Synthesis of two proven and popular methods of management and optimal tuning production process that complement each other is called Lean Six Sigma.
The goal of integrating the concepts was to create a system with a synergistic effect that could be applied to any enterprise, regardless of the field of activity and size.
The concept of "Six Sigma" made up for some of the imperfections of the concept of "Lean Manufacturing" and vice versa.
The experience of using a complex synthesized process was first described in 2001, and after 2 years several books were published with a detailed review of the theory and practice of Lean Six Sigma. As a result, it became clear that the concepts conditionally “divided” all the procedural diversity among themselves: “Lean” showed what needs to be done, and Six Sigma showed how to organize activities for this.
How do the concepts complement each other?
The concept of "Lean production", having changed the culture of production, over time expanded the toolkit, included the ideas of the value stream, the method of protecting against errors, and was transformed into "Lean Management" (Lean).
By the end of the 20th century, both of these concepts (Lean and Six Sigma) were the most popular areas of business consulting in quality management, since the number of successful implementations in relation to the total number of implementations turned out to be higher than for other quality management methods. Together, they showed even greater efficiency.
How Six Sigma complements Lean:
- Lean does not set requirements for the infrastructure necessary to implement the concept. The solution to this issue depends on the initiative of managers and their organizational skills, and when changing the composition of managers, difficulties arise with the transition. Six Sigma helps to formalize the obligations of the top management of the enterprise, form a plan for allocating resources and monitoring the success of their development.
- The concept of Lean is not as strict as in Six Sigma, the focus is on consumer needs. Satisfaction of requests from the elimination of production costs and non-production losses depends indirectly, while in Six Sigma the description of the principles of the DMAIC concept begins with the definition of consumer requirements: Define, Measure, Analyze, Improve, Control (Russian: Define. Measure. Analyze. Improve. Manage).
- Defects, within the framework of the Lean concept, are named as the main sources of production losses, but the methods of statistical management for their elimination are prescribed in Six Sigma.
How Lean complements Six Sigma:
- Six Sigma describes methods for eliminating defects, but in addition to defects, Lean Management also mentions waiting, transportation, overproduction, inventory, people movement, and non-value-adding activities. Sometimes practitioners also highlight the use of low-quality raw materials (“false economy”) and diversity, as a result of non-standardized components of the process.
- Six Sigma does not explain the relationship between customer satisfaction (quality) and process duration. Thanks to the Lean system, the concept of “time” is introduced as a key one.
- Lean expands on the scope that Six Sigma describes, adding the elimination of unproductive activities, the optimization of the workplace, reducing inventory, reducing transportation costs, and more.
At the same time, both basic systems are characterized by an orientation towards a single process (in contrast to the concepts that preceded them, trying to achieve universal coverage). This originality was preserved by the synthesized concept.
Application of the Lean Six Sigma system in industries
Both of the underlying systems that created the synergistic concept of Lean Six Sigma are "living" systems. Having passed multiple "tests" in the industrial and non-industrial sectors, the concepts have become universal - applicable with equal success in various industries. Using the example of logistics, we can show the use of the Lean Manufacturing + Six Sigma complex in the service sector.
The lead time, according to Little's formula, is equal to the volume of work in progress divided by the average rate of work completion (the amount of work that one employee performs in a period of time). To reduce lead time, the synthesis of Lean and 6 Sigma systems in logistics is focused on optimization in 3 main areas:
- The logistics process is a slow process, which makes it costly. (More than 50% of slow processes are associated with non-value added waste).
- The speed of services in logistics is reduced due to a significant share of work in progress. As a result, about 90% of the time the work is considered unfinished, which reduces consumer satisfaction.
- The direction is based on the Pareto principle, characteristic of slow processes: 80% of the costs are the result of 20% of the actions. By identifying and reducing these 20%, timeliness increases to 99%.
The specificity of logistics is also that it accounts for about a third of sales. Calculations show that 10% of defects in logistics increase lead time by 38% and work in progress by 53%. A significant part of the costs relates to return logistics. Depending on the initiator of the return, the reason may be:
- dissatisfaction of end-users implementing a money-back guarantee,
- problems with installation and use (with subsequent return of marriage),
- repair work associated with multiple shipments of goods in both directions,
- expiration date and environmental safety, etc.
For example, in the United States Internet commerce, the return of electronics and high-tech products, according to various estimates, reaches 50-80%. This increases the number of problems for the industry, which was originally created and set up for direct movement, without a large-scale reverse flow, and which was not ready to conduct return accounting, disposal of goods, etc.
It follows from the above that the reverse flow should be tuned as carefully as the direct flow, while reducing the number of non-value-adding operations. This can be helped, for example, by computer programs that would be compatible with the information systems of all departments and would allow the formation of group orders, sorting them by delivery time, product types, priorities, etc. The general tasks remain the same, as in the production of products - reducing the variability at the input, reducing the number of switching between tasks, standardizing the platform within the cycle while maintaining the assortment that meets the needs of the client, etc.
Logistics is a frequent application of Lean and Six Sigma concepts in the service industry, but illustrates the general features of the application of the system.
The effectiveness of Lean Six Sigma in numbers
The introduction of Lean Six Sigma is reflected both in economic growth and in the improvement of the atmosphere within the team, which, ultimately, also affects the economy - a culture of well-coordinated teamwork arises, a quick exchange of information and specific knowledge. As a result, the implementation of an integrated concept:
- speeds up processes by 20-70%;
- improves the quality of services and manufactured products by 20-40%;
- increases the overall efficiency by 10-30% (compared to a separate implementation of one of the basic systems).
Often the implementation of the concept is more difficult than expected. The “human factor” kicks in, there are internal contradictions in the requirements, the statistical process becomes an end in itself, and not a method for detecting defects.
Among the common mistakes, they also mention overloading with the tasks set for themselves, when, for example, there are 100 technical transformations for 100 identified customer needs. But this, at first glance, "lifting" volume involves the planning and regulation of about 10 thousand relationships, which significantly complicates the implementation. In such cases, it is advised not to transform everything at once, but to focus on the critical needs for the client, selected using a priority list.
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At all times, company leaders thought about how to improve the performance of their organization. There were radical management methods, but they are gradually dying out. Liberal management methods are considered ideal, but they are good in small companies. When thousands, tens of thousands of employees work in a company, it is incredibly difficult to find an individual approach to each employee, a comprehensive philosophy is needed.
Six sigma (six sigma) is considered both as a methodology, and as a philosophy, and as a set of tools for improving work. It can be implemented in organizations of different directions - from medical to transnational corporations.
Six Sigma- the concept of production management, based on the implementation of improvements, based on the measurability of any data. The concept of Six Sigma was developed in 1986 by Bill Smith of Motorola and has found wide application in many areas of business. In the mid 1990s CEO General Electric Jack Welch adopted this strategy and it became world famous. In the 2000s, the joint combination of Six Sigma and . Both concepts are a rethinking of the philosophy "".
A bit of math
The term "six sigma" itself is taken from mathematical statistics and means the standard deviation of a random variable from the mean value. The standard value is characterized by two parameters - the mean value (mu) and the standard deviation (another name is the standard deviation - sigma).
For example, let's take the Quality parameter as a (sorry for the tautology) random variable. So, we want to estimate the likely percentage of defective products in production. To do this, set the lower and upper tolerance limits of the "Quality" parameter. The larger the sigma value, the lower the percentage of ideal products. To increase the percentage of perfect products, you need to reduce the sigma value, and to reduce it, you just need to increase the number of sigma.
Setting a six sigma tolerance would mean that we would have 3.4 defective items per million, or 99.99966% perfect items. The essence of the concept is that the use of process management tools will reduce the value of the standard deviation.
Basic Principles of Six Sigma
- Key performance indicators (KPIs) should be measurable. If processes can be measured, then they can be controlled, and therefore improved.
- It is necessary to constantly strive to ensure that all processes in production are predictable
- Consumer satisfaction. They are also indicators of product quality. No matter how much the product costs, the consumer expects it High Quality, fast delivery, excellent service
- Interest in the client must be sincere. The client feels insincerity
- It is worth managing a company only on the basis of data and facts, not rumors and conjectures
- Proactive management. It is better to spend money on prevention than later on restoring the company's image
- The pursuit of excellence
- Establishing teamwork and staff involvement. The employee must be interested in the results. An motivated employee brings a significant contribution to the development of the company
- Determination and analysis of the causes of defects
- Further process control
If a company has adopted Six Sigma concepts, it can now use different tools in a very harmonious way. It can be a chart , tree diagram, .
Six Sigma Methodology
There are three interrelated elements at the heart of Six Sigma as a methodology:
- process management
- improvement of existing processes
- design of new processes
How are processes improved? Five steps are used for this and are called the DMAIC (Define, Measure, Analyze, Improve, Control) method.
- Define- identify the main problems in the process. A team is formed, which is empowered and its area of responsibility is determined.
- measure- All data is collected. Preliminary assumptions are made.
- Analyze- all assumptions are checked, the true causes of deviations and problems are clarified.
- Improve- Improvements are developed and implemented.
- control– standardization and documentation; constant monitoring based on them.
Seven Degrees of Six Sigma Proficiency
These same teams, which are formed by the company's management, are assigned their own titles. There are seven titles in total.
- Management. These are business owners.
- Champion. Member of the top management of the company. It is he who must make the decision to launch a Six Sigma project.
- Black belt. Six Sigma expert. Responsible for training and leading the team. Takes full responsibility for the results.
- Green belt. This person works under a black belt. Analyzes and solves problems.
- Yellow belt. Responsible for the implementation of small tasks.
- White belt. Responsible for the implementation of simple tasks.
IN modern world the concept of six sigma has become very popular. The popularity of any concept depends on the number and scale of companies that implement it. Therefore, when General Electric introduced it, other companies also pulled up. Western companies take a lot from Japanese and try to improve their concepts for the Western mentality. Six Sigma is perhaps the first attempt in this field.
What do you think of the Six Sigma concept? Leave your opinions in the comments.
Michael George A chapter from Lean Six Sigma in Service. How Lean Speed and Six Sigma Quality Drive Business Improvement
Publishing house "Mann, Ivanov and Ferber"
Rice. 2. Normal distribution The limits of the normal distribution are 6 a
Six Sigma metrics allow you to compare the distribution of actual results against a range of acceptable values (customer requirements). A defect is any value that does not meet the customer's requirements. The greater the area under the distribution curve falls within the range of customer requirements, the higher the sigma level. To compare different processes, instead of the number of defects, the concept of "percentage" of defects (or "defects per million opportunities") is used.
Six Sigma is a process that yields 3.4 defects per million opportunities, given expected variances.
Here is one example: any enterprise that planned to develop construction in Fort Wayne soon found out that doing business in this city was, to put it mildly, problematic. Among other things, obtaining the necessary permits alone often took nearly two months (51 days on average). A team of municipal employees benchmarked and identified gaps that prevented Fort Wayne from competing with other cities where a similar issue was resolved in less than a month.
The team tasked with improving the permitting process soon identified the most important steps, eliminated redundant steps, and developed standardized procedures with clear guidelines. When the process began to be implemented in a new way, 95% of permits were issued in less than 10 days. Many customers - firms that had previously been reluctant to build in Fort Wayne - immediately noticed this improvement.
The ABCs of Lean Manufacturing
Every discipline has its own language, and lean manufacturing is no exception. There are a number of terms you will need to understand and explore the possibilities of Lean (you will encounter all of them throughout this book).
Lead time and process speed
Lead time indicates how long it takes to deliver a product or service from the moment an order is received. A simple formula known as Little's law (after the mathematician who proved it) helps to understand the factors that affect the lead time:
This equation allows us to determine how long it will take to complete a unit of work (lead time), given the amount of work in progress (work in progress) and the amount of work that we can do per day, week, etc. (productivity).
Little's law means much more than it might seem at first glance. Most of us have no idea about performance, let alone variance rates. The very thought of having to follow every step of the order fulfillment process - especially if such a process lasts several days or weeks - makes us despondent. (Think back to the history of obtaining permits in the city of Fort Wayne and imagine what it's like to track a process that takes 51 days.) With the values of the two variables involved in this equation, we can determine the third. In other words, if you know WIP and productivity, you can determine the lead time. If you know the lead time and productivity, you can estimate the WIP in the process.
Unfinished production
Sometimes those who deal with the provision of services avoid the term "work in progress", since this term is traditionally associated with the production line. However, the concept itself is applicable to almost any process. If you feel the need to translate this Lean term to your business, try thinking of WIP as "things" in progress. These "objects" can represent customer requirements, receipts to be processed, phone calls to be answered, reports to be completed, etc. - we are talking about any work waiting to be completed. Almost everywhere in this book, the term "work in progress" is used. When faced with it, think about your own work and how much unfinished business you have on your desk, waiting in the wings on your computer or on your answering machine. All this is a work in progress.
