Hello again Blogosphere. My apologies for 1 year of blogging silence. More and more I apply Lean methods to Six Sigma efforts. Overanalysis is a trap in many projects, especially when newly trained belts unleash their newly acquired skills to their first projects. Keep it simple and practical ! It’s amazing what a good executed basic quality or problem solving tool can bring in process improvement results.

This first blog will be an illustration of how application of basic tools help to structure improvement project selection.

Recently I was called to assist a customer that had identified a couple of hundred issues in their organization. Off course these can’t be resolved all at the same time. By using some basic tools we managed to sort the wheat from the chaff : categorizing these issues by the KANO model, mapping the issues to the organization process architecture helped us to identify the most critical processes for improvement. Then SIPOC studies of the critical processes identified potential improvement projects by the gap analysis between process inputs and process CTQ’s and process outputs and customer CTQ’s.

From a couple of hundred issues crying for attention the situation is now focused on a couple of critical improvement projects, just by good execution of some basic tools ... and the good part is, it only took me and the customer team a couple of days to get to this point.

When you are just started to work on a new project, as Six Sigma professional you are conditioned not to jump to conclusions and let the data and facts guide you to process improvements. However, by asking yourself two simple questions at the start of such an improvement initiative, you be able to get a first idea of where to start looking for improvement ideas.

1. Is the process customer facing or not ?
A customer facing process delivers its outputs to external customers (or front office if you like) Examples : call centres operations, sales and after sales service ….
Non-customer facing processes deliver their output to internal customers. These are typically back-office operations like planning, dispatching, purchasing, etc …

2. Is the process a repetitive or not ? Repetitive processes return in a time set manner. The repetition can continuous or can be separated in time. Examples of repetitive processes : the financial reporting that has to run every month (separated in time), many manufacturing-like processes repeat continuously.

In a non-customer facing process with repetitive work you need factory-like processes. Improvements will be focussing on flow creation, reducing waste and overburden, improving ergonomics, automation and standardization of work.

Non repetitive and non customer facing processes need the job shop approach and require highly skilled employees, specialist in their area, supported by the required systems and organisational structures.

A non-repetitive and customer facing process requires professional service type of processes. Improvements will focus on skill development building, first time resolution improvement, building customer relationships, etc …

Repetitive and customer facing : mass service process. Think about services like postal offices, hospital admissions, fast food restaurant services, etc … Standardization of work and customer friendliness in all its aspects are main areas for improvements.

“Are quality and change one of the same thing, can you have one without the other or are they inextricably linked?”

What is Quality ? http://en.wikipedia.org/wiki/Quality
Quality can refer to
a. a specific characteristic of an object (the qualities of ice - i.e. its properties).
b. the achievement or excellence of an object (good quality ice - i.e. not of inferior grade).
c. the essence of an object (the quality of ice - i.e. "iceness").
d. the meaning of excellence itself.
The first meaning is technical, the second practical, the third artistic and the fourth metaphysical. All four meanings, and therefore the meaning of quality, are synonymous with good.

What is Change ? http://en.wikipedia.org/wiki/Change
Fundamentally, Change denotes the transition that occurs when something goes from being the same to being different. For example, water in the liquid state is not the same as water in the frozen state. At some point, it experienced a transition and became different. Thus, it changed.

Combining these two definition leads to the logical conclusion that quality and change are 2 different things.

However, quality improvements, what we quality professionals work on day-in and day-out on the shop or office floor, is all about the transition of processes, products and services from the current to an improved future state, are a different story. Quality improvements and change are logically inextricable linked.

There are 3 kinds of lies: lies, big lies and … statistics.

Many news topics are based on so called statistical studies.
In average … the conclusions are based on the average.
In average … there is no mention of the data range or other variation metrics, like standard deviation.
In average … there is no mention of sample size.

The other day I heard a great example of the above on the radio regarding the correlation of traffic jams and people working from their home office. The hypothesis attached to the story is : home working does not reduce traffic jams.
Due to the difficult traffic situation, like in any other densely populated area in the world, and the opportunities offered by modern technology with virtual private networks set up over broadband internet connections, it becomes more and more popular that people work from their home office a couple of days per week.
According to a study, in average ;-), people working from home use their car more often then if they would work in an office. Compared to the latter, people that work from home use the car to go shopping and take their children to and from school, which coincides with traffic rush hours. As a result and conclusion the hypothesis is not rejected.

