Equable Lean Six Sigma Boe English Presentation

Business Operations Excellence®
Lean Six Sigma Transformation


Reaching operational excellence with Lean Six Sigma
transformation

Franck Strub
January 2009

Copyright © 2009 Equable 1 Business Operations Excellence®
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Who are we?

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Who are we?

>  Equable is a global provider of Lean Six Sigma deployment and
training services to diverse Clients in US and in Europe.
>  Equable was founded in 2004 by Franck Strub, a former GE
Lean Six Sigma certified Master Black Belt & expert in business
process re-engineering
>  With the best Lean Six Sigma talents in Europe, we offer all the
services to plan, execute and manage your strategy in Lean Six
Sigma transformation

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Our Clients

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Our talent network
>  Our consultants are passionate by excellence
>  Our consultants are experienced & certified:
>  they worked in significant high positions in prestigious companies
>  they coached hundreds of Lean Six Sigma completed projects,
resulting in several $M productivity and savings
>  they taught hundreds of Lean Six Sigma classes
>  they certified hundreds of Master Black Belts, Black Belts and Green
Belts
>  Our consultants are pragmatic and “hands-on” oriented
>  They are expert in change management
>  They have a solid background in finance
>  They share common values: intellectual growth, people respect,
challenging mind, culture of result, quest of excellence

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Our partners

Minitab Inc. is the US editor of a six sigma statistical
software called MINITAB®. Equable is a reference
partner of Minitab Inc. and promotes its usage

Crystal Ball® is a Six Sigma Statistical Simulation
software tool that Equable selected. It is published
by Oracle, a US Company with whom EQUABLE
www.crystalball.com
has a partner agreement

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Our services

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Our services
From strategy alignment to project governance, our know-how includes:
>  Efficiency program definition, deployment and management
>  Project selection, definition, execution and management
>  People selection and development
>  Lean Six Sigma coaching
>  Lean Six Sigma training
>  Design For Lean Six Sigma
>  Lean Six Sigma certification of Master Black Belts, Black Belts and
Green Belts
>  Talent recruitment
>  Change management

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Our end to end process approach
Business response

Customer Voice of Customer
Market
/Customer
Continuous
expectations
Improvement
Processes Loop
Company strategy
Delay
Lean 6 Sigma program
Quality

Select Lean 6 Sigma projects
Cost

Select, train & coach people
Performance indicators

Execute Lean 6 Sigma projects $$

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our method for Lean Six Sigma deployment

PEOPLE PROJECTS METHODS/TOOLS
1 • Select • Choose the relevant • Review of skills
–  Who ? projects • Project Ranking
BOE® Plan –  For which project ? • Estimate the ROIs • Planification
–  When ?

2
• Train • Implement the • Lean Six Sigma
BOE®
• Certify projects (DMAIC & DFSS)
Execute • Change Management

3 • Change Management
• Guarantee acceptance • Review the projects
BOE® • Milestone Reviews
and alignment
Manage

4
• Promote Talents • Report the output of • Communication
BOE®
the projects • Performance review
Report

Copyright © 2009 Equable Business Operations Excellence®
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BOE® Plan services:
a b c
Identification Initial sort of the Project definition
1
of all the potential project
BOE® Plan potential list
pojects

2  Estimate each project  Define project charter
 Voice of customers
BOE® against a benefits draft including the
 Voice of employees
/cost matrix business case
Execute  Voice of enterprise
 Define the adequate
 Voice of competition
d
methodology for each
3  Voice of shareholders project
BOE® Team selection
 Organization  Retain crucial
Manage assessment projects  Define teams and
 Operational program  Define a flight plan roles and
4 deployment strategy responsibilities
BOE®  Define training plan
Report  Define support plan
 Define PMO

