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Introduction to Lean Six Sigma

A Human Resources Perspective


Agenda
 Short Biography
 History of Lean Six Sigma (LSS)
 LSS Methodology
 Success Factors
 Application to HR
 Examples of project ideas
 New York ISO case study
About the Presenter
David Duda
 Over twelve years of LSS experience
 Delta Airlines, Inc. 1998-2008
 Production based application of LSS
 New York Independent System Operator 2008--Present
 Service/transactional based application of LSS

 Certified Six Sigma Black Belt


 Contact Info: pdduda@gmail.com
The History of Lean Six Sigma
A New Approach to Quality
History of Lean Six Sigma
 What is in a name?
 Lean -- Focuses on removing waste (muda) from processes
 Six Sigma – Focuses on understanding and reducing variation in
processes
 Lean Six Sigma (LSS) – Combines both approaches
 What is the Concept behind LSS?
 As wasteful activities are removed overall process variation is
reduced
 Lean Six Sigma is one of many methodologies developed
through the Quality Revolution
History—Evolution of Quality
 Craft Production
 Each item is unique
 Individual parts made to fit
 Quality through craftsmanship
 Mass Production
 High volume
 Interchangeable parts
 Quality through inspection
 Better Production
 Understanding of process variation
 Quality through process
Evolution of Quality--Timeline

1798 1920s 1950 1960 1980


Statistical Toyoda
Interchangeable Reconstruction
Process Production Six Sigma
Parts of Japan
Control System
Eli Whitney Walter Deming & Eiji Toyoda Motorola
Shewhart Juran
Expanding Application of LSS
 Initially applied in production environments
 Manufacturing
 Supply Chain
 Maintenance Repair and Overhaul (MRO)
 Rapidly grew into transactional applications
 Financial Institutions
 Insurers
 Continued to expand to services
 Hospitals and Health Care
A Couple of Questions
1. What does “Six Sigma” mean?
a. A process that has a six sigma level of quality experiences only
three defects per one million opportunities.
2. Is it Important to have a six sigma level of quality?
a) It depends on the customers perception of quality. If you are
landing airplanes, it is critical to obtain at least a six sigma
level of quality. If you are manufacturing coffee stirrers, lower
levels of quality may be completely acceptable.
Sigma Level DPMO
6 Sigma 3.4
5 Sigma 233
4 Sigma 6210
3 Sigma 66,810
2 Sigma 308,770
1 Sigma 697,672
How Good
Sigma is Good
Level Enough?
Improvements
3 Sigma 4 Sigma
93.3193% Accurate 99.379% Accurate
• 133,600 lost letters per hour • 12,420 lost letters per hour
• 33,400 incorrect surgical operations per • 3,100 incorrect surgical operations per
week week
• 13 short or long landings at most major • 1 short or long landing at most major
airports each day airports each day
• 1,336,000 wrong prescriptions each year • 124,200 wrong prescriptions each year

5 Sigma 6 Sigma
99.9767% Accurate 99.99966% Accurate
• 466 lost letters per hour • 6.8 lost letters per hour
• 117 incorrect surgical operations per week • 1.7 incorrect surgical operations per week
• 17 short or long landings every year at • 1 short or long landing every 5 years at
most major airports most major airports
• 4,660 wrong prescriptions each year • 68 wrong prescriptions each year

11
Lean Six Sigma Methodology
What is Lean Six Sigma?
LSS Methodology
 DMAIC Process
 Key Concepts
 Understanding Variation
 Voice of the Customer
 Voice of the Process
 LSS Organizational Roles
 Champion
 Master Black Belt
 Black Belt
 Green Belt
 Yellow Belt
DMAIC Process
• What is the problem?
Define • What is the goal?
• What is the current performance?
Measure • What is the defect rate?
• What are the sources of process variation?
Analyze • What are the root causes of defects?
• How do we change the process?
Improve • How do we verify our changes will improve the process?
• Are the improvements to the process consistent over time?
Control • How do we maintain the improvement into the future?
Key Concepts of LSS
 Understanding of Variation
 Two types of variation
 Controlled variation (Common Causes)
 Uncontrolled variation (Assignable/Special Causes)
 Improvement strategy based on type of variation
 Controlled variation = Change the process
 Uncontrolled variation = Deal with the special events

 Voice of the Customer (VOC)


 How does the customer describe quality
 What is the customers tolerance for defects
 VOC is often expressed as specification limits
 Goals should align with the voice of the customer
Key Concepts of LSS
 Voice of the Process (VOP)
 What is the current process capability
 How much variation is in the process
 How many defects does it produce
 What is the process average
 What process inputs are important to final quality

Conceptual Summary of Lean Six Sigma

Y=ƒ(x)
The Output (Y) is a function (ƒ) of the inputs (x)
LSS Organizational Roles
Champions

