- 1. May 2010 Rapid Transformation Making Change Happen Fast
Larry W Dyer Director, Process Improvement Master Black Belt
Coventry Health Care
2. Agenda
- Lean and Six Sigma Overview
- Where to start with Kaizen
- Top 10 reasons projects fail
Rapid Transformation WC Process & Strategy 3.
Assumptions
- You have some exposure to Six Sigma and Lean
- You understand what the project charter is
- You understand that projects with a high return on investment
and moderate to low effort are executed first
Rapid Transformation WC Process & Strategy 4. Every Firm Is
Driven to Improve Quality, and Reduce Cost and Lead Time
- Customer loyalty and retention
- Shorter customer lead time demands
- Downward price pressure: lower costs
Rapid Transformation WC Process & Strategy 5. Why Do These
Goals RequireBoth Lean and Six Sigma?
- In a value stream, thework often spends up to 95% of its time
waiting
- Poor quality increases the lead time to customer
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- 10% defect rate can increase lead time by 40% and reduces
available capacity
- Capacity problems can be masked by slow cycle times
- Lean tools accelerate lead time reduction
- Six sigma brings a process under control
Rapid Transformation WC Process & Strategy 6. 95% of Time
Waiting, For What? Customer Value Added Time Business Value Added
Time Non-Value Added Time Wait Time
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- Process Cycle Efficiency Poor - 0.069%(World Class Standard =
50%)
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- Wait times are extremely long
Rapid Transformation WC Process & Strategy 7. What is Lean
Six Sigma?
- Lean Six Sigmais a combination of two process improvement
methodologies Lean and Six Sigma
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- Pioneered by Ford and perfected by Toyota
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- Focuses on eliminating waste and finding better ways to do
things
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- Helps eliminate steps that add no value
- Six Sigmais all about quality and repeatability.
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- Started by Motorola in the 80s; improved by GE
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- Focuses on reducing defects and variation and incorporates
powerful statistical tools to control a process
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- Six Sigma Quality literally means 3.4 defects per 1 million
parts
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- It is the origin of the DMAIC process
Rapid Transformation WC Process & Strategy 8. Greatest
Challenges to Successful Deployment From ASQ, Quality Progress,
August 2009 Why? Why? Rapid Transformation WC Process &
Strategy 77 of 5,000 hospitals Confidence level 95% Confidence
interval +-11% 9. Why Lean Six Sigma?
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- Because Lean cannot bring a process under statistical control,
and Six Sigma alone cannot dramatically improve process speed.
- Six Sigma is the Unifying Framework
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- It provides the improvement infrastructure (role definitions,
deployment model, etc.) and the overriding methodology
(DMAIC).
- Lean provides additional improvement tools to turbo charge
improvement efforts.
Rapid Transformation WC Process & Strategy 10. When to Use
LSS for Process Improvement
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- You have a challenging goal to reach or issue to solve
-
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- Driven by the business strategy
-
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- Issues that are valuable for the business to resolve
-
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- Problems that have stood the test of time
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- You are willing to commit people to identify and resolve the
issue
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- You want a more robust solution than traditional methods can
provide
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- You want group ownership of a course of action
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- You dont have a specific challenge or clear issue to solve
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- You already have a solution and course of action
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- You dont have a process to improve
Rapid Transformation WC Process & Strategy 11. Rapid
Transformation
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- Statistical Process Control
- Focuses on a subset of Six Sigma Tools
-
- Quick Improvement Techniques
Rapid Transformation WC Process & Strategy Lean Is Cool! 12.
What is Kaizen?