The goal of lean manufacturing is to create conditions so that you have enough resources and work is carried out at a given pace in accordance with customer requests. More importantly, through a standardized process, Lean allows you to quickly respond to customer signals, which means that it makes the process predictable, manageable, and stable.
Jim Kaminsky, Assistant Vice President, Bank One
Delays / waiting times
Work in progress means there is work waiting to be done. In Lean language, this job is "in line"; and the time during which it is not dealt with is called "waiting time." Time in the queue, regardless of duration and reasons, is a delay.
Value-adding and non-value-adding work
When you start tracking the flow of work, it becomes clear to you that some activities add value from the customer's point of view (and are called value-added work for this reason). To check if it adds this work value, ask yourself if your customer would be willing to pay for it if they knew it was included in the overall price of the product. If, in all likelihood, he refuses to pay for it, or prefers to do business with a supplier who does not have such costs, we are talking about work that does not add value.
Process efficiency
For any service delivery process, a very important indicator is the proportion of the total cycle time that is spent on value-adding activities. This indicator simultaneously shows the proportion of losses and is called the efficiency of the process cycle. It is the ratio of value added time to total lead time:
Process Efficiency = Customer Value Added Time / Total Lead Time.
If the process efficiency is below 10%, then the process is overloaded with non-value-creating waste and can be improved.
Losses
As we have just shown, waste is everything that does not add value from the customer's point of view: time, cost, work. There are some losses in all organizations, as there are weaknesses everywhere. It is they who should be eliminated during optimization. The volume of losses in any activity is proportional to the duration of delays in the course of work. Lean manufacturing teaches us to recognize and eliminate waste, rather than mindlessly following the beaten track. In the practice of lean manufacturing, there are seven types of waste.
Key Lean Lessons
The foregoing allows us to draw some seemingly very simple, but extremely important conclusions that say that with the help of lean manufacturing we can quickly achieve improvements. Here are the findings, which will be discussed in more detail below.
- Most processes are not "lean" and have a process efficiency rate of less than 10%.
- Reducing work-in-progress is paramount (because you can't control work-in-progress, you can't control lead time).
- Each process should work on a "pull" system rather than a "push" system, which eliminates lead time variance.
- About 20% of work generates 80% of all delays.
- You can't improve what you can't see: you need to visualize the process based on the data.
Lesson #1 Most processes are not "lean"
I guess you won't be surprised to learn that in "lean" service processes, the bulk of the work—50% or more—is done in non-value-adding activities. This can be visualized on a process map using colors or other techniques to visually distinguish value-adding work from non-value-adding work. Yes, Fig. 3 shows the initial fragment of a basic block diagram compiled by the Lockheed Martin team. This team found that 83% of the work done between placing a purchase order and receiving a product does not add value (i.e., is a waste). This includes correcting errors, requesting quotes from wholesalers (although prices can be negotiated in advance), obtaining corrected drawings, and other actions caused by delays in earlier stages of the process.
Can speed compromise quality?
We have all been in situations where the requirement to “work faster” created quality problems and slowed down processes as a result. Therefore, it would be quite reasonable to fear: will a lean approach aimed at speeding up the process cause damage to quality? This is not happening. Why? Because lean reduces time by eliminating non-value-adding activities, eliminating queues, reducing time between value-adding activities, and so on. Lean typically leaves the critical process steps that provide value to the customer intact. The use of Six Sigma tools for value-creating operations reduces the number of defects, which in turn speeds through the value-adding stages.
However, since these stages typically account for less than 10% of the total lead time, increasing the speed of value-adding processes has little effect on the speed of the overall process. Impact only increases appreciably when non-value-adding activities are eliminated.
Rice. 3. Simple flowchart (illustrating value-adding and non-value-adding activities)
The Lockheed Martin Supply Center team found that most of the work from the time a purchase order was placed to the time the materials were received was waste (no value added). Measures were taken to compensate for errors, omissions and delays in earlier stages of the process, as well as measures to reduce the huge variety of heterogeneous tasks (complexity). The finer detailing of the value stream (representing the 248 stages at the required level of detail) and the subsequent reduction in complexity through standardization eliminated much of the waste. The results of these improvements have allowed the company to cut procurement costs in half.
Lesson number 2. The primary task is to reduce work in progress
Let's go back to Little's law.
Lead Time = WIP / Productivity.
This equality is not just a theoretical construct, it has many practical implications. First of all, it shows that there are two ways to reduce lead time - either by reducing WIP or by increasing productivity. In any operation that does not involve direct contact with the customer, that is, where work in progress is orders, emails or reports, and not people, it is much easier to control the volume of work in progress than to increase productivity. In fact, you can speed up any process - save time - simply by reducing WIP and doing nothing to increase productivity.
This conclusion explains how, by applying the principles of lean manufacturing, it is possible to quickly achieve positive results. It should only be as far as possible to limit the amount of work received for processing per unit of time. The following explains what to do if work in progress is “people” and the best way to save lead time is to connect additional capacity to increase productivity.
Why should we prioritize work in progress? To reduce its volume, only intellectual capital is needed. Improving productivity requires investment or an increase in the payroll, both of which have a negative impact on the return on invested capital, and therefore on shareholder value. Little's Law provides a mathematical foundation that allows us to apply lean manufacturing methods to any process.
Lesson number 3. "How to cut down on this damn work in progress?" (Creating a "pull" system)
Take a look at your workplace. Is your email inbox full of unread messages? Do you have a long list of emails that will take days to review? Is your answering machine refusing to receive new messages? Is anyone waiting for the results of your work?
All these are different forms of work in progress, work that someone else is waiting for you - a colleague or a client. As a lean newcomer, you know that in order to reduce cycle times and waste, you must reduce WIP. You know that work-in-progress is like cars on a freeway: if there are more cars, the speed of traffic on a congested road drops! But how to do that?
Naturally, you can't limit work-in-progress in customer-directed processes when the work-in-progress is customers waiting for service or wanting to purchase a product (in such situations, there are other ways to maintain or reduce lead time).
For any job that doesn't have a client in front of you, the key to reducing WIP is Little's Law. In lean service processes, there is a stage that precedes the process itself, a stage in which input factors (requests for work, orders, calls, etc.) are "accumulated". Then someone controls the input of these "factors" into the process.
Consider the following example. Independent distributors to determine estimates for construction works needed information about commercial offers from the marketing department. They were unhappy that the marketing department took two to three weeks to present this information. The period that suited them was three days.
The task force collected data over the course of several weeks, showing that marketing staff could process an average of 20 offers per day. Distributors wanted a guaranteed 3 day lead time; the data obtained indicated that the deviation in the process required a more stringent target of 2.4 days.
How much work in progress was allowed in this process? Turning to Little's Law and substituting 20 (productivity) and 2.4 (lead time) into the formula, the working group received a maximum volume of work in progress equal to 48 proposals - this is the number of proposals "in work" at any given time.
Lead time = 2.4 days = (WIP = 48 offers) / (Productivity = 20 offers/day).
To manage such a system, they created a stand to visually display information about the number of proposals being processed. The work in progress limit was 48 requests, so until their number dropped to 47, a department employee could not start processing new requests, as shown in Fig. 4.
The secret that makes this system work is in the lower left corner of Fig. 4, which shows the drive labeled "input". (Depending on the nature of your work, this repository may be a physical container or an electronic database.) Requests do not formally enter the process while they are in the raw material reservoir. The only signal to supply work to the input of the process is the output of a unit of output from the process - this is the "pull" system. Guaranteed service delivery time - about two and a half days is counted from the moment the application enters the process. In other words, the "pull" system in the service industry means making deliberate decisions about when to start work in the process. However, it is very important how such decisions are made: the value cannot be overlooked. In this case, it is a matter of which ticket is entered into the process when another ticket has been processed. It is hardly appropriate to process bids on a first-come, first-served basis, as some bids promise high-value promising orders, while others are small orders, questionable bids, or are likely to be rejected.
Rice. 4."Pull" system for commercial offers for sale
The issue of the processing order can be resolved by prioritizing proposals depending on the prospects. Each application is characterized by the following three parameters, each of which is evaluated on a three-point system:
- complexity of the calculation;
- competitive advantage;
- gross profit in dollars.
The scores for each of the criteria for each proposal are multiplied. The proposals with the highest rating are submitted for processing first, even if other applications are waiting for their turn for a longer time. (A new application with a rating of 9 is entered into the process faster than an application with a rating of 6 submitted earlier). Using such a system, the marketing department staff, with the same number, was able to increase gross income by 70% and increase gross profit by 80%. (Of course, the company could increase productivity by increasing the number of marketing staff and incurring huge costs.)
How to create your own "pull" system?
How to make such a system work for you? The following is an example sequence of actions.
- Define/affirm the desired level of service. Ask the customer what level of service they would like.
- Determine the speed of work of your work team (based on data).
- Use Little's Law to determine the maximum amount of work in progress allowed.
- Limit the amount of work in progress to the maximum value obtained.
- Put all incoming work into the input bin.
- Develop a prioritization system for the order in which work is put into the process from the drive.
- Continue to further improve the process, which will allow you to increase the speed of work and achieve further reduction in lead time.
The positive impact of Lean Six Sigma on situations like this is twofold: first, in service delivery, the decision is made, which was not the case before, based on data (demand variance, work in progress, and productivity). Secondly, it uses the tools of speed and quality that are adopted by those who are willing to put in the time and effort to get things done.
Carefully! Don't treat the customer like a stock or a raw material!
The "pull" system described above works when documents are submitted at the input for processing, electronic correspondence, phone calls, etc. But in the process of communicating directly with the client, you must keep the response time and productivity of the service process at an acceptable level, no matter what happens. When customers are work-in-progress, you cannot create inventory from them, nor can you increase the waiting time for a service, and therefore the lead time. Little's law says that the only possibility in this case is to increase productivity.
One problem with direct-to-customer operations is high demand variances, with busy hours of customers alternating with periods of downtime.
If the dynamics of this rotation is predictable, productivity can be increased by changing the number of service personnel accordingly: during peak hours, additional workers can be added, as is done in call centers (call-centers). If demand variances are unpredictable, then queuing theory should be applied, which will allow you to calculate how various factors, such as supply or demand variances, affect WIP (and hence lead time). For example, fig. Figure 3.11 from Lean Six Sigma: Combining Six Sigma Quality with Lean Speed, reproduced in Figure 3.11. Figure 5 shows that if you have 20% performance margins, demand variation has little to no effect on customer wait time.
Rice. 5. The negative impact of the deflection is maximum when operating at the capacity limit
Spare capacity can be provided by bringing in staff from other departments who are trained in related skills, or by using a prioritization system (as in the "pull" system described above) that assigns more complex services to more experienced staff.
Lesson number 4. Process efficiency lets you quantify your capabilities
Typically, the efficiency of processes in the service sector is about 5% (Table 1), that is, 95% of working time is spent waiting. Terrible? Still would. And it's not just about delays. The old adage is true: the longer a job is left unfinished, the more expensive it is. In lean processes, the time to add value is more than 20% of the total cycle time.
Table 1. Process efficiency
Don't be surprised if your organization's processes are less than 5% effective. Don't be discouraged. Experience shows that by applying the basic tools of Lean Six Sigma, you will quickly begin to reap the benefits and be able to reduce costs by at least 20%.
The efficiency of a process can be visualized by separating value-adding time from non-value-adding time in a value creation timeline, as shown in Figure 2. 6. (Such a visual representation helps to stir up and interest people!)
Rice. 6. Time axis of value creation
The idea of a value creation time map is quite simple. It is necessary to trace the processing of any unit of production and attribute the time spent to one of three categories: 1) adding value, 2) inevitable losses - they are an integral aspect of doing business (work that the client does not want to pay for, but which cannot be dispensed with - accounting, legal and other compliance) and 3) delays/losses. Then draw a timeline and plot all three categories on it. In the Lockheed Martin Procurement example above, you can see that it takes four days from the time a requisition is received by the procurement center to the time the order is placed. Value-added work (dark areas above the middle line) shows that during these four days the buyer spent 14 minutes processing the order. Most of the time that is shown as white space is waiting time. Initially, this process had an efficiency of less than 1% (14 minutes out of 4 days, or 1920 minutes).
The time axis of value creation tracks the movement of a unit of production during the process and takes into account the time spent. Above the middle line is time that adds value from the consumer's point of view; the rest is loss.
