Reduce Costs and Improve Your

Customers’ Experience

Process Improvement
Using Six Sigma & Lean Methods

Tom Allen, David Normandin, Nick Ross & Dave Schaefer

Soar to New Heights!

2013 National Equipment Finance Summit, Albuquerque, NM
 Objectives of this Session

o Define Six Sigma / Lean

o Demonstrate the benefits of applying
Six Sigma / Lean to your business
o Share ideas on how you can help make
your business a “Lean Organization”

o Provide resources for learning more

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Our Panel ‒ Introductions

o David Normandin

o Nick Ross

o Dave Schaefer

o Tom Allen

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 Identify Opportunities

o Please note 1 or 2:

• Major pain points in your work

And/or
• A process that you do ‒ but are not sure is
valued by customers
And/or

• An idea for a process that could be improved

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 What Is “Six Sigma / Lean” All About?
Process Improvement / Process Reengineering
Lean Six Sigma
Tools that help you systematically look at processes to evaluate what is value-
add and what is waste. Customer satisfaction increases as production /
processing / servicing costs decrease.

Identify and eliminate waste Eliminate errors by controlling the

variation of inputs to optimize the
outputs
Get the overall Process Flow right Make sure each step of the process
is right
No waste = less expense, more value No errors = less expense, more value

Value Stream Mapping: current state, DMAIC: Define, Measure, Analyze,

future state Improve, Control

Lean Agent, Certified Lean Agent Yellow, Green, Black, Master Belts
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 Maximize Value

o The customer will pay for it

o It is required to do business
o The government requires it; cannot
do business legally without it

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Six Sigma / Lean Methods Help
You Recognize & Reduce Waste

Typical Non-Lean Process

Necessary Waste
Pure Waste
Value Adding

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 Don’t Believe It?

o How can a profitable business have so much

waste in a process?
o Here is an example of a business that applied Six
Sigma / Lean methodology to improve a process

o Video:
http://www.tbmcg.com/resource-center/videos/Busi_Kaiz.swf
http://www.youtube.com/watch?v=zIncE0oxtzw

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 How?
Apply Lean Methodology & Tools
o Every process step has a purpose – adds value
(or it goes).
o Every thing has a place and it is there, in good
working order.
o Many methods and tools can be used for Six
Sigma / Lean process improvement:
• 5S
• 5 Why Analysis
• 7 Muda
• DMAIC (Define, Measure, Analyze, Improve, Control)
• Mapping Flows & Ohno Circle
• Value Streams 9
 7 Deadly Muda (Wastes)
With Examples from an Office Environment
o Transportation: Unnecessary movement. Extra handling of WIP
(work in progress).
Examples: Filing documents that will never be used. Unnecessary hand-
offs. Needed items are hard to get to.
o Inventory: Often comes from unnecessary complexity. Presence is
indicated by work that is waiting to be processed.
Examples: Excessive icons on desktop. Storage of obsolete files on
network as well as in paper form. E-mails that have been read but not
deleted.
o Motion: Unnecessary steps and actions.
Examples: Counting of documents or copies. Using an excessive number
of screens or reports to make decisions.
o Waiting or Queuing: Idle time for product or service while the needed
resource is not available.
Examples: Waiting for “sign-off” or approval. Working in batches. Running
processes on a really slow system.
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 7 Deadly Muda (Wastes)
With Examples from an Office Environment

o Over-Production: Producing more than is needed – results in inventory,

extra handling, and other waste.
Examples: Unnecessary duplication; preparing reports that are not used;
providing unnecessary information; copying users on e-mail who do not need
the information.
o Over-Processing: Extra activity – may be caused by defects.
All Rework Examples: Keying in the same data in multiple systems;
preparing reports that no one uses.
o Defects: All nonconforming product is waste – whether reworked or
scrapped.
Examples: Includes missing or incorrect information; e-mails that go back
and forth too many times; any information-sharing with incorrect data; an
error in this presentation that causes confusion, etc.

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 A Simple Example of “Muda”
in My Workplace
Before: Printer on One Cabinet… Printer Supplies in Another

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 The 5S Way

o Sort (Determine what is really needed = open up

free space).
o Set In Order (A place for everything = smooth
flow, improved productivity).
o Shine (Everything clean and works well).
o Standardize (Monitor the first 3 steps).
o Sustain (Awareness, stick to the rules ‒ requires
a cultural shift).

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After applying 5S: Supplies with printer,
in user-friendly order, properly labeled

What Would a Fully Lean Organization Do?

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 DMAIC
o Define the process. We want to have a clear beginning and end.
The Process Map will represent exactly.
o Measure. After the Process Map has been created, it is time to make
sure we understand why we do each step along the way and how long it
takes to do each step.
o Analyze. The work may also require other tools. For example, at the
points where we find loops and rework, we may want to step back and
use a tool called the 5 Whys or a Fault Tree Analysis. These tools help
us to determine the root causes.
o Improve. Typically, there are lots of suggestions for improvement. The
team will often create the new workflow Process Map or Value Stream to
show the reductions in the process.
o Control. Work through all the changes, measure the results, and
address what needs to be done to make it stick, including communication,
training, etc. 15
Value Stream Map

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 Process Flow Mapping

Gemba
(Ohno Circle)

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 Panel-Member Experiences

Panel members answer questions about their use

of Six Sigma & Lean for Process Improvement.

Other questions for our panel?

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 Post-It Ideas:

Please turn to the person next to you and share at least

one item from your Post-it:

o A major pain point in your work

o A process that you do but are not sure why
o An idea for a process that could be improved

Briefly discuss how Six Sigma / Lean tools might help.

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 Reference Materials
o Classes: There are many providers of Six Sigma and Lean classes.
SixSigma.us, http://www.6sigma.us/, conducts a 4-day Lean Fundamentals class
and a variety of Six Sigma classes throughout the U.S. and online.
o Online:
Videos:
Lean Sales & Marketing – also explores value proposition for customers: http://
www.youtube.com/watch?v=n16BdhNgKT0 (16 minutes)
Link to Lean Services videos:
http://www.youtube.com/watch?v=FatupA3JqtU&list=PL67F9D43E3F8D6351
PEX Network − group dedicated to Process Excellence − free to join, great interviews, articles,
podcasts, etc.: http://www.processexcellencenetwork.com/
A good Lean overview article in PEX: http
://www.processexcellencenetwork.com/lean/articles/the-history-and-simplicity-of-lean-process-imp
rove
/
The simplicity of a Waste Walk – blog post:
http://www.theleanwayconsulting.com/2010/01/simplicity-of-waste-walk-guest-blog.html

o Books: There are hundreds of books on Process Improvement. Here are some
recommended titles:
Process Reengineering: The Key to Achieving Breakthrough Success, by Lon Roberts.
The Deming Management Method, by Mary Walton – gives the roots of modern Process
Improvement.
Lean Six Sigma for Service: How to Use Lean Speed and Six Sigma Quality
to Improve Services and Transactions, by Michael L. George – since Lean & 20
Six Sigma began with a manufacturing focus, it is helpful to get service examples.
 Reference Materials

Contact us with questions about Six Sigma / Lean:

Tom Allen: [email protected]

David Normandin: [email protected]

Nick Ross: [email protected]

Dave Schaefer: [email protected]

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