Lean Six Sigma April 7, 2008 Ms. LaDona Kirkland

1. Lean Six Sigma April 7, 2008 Ms. LaDona Kirkland

2. Lean Six Sigma Mr. JD Sicilia Director, DoD Lean Six Sigma Program Office DUSD Business Transformation Office

3. J.D. Sicilia • Director • DoD Lean Six Sigma Program Office • 7 April 2008

4. Executive Summary • DoD has a strategic imperative to institutionalize continuous process improvement • Lean Six Sigma is the method of choice • Lean Six Sigma provides a balanced and holistic improvement methodology • Proven robust in both commercial and government applications • DTIC has embraced Lean Six Sigma • DoD Lean Six Sigma Program Office stands ready to support your deployment

5. The Department of Defense is engaged in an historic Lean Six Sigma deployment • $515M budget and 5M people; the largest deployment ever undertaken • Similar to deploying LSS across a country! Population* Gross Domestic Product* 5M Trillions of Dollars Millions of People $515B With Supplemental If DoD were a country: It would rank as 17th largest economy (16th with supplemental) It would rank as 110th largest country by population *Source: World Bank, 2006

6. The stakes are high… …DoD’s future success depends on Agility • The world around us continues to change • Middle East • Technology • Economy • Dynamic political/military situation • Are DoD organizations agile enough to face the next crisis? • With a full workload now, what gets dropped? • Do our people and processes have the capacity to respond immediately? • Is our workforce agile enough to face the next crisis? • The status quo is unacceptable – LSS provides the Warfighter a focused, enterprise framework for continuous improvement

7. DoD leadership has chosen LSS based on its proven effectiveness April 30, 2007 DEPSECDEF memo FY 2009 President’s Defense Budget Total: $515B Operations and Maintenance ($179.8B) • Assign a CPI/LSS focal point to coordinate with the DoD CPI/LSS Program Office. • Establish a 12 to 18 month workforce training objective of 1% LSS black belt trained and 5% green belt trained personnel. Personnel selected should include top-rated staff members. • Include CPI/LSS in individual employee performance objectives. • Provide support to the DoD CPI/LSS Program Office in DoD-wide process improvement initiatives. • Report progress and outcomes of ongoing and completed CPI/LSS projects and activities to the DoD CPI/LSS Program Office every 30 days initially. Military Personnel ($125.2B) Procurement, Research, Development, Test and Evaluation ($183.8B) Family Housing and Facilities ($26.6B) DoD Leadership understands that Lean Six Sigma can help it do more with its fixed budget

8. So what makes LSS so good? The two methods complement each other and deliver lower operational cost as a natural by-product • Lean Principles: • Specify what creates value from the customers perspective • Identify all the steps along the process chain • Make those processes flow • Make only what is pulled by the customer • Strive for perfection by continually removing wastes • 6 Sigma*: • If you cannot express what you know in numbers, you don’t know much about it; • If you don’t know much about it, then you can’t control it; • If you can’t control it, you are at the mercy of chance. Six SigmaTM Methods Product or Service Outputs Increase Consistency Reduce Variation Eliminate Defects The Customer Is The Driving Force Behind Improvement Efforts Increase Efficiency Simplify Work Flows Focus On High-value Steps Eliminate Waste The Customer Is The Driving Force Behind Improvement Efforts *Basic tenants articulated by Dr. Mikel Harry, the father of Six Sigma at Motorola Lean Methods

9. Lean Six Sigma is customer driven • Voice of the Customer (VOC) • Confirming the VOC is critical for a successful Lean Six Sigma project • Lean Six Sigma is all about meeting or exceeding customer needs or Critical to Quality (CTQ) • Quality • Cost • Delivery • Many projects fail because the VOC is not correctly captured or confirmed

10. The two methods are complementary • Lean is a methodology that evaluates processes with a focus on • Speed • Efficiency • Lean aims to cut waste and remove non-value added activities • Waste and value are measured with respect to the customer’s requirements Views of your process What you BELIEVE it is… What it ACTUALLY is… What you WANT IT TO BE…

11. -6s -5s -4s -3s -2s -1s 1s 2s 3s 4s 5s 6s Mean LSL USL -6s -5s -4s -3s -2s -1s 1s 2s 3s 4s 5s 6s Mean LSL USL Why is variation a critical point of emphasis? 3s 6s Process Process 3.8s 6s = 99% Good = 99.99966% Good Practical Examples • 7 lost articles of mail per hour • 1.7 incorrect surgical operations per week • 68 wrong drug prescriptions each year • 1 hour without electricity every 34 yrs • 20,000 lost articles of mail per hour • 5,000 incorrect surgical operations per week • 200,000 wrong drug prescriptions each year • No electricity for almost 7 hours each month Variation has a major impact on the customer’s perception of quality s If we assume standard government processes operate at 1 these examples become: • 636,000 lost articles of mail per hour • 159,000 incorrect surgical operations per week • 6.36M wrong drug prescriptions each year • No electricity for approximately 2 days per week