Lesson number 5. 20% of work generates 80% of delays
To achieve the main goal of lean manufacturing - speed - there is only one way: get rid of everything that slows down the process. Mapping the process and collecting data on cycle time, variance and complexity will allow you to calculate the delay time for each individual operation of the process. Experience shows that in any process with an efficiency of 10% or less, 80% of the lead time is "eaten up" by less than 20% of the operations - another example of the Pareto effect in action! This 20% is called "hidden time lost", which becomes apparent when mapping the value stream and can be represented in the form of a value time graph (as in Figure 6).
Identification of latent losses is one of the most important problems, since the priority in this case is determined by the length of the delay. By correctly prioritizing targets, you will have a powerful leverage on financial results improvement.
Lesson #6
If the opportunities for cost and lead time reduction in service delivery are so great, why not apply Lean Six Sigma more often?
One of the obvious benefits of manufacturing is the ability to see and track the flow of work. You walk along the production line and see how the product is processed and how, moving from one workplace to another, raw materials or materials turn into the final product. This flow is always documented in the dispatch department, which records value-added work. In addition, you see tangible evidence of wastage (work-in-progress, scrap, delays) in the form of piles of work-in-progress or scrap.
In the provision of services, much of the work remains invisible. With a single keystroke, someone sends a report to another office at the end of the hallway or anywhere in the world. Someone presses a button on a phone and switches a customer from one department (eg customer service) to another (technical support).
In services, it's harder to see more than just flow (process). It is almost equally difficult to estimate the amount of work in progress. Yes, some of us can estimate its volume by looking at the pile of papers on the table or counting how many people are waiting in line waiting for service. But much more often, "work" takes less visible forms - for example, reports or orders in in electronic format pending processing, 20 emails to be answered, 10 customers hanging on the phone line.
But although it is difficult to make workflow visible in the service industry, understanding it and estimating the volume of work in progress is the necessary conditions applying lean manufacturing tools to increase speed and reduce waste. To "make the invisible visible" one can use various cards, including value stream maps that you will see many times throughout this book (an example of such a map is shown in Figure 7) .
Rice. 7. Value stream map (process flow map)
In addition, fig. Figure 7 shows that many management processes are overly complex. For example, in one company, approval of a design change requires the signature of seven managers, and the approval form travels for weeks through seven incoming document trays. This service delivery process causes serious problems in the manufacturing process because it prevents changes to the drawings (and the products that are made from those drawings) in a timely manner. The long cycle of such a decision-making process means that once a quality problem has been identified, rework will continue for a very long time even after new drawings have been created from which products can be produced without defects.
When the company took a closer look at the processes for obtaining all seven signatures, it became clear that five of the seven managers do not have the knowledge and skills that are relevant to the job. It was quite enough for these five managers to receive a notification about the approval of a new document, which would not cause the slightest damage to the process. A copy of this document was still sent to them because it was useful for them to know about the changes, but they were excluded from the decision-making process. Now the two remaining managers have less than a week to study the form and resolve all issues, after which the process can continue further.
visual management
Abundance of tools visual management that lean manufacturing uses is explained by the benefits visual presentation work in progress, costs and competencies of employees. These tools allow you to:
- identify and visualize work priorities;
- visualize daily performance indicators of the process (“was the day successful or not?”);
- create favorable conditions for communication in the work area, as well as between management and staff;
- ensure feedback with work team members, foremen (supervisors) and managers and enable all employees to contribute to continuous improvement.
Rice. 8. Tact board for registering orders
At its simplest level, visual management can include posting process maps (which show how the process should be done) or a list of indicators on a bulletin board so that everyone in the work area can see how successful or unsuccessful the process is. Rice. Figure 8 shows a special kind of visual management tool called the takt board (the word takt is German for "metronome"). Such boards are used to maintain the desired rhythm or pace of the process. The board shows the desired pace of production (subject to customer requirements and WIP limits) and the actual speed at which the participants are working. The group that developed this board has defined a work in progress limit and uses it to keep the number of requests in process at 48. Next, we will talk about other visual management tools.
Examples of applying lean production tools in the service sector
A few years ago, Lockheed Martin's systems integration department focused much of its procurement work on the Mid-Atlantic Region Materials Purchasing Center (MAC-MAR). This center serves 14 regions with different addresses (“clients” of MAC-MAR). Many of these regional sites were acquired during defense industry mergers in the 1990s and operate on a variety of legacy computer systems.
Each supplier of the center is responsible for the supply of a specific list of products. Procurers connect to the computer system of the relevant site, process purchase requests, and only then move on to work with another site. This connection and disconnection presented a problem. Because different departments used different computer systems, it took an average 20 minutes for a vendor to switch from one client to another. In the language of lean manufacturing similar situation called long changeover time. However, at that time - before the advent of the LM21 program - none of the supply workers were trained in lean manufacturing, and therefore did not call and perceive this operation as changeover time and did not think about how this affects the process as a whole.
It was not only the lengthy time of physical switching from one computer system to another that prevented MAC-MAR suppliers. It was also a matter of “resetting” thoughts (“learning curve”), which also presented a problem: the lack of uniformity of systems meant that suppliers had to constantly switch from one instruction to another, trying to remember 14 different designations for one part, etc. d.
How would you act in such a situation? The suppliers worked like this: first they processed all applications from one section and only then moved on to the next. On average, it took them a whole day to process requests from one client, and only after that they could switch to the next site. If we consider productivity as the number of orders placed per hour, it was quite high, but if we take into account the priority of these orders, suppliers placed orders incorrectly most of the time. And when there is an excess of work in progress in the system, you can be sure that, according to Little's law, the lead time will be very long.
Rice. Figure 9 shows how orders were handled before the process improvement. Having connected to one of the sites, the suppliers tried to process all the requests coming from there - both urgent and those that could wait.
Rice. 9. Fragment of the interface of the program that was used before
Due to non-standard computer systems, Lockheed Martin's supply center staff could not work on multiple sites at the same time. It took them 20 minutes to switch to the next section. It is understandable that, having connected to one of the sites, they wanted to immediately process all orders before switching to the next client.
Features of the philosophy of lean manufacturing
Lean processes are characterized by:
- process efficiency over 20%;
- fixed work-in-progress limit to control speed;
- the use of a "pull" system, in which new work enters processing only when the corresponding output work is transferred to the next operation;
- the use of visual displays of information to control and monitor a process (for example, to show the status of various products or services in a process, or a list of additional ideas to reduce lead times).
The problem was that this process did not take into account the timelines required by other customers at all: an urgent order for site D had to wait until the supplier processed all orders for sites A, B and C. As a result, the supplier took 14 or more days of the so-called time turnover time for the client (customer turnover time) to go through the full cycle of processing applications from all customers. This led to long lead times, billing delays for critical projects, and the need for overtime in production (Figure 10).
Rice. 10. Lack of flexibility in the procurement process
Since switching from one site to another was an extremely complex and time-consuming process for Lockheed Martin buyers, the standard procedure was to process all orders from one site - urgent and non-urgent - before moving on to the next, as shown in Fig. 10. It is easy to calculate that when processing data from 14 sites, it often took 14 days or more before the supplier was ready to take the next batch of orders from the site.
Moreover, the same product, such as the Intel Pentium processor, could be ordered 14 times under 14 different internal designations (while each order could be 1/14 of the total), which increased the cost per product and increased the total time waiting and delivery 14 times.
The value stream map showed that most of the delays in the procurement process as a whole were caused by the "changeover" problem, which was the main hidden time loss. It was clear that if this problem was not solved, other improvements would be useless. These conclusions were confirmed by the "voice of the customer": the most important point for the consumer sites was the acceleration of the fulfillment of purchase orders and the reduction of procurement costs.
The MAC-MAR team mapped the process, determined the amount of work in progress at each stage, identified the longest delays, identified the complexity, and realized that the solution to this problem had two components:
- a program should be developed that will be compatible with the computer systems of all departments and will be able to group orders according to the types of products, displaying the summarized data together (this will avoid delays due to constant changeover when connecting to different systems);
- the structure of the program should allow suppliers to sort orders by delivery time and product types.
The result is shown in fig. 11. Instead of information on one site, now only urgent orders from all sites are brought together here. By clicking on the relevant product name, you can get information on purchase requisitions and see their history. Further transformations included expanding the range of contracted products, allowing buyers to place an order at the touch of a button (rather than reconfiguring the system to place individual orders), and many other enhancements.
Rice. eleven. Interface view after transformations
At first glance, the information on the screen does not differ much from what was originally presented (Fig. 9). However, the ability to sort orders received from all sites in order of delivery priority means that it is now possible to combine information received from different sites using different programs.
Overcoming the problems of working with different programs has increased the flexibility of the procurement process.
- Changeover time was reduced from 20 minutes to almost zero.
- The batch size is now 1 order, because the supplier does not have to switch from one area to another when placing orders.
- Cycle time, which used to be over 14 days, is now less than 1 day (if the supplier starts from site A, he can process all urgent orders and return to site A on the same day).
- WIP: Customers used to wait in line for up to 14 days, with an average wait of 7 days or 56 hours. Now the maximum wait time is 2 hours and the average is 1 hour.
- Productivity has improved - instead of serving one customer per 8-hour workday, orders from 14 customers are now processed every 2 hours (which corresponds to 56 customers per day).
Who is comfortable with this work - you or the client?
The MAC-MAR working group made other changes to the process (including expanding the list of pre-agreed conditions). Altogether, these changes resulted in a 50% reduction in procurement costs, a 67% reduction in lead times for FMCG products (from 6 to 2 months), an increase in plant productivity of almost 20% due to on-time deliveries, and an average unit cost of materials decreased by 6.4%. This example illustrates another key Lean discovery: the speed of any process is proportional to its flexibility. Lockheed Martin's original process was very inflexible (turnover rate for the consumer was 21 days); when the process of switching between clients became much simpler, suppliers were able to significantly speed up the process.
Changeover times and batch processing in the provision of services
It doesn't occur to many that there is also changeover time in service delivery. After all, if the transition from serving one customer to serving another takes you a certain period of time or you need time to reach normal productivity, we are talking about changeover time. If you are postponing servicing a client (internal or external) because it is more convenient for you to continue with the current work, then it is more convenient to process in batches. Chapter 11 explains how to eliminate these sources of process delays.
Why Lean Manufacturing Can't Do Without Six Sigma?
Lean is very effective at optimizing lead time and eliminating non-value-adding costs, yet there are some serious problems that remain unexplored even in the most advanced lean literature. Six Sigma solves these problems, which is why it is a necessary complement to Lean.
1. Lean does not contain specific culture and infrastructure prerequisites for sustainable results.
Most of the Lean sources do not address the issue of the infrastructure that is needed to successfully implement Lean projects and not only achieve appropriate speed, but also maintain it. In fact, many companies that adopt Lean willy-nilly have to develop infrastructure similar to Six Sigma, but instead of immediately adopting the traditional Six Sigma structure, they do so only under pressure. Companies that only use Lean are often unable to implement this method throughout the organization and achieve sustainable results because they do not have a clear Six Sigma organizational infrastructure. Such an infrastructure ensures the involvement of top management in the process, allows for training, fixing the allocation of resources, etc. In its absence, the success of lean production depends only on personal initiative. I have seen many successful lean programs fizzle out when management changes. In this respect, Six Sigma is less vulnerable (although it cannot be said to be completely immune to such problems): it proceeds from the fact that the interests of shareholders should be defended first. Any book on Six Sigma deals in detail with the issue of stable infrastructure, but this issue is not addressed in any book on lean manufacturing.
2. Lack of focus on critical features from the customer's point of view
By requiring the identification of process components that add value, lean includes some elements of customer orientation, but its approach is introspective. The value stream mapper makes the decision based on whether the activity adds value or not. In contrast to this approach, Six Sigma determines when to include the voice of the customer and the voice of the supplier in the improvement process. The most important indicator of this method is the characteristics that are critical for the client, the means to take into account the "voice of the client" are provided at the "Definition" stage of the DMAIC cycle (Define - Measure - Analyze - Improve - Control). In other words, Lean lacks the customer focus that permeates Six Sigma work.
In my experience, most people in the financial services industry are interested in Six Sigma, although they think that Lean is more appropriate in a manufacturing environment. However, after learning about lean from their own experience, they change their attitude, seeing that these methods are faster and easier. Applying Six Sigma tools requires a lot of effort.
