A Lean Six Sigma Strategy

Six Sigma (6σ) is a business management strategy originally developed by Motorola. As of 2009, it enjoys widespread application in many sectors of industry, although its application is not without controversy. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization (Black Belts, Green Belts, etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified targets. These targets can be financial (cost reduction or profit increase) or whatever is critical to the customer of that process (yield, cycle time, safety, delivery, etc.). The Six Sigma methodologies include, but are not limited to: DMAIC, RDMAIC, and DMADV. We will explore the DMAIC Six Sigma methodology.

No matter how you approach deploying improvement teams in your organization, they will all need to know what is expected of them. That is where having a standard improvement model such as DMAIC (Define-Measure-Analyze-Improve-Control) is extremely helpful. It provides teams with a roadmap. DMAIC is a structured, disciplined, rigorous approach to process improvement consisting of the five phases, where each phase is linked logically to the previous phase as well as to the next phase:

• Define the problem, the voice of the customer, and the project goals, specifically.
• Measure key aspects of the current process and collect relevant data.
• Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation.
• Improve or optimize the current process based upon data analysis using techniques such as design of experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set up pilot runs to establish process capability.
• Control the future state process to ensure that any deviations from target are corrected before they result in defects. Control systems are implemented such as statistical process control, production boards, and visual workplaces and the process is continuously monitored.

There are many resources that describe the DMAIC process. Our purpose here is to focus on special considerations for using the Lean Six Sigma DMAIC process in a manufacturing environment, including TestSoft’s scorecard utility, Explicore, that is particularly helpful to root out areas in need of improvement or correction.

The root of both Lean and Six Sigma reach back to the time when the greatest pressure for quality and speed were on manufacturing. Lean rose as a method for optimizing automotive manufacturing; Six Sigma evolved as a quality initiative to eliminate defects by reducing variation in processes in the semiconductor industry. It is not surprising that the earliest adopters of Lean Six Sigma arose in the service support functions of manufacturing organizations like GE Capital, Caterpillar Finance, and Lockheed Martin.

A Key Concept: In short, what sets Lean Six Sigma apart from its individual components is the recognition that you cannot do "just quality" or "just speed," you need the balanced process that can help an organization to focus on improving product, process, system, and service quality as defined by the customer within a set time limit.

Lean Six Sigma is a business improvement methodology that maximizes shareholder value by achieving the fastest rate of improvement in customer satisfaction, cost, quality, process speed, and invested capital. The fusion of Lean and Six Sigma improvement methods is required because:

• Lean cannot bring a process under statistical control
• Six Sigma alone cannot dramatically improve process speed or reduce invested capital
• Both enable the reduction of the cost of complexity

Ironically, Six Sigma and Lean have often been regarded as rival initiatives. Lean enthusiasts note that Six Sigma pays little attention to anything related to speed and flow, while Six Sigma supporters point out that Lean fails to address key concepts like customer needs and variation. Both sides are right. Yet these arguments are more often used to advocate choosing one over the other, rather than to support the more logical conclusion that we blend Lean and Six Sigma since they complement one another. Here is a quick overview:

Six Sigma:

• Emphasizes the need to recognize opportunities and eliminate defects as defined by customers
• Recognizes that variation hinders our ability to reliably deliver high quality services
• Requires data driven decisions and incorporates a comprehensive set of quality tools under a powerful framework for effective problem solving
• Provides a highly prescriptive cultural infrastructure effective in obtaining sustainable results
• When implemented correctly, promises and delivers $500,000+ of improved operating profit per Black Belt per year (a hard dollar figure many companies consistently achieve)

Lean:

• Focuses on maximizing process velocity
• Provides tools for analyzing process flow and delay times at each activity in a process
• Centers on the separation of "value-added" from "non-value-added" work with tools to eliminate the root causes of non-valued activities and their cost
  
  The 8 types of waste / non-value added work
• Wasted human talent – Damage to people
• Defects – "Stuff" that’s not right & needs fixing
• Overproduction – "Stuff" too much/too early
• Transportation – Moving people & "Stuff"
• Waiting Time – People waiting for "Stuff" to arrive
• Inventory - "Stuff" waiting to be worked
• Motion – Unnecessary human movement
• Processing Waste – "Stuff" we have to do that doesn’t add value to the product or service we are supposed to be producing.
• Provides a means for quantifying and eliminating the cost of complexity

The two methodologies interact and reinforce one another, such that percentage gains in Return on Investment Capital (ROIC%) are much faster if Lean and Six Sigma are implemented together.

In short, what sets Lean Six Sigma apart from its individual components is the recognition that you cannot do "just quality" or "just speed," you need a balanced process that can help an organization focus on improving service quality, as defined by the customer within a set time limit.

Within the individual phases of a DMAIC or DMADV project, Six Sigma utilizes many established quality-management tools that are also used outside of Six Sigma. This is where TestSoft’s product, Explicore, is able to help. Explicore is a Lean Six Sigma data analysis scorecard utility that combines the use of Lean and Six Sigma.

Let’s define what Explicore, a Data Analysis Scorecard Utility, does for the organization. Explicore is a patented software solution that has been created and refined since 1998. It enables companies to test the robustness of their manufacturing and design processes. It takes all parameters related to a product, process, or system and within minutes Explicore identifies the parameters in need of correction or improvement. The output of Explicore is a statistically based report that identifies the Key Process Indicators (KPIs) so a company can quickly identify where to put their resources to correct problem areas.

Explicore will aid in tying Lean and Six Sigma together through the use of the tool. From a Six Sigma perspective, Explicore identifies which parameters require improvement or correction. From a Lean perspective, it will identify the defects quickly and will help in the identification of waste. For example, a company started shipping a product after a design change was installed. The product went through production without too much of an issue. However, several customers complained that the product did not function properly and the product was sent back to the factory. Production was stopped and we started the investigation of the customer complaints. We deployed Explicore and discovered there was a number of design and test related issues. Our discovery found three major issues with the design and several measurement problems in test. We were able to re-design the product, correct the test problems, and made improvement adjustments in production. The results were significant. The mean time between failures increased from ten hours to more than ten thousand hours, the first pass yield improved from sixty seven percent (67%) to ninety three percent (93%), and the warranty issues decreased from $9,300,000 to $600,000 year-over-year. The production line went through the lean process and reduced cycle-time from 48 hours to 18 hours.

Intuitively, we know that Explicore saves a company resource time, cost, and improve product reliability. We realize that a customer will achieve quick results with TestSoft’s balanced approach which helps protect your investment. We believe Explicore is an excellent Lean Six Sigma tool that should be in your toolkit.