Lean 6 Sigma

A best practice is a technique, method, process, activity, incentive, or reward that is believed to be more effective at delivering a particular outcome than any other technique, method, process, etc. when applied to a particular condition or circumstance. The idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications. Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people.

A given best practice is only applicable to particular condition or circumstance and may have to be modified or adapted for similar circumstances. In addition, a “best” practice can evolve to become better as 6 Sigma improvements are discovered.

Despite the need to improve on processes as the environment changes, best-practice is considered by some as a business buzzword used to describe the process of developing and following a standard way of doing things that multiple organizations can use for management, policy, and especially software systems.

As the term has become more popular, some organizations have begun using the term “best practices” to refer to what are in fact merely ‘rules’, causing a linguistic drift in which a new term such as “good ideas” is needed to refer to what would previously have been called “best practices.”

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What is a Lesson Learned?

The structure
At its simplest form, a lesson learned is a statement with this type of structure
Ideally it will have third part to it, describing the context

The same kind of simple logic statements should be found in a well designed Logical Framework description of a project design: If these Outputs are delivered, and these Assumptions are correct, then these Outcomes will happen? While in the Logical Framework this type statement describes a plan,
a Lessons Learned statement should describe what actually happened.  where evaluations try to identify and test hypotheses about significant combinations of context, mechanism, and outcome .
In its more complex form, a Lesson Learned could be told in the form of a story, which describes the context, what happened there and what were the consequences. Lessons learned told via stories are likely to be remembered, and passed on.

But lessons learned can also be summarised in the form of a headline, which seeks to capture the story. These can aid remembrance of a lesson but are often at the cost of contextual information. Presence of Field Office staff leads to reduction in project conditionalities. It was a headline for a proposed lessons learned within the African Development Bank, in the context of an organisation-wide a decentralisation initiative.   The headline has an structure, but no information about the context.

Some criteria for good Lessons Learned

1. Based on experience
The U.S. Army’s Center for Army Lessons Learned (CALL) describes lessons learned as Knowledge gained through experience, which if shared, would benefit the work of others.
Other definitions also capture the necessity for the lesson learned to be based on experience:
a)    A Lesson Learned is knowledge and experience positive or negative derived from actual incidents
b)    A lessons learned is knowledge or understanding gained by experience
And the inverse:  A lesson is not simply restating or paraphrasing existing doctrine, policy, process, etc.
This does not qualify as an appropriate and bona fide lessons learned.

2. Makes a difference
Lessons learned are knowledge derived from the implementation and evaluation of a program that can be used to identify strengths and weaknesses of program design and implementation. This information is likely to be helpful in modifying and improving program functions in the future.
3. Useful to others
Knowledge gained through experience, which if shared, would benefit the work of others?

Others or me, the result of a Lessons-Learned Session (LLS) must be something that is ACTIONABLE and USEFUL for the next person who will perform the same or similar activity or project.

4. Have wide but not universal applicability
Lessons Learned is learning from experience that is applicable to a generic situation, not just to a specific situation. Generalizations based on evaluation experiences with projects, programs, or policies that abstract from the specific circumstances to broader situations. Frequently, lessons highlight strengths or weaknesses in preparation, design, and implementation that affect performance, outcome, and impact  (OECD-DAC) Lessons Learned are not the same as recommendations. Recommendations usually refer to very specific situations. On the other hand, statements about morality or physical laws usually more claim more universal applicability.  A good Lessons Learned statement will describe where it is most applicable i.e. in what contexts.

5. Are verifiable.
Not only are they based on experience, but there is enough information provided to enable someone else to check the facts and to see if the interpretation of the experience is plausible. At the very least, the author of the Lessons Learned statement should be identified.
In Michael Quinn Patton Utilization Focused Evaluations (4th ed) he defines high-quality lessons learned as ‘triangulated knowledge confirmed from multiple sources that can be applied to future action’ This is very close to how some would define est Practices.
Learning from other peoples experiences of identifying sessons learned?

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Uses 6 Sigma To Be Sure Tech Managers Are Ready To Step Up

Cummins CIO Farnsley applies process improvement method to identifying and developing the manufacturer’s IT management talent.
When it comes to having talent queued up to advance when top spots open, most IT departments don’t have deep benches, especially in the area of management skills. Cummins CIO Gail Farnsley realized that, for her fast-growing, multibillion-dollar manufacturing company, not having that deep bench of IT talent was a problem. Cummins was looking outside the company for IT managers, while potential candidates were languishing within.

Farnsley decided to bring her training in 6 Sigma methodology (she’s a midlevel Green Belt) to the task of identifying and developing employees with potential to move into IT management, particularly the eight business-unit tech manager positions that report to her. It wasn’t a clean fit. “It’s not a perfect 6 Sigma project,” she says, mostly because management skills are hard to quantify.

