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Applying Lean Six Sigma to Business Continuity Planning

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Title: Applying Lean Six Sigma to Business Continuity Planning


1
Applying Lean Six Sigma to Business Continuity
Planning
Jason Radde Office of Emergency Response and
RecoveryPeter RusselburgOffice of Performance
ImprovementGSA Training Conference and Expo 04
May 2010
2
Agenda
  • Introduction
  • Background
  • What is Lean Six Sigma?
  • Continuity Planning and Lean Six Sigma
  • Lean Six Sigma Role
  • GSA Case Study

3
Lean Six Sigma Background
  • LSS is the private and public industry standard
    for continuous process improvement
  • Increase throughput
  • Shorten cycle times
  • Reduce defects
  • Lower costs

IRS GSA NIH
US DoD Wells Fargo CitiGroup
Bank Of America United Health Group Cardinal
Health Blue Cross Home Depot Xerox
Maytag Ford Honeywell Johnson Controls Johnson
Johnson
Lockheed Martin Bombardier John
Deere Whirlpool GenCorp Nokia Sony
Siemens Compaq Toshiba DuPont Dow Chemical
Motorola TI IBM Kodak AlliedSignal GE
4
Introduction
  • In recent years, organizations (public/private,
    large/small) have begun to value the importance
    of conducting high-quality continuity planning
  • The key to business continuity planning is to
    fully understand the critical business processes
    required to support an organization's essential
    functions, along with the resources are required
    to deliver them
  • The growing complexity of day-to-day operations
    and dependencies on strategic business partners
    and IT systems has amplified the need for
    organizations to develop reliable Continuity
    Plans and a resilient infrastructure to ensure a
    minimum level of service during a disaster
  • Lean and Six Sigma process improvement programs
    have been used to significantly improve financial
    and operational performance across all sectors of
    the commercial business spectrum, and have
    extended their impact into all major business
    functions and activities
  • Over the past decade, the public sector has begun
    to adopt Lean and Six Sigma principles and
    roll-out internal Continuous Process Improvement
    (CPI) / Lean Six Sigma (LSS) programs to
    accommodate budget cuts and staffing reductions,
    as well as to improve efficiency, effectiveness,
    and accountability

5
What is Lean?
  • Focuses on improving speed and efficiency while
    eliminating waste within business processes
  • Targets the Seven Deadly Wastes that plague
    virtually all businesses
  • Reduces process complexity through the use of
    pull techniques, lean work methods and
    sourcing/supplier integration
  • Reaches beyond visible symptoms (defects,
    waiting, etc.) to address structural factors and
    the root causes of waste
  • Lean Thinking can be summarized in five
    principles
  • Specify and Focus on Value
  • Identify the Value Stream
  • Allow Value to Flow Without Interruptions
  • Let the Customer Pull Value
  • Continuously Pursue Perfection

Lean is a discipline that aims to systematically
eliminate waste and other non-value adding
activities while improving the flow of value to
the customer. Lean expands the limited focus of
more traditional improvement efforts, leveraging
the discipline across all value streams.
6
Identifying and Eliminating Waste
An approach to identifying and eliminating waste
(low value-added activities)
Seven Deadly Wastes
Typical White Collar Process
Excessive Motion
  • Data at different source locations,
  • Manual signature and approval workflow
  • Office equipment distance from work areas

True Value-Added
Waiting Time
Other
  • Waiting for decisions, approvals, meetings, etc.
  • Functional silos / Lack of Ownership
  • Inappropriate prioritization of work

Searching for Information
Over-production
  • Focusing on details not valued by customer
  • Employees not empowered by full process
    visibility forces need for rule by committee

Unnecessary Processing
35
  • Policies prevent task completion
  • Redundant or unnecessary paper work
  • Transcribing information multiple times

Approval Wait Time
Defects
  • Re-work of any kind
  • Poorly communicated customer requirements that
    drive downstream rework

Excessive Inventory
Value-Added Project Work
  • Overstaffing work streams due to lack of
    understanding of critical path
  • Minimal understanding of bottlenecks

Meetings Conference Calls
Unnecessary Transportation
  • Multiple unnecessary signatures needed for an
    approval
  • Circulating products for unnecessary review

7
What is Six Sigma?
  • Complements Lean by eliminating costly defects
    and variations from business operations
  • Provides a highly structured approach/process to
    business improvement through the elimination of
    variation (defects) in products and service
    processes (true Six Sigma performance equates to
    3.4 DPMO)
  • Ensures that process objectives and outputs are
    targeted towards customer defined objectives
  • Is typically supported by a belt certification
    program. Green Belts and Black Belts execute
    projects under the guidance of Six Sigma Master
    Black Belts.

