Business Improvement Overview

Business Excellence
Methodologies

An Overview

All Rights Reserved All Rights Reserved

Overview

• Lean and Six Sigma History
• Lean and Six Sigma Business Impact
• Requirements For A Successful Business Excellence Program
• Available Business Excellence (BE) Methods
• Which Method Is Appropriate
• Implementation Strategy
• Who Are The Drivers For BE
• What Is LEAN
• What Is Six Sigma
• What Is Lean Six Sigma
• What Is Design For Six Sigma

All Rights Reserved 1

History

• Business excellence methodologies are not quality initiatives
• Business excellence is about the quality of the business, not about
the business of quality
• Two big methods have emerged over the last 50 years
• Total quality management (TQM)
• Lean manufacturing = Toyota Production System (TPS)
• These methods have evolved to become what is currently called
• Six Sigma
• Lean
• Six Sigma has been used successfully by Motorola, GE, BHPBilliton,
Textron, Honeywell and others to increase business performance
by reducing defects
• Lean has been used successfully by Toyota, GE, Honeywell, and
many others to increase business performance by eliminating
waste

Business Improvement Methods Are Of All Times

History

Total Quality Lean Manufacturing
Management Toyota Production
(TQM) System (TPS)

Defect Waste
Reduction Six Sigma LEAN Elimination

Synergy
Motorola, GE, BHPBilliton, Toyota, GE, Honeywell,…
Textron, Honeywell, …

Lean Six Sigma
Motorola, GE, BHPBilliton, The Best Of
Textron, Honeywell, … Both Worlds

Results

• Without going into the details of each successful implementation
of the business improvement methods it can be shown that all
lead to
 Cost reduction
 Increased customer satisfaction
 Engaged work force
 Use of a common ‘language’ across the business functions
• Depending on the size of the company Black Belts deliver between
3 to 6 projects each year
 Each project generates between $25k and $2.5M savings
 Black Belt training expenses are largely offset by the project benefits
• Green Belts deliver 2 to 4 projects each year
 Each project generates between $10k and $100k savings

Business Improvement Methods Deliver Tangible Business Results

Results


Results

Black Belt Green Belt
Projects Projects

3–6 2–4
Projects/Year Projects/Year

Project Value Project Value
$25k - $2.5M $10k - $100k

Minimum Typical Typical Minimum
$75k/Year/Black $500k/Year/ $150k/Year/ $20k/Year/Green
Belt Black Belt Green Belt Belt


Requirements

• In order to be successful at business improvements certain
requirements need to be satisfied
 Management engagement and support at all levels
 Properly selected project leaders, also called change agents
 Properly trained project leaders and team members
 Execution of the method as a team driven effort
 Selection of projects that will gain momentum for the initiative
 Screening of the business needs to create a pool of potential projects

Business Improvement Require Planning And Support

Requirements

Selection Of
Quality Training
High Impact Projects

Team Driven Effort Success Projects Aligned With
Business Needs

Management Engagement
Top Notch Project Leaders
& Support

Business Improvement Require Planning And Support

Which Method Are Available?

• Methods available
 Six Sigma also know as the acronym DMAIC (Define Measure Analyze
Improve Control)
 Lean
 Lean Six Sigma
 Design for Six Sigma also known as DMADV (Define Measure Analyze
Develop Validate)

Improvement Methods Come In Different Flavors But Have The Same Objective

Available Methods

Six Sigma LEAN
(DMAIC) (TPS)

Synergy
Defect Reduction Waste Elimination
Quality Level Of Speed Of Execution
Individual Process Steps Cycle Time Reduction

Lean Six Sigma
Waste Elimination
Maturity
Followed By Process
Optimization
New Process Or
Product Development

Design For Six Sigma
(DMADV)

Which Method To Use?

• Lean
 Focuses on the complete process and aims at reducing sources of
waste for existing processes
• Six Sigma
 Focuses on ‘troublesome’ parts of the process and aims at improving
defects (services or products that do not meet customer requirements)
for existing services or products
• Lean Six Sigma
 Encompasses both approaches, usually waste reduction followed by
process improvement for the remaining process steps (for existing
processes and products)
• Design for Six Sigma
 Used for the development of new processes or products in order to
avoid having to use the above methods

Guidance Will Help You To Select The Right Method For You

What Method Is Right?

• Lean tends to generate results somewhat faster than Six Sigma
but often does not consider full process optimization
• Six Sigma generates more stable process steps but does not
necessarily look at the overall business
• Lean Six Sigma is the preferred method, leading to the best
improvements but requires more upfront investment
• Design for Six Sigma is typically used by companies that have used
Lean Six Sigma for several years and that have optimized the
existing business
 It is very unusual to start with Design for Six Sigma because in general
one wants to ‘clean up’ existing processes first
 Starting a process over from scratch could be disruptive for the
existing business

Different Approaches For Different Goals

Which Method To Use?

