LEAN ANALYTICS

3 BOOKS IN 1

The Complete Guide to Using Data to Optimize and Build a Better

Startup Business

JEFFREY RIES
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BOOKS INCLUDED:

Lean Six Sigma

Lean Enterprise
Lean Analytics
 Table of Contents

Lean Six Sigma

ntroduction

Chapter 1: What is Six Sigma?

Chapter 2: The Different Levels of Implementing Six Sigma

Chapter 3: Why is Six Sigma Used?

Chapter 4: Tools to Use with Six Sigma

Chapter 5: Steps to Follow in the Six Sigma Methodology

Chapter 6: Scope the Perfect Project

Chapter 7: Transform Your Problem

Chapter 8: Knowing Your Goals and Your Needs

Chapter 9: Determine Who is Responsible for Each Project Part

Chapter 10: Picking Out the Solution, Implementing, and Following Up

Chapter 11: Common Issues with Implementing Six Sigma

Chapter 12: How to Get Six Sigma Certification

Chapter 13: Tips to Help with Six Sigma

Conclusion
Lean Enterprise
Introduction
Chapter 1: Why Lean Matters to Your Enterprise
Chapter 2: Creating a Lean System

Chapter 3: Setting Lean Goals

Chapter 4: Simplifying Lean as Much as Possible

Chapter 5: Lean and Production

Chapter 6: Run a Lean Office

Chapter 7: Kanban
Chapter 8: 5s

Chapter 9: Six Sigma

Conclusion
Lean Analytics
Introduction
Chapter 1: What is Lean Analytics?
Chapter 2: The Lean Analytic Stages Each Company Needs to Follow

Chapter 3: The Lean Analytics Cycle

Chapter 4: False Metrics vs. Meaningful Metrics

Chapter 6: Simple Analytical Tests to Use

Chapter 7: Step 1 of the Lean Analytical Process: Understanding Your Project Type

Chapter 8: Step 2: Determine Your Current State

Chapter 9: Step 3: Pinpoint the Most Pressing Metric

Chapter 10: Tips to Make Lean Analytics More Successful for You
Conclusion
 Lean Six Sigma
A Beginner’s Step-By-Step Guide to Implementing Six Sigma
Methodology to an Enterprise and Manufacturing Process
 Introduction
Congratulations on getting a copy of Lean Six Sigma: A Beginner’s Step-
By-Step Guide to Implementing Six Sigma Methodology to an Enterprise
and Manufacturing Process and thank you for doing so.

The following chapters will discuss everything that you need to know to get
started with Six Sigma. Six Sigma is a methodology that is going to change
the way that you do business. It strives to help you reach near perfection in
the products that you sell, the customer service that you provide, and the
lack of waste that you achieve. Moreover, it can work for all types of
industries and businesses.

This guidebook will provide you with the tools you need to work with Six
Sigma and see an improvement in your business. While other companies
may waste hundreds of thousands of dollars on inefficient methods and
faulty products, you can use the Six Sigma method to help improve your
customer service, increase your productivity, and make your company more
efficient. When Six Sigma is implemented properly, you can reach near
perfection in all your company processes. This guidebook will show you
how this is possible!

There are plenty of books on this subject on the market, thanks again for
choosing this one! Every effort was made to ensure it is full of as much
useful information as possible, please enjoy!
 Chapter 1: What is Six Sigma?
If you have been running your business for some time, you have probably
heard about Six Sigma at some point. It is known as a quality improvement
method that is used often to help you find defects in the business model so
that you can reduce them and get the business to be more effective than
before.

Six Sigma is one of the most effective methods currently available to help
improve the performance of any organization. It is able to do this by
minimizing the defects in a business's products or service. With this
method, all the errors committed have a cost associated in the form of
losing customers, replacing a part, waste of material or time, redoing a task,
or missing efficiency. In the end, this could end up costing the business. Six
Sigma works to reduce these losses in order to help a business grow.

This methodology of Six Sigma was endorsed by Motorola in the 1980s.