- Kai + zen = taking something apart to make it better
- Rapid improvement within a short time
- Well planned and highly structured
- Essentially an accelerated DMAIC project
Rapid Transformation WC Process & Strategy 13. When to
Kaizen
- When obvious waste sources have been identified
- When the scope and boundaries ofa problem are clearly defined
and understood
- When implementation risk is minimal
- When results are needed immediately - i.e., capacity
constraints, setup reduction, acute quality problems,
safety/ergonomic issues
- In the early stages of a project to gain momentum and build
credibility
Rapid Transformation WC Process & Strategy 14. When to Use
Kaizen Project Idea Incremental Improvement? Re-engineer Project
Small Project? Large Project Process Speed? Process Quality Project
Kaizen Perform Value Stream Mapping Break into Small Projects Yes
No Yes Yes No No Use Inter-Ocular analysis Rapid Transformation WC
Process & Strategy 15. Kaizen Goal
- Focus on each step in the process
- Reduce the Non-Value Added Steps
- Minimize the Business Value Added Steps
- Streamline the Customer Value Added Steps
Product Lead Time Customer Value Added Non-Value Added Start
Finish Business Value Added Rapid Transformation WC Process &
Strategy 16. Kaizen Benefits
- Provides momentum for the project
- Drives value ($) early, thus improving ROI
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- Eliminate hidden costs of waste
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- Ensure work provides value
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- Allows major improvements quickly
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- Eliminate waste and interruptions
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- Influence the work you do every day
- Reduces stress on project team to Get Something Done!
Rapid Transformation WC Process & Strategy 17. Kaizen VS
Traditional DMAIC Project
- Team is 5 Days Full Time vs. 4 Mo Part Time
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- Actual team hours may be close
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- 100% Dedicated for 5 days
- Scope Completed/Problem Identified Going In
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- Team does not have time for scope assessment
- May use Tribal Knowledge vs. Detail Analysis
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- Solution may be known but historically not listened to
- 30-Day Follow Up Action Items
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- Items that cannot be finished that week
Rapid Transformation WC Process & Strategy 18. Kaizen
Structure Team Training Rapid Transformation WC Process &
Strategy Issue List Area Discovery Cause & Effect
GoalBrainstormed Ideas Final Presentation Effort Benefit .5 1.5 1.0
2.0 2.5 .5 3.0 3.5 4.0 4.5 5.0 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
1 2 3 4 5 8 9 10 7 6 Action Items What Who When Status
Implementation 19. Kaizen Preparation
- Begin preparation 2 weeks before start of the Kaizen event
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- Notify participants of their involvement
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- Create introductory training for participants
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- Share the project charter
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- Collect preliminary process maps
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- Complete any meeting logistic issues
Kaizen! Timeline(Maximum of 45 Days from Start of Event Prep,
Through Event, to Final Follow-up) Pre-Event Prep (3-10 days)
Kaizen! Event (3-5 days) Event Follow-up (30-35 days) Rapid
Transformation WC Process & Strategy Meeting Logistics Order
lunch Soft drinks Ice Tea Coffee Etc. 20. Facilitation Keys
- Be a part of scope and team selection if possible
- Plant seeds but dont overpower the team with your ideas
Rapid Transformation WC Process & Strategy 21. Kaizen Team
Rules
- Throw out all of your fixed ideas about how to do things.
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- That is the way it has always worked!
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- It has to be that way!It wont work any other way!
- Maintain a positive attitude (how will it work, not how it
wont).
- Practice mutual respect.Treat others as you want to be treated.
Never leave disagreements unspoken.
- The only stupid questions are the ones not asked.
- Ask Why? at least five times until you find the ultimate
cause.
- Were not interested in assigning blame - only in creating
solutions!
- One person, one vote position doesnt matter.
- Understand the process, and JUST DO IT!
Rapid Transformation WC Process & Strategy 22. Toolset Used
During Kaizen
- Any tool may be used to aid the team during a Kaizen event from
a Process Map to a Designed Experiment.
- Bottom line is you use any tool that is needed!
Rapid Transformation WC Process & Strategy 23. Kaizen
Toolset: Resource Flow Layout
Indicates an in-box or outbox where work (forms/information)
waits to be worked on or transferred Lines indicate
paper/information travel: - No set path - Lots of rework 230 yards
Rapid Transformation WC Process & Strategy 24. Kaizen Schedule
Rapid Transformation WC Process & Strategy 25. Weeks
Activities
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- Project and Goal Background
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- Present Data/Burning Platform
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- Specialized Training Geared Toward Project Goal
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- Team Spends Afternoon in Project Area
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- Gather Insights from Personnel
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- Observe Issues/Conduct Studies
Rapid Transformation WC Process & Strategy 26. Failure Mode
Effects Analysis
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- What will happen if our project fails?
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- What will happen if the implementation fails?
Rapid Transformation WC Process & Strategy 27. Weeks
Activities (Cont.)
