't measure something, you can't understand it.
You may have heard this quote before or some version of it. A recognized expert in
performance improvement, Dr. H. James Harrington is certainly speaking directly to the Six
Sigma goals of improving and controlling a process.
You want to understand two aspects of measurement here: what to measure and how to
measure. To do this, you first must know what questions you want to answer. This will
determine what type of data you need to collect. And the measure step of DMAIC is all
about the data. Where is it? Who can help you find it? How do you make sure the data is
accurate? You need to determine in advance what data you need and how to get it. A good
approach here is the classical mathematical expression,
Y is a function of x
What is the input you need, x, to determine the output you're looking for, Y?
Determine throughput
➢ Utilization rate
➢ Yield
➢ Process time

To determine the throughput of a machine in your factory, you might need to know such
things as utilization rate, yield, process time, and each of these components can be broken
down further.
Determining Yield
➢ Scrap rate
➢ Rework rate
For example, to determine a machine's yield, you would want to know the scrap rate and the
rework rate of that machine. So if your Six Sigma project is to improve the throughput of a
particular machine, one question you're trying to answer is to determine the yield of the
machine, and to do this you'll need historical data about the machine's scrapped and
reworked output.
Measurement Consideration
➢ Data collection methods
➢ Operational definitions
How to measure is very dependent upon two details. First, how your data is currently
collected. If your quality data is collected in parts per million, then you're certainly want your
measurement to follow the company guideline or, if appropriate, change that guideline in
advance. And second, operational definitions within your company. As you establish your
performance measures, you must ensure that everyone agrees on how the terms are
defined. I once worked at a consortium of 15 different manufacturing companies, and I was
absolutely amazed at the number of definitions of the term cycle time, each one just slightly
different from the others. There's a long list of appropriate tools for the measure step
depending upon the type of project.
Measurement Tools
➢ Data collection
➢ Cause-and-effect diagram (fish bone)
➢ Process mapping
➢ Value streaming mapping
➢ Process control charts
➢ Process capability charts
➢ Histograms
➢ Pareto charts
Key Six Sigma tools used here include data collection, which is your process for collecting the
right data as efficiently as possible; cause-and-effect diagram, which helps you determine
the right data to collect. You may know this as a fish bone diagram. Process mapping, which
helps you understand the functional relationship between your performance standard and
your data; value stream mapping, in which you distinguish value added activities from those

that add no value to the process; process control charts, which show the performance of a
particular process as it relates to the established specification limits; process capability
charts, which provide information about the variability of a process; histograms, which give
you historical data about critical performance aspects of the process; and finally, Pareto
charts, which allow you go give a high to low ranking of those performance categories. The
measure step is not an easy process, but if you spend time here getting this right, it
definitely sets the stage for success.
2.3 Analyze
- You can't find the solution to a problem until you truly understand why you are having the
problem in the first place.
This is what the analyze process is all about. You focus on why. Why are you experiencing
this particular problem?
You must have this understanding before you can figure out a solution. You'll rely very
heavily on statistical analysis in this stage, and this is where the company's Black Belt and
Master Black Belt experts come in. These are very experienced people who act as coaches to
the team, providing advice, guidance, and training for the data analysis tools. Your goal in
the analyze stage is to make sense of all that data you've collected so far and to use your
analysis to find the source of your problems.
Understand
➢ How the existing process works
➢ How that process should work
Before you can discover the why of your problem, you must truly understand how the
existing process works and how that process should work. You can use process mapping to
drill down to even more detail in the process.
Process mapping consideration
➢ Time
➢ Cost
➢ Yield
➢ Capacity
You should consider such elements as time, cost, yield, and capacity. From here, you can
start to identify how the process should work. In analyzing the new process map, you want to
look specifically for time traps, activities that are slowing down the total process time.
Eliminate complexity

In short, find specific areas to eliminate complexity.
Review Data
➢ Controls charts
➢ Capability charts
➢ Histograms
➢ Pareto charts
Take a critical look at data you already formatted into control charts, capability
charts, histograms, and Pareto charts, and seek out trends and anomalies to help you spot
problem areas.
The Five whys Techniques
Continuous to ask why until you identify the root cause of a problem.
One of the most important tools to master is the Five-Whys investigation, which helps you to
uncover the root cause of a problem. This approach is pretty straightforward in that once
you identify the symptom, you continue to ask the question why until you actually discover
what is causing this to happen. On average, you'll determine the root cause after asking why
five times. A solution that addresses the symptom is merely a temporary fix. To permanently
fix the problem, you must address what is actually causing the problem. Many times the
permanent solution is to increase training, for example. The company investigates a
repetitive policy violation or a safety incident and discovers that the root cause is simply a
lack of awareness. An employee-wide training program greatly reduces and sometimes
eliminates the issue by making everyone more aware of it.
Analyzation Tools
➢ Scatterplots
➢ Time series graphs
➢ Analysis of variance
There are some additional tools that can help us in the analyze stage. Scatterplots, which
graph two variables against each other to determine if there is a relationship. Time series
graphs, which plot a variable on a timeline to see if any patterns emerge. Analysis of
variance, which compares the distribution and variance of different data samples. Dependent
upon your team's competence, this statistical analysis can provide very powerful tools for
finding the true causes of your existing problems. Again, don't forget that you have the
expertise of company Black Belts and Master Black Belts to help you in this particular
area. Needless to say, your effectiveness in the analyze stage greatly impacts your ability to
improve the problem.

