Lean Six Sigma Leadership

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What is Six Sigma?•A “Layman’s” Definition

A popular management philosophy, based

upon facts and data used to make decisions

in the organization

•A Technical Definition

A level of perfection measured by 3.4 errors

per million opportunities

A Lean Sigma OrganizationA Lean Sigma Organization

• Features programs and products are delivered in the right amounts, at the right time, to the right location, and in the right condition

• Programs and products are produced only for a specific customer rather than being added to inventory

• Allows production of a wide variety of programs and services, efficient and rapid changeover as needed, rapid response to fluctuating demand, and increased quality

• Fosters a company culture in which all employees continually improve their skill levels and eliminate variation in their production processes.

3

What Is a Lean Sigma Leader?

A Lean Sigma Leader is that manager A Lean Sigma Leader is that manager who is responsible for who is responsible for creating an creating an environment environment and expectationand expectation wherewhere everyone everyone cancan unleash unleash theirtheir creativity creativity to their fullto their full potential. potential.

The Call to ActionThe opportunity for Lean Sigma leadership exists at the

junction of several powerful forces:• Need for leaders to guide the transformation to the new

economy• Speed of changes in the pharmaceutical business

climate• Long term economic peril that organizations face• Increasing reliance upon intellectual capital• Movement of Generation X and Y into the workforce• The talent crunch in a booming economy• Personal motivation among current business leaders to

leave a legacy and make a difference in the world

What Do Leaders Do?

• ChallengeChallenge accepted beliefs accepted beliefs • Find new ways to Find new ways to motivatemotivate and and communicatecommunicate• MeasureMeasure things differently things differently • Keep track of how many new Keep track of how many new improvement ideasimprovement ideas

your team and organization has generatedyour team and organization has generated• Keep score of the Keep score of the time on task time on task that your teams are that your teams are

spending on the project spending on the project

What Are the Benefits of Lean Sigma? Increased Customer Satisfaction through improved Increased Customer Satisfaction through improved service outcomes service outcomes

Measurements, Monitoring, & Management are more Measurements, Monitoring, & Management are more accurate and timelyaccurate and timely

Employees learn new ways of thinking Employees learn new ways of thinking

Cost of ServiceCost of Service is lowered is lowered

Ability to serve consumers is improvedAbility to serve consumers is improved

Non-value added activitiesNon-value added activities are eliminated or reduced are eliminated or reduced

Internal processes and communications between Internal processes and communications between departments and groupsdepartments and groups are improved are improved

Classical View of Performance Practical Meaning of “99%

Good”20,000 lost articles of

mail per hour15 minutes of unsafe

drinking water each day5,000 incorrect surgical

operations per week2 short or long landings

at most major airports each day

200,000 wrong drug prescriptions each year

No electricity for almost 7 hours each month

3 Sigma

4 Sigma

6 Sigma

93.32%

99.38%

99.99999%

HistoricalStandard

CurrentStandard

NewStandard

CapabilityLong-Term

YieldStandard

Where Does Industry Stand?

1,000,000

100,000

10,000

1,000

100

10

1

2 3 4 5 6 71

IRS – Phone-In Tax Advice(140,000 PPM)

Restaurant Bills

RX WritingJournal Vouchers

Wire Transfers

Airline Baggage Handling

Best-in-ClassBest-in-ClassAverageOrganization

AverageOrganization

PPM

Sigma Scale of Measure

How Lean Sigma WorksHow Lean Sigma Works

BRAINSTORM

REFINE, EVALUATE AND SELECT

Focus And Select Vital Few Causes Using Tools

Generate Ideas(“Raw Material” For Solutions)

Synthesize Ideas(Build Potential Solutions)

Pilot(Select Best Solution)

F I L T E R

ANALYZE

IMPROVE

Develop Solution“Proposal”

Incremental and Exponential ImprovementIncremental and Exponential Improvement

Time

Imp

rove

me

nt

IncrementalImprovement

ExponentialImprovement

Incremental Improvement

12

Lean Six Sigma Training Lifecycle: Lean Six Sigma Training Lifecycle: DMAICDMAIC Lean Six Sigma Training Lifecycle: Lean Six Sigma Training Lifecycle: DMAICDMAICDEFINE MEASURE ANALYZE IMPROVE CONTROL