The company, at that time, was trying to find a way that they could measure
their defects at a granular level compared to the previous methods, and their
hope was to reduce these defects in order to provide a better product to their
customers.

What they ended up with was a huge increase in the quality levels of
several of their products, and the company received the first Malcolm
Baldrige National Quality Award. It did not take long until Motorola shared
their Six Sigma method and soon there were many other companies who
were reaping the rewards as well. By 2003, it was estimated that the
combined savings of all companies using the Six Sigma method were more
than $100 billion.
What is the Sigma Scale?
The first thing that we are going to look at is known as the Sigma scale.
This is a universal measure of the performance of any type of organization
or business. Sigma is known as the statistical term to represent a standard
deviation or the measure of a variation in a dataset. Higher scores of this
indicate better performance, or it can mean the results are more precise.

In other words, if the output is defective 60 percent of the time, it means

that the performance of One Sigma is compliant. However, if the output is
defective 31 percent of the time, it means that it is demonstrating what is
known as Two Sigma compliance. An example of how this works for the
different Sigma’s includes the following table:

The Sigma Scale

Defects out of a
Sigma Percent Defective
Million
1 69% 691,462
2 31% 308,538
3 6.70% 66,807
4 .062% 6,210
5 0.02% 233
6 0.00% 3.4
7 0.00% 0.019

As shown above, Six Sigma implies almost perfect output because there are
only 3.4 defects per million opportunities.

DPMO
The term defect is used a lot when it comes to Six Sigma. The goal of the
company is to reduce how many defects occur so they can reduce waste,
provide a better product for their company, and make more money.
However, what does this defect mean?

The “defect” is going to be explained as the nonconformities that are

showing up in an output that falls lower than what the customers find as
satisfactory. The number of DPMO, or defects present per million
opportunities, is going to be used to figure out which part of the Sigma
scale that process corresponds to. Most organizations in the world would
fall somewhere between Three and Four Sigma. This may not seem so bad,
but it really implies that they could be losing up to a quarter of their total
revenue simply because there are some defects in the organization.

The Six Sigma methodology can help these businesses out. It can move
them up to a new level of Sigma, which can reduce all that waste and those
defects, effectively helping them to earn more profits.
Applying Six Sigma
While there are many different methodologies that can come with Six
Sigma and can help the business to reduce its defects, the two basic ones
that are good to start with include DFSS and DMAIC. Let us look at each of
them below to understand how they work a little better.

DMAIC
The first one is DMAIC. In order to help modify a process that is already in
existence and change it so that it can be more compliant with the Six Sigma
methodology, therefore, more efficient, you would work with DMAIC. This
stands for:

Define: This is where an organization needs to define the goals for

process improvements so that they are in coherence with the
strategies of the business and with the demands of the customers.
You can’t get far in your process without defining what goals you
want to reach and which processes must be improved to reach these
goals.
Measure: This is the current performance of the systems in place for
the business. It will also take some time to gather data that is
relevant and can be used in the future. Measuring the data you
receive and the results that you are looking for can be important,
and you must make sure you are relying on the right tools to do it.
 Analyze: This is where you will analyze the current setting and then
observe how the relationship between the performance and the key
parameters work. Lean analytics can be a good tool to use to
analyze the situation and make sure your improvements are actually
working. If changes need to be made, your analysis will showcase
when this should happen.
Improve: From the other steps, you will be able to find ways to
improve the process. This helps to optimize the process to earn the
business more money.
Control: Here you will control the parameters before they are able to
affect the outcome.

DFSS
Now, the business can also choose to completely start a new process from
scratch and make it work with the Six Sigma methodology. This would be
done with DFSS. When a new process is started in this manner, Design for
Six Sigma methodology, or DFSS, is going to be used. Some see it just as
an offshoot of Six Sigma and others are going to see it as its own
methodology. Either way, the DFSS requires the IDOV approach, which
stands for:

Identify: Here you are going to identify and then define the process
goals. These need to be consistent with both the standards of your
industry as well as the demands of the customer.
Design: This includes taking into consideration all of the possible
solutions, and then selecting the one that is optimal.
Optimize: This is when you will optimize the performance of the
application. You can use different methods to do this such as
statistical modeling and advanced simulations.
Validate: This is when you will verify the solution that you chose
and see if it works.
There are times when the DMAIC that we talked about before can turn into
a DFSS. This happens when you look at the processes you are using and
find they are completely irrelevant or just are not working for you. You may
decide to redesign them to get the results that you want.

