In this lecture we will discuss the difference between lean thinking and traditional thinking.  Let’s recall two of the types of work.  Those work activities that add value and those that do not.  In the video above we see an activity that is adding value.  Value added work has three characteristics to it: 

1. Somebody is willing to pay for the activity.
2. Transformation that moves the process closer to the end objective occurs.
3. The activity is performed correctly the first time through occurs.

  This guy is perfect!  Kind, team player, technical skills and desire to grow in the organization.  It's like a dream come true finding this type of employee.  Then the final interview question is presented, "how do you feel about lean six sigma?"  They respond, "I've only heard of it."  With the ever growing "popularity"  of both lean and six sigma it almost feels like a game changer if a new employee or existing individual has not sought out lean six sigma education or joined a group to become more familiar with these two powerful strategies.  Then of course there is the "gap."  Yes the gap,  it's that ever increasing distance between those with "master black belts" and lean six sigma expertise and those who "missed the boat" for training or were part of "next years group."  How do we bring those individuals up to speed so that the changing dynamics of an organization or job market of a career does not continue to drift further and further apart?

  The answer to that question has remained the same for hundreds if not thousands of years;  education, training and experience.   

Education:

  It's no secret that education for employees or learning for yourself yields: improved performance, consistent knowledge and a specialized skill set.   But along with these benefits education can influence a group of behaviors in a positive way too.  Imagine for a second an individual who had absolutely no understanding of soccer (I know it's hard to imagine) going with you to a soccer game.  While fans are cheering, eating good food and actively engaged in the game, they just sit there with absolutely no connection with the game or anything going on around them.  Worse yet they may feel left out and never want to be a part of a soccer game again.  A tragedy indeed.  Now let's imagine that for a few minutes, maybe an hour before you share with them important moments in the sport of soccer's history, you briefly explain to them the rules of soccer and you help them understand the general strategy of the game.  Flashback to our soccer game and this time when everyone is cheering, screaming and excited they understand a few things.  Soon they begin asking you more questions and shortly thereafter they want more knowledge.  Similar to this most employees and individuals may feel discouraged in environments where they don't understand what is going on around them.  Whether it's technical or philosophical it is hard to be a part of something you haven't ever heard about.  Why would anyone see the value in eliminating waste when they could crank the machine up and sweat themselves to death creating more value?  How would anybody understand the difference between creating value and non-value?  They can't unless they have some knowledge or education where they can then begin to wrap their minds around the concept.  In our recent release of the  brand new completely remade 8 forms of waste course students first participate in an educational experience learning about general aspects of lean, waste and then moving on to the specifics of waste.  Like a soccer game the community is now completely open to posting in each of the 15 lectures.  This gives students an opportunity to discuss with one another the knowledge they are acquiring.  Additionally they gain a firm understanding of fundamental lean concepts helping them to join or be a part of groups, strategies and initiatives that will surely cross their path sooner or later.  

Training:

  Educate someone on the strategy or direction of the organization and they are off to a good start.  Now instead of "I've only heard of it,"  we might hear, "oh yeah, I was lucky enough to take a class on that."  Place the individual in a community with others and now they can discuss, share thoughts and learn from others.  Add a little training to their already educated mind and talking transforms into doing.  That was the focus of the transformed 8 forms of waste course giving people the opportunity to take education and engage themselves or employees within an organization in activities that provide a real training experience.  The benefit to this of course is that everyone knows what is going on around them and nobody "misses the boat."

Experience:

  With education and training under one's belt the last piece of the puzzle is experience.  As the saying goes "if you don't use it, you'll lose it,"  the same is true for education and training.  If all you do is sit through a course and complete a few reports then after obtaining your prized certification you set aside your new found knowledge you will surely forget what it is you've learned.  Like kaizen a good way to continue developing skills in a field or closing gaps between expertise and novice is to practice everyday.  whether it's a large scaled project or touching up on a recently read book try to stay engaged so that you don't have to start the process all over again.  

  There are many ways to onboard new employees and close gaps in the skill sets of current individuals.  Whether it's a 2 hour course like the newly released 8 forms of waste course or a training program like the introduction to lean finding an effective and affordable way to welcome new faces to your organization and graft them into the field comfortably will empower and enable employees to be a part of your improvement journey and may possibly set them up as a future leader.  

  The benefits of lean six sigma are widely known now throughout the world.  With organizations, such as Motorola and GE leading the way, where do small businesses sit in terms of the strategic benefits seen by these giants?  Simply put, the same benefits that have been realized by organizational giants are usually more applicable to smaller organizations.  Why?  Smaller organizations have less people and often do not stretch across global boundaries.  This gives them the ability to train more people, move quicker and create results in lightning fast fashions.

