PPMP20009

Leading Lean Projects

Week 1 – Lecture

Introduction to Lean Management

Week 1 - Outline
• Unit overview
• Assessments
• What is Lean?
• History of Lean
• House of Lean
• Why Lean?
• Lean concepts
• What is Six Sigma?
• Lean Six Sigma
PPMP20009 - Weekly Topics
1. Introduction to Lean Management
2. Lean Framework in PM
3. Lean and Value Management
4. Lean Thinking and PM Methodologies
5. Agile PM and Lean Methodologies
6. Leadership Competencies for Lean PM
7. Team Competencies for Agile PM
8. Project Quality Management: Tools and Techniques
9. Lean Six Sigma: Concepts and Applications
10. Risk Management for Lean Projects
11. Organisational Project Management (OPM)
12. Review of PMBOK@ & PRINCE2@

4
ASSESSMENTS Assessment 1:
Written Assessment 40%
Friday, Week 6
Individual

Assessment 2:
Written Assessment 40%
Friday, Week 11
Group Assignment

Assessment 3:
Online Quiz 20%
During tutorial classes, Week 12
Individual

For more information, check the Unit

Profile and Assessment tab on Moodle
5
What is Lean?
A systematic approach to identify and eliminate
waste through continuous improvement by
flowing the product only when the customers’
needs it (called ‘Pull’) in pursuit of perfection.

National Institute of Standards and Technology (NIST, USA) Origins of Lean Framework
What is Lean?
• A business theory that strives to create more value
for clients by using the fewest resources.
• Lean management is more a way of thinking rather
than a reduction program for cost and expenses.
• A mindset rather than steps and procedures.
• Focuses on value rather than product.

National Institute of Standards and Technology (NIST, USA) Origins of Lean Framework
The 8 Wastes of Lean

https://theleanway.net/The-8-Wastes-of-Lean
 History!

1920 Ford Creates Assembly line

But we need Variety=change
1890 Best way to do work (Base
Line: standardised)

Father of Waste
Toyota Engineer TPS inventor
Early History of Lean
1896 – Sakichi Toyoda’s power loom equipped with auto stoppage device

1924 – World’s first automatic loom with zero changeover

1938 – Flow production implemented in

Toyota’s first automobile factory

1945 – Development of
the Toyota
Production Systems (TPS)
begins
1900 1920 1940 1965

Deployment of the supermarket system - 1952

Quick die changeover enabling rapid changeover - 1960

Pull systems and Kanban deployed at Toyota - 1962

Toyota wins Deming Application Prize - 1965

Source: Motorola University @ 2010

Origins of Lean Framework

Recent Developments of Lean
1984 – General Motors forms first joint venture with Toyota to apply TPS
1986 – Six Sigma Methodology introduced at Motorola
1988 – Motorola wins 1st Malcolm Baldridge National Quality Award
1990 – MIT publishes “The Machine That Changed The
World” 1991 – Black Belt initiative introduced at Motorola
1999 – Six Sigma widely adopted by Fortune 500
manufacturing companies
2000 – Six Sigma widely adopted by
Financial
Services and Hospitality industries
1984 1990 2000 2008

Six Sigma business improvement at Motorola & Motorola wins

2nd Malcolm Baldridge Award - 2002

Digital Six Sigma at Motorola & IT Industry begins to adopt Lean -

2003
Healthcare industry begins to adopt
Lean- 2005
Motorola begins Lean
transformation - 2006
Source: Motorola University @ 2010
Motorola adopts
Lean Six Sigma -
2008
Origins of Lean Framework
Lean Emerged after WWII by Japanese!
The House of Lean
The House of Lean - Explained
LEAN SYSTEM

Just - Efficient use of:

Built – In - • People • Improve Process
in
• Equipment Capability
Time • Materials • Minimise variations
Quality
(JIT) • Space • Manage
(Jidoka)
Abnormality
Workload Levelling (Heijunka)
Stable and Standardize Processes
Visual Management Systems
• JIT – is a set of principles, tools and techniques that allows organisations to deliver service or
products in small quantities with short lead times to meet specific customer needs.
• Jidoka – build a culture of stopping to fix problems, to get quality right the first time. It reduces
defects, rework and scraps.
• Heijunka – smoothing out the volume and mix of items generated so there is little fluctuation in
delivering customer orders.
• Standardize Work – foundation for continuous improvement and employee empowerment.
• Visual Management– communication devices are used to tell us in a glance how
work should be and if it deviates from the standard.
Concept of Lean Framework
Why Lean?

