Lean Six Sigma Yellow Belt – Beginning Lean Six Sigma

1. Key Principles in Six Sigma (Define)

If you’re like anybody else in the world, you probably do something and then later ask, well, how did that turn out? Or why did that happen? Because of this common curiosity towards results, determinism becomes one of the key elements and principles of a Six Sigma strategy. The principle of determinism is a core belief that is at the heart of a Six Sigma strategy. Determinism is the principle that you can create any desired outcome by configuring and controlling the inputs in a specific manner. The cause and effect philosophy of Six Sigma means that you can analyze a process and see how that process allows for variation. The inputs of a process all affect the outcome in some way.

Now, be careful when you classify process inputs. We’ll talk about this later on. Let’s take, for example, the coach who wins a game wearing Red Sox. That coach now wears Red Sox every single game. This is referred to as superstitious delusions. Did the socks cause the team to win the game or did that win come from other more valuable inputs? Businesses are similar to this principle in a certain extent. Many companies have gone and ramped up their capacity after a good sales month only to assume that growth is happening. They later realize they were not expanding or growing at all, just having a good month. So be careful with the cause and effect of Six Sigma.

The matrix on the next page will help you distinguish which of your solutions work best. Here is an example of a cause and effect matrix. It can be used to figure out what the best possible solutions may be. We have attached a matrix in the attachments portion of this section. The instructions for how to use this matrix are listed in the Excel tabs on your matrix. Make sure you study them. It can be tricky. The principle of determinism explains to us that every output is a result of a specific process being applied to it or the application of a specific function. Let’s take a look at this concept in more detail in the next few slides. This core equation used in Six Sigma looks something like this y equals f times alpha or more accurately, y equals f times alpha plus epsilon. This simple equation will be very important to your understanding of the principle of determinism.

The equation can be used to make your predictions and some of your results quantifiable. Let’s take a look at this equation in more detail. The first part of the equation is why, which represents the desired outcome, result or goal you want to achieve. This is typically what is important to the customer. The next letter is x, which represents the input factors, variables or elements required to create the outcome. We sometimes refer to this to as a variable because there will be so many different input ideas. The next letter, f, represents the function or process applied to the variables by which they are modified, changed, or altered. The transformation processor. The final key to this formula is epsilon. Epsilon represents some level of error or the amount of difference due to uncertainty or predictability when the process is applied and how near or far it is from the desired outcome. But you can probably tell by now how valuable this formula could be in determining and quantifying outcomes. Let’s apply the formula to something we’re a bit more familiar with.

This will help us to get a deeper understanding of just how powerful the principle of determinism really is. Let’s say you are preparing to bake a loaf of bread for your neighbors. So you get out a set number of ingredients. Then you mix them all together in a specific way, then place it in the oven for a specific amount of time at a specific temperature to bake. When it is all done, we eat the bread. Now let’s look at the process again and apply the formulas to some of the elements in our baking. In this case, Y is the loaf of bread you want to make. X represents the inputs. Those are the ingredients you will use to make your loaf of bread. An f will represent the process being applied. In this case, that process is mixing, baking, and any other activities you may have chosen to do. Remember what the last element was. That’s right, epsilon. If we made the bread multiple times, we would not always end up with the exact same result or the same type of bread. The heat may be slightly different, or the ingredients could be more or less than the previous activity.

That is what the epsilon represents, the uncertainty in the process that naturally occurs in all processes. As you probably guessed, the end result might be almost the exact same thing. But each time we bake the bread, it will certainly have some difference or variance in the outcome. Epsilon helps us to figure that. But you can probably tell by now that this formula used in the principle of determinism can be very powerful. But just a word of caution from experience, try not to think of it just as a formula. If you think of the principle of determinism as just what it is, a deterministic principle, you will see many more opportunities to utilize this power formula in many different applications. And the results that you yield will be much greater than if you think of it as just a math formula. Remember, the principle of determinism is a key principle of any six sigma strategy.

2. Beginning Lean Six Sigma

Can you imagine what it would feel like changing company strategy? Executives, managers, supervisors, and your entire organization are now talking about this new Lean Six Sigma stuff, and they promise you that everything’s going to be better as a result of this strategy. Well, that can be stressful if you have no idea what Lean or Six Sigma is or how it works. What are all these kizens that are going on? Why does everybody seem like they’re always doing an audit or asking me questions about my area and my processes? It may feel like I’ve been doing this for ages. Why do we need to change? And how come people are asking me about improvements? Do they really care about what I have to say? In this lecture, we’re going to talk a little bit about what it might feel like to you to start your Lean Six Sigma journey and projects within your organization. More often than not, Lean and Six Sigma will start off at the top of the organization. There will be a committee that makes the decision to implement and sponsor the Lean and or Six Sigma strategy. While these leaders often give the initial okay, the entire organization will be involved in one degree or another.

