The five whys analysis – hypothetical example
Why? Why? Why? Why?
Because Because we Because the
Proposal
don’t have forget to get form isn’t ???
takes too all the from used
long
information customer correctly
Problem Cause – Level A Cause – Level B Cause – Level C Root cause
Maximising productivity with
Lean Six Sigma
A handy document to give you a quick
overview of productivity tools
Consultation Billing
Schedule
Admission Prep Procedure & &
appointment
prescription discharge
10 min 20 mins 20 min 30 min 15 min 10 min
PT
DT
90 min 180 min 90 min 60 min 60 min
Maximising productivity with
Lean Six Sigma
A handy document to give you a quick
overview of productivity tools
February 2020
home.kpmg/in
Introduction
Lean Six Sigma is a ‘management There are various tools in Lean Six Sigma
philosophy to improve process capability methodology which are used to improve
by reducing variation in the process’. productivity and efficiency of processes.
It is a methodology to improve process to The objective of this document is to look
reduce defects (quality improvement), at some of the tools to maximise
increase productivity, reduce cycle time, productivity in any organisation.
reduce cost and satisfying customer
needs profitably.
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Maximising productivity with Lean Six Sigma
1. What is productivity?
Productivity is the ratio between output development. To improve productivity,
and input. It denotes the relationship products must be designed to satisfy
between output and one or all customer needs with optimum
associated inputs. consumption of resources minimal
generation of waste in the process. 1c
In the words of Peter Drucker,
‘productivity means a balance between
all factors of production that will give
the maximum output with the smallest
effort’.
The Japanese holistic view of
productivity explains productivity as a
comprehensive holistic phenomenon
encompassing all elements required to
improve products/services (output).
Productivity in the future must concern
itself with seeking affluence of a kind
that will provide people with material
wealth as well as spiritual satisfaction.
Also, the output, particularly in the form
of physical pollution, must be
controlled in the context of increasing
concern of society for clean
environment and sustainable
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2. Steps to maximise
Maximising productivity with Lean Six Sigma
productivity
In order to maximize productivity using Lean Six Sigma Methodology, we must:
• Develop a measurement system for all processes
• Identify critical inputs and processes
• Develop a method for achieving productivity improvement, such
as idea generation from employees, continuous improvement
programme, best practice replication and standardisation
• Train resources on improvement methodology and tools
• Establish reasonable goals for improvement
• Ensure that the management support for productivity
improvement using Lean Six Sigma methodology
• Measure improvements and communicate the to the
organisation.
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3. Tools to maximise
Maximising productivity with Lean Six Sigma
productivity
Lean Six Sigma is a methodology that • It is an effective tool for businesses in
helps eliminate waste and inefficiencies almost any industry to identify cycle
and improve productivity and quality. time, error rate and unnecessary delays
within the process
The methodology uses various tools that
help with analysis and improvement of • A value stream helps in identifying
processes to maximise productivity. both value added and non-value added
Lean Six Sigma and its tools have created steps.
an impact in the operation of many
3.1.1 Why use value stream Mapping?
companies. These tools help
organisations identify wasteful activities, • Enables to visualize the process /
problems and opportunities to improve production flow
productivity and promote improvements • Allows to see waste in the system
in quality both in a systematic and
strategic manner. • Creates framework for designing
complete system
In order to maximise productivity, here is
a list of five Lean Six Sigma tools that • Demonstrates interaction between
you need to know. information and material flow
• Prevents focusing on large
3.1 Value stream mapping improvement opportunities with little
• Value stream mapping (VSM) is a Lean impact.
tool that helps to see and understand
all the activities required to bring a
product/service from customer request
to fulfilment or completion. It helps in
looking for opportunities to eliminate
or reduce waste in the process
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(“KPMG International”), a Swiss entity. All rights reserved.
Maximising productivity with Lean Six Sigma
Figure. 1.2
VSM example
Consultation Billing
Schedule
Admission Prep Procedure & &
appointment
prescription discharge
10 min 20 mins 20 min 30 min 15 min 10 min
PT
DT
90 min 180 min 90 min 60 min 60 min
Process time = PT = 10 min + 20 mins + 20 mins + 30 mins + 15 mins + 10 mins = 105 mins
Delay time = DT = 90 mins + 180 mins + 90 mins + 60 mins + 60 mins = 480 mins
Lead time = LT = PT + DT = 585 mins
Total process time 105
Process cycle efficiency = = = 17.94%
Total lead time 585
3.1.2 What is the process of creating a value stream map?
• Focus on the customer and the • Map the process
customer’s requirements
• Collect data such as cycle time,
• Choose one of the customer processing time and first pass yield
requirements to begin with • Construct the VSM.
• Walk the shop floor
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Maximising productivity with Lean Six Sigma
3.2 Cause and effect analysis 3.2.1 Why use cause and effect analysis?
• A cause and effect analysis diagram is • To identify potential causes of the
also called the fishbone diagram problem or effect
because it resembles a skeleton of a • To categorise causes in broad
fish. It is one of the well-known Six categories for effective problem
Sigma tools to brainstorm various solving
causes of a problem
• To gather inputs from team members
• The cause and effect diagram aids
or small medium enterprises (SME) on
organisational teams to identify
sub-categories of causes.
potential causes for a described issue.
It is also referred to/known as an
Ishikawa diagram, named after its
developer Kaoru Ishikawa.
