Operational Excellence using Lean Six Sigma Amit Dasgupta

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1 Operational Excellence using Lean Six Sigma Amit Dasgupta Amit Dasgupta 1

2 Contents Introduction to Operational Excellence Deployment Practice Our Services Amit Dasgupta 2

3 Operational Excellence using Lean Six Sigma Increasing globalization & competitive pressures compelling organisations to raise their performance bar Consequently, Operational Excellence (OE) is high on the priority list of many companies Yet, finding ways to actually enable operational excellence remains a challenge Top companies with successful track records have discovered Lean Six Sigma as an effective approach for operational excellence. Some examples: Motorola adopted Six Sigma in 1987 The company saved $16 billion in 10 years In The first year Xerox s saved $240,000 using Lean Six Sigma, through reduction in production loss of toner. Also Xerox helped Bank of America save $800,000 by consolidating document centers Toyota worked with one supplier to reduce lead time by 46%, work-in-process inventory by 83%, finished goods inventory by 91%, overtime by 50%. All this increased productivity with 83%. Source: Business week and Internet The right operations strategy using a holistic approach involving key stakeholders, focused not just on efficiency but also on innovation, can help institutionalize operational excellence in an organization. Amit Dasgupta 3

4 Operational Excellence Framework This framework is adopted to institutionalize OE Leadership Vision Commitment Enablers Strategy Drivers Learning & KM Adaptive Continual Improvement Innovation Operational Excellence Focus Customer Teamwork Mindset Change Collaboration Execution Quality Measurement Benchmarking Control Performance Management Processes Flow Value Addition Best Practices Amit Dasgupta 4

5 Concept of Lean Six Sigma Lean is about doing more with less: less time, inventory, space, labor, and money. It is a commitment to improving efficiency by eliminating or reducing waste and non value added activities Six Sigma seeks to improve the quality and reliability of processes and minimizing variability using quality management and statistical methods What is Lean Six Sigma? Lean Six Sigma, is a marriage of two distinct business management strategies. As a result, Lean Six Sigma allows managers to effectively address issues of speed, quality and cost. Critical Customer Requirement B A Lean As-Is Flow To-Be Flow Simplifies work flows, Eliminates waste, Focuses on high-value steps Product or Service Output Increases consistency Reduces variation Eliminates defects Defects: Service unacceptable to customer Six Sigma Amit Dasgupta 5

6 Contents Introduction to Operational Excellence Deployment Practice Our Services Amit Dasgupta 6

7 Lean DADIM Method Project Selection Project Charter Mobilize Team Define SIPOC Demand Flow Cause and Effect Value Stream Map Analyze Manage Dashboard Ensure Controls Handover Process Project Closure Develop Brainstorm Possible Solutions Apply LSS Principles Poka Yoke Future State Map Impact Benefit Assessment Future State Components Implement Prioritize Implementation Plan Test Solution Rollout Solutions Measure Benefits Communication Amit Dasgupta 7

8 Lean Deployment - Workshop Driven Approach A proven practice of workshop based deployment ensures successful results Mobilize Define Analyze Design Implement Manage Identify Value Stream Select Team Training Project Charter SIPOC, VOC Data Collection Demand Flow Value Tree Fish Bone Diagram Interviews Work Flow Current State Map Value Analysis Brainstorming Future State Design Action Plans KPIs Prioritization Test Cell Implement Measure Dashboard Establish Controls Handover 1 Week 1 Week 2 Weeks 2 Weeks 4 Weeks 2 Weeks W1 W2 W3 W4 W5 Leadership Commitment Establishing Leadership commitment and sponsorship, the most important success factor for operational excellence. Leadership is assisted to; articulate company s strategy and vision & communicate the importance of operational excellence Value Stream Selection Assistance in selection of process areas for deploying Lean Six Sigma, that are closely aligned to company s business goals Mobilisation & Training 1 week Deployment Weeks/Project Report out to sponsors & management team after each workshop Training Awareness creation and training on Operational Excellence framework, Lean Six Sigma & Kaizen principles, tools & techniques and performance management Experiential learning through simulation games Training for Lean Six Sigma certification Workshops A participative workshop driven approach is followed, where team members are actively involved in assessing the current situation, identifying areas for improvement and designing process changes. Extensive use of visual charts & templates to improve effectiveness Periodic report out to sponsors and management team Our consultations mainly coach, guide and facilitate. Amit Dasgupta 8