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BOE® Execute services:
Implementation of Lean Six Sigma Projects in the perspective of training and
rolling out the organization
1
Training programs
BOE® Plan •  Master Black Belt : 5 weeks
•  Black Belt : 4 weeks
2 •  Green Belt : 2 weeks
BOE® •  Yellow Belt : 2,5 days
Execute •  Champion & Steering Committee members : 1 day
Coaching : support of Black Belts and Green Belts while
3 implementing the projects, PMO, support of Management
BOE® Certification:
Manage •  Define the Lean Six Sigma certification criteria of the
client
4 •  Assess and Validate the projects carried out by the
BOE® Master Black Belts, Black Belts and Green Belts
Report •  Set up the Lean Six Sigma tests and test the Master
Black Belts, the Black Belts and the Green Belts

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BOE® Execute - Each individual Lean Six Sigma
project respects a common framework & timeframe
Month 3 Month 4 Month 5
Month 1 Month 2

•  Identify the issues and the scope of the project, the objectives and the business plan
•  Set up the macro-planning and the project team
Define •  Map the macro-process (SIPOC)
•  Voice of the Customer
(3 weeks)
•  Formalize and validate the Project Chart

•  Define the data collection program
Measure •  Collect the data for each indicator for all the end to end processes
•  Analyze and validate the proposed measurement system
weeks)
(5
•  Measure the “as is” process performance

•  Analyze the statistic data
Analyze •  Analyze the detailed process mapping
•  Analyze the process added value
(6 weeks)
•  Identify the inefficiency root causes

•  Identify improvement solutions addressing the root causes
1
Improve
•  Plan, develop and implement pilot solutions
2
•  Roll out the solutions (5 weeks) 2
1 3
3

•  Monitoring of the output
•  Control and audit the
Control
sustainability of the output
•  Standardize and transfer the (3 weeks +)
output to the process owner
•  Close the project

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BOE® Manage and Report
Support of the individual Lean Six Sigma projects and monitoring of the global
flight plan

1
BOE® Plan Manage
•  Customization of the Lean Six Sigma referential
2 •  Change Management – People acceptance
BOE® •  Lean Six Sigma project review by their sponsors
Execute Report
•  Performance review of the Master Black Belts, the
3 Black Belts and the Green Belts
BOE® •  Promotion of the Master Black Belts, the Black Belts
Manage and the Green Belts
•  Communication of the plan and the vision
4 •  Communication of the output & benefits
BOE®
Report

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BOE® - typical timeframe & approach
2010-2011 2012
2009

In a decentralized environment a
regional entity can volunteer for the
Pilot Phase Pilot Phase and provide a positive
background of internal competition

• 12 Black Belts To be adapted according to the
• 12 Pilot projects (proof of concept) + 12 projects in first year resource availability and the
change management culture

Roll Out

•  60 additional Black Belts
•  120 projects per year with 60 Black Belts (acceleration pace)
•  Executive training
• Sponsor & stakeholders trainings
• Green Belt trainings
Knowledge Transfer

• 60 additional Black Belts
• 240 projects per year with 120 Black Belts (cruise pace)
• Training of Client’s Master Black Belt
• Lean Six Sigma License transfer

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Lean Six Sigma benefits
>  Revenue growth through:
–  increased customer satisfaction
–  introduction of quality products & services
>  Margin increase through:
–  less non quality costs (reduction of defects, wastes and manual
rework)
–  more productivity and capacity (reduced cycle times)
>  Potential Gains per project*:
–  Cycle time : 30%-70%
–  Defects : 70%
–  Costs : 30%-50%
–  Capacity : 20%
–  Productivity : 20%
–  Project ROI : 4 in one year
–  Project benefits : 400 K€
*non contractual values depending on projects

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Who is doing what in Lean Six Sigma?

