A Practical Approach to Lean Six Sigma

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    A Practical Approach to Lean Six

    Sigma

    In its optimum form, Six Sigma is anything but simple or practical. Given itsconsiderable upfront cost and ongoing complexity, its best viewed as a results-driven expedition of Homeric scope, one where the final destination is 3.4 defectsper million opportunities. Its not a journey for the faint-hearted. You must beseriously committed to pursuing it for the long term, or youll never recoup yoursizable upfront investment, let alone enjoy a net return.

    First and foremost, an effective Six Sigma program creates a high definitiondata picture where the subtlest defects literally jump out at you. Its all about

    mapping as-is processes, engineering a depth and richness of picture clarity thatlets you draw the most accurate map possible. This meticulous defining of an as-is landscape is an inviolate first step for truly optimizing a process. Such amapping expedition demands that you collect--and put in high-definition focus--astaggering amount of statistical pixels. Without this requisite definition, themeasurement, analysis, improvement, and control meant to follow are irrevocablycompromised.

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    If theres a practical Six Sigma truth, its this: Organizations lacking thedetermination, patience, and financial wherewithal to painstakingly define thelandscape shouldnt bother setting out on the trip. Of course, many skittish

    managers settle on just that sort of opt out approach. Quality leaders in smallerenterprises (from a few dozen to a few hundred employees) are particularly quickto surrender Six Sigma ambitions without a protracted fight. Typically, theyll runthe numbers to roughly budget what their initial investments in traditional SixSigma programming might be. Soon after, they determine that, relative to theirmore modest organizational scale, the cost is too steep, and the degree ofgranular insight delivered is more than they need at that time. Simply put, theenterprise hasnt yet reached a maturation point where the cost/benefit of a full-out Six Sigma effort can be justified.

    That smaller enterprises should be reflexively risk-averse to investing in big Six

    Sigma initiatives is wholly understandable. When devoting money and muscle todeep-defining activities, the smaller your organization, the less time it takes tofeel like youre in over your head. But thats no reason to give up on Six Sigmaentirely. Organizations with less economy of scale and fewer financial resourceshave a more practical--some might say more svelte--beginners option. Imtalking about lean Six Sigma.

    Developing a leaner picture

    Where Six Sigma is all about depth of field, lean Six Sigma is about breadth.Think of the latter as a new 50-inch TV and the former as the HDTV broadcast

    service that you might eventually pipe through it, if and when finances allow. Thewidescreen, lean picture neednt deliver depth of clarity to yield early and rapidimprovement. It merely needs to be wide enough to deliver a panoramic visionyou didnt have before.

    Building on this metaphor, a high- definition picture isnt worth much if the screenon which its displayed isnt wide enough to show all the major process steps. Fora smaller enterprise, field of vision is much more important than sharpness ofvision, at least to start. Consequently, smaller enterprises that successfully mapa low-definition but complete picture on a new and much larger lean screenenjoy vastly improved vision at a relatively small expense.

    In short, for a smaller company thats never invested in any kind of wholesalequality initiative, lean is a great place to start. However, such companies mustacknowledge that the bulk of their lean gains will come early, and theyll seediminishing returns without an eventual deeper commitment to Six Sigma and thegranular level of information and insight it can produce. That said, whether yourea smallish regional enterprise or a Global 500 company, it always makes sense

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    to invest in lean--the big screen--before committing to the high definition of SixSigma.

    As a onetime quality leader with GE, Id venture to say that if the company couldturn back the clock, it, too, would adopt a lean approach first, followed by SixSigma. Think of lean as the proof of concept, which, positioned correctly,engenders wholesale confidence in the broader precepts of Six Sigma. Suchconfidence, in turn, ensures faster enterprisewide buy-in for the deeper dive intoSix Sigma efforts when the time comes.

    Surveying the backyard

    Although lean Six Sigma process-mapping tools have significant limits, if theorganizational landscape under scrutiny is relatively small--and the surface

    defects to be identified are comparatively large--these limits are actually anadvantage. Say that, metaphorically speaking, you want to survey your backyard(or back office) to identify the major obstacles that limit the amount of usable land(or productivity) that you have.

    Bringing in a geologist to analyze the composition of the soil and boulders strewnabout is not only overkill, its also counterproductive. The geologists serviceswould be less useful to you than those of a professional surveyor (the leanexpert). Your own unaided eyes would, in fact, help more than any geologist,provided that they could take in a full, unobstructed view.

    Again, the lean goal in redesigning the organizational landscape isnt to mapterrain for optimal land use; its to chart a path through the backyard that yields amajor improvement in productivity from the status quo. In this case, theres noneed to retain an environmental expert to distinguish swamp from solid ground. Athorough and thoughtful walkthrough of the property will do well enough topinpoint soft spots from terra firma.

    When to go lean

    Having the needed focus to recognize large process obstacles that hide in plainsight is all well and good. But from a practical standpoint, such breadth of vision

    and keenness of observation is only useful to the extent that you cancommunicate it to others. This brings us to a crucial step in any practicalapproach to lean Six Sigma: articulating the business problem.