Daryl Green, Senior Vice President, Bank One
3. Lean Doesn't Recognize the Impact of Variance
Lean manufacturing does not have the tools to reduce variance and provide statistical process control. Six Sigma considers the elimination of deviations a key factor and offers a wide arsenal of tools for dealing with deviations (from statistical process control to experimental design). As mentioned above, 10% defects can lengthen lead times by 38% and increase WIP by 53%. In other words, the speed and cost savings achieved through lean manufacturing can be offset by increased variances!
Rising defect rates are not the only source of variance, which leads to increased WIP and lead times.
“Who needs lean manufacturing? I don't have time to change!"
Most service providers believe there is no changeover time in their operations. They associate it with dead zones during the transition from the manufacture of one type of product to another in production. However, there is usually a learning curve in the process of switching from one task to another before performance peaks, as we saw with Lockheed Martin's MAC-MAR Supply Center. Such a learning curve is shown in Fig. 12.
Rice. 12. Learning Curve Costs and Performance
An employee remains "attached" to each task for 20 minutes, despite current customer demand requiring that task be completed within 5 minutes. This is analogous to the situation at Lockheed Martin, where the supplier was "bound" to one client all day long, and the number of "tasks" in front of him was 14, corresponding to the number of sites (tasks A to N). In this case, the total order time is quadrupled. The application of lean manufacturing methods can significantly reduce the time taken by the learning curve.
Bottom line: Anything that lowers productivity leads to longer lead times, as people stay “attached” to the same type of task for longer than current consumer demand requires. Using lean manufacturing tools can significantly reduce lead times and minimize the impact of changing activities on productivity. One of the main sources of the learning curve is complexity, that is, the variety of tasks performed. The greater the number of different tasks, the less often they are repeated, the steeper the learning curve. Therefore, by reducing complexity, Lean Six Sigma solves the learning curve problem.
Variations in demand and time spent on operations to create products have a significant impact on lead time, while lean manufacturing does not imply a direct impact on these factors. This connection is illustrated in Fig. 13, which depicts the results of one of the stages of the procurement process described above at Lockheed Martin.
Rice. 13. Impact of deviations on waiting time
Imagine that Bob spends on average 16 minutes on a particular task. However, due to variability in 68% of cases (one standard deviation), the total time can deviate from the average in one direction or another by 8 minutes, in which case the coefficient of deviation will be 8/16 = 50%. Now suppose that Bob has a similar variance. As can be seen from the figure, if Bob is loaded to 90% of his capacity, the work he is doing will wait in line for an average of 60 minutes, which accounts for about half of the waiting time in line. If Bob encounters a particularly difficult problem, this time can increase to 100 minutes.
Deviation has little effect on processes that run with a large margin of throughput (left side of graph). But the vast majority of service organizations operate near capacity limits, which is when variances have the greatest impact on how long a job (or customer) has to wait "in line." Processes involving direct contact with the consumer are often subject to high demand deviations, since we cannot control the actions of the consumer, who chooses the time of contact at his own discretion. What is the conclusion? The higher the deviation at the input, the greater the bandwidth reserve should be provided. If the deviations are small, or we can control demand in some way (which is more likely in the case of internal processes), we can work with increased load without the risk of significant delays. When I first presented this analysis to Lockheed Martin, Manny Zulueta, Vice President of Lockheed Martin's MAC-MAR Supply Center, said, "This confirms our observations!"
The impact of demand fluctuations on waiting times is greater the higher the percentage of capacity used by the process (as seen from the steep slope of the curve on the right). The more significant the deviations, the stronger this influence.
Lean also needs DMAIC
Most Lean descriptions start problem solving from the Improve stage, bypassing the Define and Measure stages. Because the Define stage identifies the scope of the problem, and the Measure stage seeks to quantify it and relate it to resources, people often bite into a portion of Lean that they can't chew or get lost in the confusion. miscellaneous improvements.
Why does Six Sigma need Lean Manufacturing?
There are gaps in Six Sigma, as there are in Lean methods. Let's take a look at what six sigma deficiencies can be addressed by lean manufacturing.
The general idea is that, as the practice of many companies has shown, using Six Sigma can achieve a lot. But there is one difficulty. Whatever tool you choose, if there is no lean component in it, if you do not pay attention to increasing speed and reducing WIP, all your achievements will sooner or later come to naught. The process will remain slow and laborious, and the costs will be prohibitive. There are five reasons why Six Sigma needs Lean Manufacturing.
1. Identification of losses. Although process mapping is one of the six sigma tools, it does not collect data (including changeover time, unit processing time, transportation, etc.) necessary to numerically describe the process steps and identify activities that do not add value and increase the cost of the service/product. Lean manufacturing has a powerful tool in its arsenal - the value stream map, which overcomes barriers between functional units and allows you to identify waste and delays. Six Sigma rarely looks at activities from a value-adding perspective and does little to eliminate non-value-adding activities. First of all, the Six Sigma protocol prescribes the elimination of deviations, and only if this proves impossible, design according to the Six Sigma criterion (DFSS) is carried out. Lean manufacturing assumes that process reengineering (to eliminate non-value-adding activities) is necessary to some extent in all cases below 10%.
2. Increasing process speed and cycle time. Cycle time and responsiveness optimizations are often considered the result of Six Sigma. However, Six Sigma experts do not link quality and speed either practically or theoretically, nor do they set a limit on the amount of work in progress required in the "pull" system (this operation is needed to make lead time a controllable parameter with limited deviation). The volume of work in progress is the most important factor in cycle time (according to Little's law). If you do not limit the amount of work in progress to the maximum allowable limit, reducing cycle time will remain a dream.
Loss of a client
One of the most significant losses that Lean does not take into account is the loss of a customer. You are missing out on customer-related revenue, and the cost of acquiring a new customer is typically much higher than selling the same amount of service or product to an existing customer. In fact, all the waste that Lean explicitly defines is internal to the process, not external. It can be shown that eliminating these internal losses greatly reduces the chance of losing an external customer, because you are delivering services quickly, without loss, and at minimal cost. However, you can waste a lot of time and effort delivering a service that the customer doesn't want, and so Six Sigma takes a more constructive approach to addressing the "voice of the customer" and defines customer loss as a defect.
3. Tools to improve speed. Six Sigma tools rarely include Lean tools such as Total Machine Maintenance (TPM), Value Over Time, 5S, etc. These extremely effective speed tools have been developed and refined over decades practical application. Of course, in order to adapt them to the service sector, some effort is required, but neglecting them, you will not achieve maximum process productivity.
4. Methods for obtaining quick results (kaizen process, DMAIC). Lean manufacturing has a kaizen method of rapid improvement. It is a short-term, intensive project, when a group of people with relevant knowledge, within four to five days, purposefully and systematically improves the chosen process or activity. The effectiveness of such events is extremely high, the need to quickly achieve tangible results gives a powerful impetus to creative thinking. As you will learn in this book, kaizen plays a prominent role in service delivery, although the method often requires some modification. Availability in your arsenal operational method The improvements provide an excellent catalyst for DMAIC projects. Lean's action-oriented approach results in faster results.
5. Six Sigma quality is achieved much faster after the elimination of non-value-adding steps in Lean. The Six Sigma Research Institute has compiled a table (Fig. 14) that explores the total impact of defects on the real throughput. For example, consider an invoicing process that includes 20 transactions, each at level 4a (99.379% yield). The total real throughput will be (0.99379) 20 = 88%, which is quite typical for service delivery processes. This low yield creates problems with accounts receivable and necessitates money grabbing and reprocessing.
Rice. 14. Real Bandwidth
This table clearly shows that it is very difficult to achieve high quality processes with a large number of operations, and vice versa, low quality much stronger effect on a complex process. Most effective method Achieving Six Sigma quality is about simultaneously improving quality and applying Lean principles to eliminate non-value-adding process steps.
The use of lean manufacturing tools allows you to quickly (at most in a few weeks) get rid of non-value-adding activities, most likely there will be at least half of them (10). Thus, now, instead of 20 stages of invoice processing, only 10 pass. It is clear that even without additional quality improvement measures, a 10-stage process has a much lower probability of errors than a 20-stage process.
In this case, the real throughput increases to (0.99379) 10 = 94%. Higher output will increase the return on your improvement investment, and more importantly, the speed of the process will double, allowing you to not only deliver your services to the customer faster, but also increase the rate of return on your quality tools by doubling their effectiveness.
By combining Lean and Six Sigma, you can not only reduce the number of operations, but also increase the quality level of the remaining operations to, say, 5a, which will increase the real throughput to (0.99976) 10 = 99.8%.
A challenge for Six Sigma proponents
The question sometimes arises: is it better to start with Six Sigma process optimization (without eliminating non-value-adding stages) or eliminate non-value-adding stages first using Lean manufacturing methods and only then move on to Six Sigma process optimization. Some Six Sigma proponents believe that lean manufacturing practices (such as the "pull" system) should be applied after the process is in a controlled state and has become optimized. However, this point of view is easily challenged: “Would using lean manufacturing and a “pull” system that will allow you to control speed and reduce cycle time hurt the implementation of Six Sigma?” In fact, using the arsenal of Lean and Six Sigma tools at the same time will have the most beneficial effect on the culture of the enterprise. Projects should be selected based on their impact on improving ROIC, not on the set of tools needed to solve the problem - the one that Lean offers or the one that uses Six Sigma.
Merging Lean and Six Sigma to Improve Services
It is known that Lean Six Sigma is a powerful tool for implementing top management strategy and a tactical tool that allows managers of independent departments to achieve annual and quarterly goals. If management stays away from the Lean Six Sigma program, the company will most likely have to give way to competitors where leaders have added these methods to their arsenal.
Merging the fundamentals of Lean and Six Sigma allows us to formulate five "laws" that guide the direction of improvement efforts. Below are the first four (we started their numbering from 0, since this law is the basis for the rest).
0. Law of the market. Quality-critical issues from the customer's point of view are the top improvement priority, followed by return on invested capital (ROIC) and net present value (NPV). We call this law the Zeroth Law because it is the foundation for the others.
1. The law of flexibility. The speed of any process is proportional to the flexibility of that process (see Figure 10).
2. The law of focusing. 20% of all operations are responsible for 80% of delays in any process.
3. Law of speed. The speed of any process is inversely proportional to the amount of work in progress (or the number of "objects" in work). Little's law states that the number of items in a process increases due to long setup times, rework, demand and supply variances, time, and complexity of the product being offered.
4. The law of complexity and costs. Typically, the complexity of a proposed service or product increases non-value-adding work and work-in-progress by more than poor quality (low sigma) or slow speed (lack of lean).
History of success. New Lockheed Martin Traditions
Lockheed Martin was formed as a result of the merger of Lockheed and Martin-Marietta (one of a number of mergers) in 1995, so formally this enterprise is about seven years old. But ask the people who work here, and they'll tell you the company feels even younger because as recently as two years ago, most employees were closely tied to their former organizations, and Lockheed Martin was more of a heterogeneous group of 18 corporations than unified education.
Two years ago, the LM21 Operational Excellence program was born, based on Lean Six Sigma. According to Mike Joyce, vice president of LM21, it was this method that became the consolidating beginning for the company, which helped employees learn how to work together for a common goal. Below is how they achieved this.
Business idea
The success of Lockheed Martin is largely determined by inventions, major scientific and technological achievements and quality of workmanship. This explains why so much of the improvement effort is in service delivery: development, procurement, engineering, lifecycle support, hiring, billing customers, legal support etc. Procurement is also a service that comes to the fore, since about 50-60% of the costs for each type of product are purchased or subcontracted.
As Joyce says, “It would never have occurred to us to equip new fighters with 1975-style radars, but nevertheless, it seemed quite acceptable to us that 1975 business processes were used in our supply chain. We need not only to develop a new radar, we must thoroughly work out the very process of creating this radar.”
The government has contracted Lockheed Martin to do what the company defines as "software development" - developing custom software solutions to meet specific customer needs. The company says: "Scientific and technological achievements and innovative solutions are part of our daily work." No wonder 50,000 out of 125,000 employees at Lockheed Martin are scientists and engineers.
The issue of tradition at Lockheed Martin was a very important factor. Lockheed Martin incorporated former divisions from a wide range of companies, including General Dynamics, GE, IBM, Goodyear, Westinghouse, Loral and Ford, each with its own heritage. The combination of 18 different companies meant 18 different computer systems, 18 different product numbering systems, 18 different approaches to sourcing, 18 ways of making specifications, hiring employees, paying bills.
What's more, every company had a different history of quality improvement: quality circles, statistical process control (SPC), continuous streaming, six sigma, TQM, lean manufacturing. Consequently, Lockheed Martin's improvement strategies were, on the one hand, to give people the opportunity to be proud of the traditions of their company and continue them, and on the other hand, to ensure coordinated teamwork.
