Transportation Define

Inventory
Motion Control Measure
Waiting
Overproduction
Improve Analyze
Overprocessing
Defects
Skills
Business process optimization
with Lean Six Sigma
In this course:
• What is a process. Process optimization cycle
• How to understand needs of process customers and how to
measure them
• How to visualize your process and measure it
• Which steps are adding value and which are waste
• How to perform root cause analysis
• Strategies for process improvement
• Launching continuous improvement
What is a process. Process
approach and process
optimization cycle
Process is..
..a set of interrelated work activities that transform inputs into outputs

• The output is a result of a process, it can be product or service which you offer
to your client
• The process may occur only once or be recurrent, or periodic
 Examples of a process

Changing flat tire on a car Issuing a credit card Getting children ready for
school every
morning

Foto by Andrea Piacquadio: https://www.pexels.com/ru-ru/photo/3806249/ Foto: RDNE Stock project: https://www.pexels.com/ru-ru/photo/7821717/ Foto: Oleksandr P: https://www.pexels.com/ru-ru/photo/2781814/
 Process approach
ISO Quality management principle #4:

Consistent and predictable results are

achieved more effectively and
efficiently when activities are
understood and managed as
interrelated processes that function as
a coherent system.

https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100080.pdf Foto by Andrea Piacquadio: https://www.pe

Process optimization cycle: DMAIC
Sequence which you need when optimizing processes

Define

Control Measure

Improve Analyze
DMAIC

Define You define what are you going to improve, who will benefit from this improvement,
and what would be improvement targets

You are going to gather 360 information about the process – data which reflects
Measure process performance, quality incidents, number of reworks. Also, you will
visualize your process using ValueStreamMap

Analyze You will go in details of the problems and find root causes
DMAIC

You will find solutions which will fix the problem and pilot them. Here is there the
Improve magic is happening.- After the pilot you can modify your solutions and
implement on a larger scale

You start monitoring performance of the improved process, create dashboards, build
Control response protocols. Here is where continuous improvement starts- once you see that
process constantly doesn’t meet expectations, you might want to start next phase of
optimization cycle

Define
Practice
• List 5 processes which you see in your daily life.
• Who is the client of the process?
• Do you think the process performs well?
• How can you measure these processes?
 Process Diagnostics: process
structure, customer needs, main
process metrics
SIPOC
Supplier Input Process Output Customer
 SIPOC: Pizza delivery
S I P O C
Delivery address Courier
Google/App store Mobile app
Create order Time of delivery Application
Restaurant Menu
Type of pizza, quantity Chef

Delivery address
Customer Restaurant address Order is assigned to a Courier
Application Time of delivery
Find a courier courier
Couriers locations

Application Type of pizza, quantity

Cook pizza Pizza is ready Dispatch coordinator
Restaurant Ingredients

Chef Hot pizza

Packed pizza
Restaurant Carton Pack pizza Courier
Order info applied
Application Order details

Dispatch coordinator Packed pizza

Pizza delivered Customer
Application Route details Deliver pizza
 Collecting Voice of the Customer

Desk research

Formal feedback
analysis

Online Survey Interview with clients

Foto: SHVETS production: https://www.pexels.com/ru-ru/photo/7176320/

 Foto: RDNE Stock project: https://www.pexels.com/ru-ru/photo/7363125/
CTQ Tree: pizza delivery
What is important for you when you order
pizza?

Fast delivery 60 km/h ?

What does ‘fast’ mean for you?

Something about half an hour 25-35 minutes ?

And what does ‘about half an hour’ mean?

Well, from the moment I’ve made an order

I don’t want t wait more than 30-40
minutes. And I don’t want pizza to be Min 30 minutes,
delivered faster, because I usually make an Max 40 minutes
order when I leave office and it takes me
30 minutes to get home
CTQ Tree
• 1. Ask the client a question about Good
service
your product/service
?
Good
• 2. Ask the client question ‘what does Fast
quality
it mean for you?’ ?
?
No waiting …..
• 3. Repeat as many times as needed, in queue

until you get to something specific ?

and measurable No more than 2
people in front
of me
Process metrics and key performance indicators
Financial Operational Client

Process cost Cycle time Net Promoter Score

Cost of one unit Number of units Number of claims
Net profit produced ….
… Takt time
Quality rate
Downtime
…
 Foto: Polina Tankilevitch: https://www.pexels.com/ru-ru/photo/4109137/
Formulating goal statement
Key parts of goal statement: Examples:

In 3 months, reduce average

• process which needs to be pizza delivery time from 58 to
improved 40 minutes.
• key process metric
• it’s starting and ending points
Reduce percentage of claims
• expected time for on pizza delivery from 5% to
improvement 1% by December’2023.
Practice
• Select a process from your daily routine- for example, making coffee.
• Draft a SIPOC for this process
• Define 3-5 metrics to track for this process
 Getting to know and
visualizing the process
Sources for understanding process (1)

