Suresh Jayaram

A) What BSS training they have been through (Checkbox) Champions, GB, BB, MBB, Lean Optional information from participants if they remember or we can have Moumita fill in the location / month / year if left blank Location: ____________, Month: ____________, Year: _____________ C) Industry (Drop Box) (IT, ITES (BPO/KPO), Mfg, Services, Hospitality, Other) D) Phone Number (Mobile Preferred / Landline) E) Interests (Check Box) (Jobs, Six Sigma Discussions, Lean Discussions, Additional Training, Keep in Touch with Friends, Consulting / Project Assignments)

We should probably use a subgroup for non benchmark participants instead of putting them on the main page because we will not be able to send them targeted communication otherwise. My understanding is that everyone would be a member on the main page. Any communication we blast on the main group will go to everyone including Benchmark and non Benchmark participants. If they are part of a subgroup, they can receive specific email blasts that are different from the ones we send for the past participants or we can choose to send it to everyone by sending it from the main page. Any thoughts?

Both Lean and Six Sigma are process improvement methodologies that seek to add value to the customers, eliminate waste, reduce variation, and ensure long term business success. There are strong proponents of both Lean and Six Sigma arguing that one is better than the other. There are companies who only work on Lean. They would not touch Six Sigma with a long stick! An example of such a company is Toyota - the originator of Lean concepts. Lean is touted as the enabler for change in culture of the company. Along similar lines, there are consultants who only focus on Lean. At best, they consider Six Sigma as one of the tools within their Lean toolkit. On the other hand, there are proponents of Six Sigma who claim it is far better than Lean. Some companies have deployed Six Sigma but have not yet jumped onto the Lean bandwagon yet. Most practitioners of Six Sigma have taken the appropriate Lean tools and incorporated into Six Sigma calling the combined toolkit as Lean Six Sigma. The overall methodology is still DMAIC with Lean tools peperred in - roughly 80% of the tools are from Six Sigma and 20% from Lean. GE is one example of a company that initially started off with Six Sigma and then jumped to the Lean Six Sigma journey. In reality, there are differences in the two approaches that companies need to leverage. Lean alone is not sufficient and Lean Six Sigma alone is also not sufficient. There are Lean concepts (process elements) that cannot be integrated into the Six Sigma project way of working. What is needed is for companies to deploy both: Lean Way of Working and Lean Six Sigma Projects. This combined approach does not have a name yet. Maybe we should start calling it: Lean Sigma.

Even though Lean and Six Sigma are more than a set of tools. Here are some commonly used tools / methodologies in Lean: Waste Identification Standard Operating Procedures (SOP) Continuous Improvement (Kaizen) Value Stream Mapping (VSM) Metrics (Cycle Time, TAKT Time, Process Cycle Efficiency) Planning (A3, Hoshin-Kanri) Mistake Proofing (Poka-Yoke) Total Productive Maintenance (TPM) Single Minute Exchange of Dies (SMED) Load Balancing (Heijunka) Plan - Do - Check - Act Cycle (PDCA) Visual Controls Pull Systems (Kanban, Supermarket, FIFO) Flow Concepts Line Balancing Just in Time Concepts Autonomation Workforce Engagement Workplace Organization (5S)

If people are interested, then they will join the new group. If they are not interested, then even if they receive emails, they will probably just ignore them. The % conversions will probably be very low for the non-interested group. One issue could be that our site membership will not be as high on collectiveX as it used to be on the Yahoo group site - but at least we will have higher quality members who are interested in the topics being discussed. SJ

Dear VK, My preference would be to use a single main site with several subgroups. In the main site, only we can post about the company, upcoming training etc. Underneath, we can have several subgroups. a) One subgroup is for all newcomers (open to non-benchmark) Second subgroup for past participants (limited/closed) c) Third subgroup for Jobs discussion forum (limited/closed to past participants) d) etc No participants should be allowed to post in the main forum. We may need to pay for the feature of creating more subgroups as needed but this will simplify the structure, avoid duplication of material posted, feature so send email blasts to everyone or to specific subgroups, and also simplify moving members from one place to another. SJ