Six Sigma is a discipline that enables companies
to eliminate costly defects in their operations
and realize breakthrough profits. To achieve
this, Six Sigma managers use data and statistical
analysis to locate process errors. A "sigma
rating" is then determined, which pinpoints the
number of defects-per-million-opportunities
(DPMO) in any manufacturing, service or
transactional procedure.
8
Six Sigma Methodology
Six Sigma offers a potent suite of tools used in
improving the quality of a companys operations
and support processes
Phase
Activities
Tools
Define
  • Establish project structure and scope
  • Identify the problem
  • Identify factors critical to the process
  • Set goals
  • Project charter
  • SIPOC diagram
  • Problem statement

Measure
  • Develop means of input measurement
  • Quantify process capability / determine variation
    in measurement process
  • Process capability analysis
  • Gage RR concepts
  • Quality tools
  • Utilize tools to determine key drivers causing
    variation in process
  • Identify root causes and hypotheses
  • Search for correlations among variables

Analyze
  • Process mapping, cause and effect
  • Ishikawa diagrams, root cause analysis
  • Pareto analysis, histograms, run charts
  • Prepare organization for change
  • Establish operating tolerances drivers
  • Identify and implement improvements
  • Test new process and solicit feedback
  • Quality tools (QFD)
  • Regression analysis, capability analysis
  • Change management concepts
  • Process mapping

Improve
Control
  • Implement controls to ensure improvements are
    accepted
  • Monitor and adjust process as necessary, focusing
    on customers point of view
  • Mistake proofing concepts
  • Post project metrics
  • Making change last

9
Continuity Planning and Lean Six Sigma
Continuity Planning Elements
Lean Six Sigma Principles
  • Assess organization functions to identify
    personnel, materials, processes and equipment
    necessary to keep the business operating
  • Review process flow charts and identify
    operations critical to survival/recovery and
    cross organization interdependencies including
    expedited decision-making capability and
    high-value systems
  • Define crisis management procedures and
    individual responsibilities in advance make sure
    the individuals involved know their roles and
    responsibilities, understand your gaps, and plan
    for how they can be filled
  • Who are the customers and what are their
    priorities? What is the performance standard?
  • Identify core processes, key customers and
    customer requirements
  • Engage stakeholders and clearly determine
    objective
  • How is the process performing today and how is it
    measured? What might be causing it?
  • Understand the flow of value across an enterprise
  • Understanding workload and capabilities

10
Continuity Planning and Lean Six Sigma
Continuity Planning Elements
Lean Six Sigma Principles
  • Develop a comprehensive Continuity Plan with
    input from major stakeholders and process owners
    from all Mission Essential Functions
  • Establish procedures for succession of
    management, and engage suppliers, shippers,
    resources and other partners in planning
  • Review emergency plans annually to ensure as
    business/priorities change so does your
    preparedness requirements
  • What are the most important causes of the process
    issue?
  • Conduct appropriate analysis using real data
    (FMEA, QFD, Root Cause, Cause Effect, 5-Why,
    etc)
  • What are the solutions? How do we implement
    them?
  • Apply LSS philosophy to drive out waste and risk
  • Model and pilot results
  • Execute implementation and deliver relevant
    training
  • How do we sustain the benefits?
  • Establish control plan
  • Initiate continuous improvement plans

11
Project Background
  • In May 2007, the President issued National
    Security Presidential Directive 51/Homeland
    Security Presidential Directive-20
    (NSPD-51/HSPD-20). The National Continuity Policy
    is an updated, integrated approach to maintaining
    a comprehensive and effective continuity
    capability to ensure the preservation of our
    constitutional form of government and the
    continuing performance of National Essential
    Functions under all conditions.
  • In August 2007, the President approved the
    National Continuity Policy Implementation Plan
    (NCPIP), which directed Departments and Agencies
    (D/As) of the Executive Branch to identify their
    Primary Mission Essential Functions (PMEF) which
    support the eight National Essential Functions
    (NEFs) and directed the Secretary of Homeland
    Security to issue Federal Continuity Directives
    to provide guidance to D/As on how to implement
    the NCPIP.

