A Lean Six Sigma Primer for Project Managers

1. A Lean Six Sigma Primer for Project Managers Michael Roberts, PMP L6s

2. Agenda A look at process improvement… The Evolution of Lean Six Sigma The Lean Six Sigma Methodology L6s Concluding Comments / QA

3. A look at Lean Six Sigma Process Improvement L6s

4. Process Improvement “A project is a temporary endeavor undertaken to create a unique product, service, or result.” An ongoing work effort is generally a repetitive process because it follows an organization’s existing procedures.” PMBOK, 4th ed. So… why should project managers care about process improvement???

5. Process Improvement • 4 Reasons… • Project Management is a discipline built on processes • Project plans link processes together to achieve project results • Improving process efficiency and effectiveness, in both dimensions, is fundamental to improving overall project management performance • Project managers typically must include quality assurance processes for project deliverables

6. But, typically, what can be said about our processes? “We don't know what we don't know. We can't act on what we don't know.We won't know until we search.We won't search for what we don't question.We don't question what we don't measure.Hence, we just don't know.” – Dr. Mikel Harry

7. Lean Six Sigma Process Improvement • Lean Six Sigma seeks to : • Improve the effectiveness (quality) of manufacturing and business processes by identifying and removing the causes of defects (errors) and variation. • Improve the efficiency of manufacturing and business processes by identifying and removing sources of waste within the process. • Improve effectiveness and efficiency,based on outputs that are critical tocustomers.

8. Lean Six Sigma Process Improvement • It is a management philosophy - a commitment to managing through process, not function, and making decisions based on facts and data. • Lean Six Sigma seeks to understand performance concerns through a methodology and toolset focused on understanding customer through process, value flow and data driven analysis.

9. Lean Six Sigma Practitioners • Most Lean Six Sigma programs seek to drive a quality culture change through a multi-level based program.

10. Key Factors for Success • Establish goals and objectives for the program up front. • Strong Executive and mid-level management support. • Integrate the program into existing operations not as a separate organization. • Shared goals and objectives between practitioners and leadership. • Build the program to change the culture so that at some future point, everyone is a practitioner.

11. The evolution of Lean Six Sigma L6s

12. Lean Six Sigma Timeline Six Sigma • Deming • 14 Points • 7 Deadly Diseases Guinness Brewery Shewhart Introduces SPC 1900 1930 1950 Ford Assembly Line • Gilbreth, Inc. • Management Theory • Industrial Engineering Toyota Production System LEAN

13. Lean Six Sigma Timeline Six Sigma Motorola Introduces Six Sigma AlliedSIgnalGE Adapt LSS to Business Processes SPC TQM LeanSix Sigma 1980 1990 2000 Just – in–Time Lean Mfg. LEAN

14. Evolution of Lean Six Sigma • Lean Six Sigma evolved over a century • It is built upon proven quality and process improvement tools and techniques • Lean Six Sigma introduced three new principles or methods: • Focus on quality and efficiency as defined by the customer • Focus on financial impact to the bottom line • An enhanced problem solving methodology that looks for sustainment of performance gains

15. The Lean Six Sigma Methodology L6s

16. Five Principles of Lean Thinking • Specify value in the eyes of the customer • Identify the value stream and eliminate waste • Make value flow at the pull of the customer • Involve and empower employees • Continuously improve in the pursuit of perfection L6s

17. Seven Types of Waste • Defects (the effort involved in inspecting for and fixing defects) • Overproduction (making more than what is needed, or making it earlier than needed) • Transportation (moving products further than is minimally required) • Waiting (products waiting on the next production step, or people waiting for work to do) • Inventory (having more inventory than is minimally required) • Motion (people moving or walking more than minimally required) • Processing Itself

18. VOC vs. VOP Voice of Customer Voice of Process The Voice of the Process is independent of the Voice of the Customer

19. What’s good enough?

20. Goals of Lean Six Sigma LSL USL LSL USL Defects Defects Defects Customer Target Customer Target Prevent Defects byReducing Variation Prevent Defects byCentering Process LSL USL Customer Target Meet Customer Requirements

21. Introducing DMAIC • The foundational methodology to Lean Six Sigma’s Success is, DMAIC. It’s uniqueness as a problem solving methodology is it’s intentional focus on data and requirement of a sustainment strategy. • Define: Describe the problem quantifiably, and the underlying process to determine how performance will be measured • Measure: Use measures / metrics to understand current performance and the improvement opportunity • Analyze: Identify the true root cause(s) of the underlying problem • Improve: Identify and test the best (cost, time to implement, impact, etc.) improvements that address the root causes. • Control: Identify sustainment strategies that ensure process performance maintains the improved state.