The way process is described

Read documents:
Standard Operating
procedures
Manuals
Instructions The way process looks in reality
Audit reports
Sources for understanding process (2)

Gemba:
Go to the place where process is
happening
Watch
Listen
Ask Questions
Try yourself
Process data
Data collection plan
Data to be Operational definition How data is collected Period/Sample size
collected
Delivery time Time from the moment Automatically, from All data from
order is created in the the ‘Status’ table, by 1/09/2023 to
system till the moment subtracting time of 21/09/2023
the order is delivered. the status ‘created’
Measured in minutes from time of the
status ‘delivered’
…. …. …. …
…. …. …. …
…. …. …. …
Process data analysis
1. Select metrics which you need to
analyze
2. Define period which is relevant
for analysis (e.g. take into
account seasonality of work in
shifts) https://www.minitab.com/en-us/products/minitab/
3. Plot data over time and look for
trend and uncommon data
behavior.
4. Calculate mean, median,
estimate variation, define
outliers, try to find correlation
5. Compare actual metrics with
expected values

https://combined-transport.eu/process-mining-celonis-digital-transformation
Value stream map
Gather people from different functions in one

Function 1
place Perform
Start Perform Perform
Activity 1 Activity 2 Activity 3
Ask them to describe what they do in
2 min 3 min
chronological order

Function 2
Use ‘verb-noun’ type of phrase t0 write it on
the post-it or digital board Perform Perform Perfo
Activity 11 Activity 12 Activi
5 min 1 min
Use ‘swimlanes’

Function 3
Select needed level of details – stay high level Perfo
Activ
in case the step is not important, reflect more
detailed steps for problematic cases
Practice
• Create a value stream map for a selected process
• What are the things you didn’t know about the process you have
discovered?
Concept of value-added
activities and waste
Types of activities in the process

Value added Necessary Waste

Types of activities in the process

Value added:

Change the nature of the product or

service in a way that customer is
willing to pay for
Types of activities in the process

Necessary activities:

Activities required to keep the

business running, but which are not
adding value
Types of activities in the process

Waste
Types of activities in the process

Value added Necessary Waste

Types of Waste (1)

Inventory Overprocessing

Keeping more things at Adding more features

stock than minimally to the product than
required required by the client

Overproduction
Production of more
items than needed
Types of waste (2)

Defects

Nonfulfillment of intendent
requirements or reasonable
expectation
 Types of waste (3)

Motion Waiting
Unnecessary movement Doing nothing/idle objects
done by people involved waiting for their turn

Transportation
Movement of products or
information without
adding value to client
Type of waste (4)

Talent
misuse

Inconsistency of persons
skills and type of work he is
supposed to do
TIM WOODS
Transportation
Inventory
Motion
Waiting
Overproduction
Overprocessing
Defects
Skills
Practice
• Select a process from your daily life
• Find value added steps and waste
• What is the percentage of waste in your process?
Performing root cause
analysis
 5 Whys
Situation: your kid is late to school
Why you were late to school?
Ask “Why?” Because when I walked out a rain started
repeatedly 5 times Why did the rain slow you down?
until you get to the Because I had to come back home and
change my shoes
true root cause Why didn’t you put the right
shoes from the beginning?
Because I didn’t know it’s going to rain

Why didn’t you check the forecast before going out?

Because I ran out of gigabytes on my phone

Why didn’t you run out of gigabytes?

Foto: Katerina Holmes: https://www.pexels.com/ru- Because I was watching videos on my mobile

ru/photo/5905510/
 5 Whys: monument disintegration
Situation: monument is disintegrating
1. Why it was happening?
Because they had to use a lot of chemicals to clean it.

2. Why did they have to use a lot of chemicals?

Because there was a lot of birds' droppings on it.

3. Why there was a lot of birds’ droppings?

Because there is a lot of food for birds around.

4. Why there is a lot of birds’ food around?

Because there are a lot of insects around the monument

5. Why there are a lot of insects around?

Because they are attracted by the lighting of
the monument at dusk time.

