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January 24, 2013

The Six Lean Goals

Came across an interesting article on The Six Lean Goals. URL:

Goal 1: Define Demand for Services

Quite simply, this means defining the desire of purchasers, consumers, internal customers, and so on, for services. Services must be consistently delivered per customer expectations in order to ensure business success. When defining demand it is important to understand the multiple dimensions of customer expectations. Does the service meet specific "content" requirements (the ability to repair a computer)? Can the service be delivered when and where the customer desires (in my office; within the next sixty minutes)? Does the customer’s experience with the service providermeet expectations (courteous, active listener, thorough, professional appearance)?

Ultimately, the nature of demand – what is demanded, how much, how frequently, by whom,, where, when, and so on – guides decisions on how demand will be met and what the supply chainmust look like to deliver to demand. Without a deep understanding of these dimensions an organization will find it quite difficult to creating a lean enterprise.

Goal 2: Extend Demand Lead Time

In the service environment, statistics are used to characterize and forecast demand. The best statistic is one that reflects a known demand and ample time to respond to int. Organizations must build into their efforts the sensing and forecasting mechanism that give them the earliest possible lead time, companies give themselves flexibility to combine and schedule their resources to match supply to demand.

Goal 3: Match Supply to Demand

The third goal of a lean enterprise is to match the supply of its service offerings to the demands of an ever-changing marketplace. It is essential that a company continuously assess its ability to meet existing and emerging customer expectations (as described in Goal 1) and use demand input to design how it will make resources available in response to demand. In the perfect lean organization, demand and supply are matched exactly.

In the service environment, organizations constrain supply by how they set their operational hours and make the necessary resources available. Without access to an affordable and infinite supply of resource, at any time and any place, customers have learned to wait, learned to do it themselves, or simply lived without the desired service. Bottom line: A lean enterprise must focus on matching supply to demand to increase customer satisfaction and to gain competitive advantage in the marketplace.

Goal 4: Eliminate Waste

Waste is defined as any activity that doesn’t create value for the organization or its customers. Much ado has need made about internal services that are essential business capabilities being classifiedby tradition “lean” definitions as non-value-adding and, thus, a waste. For example, it makes business sense that a company needs processes to recruit, hire and develop its people. How could these processes beclassified as non-value-adding? The industry has responded by developing multiple “good business sense” definitions of value.

Value Adding (Value Creating)

In traditional lean applications, a value adding activity directly affects service offerings. This definition has been expanded to encompass all the value-creating activities of a business such as all transactions that support order fulfillmentactivities and business activities that deliver vital resource capabilities which in turn enable the service delivery.

Non-Value-Adding (Value Destroying)

A non-value-adding activity does not add value to the offerings or an essential business capability. Waste such as waiting extra processing, and defects are example of non-value-adding activities.

Goal 5: Reduce Supply Lead Time

Supply lead time is the total time it takes to complete a series of tasks within a process or combination of processes in order to deliver a service in response to a customer demand. Lead time consist of task cycle times and periods of waiting, which are classified as batch delays. Examples of lead time include the period between the receipts of a sales order and when the customer’s payment is received, the time it takes to request maintenance support to the completion of the work order, and, on an enterprise level, the time it takes to introduce new services after they are first designed.

By reducing supply lead time, a lean enterprise improves its ability to match supply to demand, respond to changes in customer demand, increase capacity to handle multiple demands more efficiently, improve planning and scheduling flexibility, and improve response time to unplanned events.

For some organizations this goal drives their entire lean initiative as it is believed that supply lean time reduction, by design, drives resource efficiency.

Goal 6: Reduce Total Costs

In economic terms a lean enterprise is one that strives for an absolute advantage in the marketplace. The absolute advantage is a concept of trade in which an entity delivers services more efficiently, using fewer labor and/or capital resources than its competition.
Any investments inexcess resources such as people, materials, and equipment, or in inefficient processes are considered wastes. Conversely, not applying enough of the right types and amount of resources to meet service demands would also be a waste. By investingin lean principles and methods, an organization eliminates the costs of wasteful activities.

Reference: The Lean Enterprise Memory Jogger for Service by Richard L. Macinnes

PIUSS: Basic Comparision Between Lean and Six Sigma – Concepts

A primary distinction between Lean and Six Sigma is with regards to their basic perception. Lean aims for continuous process improvement by encouraging and guiding the workforce to reduce waste within their domain. It is an ongoing practice, and needs to be embraced by all the personnel in all parts of the organization. In contrast, Six Sigma is a logical and practical method that focuses on reducing defects in a specific business, or operations. The outcome pertains to that particular area, instead of encompassing the entire organization. Six Sigma specialists, such as Black Belts and Master Black Belts lead the improvement process.

PIUSS: Basic Comparision Between Lean and Six Sigma – Methodology

Lean instantly understands the activity and requirement of the process. If an activity adds value, it is later improved by a finer flow of process and subsequently improvement of manufacturing. Six Sigma focuses on particularly eliminating variations in the process output. Lean believes that any process which does not add value represents waste in the process and should be eliminated by decomposing the processes to their minimum levels. On the other hand, Six Sigma does not consider the value added aspect, and believes that defects in the process or output are waste. This could be regarded as a significant difference between Lean and Six Sigma. Lean is a persistent approach, with the perception that improvements are attainable irrespective of the fluctuations in the technology, environment, etc.

