Lean Six Sigma (LSS) “How to collect needed data for process improvement measures” Line Graph Survey Spreadsheet Notes: Listing Instructors’ names is optional Talking Points A) “Welcome to Lean Six Sigma Yellow Belt training. I will be your instructor for today’s training.” April 20, 2016 Presenter: Bruce Berger

Today’s Presentation Objectives Understand basic Lean and Six Sigma methodologies Understand how to identify an appropriate line graph performance measure Understand how to create a “best practice” survey instrument Understand how to collect the appropriate data for the performance measure improvement Talking Points: Please sign the roster going around We will do several exercises starting after the break this morning. You will want to return promptly after each break (and be back from promptly from lunch) as we will show some funny videos to those who are back on time. We also have an evaluation at the end of the day to get your feedback on how we can improve future Yellow Belt classes. 2 2

Lean Six Sigma Lean Six Sigma Overview (2 approaches in one) Lean primarily focuses on Increasing Outputs, for example, increasing process speed while eliminating unnecessary inventory and waste. Lean Six Sigma Increased Quality with lowered Defects, Variation and Cost Increase Speed with No Wasted Effort Talking Points: Lean….Toyota used the term “Lean” when they settled on about 20-30 techniques that helped them speed up processes and reduced inventory. The term Lean has been used by others for the use of these techniques. Lean….Techniques include Value Stream Map, Bottleneck protection techniques, Takt time, Kanbans, Work-in-Process (WIP)” to name a few. Lean…techniques are used when a process has significant “Wait Time” or “Excess Inventory” associated with it….it uses “try and track” PDCA concepts to achieve faster process cycle time with less inventory Lean….will be learned in Green Belt and Black Belt training. Six Sigma….can do all that Lean does and more….eliminate defects and improve quality….Lean works with Outputs while Six Sigma is more concerned with Outcomes of the output. (for example…Lean could improve process and allow workers to produce Vendor payments more quickly….but not necessarily with less errors. Six Sigma could focus on both. Six Sigma primarily focuses on Improving Outcomes, for example, eliminating defects (DMAIC) and reducing unwanted variation (Process Management) 3

LSS Overview: History of Lean Six Sigma Six Sigma and Total Quality Management (TQM) programs originated from methodologies and techniques advocated by Americans (Dr Deming and Dr Juran) and initially adopted by the Japanese after World War II. Post WWII Miami-Based Florida Power and Light adopted TQM in the early 1980’s (and was the 1st international company to win Japan’s Deming Prize in 1989) 1981 1988 US Malcolm Baldrige Award was created in 1988 and modeled after the Deming Prize and Total Quality Management Methodologies. Mid-Late 1980’s Motorola started a similar program and called it Six Sigma in the mid-1980s (and later won the US Malcolm Baldrige Award) Other companies followed including General Electric, IBM, Texas Instruments, AlliedSignal, Kodak, Merrill Lynch, Chase Bank and the US GAO. 1990’s 1992 Florida Governor’s Sterling Award founded and utilizes Malcolm Baldrige Award Criteria for it’s award. Six Sigma became popular due, in part, to publicity about General Electric’s former CEO Jack Welch’s commitment to achieving Six Sigma capability. (note: Six Sigma means statistically near perfect performance) Mid 90’s to Today American companies increasing embraced Lean tools and techniques as Lean focused on process throughput and efficiencies. 4

Line graphs help us understand our performance Lean Six Sigma Overview What is Lean Six Sigma? It provides Customer Satisfaction through the total involvement of ALL employees… Or put in a graphic way… …It makes Line Graphs move in the direction you want them to go. Talking Points LSS is a graphic language. To be successful at LSS, you must fluent in this graphic language….we will help you start thinking graphically today….. How many here speak fluently a foreign language?.....If you were to live in a country that speaks that language would you think in English and then translate into the language before speaking?...or would you eventually think and speak in that language?....the same with LSS’ .Line Graphs are the END game…. All other techniques are the MEANS. Line graphs help us understand our performance 5