Master Black
Belts

Black Belts

Green Belts

Yellow Belts
Lean Six Sigma Success Factors
What are the building blocks for successful LSS programs?
Considerations for LSS Success
 Organizational Factors
 Commitment of Senior Management
 Clear organizational vision and goals
 Effective LSS training strategy
 LSS Team Factors
 Flexibility
 Practicality
 Focus on Customers (Internal and external)
 Strengths of LSS Methodology
 Data Based
 Scalable
 Structured
Considerations for LSS Success
 LSS Challenges
 It is not a quick win approach to continuous improvement
 It requires an investment
 It requires a degree of organizational humility
Applying LSS in Human Resources
Can I apply LSS to my processes?
Questions for Consideration
1. You have mentioned that LSS is an organizational approach.
Can I learn LSS concepts and apply them to my area of
expertise?
2. What are the challenges faced when trying to apply LSS to
HR processes when the larger organization hasn’t
embraced the methodology?
3. What are the unique challenges for HR in the application
of LSS?
4. What types of process are idea for LSS application?
Effective LSS Application In HR
A Case Study: The New York Independent Operator (NYISO)
NYISO Success Factors
 Well-defined corporate mission and goals
 Executive commitment to LSS
 Established infrastructure to support LSS
 Systematic approach to LSS training
 Focus on core processes (affecting multiple value streams)
 Supportive corporate goal structure
Background -- The Roles of the NYISO
 Reliable operation of the bulk electricity grid
 Managing the flow of power nearly 11,000 circuit-miles of transmission lines
from more than 300 generating units
 Administration of open and competitive wholesale electricity
markets
 Bringing together buyers and sellers of energy and related products and services
 Planning for New York’s energy future
 Assessing needs over a 10-year horizon and evaluating the feasibility of projects
proposed to meet those needs
 Advancing the technological infrastructure of the electric system
 Developing and deploying information technology and tools to make the grid
smarter
Case Study Project
 Title: Reduce Cycle Time to Hire for Open Positions
 Problem
 Project baseline data reviewed from November of ‘05 to
November of ‘06
 Average cycle time to hire was 70 days (Median = 43 days)
 Standard deviation was 70 days
 57 percent of positions filled within 60 days
 Goal
 Fill open positions in 60 days or less 90 percent of the time
 Result
 87 percent of positions were being filled in 60 days or less
(2007)
Overview of Improvements
 Defined and communicated HR Hiring Process / Roles to NYISO
Management
 Implemented Kick-Off Meetings for all Openings:
 Review/Define Job Specs and Posting information
 Discuss salary range and position level
 Discuss Pre-Screening questions and timing
 Discuss Recruiting strategy
 Review Hiring Process and HR/Hiring Manager Roles
 Standardized Pre-Screening process and questions
 Developed standard interview format, questions, evaluation
 Created dashboards for HR management and Senior Team
reporting
Controls Overview
Process Step Control Activity
Strategy Session Requisition signed by HR and Hiring
Manager before recruiting begins
Job Description Legal Review for Fair Labor
Changes Standards Act ramifications
Job Posting Hiring Manager review / signoff
Preparation before posting
Offer Preparation Generalists secure approval signoff
from Management and HR
Appendix
Supplemental Material
Improvement Process Road Map

Define Measure Analyze Improve Control

Define Measure Analyze Improve Control


Activity Activity Activity Activity Activity
• Identify Problem • Develop Operational Definitions • Propose Critical X’s • Develop Potential Solutions • Develop SOP’s, Training Plan &
• Complete Charter • Develop Data Collection Plan • Prioritize Critical X’s • Develop Evaluation Criteria & Process Control System
• Develop SIPOC Map • Collect Baseline Data • Conduct Root Cause Select Best Solutions • Implement Process
• Finalize Project Focus • Determine Process Analysis on Critical X’s • Work with EBPM&C to create Changes and Controls
Performance/Capability • Validate Critical X’s Develop ‘To-Be’ Process Map(s) • Monitor & Stabilize Process
Tools • Validate Business Opportunity • Prioritize Root Causes • Develop High-Level • Transition Project to Process
• Charter Form • Review EBPM&C process maps to Implementation Plan Owner
• Multi-Generational Plan create ‘As-Is’ Process Map Tools • Develop Pilot Plan & Pilot
• Stakeholder Analysis • Pareto Charts Solution Tools
• Communication Plan Tools • Fishbone Diagrams • Control Charts
• SIPOC Map • Operational Definitions • Brainstorming Tools • Standard Operating Procedures
• Voice of Customer (VOC) • Data Collection Plan •5 Why’s • Brainstorming (SOP’s)
•Defect definition • Graphical Analysis • Non Value-Added Analysis • Solution Selection Matrix • Communication Plan
•Goal definition •Pareto Chart • ‘To-Be’ Process Maps • Implementation Plan
•Histogram • Piloting and Simulation •Training Plan
•Box Plot • Process Control Plans
•Run Chart
• Detailed ‘As-Is’ Process Maps

From: NYISO Green Belt Training Module—Intro to LSS


Lower Spec Upper Spec
Limit Limit

68.26 %
-3 -2 -1 1 2 3

Voice Of
The 95.44 %
Process
-3 -2 -1 1 2 3

Why 6 Sigma? 99.73 %


-3 -2 -1 1 2 3

6s Units from the


mean to nearest
  
spec. limit
99.99999975
Voice Of The
Customer
Sources of Information
 The New Economics: W. Edwards Deming
 Lean Thinking: James P. Womack and Daniel T. Jones
 Understanding Statistical Process Control: Donald J. Wheeler
and David S. Chambers
 Lean Production Simplified: Pascal Dennis
 Knowledge gained producing training material and
supporting LSS training for the following organizations:
 Delta Air Lines, Inc.
 New York Independent System Operator
Helpful Links
General Info:
Six Sigma Website: http://www.isixsigma.com

Organizations that provide Six Sigma Training:


ASQ: http://asq.org/certification/index.html

BMGI: http://www.bmgi.com/
Disclaimer
This presentation was not prepared by, with, or for the New York Independent System Operator, Inc., and any
opinions expressed or conclusions reached herein are not the opinions or conclusions of the New York
Independent System Operator, Inc.

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