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Maximising productivity with Lean Six Sigma
Figure. 1.3
Cause and effect diagram – hypothetical example
Materials Method Machine High level
categories
Poor Bad Bad lighting
materials estimates conditions
Lack of Old Write problem
No briefing
materials software statement/effect
here
Employees
No process Slow
unable to choose
defined computers
materials
Delay in
processing
Poor quality Location
Will issue
control is far
Lack of No calibration Bad working
Training between testers environment
Write possible
causes here
Incompatible
Lack of Lack of health
testing
creativity insurance
process
Man Measurement Mother nature
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Maximising productivity with Lean Six Sigma
3.2.2 What is the process of creating a 3.3 The Five whys analysis
cause and effect diagram?
• The Five whys is a simple problem-
• To start the process, the team should solving technique that helps one to get
state the problem to the root of a problem quickly.
• Problem statement is then followed by Organisations rely on the Five whys as
brainstorming for potential causes to it is a relatively simple method to use
the problem and it does not require any data or
statistical analysis. The five whys
• Categorise potential causes in originated in 1930s with the Japanese
categories such as man, machine, industrial revolution.
material, method, measurement and
mother nature 3.3.1 Why use the Five whys analysis?
• The problem statement is placed at the • The idea is that each time you ask
head of the fishbone and each of the 'why' a problem may have occurred,
main bones in the fish address one of you move closer to identifying the root
the categories. The main categories cause. But you don't need to stop at
can further be broken down into sub- five. Keep going until you get to the
categories. root of the problem. You may stop
once the root cause is identified even if
‘why’ is asked less than five times.
Figure. 1.4
The five whys analysis – hypothetical example
Why? Why? Why? Why?
Because Because we Because the
Proposal
don’t have forget to get form isn’t ???
takes too all the from used
long
information customer correctly
Problem Cause – Level A Cause – Level B Cause – Level C Root cause
© 2020 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated wi th KPMG International Cooperative 9
(“KPMG International”), a Swiss entity. All rights reserved.
Maximising productivity with Lean Six Sigma
3.3.2 What is the process to conduct the 3.4 Pareto chart
five whys analysis?
• In 1906, Italian Economist Vilfredo
• Identify people with knowledge of the Pareto, while researching his ideas,
systems and the processes under observed that 80 per cent of the land in
review for the session Italy was owned by just 20 per cent of
• Document and elaborate on the the people. Joseph Juran, a Quality
problem Guru came to know about the tool and
began to apply the tools for quality
• Question why the problem occurred issues by using the phrase "the vital
and come up with possible answers few and the trivial many"
• If answers to this question do not lead 3.4.1 Why use the Pareto analysis?
to a root cause, ask again ‘why’ and
again document responses • The Pareto chart is a graphic
representation of the Pareto principle
• Repeat the process until the root case (also known as the 80/20 rule): the idea
has been determined. that 80 per cent of the problems/effect
may be caused by as few as 20 per cent
of causes
• The purpose of a Pareto diagram is to
separate the significant aspects of a
problem. By graphically separating the
causes of a problem, a team will know
where to direct its improvement
efforts.
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(“KPMG International”), a Swiss entity. All rights reserved.
Maximising productivity with Lean Six Sigma
Figure. 1.5
Pareto chart – hypothetical example
Pareto chart of ...
250 96% 100% 100%
91%
217 90%
83%
80% Cut off (80:20 Rule)
200 80%
70%
Cumulative %
69%
Frequency #
150 60%
112 50%
45%
100 40%
67 30%
50 43 20%
23 18 10%
0 0%
Missing Stitching Loose Thread Hamming Fabric Flaws Others
Button Errors Errors
Vital few
causes
3.4.2 What is the process of creating a Pareto chart?
• Decide what categories will be used to • Add data to a spreadsheet and sort
group items. The category or sub- data in descending order
category of causes can be identified
• Determine percentages for cumulative
from the cause and effect analysis
data
• Collect the data for each category or • Plot the graph.
assemble data that already exists
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(“KPMG International”), a Swiss entity. All rights reserved.
Maximising productivity with Lean Six Sigma
3.5 5S
• 5S is a systematic approach to organise and standardise the workplace. The 5S was
originally developed by Toyota production.
3.5.1 Why use 5S?
• To improve efficiency and productivity
• To maintain control over processes
• To maintain safety and cleanliness
• To maintain a good quality product.
Figure. 1.6
5S – hypothetical example 1S: SERI
SORT
5S: SHITSUKE 2S: SEITON
5S
SELF DISCIPLINE SYSTEMATIC
ARRANGEMENT
4S: SEIKETSU 3S: SEISO
STANDARDIZE CLEANING
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Maximising productivity with Lean Six Sigma
3.5.2 What is the process of creating 5S?
• Seiri (sort): identify items that are • Seiketsu (standardise): it is the process
unnecessary and remove them; sort to standardise the process of sort, set
items by frequency of use in order and shine
• Seiton (set in order): identify the place • Shitsuke (sustain): sustain the process
to arrange the items and place them for by self-discipline of the
prompt usage
• Seiso (shine): clean the workplace so
that there is no unnecessary clutter
Conclusion
Lean Six Sigma methodology and tools are the principles which can be applied
to any processes in the organisation to:
• Improve and maximise productivity
• Improve quality
• Reduce cycle time
• Eliminate waste in process.
• Reduce cost
• Improve customer satisfaction
• Improve market share of the organisation
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(“KPMG International”), a Swiss entity. All rights reserved.
KPMG in India contacts:
Dr. KK Raman Venkataramani Sankaran Nitesh Jain
Partner Executive Director Director
Management Consulting Management Consulting Management Consulting
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E: kkothandaram@kpmg.com E: vsankaran@kpmg.com E: niteshjain@kpmg.com
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