12
GSA Case Study
  • In February 2008, the Secretary of Homeland
    Security issued Federal Continuity Directive 2
    (FCD-2) which provides guidance for D/As on
    identifying their Mission Essential Functions
    (MEFs), and potential PMEF. It further provides
    direction to D/As on conducting Business Process
    Analyses (BPA) and Business Impact Analyses (BIA)
    and the process for submission and approval of
    the approved PMEF
  • In 2009 the Office of Emergency Response and
    Recovery embarked on an effort to identify and
    develop a resilient operational infrastructure
    for the agencys PMEF this effort included the
    development of a BIA designed to identify assets
    that support the GSA PMEF, the initial
    inter-dependencies between them and the potential
    outage impact following a disruption
  • Building on the results of the BIA Phase I
    effort, OERR engaged the Office of Performance
    Improvements CPI Program to further zero-in
    agency MEFs, specifically to de-scope the number
    of functions and volume of workload covered by
    the PMEF to establish a more manageable, lower
    risk requirement

13
Project Approach
Project Objective
Establish and apply a common interpretation of
MEF across the agency, to document, quantify and
analyze all critical processes, resources, and
dependencies and to develop an effective
agency-wide Continuity Plan
Define
Measure
Analyze
Improve
Control
Objectives
  • Clearly define MEF criteria criteria with agency
    stakeholders, to include defining not just what
    is in scope, but what is out of scope
  • Document through process mapping / value stream
    mapping all agency activities that comply with
    the definition for MEFs as established during the
    Define Phase
  • Analyze time and resource requirements for each
    MEF, including risk / resiliency profiles, and
    contingency options
  • Develop a comprehensive GSA Resiliency
    Improvement Plan, including highlighting areas
    with high risk or resiliency deficiencies
  • Begin to execute tactical planning using
    Continuity Plan and address risk areas /
    deficiencies with integrated improvement
    initiatives

Key Activities
  • Define the scope of the project effort and
    identify key Stakeholders
  • Define MEF selection criteria
  • Develop a prioritization strategy for MEF
    selection
  • Identify and validate the MEFs (and respective
    MEF owners)
  • Identify key processes and interdependencies
  • Identify all major inputs and outputs
  • Obtain and analyze current MEF universe
  • Determine MEF outage impact
  • Determine gaps
  • Determine time and resource requirements
  • Determine opportunities to streamline processes
  • Define system requirements
  • Define required modifications to current state
    operations
  • Ensure MEF owners are aware of their roles in
    Continuity Planning
  • Deploy improvement efforts to shore up resiliency
    of operations
  • Conduct integrated planning

Representative Products / Deliverables
  • Data collection results (workload, resources,
    locations, work volume)
  • Suppliers, Inputs, Processes, Outputs, Customers
    (SIPOCs)
  • Value Stream Maps
  • Project Charter
  • Standard MEF definition
  • Stakeholder Analysis
  • Data Collection Plan
  • Time and Resource vs. Capacity Analysis
  • FMEA
  • 5-Why Analysis
  • MEF QFD Prioritization Matrix
  • Resiliency Improvement Plan
  • Agency-Wide Out-brief
  • Development of Future Project Charters
  • Contingency Planning Efforts

14
Phase Objective
Clearly define Mission Essential Function (MEF)
criteria with agency stakeholders, to include
defining not just what is in scope, but what is
out of scope
15
Phase Objective
Document through process mapping / value stream
mapping all agency activities that comply with
the definition for MEFs as established during the
Define Phase
16
Phase Objective
Analyze time and resource requirements for each
MEF, including risk / resiliency profiles, and
contingency options
Typical Deliverables/Tools
Cause and Effect Analysis
Quality Function Deployment
17
Phase Objective
Develop a comprehensive GSA Continuity Plan,
including highlighting areas with high risk or
resiliency deficiencies
18
Control Phase
Phase Objective
Begin to execute tactical planning using
Continuity Plan and address risk areas /
deficiencies with integrated improvement
initiatives
19
Summary
  • Understanding an organizations essential
    functions and critical business processes is key
    to conducting proper business continuity
    planning, and Lean Six Sigma offers specific
    tools and methodologies which can greatly
    facilitate and improve this process
  • In addition to the direct benefits achieved on
    the Continuity Planning project, indirect
    benefits will be gained through an increased
    knowledge about agency processes that could
    provide valuable, time-saving support to
    unrelated improvement efforts
  • The driving cultural transformation behind Lean
    Six Sigma is the Continuous Improvement element
    organizations and individuals are empowered to
    take hard looks at their operations, identify
    improvement opportunities and pursue them
  • This cultural element is supported by a rigorous
    training effort directed across the enterprise to
    help individuals identify waste, with the tools
    and techniques to eliminate it but also
    requires significant outreach and education of
    senior leadership to inform them of how they can
    support these types of initiatives

20
Questions
  • If you have any questions about the Continuity
    Planning effort and/or the Continuous Process
    Improvement program at GSA please contact
  • Jason RaddePolicy and Plans Division (DP)Office
    of Emergency Response and Recoveryjason.radde_at_gsa
    .gov202-208-0630
  • or
  • Peter RusselburgCPI Program ManagerOffice of
    Performance Improvementpeter.russelburg_at_gsa.gov2
    02-501-3447
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