Solution: Switch on the lights later,

Image: Freepik.com when birds already sleep
5 whys: template and remarks
Problem 1 Why 2 Why 3 Why 4 Why 5 Why Solution

Validate root
causes with data

Problem 1 Problem 2 Problem

Root Root Root

Cause Cause 1 Cause 2
Ishikawa diagram

1. Formulate Problem
Category 1
statement
Category 5
Category 3 2. Define categories to
get 360 view of your
Problem problem
statement 3. Brainstorm reasons
of the problem from
Category 4 the categories you
Category 6
selected
Category 2
4. Apply ‘5
Whys’
Categories for Ishikawa diagram: 6M

Material Machinery Manpower

Problem
statement

Mother nature Measurement Method

Ishikawa diagram: late pizza delivery
Manpower

No support of
Competition on the
different languages
delivery market
Typo in
Lack of
address
No integration with
couriers
directory

Delivery is
late
 Ishikawa diagram: late pizza delivery
Mother nature Manpower

Increase Traffic jam

of orders No support of
Competition on the
Lack of different languages
delivery market
couriers
Typo in
Lack of
Heavy address
No integration with
couriers
rain directory
Traffic jam
Delivery is
late
Ishikawa diagram: late pizza delivery

Methods Mother nature Manpower

Late pizza
delivery

Material Measurement Machines

Analyze phase conclusions
• Use 5WHYs to find true root cause

• Get 360 view of your problem with diagram

• Verify root causes with data

Strategies for process
improvement
Common process improvement approaches

• Automation
• Robotization
• Outsourcing
• Insourcing
• Centralization
• Decentralization
• ….

Apply Lean first!

Poka-yoke
Design a process in a
way there is only one
(correct) way to
complete it

Easy to find and

correct a defect

Foto: Karolina Grabowska: https://www.pexels.com/photo/usb-5882581/ Foto: Tim Samuel: https://www.pexels.com/photo/5834960/

One piece flow
Minimize a size of a batch for passing it from one step to
the other
Batch of 5:
Cycle time = 40 days

One piece flow:

Cycle time = 28 days.
30% faster!
5S

Sort Remove all that is not necessary for work

Each object needed for work has its own place

Set in order
Everything is clean, functional and ready to use
Shine
Standardize Setting standard of how the work should be
performed in most efficient way

Making sure previous 4S are in place and

Sustain standards are followed
5S: Examples

Picture source: www.compliancesigns.com/

Brainstorming
1) Gather a diverse team of experts

Foto: https://www.pexels.com/photo/3184296/
2) State the problem clearly and write it down

3) Agree on rules:
no criticism
any idea is welcome, the more the
better
4) Start facilitating:
energize team
control rules
control that all ideas are
captured
 Prioritization of solutions
High Problem Root cause Solution Priority
Impact on a problem

Low

Easy Implementation Hard

To-be process map

As-Is process map:

To-Be process map:

 Pilot

Smaller scale
Mock-ups
Assess feasibility and capability
Quick feedback from the Client
Compare performance

Foto: cottonbro studio:

https://www.pexels.com/ru-ru/photo/4972948/
Process improvement plan

Classical Agile
Practice
Find good processes around you. Explain why they
are good - what are the concepts from this course
you can see implemented in those processes? Is
there something else which can be improved?
Launching continuous
improvement
 Process dashboard
Track performance of your process using data

https://colorlib.com/wp/free-dashboard-templates/
 Reaction plan
Process Threshold Action if Links to Key
metric breached protocols contacts Common response strategies:
Continue as is, but with close monitoring

Involve manual execution

Follow special instructions

Stop, repair, resume

Stop and escalate

COMMUNICATE!
Foto: Mikhail Nilov: https://www.pexels.com/ru-
ru/photo/7682340/
Process owner
A role responsible for the end‐to‐end execution of
business processes against performance
expectations and ultimately the delivery of value to
customer
Ensures alignment with strategic objectives of the organization
Ensures that clients needs are known and business process design
meets expectations within organizational context
Serves as point of contact for process‐related questions
Ensures understanding of how people and systems are engaged to
support process execution
Monitor and report process performance data
Proposes a corrective course of action if needed and leads a team to
assess, prioritize, and implement requests for process change
Escalates instances of significant process performance breaches
Collaborates with other Process Owners and Stakeholders to ensure
alignment within organization
Process review
Participants: process owner ,
key stakeholders and functional
leaders

Cadence: monthly or quarterly

Goal: review process

performance, discuss changing
clients needs and context of the
organization, align on process
changes

Foto: Mikael Blomkvist: https://www.pexels.com/photo/6476254/

Continuous improvement
Process
dashboard

Reaction
plan

Process
owner

Process
reviews
Key elements of process optimization
• Engage with process’ customer to get their expectations
• Define problem, goal and process which you will be optimizing
• Collect and analyze key process metrics
• Visualize your process with Value Stream Map
• Find Value adding steps and Waste
• Understand root causes of the problems
• Brainstorm solutions which would fix those root causes
• Create a process improvement plan and run a pilot before full-scale implementation
• Update process dashboard for the new process, nominate Process owner, organize
regular process reviews and ensure there is reaction plan in place
Good luck with process
optimization journey!