Top Management Engage and promote Lean 6 sigma
Quality Manager/ Select processes, projects & people.
Make plan. Change Agent
Champion
Lean Six Sigma expert. Train and
Master Black Belt/Expert
coach Black Belts and Green Belts
Black Belt/Project Leader Deliver Lean 6 Sigma projects. Full time
project leader.
Green Belt/Team member Contributes to Lean 6 Sigma projects

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Our Lean Six Sigma Trainings

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Lean 6 σ for Executives training agenda

Lean Six Sigma for Executives: 1 day
Introduction to Lean Six Sigma
Change Management of Lean Six Sigma
Process Optimization with Lean Six Sigma
Lean Process Analysis and Improvement tools
Methodology DMAIC 6 Sigma
Methodology DMADV 6 Sigma (DFSS)
Project Governance
Roles in Lean Six Sigma:
•  Champion
•  Black Belt
•  Green Belt
•  Sponsor
•  Stakeholders
Lean Six Sigma deployment (theory)
Lean Six Sigma deployment (exercise)

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Lean 6 σ Black Belt training agenda
Week 1: Introduction to Lean 6 σ with focus on Lean
Week 2: Lean Six Sigma DMAIC
Recapitulation of week 1
Process Optimization with Lean Six sigma
Define
Lean Process Analysis and Improvement tools:
Measure
•  Process Mapping
•  8 wastes identification Introduction to Minitab™
•  Value Stream mapping Analyze (Process Analysis & Data Analysis)
•  Notions of 5S Improve
•  Setup time reduction Control
•  Total Productive Maintenance
Use of DMAIC template & Storyboard
•  Standard operations & Continuous flow
Work on real projects: Review of trainee projects,
•  Kaizen event
Interactive coaching, plan
VOC, CTQ selection, measurement and monitoring
Customer Business Process Review + Projects
Selection and Project definition and plan for Week 2

Week 3: Lean Six Sigma DMAIC
Recap of week 2
Measure Six sigma tools
•  MSA (Gage R&R)
•  Performance measurement
Analyze (Statistical Analysis)
Improve Six Sigma tools (Regression, ANOVA, DOE
introduction)
Control (SPC)
Project Leader Guide
Follow up on all the real projects : Review of trainee
projects, interactive coaching, Plan to close projects

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Lean 6 σ Green Belt training agenda
Week 1*: Introduction to Lean 6 σ with focus on Lean
Process Optimization with Lean Six sigma
Lean Process Analysis and Improvement tools:
•  Process Mapping
•  8 wastes identification
•  Value Stream mapping
•  Notions of 5S
•  Setup time reduction
•  Total Productive Maintenance
•  Standard operations & Continuous flow
•  Kaizen event
VOC, CTQ selection, measurement and monitoring
Customer Business Process Review + Projects Selection
Project definition and plan for Week 2

Week 2*: Lean Six Sigma DMAIC
Recapitulation of week 1
Define
Measure
Introduction to Minitab™
Analyze (Process Analysis & Data Analysis)
Improve
Control
Use of DMAIC template & Storyboard
Work on real projects: Review, Interactive
coaching, plan

*Note : week 1 and week 2 of green Belts are similar to week 1 and week 2 of Black Belts. This allows trained Green Belts to become Black Belts by taking
only a Black Belt Week 3 incremental training

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Lean 6 σ Yellow Belt training agenda
Day 1:
Process Optimisation with Lean Six Sigma
DMAIC project framework
DEFINE phase
•  Project charter
•  Business Case
•  Project plan
•  Voice of Customer

Day 2:
MEASURE Phase :
•  Measurement system validation
•  Data sampling and data collection
•  Graphical display of data
•  Performance measurement
ANALYZE Phase :
•  Process analysis and mapping
•  7 types of wastes (Mudas)
•  Value Stream Mapping

Day 3 (half day):
ANALYZE Phase (cont.):
•  Cause analysis
•  Data analysis
Kaizen events
IIMPROVE phase
CONTROL Phase
Lean Six Sigma project closure

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Change management training agenda

Change Management
Objective: be able to implement and to manage efficiently
a fast change by working on its acceptance

Introduction to efficient change process
Change profile
Prepare teams for success
Define change project
The need for change
Setup a vision and communicate
Motivate and engage people on change
Lead the change
Follow up the change
Changing Systems and Structures
Questions and answers

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Meeting facilitation skills training
agenda
Meeting facilitation skills
Objective : be able to facilitate efficiently a productive
working meeting/workshop by following a timely process