  Reducing capital expenses, increasing efficiency and minimizing variability are only a few of the benefits any sized company can realize by undertaking strategic implementation of lean six sigma.  But there are many other benefits that we don't see right away:

Engaged and Confident Employees
  Along with reduced capital expenses, waste and increased efficiency lean six sigma gives employees a means of using their talents in a positive way.  Since every strategy requires effective execution of tactics there is no better way to drive improvements than through the people who are closest to the work.  Those people are the individuals who produce products and services day in and day out.  They are the ones who live at the gemba.  That makes those individuals the perfect resources to tap into when looking to improve the efficiency and effectiveness of a process.  As these employees begin to engage in kaizen events and develop their skills confidence grows within each of them.  As confidence grows within employees and they begin to see, feel and realize their positive impact the benefits reach far beyond performance and accountability, in fact "they are life changing" as Bob Chapman once put it.  As people become confident, motivated and realize their talents they often times continue to search out opportunities and engage in continuous improvement.

Stronger Economic Conditions

•   Rising costs of healthcare, retail and consumer costs soaring and manufacturing being offloaded all around seems to grasp recent trends around many different industries.  While some of these trends mimic years of past lean six sigma provides a very effective means for doctors, retailers and distributers to separate from tasks such as paperwork, reorder points and returns and focus on the customers and consumers.  This results in better diagnosis, higher customer service and a general sense of people caring about people.  
•   It has never been more important to get the product you need in the condition you need it.  Whether it's the holidays where you want your gifts to function properly for the recipient, or a fighter plane that must perform at its best to achieve the mission at hand, lean six sigma helps all customers deliver with fewer defects resulting in fewer return and reverse supply chain activities.
•   We have I-phones, I-watches and I want it right away needs.  As technology increases and the need for products and services continues to be quicker than ever processes have no room for waste in them.  Lean six sigma not only shortens the time it takes to fulfill customer requests but ensures that revenue flows freely in all directions.

  As the years go by it becomes more and more obvious that we need lean and six sigma if we are to survive in changing times.  If not for the more obvious reasons of reduced waste and stable processes but for the reasons we don't always see right away....  What reasons can you think of?

  Selecting a project in Lean Six Sigma can sometimes be a daunting task.  But like any other project it is a necessary step that you will have to take at some point.  One very important piece of this early decision comes in the form of a document called a project charter.  The project charter is a very important piece of the puzzle that we have written about before in a post titled The Project Charter.  The project charter is one of the first essential steps in many different types of projects.  It acts as an informal contract between the organization and the team.  The charter will set a clear outlook on what the team's objective is and how their success factors will be measured.  Additionally it contains historical evidence for the project, a clearly defined problem statement, a goal statement, the boundaries associated with the project, team members, measurements and an estimation of the time needed to complete the project's implementation all on one sheet of paper.

Where does the charter come from?
  In general a project charter will normally take one of two roads of development.  The first is that a charter is developed by leadership or the top level management of the organization and then is presented to the team.  The other very common way a charter can develop is through the team's discovery of opportunities or issues that might need to be solved or improved.  The team then pieces together a project charter and presents their findings to upper management.  No matter how the project charter is developed, consensus and buy in from upper management and the team is absolutely critical to the project's success.  This agreement of the project's direction will show the rest of the organization that both the team and upper management approve and endorse the project moving forward and will provide the team with the support and empowerment they will eventually need.  

What is included in a project charter?
 
  Basic identifiers - The charter should always begin by defining basic elements such as the company name and the project title.  Like a contract this identifies who the contract is between and a general title to keep projects organized.

  Business Case (historical reasoning) - Next the charter should include a clearly written one or two sentence business case.  This simple two sentence business case will define "why" the team has been formed and how the project aligns with the organization's strategic direction.  In other words the charter will show how the project aligns with the vision and the mission of the company.

  Problem Statement - After the business case is clearly defined the charter will very clearly tell us what the issue or opportunity is that the team is going to focus on.  This is called the problem statement.

  Goal Statement - The next important element is the goal statement.  The goal statement lays out the objectives that the team is expected to achieve.  These expectations or the goal statement should always be agreed upon by both the team and the team champion.  A very important piece of the goal statement is to be sure that when it is written out, it is done in such a way that makes the statement measurable.  

  Scope - The project charter will also include the boundaries or the scope of the project.  These boundaries make it clear what is acceptable and what is out of the project scope.  It is very important that the boundaries are clearly defined in the scope.  This part of the charter is what will empower and hold the team accountable for their actions. The scope will give team members the freedom and support they need to focus their energy on the important tasks at hand.  
  
  Measurements - As noted earlier the goal statement should be worded in such a way that makes the objective measurable.  Those measurements or Key performance Indicators are placed on the charter so that the team can identify baselines of where they are starting from, where they are headed and eventually actuals that can be used for reflection or as a means to see how near or far the team landed in relation to their target. 

  Team Roles - Another important designation that is contained within the project charter are the roles of each of the team members.   This simply lays out who's on the team, who the champion is and who the sponsors are along with any other members that might apply to the project.

  Milestones (schedule) - Last but not least the charter will include a high level project schedule or a gantt chart.
  
  All of the information outlined above is normally documented on one piece of paper, with each category being very clearly defined, concise, accurate and to the point as possible.  It's quite a bit of information I know, so let's list some of the advantages related to documenting all this project information.

Example and walkthrough

  If you haven't downloaded the charter template yet you will need to do so now.  You can click right here to get your template.  Now that you have your template let's get started.