Define Problem,

Team Charter, & Project Plan

Develop the SIPOC

Diagram

Develop the CTQs &

SIFOC

Create MeasurementScorecards

Implement Project Data

Collection Plans

AnalyzeTheData

AnalyzeThe

Process

AnalyzeThe RootCauses/Waste

GenerateSolutions

Select/Test

Hypothesis

DetermineLean

Control Points

ImplementThe Lean

Management Response

Plan

1

2

3

4 6 9 11

57

8

10 12

Lean Sigma Toolbox• There are 20 tools in the Lean Sigma Toolbox:

10 Technical Tools and 10 Management Tools• The Technical Tools are used to work with data,

and the Management Tools are used to work with concepts and words

• Technical Tools have mathematics and statistics associated with them

• Management Tools center around acceptance of the team’s solutions and how it conducts its work

Lean Sigma Technical Tools• Critical-to-Quality (CTQ) Tree• Process Maps• Histograms• Pareto Charts• Process Summary Worksheets• Cause-and-Effect Diagrams• Scatter Diagrams• Affinity Diagrams• Run Charts• Control Charts

Effect

Failure Mode (Defect)

MeasurementPeopleMaterials

EnvironmentMachinesMethods

Toolbox: Example of FishboneToolbox: Example of Fishbone

Prevent or Detect

Cause-and-Effect DiagramCause-and-Effect Diagram

Lean Sigma Management Tools• Poka Yoke and 5Ss• Project Charter• Quick-and-Easy Kaizens• Relationship Matrix• Process Failpoints Matrix• Workplace Organization• Workplace Standardization• Lean Management Scorecard• SCAMPER Solutions Chart• FMEA Analysis Charts

Tool Box – Example of a FMEA FormTool Box – Example of a FMEA Form

Lists Failure Modes for

each Process Step

Lists the Effects of

each Failure Mode

List of Process Steps or

Product Parts

Rates the Severity of the Effect to the Customer

on a 1 to 10 Scale

Doing a Lean Sigma AnalysisDoing a Lean Sigma Analysis

Rates how often a particular Cause or

Failure Mode Occurs:

1=Not Often

10=Very Often

Lists the Causes for each Failure

Mode: Each Cause is

associated with a process input

out-of-Spec

Documents how the Cause is

currently being controlled in the

process

Rates how well the Cause or the Failure

Mode can be detected.

1=Detect Every Time

10=Cannot Detect

FMEA Form-Assessing Current SituationFMEA Form-Assessing Current Situation

Lean Sigma Leadership• World Class organizations have three major

focus areas: Customer Focus, Process Focus, and People Focus

• Management’s responsibility is to measure and improve these three areas

• Lean Sigma helps managers align customer requirements with processes through people

Key Leadership Characteristics

Six characteristics for leaders success are: Six characteristics for leaders success are: Positivity, Focus, Flexibility, Organization, Positivity, Focus, Flexibility, Organization, Proactivity and ResiliencyProactivity and Resiliency

The more The more resilientresilient leaders are, the greater is leaders are, the greater is the potential speed of changethe potential speed of change

Resilient people: quickly regain their Resilient people: quickly regain their equilibriumequilibrium after disruptions while avoiding after disruptions while avoiding dysfunctional behaviors that impede success.dysfunctional behaviors that impede success.