12. DTIC has started its LSS journey • Progress: • 8 Green Belts trained • 8 Projects in progress

13. LSS can be used to improve DTIC’s core functions

14. Projects have been identified and are underway

15. Key next steps • DTIC • Champion training • Project selection • Belt selection • Belt training • Project completion • DoD LSS Program Office • Improve effectiveness of Warfighter support • Continue training at all levels and complete strategically aligned projects • Horizontal integration and standardization efforts underway • Committed Leadership • Strategic Alignment • Data-driven Decisions • Emerging CPI Culture

16. Questions?

17. Backup

18. Aware Deploy Sustain The deployment will increase DoD’s maturity in well defined stages Fiscal Year 2012 2008 2009 2010 2011 Program Monitor and CPI Program Launch Institutionalize LSS/CPI Sustain LSS/CPI LSS/CPI Transformation Leadership Buy-in Project Portfolio Generation Belt Selection/ Training Project Execution Results Tracking/ Lessons Learned

19. LSS projects must deliver tangible benefit to our end customer…the Warfighter Human Resources Management Who are our people, what are their skills, where are they located? Weapon System Lifecycle Management Who are our industry partners and what is the state of our relationship with them? Warfighter Materiel Supply & Service Management Core Business Missions What assets are we providing to support the warfighter and where are these assets deployed? Real Property & Installations Lifecycle Management How are we investing our funds to best enable the warfighting mission? Financial Management Plan/Budget Procurement IT HR Legal Design/Dev Storage/Trans. Maintenance Disposal Following a rigorous project selection process ensures that projects initiated at the functional level address the cross-functional Core Business Missions

20. Across DoD LSS is at varying levels of deployment OSD, DoD Agencies and Field Activities • DoD level LSS goals • Support leadership’s business transformation objectives • Drive consistency throughout the enterprise LSS Experience .5 yrs Projects1 Active: 541 Complete: 532 Belts1 Black: 160 Green: 2,335 LSS Experience 3 yrs LSS Experience 5 yrs LSS Experience 2.5 yrs Projects Active: 3,071 Complete: 2,099 Projects Active: 1,856 Complete: 5,434 Projects Active: 1,423 Complete: 4,457 Belts Black: 902 Green: 2,411 Belts Black: 1,122 Green: 7,343 Belts Black: 260 Green: 871 … better stewardship of taxpayer dollars where greater efficiency leads to improved effectiveness. . . creation of more readiness and assets within our budget through Lean Six Sigma. Air Force Smart Operations for the 21st Century (AFSO21) … key behind learning processes is to achieve a transformation outcome that will save cost, time and effort. Lean Six Sigma techniques implemented throughout the Army ..… reaching a $2 billion-savings mark this year. Burning Platform 1includes OSD Staff, DoD Agencies and Field Activities; All data based on March2008 DoD LSS Data Call

21. The two methods offer complementary perspectives in satisfying customer expectations (cont) • Six Sigma is a methodology that focuses on improving quality through reducing variation Transformation Process Inputs Outputs …to change these. Must change these…

22. LSS Practitioner slide

23. Improve General and Flag Officer Nomination Letter Process Project Sponsor: LtCol Stovall Process Owner: COL Munster Greenbelt: MAJ Holliday DEFINE MEASURE ANALYZE Problem Statement: • A large number of 3/4 star nominations that were sent to the SecDef from Apr to Nov ’07 contained errors and had to be rewritten. • Improve our support to the customer by decreasing or eliminating errors • Improve the timeliness of nominations • Save time for CJCS • Eliminate rework • Error free nomination letters; initial goal less than 5% error rate • typographical errors • material/research errors in information pertaining to nominee • incorrect references/interpretation of law % letters returned with errors 33.33% 333,333 1.93 OSD and JS Records Apr-Nov 2007 • Most significant root causes: • Insufficient training • Outdated or incorrect nominee information • Ignorance of the law Primary Metric: Defect Rate: DPMO: Sigma Level: Data Source: Time Period: Expected Benefits: Customer Spec: • Process mapping revealed hidden rework loops: • Errors in service letters flow through to JS letters • Lack of templates and SOPs leads to “reinventing the wheel” on each nomination • Incorrect JMIS (joint tour) information • Ignorance of constantly changing law Defect: RESULTS CONTROL IMPROVE Legacy Process Improved Process Four process improvement areas were identified to address the main root causes of errors Developed a control plan to implement improvements and ensure sustainability Process monitored using control chart (p-chart) to ensure improvements are sustained 33% 6.3% 1 1.9 3.0 2 3 Results based on initial implementation Goal of 5% or less should be achievable once full implementation is complete 4

24. Point of Contact Mr. JD Sicilia DoD Lean Six Sigma Program Office 703-693-0031 John.Sicilia@osd.mil