  STEP 1 - As we noted earlier on the first thing we will need to document is the basic identifiers.  Let's say our company name is Bob's machine house, I know original right?  Next we will input our project title.  Our title will be Accounting Cycle Time Reduction.

  STEP 2 - Now we are ready to identify our business case or the historical reasoning for the project. This is a short summary of our strategic direction and reasons for the project.  In general your short summary should include either quality, cost or scheduling issues or opportunities.  Most of the time the business case will be directly related to either:

• Design of a new process or product.

Or

• Redesign of an existing process or product.

  Your template should have a general format for the wording so we just need to fill in a few spots in the statement.  Let's give it a try.  As an (appropriate level i.e. organization, department, group) our (area of problem) performance for the (name department or area) area is not meeting (objective, goal, target or measure).  This is causing (type of problem) that are costing $(list estimated amount) per (time frame).  Keep in mind that a cost to benefit analysis should be performed prior to establishing the charter.  One tool you can use to calculate the cost to benefit is the Pareto Priority Index.  It goes without saying but if the costs outweigh the benefits than the project should not move forward.

  Step 3 - After our business case is documented we are ready to define our problem statement.  This statement should be as detailed as possible.  The problem statement should provide insight in the following ways:

• What category the problem falls under.
• Where the problem occurs.
• What the problem is.
• The magnitude of the problem (metric e.g. %).

And

• Explain why it is so important to correct or improve the problem.

  The template will again provide you with a general problem statement that you can use.  We will just need to fill in a few specific areas just like we did with our business case.  Our (category of problem) at the (where is the problem?) have not been meeting (What is the problem?).  As a result of this (connect a metric with the magnitude of the problem e.g. %) It is crucial that we (correct or improve) this because (why it is important).  
  One thing to keep in mind as you define your problem statement is that it should not be leading in any way.  Make sure the statement is neutral and does not pass preconceived judgements or diagnosis.

Example - Problem Statement

  Our cash to cash cycle at the accounting process has not been meeting the standard of 30 days.  As a result of this our funds are invested in inventory 50% longer than we expect.  It is crucial that we improve this because we are not getting a return on our investments quick enough.

  With a neutral statement like this, the team has no preconceived notions, allowing them to work towards the project objectives with an open mind.

  STEP 4 -  Our next step is to gain consensus on a goal statement.  As a general rule of thumb goal statements are generally in the realm of 50% improvement or reduction depending on the goal. We will again use the standard goal statement format in the template.  The statement might sound like this:   The Goal is to reduce the cash to cash cycle time by 50% resulting in a reduced, cash to cash cycle of 15 days.

  STEP 5 -  Once everyone including the project champion have agreed on the goal statement we then need to define our project boundaries or the scope of the project.  There are two boundaries you will need to clarify here.  The first is the longitudinal scope which tells us where the process starts and where the process ends.  One example of our cash to cash cycle time  might be:

Example
  Start - When materials are acquired  and  End - When we receive payment.

  The other boundary we need to define in our scope is the lateral scope.  This refers to the "width" of the process.  One example of the lateral scope for our cash to cash cycle time might be:

Example
  The cash to cash cycle time for our accounting project only applies to the accounting and purchasing department but no other department is applicable in the entire organization.

  After combining the two boundaries our scope tells us that we need to be empowered from the point materials are acquired to the point where we receive payment only within accounting and purchasing.  One thing to note with scope is that you may want to include more specific level of authority than just lateral and longitudinal.

  Step 6 - Next we need to define our measurements.  There are at minimum three measurements you should establish and track.  A baseline, A future state and the actual results after the project is complete.  Since our goal statement and problem statement already defined the metrics we need, we just need to input them into our template in the measurement section.  The one that I will use is the number of days for the cash to cash cycle time, you may want to use others too though.  Since we know our standard of 30 days is being exceeded by 50% as defined in the problem statement, we can input a baseline of 45 days (30 days + 50% of 30) in the current state.  Our future state measure was defined in our goal statement.  So we can input 30 days (45 days baseline - 15 days improvement) in the future state which tells us we need to improve by 15 days.  The actuals will be measured when the project is complete.  Remember since you more than likely will have more than 1 measurement to input those too.  

  Step 7 - Your team roles should be somewhat self explanatory, just be sure to input your sponsor, coach or champion and each of the team members in the template.  

  Step 8 - Last but not least we need to establish a schedule for our project.  This schedule defines the amount of time you think you will need from the start of the project to the complete and full implementation.  The template includes a scheduling tab that you can enter in the stages you want to measure.  The dates will automatically populate back to your charter, but let's look at one example just to be clear.  If I were using the DMAIC method I would want to make my start and complete dates visible for the Define, Measure, Analyze, Improve and Control Phase.  If you are using another methodology simply plan the high level steps of that methodology the same as we did with the DMAIC example.

  Now you have all the necessary information on your project charter to move forward with your improvement.  Be sure to remember though that the charter should be revisited every day of the event to adjust and monitor the charter.  Even if you don't feel like doing it, just do it.  There will be times where new people join the project and it will save you a lot of time and energy if you can hand them an up to date Project Charter to catch them up to speed.