For some people, they want to be able to use the system that they already
have in place to get started with Six Sigma. Others find that how they
currently do things is such a mess that it is just easier to start over and try
something new. Your business will have to look at its current processes and
determine which method will make the best sense for you.
 Chapter 2: The Different Levels of Implementing
Six Sigma
There are several different levels when it comes to implementing Six
Sigma. The role that a person plays in this is going to depend on how much
training they have with Six Sigma, what position they hold in the company,
and so much more.
Implementing Six Sigma
Six Sigma is designed to have professional quality management roles for
everyone who is a part of the team. They have also adopted a ranking
system that is similar to what you find in martial arts, in order to tell who
does what in the business when working with Six Sigma. Some of the
different rankings for this method include:

Executive Leadership: This is going to be anyone who is in the top

management level of a business and can include the CEO. These
visionaries are going to authorize the others on the team to provide
them with the needed resources to improve a process. You must
make sure that your leadership includes some of those in the upper
levels of your company. Without this support, it can be impossible
to get Six Sigma and its processes to work properly.
Champions or the Quality Leaders: These individuals are going to
be in charge of integrating and implementing the methodology
through the whole organization. They are the ones who will be
chosen from the upper management and they can be mentors to the
Black Belts.
Master Black Belts: These are individuals identified by the
Champions and they are expert coaches with Six Sigma. They are
going to be guides to the Black Belts as well as the Green Belts and
they will assist the Champions in implementing Six Sigma
throughout the organization.
Black Belts: These individuals will operate under the guidance of
the Master Black Belts. Their main task is to supply the ideas of Six
Sigma to the different projects specified. They can also be in charge
 of executing the Six Sigma project. They will need direction from
the Master Black Belts, but they do have some leadership qualities
as well to perform their jobs.
Green Belts: These individuals will work on the implementation of
Six Sigma in the business. They can also work with other projects in
the business. The belts above this one will devote all their energies
to Six Sigma, while these individuals will be able to work on other
projects that the business needs, but can also work with Six Sigma a
little bit.
Yellow Belts: These employees have some training with the
techniques of Six Sigma, but they do not really have the opportunity
to apply their knowledge to a project that is using or relying on Six
Sigma.

Each of these levels is going to be important to implementing Six Sigma for

a business. This is not something with which just one or two people can do
and be effective. This large methodology can help reduce waste, create
better products, and help a company to meet and exceed the expectations of
their customers. However, it is going to take some work from top
management, as well as from others who are well versed in Six Sigma, in
order to see the great results. Everyone can play a role in Six Sigma, which
is why it is so important for a company to implement it throughout the
whole business and ensure everyone is a part of it.
 Chapter 3: Why is Six Sigma Used?
Now that we have looked at Six Sigma and what it is about, you may have
some more questions. A common one is “Why is Six Sigma used in the first
place?” Is it that good at getting rid of defects in a business? Can it really
help to reduce waste as much as it claims? Or is it too much work to
implement? There are many reasons why a business would choose to
implement Six Sigma, and some of the main ones include:

The quality of the product that the company provides to customers

will improve by quite a bit. The same can be said when talking
about the productivity of the company.
The number of possible defects that happen out of a million
opportunities will reduce quite a bit. This means that the quality of a
product is going to improve way more than a company can do on its
own. The fewer defects in a product, the happier the customer is.
The result of any process that is defined here is going to be based on
data that has been collected, rather than just on some assumptions
that management tries to make.
The amount of profit that the company is able to make is going to
increase rapidly. This means that the company now has growth in
the terms of more profits and more opportunities.
It calls on the business to come up with a more correlated and
integrated approach to help them solve problems that are already
there.
Some of the other conventional cost-cutting methods are not going
to be the best for some companies. Six Sigma will prefer to remove
costs that end up not giving value to their customers.
The net production costs that you will incur when you manufacture
a new product will be reduced as well.
By being able to reduce how many defects they are dealing with
effectively, a company may be able to raise their expectations in the
future.
Six Sigma can help to meet the needs and the expectations of more
of their customers. This is because the company can use this method
 in order to provide them with the same product they love, but with
higher expectations that it will be good, last a long time, and do
what it promises.
The internal understanding inside of a business across the various
departments is going to increase. This means that the employees of
a business are going to be more aware of the techniques and
strategies that each part uses in order to solve a problem. This helps
them all to learn and do better with their own work.
There seems to be more job satisfaction for employees when Six
Sigma is used. Because of this job satisfaction, the amount of
internal communication that occurs inside of an organization is
going to increase as well.
The time spent on production while manufacturing a new product is
going to decrease. This allows the business to deliver the service
faster than ever.
The market value of that company will increase due to all of the
other factors.

As you can see, there are tons of great benefits that come with Six Sigma; it
is a tool that many businesses are using so that they can provide a better
product to their customers and make more money in the long-term.

The other side of Six Sigma

Even though there are many reasons to love Six Sigma, some people do not
rank this process very high. Six Sigma sets up a standard of 3.4 defects per
a million opportunities. For many businesses, this sounds fantastic because
it can help them to provide better products and services to their customers.

However, this type of quality standard is not always the optimal one to go
with depending on your process. For example, if you are working with a
process that concerns the well-being of a person, you may want to go with a
quality standard that is even higher.

In addition, there are also some other types of businesses and operations
that are going to work well if they have a lower level of Sigma. Many find
that there really isn’t a clear justification as to why a business would choose
to go with the number six from the table, and they may do better if they go
above or below this level. Because of this capriciousness, there are some
quality managers who are not as fond of using Six Sigma and they will
choose a different method to get their defects taken care of.
 Chapter 4: Tools to Use with Six Sigma
There are many tools that you can use in order to make Six Sigma work for
you. These tools are there to ensure that you are providing good quality
management to your business and some of the tools are so successful that
they can be used outside of a Six Sigma application as well. Some of the
main methods that can be used include:

5 Why’s
The 5 Why’s is a technique that is there to explore the cause and effect
relationship of a problem. The goal of this technique is to find out the root
cause of a problem by repeating the question “Why?” Each answer is going
to form the basis of the following question. The 5 in the name derives from
the idea that it takes about five iterations in order to resolve the problem,
but depending on your particular issue, you may need to use more.

Not all problems though are going to have one root cause. If you would like
to figure out more than one root cause, this method is going to be repeated
by asking a different sequence of this question each time that you use it.

In addition, the method is not going to provide any hard rules about what
lines you should explore with the questions, or how long you need to
continue your search to make sure you find the root cause. Thus, even if
you follow this method closely, it may not give you the outcome that you
want.

An example of the 5 Why’s includes the following:

My vehicle is not starting:
1. Why? The battery is not working.
2. Why? Because the alternator is not functioning
3. Why? The belt on the alternator has broken off.
4. Why? The belt should have been replaced a long time ago, but was
not.
 5. Why? The vehicle owner did not follow the required maintenance
schedule for the vehicle.

This helps to show why there was an issue with the vehicle, and you can
easily choose to take it further into some more why’s until you find the
solution that you are looking for.

Axiomatic design
The axiomatic design is a systems design methodology that is going to
analyze the transformation of the needs of the customer into design
parameters, functional requirements, and process variables. The method is
going to get its name because it is going to use the design principles that
govern the analysis and decision-making process. The two types of axioms
that are used with this process include:

Axiom 1: This is the independence axiom. It is going to help you to

maintain the independence of your functional requirements.
Axiom 2: This is the information axiom. This is going to help you to
minimize the informative content of the design.