2.4 Improve
- It's one thing to create a product, but the real sweet spot is improving upon your work time
and time again. This is the heart of any Six Sigma project, the improve step. Everything done
so far in the DMAIC method, define, measure, and analyze has led you to your ultimate
goal, improve the process. Your job here is to implement a change that will resolve the
problem and improve the performance measure.
Improvement Tools
➢ Brainstorming
➢ Communication
There are two major tools used in the improve stage of a Six Sigma project, brainstorming
and communicating. Based on your analysis, the project team must first generate a list of
possible solutions to the problem. Brainstorming techniques have been proven to be very
successful in finding innovative solutions that are not immediately obvious to the
team. Before the team can arrive at a proposal, they must spend some quality time simply
gathering ideas. After a set of ideas is collected, each idea is then evaluated one by one until
the most favorable solution is determined. It's important to note that many times the
proposed solution goes beyond the reduction of defects and process variation. Many times
the solution also involves eliminating some non-value added steps, or changing machine set
up procedures, or reducing delays in the process. In short, many Six Sigma solutions also
involve Lean applications, which are designed to help streamline the process. You now must
implement your solution. Nothing really changes until you have a successful implementation
Communication with everyone involved
and the key here is to ensure you are effectively communicating with everyone involved with
the change. Make sure everyone is informed of the changes to take place and why these
changes are important. It's human nature to resist change in any form and effective
communication techniques can ease the transition.
Recognize those effected by the change and involved them early
One very good way to ease the resistance to change is to recognize those employees who
will be affected by the change and involve them in the project early. Once the Six Sigma
team has settled on a proposed solution, it's a good idea to get input from those
employees before finalizing the solution. This gives them a feeling of involvement and
ownership in the solution and just as important, their suggestions could greatly improve
your proposal. Having that sense of partnership in the project, any changes in procedures
will certainly be more readily accepted.
Ensure you have the support of the process owner

You also want to make sure you have the support of the process owner. The process owner
controls all the resources needed to implement your solution and here again, the earlier you
involve that person the better for the team.
Follow good project management techniques
Follow good project management techniques during the improve stage. Make sure someone
on the team is assigned to assure everything is done on schedule and that the solution is
properly implemented. Make sure all stakeholders are informed as needed. Six Sigma
projects vary widely across your company so the skills needed for implementation and
project management will also vary widely. It's always a good idea to know in advance what
kind of support you can get from stakeholders, process owners, and Six Sigma experts within
the company. Remember that brainstorming, communicating, and implementing are the
keys to success in the improve phase.
2.5 Control
Control is the most important step in the DMAIC methodology. Now, that's a pretty bold
statement so let me tell you why this is so. Control is what enables you to have a continuous
improvement organization. And every successful company today is continuously
improving. In the control phase, you make the improvement permanent. You put in place
tools and procedures to ensure your solution is maintained and the change is everlasting. In
doing so, you have now established a new process and a new baseline for performance, and
you are ready to improve that new process again. Because successful companies follow a
continuous improvement philosophy, the control step connects the Six Sigma program with
all other company efforts in quality management, engineering, and process improvement.
Controls
➢ Checklists
➢ Monthly review meeting
➢ Documents updates
➢ Training
The controls you put into place do not have to be elaborate at all. Many times they are
something as simple as a supervisor's checklist or monthly review meetings. If it is a change
in standard operating procedures, you must make sure policy and procedure manuals are
updated to reflect the new standard. And equally important, you must provide for ongoing
training in that new standard. The important thing is to have a mechanism in place to ensure
you maintain the new baseline of performance. Otherwise a continuous improvement
effort is simply not possible, because you will have slipped back to the original process and
the original level of performance. Since the Six Sigma team often is not directly responsible

for the improve process, it is important that the new process is documented properly for the
process owner. You also want to include guidance on how to monitor process
performance. The best monitoring systems are automatic, identifying and notifying the
process owner when performance is drifting out of an acceptable range. Closely related to
effective monitoring systems are the control tools of a mistake prevention and mistake
proofing.
Mistake prevention
Implementing a procedures that makes it difficult to cause an error
Mistake prevention means you want to implement procedures that make it difficult to make
a mistake in the first place. Some computerized forms, for example, only allow you to enter
data in a certain format, the format that is acceptable to the company's software
systems. This prevents incomplete forms or forms with errors from even entering the system.
Mistake proofing
Implementing a procedures that does not allow someone to continuous if a mistake is made
Mistake proofing means that if someone does make a mistake, it is not passed on to the next
step. A good example of mistake proofing in your everyday life occurs when a restaurant
server repeats your order before leaving the table. If a mistake has been made, you have the
opportunity to correct it before the server places your order with the kitchen. In the drive-
through lane of a typical fast-food restaurant, you notice such mistake-proofing tools being
used several times in the process.
Document the gains from improvement
At this point in the control process, the team should also document the gains realized from
the improvement, comparing output data of the old and the new processes. This data goes
into your financial calculations which establish the success of your Six Sigma project. And this
step marks the end of the project. Once your improvement is in place with the proper
control measures and you have verified the financial benefit of your new process, you are
able to formally close your project. And you are now ready to celebrate your success.
2.6 Design for Six Sigma
Sometimes, you don't need to improve your process. Sometimes, the existing process is so
bad, you need to throw it away and design a new one. And sometimes you don't even have a
process to improve. For example, when developing a new product and the processes that go
with it. Fortunately, the Design for Six Sigma Methodology addresses just this
situation. When improving an existing process, you are primarily dealing with one variable as
you develop methods to make that process better. When you are completely redoing a

