Waste Removal: The Lean Six Sigma Way. Frank Turocy, CPA, MSA Lean Six Sigma Green Belt Senior Manager

Transcription

1 Waste Removal: The Lean Six Sigma Way Frank Turocy, CPA, MSA Lean Six Sigma Green Belt Senior Manager

2 Introductions Name Place of employment/position Tell me one way you or your agency is inefficient (no need to be too specific) Don t be shy, this will be a very interactive session

3 Concept of value Agenda What is lean six sigma? How can these principles apply to me and my agency? Does it work?

4 Recent History of Process Improvement Henry Ford Mass Production (flow) 1926 Kiichiro Toyoda JIT 1937 Deming Japan 1950 Life Cycles (Product and Business) 1950 s Drucker Management Science 1960 s Deming US Theory of Constraints (Goldratt) Early 1980 s Lean Manufacturing (US version) 1987 Six Sigma (Motorola) 1987 Six Sigma (GE) 1996 Lean Six Sigma (GE/Allied Signal) Late 1990 s

5 So what are the takeaways? 1. Continuous Improvement and the elimination of waste. 2. The need to innovate. The greatest danger in times change is not the turbulence. The greatest danger is to act (today) with yesterday's logic. -- P. Drucker

6 Value/Performance Why Change? S Curve Time

7 Value Value What is value? Who Defines it? Time

8 Changing Value - Products

9 Changing Value - Companies

10 Lean Six Sigma Lean Six Sigma provides an approach to maximize efficiency and minimize waste Aims to find what creates value, and remove what does not from a process High level of importance on continuous improvement

11 Lean Six Sigma Summary Lean efficiency capacity speed Six Sigma flawless higher-quality remove variation

12 Lean Simulation: Seeing Waste and Creating Value Four exercises follow instructions on screen for each Be creative Ask questions Observers: Watch what is going on around you Discussions after each exercise

13 Exercise 1 Produce batch of 5 planes prior to transporting to next step. Keep on producing, do not stop. You can not fix assembly mistakes from another operator. Flip airplane upside down if you receive a reject. Keep producing batches of 5 until we have completed our first defect free airplane. Blocks need to be pushed tightly together.

14 Exercise 2 Produce batch of 5 planes prior to transporting to next step. Keep on producing, do not stop. You can not fix assembly mistakes from another operator. Flip airplane upside down if you receive a reject. We will stop production after 6 minutes. Blocks need to be pushed tightly together.

15 Exercise 3 Produce 1 airplane and stage in WIP area. Then produce one additional plane, place in front of you and then stop. You will start producing your next plane when the WIP area is empty. You can not fix assembly mistakes from another operator. Flip airplane upside down if you receive a reject. We will stop production after 6 minutes. Blocks need to be pushed tightly together.

16 Exercise 4 We will reassign the QC job duties so they are adding more value to the process. Produce 1 airplane and stage in WIP area and then you can not start assembling your next plane until the WIP area is empty. You can fix assembly mistakes from another operator. We will stop production after 6 minutes.

17 Lean Five main principles Customers define Value Identify the Value Stream (value-add vs. non-value add steps) Implement Flow Establish Pull Continuous Improvement

18 Six Sigma Six Sigma = Quality Making a process that rarely produces defects or quality issues Higher quality Remove variation as much as possible Six Sigma is a business problem-solving model designed to improve profitability by improving quality and eliminating variation. There s never time to do a job right, but always time to do it over

19 Deadly Wastes in Processes Defects Overproduction Waiting Not utilizing people s talent Transporting Inventory Motion Excess Processing Attitude Where do you see value being wasted?

20 Implementing Lean Create continuous process flow to bring problems to the surface. Use the "pull" system to avoid overproduction. Level out the workload. Build a culture of stopping to fix problems, to get quality right from the start. Standardized tasks are the foundation for continuous improvement and employee empowerment. Use visual control so no problems are hidden. Use only reliable, thoroughly tested technology that serves your people and processes.

21 The Lean Six Sigma Model Define Organize the Project Scope Develop Project Charter Measure Determine Current State Process Opinion of the Experts Analyze Collect Data Confirm/Deny Opinions Improve Manipulate Process to Improve Create desired Future State Control Sustain the Gains Develop Procedures / Controls

22 Project Strategy Define and Measure the current state of the process Project Charter Current State Value Stream Map

23 Value Stream Mapping The Value Stream Map clearly depicts the process, constraints, flow, lead time and cycle time. The difference between cycle time and lead time defines the opportunity for improvement.

24 Why value stream mapping is an essential tool It helps you visualize more than just the single-process level. You can see the flow. It helps you see more than waste. Mapping helps you see the sources of waste in your value stream. It makes decisions about the flow apparent, so you can discuss them. Otherwise, many details and decisions just happen by default. It forms the basis of an implementation plan. By helping you design how the whole door-to-door flow should operate a missing piece in so many lean efforts value stream maps become a blueprint for lean implementation. Imagine trying to build a house without a blueprint!

25 Value Stream Map Let s break into groups of 2-3 people, create a value stream map to discuss.

26 What Do Value Streams Really Look Like?

27 Project Strategy Analyze the current state FMEA Failure Modes & Effects Analysis Collect Data & Statistics

28 Failure Modes and Effects Analysis What process step is under investigation? In what ways does it go wrong? How does the issue impact the output? How severe is that to our customers? What causes the inputs to go wrong? How often does this occur? What is currently in place to stop the inputs from going wrong? What can we do to reduce the occurrence of the cause?

29 Project Strategy Improve the process Prioritized improvement ideas focused on several key areas Control Develop Summary of Future State document

30 Lean Ground Rules Take Ownership Respect Others Choose to be Positive Work Together Be Open to the Possibilities Listen Intently Be a Person of Influence Fail Forward

31 Case Study: Billing issues dominating time Opportunity/Challenge A non-profit was experiencing low collection rates and long collection times related to their billings for counseling services. The root of their problems lied in the quality of the clinical notes being completed, the timeliness of note completion, and the timeliness of supervisor review. Due to the high amount of rejected claims, the billing department became overwhelmed causing a delay in billings for current services and untimely follow-up of previous billings. Both of these resulted in delayed/lost collections. Actions Remove waste and non-value added steps from the process. Level out the workload throughout the process by utilizing the talent of the existing staff. Place quality checks throughout the process, instead of pushing all problems to the end of the billing cycle.

32 Case Study: Billing issues dominating time Results Average note completion time is as follows: Year ended October 31, 2012: 76 hours Year ended October 31, 2013: 92 hours Year ended October 31, 2014: 27 hours Company rarely experiences claim rejection based on mismatched note signatures, which was previously their largest source of rejected claims. Company now bills self-pay clients monthly, which was previously being completed semi-annually. Company experienced an approximate 10% decrease in volume in 2014 and maintained revenue levels from the prior year. Company used the lean principles delivered to them to reengineer practically every transaction cycle in their business.

33 Who uses Lean Six Sigma? Manufacturing General Electric Caterpillar Inc. DuPont Ford Samsung Healthcare/NFP Akron Children s Hospital Cleveland Clinic Construction/Contractor Lockheed Martin Retail/Distribution Acme Markets Target Amazon Chevron Penske Truck Leasing Cintas The McGraw-Hill Companies Other US Army US Navy US Marine Corp Financial/Professional Services Bank of America Merrill Lynch GEICO