Does Lean Six Sigma deployment make sense for companies during the economic downturn? During an economic downturn, the economic activity is shrinking and as a result revenue for the companies is also declining. Companies can focus on improving market share by aggressively investing in marketing or reducing the prices to attract more customers. This may be successful in the short term but this only invites a similar tit-for-tat move from competitors, which again results in more price pressures and further loss in revenues. This cycle of cutting prices can only be sustained to some extent and companies whose cost structures are not competitive will no longer be able to compete with companies that are able to reduce their prices because their cost structure is lower. If the prices fall below the costs incurred, companies will start losing money and start consuming operating cash. A company that runs out of cash will find it hard to survive in the long run. Thus the only option for companies is to cut costs to remain competitive. How does a company go about cutting costs? The easiest approach is to cut headcount in areas where the companies' products are not very competitive in the marketplace. However, companies have to avoid the urge to cut headcount to such an extent that their long-term viability is impaired. One example of this was a company that reduced headcount to conserve costs and as a result the remaining employees were so overworked that they made more "errors" in purchasing contracts that cost the company more money than what they saved. A company that entrenches itself by cutting costs such as in R&D may be able to show profits in the short term but its long term growth would be impacted. It has been shown that companies that played the downturn smartly by investing in the right areas, re-tooling the company workforce and technology were the ones that reaped huge benefits when the economy turned around. A case in point in Kelloggs company which overtook its competitors during one of the economic downturns in the past. So, how is a company to cut costs wisely? The answer to this is through the power of Lean and Six Sigma. Lean and Six Sigma help focus the company's improvement efforts to elimination of non-value added activities and reduction of variation. Both of these tools will help reduce the company's cost structure in the right areas which not only reduces the company cost structure but will also improve customer satisfaction. This can best be leveraged by companies that are already using Lean and Six Sigma - they would just have to reinforce these tools and reap the benefits. For companies that are new to these tools, they would have to spend some resources in training but these expenses are well worth the effort in the long run. So, why do all companies not want to use Lean Six Sigma during these times? One reason could be lack of awareness among the managers on the power of Lean Six Sigma (which is hard to believe in this day and age - but we have found this to be true in some cases). A second reason could be due to resistance to change - it is a lot easier to cut costs and hope for the best than to sell the idea of a small investment in the beginning that will reap rewards in the long term. They would have to really believe in the power of Lean Six Sigma if they have to sell this concept to their top management. Third, there is a mistaken notion that Lean Six Sigma projects take too long to reap the benefits. What can we expect to see during the economic downturn? The companies that are already using Lean Six Sigma should see an increased focus in these areas and there will probably be more companies joining the Lean Six Sigma bandwagon. So, my prediction is that there should probably be more job opportunities for people with Lean Six Sigma background during a downturn. Even if there are fewer jobs to go around, the people with Lean Six Sigma skills will be preferred as they have what it takes to help the company face the economic downturn in the short term.

Some people ask which is better Lean or Six Sigma? Which should we deploy? Both Lean and Six Sigma and process improvement methodologies that focus on providing better value for its customers. However, the approaches used to deliver this improvement is different. Lean focuses on engaging 100% of the workforce and using their skills and expertise to make small continuous improvements to the workplace by removing wastes. Six Sigma focuses on making improvements on a project by project basis by training a small percentage of the workforce as Green Belts and Black Belts (usually 25%) who in turn focus on using statistical tools, facts and data to identify the root cause of the problem and getting rid of them. Companies benefit the most by deploying both of these methodologies. They don't contradict one another - they are in fact complementary. Lean can be used to make small continuous improvements while Six Sigma can be used to tackle the hard to solve problems using more advanced tools. You waste resources by using Six Sigma on simple problems where the solution is already known. Without Six Sigma, Lean may not be able to get rid of tough problems and without Lean, Six Sigma will take a lot longer and expend more effort to accomplish the same results.

Let's apply this to a real world example: Every day there are roughly 144,000 flights that take off throughout the world. In a year, this amounts to 52.56 million flights. On an average, there are 36 plane accidents every year. The DPMO is given as equal to ratio of the total number of defects divided by the number of opportunities for making defects multiplied by 1 million. This corresponds to a DPMO = 0.685 (36/52.56). Here we are assuming that for each flight the opportunity for error is 1. Using the sigma calculator, we get a Sigma Level of 6.3.

