Validate business issues early on in sixsigma events
When being presented with a business problem one of the first steps to undertake before embarking on an improvement plan or kaizan event is to validate the problem. Carrying out these steps will not only help the improvement team understand the issue but will also generate thoughts on potential solutions that can be utilized in later stages.
Validating the problem at the start of the improvement project helps:
1. Prove that the problem exists
2. Analyze the impact the problem has
3. Ensures that its important to the business
4. Ensures that its important to the customer
5. Ensure that the problem can be improved or irradiated
Validating the problem can be carried out in a number of steps and is likely to include
1. Analysis of data – for example measuring defect rates, customer service levels.
2. Identify then interview stakeholders (capture desired outputs and review inputs)
3. Construct a SIPOC diagram
4. Review of the process (including business process maps if they exist)
Its important to remember the scope should be to validate the problem, there is a tendency that this stage can result in further exploration into problem finding rather than validation and project managers should ensure appropriate focus.
Once the problem has been validated, the project team may progress onto root cause analysis and potential solution design safe in the knowledge that the problem has been captured, validated and the impact to the business quantified.
Business Improvement best practice - measure before you start
Before any organization embarkes on an improvement program its important to take stock of its current position. This is for two reasons, firstly in order to quantify improvements that are made, secondly and perhaps most importantly to ensure the appropriate timing to introduce improvment activity.
However, what data should the organization capture, what can provide quantative information which can both highlight problem areas whilst providing assurance that subsequent changes deliver value. The list below describes an indicitive list of the start point of measures
- Defects produced
- Takt Time
- Cycle Time
- Lead Time
- Inventory Levels
- Cost of quality
- Productivity
- Resources
The other issue is how to capture this data. One excellent method of capturing the business as is position is to produce a Value Stream Map. Value stream maps capture the material and information flow within an organization and provide a mechanism for capturing information about current processes and most importantly current problems.
Other methods exist also, from existing scorecards through to financial reports - the important step is to ensure that some data is gathered.
Failure to analyze before you start could cause a number of problems
- Failure to identify areas requiring improvement
- Failure to proove that improvement activity results in benefits
- Failure to idenfity correct approach to solve problem
What is cycle time
Cycle time is a business term used to define the total time it takes to complete a business process. This includes any activity required to produce the output including lead time, processing time and waiting time between process steps.
As cycle time includes all activity for a process (both value add and non value add) it is an excellent KPI that can be used to demonstrate improvements to the process. Indeed reducing cycle time is one of the most common targets of business improvement activiy.
Long cycle times can produce higher production costs, excess inventory - it can also have an impact on customer satisfaction as lenghty cycle times will result in delays to the customer.
Using customer complaints to improve your business
One of the major rules of business is that you wont satisfy all your customers – No one group is totally satisfied – a lack of customer complaints can show two things – firstly that the customer may not be being honest in their appraisal and second they may not be being asked.
We all experience bad customer service at some stage – however how is dealt with can have a significant impact on our impressions of the offending organization. Unhappy customers can tell friends (influencing other purchasers) – they may not purchase from the same company again. Given the accepted business rule that acquiring new customers costs, it makes sense to measure and aim to improve customer satisfaction.
While various tried and tested methods exist with regard to how to improve customer satisfaction many organizations fail to implement the basics.
There are several common methods and tools in capturing and analyzing customer satisfaction
1/ A system to trap and monitor customer complaints
2/ Surveys to measure customer satisfaction
3/ Industry benchmarking
Trapping customer complaints can help improvement teams analyze results and then focus attention on problem areas. Business should ensure appropriate customer feedback exists to brief on what is being done with complaints and ongoing analysis is imperative in order to measure trends.
What is the cost of quality
The cost of quality is a business term that relates to the financial loss to business because of defects
The source of costs can vary from excess production time due to reworking through to loss of revenues due to customer returns.
Cost of quality can be categorized into three broad groups
• Failure costs – examples include rework, warranty,
• Appraisal costs – audit, inspection and cost of compliance
• Prevention costs – business improvement programs, training,
What is an acceptable quality level
The acceptable quality level (AQL) is a term that relates to whether tolerance levels can be applied to the percentage of defects found in a batch.
In ideal terms the defect rate would be zero however in some circumstances business may accept a certain volume of defects.
For example if the AQL is 2% it means that 2 parts per hundred maybe defective.
AQL can have a significant impact on production costs – for example if the AQL is zero then greater inspection is required at manufacture – this can result in higher prices.
An AQL expects that the company has knowledge of the lot size of the production run and the level of inspection required. AQL does have some drawbacks however – the sample of the production run checked may not be representative of the batch as a whole
Improving businesses by using Quality circles
Quality circles, which originated from Japanese manufacturing, are a business improvement workgroup typified by groups of workers who meet regularly and target continuous improvement of the processes under their direct control
Typical topics include targeting health and safety, skills and training, improving quality of output, process improvement and design. A typical quality circle will contain less that a dozen employees
Quality circles are dependant on a number of factors for their success
• Team must have a clear purpose and management support
• Focus should be on process
• Team should be trained in problem solving and have right tools and methodologies available to them.
• Team should be stable and be integrated into company wide efforts
Quality circles are popular as they encourage employee participation, and can promote job satisfaction without monetary benefits and as well as improving business processes can deliver in a number of other areas typically including employee development, creation of team spirit and organizational culture.
The structure of a quality circle will often include steering committees, and co-ordinators who co-ordinate and administer the program. Circle members can be from any part of the organization hierarchy but are typically grass root workers.
What is DMADV
DMADV is a sixsigma methodology which is used to create processes (or improve processes that have already been optimized but may still experience unacceptable defect rates).
DMADV stands for
Define – define the goals of the project
Measure – measure the needs of the customer and process specifications
Analyze – develop the options available
Design – design the detail of the process
Verify – the performance of the process and ensure it meets customer requirements
What is a SIPOC diagram
SIPOC is an acronym for Suppliers, Inputs, Process, Output, Customers. It is a method that helps improvement teams remember each stakeholder group when mapping and analyzing processes.
A SIPOC diagram is a tool used to identify attributes of a process before an improvement project can commence. It is frequently used in the early stages of the DMAIC process. as it helps establish causal relationships between steps. Once complete a SIPOC diagram should represent a high level map of the process.
At each step in the process the SIPOC terms can be used for example what inputs did the process have and who supplied them – what outputs did the process create and who consumed them. Specific requirements can also be captured if required. The following link shows an example SIPOC diagram
What is the five whys
The five whys is a lean tool used to ascertain the root cause. It’s a simple technique that asks why something is done the way it is, another why is asked of the response. Why is asked a number of times (notionally five) to drill down through the process and capture the root cause.
Five whys has a number of different benefits for example
• Its simple to do
• It doesn’t require specialist training
• It ensures that the process being reviewed cant be taken for granted
• Process steps have to be defended with facts in order to preserve them.