Movement towards this goal began in 1998, when the management of Lockheed Martin realized that the new enterprise had huge resources of quality and craftsmanship. They rolled out a program called "LM21 - Best Practices" to bring their knowledge and experience to the entire company.
Mike Joyce, Vice President of the LM21 Program (Lockheed Martin's Operational Excellence Program), Manny Zulueta, Vice President of the Material Acquisition Center - Mid Atlantic Region (MAC-MAR ), James Isaac, Director of Supply Chain Improvement, Northern Material Acquisition Center, and Miles Burke, Certified Black Belt and Supply Chain Improvement Manager.
Lockheed Martin employs 125,000 people worldwide in four core areas: Aeronautics, Space Systems, Systems Integration and Service Technology.
While sharing best practices was a good start, it had its drawbacks:
- what is "the best"? In the current business environment, the pace of change is accelerating. By prioritizing best practices, you can lose sight of the losses and opportunities for improvement in the enterprise as a whole;
- people can become complacent. Lockheed Martin strives to ensure that every employee feels the urgency of continuous improvement and never think they have reached perfection. “The best” is a transient concept;
- the system of "best practices" was too flexible. At first, factories and other departments decided for themselves which of the best methods they wanted to use. “But when Lockheed Martin makes a product, it has to mean something in terms of quality standards,” says Joyce. - We can't let our divisions refuse to improve quality, saying, for example, that they are interested in best practices for business development. Quality and speed are a must for everyone.”
The LM21 program covered all departments of the enterprise, it extended to all types of work and was aimed at increasing productivity and efficiency.
Manny Zulueta, Vice President, Material Acquisition Center
So two years later, the priorities of the LM21 program shifted from focusing on best practices to excellence in performance, with the overarching goal of Lean Processes at Six Sigma quality.
“This covers the entire Lockheed Martin system in operation,” says Joyce, “everything we do from customer invoicing and purchasing to product development and hiring people.” The new LM21 approach is based on the principles of Lean Six Sigma: all work is carefully analyzed, value-adding operations and waste are identified, which are eliminated, and the remaining operations are improved. More importantly, LM21 is not perceived as something outside or external to the organization's activities. “It's a strategy that helps managers achieve huge year-over-year goals and put in place processes to deliver sustainable long-term results,” says Joyce. "It's up to each and every one to do their job and improve the way they do it."
Preparation and deployment
Integral part Deploying the LM21 program at Lockheed Martin is a critical part of a Six Sigma infrastructure. Among them:
1. Undoubted and clear support from senior management and their participation in the program
Lockheed Martin CEO Vance Coffman has been vocal about his support for the LM21.
2. Senior management trained in Lean Six Sigma concepts and how to apply them
Coffman and his executive committee Completed a four and a half day training course (two and a half days of classroom training and two days of hands-on training, focusing on process adjustments). This course included:
- Lockheed Martin's 5 Principles of Excellence (see sidebar);
- half day of classes on the topic "determining value from the customer's point of view", including round table with clients giving their opinion on whether it is convenient to deal with Lockheed Martin;
- study of value streams and process flows, including simulation modeling for systems development;
- structured problem solving practice.
Lockheed Martin's Five Principles of Excellence
Mike Joyce says it was important for Lockheed Martin to predefine the principles of excellence, as they serve as the criteria for choosing an approach to getting work done. These principles include elements of both Lean and Six Sigma.
- Understand what is of value from the customer's point of view. The client appreciates you not only for what you give him, but also determines whether it is convenient for him to do business with you. Everyone should understand what is the value for his client. Understanding this question correctly is the first step, because it allows you to classify any work as either adding value or waste. If you misunderstood value, then all subsequent work will be a waste!
- Understand what value streams are. The manager must know in detail in which departments of the organization the product or service is being created. There is no room for guesswork: you should write it down, documenting each step, and be prepared to answer questions like, “When was the last time we saw this? Where are these observations?
- Deeply understand the flow of work. Engineers often talk about the "top of the pyramid of requirements" - the most important need that a product or service must satisfy, and it is this need that dominates everything else. When perfection is achieved, the top of the pyramid of requirements is the design of systems that optimize the flow of data and the flow of "molecules". If you don't optimize the flow, you won't achieve optimal efficiency.
- Prioritize cycle time and pull. The goal is to reduce turnaround time to an absolute minimum so you can instantly respond to changing customer needs.
- Strive for perfection. For Lockheed Martin, this means Six Sigma quality at the speed of Lean manufacturing.
Leadership training has two other important aspects:
- At first, many members of Vance Coffman's team were unenthusiastic when they learned that they would have to set aside four and a half days in their schedule for training. In one of their meetings, Mike Joyce asked them, "How many of you have been trained in this way of thinking?" Of the 20 people, only two raised their hands (one was familiar with Six Sigma, the other with Lean Manufacturing). At the time, Joyce said that if this team was going to lead the company's implementation of Lean Six Sigma, they should know what they were talking about. After completing the training course, management representatives unanimously declared that it was the best training for all the time of their work. As Joyce himself said: “We were not going to make black belts out of them or to radically change the process in two days. But we hoped to provide momentum that would help them move in the right direction and support the LM21 program”;
- Lockheed Martin's top management team was trained in Lean Six Sigma within their departments, not in isolation. The question arose: "Why?" As Joyce responded, “Ultimately, everyone in the company needs to be involved in the LM21 program. So instead of training all of you together, I want you to be trained along with your staff in a work environment. Let everyone see that the leadership is determined to carry out this program.”
- The primary responsibility for identifying and selecting projects rests with line management (eg, departmental managers), who often act as project sponsors. They are usually the owners of the process, that is, they are responsible for maintaining and improving the process.
- The Subject Matters are a group of 20 experienced professionals who report directly to Mike Joyce. In this sense, they are like Six Sigma champions in other organizations, but at Lockheed Martin they play a much more important role. These 20 professionals come from different functional areas: business operations, cash control and regulation, supply chain management, production management, development, human resources, customer relations, logistics management, software management, etc. Their main goal is to study everything related to LM21 in a short time and promote the rollout of the program in each site and in each functional unit. Their mission is to act as catalysts for the process at Lockheed Martin's 36 sites and ensure that operations in these locations are carried out in line with the corporate methodology and meet established standards.
- Lockheed Martin has set itself the goal of training 1% of its employees to become certified Black Belts (certified means that they have completed a course of several weeks, completed a number of projects and are Green Belt mentors, helping the sponsor and administration of LM21).
- Anyone can take a 40-hour training course to become a "green belt". The Green Belt is required to do only one thing: after training, he must lead a team working on a project to achieve cost savings. To date, 43 out of 160 employees of the system integration group at the Material Acquisition Center have completed such training, 32 of them have certificates.
- increased demands on program managers.
Until now, most program managers have been required to do one thing - to provide the client with what is stipulated in the contract: “Here are the costs, and here is the work schedule. Ensure timely delivery." Now they are being told that this is not enough: they must not only meet cost commitments and stay on schedule, but also care about improving the way they work in the program they are responsible for. “It's like changing the rules in the middle of a game,” says Mike Joyce. - We want to make sure that they have the knowledge and tools that will allow them to be at the level of increased requirements”; - synchronization of work of all departments of the enterprise.
Suppose Lockheed Martin focused solely on streamlining manufacturing operations and made them the epitome of lean manufacturing: fast, efficient, just-in-time, without unnecessary investment in inventory. However, all this work will go down the drain if the planning department continues to process orders in batches or if the supply does not eliminate the shortage, and the suppliers do not provide the required quality or improve the design. Problems of this kind can affect the performance of any organization that does not adhere to a systematic approach to work, making sure that the pieces of the puzzle add up to a single picture. Keeping track of all of these things helps companies avoid the classic state of constant failure that limits the return on investment in Lean Six Sigma; - convince people they can't do without Lean Six Sigma.
Your attempt to bring Six Sigma, and especially Lean, to the service industry is likely to be met with one of two replicas (and both are well known at Lockheed Martin). First: “It doesn't suit us... It has nothing to do with software. legal services. to (fill in yourself). Second: “You see, we have already tried this. We did this ten years ago. It doesn't make any sense." To these objections, Mike Joyce replies, "Okay, let's watch your process and find out what's really going on." He invites people to independently go through the entire process that the document goes through, observe what happens, and collect data on the current state of affairs. People are invariably amazed by their discoveries. and begin to realize that they have plenty of room to improve quality, speed, and reduce costs!
3. Management at all levels received basic training
When the training was completed by a team of senior managers, the basic course was required to master all Lockheed Martin employees who are included in the material reward system. In this organization, this applied to everyone who held a directorial or higher position. This five-day lean training was organized within the divisions and delivered in groups of 50 until all 5,000 managers completed it. (Now the program has expanded to include customers and supplier leaders, who have been trained in ways to get results quickly.)
4. Implementation started with value stream mapping
From a strategic point of view, the starting point for Lockheed Martin was to map the value stream at the program level, since it is at this level that cross-functional stream optimization takes place (a program is a set of processes that is used to provide a specific customer with a product or service). The value stream map reflects the current state of affairs, that is, it shows what is happening in the workplace. Value stream maps provide an opportunity to evaluate operations based on the principles of excellence: are you creating value in the mind of the customer? What are your omissions? What can you do to overcome them?
5. They continue to build stable infrastructure
All employees are involved in improvement projects and undergo just-in-time training. LM21 projects rely on an internal workforce that includes black belts, green belts, sponsors, and what Lockheed Martin calls experts in subject area(Subject Matter Experts - SME).
6. Their methods are a fusion of Lean and Six Sigma.
The LM curriculum and improvement methods are a combination of Lean Six Sigma core tools and principles, such as DMAIC methodology, identifying the seven wastes (a Lean tool), process mapping, working on cycle time reduction, etc.
7. At the first opportunity, they took on the suppliers.
“Like most manufacturers, we have always paid great attention to the control of incoming materials, making sure they meet our requirements. technical requirements and engineering documentation,” says Manny Zulueta, vice president of Lockheed Martin's Material Acquisition Center. “Then we rolled out five or six programs where we worked with major suppliers to implement Lean and Six Sigma in their factories to make them better suppliers... And we got the materials coming in almost flawless. Now, when we receive the material, we just need to make sure that it has arrived in the right quantity, have a quick check of its condition, and then we can send it to the warehouse.”
Supplier collaborations range from Lockheed Martin's Lean Six Sigma training to supplier staff to workshops where suppliers can share experiences.
However, the possibilities of such cooperation are not unlimited. With thousands of suppliers, Lockheed Martin cannot do this with all of them. “We identified a set of criteria that allow us to determine how important a particular supplier is to us, weighed all the pros and cons, and evaluated them using a system of quantitative indicators,” explains Zulueta. - We took into account the following factors: how well suppliers meet our requirements, whether they have technologies that are important to us, to what extent their work affects the quality of products, etc. We have compiled a list of about 200 top suppliers that we all want to work with ".
“The secret to partnering with suppliers,” says Zulueta, “is a close relationship with the management of the supplier company. Everything works out if we manage to involve the top management, because we believe that it is imperative that they be involved in the transformation of processes. Usually such work with the supplier takes several months. We cannot do without the support of senior management. If the president of the company, CEO or general manager is not interested in it, most likely the business will end in failure.
Lean Six Sigma Experience Helps Advance
James Isaac is an example of how the LM21 program is being used for leadership development. He is now director of supply chain improvement at MAC-MAR, a position he assumed in the spring of 2002. Prior to that, he worked for two years in the role of "specialist in the subject area." “We received a very thorough training,” says Izak. “At the same time, we received personal training in management skills, participating in the work on successful projects and improving productivity.”
Before Isaac was appointed to his current position, he was only indirectly involved in supply chain management. “Before I became a specialist, I worked with Lockheed Martin as a systems engineer for 18 years,” he says. - It was very interesting to look at the design from the point of view of the supplier. Now I look at what is happening with the developments that I used to do myself, with completely different eyes.
results
Today, the LM21 program brings together more than 5,000 projects, more than 1,000 of which are carried out in the field of business operations (management, financial management, closing deals, supply, etc.). The original goal was to reduce costs by $3.7 billion over four years - in fact, the cost savings are closer to $4 billion. As Mike Joyce noted, in an organization of the size of Lockheed Martin, it is difficult to argue that all this is the result of LM21, however the attention paid to perfection is undoubtedly one of the most important factors. Other business indicators are also improving: the company has a record number of orders; liabilities have fallen significantly from their level at the time of the merger; annual inflow Money numbered in the billions. These changes, many of which are in the service sector, have allowed Lockheed Martin to create a next-generation cruise missile with the same capabilities as other products, but at half the cost and three times the cycle time. All lean manufacturing metrics at the departmental and individual project levels have improved significantly. Handovers have been significantly reduced in many processes, resulting in faster cycle times and greater customer satisfaction.