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- Gather Insights from Personnel
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- Analyze Problems to Determine Root Causes
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- Begin to Define Future Metrics
Our ability to assess the performance of a process we wish to
improve is only as good as our ability to measure it. Rapid
Transformation WC Process & Strategy 28. There are usually
three views of a process: Process Mapping Rapid Transformation WC
Process & Strategy What youTHINKit is.. 1 What itACTUALLYis.. 2
3 What itSHOULDbe.. 29. The Hidden Operation Rapid Transformation
WC Process & Strategy Work Arounds Op i Op i + 1 Analysis Scrap
Off-Line Correction Correctable ? Verified ? No Yes Quick Fixes
Inspections Scrap Rework Extra Equipment Increased Inventory
Increased Cycle Time Frustration Defects Customer Dissatisfaction
Cost 30. Example: High-level Swim Lane Process Map Rapid
Transformation WC Process & Strategy 31. Example: High-level
Swim Lane Process Map Rapid Transformation WC Process &
Strategy 32. Identify Waste
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- Each process activity can be tested for its value-add
contribution
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- Ask the following two questions to identify non-value added
activity:
-
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- Is the form, fit or function of the work item changed as a
result of this activity?
-
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- Is the customer willing to pay for this activity?
NVA NVA NVA NVA NVA NVA NVA Rapid Transformation WC Process
& Strategy Call for an Order Answer phone Asks for more?
Greetings and mention specials Calculate price Rewrite Order Order
still OK? Gets address & phone # Add to Order Give order to
Cook Rewrite order Yes Yes No No Request order from customer Writes
on scratch pad Asks cook for time estimate Inform customer of
price/time No Thanks customer & hangs up Completes order from
from note pad Another call waiting Writes time on scratch pad
Writes time on scratch pad Confirm order Yes 1 1 New order? No No
Verify with notes Yes 2 2 OK Not OK 3 3 33. Get to the Root
Cause
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- The follow-up time with clients is inconsistent.Why?
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- Client follow-up expectations vary.Why?
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- The Account Managers set unrealistic expectations with the
clients.Why?
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- Account Managers are not trained on what expectations to set.
Why?
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- No training has been developed about setting
expectations.Why?
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- Each client has a unique service level agreement and that
information has never been published.
34. Weeks Activities (Cont.)
- Reduce and Prioritize Ideas
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- Affinitize Ideas/Solutions
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- Rank using Benefit/Effort Matrix
2. Multivoting 3.Rank by Benefit/ Effort/Cost 135 93 33 Rapid
Transformation WC Process & Strategy 35. Mid-Kaizen Review
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- Review team successes with management team
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- Review proposed Kaizen activities for implementation
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- Address any obstacles impacting implementation
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- Gain agreement from Management to proceed
- Responsibility for Conducting the Meeting:Kaizen Team and
Project Sponsor
- Frequency:End of third day
- Attendees:Kaizen Team, Project Sponsor ,Management
Rapid Transformation WC Process & Strategy 36. Weeks
Activities (Cont.)
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- Develop plan to pilot the new process
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- Create/Update Company Procedures to document and sustain
improvements
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- Finalize metrics to measure new process
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- Present results to Management Team, complete follow-up, monitor
results over time
Rapid Transformation WC Process & Strategy 37. More on
Process Mapping 38. Process Mapping Hints
- If your process handles or creates a work product or thing,
then use this as part of your map indicating the information that
is added, used, or changed.
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- Header sheets are a good example
- Include samples of all information referenced as a part of the
process .
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- If you use a chart, graph, report, or other information as part
of your task, include a physical copy on the map.
- This can not be done as separate parts pasted together.
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- It is a group activity where each person teaches the others
what their role is and what work they perform.
- It ALWAYS takes longer than you think
Rapid Transformation WC Process & Strategy 39. Example:
Simple Process Map Rapid Transformation WC Process & Strategy
40. Example: Moderately Complex Process Map Rapid Transformation WC
Process & Strategy 41. Example: Complex Process Map Rapid
Transformation WC Process & Strategy 42. Example: Value Stream
Map Rapid Transformation WC Process & Strategy 43. Why is it
Important to Complete Projects Fast?
- Minimize the number of active projects
- Maximize the allocation of resources (intellectual capital) to
the projects with the greatest return on investment
Black Belt with 8 Simultaneous Projects AndNo Prioritization
:Black Belt focused on 2 Projects at a time ofHighest Priority :WC
Process & Strategy 44. October 13, 2009 Three Project Examples
45.