Farnsley has realized what too many IT managers haven’t: What makes a good IT manager has changed, and IT departments aren’t preparing people for the new demands. “It’s more than an execution job,” she says. An IT manager today has to be a business partner and has to have international, compliance, and even 6 Sigma experience. “We weren’t pushing our people to have those skills,” she says.

Farnsley began the project with a “voice of the customer” survey, asking business-unit heads about the strengths and weaknesses of the IT division. Then she ranked and prioritized the qualities of a future IT leader.

One area Farnsley identified was that IT management candidates need experience in non-IT roles. So she’s working with HR to identify jobs an IT person could do for a couple of years, in marketing or manufacturing, for example.

Farnsley’s goal isn’t just to identify high-potential candidates, but to track how many of them actually make it to leadership positions. The end goal is simple: “The next time we have a [business unit] position open, we have a person internal to fill it,” she says.

Farnsley should finish the project next month. Then she’ll present it to the IT leadership team, HR, and the company’s functional leader group, which includes the heads of manufacturing, marketing, and sales, as well as Farnsley herself.

The question that kicked off the project was this: “Do we have the right leaders in place to meet our growth challenge?”
Farnsley hopes to be able to answer that soon in the affirmative.

Q&A With Gail Farnsley
Information Week: How did your 6 Sigma IT leadership project come about?

Farnsley: We were looking at where the company’s heading in terms of growth, and we wondered, do we have the right leaders in place to meet that growth challenge? Also, in the last 6 or 7 years, the demographics of IT leaders have changed. And we were looking outside the company for IT managers, which isn’t a good thing. We weren’t developing our people internally.

IW: What IT management jobs were you concerned about?

Farnsley: Business unit IT leaders-they don’t have the CIO title. These business units are significant entities in themselves. The largest business unit has a capital budget $30 million and an expense budget of $70 million.

IW: What problems in the HR process were you trying to address?

Farnsley: We wanted to use the company’s Organizational Development Review process. At Cummins everyone has an individual development plan. On the form it might say they need international experience, or whatever the thing is. If it was left up to the manger to talk to the person about it, it didn’t happen. We wanted to come out of the ODR process matching those needs to specific jobs.

IW: What kind of jobs would provide good experience for potential IT leaders?

Farnsley: In Asia, we have an IT leader for our shared services. Also we have an area business leader who coordinates IT in Asia. Those are good developmental roles. They provide line-of-business experience versus project experience, and also international experience.

IW: How will the 6 Sigma project help that?

Farnsley: We might identify four jobs that would be ideal, but none are available now. Why? If these are the key
development jobs, do we have people in those jobs who are blockers, not high potential employees? Now we hope to have a much more strict business process management.

IW: What other benefits do you see?

Farnsley: I was concerned that we were creating a big divide between IT and the business. So that when you need someone to lead a big business initiative, the IT managers aren’t being considered. They are just IT people. That’s why we’re looking to develop leadership skills, business partnership skills. You can get by in IT if those aren’t you’re strongest things, but it’s getting harder. You can be a really good project manager, but if you’re not viewed with coming up with innovative initiatives for the company, you won’t advance

Time is money. This axiom never truer than during rocky financial periods when the pressure to produce swift revenue results from any investment intensifies. In boom years and recessions alike, IT is expected to facilitate business efficiencies and innovations that yield significant cost reductions and increase profits. But during a downturn, many companies tighten or freeze budgets, expecting IT to do even more with less.

This approach could be a critical error, locking IT into an existing environment that consumes as much as 80 percent of the budget in maintenance costs and reactive fire-fighting. Instead, targeted investments in new technologies and operational disciplines such as Lean 6 Sigma, which aims to achieve results in a short time frame by eliminating process inefficiency and focusing only on activities that increase the value of the final product, can deliver significantly higher returns than simple cost cutting in tough economic times. LSS principles and practices, particularly when combined with BPM technologies and modular service-oriented architectures (SOA), offer at minimum the foundation for greatly increased operational efficiency and flexibility.

Where should an organization start? First, apply lean sigma methodology to IT operations to free up technical resources.
Lean sigma concentrates on removing process waste and smoothing workflows. Waste can be found throughout IT, much of it driven by interactions with the business process management system.

McKinsey & Company research finds organizations can cut application development and maintenance costs by as much as 40 percent through Lean 6 Sigma by identifying waste in the form of unnecessary functionality, changes in requirements during development, ineffective prioritization of maintenance requests, incomplete information, bug fixing and rework, and maintenance backlogs with many partially completed requests.

Next, businesses should invest in Business Process Management techniques and use Lean 6 Sigma methodology to guide project selection and accelerate ROI. A robust Business Process Management platform includes process modeling, real-time monitoring, integration, human workflow, and business management system rules capabilities along with repositories to store key assets and support governance and reuse.