process or designing a new process, there are a lot more unknowns. This is the most
significant difference between improving a process and designing a new process. And in
most cases, new processes and products have even more focus on meeting the customer's
performance objectives. Design for Six Sigma helps to ensure that your new product will
meet those customer needs and that the processes can meet Six Sigma capabilities. Your
focus is on those attributes that are critical to quality in the eyes of the ultimate customer.
DMADV Methodology
➢ Define
➢ Measure
➢ Analyze
➢ Design
➢ Verify.
Design for Six Sigma uses the methodology of define, measure, analyze, design, and verify. A
slight variation on the DMAIC Model. In the define phase, you identify the process and
clearly define the issues to be addressed. You then measure the critical to quality
attributes and analyze customer requirements as you develop a concept for your new
process. In the very important design phase, you specify the details of the new
process, review your progress, and approve the final version of the process. Lastly, in the
verify phase, you develop a working prototype, test it, and create a plan for implementing
the process. The DMADV Methodology concentrates more on the final customer and uses
such tools as the voice of the customer to determine and measure their expectations. I'm
sure you've seen this at restaurants for example, where they ask you to provide
feedback regarding your dining experience. Results of the surveys are used as input to a
House of Quality Model, that helps you to align customer requirements and technical
requirements as you design the new process.
Quality Function Deployment (QFD)
An approach that assists the design, manufacturing and marketing of a new product and its
related process.
When developing new products, this is a key aspect of the Quality Function Deployment
approach that assists the design, manufacturing, and marketing of that new product and its
related process. You may come across the DMADV process by other names.
DMEDI Methodology
➢ Define
➢ Measure
➢ Explore
➢ Develop
➢ Implement

Such as, DMEDI, which stands for define, measure, explore, develop, and implement. The
two models employ the same basic techniques to accomplish the same goals. They just use a
different name.
Design for Six Sigma (DFSS)
Design for Lean Six Sigma (DLSS)
Some companies simply refer to their analytical model as Design for Six Sigma, or in some
cases, Design for Lean Six Sigma. The objectives are the same regardless of the title
used, and quite often the terms are used interchangeably. Design for Six Sigma is a business
strategy for executing important projects that require significant design changes. There is a
much greater emphasis here on translating customer needs into business requirements in
order to create new processes, new services, and new products.
2.7 Question 1 of 3
Your goal in the Analyze stage is to make sense of the data you've collected and find the
source of your problems. In analyzing a process map, what should you specifically look at?
o Time traps
o Areas where you can increase the amount of time spent on a task
o Areas where you can increase training
o How to include more activities that slow down the total process time
2.8 Question 2 of 3
Appropriate tools for the Measure step of Six Sigma include all of the following, except:
o Process mapping (helps you understand relationship between performance standards
and data)
o Pareto charts (to summarize the relative importance of differences between groups of
data)
o Qualitative analysis (evaluating employee comments to determine why you're
experiencing a problem) - six sigma is a very quantitative, statistics-based method of
analysis.
o Cause-and-effect diagrams (helps you determine the right data to collect)
2.9 Question 3 of 3
What are two major tools used in the Improve stage of a Six Sigma project?
o Document writing and assessment
o Brainstorming and communicating
o Analysis and more analysis
o Isolation and silence

3. Understanding Lean
3.1 Lean metrics
Many of the principles of lean production go back to Henry Ford in the 1920s, who believed
that you should eliminate anything that does not provide value.
That's the basic premise of lean. James Womack and Daniel Jones became famous with their
1990 book on Toyota's lean manufacturing approach.
The Toyota Lean Manufacturing Approach.
➢ Determine value
➢ Identify the value stream
➢ Make value flow without interruptions
➢ Allow the customer to pull value.
➢ Pursue perfection
They outlined five key principles of this approach to value. Determine value for the specific
product. This is where you determine your performance metrics. Identify the value stream for
that product. Applying process mapping tools, you can determine the steps that add value to
your product and the steps that do not. Make value flow without interruptions. Applying the
principles of lean and their problem solving tools, you eliminate those non-value-added
steps. Let the customer pull value from the manufacturer. This is the basis of just-in-time
manufacturing that tells you to only produce what is needed to satisfy customer
demand. Pursue perfection, and this is the foundation for continuous process
improvement. Process mapping it is one of the key tools of the lean philosophy. The first
step to understanding the process is to draw a picture of that process. In this manner, you
can more easily see the flow of activities, and you can begin to distinguish value-added
activities from the others. Only after producing a clear map of the process can you begin to
apply the many lean tools available to improve that process.
Lean + Six sigma
➢ Waste
➢ Cycle time
➢ Inventory
Many of the lean performance measurements are also metrics of Six Sigma projects. Waste,
cycle time, and inventory are good examples. One of the limitations of lean is that their tools
are not based in statistics. So when variability is the cause of the problem, lean project
managers will call in a Six Sigma expert for assistance. Nowadays, it really takes an
understanding of both lean and Six Sigma applications when determining how to approach a

specific process problem. Most applications of lean have been done in a manufacturing
environment, so historically, that is where the experience lies.
Manufacturing Metrics
➢ Improved customer service
➢ Better use of recourse
➢ Reduced inventories
➢ High product quality
Metrics include improved customer service in every category, better use of machines and
people, reduced inventories, and higher product quality. Lean looks closely at such things as
machine layout, setups, highly trained workers, and on time delivery methods. Most large
and medium-sized companies are well acquainted with lean principles. But surveys indicate
that most small companies have yet to apply these tools and are often not even familiar with
the principles and performance metrics. So there's a lot of opportunity for process
improvements in the small business sector.
Activities and Process Metrics
➢ Reduced waiting time
➢ Improved delivery service
It's important to note that lean principles also apply to service activities and
processes. Typical examples might include reducing the time waiting in line at a restaurant or
improving delivery service for a transportation company. The principles for lean services are
the same as lean manufacturing. When you're launchin' a lean project, the most important
thing to remember is to start with a value stream mapping exercise. This is the foundation
for applying more specific lean tools and methods, and this is your first step to success.
3.2 Five Ss
[Instructor] The foundation for good processes is an organized workplace. Lean helps you
organize the workplace with a simple tool commonly called the Five S's. Although Lean
applications depend on a remarkable attention to detail, you start with a pretty simple
approach. The Five S's specifically define a system for organizing and standardizing the
workplace, and they come from Japanese terms that stand for, Sort.
Sort
➢ Ensure that each item in a workplace is in its proper place
Set in order
➢ Arrange materials and tools so that they are easy to find when needed