Cost-benefit analysis
Cost-benefit analysis, or CBA, is an approach that is meant to estimate the
strengths or weaknesses of varies alternatives. It can be used with project
investments, processes, activities, and even transactions. It can be used to
determine, out of several solutions, which options will provide the best
approach to a business in order to achieve benefits while still saving the
company money.

To keep it simple, the CBA method is going to come with two main
purposes. These purposes are:

To determine if a decision or an investment for a business is sound.

This means that the benefits will outweigh the cost. You also want
 to look at how much this is. If the benefits do not outweigh the costs
much, then it is probably not the best option to go with.
To help provide a good way to compare projects. This can involve
comparing the total amount that you expect each option to cost
against the benefits you expect to get.

The benefits, as well as the costs, are going to be shown in monetary terms,
which makes it work well for Six Sigma. Moreover, they can be adjusted in
the formula for the time value of money. This ensures that all flows of costs
and those from benefits over time are expressed with a common basis.

The simple steps that you will follow when you are working on a cost-
benefit analysis include:

You first have to define the goals and the objectives of the project
or the activity.
You can list the alternative programs or projects that you may be
able to use.
List the stakeholders
You then select the measurements you want to use in order to
measure all of the elements when it comes to benefits and costs.
You can also work on predicting the outcome of the benefits and the
cost of each alternative over a period of your choosing.
You can then convert all of the benefits and costs into a common
currency to help them compare better.
Make sure to apply any discount rates
Next, you can calculate the net present value of all project options.
Perform a sensitivity analysis: This is going to be the study of how
the uncertainty of the output from a mathematical system can be
shared to different sources of uncertainty in its inputs.
After you have all this information, you can then pick out the option
that is the best.

Root cause analysis

A root cause analysis, or RCA, is going to be a method to help with solving
problems and it focuses on finding the root causes of the problem. A factor
will be considered the root cause if you can remove it and the problem does
not recur. Essentially, there are going to be four principles that come with
this type of method including:

It is going to define and describe properly the problem or event.

Establish a timeline from the normal situation until the final failure
or crisis occurs
Distinguishes between the casual factor or the root causes
Once it is implemented, and the execution is constant, the RCA is
transformed into a method of problem prediction.
The main use of the RCA is to identify and then correct the root causes of
an event, rather than just trying to address a symptomatic result. An
example of this is when some students receive a bad grade on a test. After a
quick investigation, it was found that those who took the test at the end of
the day ended up with the lower scores.

More investigation found that later in the day, these students had less ability
to stay focused. In addition, this lack of focus is from them being hungry.
So, after looking at the root cause and finding it was hunger, it was fixed by
moving the testing time to right after lunch.

Notice that the root causes are often going to come in at many levels and
that the level for the root is only going to be where the current investigator
leaves it. Nevertheless, this is a good way to figure out why one particular
process in the business is not working the way that you want and then
finding the best solution to fix it.

SIPOC analysis
If you are talking about process improvement, a SIPOC is there to be a tool
that can summarize the inputs and then the outputs of at least one process
and then shows it in table form. This acronym stands for suppliers, inputs,
process, outputs, and customers and these will be used to form the columns
on your table.
Sometimes the acronym is going to be turned around in order to put
customers first, but either way, it is going to be used in the same way.
SIPOC is presented at the beginning of a process improvement efforts or it
can be used during what is known as the define phase of the DMAIC
process. There are three typical uses of this depending on who is going to
use it including:
To help those who are not familiar with a particular process a high-
level overview.
To help those who had some familiarity with the process, but may
be out of date with the changes in the process or those who haven’t
used it in a long time.
To help those who are trying to define a new process.

There are also some aspects that come with this method that are not always
apparent. These include:

The customers and the suppliers are sometimes external or internal

to the organization that is trying to perform the process.
Outputs and inputs can include things such as information, services,
and materials.
The focus of this method is to capture the set of inputs as well as
outputs, rather than worrying about all the individual steps that are
in the process.