Management Competencies Needed

• In order to assess the learning and development needs of organizational leaders, the Lean Management Development Questionnaire (MDQ) model was created

• It is intended to provide competence information relevant to successful lean managerial performance

• MDQ measures 20 competence dimensions which are organized into five cluster area categories

Management Competency Areas

Managing Change

Managing Change

Planning and Organizing

Planning and Organizing

Interpersonal Skills

Interpersonal Skills

Results Orientation

Results Orientation

LeadershipLeadership

Managing Change Competencies

The four key competencies in Managing Change are:• Initiative = the ability to take action and originate an

activity or task• Risk Taking = determines how far managers are

prepared to prudently take risks to make things better• Innovation = is about a general concern for making

things better by generating ideas and putting them into practice

• Flexibility/Adaptability = a manager’s ability to

respond flexibly to different people and situations

Complexity of Managing Change

• Change in any area creates ripple effects in Change in any area creates ripple effects in other areasother areas

• It’s like dropping a pebble in a bucket of waterIt’s like dropping a pebble in a bucket of water• Often the ripple effects cause unintended Often the ripple effects cause unintended

consequences that interfere with the change consequences that interfere with the change initiativeinitiative

• Change becomes a problem as simultaneous Change becomes a problem as simultaneous projects begin to increase and then interactprojects begin to increase and then interact

Lean Sigma and Speed of Change

• Begins with the pace at which change is Begins with the pace at which change is happening in a rapidly changing worldhappening in a rapidly changing world

• It is also the speed at which an organization can It is also the speed at which an organization can rebound from the disruption caused by major rebound from the disruption caused by major projectsprojects

• When people are operating at optimum speed of When people are operating at optimum speed of change, they can absorb fast complex change change, they can absorb fast complex change with minimal loss of productivitywith minimal loss of productivity

Planning and Organizing• The four competencies involved in Planning and

Organizing are: Analytical Thinking, Decision Making, Planning, and Quality Focus

• Lean Sigma has a heavy concentration on Analytical Thinking and Quality Focus and a medium impact upon Decision Making and Planning.

Interpersonal Skills and Resilience• Four characteristics for interpersonal success Four characteristics for interpersonal success

are: Oral Communications, Sensitivity, are: Oral Communications, Sensitivity, Relationships, and TeamworkRelationships, and Teamwork

• The more resilient managers are, the greater is The more resilient managers are, the greater is the potential speed of changethe potential speed of change

• Resilient managers quickly regain their Resilient managers quickly regain their equilibrium after disruptions while avoiding equilibrium after disruptions while avoiding dysfunctional behaviors that impede successdysfunctional behaviors that impede success

‘Results Orientation’ Competencies

The Four Key Building Blocks areThe Four Key Building Blocks are::• AchievementAchievement = governs a manager’s = governs a manager’s

motivation and career commitmentmotivation and career commitment• Customer FocusCustomer Focus = involves a manager’s = involves a manager’s

commitment to service conceptscommitment to service concepts• Business AwarenessBusiness Awareness = focuses on a = focuses on a

manager’s business literacymanager’s business literacy• Learning OrientationLearning Orientation = allows a manager to = allows a manager to

foster a commitment to self-improvement and foster a commitment to self-improvement and developmentdevelopment

Lean Sigma at WorkStructure

Systems

Strategy

Processes

Skills

Leadership

Attitudes

Behavior

Values

F U T U R E Trends to Consider Fast = speed is foremost, and value-information and better

early warning systems will be critical Urban = population growth, water shortage, crime and drug

addiction will be major threats Tribalism = will continue to be the basis of all family, team and

belonging; despite increased terrorism, there will be an increased respect for culture

Universal = global management may lead to job insecurity, erosion of non-wage benefits, and further weakening of trade unions

Radical = traditional political movements will shrivel and die, and organizations serving vital needs will grow

Ethics = our values will carry us through periods of tremendous change and will provide context and meaning

Ten Conclusions for Managing the Future

Prepare for the unexpected Get ready for faster reaction times Develop flatter organization structures Build teams and alliance partners Grow with the Global Village Practice cultural sensitivity Invest heavily in technology Create a family work atmosphere Provide a Vision with purpose and meaning Enhance your leadership and management

competencies

Basic Lean Sigma Building Blocks For Change

Pressurefor

Change

ClearSharedVision

Capacityfor

Change

ActionableFirstSteps+ + +

=SUCCESSFULCHANGE

SummaryThe shortfall between promised The shortfall between promised

results and actual results is results and actual results is overcome by managing the overcome by managing the change properlychange properly