Similar results are visible in the area of production activities of a non-core nature, which is engaged in Lockheed Martin. Comparable acceleration and cost reductions have been achieved by the Naval Electronics and Surveillance Systems group, which provides products and services to combat fleets around the world, including advanced shipborne combat electronic systems in combination with communication systems. These results are reflected in the ability of Lockheed Martin in relation to new orders. For example, the company was recently selected as one of the prime contractors for Deepwater, the most ambitious US Coast Guard program ever.
For this infrastructure restructuring program navy billions of dollars have been committed, and Lockheed Martin will lead its implementation. Starting its 20-year program, the company is using Lean Six Sigma tools extensively to define customer value and identify critical customer requirements, using Six Sigma design and establishing close relationships with new suppliers. .
Grow your business
According to Mike Joyce, it's important that management doesn't equate "waste elimination" with "laying people off."
“The goal of LM21 is not to fire people after we eliminate waste, but to improve our operations and provide people with value-adding work without letting them waste their energy,” he says. “By eliminating losses, we can offer the client a better deal, which will allow us to develop our business.”
Like any other company, Lockheed Martin admits it cannot guarantee lifetime employment. But working under the LM21 program expands the company's ability to win major new contracts. Employees who participate in LM21 trainings and projects acquire skills that enable them to better serve customers, which means that their chances of long-term employment with the company increase. “The client provides us with work,” says Joyce, “so ultimate goal everyone and everyone is stable employment”.
Challenging tasks
Imagine how difficult it is to get 125,000 people to think and work in a new way, and you will appreciate the work done by Lockheed Martin. The company has set a goal - 60% of employees (about 70 thousand people) by 2004 must either take a week-long training course to receive a "green belt" or take part in a week-long project. Meanwhile, the company is actively engaged in the compilation of value stream maps for all implemented programs (their number is 2000). Among other tasks:
This data is correct for a normal distribution. It should be borne in mind that not every process is characterized by a normal distribution. More about statistical process control: Wheeler D., Chambers D. Statistical process control. Business optimization using Shewhart's control charts. M. : Alpina Business Books, Alpina Publishers, 2009. Approx. scientific ed.
More on Lean Terms: An Illustrated Glossary of Lean, Ed. C. Marchvinski, D. Shuka. - M.: Alpina Business Books, 2005. Approx. scientific ed.
Read more about value stream maps: M. Rother, D. Shuk. Learn to see business processes. The practice of building value stream maps. - M.: Alpina Business Books, 2005. Approx. scientific ed.
It should be borne in mind that D. Womack and D. Jones, who “formalized” Japanese “lean manufacturing” for Americans in the early 1990s, start with customer value as one of the central ideas of the entire concept of lean manufacturing. Note. scientific ed.
Extremely popular among the Japanese (and, first of all, at Toyota), control charts - the main tool for reducing variability - arose long before the concept of six sigma. Accordingly, it is difficult to agree with the author that lean manufacturing ( production system Toyota) does not have such tools. In general, no improvement in quality is possible without a reduction in variation. Note. scientific ed.
Developed based on the work of James Womack, author of books such as The Machine that Changed the World and Lean Thinking : Alpina Business Books, 2005). Note. scientific ed.
Lean in the Perform methodology is a comprehensive system aimed at improving customer satisfaction and team performance.
The main benefits for the company are increased efficiency and competitiveness
- Efficiency increase by 20% (on average), incl. through performance
- Improving the quality of services provided and increasing customer satisfaction
- Strengthening teamwork, increasing the initiative and involvement of staff
- Staff development and professional growth
- Additional increase in business efficiency by 5-6% annually
Whiteboard meetings promote focused discussion of employee workload and continuous improvement
Visualization boards act as "dashboards" that reflect the effectiveness of the team's work, incl. qualitative and quantitative KPIs
Visualization board key blocks:
- Individual and team performance
- Problems and Ideas
- News
- Command section
whiteboard meeting– a focused discussion that creates a single information space for an interactive discussion of the results of work and opportunities for improving efficiency
- Carried out by the team on a regular basis
- All team members actively participate in the meeting, the rotation of moderators is observed
- Duration – 15 to 30 minutes
- Motivates and energizes the team
Kaizen session- a tool for structured solving complex cross-functional problems and generating ideas - structured brainstorming aimed at developing solutions to existing problems, as well as identifying new hidden problems. It is characterized by a strict sequence of actions and a wide range of tools used, the session is controlled by the moderator.
LEAN production concept
The concept of LEAN Production (“lean manufacturing”) was formed at Toyota in the 1950s. In the sixties, Toyota triumphantly broke into the car market: Japanese cars turned out to be both better and cheaper than American ones. Then the LEAN concept was also interested in other industries: energy and trade, services and healthcare, the army, and later in IT.
The essence of LEAN is to do everything possible to really understand the requirements of the client and gradually remove everything unnecessary that does not bring value to him. That is, do this:
Lean IT (lean IT)
Lean IT (Lean IT) is a business concept that, in relation to the work of the IT department, has inherited a strict Lean approach (the concept of managing the production cycle of an enterprise, based on the constant desire to eliminate all types of waste). Its aim is to do more work for less, but on the condition that the benefits Lean applications IT, will be no less than before. However, if the benefits of adopting Lean are obvious, then why are IT departments so overwhelmed by it that they don't even respond to business unit requests for digitalization?
The problem is waiting. The fact is that after the introduction of Lean IT, the leadership of the IT departments wants to see an immediate return, they literally get hung up on this, endowing the methodology with miraculous possibilities. As a result, the team responsible for the implementation of Lean IT begins to rush, and this begins to affect quality: processes are carelessly automated or outsourced to third-party managed service providers without proper quality control. Many IT departments don't pay enough attention to IT staff training, so automated processes often fail either at the company itself or at the outsourcer. Thus, instead of collaborating with business departments, IT personnel have to periodically refine "automated" processes, which does not leave them time to work on such really important projects like digital transformation.
How to approach Lean IT from the right side?
The first thing to keep in mind is that the IT team should not rush to implement Lean IT, otherwise it will lead to technological failures. First, you need to create a proper nomenclature of technology services with a description of the implementation scheme for each of them. Here's what it should have:
- a detailed scheme for putting the service into operation, what is needed to support it at the initial stage and at the end life cycle;
- list of involved technical staff and their managerial roles;
- requirements for service providers;
- life cycle planning, quality control;
- relationship with other departments.
It should also be borne in mind that, unlike Lean in manufacturing, which is aimed at reducing all types of costs, Lean IT in the software area must adapt to the speed of technology development and the variability of business needs. This is the key difference between Lean IT and Lean in production - the latter is much more static in nature, so major changes in it can be planned in advance. When counting on the introduction of Lean IT, it is worth considering the impact external factors and especially breakthrough digital technologies- all this requires giving business processes a digital look and this work should be carried out by the IT department.
Thus, for the successful implementation of Lean IT, confident adaptability to changing business processes is necessary - even a slight turn in business strategy requires IT professionals to quickly make changes or add new technology. To be able to respond to these changes, the IT department needs to resort to dynamic buffer management (Dynamic Buffer Management, DBM) - this is another development from industrial Lean, but in IT it will help manage the services that IT departments need to manage or create. IT always has the resources and best practices to streamline workflows, it's important to be realistic about the current pace of digital innovation.
6 Sigma concept
The 6 Sigma concept was developed by Motorola in the 1980s in order to reduce deviations in manufacturing processes. electronic components. The name of the project is based on the Greek letter "sigma", which denotes the statistical concept of standard deviation.
In the conditions of an unstable and volatile economic situation, more and more attention is attracted by management methods, including production, aimed at overcoming crisis phenomena and increasing the efficiency of enterprises at the expense of internal resources. Among the advanced approaches aimed at improving the performance of any enterprise, the concept of "Lean Production" (or Lean-system) stands out. The introduction of the principles of the Lean-system allows you to bring any company to a qualitatively higher level: it helps to find ways to optimize business processes by eliminating losses and inefficient operations at all stages of the production process, to identify sources for further growth.
Lean Six Sigma- an integrated concept that combines the most popular quality management concepts in the 90s of the last century: the concept of " Lean manufacturing, focused on eliminating waste and overhead, and the concept of "Six Sigma" (Six Sigma), aimed at reducing process variability and stabilizing product characteristics.
The Lean Six Sigma model is a combination of two popular approaches abroad. The central theme of the Lean concept is customer value. Its ancestor was the Japanese corporation Toyota, where lean manufacturing methods were formed back in the middle of the last century. Within the framework of the Lean model, any activity is classified into operations and processes that add value or neutral. The first group develops, the second is considered as losses and eliminated. Popular Lean solutions are, for example, 5S (five simple steps to create a quality work environment to increase productivity), kanban (a system built on the principle of "just in time", that is, with minimal inventory), kaizen (a focus on continuous improvement at each stage of value creation), TPM (total care behind the equipment).
The concept of Lean Six Sigma has a wide scope and can be used by any enterprise, regardless of size and field of activity.
The period of formation of the concepts of "Six Sigma" and "Lean Manufacturing" falls on the mid-80s of the last century. At that time, in the field of production, the highest requirements were set for product quality and resource saving. The concept of "Lean Manufacturing" was created as a cost optimization methodology in the automotive industry. The concept of Six Sigma owes its birth to the defect management program finished products by reducing process variability in semiconductor manufacturing. It is only natural that the pioneers in the application of these concepts were manufacturing enterprises. The stages of development of the concepts of "Six Sigma" and "Lean Manufacturing" repeat the stages of development of standards for quality management systems (QMS). The progenitors of the most used standards for the ISO 9000 QMS were standards containing quality assurance requirements for the military industry, later for the automotive and mechanical engineering.
Six Sigma is a process optimization methodology based on mathematical models. It was formed at Motorola, but became widely known after being adapted for General Electric. The name comes from the statistical concept of standard deviation, denoted by the Greek letter σ - sigma. The maturity of the production process is assessed by calculating the yield of defect-free products. The lower the index, the more stable the production. It is believed that the highest level of Six Sigma gives no more than 3.4 defects per million operations.For some time, the concept of Lean and the Six Sigma methodology, developing in parallel, competed with each other, finding their supporters and opponents. Many companies use a comprehensive version of Lean Six Sigma. After all, an integrated solution allows you to get an economic effect both by reducing losses and by building stable and controlled processes.
The beginning of the 90s of the last century can be characterized as a time of active use of standards for management systems and the concepts of "Six Sigma" and "Lean Manufacturing" in non-traditional areas for them. Increasing competition pushed service and intellectual product producers, state and public organizations to find new ways to maintain and increase demand. From the point of view of consultants, the prospects for adapting the standards and concepts of quality management to the needs of enterprises in these areas were extremely wide. For example, at present, 80% of the gross national product is produced in the service sector. Having undergone repeated testing at enterprises in both manufacturing and non-manufacturing areas, the concepts of Six Sigma and Lean Manufacturing have gained universality. As a result, the name "Lean manufacturing" - "Lean production" - was transformed into "Lean" - "Lean management". By the mid-90s, Six Sigma and Lean Management concepts became one of the most sought-after areas consulting business in quality management.
The ratio of "the number of successful implementations" to the "total number of implementations" is higher in comparison with other methods and concepts of quality management. In addition to the subjective factors of success, due to the efforts of training centers and consulting firms, there are a number of objective factors. With regard to the Six Sigma concept, the most significant one stands out among the success factors - high organization. High organization is one of the most distinctive features of American business, which is expressed in the following:
- all activities are carried out within the framework of projects, each of which has set goals, deadlines, budget, distribution of responsibilities and authorities, requirements for identifying risks, maintaining records, etc.;
- the requirements for the knowledge and skills of the personnel involved in the projects are clearly defined and classified into categories (“black belt”, “green belt”, etc.);
- the progress of each project is regularly monitored using an established system of measurable indicators - "metrics".
There are several success factors for Six Sigma. The procedure for its implementation is formulated in the American Quality Engineer's Handbook as "identifying, selecting, and executing projects." The greatest attention is paid to the choice of projects, which must be justified both from the point of view of the greatest economic feasibility, and from the point of view of the possibility of implementation in practice. It is interesting to note that a specialist with a “black belt”, despite the nature of his work, has all the advantages of an external consultant, namely:
- he is independent and can make impartial assessments and judgments;
- he is not perceived by colleagues as “one of us”, his opinion is listened to as the opinion of an expert in matters of quality improvement;
- The reputation and further career of a Black Belt specialist is completely determined by the success of the projects implemented by him within the framework of the Six Sigma concept, which explains his high level of motivation.