We know we’re successful when… Lean Six Sigma Overview Example We know we’re successful when… Our Customers tell us that they are satisfied with our services. Our Costs for doing business are the lowest possible. Talking Points What line graphs does your dept measure? What is the target?....What is your performance? 6

We know we’re Successful when… Lean Six Sigma Overview Example We know we’re Successful when… Our Employees are Satisfied. Our Services are Delivered On-Time. Talking Points What line graphs does your dept measure? What is the target?....What is your performance? So, how do we make line graphs move? 7

Utilize Lean Six Sigma Components Moving line graphs requires efforts in three (3) areas… Strategic Planning helps us “focus” on key projects to reach our Vision. Process Management helps us maintain good results as we perform our Mission. Performance Improvement helps us fix work problems and improve our Performance. Talking Points A) These components are in place in organizations that are successful with Lean Six Sigma…all Governor’s Sterling and US National Baldrige Award winners have these components alive and well deployed. What are examples of these components seen in your organization today? Note: Florida Benchmarking Consortium (FBC) holds Yellow Belt and Green Belt Training in Performance Improvement. 8

LSS Component: Performance Improvement DMAIC 5 Steps Six Sigma teams utilize the a 5 step problem solving DMAIC process: 1) Define 2) Measure 3) Analyze Talking Points Green Belt teams learn many more techniques than shown here. This DMAIC process is only used when there is a GAP in performance and you want to know WHY it is so…..(in other words you want to know the cause of the GAP) The 1st 2 steps involve allowing the problem solver to organize the data and let the data take you to where Root Causes can be identified . 4) Improve 5) Control 9

Lets look more closely at the Line Graph and the spreadsheet tools. DMAIC Process Step 1: Define The objective of step 1 is to “Demonstrate the importance of improvement needs in measurable terms.” Talking Points Step 1 is about setting up the problem and confirming you have a GAP in performance using data and a Line Graph. Two (2) LSS tools are often used….Spreadsheet and Line Graph. Lets look more closely at the Line Graph and the spreadsheet tools. 10

LSS Tool: Line Graph GAP A well designed outcome Line Graph indicator has … Talking Points You only need 3 data points to see a trend Ask, “What if there is no Target….does that matter? Why? Ask, “What if the target is set too high?...how does that impact staff?” Ask, “What if Target is set too low? ….how does that affect performance?” Ask, “How many have Line graphs (or at least current Performance) posted or available for your dept employees to see?” Clear labels showing what is being measured and when Data points connected by a line Target info., a “Good Direction Arrow” and a labeling of the gap in performance between the Target and actual data 11 Define Measure Analyze Improve Control

LSS Tool : Spreadsheet Spreadsheets capture demographic data (e.g. When, What, Where and Who) related to a Process and Performance Indicator(s). Talking Points Explain what is Water Pipe Leak and Break. Ask if any from the group can explain to others what it is. This spreadsheet will be used later in Histogram and Pareto exercise. Ask if anyone can give an example of another demographic data element that could be useful to the team? (AM/PM, Supv, Type Truck, Shift, etc.) 12 Define Measure Analyze Improve Control

LSS Tool: Spreadsheet- Example Talking Points Go around to each team and allow them to select a spreadsheet column (or assign to teams. Answers are provided on the Excel File: “_Yellow Belt Training_3_Histogram-Pareto_Exercise data and Answers” If time permits, demonstrate “QCTools” ability to do fast Histograms and Paretos 13

LSS Technique: Survey: Desired Survey Characteristics Satisfaction Surveys should … Be concise, easy to read and understand and quick to fill-out. Provide rater and provider profile information (e.g. customer group, program, department, vendor, geographic location, etc.) Measure customer requirements (or outcomes) most important to the customer. Measure overall customer satisfaction (following customer requirements ratings) Provide uniformly graduated rating scales to allow raters to record their level of agreement/disagreement with the customer requirement being rated. Solicit comments for each rated customer requirement encouraging comments for low rated customer requirements. Solicit suggestions to improve at the end of the survey. Capture demographics, response ratings and comments in electronic form (e.g. “Survey Monkey”) Exception to #1 above are Employee Surveys. The next slide displays an example of a survey that meets these characteristics. 14

