Lean Six Sigma Initiative

DALLAS Center for Performance Excellence (CPE) Setting New Standards for Local Government City Council Briefing Wednesday, January 7, 2015

Lean Six Sigma: A Component of the CPE RELATIONSHIP TO CPE

City Manager Public-Private Advisory Board

Collaborative Direct

Assistant City Manager

City University

Lean Six Sigma Working Group Strategic Planning/Business Planning/Performance Metrics/Baldrige Framework

DALLAS Center for Performance Excellence

Quality Management Systems

Department Professional Accreditations EMS ISO 14001 & OHSAS 18001

(ISO9001) Internal/ External Communication Plans

Sunset Reviews

Auditor’s Standards Integration

Strategic Partners

Continuity of Operations Plans (COOP)

Comprehensive Planning

Business Intelligence/ Performance Analytics/311

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Lean Six Sigma: What is it? A combination of two disciplined, data-driven approaches and methodologies for improving performance: • Lean Enterprise: Developed by Toyota Motor Company as the Toyota Production System in the 1950’s

• Six Sigma: Developed by Motorola in the 1980’s

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Sampling of Organizations Utilizing Lean and/or Six Sigma to Improve Performance • • • • • • • • • • • • • • •

3M Accenture Alcoa Toyota Allied Signal Amazon Amerimax Apple Bank of America Bayer Bell Helicopter Boeing Capital One Caterpillar Citicorp Coca Cola

• • • • • • • • • • • • • • •

Dell Dr. Pepper Home Depot Honda Ford Motor Company Fujitsu General Electric Motorola Northrop Grumman Raytheon Starwood Hotels & Resorts Sony Texas Instruments United States Marine Corps Xerox 4

Focus Comparison Lean – focuses on dramatically improving flow in the value stream and eliminating waste Specify Value

Understand Demand

Flow

Level

Perfection

Improved efficiency and speed

Six Sigma – focuses on eliminating undesired results and reducing variation in processes Define

Measure

Analyze

Improve

Control

Improved effectiveness

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Process Comparison

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Six Sigma: Statistically Visualized

Source: 7

Achieving Six Sigma A statistical representation Sigma Level 1 2 3 4 5 6

DPMO 691,462 308,538 66,807 6,210 233 3.4

% Defective 69% 31% 6.7% .62% .023% .00034%

% Yield 31% 69% 93.3% 99.38% 99.977% 99.99966%

In other words, a measure of quality that strives for near zero defects.

*Defects per million opportunities

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Six Sigma: 8 Areas of Waste

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Sampling - Lean Six Sigma Analysis Methods Descriptive Statistics Pareto Charts Graphing Regression Analysis Capability Analysis Process Mapping Value Stream Mapping Fish Bone Diagram Spaghetti Diagram XY Summary TAKT Time and Cycle Time Visual Management

Process Capability of DAYS ELAPSED

USL

W ithin O v erall

P rocess D ata LS L * T arget * USL 10 S ample M ean 61.3 S ample N 40 S tD ev (Within) 11.1355 S tD ev (O v erall) 11.0644

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O bserv ed P erformance P P M < LS L * P P M > U S L 1000000.00 P P M T otal 1000000.00

Standard Work Chart

Quality Check

E xp. PPM PPM PPM

P otential (Within) C apability Z.B ench -4.61 Z.LS L * Z.U S L -4.61 C pk -1.54 O v erall C apability Z.B ench Z.LS L Z.U S L P pk C pm

20

30

40

Within P erformance < LS L * > U S L 999997.96 T otal 999997.96

50

60

70

-4.64 * -4.64 -1.55 *

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E xp. O v erall P erformance P P M < LS L * P P M > U S L 999998.23 P P M T otal 999998.23

I Chart of DAYS ELAPSED Project Progress Baseline

90 80

Project

Improvement

1 1 11

70

From:

12/2/2009

Date Prepared

Prepared By

Dept/Location

Team Leader

Supervisor

To:

12/2/2009

12/9/2009

Judy M

Municipal Court

Judy M

Cam McCabe

Safety Precaution

Individual Value

• • • • • • • • • • • •

60 1

50

1 1 111 1 1

40 30

1

Cycle Time

UCL=34.4 _ X=15.2

1

LCL=-4.1 1

Takt Time

1

1

0

Units STD WIP

1

20 10

Standard WIP

1

17

33

49

65 81 97 Observation

113

129

145

Operator Number 1

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Long-term Employee Training & Certification Goals 7,000

50% of Workforce

6,000

5,000

4,000

3,000

20% of Workforce

2,000

1,000

1% of Workforce 0

Goal

Blue Belts

Green Belts

Black Belts

6,500

2,600

130 11

Prospective Project Identification Projects identified through a variety of means, including but not limited to: • Annual budget process • Sunset reviews • Monthly expenditure forecast reviews • Twice annual departmental business plan reviews • Council suggestions • Customer feedback • Internal audits • 311 data analysis • Business intelligence/performance analytics • Continuity of Operations (CoOP) assessment 12

Project Selection Process 1. Development: Proposed project charter developed by Green Belt as part of define phase 2. Review: Charter reviewed by Black Belt/Master Black Belt for appropriate scope and feasibility 3. Verification: Charter independently reviewed internally (by Finance, etc.) to verify projected benefits 4. Selection: Charter presented to CPE working group, then executive leadership team for consideration

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Monitoring Progress • Lean Six Sigma/dashboard • Quarterly/annual report outs • Strategic planning – tracking organization-wide priority metrics • Business planning reviews and scoring - using Quality Texas/Baldrige criteria • Citizen and employee surveys 1,100 900 700 500 300 100 -100

Business Plan Scoring

644 438 205

747 526

747 588 436

261

Qtr 1 FY2011-12 Qtr 4 FY2011-12 Qtr 2 FY2012-13

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Project Examples from Other Cities • Development Services – reduced time for residential plan review • Fire – Implemented in-house total predictive maintenance program for protective gear • HR – Improved employee requisition process • Library – Reduced time to reshelf existing books, and time from purchase to shelf for new books • Library – Optimized hours open • Municipal Court – Condensed warrant process time • Parks – Improved work order system • Parks – Reduced time required to chalk ball fields • Police – Increased time on street by reducing time to issue daily equipment from armory

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Project Examples from Other Cities • • • • • • • •

•

Police – Reduced dispatcher attrition rate Sanitation – Extended life of tires on heavy trucks Sanitation – Reduced missed collections Sanitation & Fleet – Reduced residential truck hydraulic maintenance costs Sanitation & Streets - Reduced costs associated with brush disposal Utility Billing - Improved billing process Warehouse – Reduced inventory costs Water – Optimized magnesium dosage, reducing cost for chemicals Water – Reduced inventory cost in water meter shop 16

Applying Lessons Learned from Others • It is a marathon, not a sprint • Participants need to work in their own areas so projects are considered part of their current job • Senior managers must actively steer, while participants push for progress from organizational layers • The optimum ratio of Green Belts to Black Belts is critical to mentoring and successful project completion

• The indirect benefits are even greater than the direct benefits 17

Indirect Benefits – Not Just About Saving $$$ • Enhanced Responsiveness for Citizens/Customers • Increased Capacity of Existing Workforce (Saving Time)

• Improved Organizational Communications • Employee Empowerment + Job Enrichment = Motivated Workforce • Opportunity to Differentiate Ourselves in a Positive Way 18

Next Steps for Deployment • Using existing resources, hire Master Black Belt – January, 2015 • Recruit and begin in-house training of up to 50 Green Belts from all levels of the organization in various departments – February/March, 2015 • Progress report to City Council – May, 2015

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