Six Sigma LEAN
(DMAIC) (TPS)

Synergy
More Stable Individual Somewhat Faster
Process Steps Results
Does Not Look At The Does Not Consider Full
Overall Process Optimization

Lean Six Sigma
The Preferred Method
To Be Used After Lean Maturity
Six Sigma Has
Reached Full Maturity

(DMADV)

How Is Business Improvement Implemented?
[1/2]
• Starting point is recognizing the need for improvement at the
management level
• Based on the indentified needs business drivers are quantified and
clusters of projects are selected with external guidance
• Upper and mid level management is supported with high level
training 3-5 days aimed at business metrics and project cluster
identification
• Middle management is given specific training on project selection,
candidate selection and support roles 3-5 days
• Projects are selected by upper and middle management and tied
to specific candidates for implementation
 Start with selecting high impact projects
 High impact projects are executed by full time specialists (Black Belts)
delivering fast, sustainable results


[2/2|
• Black Belts candidates are fully trained and execute their project
in synch with the training calendar
• Executed improvements gain momentum for the method and
smaller project can be selected
• Candidates for smaller projects (Green Belts) are trained at a
lower level and supported by external resources or experienced in
house Black Belts
 Green Belt projects take usually longer to execute and generate lesser
results than Black Belt projects
• When the business has achieved a level of maturity (after 3-7
years) new products and processes are developed based on the
Lean Six Sigma methodology


Management
Training
External
Support
Identify
Project
Clusters

Candidate External
Project Training Support
Selection

Project Candidate
Selection Project
Selection
Execution
Black Belt

Candidate Candidate Project
Training Selection Execution
Green Belt

Who Are The Actors? [1/2]
• Senior management
 Initiate and support the business improvement initiative
 Make business improvement a way of life
 Determine the business objectives
• Deployment champion
 This person owns the business improvement methodology and is
responsible for delivering results
 Indentify clusters of projects that support the business objectives
 Select Black Belts, Green Belts
• Project champions
 Identify projects within the project clusters that fall within their area of
responsibility
 Support Belts throughout their projects
 Hold Belts accountable for project results
• Master Black Belts (in the beginning often external)
 Support the deployment
 Train and mentor Black Belts, Green Belts
 Help with project identification and selection
 Help Thesecandidate selection Depend On Organizational Structure
with Are Typical Roles And

Who Are The Actors? [2/2]
• Black Belts
 Responsible for the execution of individual projects often across
business divisions
 Deliver results to the project leader/project champion
 Full tim e exclusive role
 Change agents, help build momentum for the methodology
 Leaders of high impact and complex projects
• Green Belts
 Responsible for the execution of individual projects located within
their own area of expertise
 Deliver results to the project leader
 P art tim e role that needs to be balance with day to day activities
 Change agents, help build momentum for the methodology
 Lead less complex projects usually with lower impact
• Yellow Belts
 Supporting team members to Black Belt and Green Belt projects
 Have a limited amount of training that is provided by in house Black
Belts and Green Belts
These Are Typical Roles And Depend On Organizational Structure

Who Are The Actors?
Drive BE Initiative
Provide Support Set
Goals
Identify Projects In Their Area
Owns BE Methodology
Support Belts
Identifies Project Clusters
Hold Belts Accountable
Selects Belts

Supporting Team Members For
Supports Deployment GB/BB Projects
Training & Mentoring Of Belts In House Training By GB or BB
Support For Project Selection

P art - Tim e Resource
Full -Tim e Resource Executes Simpler Projects
Executes Complex Projects Responsible For Results
Responsible For Results

These Are Typical Roles And Depend On Organizational Structure

Lean

• Pros • Cons
 Requires less technical  Lacks the in depth
methods when executed at a understanding of the
superficial level processes
 Generates results faster  More difficult to sustain due to
 Engages the work force more weaknesses in the control of
quickly because it is easier the improvements
accessible  Requires hands on
 Training can be trimmed to 1 involvement of management
week work shop training for  Full training on Lean is 3 to 4
simple projects weeks
 Investment for software is
minimal to nill


Six Sigma

• Pros • Cons
 More in depth process  Requires longer training
knowledge • Depending on the projects 2
 Does result in better (Green Belt) to 4 weeks (Black
sustainable results Belts)

 Requires management support  Requires specific software (for
but not hands on involvement Black Belts)
 Forms the foundation for DFSS  Generates results slower
 Training is more technical but
accessible for everyone with a
high school degree


Lean Six Sigma

• Pros • Cons
 The most powerful method  Requires longer training 3
 Sustainable results weeks (Green Belts), 5 weeks
 Management support required (Black Belts)
but no hands on involvement  Requires specific software
 Use DMAIC as the overarching (Black Belts only)
method
 Integrates Lean and Six Sigma
 Avoids duplication of effort
 Fully integrated method
avoids segregation of projects



• Pros • Cons
 The indicated method for new  Results are more difficult to
process and product quantify
development  Requires expertise with Six
 Has a 80% overlap in tool Sigma
usage with Lean Six Sigma,  Training is 4-5 weeks (Black
hence can be thought as an Belts)
add-on method  Not indicated to be used at the
Green Belt level
 Most technical of all the
methods
 Requires specific software


Business Improvement Overview

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