Shine
➢ Keep the work area clean
Standardize
➢ Establish formal procedures to ensure all steps are performed correctly and
consistently.
Sustain
➢ Continue the standardized process through effective training and communication
practices.
Ensure that each item in a workplace is in its proper place. If the item is not needed, remove
it. Set in Order. Arrange materials and tools so that they are easy to find when
needed. Shine. Keep the work area clean, which is also important from a safety
perspective. Standardize. Establish formal procedures to ensure all steps are performed
correctly and consistently. Sustain. Continue the standardized process through effective
training and communication practices. So let's take a closer look at Standardize. A big part of
this principle applies to machines in a factory operation. One goal is to find the
best equipment layout for the product. Often arranging tools sequentially according to the
process flow. Lean advocates a concept called cellular design, in which the equipment is
arranged in a U-shaped layout rather than being placed in a straight row. With properly
cross-trained production operators, five machines arranged as a work cell can effectively
be maintained by two or three operators. As compared to five operators in a straight line
layout. All machines are in line of site, and in closer proximity to the operators. Cross training
the operators in clearly specified procedures, allows for much more efficient staffing and
reduces wasted movement on the factory floor. And studies have shown, that such highly
trained, and efficient employees have a much higher level of job satisfaction. Another
important feature of Standardized is the application of visual controls throughout the
factory. If a machine is down or a part is defective for example, there is an indicator in plain
sight of all the employees. If needed, corrective action can be taken immediately. For
example chip companies use visual controls extensively throughout their assembly
plants. Each workstation has a system of red, yellow, and green lights mounted to the top of
the machine. Once glance across the factory floor can tell you which machines are up for
production, which machines are down, and which machines are in standby. I mentioned that
Shine is also important from a safety standpoint. Some Lean experts believe safety to be
important enough to be added as the sixth s. When streamlining processes and reducing
waste throughout your company you do not want to create an unsafe working
environment. When you think about it, perhaps the safety first policy is best supported by
making safety the first s. Implementing and sticking with the Five S's isn't always easy. But if
you do this again and again, and you do it right. You'll be getting your projects off to a good
start every time.

3.3 Just in time
- Henry Ford is considered the father of just-in-time in the United States. Simply put, Ford
did not believe in using warehouses. He bought material to fit the production plan, only
enough to meet immediate needs.
Ford recognized that transportation was a critical factor for success in such a strategy, so he
owned a private network of railroad cars and trucks to ensure smooth delivery of
materials. Well, that's what just-in-time is all about.
Just in Time
A manufacturing approach where raw material, components, and subassemblies are
delivered to the factory as they are needed for production.
JIT means that raw materials, components, and subassemblies are delivered to the
factory just when they are needed for production. This allows inventory to be maintained at
minimal levels, thus reducing costs and increasing flexibility within the system. Should an
item become obsolete or a defect is discovered, with minimal inventory it is much easier and
quicker to make the needed adjustments. JIT is applied within the factory itself also. Work is
not started into the factory until there is actual or forecasted demand for the final product.
Pull system
When customer demand drives the output of a factory and its internal operations.
This is commonly pulled the pull system in that it is customer demand that drives the output
of the factory and all its internal operations. This is a very important concept to
recognize because for decades most industries in America, including automobile
manufacturing, were run on business accounting principles. Maximizing the output of an
expensive machine meant you could spread those capital costs over more products. So
companies ran their factories at maximum production levels and hoped to sell all the
product they made during the year. Under JIT, work in process inventory is only moved from
work station to the next when it is needed.
This is commonly controlled by a Kanban system. Kanban means a sign or signal, and the
system uses a basic communication device, often just a simple card to notify each work
station when more inventory is needed. The card signals the work station to produce and
forward a specified amount of inventory just-in-time to the next work station. Total inventory
is reduced and throughput is increased, helping to reduce costs through a much more
efficient system. There are several key considerations to keep in mind here.
Just-in-Time Consideration
➢ Require an effective delivery system.

➢ Dependent upon standardized work process
A JIT strategy is highly dependent on an effective delivery system, as Henry Ford
recognized. The further away your suppliers are, the more difficult it is to deliver just-in-
time. One of the reasons the US struggles to implement JIT is that American companies tend
to source globally and regionally. Simply put, suppliers are further away. A JIT strategy is
dependent upon standardized work processes and methods that are consistently
performed. Variability is the enemy of just-in-time. Clearly, this is an area where lean and six
sigma work together to drive out both the variability and non-value added activities. As I
point out here, there are lots of interconnections in using these tools. For example,
standardized processes support just-in-time practices. As a lean project manager, you must
have a strong understanding of each tool and how it can be effectively applied to improving
your process.
3.4 Total productive maintenance
A factory cannot function unless the machines are working and available when they are
needed. Now that may seem like a pretty simplistic statement, but this is what Total
Productive Maintenance, or TPM, is all about.
Total Productive Maintenance (TPM)
Maintaining and improving the integrity of production and the quality of systems.
TPM tries to understand both preventive and corrective maintenance procedures and
to apply those methods in the most effective manner to keep the factory running when
needed.
TPM Ensure
➢ Machines will not break down unexpectedly
➢ Scheduled maintenance will be completed in a timely manner
TPM practices ensure that machines will not break down unexpectedly and that scheduled
maintenance will be completed in a timely manner. The goals here are to minimize
equipment downtime and maximize equipment availability. The approaches are closely
intertwined because the biggest factor in preventing unexpected downtime is to make sure
that periodic maintenance activities are diligently completed. This increases production
flexibility to allow changes as needed and helps to ensure a smooth flow of material through
the factory. The most significant contribution Lean has made in this effort is in the reduction
of setup times. I worked for many years in the chipmaking industry. And for much of that
time, we treated setups as a constant, as something that required a specified amount of
time that could not be changed.