This Six Sigma project was undertaken to improve the profitability of a job shop. A job shop undertakes projects from various clients who have different manufacturing needs. The projects are usually short term in duration - some lasting for a few days and others as long as 1 year. There is no guarantee that the job shop gets the same work over and over again. Due to the different needs of its customers, the job shop had accumulated different types of machinery such as Gear cutting machine, lathes, numerical control centres, electric discharge machining etc. Over the years, costs had spiralled out of control and the company was no longer being profitable. Define Phase A survey of the job shop's customers indicated that they were generally happy with on-time delivery and quality but required the company to reduce its prices. As the costs of doing business had increased and the market was fixing the pricing for services, the job shop also had become unprofitable and was bleeding red ink for the last several years. A project charter was developed and signed and approved by management. The project team consisted of 4 team members and 2 subject matter experts. The project sponsor was the division manager and the process owner was the manager of the machine shop. Measure Phase Data was collected from various pieces of equipment - machine utilization, rates charged for its services, number of people working etc. Data was collected based on computer records and actually walking through the shop floor and making observations. Based on preliminary findings, there was no well established methodology to determine the cost of operating the machines. The only rates available were the rates charged to the customer which was based in an ad-hoc manner based on market rates. Analyze Phase The root cause of the high costs for assets was identified as poor machine utilization. There were more than 85 pieces of equipment with some assets seeing less than 100 hours of work per year. Some of these assets were more than 40 years old - just sitting there occupying space and collecting dust. Based on the analysis, the assets owned by the company were divided into dogs & stars. The dogs were assets that were driving down business performance and the stars were assets that were contributing value to the business. Improve Phase The "dog" assets were auctioned off and the people assigned to these machines were re-trained to operate other assets. The attrition due to people retiring was not replaced. Some business that could not be profitably handled within the company was outsourced to nearby providers who could provide the same service and quality level at half the costs. The remaining star assets were regrouped to occupy less space and personnel and were operated on a 24x7 basis. An FMEA (Failure Modes & Effects Analysis) was also performed to identify potential failure modes of the suggested solutions and minimize risks. Control Phase The process was transitioned to the process owner who was now responsible to monitor the utilization of assets from a cost perspective and keep things under control. This project resulted in a savings of $1.3 million. The savings was due to reduction in the number of people required to run the operations, floor space, maintenance costs, tooling inventory, and recovery of surplus machine value over book value.

When we talk about Sigma Level in terms of metrics, if we know the Sigma Level, we can get an idea of how many defects the process is making. In order to compare different processes that may have different number of units of products or services and different opportunities for making mistakes, we usually talk in terms of DPMO (defects per million opportunities). The following table shows the relationship between Sigma Level and DPMO. For example, if a process is operating at 4 Sigma Level, then if the process has an opportunity for making 1 million defects, this process will only make about 6,210 defects. The above table only provides DPMO for only certain combinations of Sigma Levels. If you are interested in translating any Sigma Level to DPMO or vice-versa, you can use the attached Excel Spreadsheet.

When we hear that an organization has deployed Six Sigma, they usually have put in place an organizational structure that supports Six Sigma projects within the company. There are several different roles played by different individuals. Here is a brief list of different roles and their responsibilities in a Six Sigma organization: Green Belt / Black Belt: These are project leaders responsible for leading Six Sigma projects and teams to complete the project on time and realize savings for the company. Team Members: These are resources who attend team meetings and work on different actions required on Six Sigma projects (like collecting data, coming up with improvement ideas etc). Subject Matter Experts (SME) are "experts" who do not necessarily attend all team meetings but only come on an as needed basis and provide the needed expertise. Master Black Belt: Master Black Belts are responsible for training and coaching Green Belts and Black Belts in an organization. They also work with senior management within the company to identify and launch Six Sigma projects. Project Sponsor: Project Sponsors are managers within the company who authorize Green Belts and Black Belts to work on projects. They provide resources for projects such as team members, required money for capital expenditures etc. Process Owner: Process Owners are the persons who take over the improved project once the Green Belt or Black Belt has finished making the required improvements. Process Owners are responsible for maintaining the sustenance of processes after the completion of the Six Sigma project. Financial Analyst: Financial Analysts are independent entities in the organization who check and approve the benefits reported on Six Sigma projects. They ensure the reliability of numbers reported on Six Sigma projects. Deployment Champion: Deployment Champions have the final accountability for the Six Sigma program within a company. They provide the strategy for deployment of Six Sigma in an organization.