Chances are your company had some type of current state assessment done. Maybe they performed a SWOT analysis looking at the risks internally and externally of their organization, and hopefully they’ve laid out some sort of roadmap on a gantt chart of how they’re going to get where they want to be from where they’re at. Now, this oftentimes requires a decision to be made based on analysis of the company’s current state assessment. After your vision is in place, you can now create tactical projects that will help you move in the direction of the organizational vision you’ll know, where you’re at and how to get where you want to be. One key consideration of Lean and Six Sigma is that you are somehow meeting the needs of your customers.

Along with eliminating waste and reducing variability, the customer realizing value is very important to your overall vision. Let’s reflect for a second and remember that customers are both internal and external. They were the why in the equation we discussed earlier. Remember the principle of determinism. If your company has already identified its current state, you most likely identified a few key places where your organization could do a little better in meeting the customer needs. These areas will be opportunities for projects or improvement initiatives. In both Lean and Six Sigma, we refer to these improvement opportunities as deployment opportunities. Sometimes you’ll hear them referred to as kaizen events. Also, some things you will want to ensure before deploying a project is that the cost to benefit analysis is appropriate, meaning that your activities both guide you closer to the company vision and provide positive results for the resources invested.

No matter what organization you work for, your resources will be limited to a certain capacity, you’ll most likely only have so many black belts, so many green belts, and so many white belts throughout your organization. That means you’ll need to figure out an effective way to maximize the impact of these important resources and these highly skilled individuals until more of the organization come on board with your new Lean Six Sigma strategy. In the next few slides, we’re going to share with you two tools that Lean Strategies International uses very frequently in selecting projects. These tools will help us better hone in on what will give us the biggest impact while using the fewest amount of resources. The first tool we will talk about is the Pareto Priority Index.

The first thing you will need to do is input the savings amount and the probability of the project’s success. One important thing to know is that the probability of success is more often than not, a qualitative measure, so be sure that all the necessary parties are involved when you figure the appropriate number or probability of success. After you have placed the savings and probability for success in the appropriate tabs, it will populate a figure in the first yellow shown above. Next, you will need to input the cost of the improvement and the time it will take to complete the project. That will give you a number in the second yellow column. Last but not least, you will divide the first yellow column by the second, which will give you the PPI score in green. Whichever score is the highest will provide you with the best project results, which will give you the most bang for your resource investments. In case the math is a bit difficult for any of you well, like it’s difficult for me, we’ve attached an Excel template in this section for you.

The formulas are already factored in, so you’ll just need to place the appropriate numbers in each of the tabs. The Pareto Priority Score is a great way to take a qualitative analysis and data and make it quantitative and will most likely become your best friend when selecting your projects. The second tool that we are going to introduce is referred to as the solution matrix. It charts the value of your solution suggested by placing them on a quadrant based on the solution’s weight and how much of an impact it will have on your organization. Here is one example of a solution matrix. As you can tell, the arrow on the left is used to identify the difficulty of the initiative, and the arrow on the bottom measures the benefit of the activity or the initiative. The solution matrix is typically used in Kaizen to structure solutions that were based on previous application of a methodology, but at times it is used to make certain initiatives visible too. We will come back to the solution matrix in some of the methodologies that will be shared later on at a more tactical level.

Be sure to download your copy of the solution matrix in the attachment portion of this lecture. It’s worth noting that these are only two ways you can identify initiatives to move forward and to act on. Some other things you may wish to consider when deciding on the proper initiatives and projects for your organization. Are does this move us closer to the vision or are we moving further away by doing this initiative? How will the project affect the company’s reputation? How will this project impact the hearts, minds and spirits of our employees and various other elements that might come to mind that are unique for your organization?

Using relatively simple tools and formulas such as the PPI index and the Solution Matrix can help focus in on opportunities that will provide the greatest benefits for you and for your organization. One last thing to note is that whatever method you choose to use for improving selection, it should become the standard method for your organization to use every single time. This will ensure that everybody understands how to use the proper method and they know what to do when selecting the proper initiative to act and move forward on.