Supervisors knew, for example, the weekly preventive maintenance on a particular machine
took three hours, and they felt they had no control over this activity. The machine was simply
going to be down for three hours, even longer if things did not go right. Lean concepts came
along, specifically applied in this case by Japanese chipmakers who believed that setup times
were a variable that could be managed.
Single-Minute Exchange of Die (SMED)
Reducing the amount of time and cost for performing a machine setup.
The Lean principle is called Single-Minute Exchange of Die, or SMED, and the goal is to
reduce the time and the cost of performing some machine setup, be it to perform scheduled
maintenance or to change the tool configuration needed to make a different product. A key
approach here is to map the process and identify those activities that can be performed in
advance of taking the machine down. In other words, you set up in advance for the
upcoming setup. The technician gathers all parts needed for a changeover or all supplies
needed for the scheduled maintenance before the machine is taken out of production. Of
course, the resulting decrease in downtime from applying the SMED approach means better
equipment availability and more efficient production scheduling. Changeover and
maintenance activities are made even more efficient by eliminating non-value-added
steps and standardizing maintenance procedures. By mapping the maintenance
processes, you are also able to find opportunities to smooth the maintenance activities over
time. Queuing theory experts who understand the impact of wait time have shown that the
longer a machine is down, the more congested the production line becomes. So more
frequent, shorter interval preventive maintenance is less disruptive to the production
flow than longer maintenance periods.
For example, with a better understanding of preventive maintenance task, you might be
able to spread some annual PM activities throughout the year. By spacing them out over the
required quarterly PMs, the annual PM is significantly reduced in exchange for only a small
increase in the time to complete each quarterly PM. Your emphasis on TPM efforts should
always be on improving production performance, and Lean offers many specific tools to help
you succeed.
3.5 Quality at the source
Henry Ford expressed it quite well when he said that quality is doing it right when no one is
looking.
To me, that's the essence of the concept of quality at the source. If you do it right, you do
not need anyone to inspect your work. The inspection step is no longer needed in the
process. A non value added activity can now be eliminated. Which further helps you to

streamline the process. Stop in a production line is not something one takes lightly. Bringing
production to a complete halt and then starting it up again is a very costly thing to
do. Toyota's production system astonished the manufacturing world when they authorized
any person on the assembly line to stop production if they saw a quality problem. Not the
manager, not the supervisor, but the line operator. All he had to do was pull a cord. This
ability truly allows quality at the source. Each individual is responsible for the quality of their
work and does not, under any circumstances allow a defect to pass onto the next work
station. If something is wrong with any part of the assembly process, the entire line is shut
down until the problem is resolved. This guarantees that the product meets specification
requirements as it moves from one station to the next. Just as it is used in the sixth sigma
methodology, mistake proofing is an important element of quality at the source.
Poka-yoke = Foolproof
The Japanese term for this is poka-yoke. Which means foolproof. And this is a commonly
used lean expression. Procedures are put in place to make sure a mistake is not made and
then passed onto the next station. The impact of quality at the source goes far beyond
product quality on the shop floor. In fact, this is a key enabler of just-in-time capabilities for
your company.
Quality at the Source Benefits
➢ Throughput time decreased
➢ Quicker delivery to customers
➢ Just-in-time delivery
If dedicated inspection steps are eliminated from your production processes, your
throughput time is significantly decreased. This allows you to deliver your products to your
customers quicker and with greater flexibility. Allowing just-in-time delivery if
requested. Quality at the source within your key suppliers also enables a just-in-time delivery
of materials, components, and sub assemblies to your factory. Suppliers are not delayed by
in-line inspections or by having to perform a final inspection before shipping to you. Because
you are assured that everything is within specification limits, you do not require an incoming
inspection when the items arrive.
In short, suppliers deliver materials that go directly from your receiving doc, to your factory
machines in a true just-in-time manor. Enabling this capability with your key suppliers and
customers makes for a highly competitive supply chain. The widespread benefits of quality at
the source make it one of the key elements of lean manufacturing.
3.6 Continuous improvement
If you're not getting better, you're getting worse.