    There can be no meaningful improvement unless those materially involved in aproblematic process feel a need for change. Ask yourself, Can I illustrate a needso process stakeholders fully comprehend it and feel motivated to act upon it?Then ask, Do I have the data to clearly define the full depth of the problem? If

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    you answer yes to the first question and no to the second, you lack the high-definition picture to leverage traditional Six Sigma and should instead use a leanapproach.

    Bear in mind that full-out Six Sigma strives to remove all process variation untilits rendered reliably repeatable without defect, or at least without more than 3.4defects per million opportunities. Lean, in contrast, seeks only to broadly mapvalue- and nonvalue-adding process steps with the modest goal of enhancingprocess performance, not fully optimizing it.

    To revisit my backyard metaphor, the optimal solution may well be to go in with abackhoe and level the entire lot (i.e., troubled process). But what if there areobstacles lurking beneath the surface that you didnt know about before starting?Moving ahead with your wholesale reengineering plan without knowing where all

    the underground gas lines and oil tanks are might lead to costs far exceeding anyexpected benefit.

    On the other hand, if you stick to mapping the surface--and recognizing above-ground performance barriers that dont readily reveal themselves as obstacles--you can see real and immediate improvement. Good surface mapping will alsoallow you to identify simple modifications that take advantage of the visibleterrains natural contours.

    Once stakeholder understanding and buy-in is secured for this pragmaticapproach, the lean process- improvement facilitator must draw out the previously

    unvoiced insights of each constituency and then leverage their unique expertise.

    A practical approach

    Since joining Genpact Ive seen lean improve transactional processes welloutside the manufacturing arena, where Six Sigma got its start. Working with aleading hardware and systems provider to retail banks, for example, we broughtvarious fulfillment-process stakeholders together to identify major breaks in howproduct was ordered.

    Because the companys market included everything from community banks to

    global powerhouses, customer accounts usually ranged from a few hundreddollars to hundreds of millions. Individual customer orders were equally broadand varied. Therein lay the problem. The complexity of completing a seeminglyendless stream of highly detailed order requirements of differing size, geographicscope, and technical requirement--while dealing with myriad internal and externalstakeholders--significantly boosted odds of errors.

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    Competing process goals among stakeholders only made matters worse.Salespeople wanted to satisfy customers needs for speed. However, hastilyinitiating a less-than-complete order made for a lot of back-and-forth alterations

    later. This protracted process involved, on average, five change orders per finalcompleted sale.

    Figuring out how to address routinely complex, frequently incomprehensible (andever subject to change) order-fulfillment policies created plenty of churn betweensales, sales order support, and order administration personnel. To helpemployees in those three areas appreciate each others frustrations andreconcile them with their own, our facilitators led a series of roundtable exerciseswhere members of each constituency were invited to speak candidly and listen tothe others.

    A technological solution was eventually deployed that allowed masscustomization and order reconciliation from any entry point where orders wereinput or updated. Yet the underlying challenge--getting salespeople to feel asaccountable for completing full and accurate orders as for signing business--remained. To address it, regional sales managers were armed with metricdashboards that enabled them to track the completion rate on all orders anysales rep generated. A newly revised sales-order-volume credit policy thataffected compensation was fine-tuned so that only dollars from completed orderswere factored.

    The result? Even when salespeople rely heavily on support or administration staff

    to drive orders to conclusion, they remain highly motivated to quickly clarifyrelated information whenever asked. On the back end of fulfillment, lean mappingidentified where the highest concentration of change orders were: 30 percentemanated from a single large customer. From there, facilitators organized ninedistinct kaizen , or continuous improvement, events. Through suchconsciousness-raising, all stakeholders came to understand what had to bedone, by whom, and why. They also came to understand how theyll bemeasured and held accountable for delivering, or not.

    This is but one example of how to spot and motivate others to remove the not-so-obvious obstacles that clearly impede process performance in your

    organizations backyard. You dont need a high-definition TV to see the surfacedefects, or a backhoe to make the terrain more easily traversable. All you need iswidescreen vision that takes in the full breadth of the situation. Assembling acollection of open minds and strong arms doesnt hurt, either. You want peoplewho, after studying a situation, can recognize those big, hidden-in-plain-sightobstacles, blaze simple shortcuts around them at first, and quickly remove themfrom the landscape later on.

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    Remember, with lean youre not ripping up the backyard overnight but graduallyrearranging the major environmental elements over time. You want to recruitprocess stakeholders who are thoughtful about whats possible in a perfect world,

    yet honest about your companys cultural tolerance and financial appetite forfunding process improvement. Revolutionary process change is nice when youcan get it (and get it right), but if youre going to go lean, ultimately you must beready to adopt a mindset of championing continuous and incrementalimprovement thats as practical as your actual approach.

    20072008 Quality Digest Magazine. All Rights Reserved.

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