Business and IT leaders need to then walk through both the organization’s core and its key supporting processes to determine how they can apply Business Process Management methodology to improve operational efficiency. Business and IT executives should identify Key Performance Indicators(KPI) to measure end-to-end performance, with particular attention given to measures in which the process crosses organizational boundaries because that’s where breakdowns often happen.

During this evaluation it’s important for IT to look at the needs of the external customer to determine where they can implement improvements that will satisfy these requirements, looking for opportunities to incorporate continuous change into processes to both respond to events and to differentiate the business in the eyes of the customer. Business rules and policies that are controlled by business users allow the company to change and dynamically assemble its processes more easily.

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6 Sigma for Business Management—What you need to know:

Delivering and supporting IT services is not enough to make IT a driver of business value. As IT increasingly plays an integral part in the business process management, it must consider new approaches to improve service quality and business process efficiency to become more aligned and integrated with business management objectives.

But how?

IT best practices like ITIL v3 (Information Technology Infrastructure Library) introduce Continual Service Improvement for service management. And, quality methods like 6 Sigma bring a business process focus to IT. In combination, they add a quality layer to ITSM (IT Service Management).

This series of articles will focus on what 6 Sigma is, how 6 Sigma techniques bring business process focus to business organization and how 6 Sigma complements ITIL v3.
 

What is Lean 6 Sigma?

Lean 6 Sigma is a business process driven quality improvement method that enables organizations to streamline business processes by reducing the number of nonconformance that 1) impact customers and 2) increase costs. The sigma measures, represents the standard deviation, indicating the amount of variation or inconsistency in a business process. The target for quality equates to 6 standard deviations or Sigma 6 from the mean— 6 sigma —by which the variation from a business process is reduced to no more than 3.4 defects per million opportunities (DPMO).

According to Quality America, a bank operating at three sigma for instance would correspond to 270 million erroneous credit card transactions recorded per year in the United States and 54,000 checks lost each night. It is numbers like this that get the attention of C-level business executives to turn to 6 Sigma quality solutions for business process transformation.

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6 Sigma is a quality management program to achieve “6 sigma” levels of quality.

6 Sigma is a highly disciplined process that helps to focus on developing and delivering near-perfect products and services.
Why “Sigma”? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind 6 Sigma is that if you can measure how many “defects” you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible.

To achieve 6 Sigma quality, a process must produce no more than 3.4 defects (defect=failing to deliver what the customer wants) per million opportunities. An “opportunity” is defined as a chance for nonconformance, or not meeting the required specifications. 6 Sigma focuses first on reducing process variation and then on improving the process capability (process capability=what your process can deliver).

6 Sigma was pioneered at Motorola in the mid-1980s by Bob Galvin, who succeeded his father and Motorola founder, Paul Galvin, as head of the company, and by Motorola engineer Bill Smith. It has since spread to many other manufacturing companies, including Ford, GE, Honeywell, Raytheon, Seagate Technology, and Microsoft. However, it can be applied wherever the control of variation is desired. In recent years, it has begun to branch out into the service industry, and in 2000, Fort Wayne, Indiana became the first city to implement the program in a city government. Some, claiming that 6 Sigma impact has not
yet been fully realized, advocate an open source approach so that the principles of 6 Sigma might be more widely adopted.
Why 6 standard deviation?
According to the graph of the standard normal distribution, only two billionths of the normal curve falls beyond 6 standard deviations, in contrast to the value of 3.4 millionths publicized by 6 Sigma promoters. Confusingly, that value corresponds to precision within 4.5 standard deviations, reflecting a 1.5 standard deviation “shift”. Introduced by Mikey Harry around 1980, its magnitude was based on observations and personal experience, not empirical data.
It is used to account for model inaccuracies, since defects in manufacturing processes do not always correspond to the normal distribution. Instead, processes tend to “drift” with time, causing the majority of error to fall on one side of the normal distribution and as a result, a higher defect rate than 3.4 DPMO if no shift were used. With 6 Sigma methodology, however, if the process drifts by 1.5 standard deviations, the level of quality will remain within 3.4 DPMO.

However, the 1.5 sigma shift assumption is not without its critics. Donald J. Wheeler, a respected quality professional, labels it “goofy”, arguing that it is misapplied in practice and that it is probably inaccurate anyway. Often, implementers of 6 Sigma simply add 1.5 “sigmas” to their sigma calculation, transforming a 4.5 sigma process (3.4 DPMO) into a 6.0 sigma process. But this reflects a misunderstanding of the nature of the shift. If short-term data is used (data that does not reflect potential process drift), 1.5 sigmas should be subtracted from the final sigma calculation to account for the potential drift. Thus, achieving 3.4 DPMO using short term data reflects a three sigma process, not 6 sigma, when used to reflect the long-term failure rate. Alternatively, if long-term data is used to make the sigma calculations, the process drift will have already been accounted for, and no additions or subtractions to the sigma calculation are necessary.

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