Pretty good advice from Pat Riley, the famous basketball coach. You simply cannot stand
still because your competitors are continuously getting better and passing you by. You also
must continuously improve. The business world knows this too. Most of us work in a
continuous improvement environment and use lean principles to some extent.
Lean tools help with the reduction of waste and wasteful activities
Every lean tool is intended to enable improvement in the process through the reduction of
waste and wasteful activities.
Kaizen
➢ Gradual and orderly continuous improvement.
The lean expression is kaizen, a Japanese word that means gradual and orderly continuous
improvement. Kaizen is intended to be used in all business activities, not just in the
production area, but also in services, administration, safety, transportation, new product
development, and literally every part of the organization. So any effort to improve any
part of your business is technically a kaizen event.
Kaizen Philosophy
➢ You are not trying to make the process perfect. You are simply trying to make it a
little better.
With a kaizen philosophy, you are not trying to make the process perfect. You are simply
trying to make it a little better. The principles of kaizen are intended to be part of everyone's
daily work. There are specific improvement projects, of course, but continuous improvement
should be part of the company philosophy and guide the way we work.
Continuous Improvement Approach
➢ Operating practices and procedures
➢ Total involvement
➢ Training
As such, there are three very important aspects of a continuous improvement approach. The
first is operating practices and procedures. Company programs guide daily work, so they also
can reveal opportunities for improvement. For example, an on time delivery program quickly
reveals inefficient and weak processes, just as a quality program reveals weaknesses in
measurement and metrics. Another important aspect is total involvement. Everyone in the
company strives for improvement. Top management provides the support to encourage
improvement programs. Managers and supervisors direct their efforts more towards
improvement than supervision. Workers participate in suggestion programs and
improvement teams. You must also consider training. Self-development programs are
encouraged. Classes teach problem solving skills at all levels of the company. Everyone is
seeking to enhance their job performance level. Needless to say, moving into a continuous

improvement mode is not a quick and easy thing. It takes time to change the organization's
culture. Now, I mentioned that kaizen is a gradual and steady approach to
improvement, looking for incremental changes, but sometimes the business situation
requires a little faster movement in the right direction.
Kaizen Blitz
➢ Expedited improvements made under tight deadlines.
If a performance issue or a quality problem comes up that must be solved quickly, we can
apply the kaizen blitz approach.
This is an intense and rapid improvement process. The company provides all the people and
resources needed for what is usually a very short time period. Kaizen blitz teams are expert
enough to understand the problem and are empowered to make the changes required to
implement a solution. All team members are dedicated full-time to the effort until a solution
is implemented. The kaizen blitz approach has proven to be very effective in such emergency
situations. As a final thought, it's important to recognize that continuous improvement
is what connects lean with Six Sigma. Continuous improvement is found in the kaizen
approach of lean and in the control phase of the Six Sigma DMAIC methodology. In a
continuous improvement business environment, lean and Six Sigma can provide a much
needed formal structure for the company's efforts. So the question is not whether your
company should use lean or Six Sigma. The real question is how can you use both these
approaches to continuously improve your processes and stay ahead of your competition?
3.7 Question 1 of 2
Many of the Lean performance measurements are also metrics of Six Sigma projects.
Three of the following choices are good examples of performance measurements. Which is
not?
o Cycle Time
o Waste
o Inventory
o Profit
3.8 Question 2 of 2
Use of a sign or signal to notify each workstation when inventory is needed is called a:
o Pull system
o Kanban system
o Delivery system
o Standardized system

4. Implementing Lean Six Sigma
4.1 Lead the project
- John F. Kennedy once said, "Leadership and learning are indispensable to each other."
We can apply this thought to a Lean Six Sigma project. Success is very dependent upon an
organization that will provide strong leadership and also be open to learning from their
experiences. To be successful in leading a Lean Six Sigma project, there are three things you
need from your company.
Lean Six Sigma Success Criteria
1. Leadership from the top
Leadership must be communicate the strategy and demonstrate their support in their
daily activities
First and foremost, leadership from the top. The organization has to be committed to a Lean
Six Sigma strategy. And equally important, top managers must effectively communicate that
commitment and must continuously demonstrate their support in their daily actions. General
Electric is a great example of corporate leadership. GE launched Six Sigma with much
fanfare and then immediately notified every employee that being certified in Six Sigma was
now a condition of employment. I would say that is pretty effective communication. But also
important to note is that the company put its full resources behind supporting the new
effort by providing project budgets, training, and people to the certification program. Their
goal was to change the corporate culture and to do so practically overnight. Such an
assertive approach will not work in all companies, but it certainly worked for GE at that time.
2. Skilled team members
Every Lean Six Sigma project needs highly skilled team members, and that begins with the
project leader. The company must ensure that you as the leader of this effort are a properly
trained and a highly accomplished employee. Team members expect the team leader to be
an expert in both lean and Six Sigma practices and to have demonstrated a strong track
record of success in previous projects. The team and the company deserve nothing less. The
company must also ensure that you and your project get top talent when it comes to
assigning employees to the team. This is one where leadership from the top shows its true
commitment to the program. Because Lean Six Sigma projects are temporary assignments, it
is sometimes difficult for managers to release their best people when most needed. Their
willingness to do is a true sign of commitment.

3. Supporting Infrastructure
I cannot say enough about the importance of providing a supporting infrastructure. Simply
put, your project's success is directly dependent upon a pool of experts and applying lean
tools, Six Sigma methods, and project management skills. This requires an extensive training
program with resources to allow continuous learning throughout the organization. Projects
must have an effective system for both selection and review. Financial systems, planning
systems, and recognition systems all must be adjusted to support Lean Six Sigma
success. And lastly, following up on President Kennedy's statement, the organization must be
able to learn from the successes and the failures of each project and apply that new
knowledge to future projects. Before beginning a Lean Six Sigma project, think about these
three considerations and evaluate your company's position in each area. It will give you a
good indication in advance of where you might need to put your emphasis as a project
leader.
4.2 Control the project
Mario Andretti, the great race car driver believed that, "If everything seems under
control, "you're not going fast enough."
While that may be true in Formula One racing, but in managing Lean Six Sigma
projects, your success is very dependent upon controlling the project environment. Like all
projects, Lean Six Sigma goes through four phases during its lifecycle.
➢ Initiating
➢ Planning
➢ Executing (Monitor and Control)
➢ Closing
Initiating, planning, executing, and closing. In that all-important executing stage, you
monitor and control the project. Up to now, the Project Manager has truly been managing
things, making the proposal, getting necessary approvals, putting together the project
plan, and recruiting key team members. Doing everything needed to put the project in
motion. But now you turn from managing things to leading people and events. This is more
than just leading the technical effort to improve the process, or find a solution to the
problem. It means leading the team to a successful conclusion. One that favorably impacts
your company's performance.
Leadership Responsible
➢ Assignment
➢ Team coordinate
➢ Performance