Specialists with a "black belt" can be hired on a part-time or full-time basis. To assess the results of their activities, “lower and upper limits of tolerance” are set - for a year of work, a specialist of this category, hired for a full-time job, should bring savings to the enterprise from $ 500 thousand to $ 1 million. upper bound is unlikely. The Lean Management concept, which was first formed in Japanese enterprises, has other success factors. High organization is no longer a factor in achieving success, but a result. The achieved high organization of processes (both main and auxiliary) allows the enterprise to save a significant amount of resources. In addition to the fact that the concept of "Lean Management" implies fundamentally new approaches to the culture of management and organization of the enterprise, it also offers a set of tools that make it possible to reduce the cost and speed up processes. The main tools are already well known to quality specialists: just in time (just in time), 5S, kaizen (the concept of continuous improvement), value stream management (value stream management), poke-yoka (error protection method), etc. In this On the list, practitioners identify "value stream management" as one of the most effective tools in achieving the goals of the "Lean Management" concept.
The concept of "Six Sigma", which has American roots, is related to the Japanese concept of "Lean Management" by mutual interest in a single process. This significantly distinguishes them from many "venerable predecessors" focused on universal coverage, and makes them related to new generation concepts such as "business process reengineering". The concepts of Six Sigma and Lean Management complement each other perfectly.
The concept of "Lean Management" does not establish requirements for the form of implementation of the concept and the infrastructure required for this. Therefore, the success of Lean Management largely depends on the initiative and organizational skills of managers, but when managers change, everything can collapse. Lean Management lacks formal commitment from top management, formal learning, planned resource allocation, success tracking with corrective action, etc.
The Lean Management concept is not focused enough on consumer needs. Their satisfaction is not directly related to its main goal - the elimination of losses and unproductive costs. In the Six Sigma concept, the focus on consumers is a key element. This is confirmed by the fact that all the main metrics of this concept are based on tracking the relationship of process parameters and product characteristics with specifications set by consumers. The key principle of the Six Sigma DMAIC concept begins with the definition of consumer requirements: Define - define, Measure - measure, Analyze - analyze, Improve - improve, Control - manage.
In the Lean Management concept, defects and inconsistencies are recognized as one of the main sources of losses in the enterprise. At the same time, it does not consider statistical process control methods to eliminate waste. The concept of "Lean Management" is not focused on finding sources of process variability and ways to reduce variability, which is one of the main elements of the Six Sigma concept.
Defects, the main target of Six Sigma, are just one of the many types of waste in enterprises. IN classical theory The concept of "Lean Management" identifies seven types of losses: overproduction, waiting, transportation, non-value-adding activities, availability of stocks, movement of people, production of defects. Many authors identify additional types of losses. For example, "false economy", which consists in the use of cheap and low-quality raw materials and materials, "diversity" as a result of the use of non-standardized elements in processes.
The Six Sigma concept does not draw parallels between quality and customer satisfaction, on the one hand, and the duration and speed of processes, on the other. At the same time, the duration of the process is directly related to customer satisfaction in the provision of services, and for production processes - with frozen funds in the form of stocks that are on standby. In the Lean Management concept, the analysis of time as one of the main resources of the process is a key area.
The set of tools of the Six Sigma concept limits the possible range of tasks to be solved. Process improvement within the framework of the Six Sigma methodology is carried out mainly by reducing the variability of processes by statistical methods and redesigning processes using the DFSS method (Design for Six Sigma - designing for the Six Sigma concept). The Six Sigma methodology misses opportunities for process improvement such as reducing unproductive activities, reducing waiting times, reducing inventory and transportation costs, optimizing jobs, etc. All of these opportunities are fully realized by the Lean Management concept.
The filling of the "gaps" described above within the framework of the integrated concept of Lean Six Sigma is shown in the table
| Basic elements of the concept | Six Sigma concept | Lean management concept | Integrated Lean Six Sigma concept |
| Formalized management commitments | √ | √ | |
| Formalized resource allocation | √ | √ | |
|
Formalized learning and distribution Responsibilities and powers |
√ | √ | |
|
Gradation of specialists involved in projects |
√ | √ | |
|
Implementation of the concept in the form of "definition, selection and Project execution» |
√ | √ | |
| Short term improvement projects - kaizen | √ | √ | |
| Monitoring with Metrics | √ | √ | √ |
| Using the DMAIC principle in the execution of projects | √ | √ | |
|
Using statistical methods to reduce Process variability |
√ | √ | |
|
Identification and elimination of losses and unproductive Cost in progress |
√ | √ | |
| Increasing the speed of the process | √ | √ | |
| "Pull" principle of the process functioning | √ | √ | |
| Reducing the costs caused by "diversity" | √ | √ | |
|
Elimination of losses resulting from "false Savings" |
√ | √ |
This table shows that in the Lean Six Sigma concept, the answers to the question “how to organize activities?” taken from the concept of "Six Sigma", and the question "what to do?" - mainly from the concept of "Lean Management". At the same time, the concept of Lean Six Sigma uses a combined set of measured indicators (metrics) and a combined set of methods and tools for implementing improvement. An example of a set of methods and tools used in the Lean Six Sigma concept is given below.
| D-define | M - measure | A - analyze | I - improve | C - manage |
|
Kano analysis Process mapping The financial analysis Prioritization |
Control cards Pareto charts Histograms Process Cycle Performance Evaluation Plan Data collection |
Pareto charts Ishikawa (fishbone) FMEA diagrams Definition of overhead costs Identification of "time traps" Estimating Constraints |
Rationale for 5S lot size Hypothetical testing Selection matrix Solutions |
Control cards Visual control of the process Training plan Communication plan Plan Standardization |
The practice of using the concept of Lean Six Sigma in Western enterprises allows you to short time(about a year) achieve results:
- reduction in the cost of products and services by 30-60%;
- reducing the time of service provision up to 50%;
- reduction in the number of defective products by about 2 times;
- increase without additional costs of the volume of work performed up to 20%;
- cost reduction design work by 30-40%;
- reduction of project execution time by up to 70%.
A graphical comparison of the performance of the enterprise using the integrated concept of Six Sigma + Lean Management with the results of the concepts of Six Sigma and Lean Management applied separately is shown in the figure.
There are two main signs that indicate the presence of avoidable losses in the processes. The first sign is any changes taking place in the enterprise, for example, an increase or decrease in production volumes, expansion of the range, organizational changes, innovations, etc. The second sign is insufficient documentation of processes and misunderstanding of the essence of processes by employees involved in the process.
Before answering the question "will it work?", it is worth considering an example when one of the seven simple quality tools did not "earn" - the data stratification method. After a seminar in one of the consulting firms, the enterprise specialist decided to analyze the accumulated data on defects.
Defects in the enterprise were detected by the following methods:
- acoustic emission method,
- ultrasonic control,
- eddy current method,
- magnetic particle, etc.
The enterprise did not have a classification of types of defects that could be associated with the causes of defects. The data array was stratified according to the methods for detecting defects, and then the analysis of the data for the entire period was carried out. Such an analysis of the results did not give, the nature of the data did not allow for another analysis. As a result, statistical methods were forgotten, and the fight against marriage resulted in an increase in fines.
To start improvement projects, you do not need to know perfectly the entire set of Lean Six Sigma tools and metrics. The 20/80 principle is also valid in relation to the demand for the knowledge of specialists in the "black belt" category. In the implementation of 80% of projects, less than 20% of the tools studied by these specialists are used. The complexity of applying the concept of Lean Six Sigma lies in the simplicity of its individual elements. Most of the problems are due to incorrect data collection and preparation, as in the example described. There are several basic principles that accompany success, both in the application of simple statistical methods and in the implementation of the concept of Lean Six Sigma:
- leadership interest;
- allocation of resources;
- experience of successful projects.
When implementing the Lean Six Sigma concept, resources include the paid time of the staff, the cost of their training and the acquisition of funds necessary for the preparation and implementation of projects. Management must acquire the knowledge necessary to control and manage these activities. A calculation of the required training hours and the cost of working hours for the implementation of projects can be found in any Six Sigma textbook. The project leader should have hands-on experience of participating in successful improvement projects. For all the importance of learning, the experience of participating in one successful project worth studying dozens of examples from practice.
, PDMToday, the nature of the job market is such that some level of Six Sigma certification is required at a minimum for employer consideration for certain types of jobs. While having a certification does not guarantee that a person is truly competent or fit to achieve the organization's goals, having a certification is the starting point for many companies. Even if you already have a job, 6 Sigma certifications are a plus in some organizations to consider you as a candidate for a higher position.
Unlike many other certifications, such as project management (PMI) certifications, there is not a single authorized institution that lists the body of knowledge (BOK) and a set of requirements required for a Six Sigma certification. Although the American Society for Quality (ASQ) body of knowledge (BQK) is fairly universal, there are still many variations regarding the required body of knowledge for 6 Sigma that are very similar but have different meanings – adding to or subtracting from the required body of knowledge of ASQ . Certification requirements vary considerably. This leads to a huge number of methods and possibilities for certification with many attributes that can confuse you and therefore they must be considered and compared before proceeding with certification.
We hope this article will provide general information regarding 6 Sigma Certification and review some of the programs that are commonly recommended by members of the relevant LinkedIn communities. Certification methods are classified as first party certification, second party certification and third party certification. First party certification is just a self-declaration, second party certification is when the training organization sets its own criteria for certification. Third party certification confirmation by an unbiased party that a product, process or service conforms to specified, industry-independent criteria or standards. Most 6 Sigma certifications are second party certifications, as the company provides training and certification.
What are the belts?
The recognized 6 Sigma belts are Green, Black and Master Black Belts (although some organizations also have white or yellow belts). A Green Belt is not required to obtain a Black Belt unless required. domestic politics. There is a large spread official duties about different belts. In general, Green Belts work on 6 Sigma projects as part of their job. Black belts are project managers and can only work on 6 Sigma projects. The Master Black Belt is the highest level of 6 Sigma, these people mentor and train others, consult on projects and can be involved in the work strategic level. Black Belts and Master Black Belts can move into different industries and develop more flexible skills and management styles, in addition to using deeper technical skills.
For 6 Sigma belts, coursework may be offered with a focus on a specific industry. The most popular industries are manufacturing, manufacturing, service provision and healthcare. The examples and cases that are used during the course have been taken from a specific industry, although the curriculum is industry independent and therefore widely applicable. Testing and certification are not industry-specific. For example, there is no separate 6 Sigma test in healthcare.
Lean 6 Sigma (LSS) contains the foundations of 6 Sigma and is complemented by a set of industry philosophies, methodologies and tools for managing cultural transformation that aims to reduce and eliminate waste. External third party experts, Lin Sensei, can provide companies with unbiased advice and instruction regarding lean manufacturing. Industry-specific Lean 6 Sigma certification courses are provided.
Some programs provide only 6 Sigma certifications, others only Lean 6 Sigma certifications, and others provide both certifications. The ASQ provides coursework for the LSS but does not have any exams or certifications in Lean. ASQ highlights the Lean Manufacturing Certification, which is offered separately by the Society of Manufacturing Engineers (SME). SME has bronze, silver and gold level grants. The International Association for Six Sigma Certification (IASSC) only provides LSS certification. And as one example, Villanova University provides 6 Sigma certification as well as Lean Sensei.
Belt Requirements
There is no standard for the amount of knowledge, and there is no standard for the requirements that are required to obtain these belts. Depending on the organization, certification can be obtained by training and project implementation, or by passing an exam only, or by training only, or by both training and exam and project implementation. If a project is still required, then at least one green belt project and two black belt projects must be done. Some certification bodies require that a black belt project generate significant monetary value or have a significant impact on the organization. The requirements for green belt projects are generally more lenient, ranging from volunteer work on a project to an online managed project. ASQ certification requires three years of work experience (full-time and paid) in one or more areas of the required Green Belt knowledge, admission to the exam is carried out after the completion of the application.
To characterize the difference between the requirements of organizations, we present specific example so the Department of the Navy (IMMF) demands more for the green belt than many organizations for the black! The IMMF requirements for an LSS Green Belt candidate are as follows - 40-hour courses with a certified LSS instructor; be a team member of at least one real project; lead at least two real projects; create a portfolio of projects and occasionally present in person to the Certification Board. After bringing these stringent requirements, it becomes clear that not all LSS belts are equally obtained. Experienced employers will know this, so it's important to choose a program where your certification will make sense.