Value stream mapping

When it comes to value streaming mapping, we are talking about a method
that is there to analyze the current state of a business and then designing a
new state to use in the future. It is meant to take a service or product that a
company offers from its very beginnings all the way through to when it
reaches the customers. The hope is that the process is used to help reduce
lean wastes, especially when compared to the process that the business is
using right now.
The value stream is going to learn how to focus on any areas of a business
that helps to add in value to the service or product. The purpose of this is to
learn where the waste is in the business and then remove or at least reduce
it. This can increase the efficiency of the business and can even increase
productivity.

The main part of this process is to work on identifying waste in the

business. Some of the most common types of waste include:

Faster than necessary pace: This is when the company tries to

produce too much of their product that it can damage the flow of
production, the quality of the product, and the productivity of the
workers.
Waiting: This is a time when the goods are not being worked on or
transported.
Conveyance: This process is used to move the products around. It
can look at things like excessive movement and double handling.
Excess stock: This is when there is an overabundance of inventory.
This can add on storage costs and can make it more difficult to
identify problems.
Unnecessary motion: This waste means employees are using too
much energy to pick up and move items.
Correction of mistakes: The cost that the business will have when
they try to correct a defect.

This process is used often in lean environments to help look at and design
flows for the system level. This is often something that is associated with
manufacturing, but it can be used in many other industries including
healthcare, product development, and even software development.

Business Process Mapping

The idea of business process mapping is going to be all activities that are
involved when you try to define what a business does, who is the person or
persons responsible, and at what standard a process in the business needs to
be completed. It can also determine how the success of the process in the
business can be measured.

Business process mapping is there to help a business become more

effective. A clear business process map will allow even outside firms, such
as consultants, to come in and look to see where improvements can be
made, such as what can happen with Six Sigma, to help the business.

This mapping is going to take a specific objective of a business and they

can measure and compare it to the objectives of the company. This makes
sure that all processes that are done can align with what the company holds
as its capabilities and values.

A good way to do business process mapping is with a flow chart. This can
help you to see how the business does a certain process and can even
include who is responsible for each part if that is important.

These are just a few of the options that you can choose from when it comes
to working with Six Sigma. All of the options above can help you to make
informed decisions while finding the process that is causing your business
the most trouble at the time. Pick one of these options that go along with
your biggest issue and find out how you can make smart decisions that will
turn your business into something even better.
 Chapter 5: Steps to Follow in the Six Sigma
Methodology
While some companies decide to start from the very beginning with a new
process in the hopes of getting fewer defects and providing better service
for their customers, this is not always something that needs to be done. It is
likely that your business already has a process in place. Moreover, with a
few simple tweaks, you will be able to make the right changes that can
make it Six Sigma compliant. This is why most companies will use the
DMAIC method to help them with Six Sigma.

The steps that are used in the Six Sigma methodology are there to help you
adopt a way of doing things that is smarter so you minimize the occurrence
of defects. It has an emphasis on getting rid of waste and doing things right
the first time. This provides you with a better customer experience and can
help you save a lot of time and money fixing the defects later on.

While this may seem logical, you may be asking how you would do this in
a way to ensure you did it right the first time. The steps in this methodology
are going to ask you to adopt a simple five-stage process, which includes:

Step 1: Define
For this first step, you are going to look at the process or the data and find
the area or the process that needs improvement. This is the nature of your
problem. During this step, you will also form a team and help them train in
the Six Sigma method so that they can work with you to improve the
current process. You must make sure that you pick out a team that is
motivated and believes that Six Sigma is important, otherwise things could
get messed up a bit.
The next thing to do is to identify the customers or the people who would
be the most impacted by this project. You can also document the critical
requirements for these customers. Then you can create a team charter that is
going to detail things like the business case, the project scope, and the
statement about the problem. This is going to help you finish up the define
step.

There are some different tools that you can use during this phase to make it
a bit easier. Project Charter, SIPOC, and stakeholder analysis are all good
diagrams that can help you to depict the different elements of your new
project visually.

Step 2: Measure
You will find that the measuring step is going to take a bit more time
compared to the defining stage. It is during this particular stage that you are
going to define what parameters you will use in order to measure how to
see whether performance has improved. You will also define the baseline
performance as well as the extent to which the process can be improved.