Introduction
Principles of facilitation
•  Content versus Process
•  Diversity in teams
•  Exercise
•  Basic facilitation principles (diagnostic and reaction)
•  “Bloody meeting” video
•  Preventions and interventions
•  Conflict management
Tools and Process
•  Tools for idea generation
•  Tools for problem cause analysis
•  Tools for solutions (generation and selection)
Real case study:
•  Idea generation
•  Problem cause analysis
•  Solution generation and selection
Questions and Answers

= Video recorded exercise

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www.equable.fr
www.equable-us.com

email: franck.strub@equable.fr
cell phone: +33 (0)6 89 06 13 98

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Appendixes

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Lean Six Sigma
Lean Six Sigma is the integration of Lean and Six Sigma

Lean Six Sigma

  Increase speed of processes   Improve quality
  Eliminate the Wastes   Reduce defects and variation

Resulting into

An operational excellence methodology centered on Customers
A pragmatic, disciplined and results oriented approach

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Lean origins

Womack & Jones Michael George

1900-1940 1945-1990 1996 2002-Present

“Toyota “Lean “Lean and
“Mass production of
Production Thinking Five Six Sigma
inexpensive cars using
System” Principles” Integration”
the assembly line”

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Toyota Production System House

Superior Quality
Reduce Costs & Delays
Improve Safety & Morale
JIDOKA: JIT:
Hilighting/ Just In Time
Visualization of problems Productivity Improvement

+
Quality must be built in Making only quot;what is needed,
during the manufacturing when t is needed,
process! and in the amount needed!quot;

Heijunka (Sequence plan) Standard Work Kaizen
Operational Stability
The TPS House was developed by Taiichi Ohno and Eiji Toyoda to make it easy to explain Toyota's continuous
improvement system to employees and suppliers. The aim of TPS is to eliminate all muri, mura, muda
(overburden, unevenness, waste) from the operations.

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Lean five principles

Specify Value… from the customer’s point of view
Identify Value Stream… map process & see wastes
Flow… move one piece at a time continuously
Pull… let the customer pull your product
Perfection… always improve the process

From Lean Thinking by James P. Womack and Daniel T. Jones, Free Press

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Lean tools
Lean designates a set of tools which has been first used in Manufacturing in
the 60’s (coming mainly from the Toyota Production System) and now used in
the service industry (business transactional processes). The Lean tools allow
the optimization of production and transactional processes flow. The Lean
tools are :
>  7 forms of wastes (Mudas)
>  5 S (Clean, order and optimize its workplace)
>  Kaizen (Change to become good)
>  Jidoka (Highlighting/Visualization of problems)
>  Value Stream Mapping (Process value analysis)
>  Just in Time, Pulling systems & Kanban refurbishing systems
>  Quick Changeover (Setup time optimization)
>  TPM (Total Productive Maintenance)
>  Process Standardization: alignment of production with demand (Takt time,
Heijunka), Standard Work

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Six Sigma origins

1989- 1990- 1994- 1995-Present

“Adopters “1st Six Sigma “Six Sigma
“Premise of Six
of 6 Consulting expanded to non
Sigma”
sigma” company” manufacturing
functions”

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6 sigma
>  Sigma is a Greek letter which represents the standard deviation in
statistics.
>  Having a six sigma performance (or process capability) means that we are
producing only 3.4 defects per million of operations!!
6 sigma
Histogram
frequency
Assumptions:
• Long term observed data
µ Contractual • Normal distribution
specification Probability of defects = 0.00034%
50 limit or 3.4 defects per million of
opportunities
σ Z Long Term = 4.5 (I can place 4.5
sigma between my specification limit
and my mean µ)
Z Short Term =Z Long Term + 1.5
Z Short Term = 6

10 Expected performance=6 Sigma
4.5xσ
defects Characteristic
0
1 2 3
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Continuous improvement

1

ZST DPMO** Methodology
Simplify/clean up
Lean 6 σ
3σ 66807
CTQ* Lean 1
4σ 6210
Process