LSS Technique: Survey- “Best Practice” EXAMPLE What, where, when and who demographics needed for stratifications Cust Rqmt statements in 1st person past tense Evenly graduated Likert scale Solicit comments for low ratings Overall Question for satisfaction Solicit suggestions on how to improve 15

LSS Technique: Survey Sample Size Calculator Sample Size Considerations: The size of a population being studied has direct impact on the size of a sample needed to better understand that population. The descriptions of the fields below and the examples given afterwards will give you a better idea of how much you should sample based on the precision and confidence level necessary to meet your business objectives. Estimated Standard Deviation You need to have an estimate of this already...see if there is some data that already exists, or alternatively or take a sample of ~30 and calculate the standard deviation. This can be calculated in Minitab or in Excel. E=Error, or allowable uncertainty Enter the level of uncertainty in your estimate that you are willing to accept. For example, if you are estimating cycle time for deliveries, how precisely do you need to estimate the average? Within +/- 1 day, +/- 1 hour, +/- 1 minute? The resulting 95% confidence interval will be of width 2*E (since E is stated as a +/-). The more precisely you need to estimate, the larger the sample size will be! Note that this is a practical consideration, not a statistical one. For continuous data, remember to enter this in the same units as the average…so, if your unit is time, and the average will be estimated in hours, enter a acceptable uncertainty of 4 hours as a "4" in the "E" cell. For Discrete data, “E” is the error you are willing to accept formatted as a percentage. Proportion Defective This is attribute data…it is the percentage defective that we are estimating. Enter an estimated 10% defective rate as 10%. If you don't have a "ballpark estimate", you can use 50% for worst case scenario, i.e., it will give you a sample size that will work for any proportion defective, but will err on the high side. Alternatively, gather ~100 data points to get a preliminary estimate. Discrete data requires a higher number of samples than continuous. Size (N) of FINITE Population When the population of interest is finite, and of known size, consider using the finite population sample size. However, we only need to be concerned about finite populations when we could realistically sample more than about 20% of the entire population. For example, we may have 500 employees in a facility, and want to interview a sample to estimate the proportion of employees who have been properly trained in dealing with a specific compliance issue. This gives us a finite total population of 500. If we could realistically sample more than about 100 people, we should use the finite population formula, since this is over 20% of the population. We would enter 500 for N. Refer to slide 15 of template Double Click on the Sample Size above tool 16

Target Setting Exercise Purpose: To Create a Data Collection Spreadsheet or Survey instrument Agenda: Identify performance measure Select spreadsheet or survey to design For spreadsheet design: Identify what, where, when and who and process milestones on template For Survey Design: Identify customer favorable outcome statements on template for the process “moments of truth” as moments occur. Limit: Small groups: 20 Minutes 17

LSS Tool: Spreadsheet- Blank Form Cycle Time Spreadsheet Talking Points Go around to each team and allow them to select a spreadsheet column (or assign to teams. Answers are provided on the Excel File: “_Yellow Belt Training_3_Histogram-Pareto_Exercise data and Answers” If time permits, demonstrate “QCTools” ability to do fast Histograms and Paretos 18

LSS Technique: Satisfaction Survey- Blank Form 19

Summary Lean Six Sigma (LSS) is a proven methodology that will help us improve our work processes. LSS tools and techniques used improve Performance Indicators include: Spreadsheet … to help gather What, Where, When and Who demographic process data Survey… to help gather performance against customer requirements Line Graph … to display performance GAP and trends 20

Lessons Learned What did you learn today? 21 Talking Points a) Record Lessons learned on Flip and have students explain key points they learned….add additional key points to reinforce learning points. b) Ask, “How can you apply what you’ve learned to your job?” 21