• Lean uses less of everything compared with mass

production
• Half the human effort in the factory,
• Half the manufacturing floor space,
• Half the investment in tools,
• Half the engineering hours to develop a new product

• Lean also requires keeping far less than half the needed
inventory on site and results in fewer defects.
(Womack, et al., 1990. p. 256)
Lean Concepts
– Voice Of the Customer (VOC)
– Critical Customer Requirements (CCR)
– Critical To Quality (CTQ)
– Critical To Process (CTP)
– Value Stream Mapping (VSM)
– Six Sigma
– Lean Six Sigma
– DMAIC for Process Improvement
Voice Of the Customer (VOC)

• VOC is customers feedback about their experiences with and

expectations for the products or services.
• VOC focuses on customer’s needs, expectations, understandings,
and product improvement.
• Individuals or organisations that receive an output (product or
service) from the processes or work activities.

• Examples: Surveys, interviews, reviews, social media, etc.

• Customers can be segregated into two main groups:

Internal External
Customers Customers

Colleagues or departments within Usually involving monetary payments

your organisation

Voice of the Customer

Critical Customer Requirements (CCR)

CCR is the specific, precise and measurable expectations which a

customer has regarding a product or service.

• Important to the customer – “customer cares about it”

• Specifies a requirement
• “Must have” or a “Must be” attributes
• Ultimately satisfy the customer
• Potentially delight
• Can be measured
• Establish a target
• Customer specifications
• Acceptable range of performance

Example: Mower starts within two pulls of the cord

Critical Customer Requirement

Critical To Quality (CTQ)

• CTQ is an appropriate measure / indicator that is

identified to track the achievement of the CCRs.

• CTQ is a metric that is felt externally by the customer.

• CTQ characteristics are product, service or transactional

characteristics that significantly influence the CCRs.

Examples:
• Customer wants Carbon dioxide gas emission to be less
than < 20%.
• Customer wants annual car service to be done within 1
hour.
Critical to Quality
Critical To Process (CTP)

• CTPs are process parameters that significantly

influence the critical to quality (CTQ).

• CTP is a metric that is felt internally by the business.

Examples:
• Cost per unit
• Productivity
• Compliance with regulation
• Changeover time
• Safety certification

Critical To
Value Stream Mapping (VSM)

• VSM is a tool that helps you see the flow of material and
information as a product makes its way through the value
stream.
• It serves as a blue-print for lean implementation.
• Process flow charting is one of the 7 quality tools of
Deming.

• VSM requires:
• The team to observe the process in person
• Finds value and waste in any process
• The value as defined by the customer
• The customer will only pay for value but not for waste.
Value Stream Mapping (VSM)
• VSM is a process for measuring value.
• Time is the most common measure in VSM
• Process time including
– Cycle time of tasks
– Time paperwork sits without activity
– Any other time to account from start to the end of the process
(including wait time)

• Other common process information includes:

– Uptime of process
– Time available for step
– Frequency of processing
– Number of inputs required before step can complete.

Value Stream Mapping

Value Analysis

Customer - Value Add

An activity can be described as adding value for
the customer only if:
• The customer recognises the value
• It changes the product toward something
the
customer expects
• It is done right, the first time
Value
Customer – Non-Value Add

Operational - Value Add Non-Value Add

An activity adds operational value - Transporting
It is not a customer value added activity and is: - Counting the amount of work
- Inspection and checking
• Required to sustain the workplace - Sorting work
ability to perform customer value - Overproduction
added activities - Checking calculations
• Required by contract or other laws - Reviewing and approving
and regulation - Moving and set-up
• Required for health & safety matters - Monitoring work
• Done right, the first time - Stamping
- Any type of rework

Value Stream Mapping

Value Analysis
Customer - Value Add
An activity can be described as adding
value for the customer only if:
• The customer recognises the value
• It changes the product toward
something the customer expects
• It is done right, the first time

Value Stream Mapping

 Customer – Non-Value Add
Value Analysis
Operational - Value Add Non-Value Add
An activity adds operational value - Transporting
It is not a customer value added activity - Counting the amount of
and is: work
- Inspection and checking
• Required to sustain the workplace - Sorting work
Value - Overproduction
ability to perform customer value - Checking calculations
added activities - Reviewing and
• Required by contract or other laws approving
and regulation - Moving and set-up
• Required for health & safety - Monitoring work
- Stamping
matters -Any type of rework
• Done right the first time

Value Stream Mapping

The ‘5 Whys' in Toyota Production System (TPS)
“The basis of Toyota’s scientific approach is to ask why, 5
times, whenever we find a problem … By repeating why, 5
times, the nature of the problem as well as its solution
becomes clear.“ Taiichi Ohno
What is Six Sigma?
• Six Sigma is a set of tools and techniques for process
improvement.
• A quality management methodology used to help
businesses improve current processes, products or
services by discovering and eliminating defects.
• First introduced by Motorola in 1986.
• Brings down the defects to 3.4 errors per million
opportunities
• Is a scientific method used for process improvement:
• Waste reduction
• Quality improvement

Six Sigma Processes

Six Sigma Framework
1. Metric
• A measure of “goodness”, using a
universal measurement scale.
• Defects Per Million Opportunities
(DPMO)
Sigma Level DPMO Yield (%)

1 690,000 30.85
2 308,000 69.15
3 66,800 93.32
4 6,310 99.38
5 230 99.977%
6 3.4 99.99966%

Lean Six Sigma Processes

What is a Defect?

