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Samenvatting Operational Excellence
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Samenvatting Operational Excellence
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Week 1 – DMAIC 0Chapter 1 – Background of Lean Six Sigma (LSS)
Two misconceptions of LSS:
1. LSS companies strives to get their processes at a level of quality corresponding to a defect rate
of 3.4 per million. The claim of a specific level of conformance quality being optimal across
industry is economic nonsense.
2. LSS is a business strategy. It is not; it is a framework for organizing improvement activities.
LSS focusses on processes, which is all work done routinely. A process consists of a number of
operations that turn input into output.
Hidden factory = the quality problems and efficiency issues of everyday processes. They cost a
substantial amount of money and the burden increases when processes become more and more
complex.
Cost of poor quality = costs that an organization makes because things are not done right.
An enterprise offering better quality may ask a higher price or may be able to increase market share of
revenues.
Many processes do not work like efficient clockworks and LSS strives to processes run like clockwork,
seeking to make them more effective and more efficient, as LSS projects are about improvement of
these routine operations.
Recurring problems make good for LSS projects = brings understanding of the root causes.
To tackle issues perceived by the customers as problematic.
LSS provides a management structure and methodology that turn systematic improvement of routine
operations into a routine operation itself.
Benefits: customer satisfaction + cost advantages.
The crucial point is that LSS should be integrates in a strategy and not function as a substitute of a good
strategy.
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,As an organization you cannot fall behind with the competitors > while improvement of quality and
efficiency may be vital to avoid competitive disadvantage, it is all but straightforward to convert it into
competitive advantages and sustained profitability.
Competitive convergence = companies look more and more alike as they copy each other best moves
and practices.
Competitive strategy is what companies do to avoid competitive convergence, so that is why LSS
should not be started as a substitute. If LSS project are not related to the strategy, they will only result
in tactical wins but have no strategic effect. LSS is an effective methodology for delivering the
improvements that the business strategy indicated as essential.
>> without strategic alignment there are successful but scattered and partly counteractive projects; with
a proper strategic focus there is unification, integration and mutual reinforcement, and thus a potential
for performance.
Innovation is one of the most important drivers of economic growth whereby cumulative adjustment
have the most impact. LSS offers a template for designing the organizational structures. Values that LSS
embodies:
- Continuous innovations and improvement
- A focus on the customer
- Data driven decisions
- A relentless focus on the vital issues that determine performance
Those values must find wide acceptance to fully integrate LSS in the organization to reap the full
benefits. It requires leadership and commitment for a long trajectory to learn LSS skills.
Strategy establishes what a company choose not to be; trying to be good in all dimensions is a poor
strategy (need other structures for price strategy than for quality strategy) > strategy focuses efforts.
Traditional notion of competitive strategy [Porter] = company makes clear about what it wants to be
and what it does not want to be, and if the position cannot be easily imitated it will lead to competitive
advantage.
- Strategy on cost leadership = cost advantages (economies of scale, low costs of labor/energy,
manufacturing virtuosity – better cost structure)
- Strategy on product differentiation = superior quality, service, reputation, brand name >
uniqueness.
- Strategy on focus = target customer segment, product line, geographical market > specializes.
Competences bring the right capabilities > habits to collect and analyze data for informed decisions. LSS
build a system of process and performance metrics, thus providing a basis for a management
information system.
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,LSS companies nurture an innovative and experimental attitude in their workforce and management. A
company that has the competences to improve adjust and innovate is better suited to face the
challenges of the current economy.
>> benefit is that skills are not build overnight and thereby hard to copy (competitive advantage); on the
other hand, commitment is needed for a long trajectory.
Chapter 2 – Organizational structure for LSS
Juran > proposed a generally accepted distinction of activities related to quality:
1. Quality planning = consist of the determination of what customers want and the development
of the product and processes which are required to comply with these needs (marketing,
product development). Approach can be Design for Six Sigma (DfSS).
2. Quality control = consist of the on-line and real-time monitoring, the detection of irregularities
and the reaction to this. Sporadic problems (reactive).
3. Quality improvement = the organized and systematically pursued improvement to increase
quality and efficiencies to unprecedented levels (breakthroughs). Projects (project-by-project
nature). Chronic problems to eliminate them once and for all.
Important: difference of control and improvement is on-line vs off-line quality management.
>> quality control is to defend the status-quo by reacting to problems = ‘firefighting’
>> quality improvement searches for improvement opportunities systematically. Approaches can be
Design of Experiments (DoE), Business Process Reengineering (BPR), Lean Six Sigma DMAIC
methodology.
It needs understanding and therefore LSS projects needs to be executed mostly by people from the line
organization and not by staff personnel, because line personnel are aware of the details of the problem.
Team of LSS:
- One or more Black Belts (BBs) and/or Green Belts (GBs), who are typically selected from middle
management. They are thoroughly trained in becoming effective project leaders, and they work
full-time or at least a considerable part of their time on the project.
- Several Yellow Belts (YBs): persons that the Black Belt or Green Belt calls in as advisors, typically
operators or employees who execute the process. Yellow Belts could as well be technical
specialists, marketing specialists, or whoever the Black Belt or Green Belt thinks could bring in
relevant knowledge. On a number of different occasions input from the Yellow Belts is
requested, and they may be called upon to collect data.
Difference BB and GB = interpreted differently in various organizations and the precise role of a BB and
GB should be adopted to the situation in one’s own organization.
Idea is that GB and BB are dispersed over the organization. Threat: no integration and activities are not
of strategic importance. Therefore, projects are selected and monitored by Champions = project owner
> responsible for the process that the project aims to improve = hierarchical superior. Champion should
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, be able to relate the project to the strategy, review project several times to necessary adjustments, and
assure to remain focused on the issues of critical importance to the company.
Champion = project owner
BB and GB = project leaders
YB = team members
Program director >> should be part of the senior business management (members of the board of
directors of one echelon below) >> he is accountable for the initiative, map out the strategic direction,
resolves conflict. LSS needs leadership from top management for sustainable advantage.
Program managers >> day-to-day administration. Arranging training and meeting, budget, software.
Responsible for project selection (BB & GB), monitoring and control. Periodic reviews, watching over,
benefit tracking, adjustment of the programs’ course.
Master BB >> LSS experts (resources). Deliver BB and GB training and support project. 1st year will be
external consultants > small/medium enterprises project will be mostly run by GB, while one/few BB
combine the roles of master BB and program manager.
The phases, objectives and who’s responsibility:
First three phases = Define. Project proposal = project-charter.
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