I don't know what bothers me most. The fact that these people need to go shopping and take their children to school, regardless the location from which they work or the undoubtedly incomplete and simplistic reflection of the study details. As usual, there was no mention of sampling strategy and size, geographical area where the sample was taken, if there was a significant difference in mileage or time people are driving (which is a different metric with higher environmental and society impact), etc …

For me, incomplete statistics really are a 3rd kind of lie, whether they are used in the news or to solve business issues.

According to Wikipedia, the internet encyclopedia, Kaizen http://en.wikipedia.org/wiki/Kaizen is : “Japanese for "change for the better" or "improvement", the English translation is "continuous improvement” or "continual improvement." The goals of Kaizen include the elimination of waste (defined as "activities that add cost but do not add value"), just-in-time delivery, production load leveling of amount and types, standardized work, paced moving lines, right-sized equipment, etc.”

The above implies that Kaizen would only be applicable in a factory-like production environment. Too bad for all of you in service and transactional activities!

But, Wikipedia continues “A closer definition of the Japanese usage of Kaizen is "to take it apart and put back together in a better way." What is taken apart is usually a process, system, product, or service.” This is interesting as it opens the door for trying it in service, transactional and/or IT driven environments also.

And finally Wikipedia states “The only way to truly understand the intent, meaning, and power of kaizen is through direct participation, many, many times.”
In other words, don’t hesitate if you want to experience the true power of a Kaizen event, just go out and do it, as I have done a couple of times just recently. It delivered us great results and learnings in just a couple of days.

Transactional Kaizen are focused, well scoped, time limited (a couple of days max), business improvement initiatives. The mere fact that one is focusing on 1 subject eliminates mental change-over time. This results in high participant motivation and satisfaction and most importantly, faster, better results then the traditional weekly 1-hour problem solving meetings that tend to go on for ever and ever as scope creeps away over time.

Consider you require a service in August and get feedback that you are waitlisted 6th (with 5 requests before yours) due to lack off resources. The outlook is that somewhere in September you’ll be helped. You decide to live with this answer and patiently wait. The remainder of August and September pass by and off course…nothing happens! No communication, no delivery of the requested service, nothing….

At the beginning of October you pick up the phone and after 3 transfers to people that might know, you inquire politely about the status of your request. You find out you are still waitlisted and in 6th position. You get an unsatisfactory explanation why the situation is what it is.

Then you decide to change tactics and express your customer dissatisfaction and frustration. You might even ask for the manager….All of a sudden, you are no longer waitlisted, the service you required since August is available next week, because resources are available in another part of the supplying organisation.

What does this story teach us?

1. This organisation would definitely benefit from a business process improvement program to sort out their business.
2. A kind, patient and polite customer seems not to be heard. The only VOC seems to be the loud and frustrated VOC in far too many cases.

I’m sure many more learnings can be deducted from this non-fiction story. Feel free to comment.

Why are we struggling with selecting the “right” Six Sigma Black Belt projects? The “right” projects are the projects that are delivered on time, within the budget and generating or exceeding projected savings in a sustained manner. The “wrong” projects are by default all other.

Now think about your own organization. What’s the proportion of “right” and “wrong” projects in your Six Sigma project population? You may just have found a new project idea: “Decrease the number of wrong projects for my organization.”

It could be a nice to start a Six Sigma project out of this idea, but would it be a “right” Six Sigma Black Belt project candidate?

Let’s process this idea through a project selection filter, a series of 10 relatively simple questions that need to be answered before any more time and resources are spend . Forcing you to carefully think over the idea, a rule of thump is not to spend more then 2 man-hours on this exercise. A positive answer scores you +1 point, a negative answers scores -1 point, a neutral answer scores 0 points.

1. Does the idea fit to the company big Y?

What is the company’s big Y? What is your CEO’s and management team strategic agenda? Refer to internal communications, the company’s website, annual reports … or just ask them!

“Decrease the number of wrong projects for my organization” fits the big Y when you find statements similar to “improving business process using improvement methodologies like Lean or Six Sigma (or equivalent)” in any of the mentioned sources.

Score: +1

2. Is there direct Impact to the external Customer?

The Customer (with capital C) is the one that your organization exists for. Customers are buying your product and thus paying your salary and annual bonuses! It may be difficult to estimate any direct impact “Decrease the number of wrong projects for my organization”, however you may expect by achieving this project the customer will indirectly benefit from this project. This is a neutral answer.

