The Pareto principle, most commonly known as the 80-20 rule, is known by business owners as the simple fact that 80% of your problems are caused by 20% of the people. Really the theory was about wealth and power distribution, but the general premise applies. Most of your issues can be attributed to a fairly small distribution of root causes.
What does it look like?
What does it do?
A Pareto Charts work in levels to help you identify the root cause of the tallest bar (the biggest issue).
How do I use it?
The trick with Pareto is to start high and whittle away. What does that mean? It means that when you find out department A is supplying department b with all of the material that ends up in their rework, don’t go to department b and shut everything down. I know that it seems counterintuitive, but jumping the gun before you find out why that material ends up in the rework pile, leads to rework on department a’s part, causing more defects.
What doesn’t it do?
Pareto doesn’t provide an instant Ah-ha moment, it’s a method that requires patience and adherence to the process to be effective. If you need the answer now, it may not be the method for you. You may be better suited to process mapping or the 5 Why’s which will point you in a direction immediately. I have to say however, if you want the right answer validated by numbers then Pareto is right for you.
In 6Sigma the devil is in the details and a successful improvement initiative depends heavily on the selection of the right tool for the engagement. A successful selection depends heavily on the knowledge and skill of your belt, so use that library of knowledge and if that belt isn’t asking you a thousand questions about your end goal-move on!
In any lean project there are a ton of buzzwords, but the one thing that is a universal truth in all lean initiative is that for any tool used to be successful it must be understood. In today’s blog we are going to talk about a Gemba walk and why it works.
What is it?
A Gemba walk is literally seeing where the work happens and the value of work. The reason for the walk can be varied but its importance is to illustrate the process to the people who will be responsible for improving it. I like Gemba because it takes 6Sigma out of theory and metrics and illustrates it in a tangible way that makes sense to the people using it.
What do I do?
This is by no means a comprehensive checklist, but it is a place to start when you are planning your Gemba walk. I provided a simple but comprehensive checklist to create your Gemba walk below.
- Identify the processes (internal/external) that the customer pays for and has an expected output.
- Identify who understands the process- What you are looking for here is not the person/division/team responsible for the process, but the person who designed the process and understands why it operates the way it does. This person should understand the performance gap analysis and have a plan to correct the gap (or at least the beginning of an idea).This step is hard for a lot of people because the knowledge master generally isn’t the person with the official responsibility, but it is critical that you get this step right.
- Focus on the steps of the process that add value, show standardization or show how the work is distributed.
- Know the expected outputs-Are they gaps? Are you asking why? Are you assigning blame? (If are, you shouldn’t be.)
- Identify the areas of the process that are going well, what is making that success happen?
- Now that you know what is working and what is not, create your checklist based on this information.
- Remember to steer clear of the 3M’s and educated your process leaders on them. Muda-Waste, Mura-process variation not caused by the customer, and Muri-overburden on facility, people and equipment caused by Mura and Muda.
This is pretty comprehensive checklist, but as with all my posts this is just to introduce you to the Gemba Walk tool. Consulting with your belt will give you the most useful questions and sources of information in your walk. Done correctly a Gemba walk jumpstart rapid improvement events, done incorrectly they can derail an entire initiative. What will you value today?
Building a business case is important to more than your improvement project, it should be one of the pillars of your decision making. A business case helps you understand why a decision is necessary, what you anticipate the solution to look like and how it will help you reach your long-term organizational goals.
Business Case Components
Strictly speaking a business case is the first direction you take in describing your project to the people who will okay the resources and the team working with the resources. At its core a business case should have the following components:
- A definition of the end product/ service that you sell to your clients.
- How your team will measure the output.
- A primary baseline (how can you measure and interpret results if you don’t have a starting line).
- An explanation of the performance gap and how that affects your business objectiv
What doesn’t it do?
A business case does not provide a magic bullet. What it does do it allow you to logically create a path to alternative solutions. The business case does not work if your team has not made a cohesive acceptance of the proposed alternative, in the case of differing opinions it may actually serve as tool that further divides the team.
Why it does work
It works because it creates focus and more often than not project teams lack a sense of focus. The best business cases create a uniform goal and team rationale. When constructing a business plan, it’s my belief that this is what you should strive for.
Change is hard and as with all of my posts, I believe in the guidance of a good belt. Talk with your belt and have a conversation about your challenges and your thoughts on solutions. Your belt is not your guru, they are a part of your solution. Utilize them.
Six Sigma has gotten a sometimes well deserved rap for being overly-complicated, but this is a tool that is the antithesis of that reputation. It does involve metrics but the bulk of the focus is on strategic planning. Strategic planning means many things to organizations, but within the lens of a 6Sigma strategy it should mean a road map to the best version of your organization.
What is a Future State Vision?
A Future State Vision is basically what it says; it is a concrete plan for the most desired state of your business. Think of it as a more specific path to your company’s vision board. This is where you create the details that will get you to the goals on that vision board.
What does it look like?
How do you use it?
The tricky thing about a Future State strategy is that you have to come up with the end before you can address how you will get there. So to begin with you will actually start at the end and the how whole point of the strategy is to figure out the most practical (in terms of manpower, expense and resources) path to get there.
What does it do?
The Future Strategy does not provide you with a road map for your current problems. The metrics you use for this strategic should resemble your operational metrics, but they should not be exactly the same because your outcome for this strategy will be different. This is a big picture operational strategy so your metrics should be performing at a macro level when you turn your attention to this strategy. What it does do is help your staff to create meaningful big picture metrics, so low hanging fruit will not work here. This tool will be a great asset to upper level management responsible for creating organization wide strategy.
As with all my Six Sigma tools, this is just a template. Your specifics will lie in the knowledge your belt will bring in drafting this tool specifically for your organization at an executive level. So what are you waiting for? Start dreaming.
This week I want to continue helping you build a Six Sigma framework in your organization to ensure that your Six Sigma effort continues without frustration and lack of focus.
Decide your level of commitment to cross-functional teams
Much like Six Sigma itself, cross-functional teams are not appropriate for every situation. Before your Six Sigma effort begins, get the leadership together and decide if you will use cross-functional teams. If cross-functional teams are appropriate, the work is not done. Get together the people that will make up the teams and decide who will do what, who they will report to whom and how they will be measured for success or failure.
Define your transition timelines
The easiest part of Six Sigma is defining your metrics; one of the hardest parts is determining how to transition between phases. Many Six Sigma efforts become stagnant because a lot of organizations leave a lot of discretion in establishing transition timelines, I think this is a mistake. While the best strategies are fluid, there does need to be some concrete milestones and transition deadlines should be one of them. This finite point gives your team direction and the ability to gauge their progress.
Decide whether Six Sigma will be a central or decentralized function
I believe that embracing Six Sigma needs to begin with the organizational culture, having said that, it’s nuts to think that you can just walk into an organization and roll out Six Sigma. Some things have to be done incrementally, because change scares a lot of people and Six Sigma is no different. If you have an organization that readily accepts new ideas and new strategies, then I would give the go ahead to implement the changes company wide. If your organization is steeped in tradition and accepting is not how you would describe it, a decentralized approach is the route you want to go.
Taking a decentralized route does not mean that you abandon gaining acceptance, it’s quite the opposite. If you have an organization that requires a decentralized approach, you are going to have to put extra time and effort into explaining and demonstrating 6Sigma to the rest of the organization. It’s important that you get that support for your effort because that support will determine the success or failure of your effort.
Next week we will continue creating a Six Sigma framework and summarize everything we have covered.
You can continue reading along with part three in the Six Sigma Strategy Series.