Belt Suppliers
There are four main providers of Six Sigma Belt certification: employers, professional associations, colleges and universities, and certification service providers.
Many companies provide training to their employees and provide second party certification based on standards defined by the company. The company pays for your training, and it is designed to help you succeed at work. The downside is that the program may not be as solid as most independent programs. No one except the company's employees will know what kind of training you have received. Coursework can have a very narrow focus on your skills. So some people might end up corporate training, but certify by the American Society for Quality (ASQ), due to its reputation and deeper coverage of the material.
The American Society for Quality (ASQ) is a professional third-party certification society that requires the candidate to submit a package of documents that will show the level of qualification required to pass the exam. You don't need to do their coursework to pass the exam, you can study on your own. Although ASQ provides training, they do not guarantee that it covers the material required to pass the exam. ASQ also has requirements for your work history and projects.
The International Six Sigma Certification Organization (IASSC) is a third party certification body for LSS that requires their exam to be passed but does not require a project. Their website is very clear on the philosophy and reasoning behind their requirements. The IASSC certifies not only individuals, but also training programs for other subjects regarding the scope of knowledge of the IASSC.
Some universities and colleges offer 6 Sigma training as part of their continuing education or certification program. There are no entry requirements or degrees earned by the school. The advantage is that you are face to face with the teacher and students and you have great networking opportunities to connect with your classmates from different industries and perspectives. The duration of training and the cost of it can vary significantly and sometimes may be insufficient. Some universities also offer self-paced online learning.
The final route to certification is certification through certification service providers, which are often companies owned or operated by 6 Sigma gurus or high-level consultants. These companies conduct both group trainings and individual ones. Some of them conduct trainings in different cities and give intensive training for several days or weeks. Others provide online training in a program that is designed for individual speed and is usually limited to 365 days to complete the course. These companies provide a package consisting of term paper, exam, project guide and sometimes software and textbooks. Some of these programs advertise IASSC certification, but it should be noted that the scope of IASSC knowledge is Lean 6 Sigma, not 6 Sigma. It is important to carefully compare study programs before making a choice.
Upon request, they will send you spreadsheets in Excel with the information indicated in the video. They do a great job of highlighting what to look for in content, materials, and learning style. Also, they warn that this information is difficult to find - it is not available on the suppliers' websites.
Final Analysis
The following table provides comparative information for some of the programs:
Green Belt 6 Sigma and Lean 6 Sigma Certification Options Online
| CERTIFICATION BODY | ASQ (American Society for Quality) | IASSC (International 6 Sigma Certification Organization) | Company BMGI | PEX Institute | Pizdeck Institute | Pizdeck Institute | Smart Solutions Co. | University of Villanova | University of Villanova |
| 6 Sigma | Lean 6 Sigma | Lean 6 Sigma Green Belt | Lean 6 Sigma | 6 Sigma | Lean 6 Sigma | Lean 6 Sigma | 6 Sigma | Sensei Lean 6 Sigma is not a green belt | |
| PRICE | |||||||||
| Course fee | No training requirements | No | $695+$650 Master Black Belt Mentorship | $2,750 | $1,395 | $1,795 | $3,995 | $1,980 | $2,180 |
| Course description | Tests, exams, tool and templates | 13 weeks, blended online learning tailored to the individual speed of learning online modules, student guidance and instructor-led virtual sessions focused on performance. Each course contains a strictly team-oriented graduation project simulation, showing the practical use of the tool, data analysis, modeling and review | 45 online modules. Each module contains reading assignments, scenarios, lessons created by T. Paizdek, assignments and quizzes. Assignments are reviewed and returned back by the Master Black Belt | 50 online modules. Each module contains reading assignments, scenarios, lessons created by T. Paizdek, assignments and quizzes. Assignments are reviewed and returned back by the Master Black Belt | Blended online learning and live training that combines the same reference materials that the instructor uses, with extensive one-on-one training regarding the course and certification | Mixed live and online learning, online live lectures, instant messaging, shared whiteboard during live classes | 8 weeks, 6 modules, mixed live lectures online, viewable later | ||
| Exam preparation materials | $695 pre- and post-tests, progress checks, course activity, and a PDF download that provides a printable version of the modules that cover the five major areas of the 6 Sigma Green Belt certification body of knowledge. In addition to online learning, you will have a printed statement to take with you to your certification exam. Additional $99 access to a bank of 3 full practice tests/questions | Recommends materials www.opensourcesixsigma.com, $170 including manual and one practice test with 80 questions and answers | included | included | included | included | Tutorial | Tutorial | |
| Exam | $209 for ASQ members, $359 for everyone else | $295 | included | included | included | included | Included - Periodic exams to test your knowledge, including an oral exam. Test without answer options. You must demonstrate the use of statistics | $220 | $220 |
| miniaccount | Not required for the exam | No | Not included, $1250 to buy or $550 to rent for 12 months. Hint: You can get a free 30 day Mini Account trial. | Required, not included | License for 1 year $300. Some quests require a Miniscore. Hint: You can get a free 30 day Mini Account trial. | Endless $500 for $1395 for 1 year | Not required | Not required | |
| Additional software | No | No | No | Not required | Software for quality support of project management - license for 1 year | Not required | Not required | ||
| Textbook | Provides a list of suggested books | No | No | Does not provide a list of suggested books | Included book "Guide to 6 Sigma" by Thomas Pizdek | Included book "Guide to 6 Sigma" by Thomas Pizdek | Integrated Enterprise Improvement System, Integrated Enterprise Improvement Volume 1: Fundamentals, Integrated Enterprise Improvement Volume 3: Executing an Improvement Project, Lean 6 Sigma Project Execution Guide | Tutorials | Tutorials |
| Additional books | No | No | A copy of the Lean 6 Sigma Dummies Manual, BMGI Lean 6 Sigma Roadmap Poster. After the expiration of the 12-month period of access to the program, links and modules of the program, as well as templates, can be reproduced through open access on our website www.BMGI.org | No | Data Meaning: A Course in Understanding Statistics DVD | No | No | ||
| Online sources | No | No | templates, study guides, forms, video programs. Creative management technology course | Articles and webinars on the site | Additional materials | Additional materials | |||
| Discounts | No | No | No | Green Belt can be upgraded to Black Belt at any time by paying the price difference and completing additional modules. You also need to pass the Black Belt certification exam. | military | Not applicable | |||
| Total | $1,153.00 | $465.00 | $695 - $1345 | $2750 | $1395 | $1795 | $3995 | $2200 | $2400 |
| Total, if a mini-account is required | $1245-$1895 | 3250 | 1695 | 2095 | 4495 | No mini account required | No mini account required | ||
| PROJECT | |||||||||
| a) online or real? | Real - tough requirements for Black Belt, but not for Green Belt | No requirements | Real or volunteer project for the organization, can be submitted at any time - not limited to 1 year. Revised by BMGI Master Black Belt | Each course includes team simulation thesis, showing the practical use of the tool, data analysis and modeling | A real project, not limited in time, should not be related to work, should be used by a certain number of people | May be a volunteer organization | simulated | simulated | |
| STUDYING TIME | |||||||||
| a) self-study | 30 hours per material | 100 hours of study, 1 year for graduation | yes - 23.4 hours, | 80 hours online and offline, 1 year for graduation | 100 hours online and offline, 1 year for graduation | 84 hours for self-study modules | Yes | Yes | |
| b) regular classes | No | No | Yes - live classes in addition to self-study - 22 hours - 13 weeks | No | No | Yes - 8 weeks of live training | Yes, but you can return to self-study | ||
| EXAM | |||||||||
| a) planned? Can the book be used? | Scheduled 2 times / year, must be sent in the application earlier than scheduled, you can use the book. A few tricky questions | At any time online or in the test center, you cannot open the workbook, but you can | At any time, you can use the book | Anytime | Anytime | Anytime | Anytime | ||
| ACCREDITATION | |||||||||
| Credentialing Institute of Excellence (ICE) | Regional accreditation by the Middle States Association | ||||||||
| SUPPORT | |||||||||
| a) access to experts | No | No | $650 access to BMGI Master Black Belt training | Students receive answers to their questions via e-mail or telephone consultation if they need it. | During training, submission of questions through the student forum. Answers from Thomas Pizdek or Master Black Belt within one business day. | During training, submission of questions through the student forum. Responses from Thomas Pizdeck or Master Black Belt within one business day | Scheduled one-on-one training with Master Black Belt, you can contact him at any time | Access to e-mail and messages 24 hours a day, every day | |
| b) access to training materials | No | Not applicable | After the expiration of the 12-month period of access to the program, links and modules of the program, templates can be reproduced through open access on our website www.BMGI.org | 1 year access to materials online, maximum 3 hours per module | Access to the site and training materials for 365 days | Access to the site and training materials for 366 days | Access to the site and training materials for 367 days | Access to the site and training materials for 368 days | |
| c) online support/features | No | Not applicable | Online forum for communication with fellow students and teachers | Business contact with a registration expert is available during business hours | |||||
| SCOPE OF KNOWLEDGE | |||||||||
| ASQ Knowledge Scope | Scope of Knowledge IASSC | Course content and instructors are provided by the Quality Team (TQG) | The scope of knowledge for Green Belt 6 Sigma is defined by the International 6 Sigma Certification Association | ASQ uses his books to build their body of knowledge | |||||
| GURU | |||||||||
| ASQ Committee | In particular, no one | In particular, no one | Thomas Paizdek | Thomas Paizdek | Forrest Breyfogle | George Ackes | George Ackes | ||
| NETWORKS | |||||||||
| When joining ASQ, there are local network events | Passing the exam, certification are recorded in a public online database | Chats and forums for discussion with students and teachers | |||||||
| IS THERE A FOCUS ON THE INDUSTRY? | |||||||||
| No | Various fields are represented, including healthcare | healthcare, Financial services, IT | No health version | ||||||
| WEB SITE | |||||||||
| www.asq.org | www.iassc.org | www.bmgi.com/training/lean-six-sigma-green-belt | http://www.processexcellencenetwork.com/institute | www.sixsigmatraining.org | www.sixsigmatraining.org | www.smartersolutions.com/blended-green-belt-training.php | http://www.universityalliance.c om/info1/UA_PDFs/Villanova/T 2-Disciplines/Villanova_6Sigma_T | ||
| https://www.opensourcesixsigma.com/Green-Belt-Bundle-p/bndl-gb-v11.htm | |||||||||
The table compares various characteristics, including price, of a 2nd or 3rd party self- or online 6 Sigma Green Belt or Lean 6 Sigma Green Belt certification representative. This article does not cover the knowledge comparisons and course details that these certification bodies offer. While presenting some reputation difference would be very helpful, this has not been studied and is therefore not included in the article. Also, information about the "success" of certification recipients was not investigated or found. The analysis regarding the choice of program is left to the reader, as their origins, finances, circumstances, opportunities and motivations are as different as the possibilities for choosing.
Based on the consideration of a lot of information, the following is important:
If you are willing to self-teach (i.e. not pay for a course), take an exam, and use work experience or a project outside of work to qualify for certification, your options are very limited. For Green Belt 6 Sigma, ASQ is the only way. There is no requirement to complete the project, but you must have three years of experience in one or more areas of the 6 Sigma Green Belt body of knowledge. While some companies will allow projects outside of the work situation, their requirements for admission to the exam are primarily payment and acceptance of their coursework. For a 6 Sigma Black Belt, there is no option that meets these criteria. For Lean 6 Sigma Green and Black Belts, the International Organization for Certification (IASSC) provides this course as you do not have to submit a project and as part of their charter they do not offer or require coursework.
This block purports to be the initial guide to a more complete collection of insights on the path to 6 Sigma or Lean 6 Sigma certification. It is my hope that 6 Sigma or Lean 6 Sigma practitioners, as well as those who offer certification programs and those who seek them, will add objective and subjective information to this post to help all who aspire to 6 Sigma or Lean 6 Sigma certification. .
Authors: Michelle Gabrielle was one of the first at Motorola to teach SPC in the early 80's, before the Belt System was invented. As an operations manager, using Lean and 6 Sigma tools with her team and her suppliers, she has been able to achieve significant cost savings and drive improvements in industries ranging from semiconductor capital equipment to DSL supply services. On this moment Michelle is working towards certification in order to prepare herself for participation in improvement projects. He currently holds a Bachelor of Science and Master of Science in Materials Science and Engineering from the Massachusetts Institute of Technology and an MBA from the Berkeley Haas School of Business at the University of California.
© Material prepared by Anna Jezhik
based on materials from foreign publications
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