Score: 0

3. Is there impact to the internal customers?

Probably the same answer as for question n°2, although you may expect a higher impact on internal customers. If more projects succeed, processes will be more robust and with less waste, allowing your internal customer to work differently and become more effective.

Score: +1

4. Is data available or can it be gathered in a reasonable time?

Probably, there is some kind of project tracking system, which should be a fairly reliable source of data for our project idea.

Score: +1

5. What is the cost of poor quality?

If not identified score: -1.

What can you consider as cost of poor quality for our idea? What are the consequences of “wrong” projects?

Consider this memory jogger to reduce the risk of forgetting important cost drivers:

COPAFILT

Commercial: internal & external customers, marketing, external communication …

Organization: structure, decision authority, internal communication …

Personal: number of employees, education, motivation, remuneration …

Administrative organization: processes, tasks, activities, support logistics …

Finances: budget, investment cost, financial costs …

Information: information systems, communication, data management, documents, reporting …

Legal: legal aspects, contracts …

Technology: computers, hardware, network, facilities, means of communication …

Consequences of “wrong” projects: decreasing motivation of the improvement teams (people may start to update their resumes and leave the organization: quantify the cost of replacement and training of newcomers), missed commercial opportunities (quantify missed revenue), failed cost reduction efforts (quantify missed savings) …

Score: +1

6. What are the potential cost savings?

Estimate the % the cost of poor quality will be reduced in achieving this project idea. What is the resulting estimated cost saving? What is the minimum potential savings your black belt projects should generate? Usually, depending on organizational decisions, it’s in the magnitude of 150.000 Euro/year.

Score: +1 if above the minimum required saving, -1 if below.

7. What are other consequences of doing this project?

Other improvements and benefits if this idea is achieved, but you can not attribute any cash flow improvement to them. Be reasonable, don’t start to make up.

Score: +1 if identified. 0 if not identified.

8. Is there an identified project sponsor?

Is the owner of the process the idea will impact identified? If no score: -1 and following questions not applicable. If yes, score: 0 and refer to following questions

Is he/she supporting the idea? Yes: +0.33. No:-0.33.

Is he/she willing to allocate resources? Yes: +0.33. No:-0.33.

Is he/she willing to invest personal time to review project progress? Yes: +0.33. No:-0.33.

9. Should we start Six Sigma Black Belt project, are team resources confirmed and sufficiently available?

Yes: +1

No: -1

10. Should we start Six Sigma Black Belt project, is there a project governance process available?

How is project progress tracked? Is there a dedicated project progress meeting? Do you plan to have a regular meeting with your project champion and/or project sponsor? Are tollgate meetings planned with the team and your MBB at the end of each DMAIC phase?

If you recognize any of these elements: score +1. If you don’t: score -1

Now sum the individual scores to a total score, between -10 and +10. Total score > 7: this idea has high potential to become a “right” project! Total Score 0 => 6: be careful, risks for Six Sigma project failure, resulting in a potential “wrong” project! Total Score < 3: drop the idea and continue with more valuable work! If the minimum savings requirement (6.) for a black belt project is not met, but the total score for example still 6 or 7, consider if this could be a green belt project.

Are you interested in successfully closing more “right” black belt projects? Then start at the beginning assessing project ideas with the suggested project filter. It’s not an absolute guarantee for success, but will significantly increase your success chances. It’s about setting your Six Sigma project teams up for success by providing them with good and carefully thought over Six Sigma project ideas.

Whatever the organization’s maturity level (go see “week of a black belt part 4-5-6-7”), any improvement initiative needs top management engagement and commitment. Usually, there is enough management attention at the beginning. The CEO or Executive team has announced the initiative and walks the talk for a while. However, there are so many 1000 things to manage when heading an organization and therefore there is a high risk of CEO or ET attention fading away.

In my experience lasting top management commitment and engagement has to be earned (there are off course examples like GE and some others where this is not the case).

One way to earn it: if you are in charge of running a process improvement deployment or if you are selecting business improvement projects, consider your management as a customer. Try to understand their needs and wants. Probably the CEO and his direct reports they have a “big Y” like “create more cash flow”. Use a Y=F(X) cascade approach to determine how they envision to accomplish this “big Y”. If within the big Y is a y “customer acquisition”, it may be nice to fix quality defects for your current customers, but it won’t earn you much attention. On the other hand, if you put some projects on your road map to improve customer acquisition processes, you will get more attention, because you have aligned your improvement agenda to the management agenda. This is just one way …

I’m sure many of you have similar challenges and experiences. I’m looking forward to all your comments and suggestions how you have earned long lasting and sustained top management commitment and engagement. Thanks in advance for your reactions!