PIUSS: Lean and Six Sigma Comparison

Lean is a beneficial initiative to understand, which reduces the tasks that are detrimental in adding value. The foremost objective is to restructure the manufacturing process in an effort to enhance quality. Six Sigma is essentially related to the management of change by facilitating perfection and improving the business processes. The emphasis remains on improving the quality by reducing the defects to 3.4 per million opportunities.

A basic difference between Lean and Six Sigma is primarily that Lean is regarded as a business philosophy, whereas Six Sigma is a process improvement programme. Lean endeavours to disseminate a change in the organizational behaviour and values, and focuses on recognising and reducing waste. However, on the contrary, Six Sigma is an applicable and practicable process improvement programme, which does not fundamentally instigate to change the managerial/organizational traditions, or a perpetual behavioural change amongst the employees.

December 01, 2012

PMI Six Sigma Yellow Belt Training

The PMI Six Sigma Yellow Belt training exercises were engrossing, informative and, most importanly, effective in providing us with the useful knowledge, understanding and training to become a Six Sigma Yellow Belt. The case studies were the most interesting part, as we were able to thoroughly understand the knowledge we had gained from the first part, and prepare for the questions which followed to test our knowledge. Another good thing was the fact that we could have another attempt at the questions in case we didn't get them right in the first instance, so that we could really gauge what we had learnt. From a critical lens, the tutorials were lengthy and time consuming. However, it is important to take into perspective that the whole training process has to be quite meticulous as it is implemented in real life cases pertaining to organizations, and they constitue a major role in organizational learning, improvement and success. Therefore, comprehensive guidance was crucial. Also, we have the option to review the exercises later and go through them at our leisure and convenience within the three months time frame, so it is relatively flexible. The software is user-friendly and the exercises had a coherent structure, so there were no issues faced. In conclusion, I would sum the whole experience as insightful, knowledgeable, interactive and fun - which makes learning all the more effective. The PMI exercises were successful in providing the key training to become a Six Sigma Yellow Belt, and in the future, I'm hoping and looking forward to proceeding on to the next levels.

November 29, 2012

From textbooks to giraffes and aeroplanes

Who would have thought that we would be making giraffes and aeroplanes in class instead of going through lengthy slides, complicated textbooks and mind-boggling journals on a masters course in an effort to learn business excellence? Well hats off to whoever came up with the idea of this interactive approach to learning! Contrary to what I had believed and anticipated earlier in terms of the structure of this masters course, I have to admit that I am fairly smitten by this approach to learning. Whilst being fun, innovative and interactive, the practical exercises are also intellectually stimulating and very effective in preparing us for the actual workplace as they not only reinforce the core learning outcomes and knowledge and understanding of the topic through practical lens, but, additionally, they also reiterate an understanding of the significance of the key competencies required in today's workplace, such as teamwork, time management, leadership, interpersonal, communication and presentation skills. Although textbooks, lecture slides and other reference materials, such as journals, etc, are fundamentally vital for success, and significant in aiding our learning on this course, the exercises are paramount in making learning more enjoyable, and I hope that we continue to have such exercises throughout the year. As Confucius says, "I see and I forget, I hear and I remember, I do and I understand.” Departing on this journey to learn management for business excellence will be interesting indeed, and I am sure everyone is excited about taking off and landing safely around this time next year as "blackbelts" in MBE.


November 28, 2012

Six Sigma Change Management

We live in a society where change is the only thing that remains unchanged; it is inevitable and inherent in the dynamic and evolving organizational processes. Six Sigma change management is a structured approach which focuses on transiting employees and organizations from their present state to a state which aligns with their aims and objectives for the future. In many organizations, change is often resisted due to a variety of different factors. It can be an organization’s most difficult to control asset, but it can also work as the central tool resulting in sustained competitive advantage for the organization. Whilst doing the presentations on Six Sigma, we learnt the two types of changes in firms: planned and reactive. Essentially, planned changes are regarded as the more superior form of change as they are instigated when managers decide to make extensive changes, whilst reactive changes occur as a result of the sudden response to making adjustments. At the heart of Six Sigma is Statistical Process Control, which is primarily a way of accumulating knowledge and experience in a coherent manner. Today’s session with Jan Gillet emphasised the key point about change, which is observable in more or less everything in our everyday life. Jan stressed the point that a state of statistical control is not a natural state, and the understanding behind this is that controlling something means we are intervening with the natural process of things. Continual process improvement makes attentive use of process control charts, which were demonstrated in the video Jan played in the first half of the session.

Session with Jan Gillet

The presentation we did a couple of weeks back on Six Sigma and Success Factors helped me to grasp some basic knowledge and understanding of the topic, but the morning session with Jan Gillet today was very helpful in strengthening that learning. The reference to Jack Welch was very insightful, as it reinforced what I had learnt reading the book ‘What I’ve Learned Leading A Great company and Great People’ by Jack Welch four years ago, in which he emphasises the importance of achieving a renewed balance at work in the midst of constant pressures and crisis. The session also reminded me of some of the key things that I had studied over the years, such as The Hawthorne Effect. In reference to processes involving Six Sigma for improvement and excellence, especially in production, I was sceptical about the impact/the extent of impact of The Hawthorne Effect in a controlled environment in the context of overt observation, which Jan addressed really well. Jan's approach to teaching was very interactive, logical and engrossing, and I am looking forward to reading his book, 'Working with the Grain', to gain an in depth and broad understanding of the subject.

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