You are controlling who does what. How individual assignments are coordinated into an
effective team effort, and how well each task is completed. And
This involves effective communication more than any other leadership
skill. Communication with all team members, make sure they are doing the right things and
also make sure that each member knows in which direction the entire team is
moving. Continuous communication with all stakeholders, like the process owners and top
management, which is important to ensure your solution can be more easily
implemented. Communicating with mid-level managers to make sure you have the
resources you need at the time you need them.
Technical expertise is importance
But I don't want to play down the importance of technical expertise. When a team member
runs into an obstacle with their Lean or Six Sigma approach, the first person they will turn to
is you, the Project Leader. Your level of technical skills in both Lean and Six Sigma must give
them confidence that you can help them with this particular problem. But don't forget that a
Lean Six Sigma organization has a support infrastructure that includes other experts and
project leaders who can assist you as needed. Master black belts who are experts in Six
Sigma methods are a good example of this, and their expertise should be brought to the
team as needed.
Implement a project review system
Another important aspect of control is to have an effective project review system. Managers,
stakeholders, process owners, and team members should have the opportunity to review the
performance as the project progresses through the execution phase. This safeguards against
the project going off track or losing focus on the central issue to be addressed. And equally
important, it almost guarantees acceptance of the final solution. People are naturally more
inclined to accept a change if they took part in formulating a solution. This acceptance is
critical to Lean Six Sigma's success. A solution that cannot be implemented is of no value to
the company at all. Controlling your project in this manner can make the difference between
success and failure for your company's Lean Six Sigma program.
4.3 Apply Lean Six Sigma to services
When Motorola first introduced Six Sigma, they focused totally on the shop floor and Bob
Galvin, Motorola's CEO at the time, estimates that decision cost them more than five billion
dollars in the first four years. You see, even manufacturing companies have service
operations. Lean and Six Sigma apply just as readily to purchasing, finance, engineering, and
transportation as they do to production processes. Motorola did not recognize this at

first and that's the five billion dollar opportunity they lost. Lean Six Sigma can help you
reduce complexity within your service processes.
Half of the work done in a typical service process adds no value in the eyes of the
customer.
Experts have estimated that as much as half of the work done in a typical service process
adds no value in the eyes of the customer and it is not just about reducing steps to speed up
the process. That's an important Lean contribution, but we also apply Six Sigma to reduce
the variability in the value added steps. Variability adds cost, time, and waste to the service
process. A classic example comes from Stanford Hospital several years ago. At the time, it
was accepted practice for each surgeon to specify a personalized surgical tray for each
operation. What instruments and supplies that surgeon wanted for each procedure. For
every surgical procedure the hospital performed, there was a different surgical tray for every
surgeon on staff. As you can imagine, this kind of complexity not only took much time and
expense, but also reduced the flexibility of the operating unit. The staff and doctors got
together and realized this was simply a personal preference, not a medical requirement. The
different configurations had little to no impact on the quality of care provided to the
patients. After some negotiations, the cardiac surgeons agreed to a standardized
configuration for all surgical trays. Non-value added steps were eliminated and process
variability was reduced. Along with a tremendous saving in cost and time. In applying Lean
Six Sigma to a service process, it's important to consider two things.
A slow process is usually caused by too much work in process
First, a slow process is usually caused by too much work in process. Complexity causes
reports, emails, sales orders, or customers to stock up. When there's too much in the
system, every item spends most of their time just waiting in line. Secondly, in most slow
processes 80% of the delay is caused by 20% of the activities. This 80/20 rule, or Pareto
Analysis, can help you readily identify the activities to attack first. You want to drive
complexity out of your service processes so that you become easy to do business with for
your customers and for your suppliers. I do want to point out that not all complexity is
bad. Sometimes the customer asks for a little complexity. Henry Ford ran a very simple
process to make black Model T automobiles. Alfred Sloan saw that some customers wanted
cars in different colors and cars that were a little more luxurious than a Model T. He created
General Motors. The key is to only allow the complexity that a customer is willing to pay
for and offer that complexity at the lowest cost possible.
How complex is your business?
Analyze the activities with the 80/20 rule. Then use your Lean Six Sigma tool set to eliminate
non-value added steps, reduce variability in the value added steps, and drive out
complexity. Improving this one process could be the start of your Lean Six Sigma program.