DMAIC 2
5σ 233
3 2

DFSS***
Design Improve 3
6σ 3.4
for 6 σ
*CTQ Critical To Quality
**DPMO Defect per Million of opportunities, long term data
***DFSS Design For Six Sigma

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Lean 6 Sigma example

Distribution Cycle Time example:
>  The cycle time of a distribution company, from customer order to
customer delivery should not exceed 3 days (our contractual terms &
conditions)
>  The Customers complain.
>  The competitors are better than us. They never exceed 3 days
>  The Management says “we are loosing money”
>  The team in place says “we dispatch in average the same day we
receive the order and we always use a 24 hours delivery carrier”

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Lean 6 Sigma DMAIC five phases

•  Define your Business problem
• Define
• Measure •  Measure your actual process performance (Y)
• Analyze •  Find the main root causes (Xs) of your defects
• Improve •  Improve & implement solutions
• Control •  Control that your new performance is sustained

•  Standardize & close the project

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Problem statement: we miss our contractual obligations of delivering in less than 3 days
Process in which we have a business problem:

?
process as felt by the customer

Collect Order &
Ship Unit delivery CUSTOMER
Forward Procurement
Order
CUSTOMER
to Customer & Bill
to delivery deptmnt

Lead time is the measurement

Definition Specification Performance
Targets/goal
limit

CTQ* Lead time 3 days 99.99% < 3 days
*Critical To Quality

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Measure

Measure your problem and your defects
Lead time distribution
nb of
Trend Contractual/Customer
occurences
Specification
50
Limit

Observed probability
of defects=12.03%
26/216

defects
10
Variation Time from
order to delivery
0 in days
1 day 2 days 3 days
Histogram

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Measure conclusion
I observed a probability of defect of 12.03%!
My performance is 2.67 σST*. We have a problem!
6 sigma goal is to reach 0.00034% of probability of defect!
Defects per million of
% defects
ZST value* opportunities

2σ 308537 30.8537%
2.67 σ 12.03%
3σ 6.6807%
66807
4σ 0.6210%
6210
5σ 0.0233%
233
6σ 3.4 0.00034%
* For short term data with ZST=ZLT+1.5

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Analyze
Analysis – finding the root causes (Xs)!
>  Pareto chart of the 26 defects
20
77%

Miss 3 pm
carrier for
outside
Paris
region
4
15%

Incomplete
2
shipping 8%
address
Other

>  2 causes represent 92% of my defects
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Improve
KAIZEN

New Cycle time from order to delivery distribution
2 actions taken:
µ
nb of
>  Speed cycle by
Contractual/Customer
occurences
processing “Outside Specification
50
Paris region” orders Limit
first & organize an σ Short term data
earlier transfer to Observed probability
shipping department of defects=0%
by removing some Expected performance: 6 σ
non value added I can place 6 σ between µ
tasks (unnecessary and the spec. limit and the
sign offs) distribution is normal!
10
6xσ
>  Change address Time from
defects
format and control it order to delivery
0
at order time (avoid in days
quality issues) 1 day 2 days 3 days
Histogram

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Lean 6 Sigma financial impact
Cost of Failure Budget :
(% Sales) •  I sell 10 € every unit
40% •  Operational margin = 25% (2.50 €)
•  every defect costs me 24 €!
35% •  at 2,67 σ (12,08% defects) I lost 40 cents
every unit I sold!!
30%

20%

15%

10%

5%

DPMO 3.4 233 6210 66807 308537 500000
Sigma 6 5 4 3 2 1

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What could Lean 6 Sigma do for you?
Nb of Manual
Human Interactions*
After
Before
Take orders offline
orders 1
4
(laptop)
Sales
Synchronize orders
Web Order Book project

Repr. by email connection
eBook
Update orders
on Intranet
Coordi 1
6
Submit order to
nator Production
Manufacturing orders

10 st dev 1.6 2 st dev 1
TOTAL
520 K€ of
saving

* averages

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What could Lean 6 sigma do for you?
% of time spent by 8 persons doing financial manual
entries before and after FPA project implementation