Lean Six Sigma Processes

Six Sigma Framework

2. Methodology
• An overall methodology that drives business
improvement
• A proven tool set to achieve organisational
transformational change
• A business improvement process that
focusses on:
• Customer requirements
• Process alignment
• Analytical rigor (data driven)
• Timely execution

Lean Six Sigma Processes

Six Sigma Framework

3. Management System
A top-down solution designed to help organisations:
• Align – link their strategy to Six Sigma efforts
• Mobilise – organise project teams and deliver
products JIT (just-in-time)
• Accelerate – apply action learning principles and
manage timely execution
• Govern – apply management processes to ensure
sustainable results

Lean Six Sigma Processes

How do the following statistics make
you feel?
Integration of Lean and Six Sigma
Lean Six Sigma is a business strategy that:
• adopts lean concepts and tools to
• reduce lead time, create value, increase flow and proficiencies in all
processes.
• minimise variations, improve quality, cost and delivery of the final
product or service to the customer.

Lean Six Sigma Six Sigma

Define Measure
Plan Do Control Define
Reduce Variation
Reduce Waste

Control Flow Focused Analyse Quality Focused

Act Check Improve Measure

Improve Analyse

Lean Six Sigma Processes

The “Fruits” of Lean Six Sigma

Lean Six Sigma Processes

DMAIC for Process Improvement
Define, Measure, Analyse, Improve & Control
Define: What is important?
What are the opportunities for
improvement that will achieve the organisation’s goals and
provide the largest payoff?
Measure: How are we
Control: How do we doing?
guarantee performance? What is our current
performance level (Sigma
How do we maintain the level)?
gains we have achieved?

Analyse: What is wrong?

What are the true root causes
for gaps or problems in
Improve: What needs to be done?
performance?
What are the possible solutions and
how do we implement the best
solutions?

Lean Six Sigma Processes

DMAIC Cycle

• SIPOC (Supplier, Input, Process, Output, Customer), a Six Sigma tool, used to map
business process from beginning to end at a high level before the work begins.

• FMEA (Failure Modes & Effects Analysis), a Six Sigma tool, for identifying potential
problems/failures and their impact on customer.
DMAIC for Process Improvement
Define: What is important?
What are the opportunities for improvement that will achieve the organisation’s
goals and provide the largest payoff?

1 Identify / validate business improvement opportunities

2 Define customer requirements

3 Develop project team charter

4 Map and understand current process at a high level

5 Conduct value analysis and Identify quick wins

Lean Six Sigma Processes

DMAIC for Process Improvement
Measure: How are we doing?
What is our current performance level (Sigma level)?

1 Determine what to measure

2 Manage measurement process

3 Understand Lean Six Sigma Metrics

4 Evaluate measurement systems

5 Determine baseline performance

Lean Six Sigma Processes

DMAIC for process improvement
Analyse: What is wrong ?
What are the true root causes for gaps or problems in performance?

1 Identify process constraints and bottlenecks

2 Identify potential root causes and sources of variations

3 Conduct failure mode effect analysis (FMEA)

4 Validate root causes using statistical methods

5 Conduct correlation and regression analysis

Lean Six Sigma Processes

DMAIC for Process Improvement
Improve: What needs to be done?
What are the possible solutions and how do we implement the best solutions?

1 Apply Lean Six Sigma best practices

2 Generate, evaluate and select solutions

3 Develop To-be process

4 Pilot selected solutions

Lean Six Sigma Processes

DMAIC for Process Improvement
Control: How do we guarantee performance?
How do we maintain the gains we have achieved?

1 Establish process control systems

2 Implement statistical process control

3 Institutionalise improved process

Lean Six Sigma Processes

Who are the Key Players in Lean 6-Sigma?
Week 1 - Summary
• Unit overview
• Assessments
• What is Lean?
• History of Lean
• House of Lean
• Why Lean?
• Lean concepts
• What is Six Sigma?
• Lean Six Sigma
 End of Week 1

See you in Week 2

Remember to do your readings!

End