9 Workshop Artifacts Active participation by teams. Use of visual charts & templates to design & deploy Lean processes Amit Dasgupta 9

10 Critical Success Factors 1. Committed Leadership Strong Leadership commitment is absolutely essential and the most important of all success factors 2. Employee Teamwork and Collaboration Operational excellence is a collective responsibility for which ownership, teamwork and collaboration is necessary 3. Performance Measurement & Benchmarking Without well defined key performance indicators and processes for measurement, success of operational excellence cannot be established or sustained 4. Alignment of Lean projects to Business Vision Unless Lean projects are closely aligned to business strategy, full potential for benefits may not be realized 5. Mindset Change Success of operational excellence is largely dependant on cultural and mind set change towards continual improvement Amit Dasgupta 10

11 Benefits of Operational Excellence Financial Benefits Creates additional new revenue streams Cost savings Increases profitability of existing products & services Lowers cost of production and servicing Organizational Benefits Creates new customer opportunities Fosters collaboration and teamwork to accomplish company goals Improves market position relative to competitors Operational Benefits Decreases employee work loads for undesirable work Eliminates non-value added activities Improves employee morale, team spirit and productivity Improves use of resources equipment, assets, space, people and money Simplifies processes and improves throughput Large companies across the world have reported benefits in billions of dollars Case Study - Gold Seal Engineering Products Ltd. Production Space: Increased by 45% Machine Downtime: Reduced by 60% Machinery Breakdown: Reduced by 42% Scrap: Reduced by 75% Standard Operating Procedures: Increased by 50% Workforce Flexibility: Increased by 57% Quality Awareness: Increased steadily Staff Motivation: Improved significantly Source: e-coach UNIDO Partnership Programme Savings of 20-50% in Value Streams quite common Amit Dasgupta 11

12 Contents Introduction to Operational Excellence Deployment Practice Our Services Amit Dasgupta 12

13 Services Consulting We offer consulting services and training to assist organisations, embark on their Operational Excellence journey & build capabilities internally, to sustain OE Consulting We support companies in initiating operational excellence by: Assisting senior management team to articulate company s vision, strategy, and business objectives to their middle and junior management teams Developing communication plans to convey management s commitment to operational excellence and its impact on achieving business goals Identifying and prioritizing functions and processes where LSS could be successfully applied Awareness creation and training on Operational Excellence with Lean Six Sigma Guiding and facilitating LSS project deployment across multiple process areas Designing performance management systems for monitoring KPIs and visual controls LSS toolkits and workplace best practices Developing transformation and change management programs to build a culture of excellence and continual improvement Amit Dasgupta 13

14 Services Training Training Objectives Training is aimed at helping participants get insights on: The importance of leadership and teamwork in operational excellence The enablers and drivers for achieving operational excellence Lean Six Sigma and Kaizen techniques, tools and deployment framework The importance of customer focus, value addition and flow to achieve higher customer satisfaction Analysis of current business processes to reduce waste and non value added activities to deliver faster process times and improve profitability How to design, deploy and manage process changes Performance management, metrics, KPIs and visual communication to monitor process adherence, improve quality and manage delivery How to achieve mindset change within the organisation to embrace a culture of continual improvement and learning Training Methodology The training methodology is interactive and workshop based, using simulation games to get a direct experience on application of Lean Six Sigma concepts, techniques & tools necessary to develop operational excellence. Training Modules Introduction to Operational Excellence & LSS 1 day Operational Excellence Deployment for a deeper understanding on application of OE 2-3 days Training for Lean Six Sigma Certification Operational Excellence Amit Dasgupta 14

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