This blog discusses the remaining simple and effective Lean Six Sigma techniques to identify the root causes of process constraints. Please note this article is a continuation of part 1.
4-Understand the process capabilities
Now that you understand a little more about what is happening in the process you will conduct an assessment to try to understand what the current process is capable of producing. To get a better sense of those capabilities I usually conduct an assessment of some of the basic process performance measures such as, the demand for your goods and services, throughput of work, work in progress, inventory, total costs, processing time, aging of work, re-work and error rates. These performance measures usually give me an indication of the process capabilities and why the process may not be meeting the customer's needs.
5-Examine the constraints within the process
Once I have a general sense of the process issues than I conduct a more detailed assessment and look at specific Lean 6 Sigma performance measures that enable me to understand what some of the process constraints are and where why these constraints exist. Some useful metrics to use include, but not limited to, the following:
- Processing Time per activity/Total elapsed time per activity-Total elapsed time is the time when work arrives to the time it leaves an activity. This ratio should be as close as possible to 1. When this ration is one than this indicates that all the activity time is spent processing however, when this ratio is less than one it means that certain work sits idle for a period of time and this not ideal.
- Queue times- This is the average time a file is sitting in queue waiting for a resource to start the work. Increasing queue times is an indicator of work building up so the lower the queue times the better.
- Inter-arrival times- This is the time when works leaves one activity until it is received by another. Any idle time between activities adds no value to the process and therefore inter-arrival times should be as low as possible.
- Number of times the same file is re-examined by another employee-Ideally the less time that people spend reviewing something someone else has reviewed the better. Caution should be taken with this metric as in many cases the review process is a necessary control to prevent errors, ensure quality standards and reduce any other risks.
- Error rates and re-work- High error rates and re-work have a negative impact on processing times and therefore, the lower these metrics are the better.
- Value add time as a percentage of time working- This is the time a resource is working on an activity that directly contributes to a final output expressed as a percentage of total time the resource is working. Non value time can include time walking over to a fax machine, administration work etc. This measure should be as close as possible to 100%. A measure of 100% indicates that all the time a resource spends on an activity is value add time.
- Total time a resource is working/Total time a resource is available- Total time a resource is available is the amount of time a resource is available to work. This ratio should be close to 1. When this ratio is at 1 the resource is spending all his available time working. When the ratio is less than one the resource is not full utilized.
- Direct Costs/Total Costs per activity- Direct costs are the costs associated with producing a good or service that directly contributes to the production of a good or delivery of a service. Ideally you would want this metric to be as close as possible to one. If this ratio is one than all your costs are being allocated to work that directly results in a good or service. This measure can never be greater than one because the total cost includes direct and indirect costs.
There are literally hundreds of different metrics you can look at however this list will give you a good handle on what and where the process constraints exist, why they exist and these measures will help you identify an appropriate solution.
The next blog will discuss quick solutions you can implement.
Interested in learning how we saved our client 1 Million Dollars and 100,000 hours of manual effort
The following URLs provide great additional information on Lean 6 Sigma
Toppazzini and Lee Consulting Lean 6 Sigma Consulting at -Lean Six Sigma Consulting
Linkedin Six Sigma Group at http://www.linkedin.com/groups?home=&gid=37987&trk=anet_ug_hm
ISixSigma web site at www.isixsigma.com
ASQ web site at www.asq.org