4.4 Lean Six Sigma for supply chain
There's an old saying that if you don't take care of the customer, someone else will.
Acknowledging this, every Lean Six Sigma project touches the final customer in some
manner, usually quality or cost or time. Today's applications for Lean Six Sigma have gone far
beyond the factory walls, spanning functional boundaries across the company and extending
throughout the entire supply chain. In finding solutions and improvements, your projects
touch different aspects of the supply chain. Let me use inventory management as an
example, because Lean Six Sigma projects for supply chain management commonly focus on
some aspect of inventory management. The purpose of having inventory is to meet demand
from your customers. If you discover a problem with meeting a particular customer's
orders, you may launch a project to determine why you are having this problem and to
implement a solution for your customer. You know up front that you don't have the right
inventory in the right place at the right time, because in this situation you are not delivering
to the customer as promised.
Causes of Inventory issue.
1. Poor forecast of demand
2. Supplier problems
3. Capacity issue
4. Transportation company
Perhaps there's a poor forecast of demand, creating a general inventory shortage. Or maybe
there's a problem with one of your suppliers for this particular product. There could be a
capacity problem at the factory. Or the problem could be with the trucking company you
hired to deliver those orders. Every business has a supply chain to manage. A Lean Six Sigma
inventory project must balance such things as demand, factory and supplier lead times, and
customer service levels across the supply chain. This goes beyond the classic cross-functional
team. You need a cross-organizational team. You need experts not only from different parts
of your company, but also experts from key suppliers of materials and services, because the
solution lies somewhere in your supply chain and not necessarily within your own company.
Lean Six Sigma is not just for manufacturing anymore.
Clearly, Lean Six Sigma is not just for manufacturing anymore. A process map of the supply
chain and an understanding of the key performance indicators are both very important first
steps. And remember, your company has many supply chains. In this example of an on-time
delivery problem, you must know the supply chain for this particular product and this
particular customer. Suppliers, for example, may be quite different for this product.
Supply Chain Projects
1. Strategic Gaps In Performance

2. Cost Reduction And Cost Avoidance
3. Customer Issues
4. Regulatory Issues
5. Safety Issues
Here are some typical Lean Six Sigma projects that could extend along the supply
chain: strategic gaps in performance discovered through benchmarking other
companies, cost reduction and cost avoidance, customer issues, regulatory issues, or safety
issues. One important thing to remember here is that.
Successful projects should be replicated throughout the company and its supply chain.
Replication is a key to success.
Perhaps you are having a customer service issue or a specific inventory control problem. This
is a really good application for a Lean Six Sigma project. But before you begin, make sure
you draw a comprehensive process map, because you could be going on a trip along your
entire supply chain and it is good to know that up front.
4.5 Question 1 of 2
Lean Six Sigma can successfully be applied to managing your supply chain. What is NOT a
typical method of improving supply chain functions?
o Source needed materials and services from suppliers.
o Use only internal experts. (These projects need a cross-organizational approach,
using experts from your company and also from key partners in the supply chain.)
o Make a product or provide a service.
o Construct a plan to meet customer demand.
4.6 Question 2 of 2
To be successful in leading a Lean Six Sigma project, what will you need?
o all these things
o leadership from the top
o a strong supportive infrastructure
o skilled team members

5. Exam
5.1 Question 1 of 11:
What is the most significant difference between improving an existing process and
designing a new process?
o When designing a new process, there are a lot more unknowns.
o Improving an existing process relies heavily on Voice of the Customer tools.
o Design for Six Sigma does not have a Define stage in the methodology.
o Existing processes are more focused on meeting the customer's objectives.
Which of these is a true statement?
o Almost half the work done in service processes add no value for the customer.
o 80% of the activities cause 20% of the delay in services.
o Lean Six Sigma cannot be applied to service organizations like hospitals and
purchasing departments.
o All complexity is bad.
You'll rely very heavily on _____ in the Analyze stage, which distinguishes Six Sigma
from other quality programs.
o senior management
o rough calculations
o statistical analysis
o qualitative analysis
The 5s principle specifically defines a system for organizing and standardizing the
workplace. What is NOT a 5s principle?
o Shine (keeping the work area clean)
o Sort (ensuring each item is in its proper place)
o Sequester (applying standardized processes to only a small minority)

o Set in Order (arranging tools so they are easy to find)
During the critical Define stage what does a Six Sigma team do?
o Determine what the project is and exactly what it should accomplish.
o Statistically validate the potential causes of a problem.
o Determines what data to collect and how to collect it.
o Determines training requirements for individuals.
What happens if a task is performed correctly and done right the first time?
o It likely required more time and resources than it was worth.
o The inspection step is no longer needed in the process. A non-value added
activity can now be eliminated.
o It should be expected that tasks won't ever really be performed correctly, and
will always require a revisit.
o Nothing is gained. A second inspection will always be necessary and
mandated.
What do Total Productive Maintenance (TPM) practices ensure?
o Equipment availability is minimized
o Machines do not break down so often
o Scheduled maintenance is not necessary
o Equipment downtime is maximized
Six Sigma is designed to guide quality efforts in every part of a business. It is based
on the belief that if _____, then there is less chance for defects to occur. I
o Management is limited
o Variation can be increased
o Defects are recorded

o Variation can be reduced
All of these choices contribute to improving your processes. But which is the most
important factor?
o Adjust operating practices and procedures.
o Have total involvement in your organization.
o Foster employee training.
What are managers of a Lean Six Sigma project responsible for?
o Assignments
o Reviewing how individual assignments are coordinated into a team effort
o Analyzing how well each task and individual assignment is completed
Why might Control be considered the most important step in the Six Sigma process?
o It connects the Six Sigma program with all company efforts in quality
management, engineering, and process improvement.
o In this phase, you make the improvement permanent.
o It enables you to have a continuous improvement organization.

6. Glossary
Use these terms and definitions to understand concepts taught in the course.
Term Definition
Variability The extent to which individual products differ from one another
Lean The elimination of all non-value-added activities, or waste created during
production of inventory
Productive
Maintenance
Ensuring all machines are working and available when needed
Inventory On-hand and ready-to-sell products
Six Sigma An approach used to reduce defects in a product and reducing process
steps
5 Whys
Investigation
Asking “why” until the root of a problem is discovered in order to
improve quality control
Poka-Yoke The Japanese word for “foolproof”; used to describe the Six Sigma
methodology of mistake-proofing the production proces

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