Time flies! My last “week of a Black Belt” blog dates from May 12th already. Anyhow, when things are busy and interesting things happen, there are lots of ideas to blog about, but no time to actually publish them.

Six Sigma’s 20th anniversary will be celebrated soon. Since 1987 and its first success stories, it has not gone by unnoticed. The number of published books, consultant organizations, internet publications, are no longer countable …

However, many people I talk to remain with some burning questions “When is an organization ready to adopt Six Sigma?” In many cases followed by “Or should we do Lean first?” and “What about BPM, are we better of with that?”

I also observe that the companies who adopt it are generally local representations to US based multinationals or their suppliers. Also the infrastructure associated with a full pledged Six Sigma deployment is (rightfully or not?) perceived as too heavy on the small and medium enterprise that account for about 70% to our local economy.

Personally, I think it really doesn’t matter what name an effort goes under. In all methodologies are good tools that can bring a lot of value to any organization, whether it is big or small, in service, transactional or production environments. The best approach for the organization is depending on its level of maturity. Maturity here is not defined in terms of age or magnitude, but in terms of how well the organization knows its customers, their needs and how well the business processes are able to satisfy those.

Consider 2 examples:

1. An organization with low maturity. Typical characteristics of such an organization: strong functional silos, no continuous improvement culture (it works, so why change it?), no clear understanding of customer needs and wants, management cannot sum up core processes when asked …

This organization should start with the basics: get to know its processes, its customers and their needs. To achieve this, it should use VOC tools. It should use SIPOC, process maps or value stream maps to document its processes. Start documenting at a high level, e.g. core process level. Once this is done, it should look for the biggest gaps between the VOC and the process outputs. These should be this organization’s first improvement projects. The organization should be process mapping again to detail the (core) processes that most contribute to the identified gaps. It should use simple and basic quality tools to get to those improvements implemented. Along the way, it will surely find some waste in the processes. Eliminate it! After the improvements are in place and obvious waste is eliminated, the organization should reflect on the learnings and start again. All along the effort document everything. Look for possible (future) process measurements.

Some might call this endeavor business process management, some might call it lean, some may call it Six Sigma. It doesn’t matter! It’s about getting the basics right first and institutionalizing a continuous improvement culture. To get this in place, there is probably no need for advanced training, for Design of Experiment or Design For Six Sigma …

2. Consider the other end of the spectrum: an organization where core processes are defined and have owners at high management level. Key Performance Indicators (KPIs) to monitor the performance are in place. The customer’s needs and expectations are known and understood.

Probably this organization has not just started a continuous improvement effort; they have started a while ago. However, the basic concepts of the improvement program are the same as in the low maturity organization, but this organization will need more sophisticated tools. This organization also needs to know its customers needs. The needs of customers today may differ of their needs tomorrow. Thus, by default, listening to the customers using VOC tools is a continuous ongoing exercise, for any organization.

Having KPIs measuring process performance, implies that measurement systems are capturing process data continuously. This data is reported hourly, daily, weekly, monthly, quarterly … KPIs are use to manage the daily operational business. This requires quality measurements! The interest is in detecting and understanding variation in the processes and making the correct fact based decisions.

Frequent gage R&R exercises will need to sustain the quality of measurement and consequently the quality of operational management. For improvement purposes, this organization will also need to identify its biggest gaps between its outputs and its customer’s expectations. This will create an improvement initiative engine as there is always room for improvement. As defect levels drop, the room for improvement by structured common sense will decrease as well, creating the need for more sophisticated tools and methodologies. This is the stage where e.g. DOE, DFSS, multiple regression, non-parametric tests and other come in.

So, when are we ready for Six Sigma ?

Are you wondering what happened to this Green Belt Candidate? (Go see Week of a Black Belt part 3).

At the end of the last training day, I refer back to the yellow notes on which, the first day of training, the participants have expressed their expectations concerning the training. 95% of the time the individual participant’s expectations are successfully met. In this particular case, I hoped for the opposite, that he would realize Six Sigma is not another flavor of the month. Surprisingly, the feedback exceeded my expectations. The strong skepticism from the first day had changed to a cautious believe in the strengths of the DMAIC approach.

This Six Sigma thing is different after all, and it is not another flavor of the month!