What is Lean?- This is the most commonly asked questions. Today I thought of posting the answer to this question here, so the people can easily refer to it. "Lean is a philosophy which focuses on two main concepts: The first is the elimination of wastes from all processes so that only steps that add value from a customer's point of view are the ones that are performed by the company. Lean focuses on continuous improvement where all employees in a company are constantly looking at their processes to eliminate waste. Lean provides some guidelines on how to look for these wastes-usually referred to as the eight wastes (Waiting, Over-production, Rework, Motion, Over-processing, Inventory, Transportation, and Human Underutilization). The concept of waste elimination requires a change in culture and mindset of its employees to encourage them to constantly look for and submit ideas for workplace improvement. Each small improvement made by the workforce may be inconsequential to the overall business but over a period of time, they add up and can be a huge source of competitive advantage to the company. The second main Lean concept is making things flow - making sure that the material or information moves smoothly within a company to meet the customer demand without getting stuck anywhere in the process. Continuous flow requires arrival of material or information just in time to when the material or information is needed in the right quantities and at the right time. This also implies that when the material or information arrives, it is immediately processes and passed on to the next step in the process. Of course, continuous flow just for the sake of making the product or information that no one needs is also a waste. So, continuous flow has to be linked with customer demand and material or information should be produced only on pull from the customer. Pull and continuous flow are difficult concepts to deploy in reality-there can be a number of issues that can crop up when implementing these initiatives. For example, the work that is done on the material or information should be defect free. If this were not the case, we would not be able to satisfy a waiting customer downstream. Since, ideally there is no excess inventory any production problems such as machine breakdowns may cause the customer to wait and disrupt the entire process. Both Lean and Six Sigma focus on business process improvement. Whereas, Six Sigma focuses on variation reduction to improve process performance, it is Lean which focuses on reduction of wastes to add the most value to the customers."

Lean and Six Sigma can be used in IT in several areas: a) Improve quality (bug-free) of the IT product/service. b - Reduce the cost of service (minimize non-value added costs) c) Improve utilization of servers and other hardware resources d) Reduce the time to deliver products & services (project management) e) Improve workplace organization (including emails etc) f) Improve employee productivity g) Improve customer satisfaction scores h) Ensure products are robust to customer usage i) Improve sales & marketing activities j) Reduce setup times for product features

There are several areas in which Lean Six Sigma can be applied to manufacturing operations. Some examples are: a) Reduce quality defects (scrap/rework) in manufacturing processes. b.) Reduce manufacturing cycle time (time of order to delivery) c) Improve employee efficiency (productivity) d) Reduce finished goods inventory levels e) Improve customer service performance scores f) Reduce cost of manufacturing & assembly (supplier component costs) g) Reduce maintenance costs (better processes) h) Reduce warranty costs for products i) Improve customer satisfaction scores j) Reduce the cost of non quality k) Reduce non-value added activities (manufacturing steps) l) Improve equipment utilization (improve throughput) m) Reduce work-in-process inventories between processes n) Improve inspection procedures (sampling techniques) o) Reduce time to meet customer requirements p) Reduce time to develop new products (manufacturing related) q) Improve workplace organization r) Improve process stability / control s) Reduce variation in manufacturing quality t) Standardize workplace u) Deploy process flow concepts v) Improve employee engagement scores w) Improve product performance by controlling critical features x) Improve planning & forecasting of demand (supply chain issues) y) Reduce the amount of obsolete inventory z) Improve related transactional processes: accounting, human resources, purchasing etc. Some of these projects are more suited for Six Sigma type projects, others are Lean type projects / processes, and some may require both Lean and Six Sigma toolkits.

There are two primary methodologies in Lean Six Sigma: DMAIC DFSS or DMADV The Lean Six Sigma DMAIC methodology described in the post earlier is for making improvements to existing processes. The second methodology DFSS stands for Design for Lean Six Sigma. This methodology is used for new products and services or when the improvements that can be made with DMAIC is not sufficient. There are several approaches to DFSS: DMADV, IDOV, etc. The most popular approach to implementing DFSS is using DMADV (Define - Measure - Analyze - Design - Validate). More than 70% of the DFSS implementations use the DMADV approach. DMAIC can be considered to be reactive in nature, in the sense that a process already exists and is making defects. DMAIC approach is used to identify the root cause of the problems and then fix it. On the other hand, DFSS is mostly a proactive approach. A process does not exist yet and DFSS is used to truly understand customer requirements and then develop a process that provides exceptional levels of quality and process performance.

Additional examples by sectors which are using Six Sigma: Banking: Bank of America, American Express, HDFC, HSBC Call Centers: ICICI OneSource, Accenture, Satyam BPO, IBM Daksh Hospitality: ITC Hotels, GRT Hotels Hospitals: Apollo Hospitals Retail: Reliance Retail Telecom: Bharti Cellular, Vodafone, Siemens Software: Wipro, Satyam, Acenture, Infosys