22. The Define Phase“Well begun is half done” – Mary Poppins • Purpose: • Identify the problem and underlying process to be improved • Understand the customer, their needs / requirements (CTQs) • Quantify the performance gap and its impact • Define the performance standard or measures • Set project success criteria • Ensure sponsorship and resources are in place • Deliverables: • Approved charter • Project plan with milestones • Planned benefit analysis • Team formed and engaged • High level process map • Customer performance requirements (CTQs) linked to process outputs and value stream

23. The Define Phase - Example“Well begun is half done” – Mary Poppins • Problem: • Project execution is poor at ScoobyDoo Enterprises. • Problem: • Project execution is poor at ScoobyDoo Enterprises. • Projects are always late and overbudget at ScoobyDoo enterprises costing lots of money. • 60 out of 80 IT projects completed in 2008 at ScoobyDoo enterprises exceeded time estimates by more than 25% at a cost of $21.1M dollars in expense and lost opportunity. • Problem: • Project execution is poor at ScoobyDoo Enterprises. • Projects are always late and overbudget at ScoobyDoo enterprises costing lots of money. • Project Sponsor: Billy Bob Buckaroo, Exec VP IT Services • Project Team: Sally Straightedge, Business Analyst • Wiley Poindexter, Technical Architect / Lead Developer • Reggie Rocketeer, PMP, Project Management Lead • Bruce Lee, LSS Black Belt • Objective: 50% improvement in on-time delivery; $10.5M benefit

24. The Define Phase - Example“Well begun is half done” – Mary Poppins • High Level Process Map: • ScoobyDoo Enterprises utilizes PMI compliant process set.

25. The Measure Phase“Measure what is measureable, and make measurable what is not so.” – Galileo • Purpose: • Identifies / establishes data sources to be used for project • Identifies process steps for project focus • Establishes baseline process performance against CTQs • Deliverables: • Validated project problem definition • Data Collection plan • Detailed process map with ins/outs and associated measures • Measurement Accuracy / Consistency Assessment (MSA) • High level Root Cause Analysis to identify process focus • Stability assessment of the process

26. The Measure Phase - Example“Measure what is measureable, and make measurable what is not so.” – Galileo • Data Source: Project Tracking Database – 80 IT Projects, closed in 2008 • Validation of Data Source: Data is collected via automated time tracking. Sampled 14 project confirmed project start and stop dates were accurate based on confirmation with accounting systems and email tracking.

27. The Measure Phase - Example“Measure what is measureable, and make measurable what is not so.” – Galileo • Baseline Performance: 63 out of 80 – 78.75% • Total Cost of Poor Quality: $21.1M

28. The Measure Phase - Example“Measure what is measureable, and make measurable what is not so.” – Galileo • Potential Area of Focus Observed in Data:Project Manager Team

29. The Measure Phase - Example“Measure what is measureable, and make measurable what is not so.” – Galileo • Potential Area of Focus Observed in Data:Sponsoring Organization

30. The Analyze Phase“It requires a very unusual mind to undertake the analysis of the obvious.” – Alfred North Whitehead • Purpose: • Identifies actionableroot causes – tied to discrete process steps • Connects the Process Outputs (Ys) to Process Inputs (Xs) to identify root cause • Deliverables: • A prioritized list of potential root causes • Data Collection / Analyzed supporting conclusions

31. The Analyze Phase - Example“It requires a very unusual mind to undertake the analysis of the obvious.” – Alfred North Whitehead Why would the team a project manager came from make a difference? • Different Experience Levels? No; data shows no statistical difference. • Co-location with project teams? Best performing teams were co-located • Different Methodologies? Each team develops their own best practices Which process steps differ between Best and Worst results? Best: PERT Estimation linked to Risk Processes Worst: Single point estimates

32. The Analyze Phase - Example“It requires a very unusual mind to undertake the analysis of the obvious.” – Alfred North Whitehead Why would the sponsoring organization make a difference? • More difficult projects? No; data shows no statistical difference. • Strong sponsorship? Best performing groups shared objectives for project success • Change Management? Best: Changes required formal assessment of impactWorst: Changes were assessed but impact was overridden 67%

33. The Improve Phase - Example“This became a credo of mine...attempt the impossible in order to improve your work.” – Bette Davis • Possible Improvements • Standardize PERT analysis with Risk Identification / Mitigation • Co-Location of project team • Sponsors share accountability with project managers for success • Standardize Change Management Processes across groups Improvements to be piloted.Pilot to execute as production for 6 months. Performance will be assessed as projects execute and complete 2 3 4 1

34. The Improve Phase - Example“This became a credo of mine...attempt the impossible in order to improve your work.” – Bette Davis • Pilot Results Impact of improvements showed in time

35. The Improve Phase - Example“This became a credo of mine...attempt the impossible in order to improve your work.” – Bette Davis • Pilot Results Previous Baseline 78.75% Defective Improved Baseline 16% Defective Original Goal50% Improvement$10.5M Benefit Achieved Goal80% Improvement$16.8M Benefit

36. The Control Phase“The greatest potential for control the ends to exist at the pointwhere action takes place. .” – Louis Allen • Purpose: • Document an approved control plan that contains all necessary items – documentation, activities, etc. to sustain the improved performance. • Include a process monitoring capability which will prevent and/or alert process owners should the process begin to deviate from improved performance levels. • Deliverables: • Updated process documentation with integration into existing systems • Control plan with transition to process team • Training Schedule • Next steps – further improvement recommendations, replication, etc.

37. The Control Phase“The greatest potential for control the ends to exist at the pointwhere action takes place. .” – Louis Allen Control Plan should include some kind of performance monitoring system on process variables that will alert process owners of drift. It should also identify an appropriate reaction plan in such an event

38. Concluding ThoughtsQ & A L6s