- It takes too long to load software on new servers for
customers
- Services and licenses are not billed to the customer until the
customer takes the server live (60-120 days)
Hardware Conversion Cycle Time Reduction
- Healthcare company upgrades/optimizes servers for customers to
enable their products to run efficiently and effectively
- HW revenue billed in 15 days
- 80% of services revenue billed in 30 days
- A $125,000 one time revenue increase was achieved by
accelerating the billing of inventoried hardware
- A $137,000 cost avoidance was achieved by reducing project
hours and interest on inventory.
- 1 staff member was redeployed to fix a bottleneck in the
Systems Integration Group
- The DMAIC methodology was used in this Lean project to reduce
cycle time and hours
- Process mapping identified non-value added work in the existing
processes
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- SMEs accelerated parallel tasks to the front of the
process
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- Finance compressed the revenue recognition to the front of the
life cycle
46. University Hiring Process
- There is a mix of centralized and decentralized (automated and
manual) hiring processes with no clear process ownership, resulting
in different hiring processes for different types of employees
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- 4 manual hiring processes
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- No clear process ownership
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- 30% of the hiring forms have multiple defects
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- Many workarounds and shadow systems
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- Process mapped all four systems
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- Identified the sources of defects
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- Removed reliance on Cat Card
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- Accelerated other activities
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- Automated new process in PeopleSoft
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- Virtual and in-person services
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- Removed Cat Card as a requirement
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- Accelerated hiring dramatically
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- Reduced department workload
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- No hiring process training
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- Needed services require Cat Card
Rapid Transformation WC Process & Strategy 47. Sales to
Project Scheduling Process
- Interfaces were not scheduled
- Staff had inconsistent workload
- Forecasting revenue was impossible
- The time required to schedule interfaceswas highly variable
with a mean of 30 days from the receipt of the Purchase Order.This
variability made it difficult to predict revenue on a monthly
basis.
- A new scheduling process was developed, trained and
validated.
- The sample mean of the time to schedule was reduced by 90% from
30 days to 3 days.
- Statistical control achieved, weekly monitoring confirms
compliance to process SOPs.
- A Kaizen was used to quickly understand the problem and the
data.
- The DMAIC methodology was used to redesign the scheduling
process.
- Process mapping identified non-value added work in the existing
processes and highlighted areas for improvement.
- New tools were developed to accurately track call events
- New procedures were written and employees were trained in the
new process.
Sample Mean reduced by 82% from 37 to 7. Rapid Transformation WC
Process & Strategy 48. Where to Deploy Kaizen in the Hospital
49. Lean Deployment Locations and Success From ASQ, Quality
Progress, August 2009 Rapid Transformation WC Process &
Strategy 50. Six Sigma Deployment Locations and Success From ASQ,
Quality Progress, August 2009 Rapid Transformation WC Process &
Strategy 51. Greatest Challenges to Successful Deployment From ASQ,
Quality Progress, August 2009 Why? Why? Rapid Transformation WC
Process & Strategy 77 of 5,000 hospitals Confidence level 95%
Confidence interval +-11% 52. To 10 Reasons for Less Than
Successful Projects
- Project Sponsor not active
- Project not linked to corporate strategy
- Poorly defined Charter Team has to spend time to get the
charter right
- Scope too large or scope creep
- Poor understanding of requirements
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- No organizational buy-in stakeholders not involved
- This is not a lean or six sigma project to begin with
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- Not honoring time commitment
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- Trying to do too much (boil the ocean)
- Jumping from Define to Improve
Rapid Transformation WC Process & Strategy 53.
References
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- Thomas Pyzdek (2004).TheSix Sigma Handbook.New York:
McGraw-Hill
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- Jeffrey K. Liker(2004).The Toyota Way , New York:
McGraw-Hill
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- James P. Womack and Daniel T. Jones,Lean Thinking , New York:
McGraw-Hill
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- George, M. L. (2002).Lean six sigma: Combining six sigma
quality with lean speed . New York: McGraw-Hill
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- George, M. Rowlands, D. & Kastle, B.(2003).What is lean six
sigma? New York: McGraw-Hill.
Rapid Transformation WC Process & Strategy