Lean Six Sigma has a hierarchical structure similar to Martial arts. There are white belts, green belts, black belts, and master black belts. The white belts go through a very high level overview training about Six Sigma (typically 4 hours) so they understand some basic terminology about Lean Six Sigma. All employees in the company are usually trained as white belts. White belts may help Green Belts or Black Belts with some data collection etc. The next level is the Green Belts who go through the Lean Six Sigma training at the next level of details. Green Belts may go through few days to up to two weeks worth of Six Sigma training. Green Belts are expected to work on projects within their own functional areas. Green Belts are usually not exposed to advanced Six Sigma concepts, so they are not equipped to solve really tough problems. The third level is Black Belts who go through a more detailed version of the Six Sigma training. The typical duration of training varies from a week to four weeks worth of training. Black Belts are expected to work on more complex cross-functional projects that are strategically important for the company. Finally, the last level is the Master Black Belts. The Master Black Belts are responsible for coaching and training Green Belts and Black Belts. They may also work on large company wide projects. MBBs are also expected to help leadership in decision making of various kinds. Sometimes people ask us if there is any minimum financial benefits that Green Belt and Black Belt projects need to deliver. There is no hard and fast rule about minimum savings that these projects need to deliver. The amount of benefits will also depend on the size of the company turnover, number of employees, opportunities for improvements etc. Some companies may have a target for Green Belt and Black Belt savings - but these are usually applied as an average across several projects rather than for individual projects.

There are several reasons why Six Sigma has not been successful at all companies. Here are a few: a) Not buy-in from top management. As a result, no support is provided to the Six Sigma resources to make it successful. Lack of communication of benefits of Six Sigma. As a result, over time the program becomes the flavour of the month. c) Lack of organizational structure to validate benefits, support teams, reward the people who are successful. d) Too many programs within a company that ensures a lack of focus on the most important ones. e) Lack of vigour in selecting the right projects and people to run the program which results in poor results. f) Poor training methods that may result in lack of understanding of the process steps on one extreme or analysis paralysis on the other.

Here are some reasons why we should be using Lean Six Sigma to make process improvements: It is a structured approach - if we follow the process, people will not forget any important steps along the way before they implement the solution. It helps quantify the benefits and thus make it easier to sell the improvements to senior managers in the company. It uses facts & data and the rigor of statistical testing to arrive at the right root cause instead of fixing symptoms or putting band-aids. There is a greater likelihood of the solution being sustainable if we follow the Six Sigma process. Six Sigma focuses on solving the right problems using the project selection matrix. It has proven itself in a large number of deployments. Frankly, there is no better tool out there to make process improvements - especially when the root cause or the solution is not known.

Six Sigma has been around for over a decade and as such it has been deployed at lots of companies around the world. More than 75% of the fortune 500 companies have deployed Six Sigma in one form or another. Some companies have chosen not to call it Six Sigma due to copyright or other issues. They have a similar approach but may call it by a different name (such as STRIVE, MEDIC, etc). Some of the more famous companies who are using Six Sigma are: General ElectricMotorolaCaterpillarMicrosoftHome DepotPhilipsAllied SignalXeroxChevronDellWIPRO Feel free to add other companies to the list by responding to this message.

Lean Six Sigma is a powerful methodology that can be used to improve business processes. It is a structured approach to problem-solving that can be applied to any process - manufacturing, sales, marketing, IT, BPO, accounting, purchasing, you name it. All processes have variation. Variation is the cause of all evil - it leads to defects and customer dissatisfaction. Lean Six Sigma methodology can be used to reduce variation from any source and thus improve costs, quality, and hence customer satisfaction. The standard methodology that is used to improve existing processes is called DMAIC. The acronym DMAIC stands for Define - Measure - Analyze - Improve - Control. If you think about it - this methodology is common sense. Before we start working on a problem, we need to have a good definition of what is the problem, why we are working on it, where is the pain area, what is in the scope of the project etc. All of these are accomplished in the Define phase. Secondly, in the Measure phase, we are interested in ensuring that the data used for further analysis is free of measurement errors. Lean Six Sigma is about making decisions based on facts & data. If the data is inaccurate, we would end up making the wrong decisions. Hence, the measured phase ensures good data. Before making any improvements, it is also important to establish a baseline so that we can clearly communicate the benefits obtained from our project to other key stakeholders. The next phase, Analyze, is all about making the hypothesis and using data to either prove or disprove our hypothesis. We make the hypothesis about what is causing the problem and then establish the real root causes. The fourth phase, Improve, focus on getting the best possible solution to solve the root cause of the problem. The solution is optimized and any potential failure modes are resolved before the solution is deployed in the real world. The last phase, Control, is all about ensuring that the solution is sustainable in the long run. Any financial benefits obtained from the project are also quantified. Finally, the improved process is transitioned over to the process owner. As we can see from this paragraph, any problem can be addressed using this structured approach. Here are some things that should come to your mind when people talk about Lean Six Sigma: Business Process Improvement Methodology 3.4 defects per million opportunities Customer focused Uses facts & data Quantify financial benefits Structured improvement approach