100%
>  140 K€ saving

>  Overtime reduced

>  Interim reduced

>  More time for analysis
(added value task)
50%

Before After

27% reduction of time spent by 8 financial analysts
…gives 1.75 Full Time Employee proven benefit!
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Lean 6 Sigma business case examples
Cash improvement:
Our customer wanted to reduce their current overdue by 80% from 10 M€ (representing more than
10% of one year revenue) down to 2 M€. Potential benefit: 5% (cost of money)*8 M€ = 400K€. Cost of
Six Sigma project: 100 K€. Return on investment: 4. After analysing 4 months of receivable aged
balance it was found:
>  the receivable aged balance was not measuring the real overdue (revenue recognition
issue) 15% deviation
>  20% of the invoices had no payment due date.
>  15% of the invoices were not addressed to the right international financial and funding
organisation (special contracts funded by IMF, WB, etc…)
>  33% were customer disputes
>  17% were real late payments (5% because of invoice sent too late, 12% without a valid
reason but were not chased)
After fixing the main issues and changing the invoice process we reached a stable monthly overdue
amount of less than 1.9 M€.
Project Sourcing efficiency:
Our customer wanted to increase their margin on the projects that they are selling. Due to a tough
competition, it was decided to source more efficiently the services and the IT systems. After a first
financial analysis, we started one project on Low Cost Country Sourcing. Potential benefits on one
year: 620 K€. Cost of Six Sigma project: 120 K€. Return on Investment: >5. For this project, we have
redesigned the sourcing processes, introduced a new Purchase Forecast tool and assigned Goals &
Objectives to Buyers. As a result of these changes, the amount of purchases made in Low Cost
Countries increased from 18% to 24% in 6 months, with a forecast of 30% in the next 6 months.

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Lean 6 Sigma business case examples (2)
Customer order Webification:
Our customers wanted to automate and optimize their Customer order process from sales
representatives taking orders to Back office logistic persons transmitting orders to manufacturing and/or
suppliers:
Potential benefits (productivity and capacity gains) : 55% of gains on 11 people *87K€ = 520K€. Cost of
Lean Six Sigma project: 120 K€. Return on investment after one years = 4.33
After a Value Stream Analysis and a confirmation meeting with main stakeholders it was decided to:
1.  Simplify the process (suppression of administrative validations (not necessary and ceating
delays and errors)
2.  IT « Webification » of the Customer order process (orders taken offline on sales laptops
and sent/synchronized with email)
3.  Automatic interface with supplier IT system and only one validation in all the process
After a training of involved parties and a 3 months pilot of the new process, the measurements done
confirms that only 5 employees can manage and process an identical order volume.

Financial Analysis Optimization:
Our customer wanted to use the ORACLE-GL Financial analysis module instead of Excel, to realize all
its analytical financial reports. Potential benefits: (productivity) : 3 interims*50 K€ = 150K€. Cost of
project Lean Six Sigma : 50 K€. Return on investment after one years = 3
After an exhaustive inventory listing of all the existing analytical reports, their value and the cost to
produce them, it was decided to keep 12 standard reports and to model them into Oracle-GL. After 2
months and few tunings, the measurements shows that 98% of all demanded analysis can be answered
with the Oracle-GL analytical module.

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Team development training agenda
Build and develop efficient teams
Objective: become an efficient team

Introduction
Individual preferences and diversity in teams
•  Questionnaire Myers Briggs Type Inventory (MBTI)
•  Scales and types overview
•  Group picture (strengths and weaknesses)
•  Exercise and Discussion
Working together:
•  Team exercise (Tower building)
•  Debrief
•  GRPI tool
Team Development: steps and needs:
•  Introduction
•  Team evaluation
•  Discussion
Trusting in each other:
•  Team exercise: «Walking together»
•  Debrief and discussion
Teamwork:
•  Exercise (Survival Challenge)
•  Debrief and discussion
Questions and Answers

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