Process Optimization Part 2

Pareto PrincipleWelcome back to our Process Optimization series, kicking off 2016 with a bang!

Last week we started looking at some tools, based on the SIX SIGMA methodology, that may be useful to help boost your productivity.

 

We recall that SIGMA symbolizes deviation from perfection and

SIX SIGMA, more specifically, is the statistical term for a process producing < 3.4 errors per million opportunities for defects.

Being the desired result of improving operational performance, SIX SIGMA can be achieved through the repetitive cycle of

DMAIC: Define -> Measure -> Analyze -> Improve -> Control , repeat…

CTQ (Critical to quality) embodies the essentials of satisfying your customers’ requirements

CTQ can be used to help define those requirements at a measurable, granular level.

Once you know what your customers want, you can use

SIPOC: Suppliers -> Inputs -> Process -> Outputs-> Customers

to identify the components associated with delivering CTQ product or service.

Today, let’s pick up more tools to help define & analyze process improvements.

PARETO

A Pareto chart is a tool for quality control, to help prioritize which defects to address first.

The purpose of the Pareto chart is to highlight the most important among a (typically large) set of factors. In quality control, it often represents the most common sources of defects, the highest occurring type of defect, or the most frequent reasons for customer complaints.

A Pareto chart, named after Vilfredo Pareto (considered Italian, but born in Paris, France), is a type of chart that contains both bars and a line graph, where individual values are represented in descending order by bars, and the cumulative total is represented by the line.

Pareto charts are a type of bar chart where X axis represents categories.

Those categories typically represent errors/defects or causes thereof.

The bars’ heights represent count or % of errors/defects, or their impact (e.g. cost, delays, rework).

By arranging bars from largest to smallest, Pareto charts assist in seeing which category to address first, for “biggest bang for buck”, for example in the below chart we see quantity of problems of each type AND the cumulative percentages of those problems.

Pareto Problem Type

 

 

 

 

 

 

 

 

 

HOW YOU CAN USE THIS?

Pareto charts are helpful to define priorities, showing % contribution of each factor. This enables deciding which defects to address first.

MUDA

MUDA is a Japanese term meaning waste. Toyota originally defined 7 types of waste to hunt down and eradicate (helpful acronym is NOWTIME):

  • Nonquality (redoing, correcting, reworking to remedy errors/defects)
  • Overproduction (producing too much of something too soon)
  • Waiting (typically the easiest waste to spot)
  • Transportation (moving further than needed; temporarily relocating/storing)
  • Inventory (too much of anything)
  • Motion (the opposite of waiting, unnecessary work movements)
  • Excess production (processing that the customer does not value/pay for)

For those linguists out there, broadening the definition of MUDA, MURA is waste due to unevenness or variation while MURI is waste caused by overstressing staff, machines or systems.

While SIX SIGMA focuses on process improvement to reduce errors/defects, analyzing waste, in its many guises, expands potential areas to tackle.

Some ways to reduce waste:

Standardizing:

Why: suitable for repeatable, predictable processes, when you want a consistent, reliable outcome, e.g. a recipe;

How: Eliminate, combine, rearrange, simplify.

5Ss (Japanese words describing housekeeping):

Why: creating an orderly, clean, safe environment serendipitously encourages creativity and higher performance

How: implement the 5Ss: Sort(remove unneeded items), Simplify (arrange), Shine/Sweep/Scrub (clean), Standardize cleanup, Sustain (self-discipline, train)

When: when a workplace is messy, when time is wasted searching for tools/information

Visual Management:

Why: mental images are more easily found, remembered, understood, followed

How: posting visual instructions, use colours, labels, visual identifications

HOW YOU CAN USE THIS?

Identifying, then, reducing waste may be the easiest starting point for process improvement.

KANO

Kano, a Japanese engineer, said that customers’ requirements differ. Some requirements yield higher satisfaction levels than others.

Kano_Part 2

 

 

 

 

 

 

 

In the above chart:

  • x represents the level to which one wants to attain a customer requirement,
  • y represents customers’ degree of satisfaction,
  • the midpoint represents customer neutrality (neither satisfied not dissatisfied)
  • Customer requirements thereby are 1 of needs, wants and delighters,
  • Over time, customers’ expectation of a specific feature typically drift from being delighted, to wanting, to needing.

For example, using cell phones for text messaging, was initially a novelty, in other words a delighter, then it became a need for performance, in other words a want, until its novelty wore off and it now is simply a basic need of every smart phone.

HOW YOU CAN USE THIS? Analyzing how satisfied your customers are, by your product/service, can help differentiate you from your competition. But bear in mind that timing is crucial, as what is perceived as new and exciting today, may soon become a mere basic expectation.

Quick RECAP:

Today we looked at 3 tools that can give big bang for buck to help define and prioritize what to work on first, to achieve greater customer satisfaction:

7 Types of waste, the Pareto chart & Kano diagram.

Please tune in again next week, when we meet 2 tools to mitigate risk and another trick to encapsulate customers’ expectations.

Thank you for your interest in improving your Processes.

Fay Rakoff

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REFERENCES

Brue, G. (2015). Six Sigma for Managers Second Edition. United States: McGraw-Hill Education.

George, M. L., & Rowlands, D., & Price, M., & Maxey, J. (2005). Lean Six Sigma Pocket Toolbook. United States: George Group

Gygi, C., & DeCarlo, N., & Williams, B. (2005). Six Sigma for Dummies. Indiana: Wiley Publishing, Inc.

Gygi, C., & DeCarlo, N., & Williams, B. (2012). Six Sigma for Dummies 2nd Edition. New Jersey: John Wiley & Sons, Inc.

Kallet, M. (2014). Think Smarter. New Jersey: John Wiley & Sons, Inc.

KellyLawless. (2013). Fishbone BadCoffeeExample.jpg (Own work). [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Pande, P. S., & Neuman, R. P., & Cavanaugh, R. R. (2014). The Six Sigma Way Second Edition. United States: McGraw-Hill Education.

Ries, E. (2011). The Lean Startup. New York: Crown Business.

Robertson, B. J. (2015). Holacracy. New York: Henry Holt and Company, LLC.

Thompson, J. (1997). The Lean Office. Canada: Productive Publications

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