You may spend some time in this phase looking at and identifying the key
defects in the process. Then when you define the key measures to improve,
the data is going to be collected so that you can analyze the differences
between the desired performance that you want and the current performance
that you already have. You should also take some time to establish the
process variations during this phase.
Step 3: Analyze
The third step that you are going to work on is to analyze. During this
particular phase, the data that you collected in the past phase will be used in
order to analyze what the gap is between the current and the desired
performance. You can then do a root-cause analysis to help you determine
what can be causing the gap between your current performance and the
goals that you want to reach. This is often going to be calculated using
financial terms so you can see the issue in dollars.

Step 4: Improve
Now that you have had some time to define the problem, measure the gap
that is there with performance, and then analyze the reason for this gap, it is
time to move over to the fourth step. During this one, we are going to take
the steps that are necessary in order to improve the issues that are there.

During this particular phase, you are going to devise a set of solutions that
you could use. Sometimes there may be only a few options to work with,
and other times there may be many different options from which to choose.
From there, you can pick out the best possible solution based on the Six
Sigma method and the options you have decided on.

The main outcome that you want to get out of this phase is to design a
performance improvement plan. This plan is supposed to work in order to
provide you with a measured difference in your existing process so that you
can really see your defects go down.
Step 5: Control
The final phase that you can work with in the Six Sigma methodology is the
control phase. Here, you will come up with the project management plans
as well as any procedures that need to be followed in order to sustain the
new process you created.

Many companies forget this step, but it is very important. How is the Six
Sigma method going to work if no one follows the plan that you come up
with along the way? During this phase, you will need to document the
process that you revised, devise and then deploy your response plan, and
then transfer this information about the new process over to the
management and others who need to use it.

When all of these parts come together, you will find that the Six Sigma
method can work really well. It helps you to figure out where the problem
areas of your company are and can provide you with data in order to come
up with a plan to fix them. It can be time-consuming and you need to make
sure that everyone in your company is on the same page when it comes to
using Six Sigma so you can get the best results out of it for your company.
 Chapter 6: Scope the Perfect Project
Now that we have some of the basics down about working with Six Sigma,
it is time to help you get started with a project using Six Sigma. The best
way to learn how to use this process is to actually get a project and get to
work. You can read about it all that you want, but it is hard to understand
until you get a project in hand and can get started on it. This chapter is
going to look at the first steps that you can take when working on a Six
Sigma project: scoping the perfect project.

Scope the project

So, a Six Sigma project is going to start out as a practical problem that is
affecting a business adversely. Then it is going to end as a practical solution
that can help to improve how a business is able to perform. If you can find a
project where a business needs some help with their current processes, then
you may have a good option for Six Sigma.

The focus of your project with Six Sigma is going to be to solve a problem
that could be hurting some key elements of performance for a company.
Some examples of these could include:

Process capability
Costs
Customer or employee satisfaction
Organizational viability
Revenue potential
Cycle time
Output capacity

You will want to get started on the project by stating out what the problems
with performance are. Make sure you use terms that are quantifiable and
that are going to define expectations. These also need to relate to the levels
of timing and performance that you desire in the end.
As you are going through and defining the project that you want to use, you
should also pay attention to some important issues. For example, some are
going to be especially good for warranting a Six Sigma level of effort.
Some problems that you can consider include:

Issues that are going to have an impact on Earnings Before Income

Tax, or EBIT, or Net Profit Before Income Tax, or NPBIT. You can
also look at those that have a significant strategic value.
Issues that are going to give you results that seem to exceed the
effort that is required in order to see improvement by quite a bit.
Not easily or quickly solvable if you use some of the other methods
that you have seen in the past.
Issues that are going to improve the Key Performance Indicator by
more than 70 percent over the existing levels of performance where
they are now.

There can also be a type of flow that comes to your project as well. You will
want to flow in the order below to help you work on a Six Sigma project in
the current manner:

Practical problem: This is a chronic or otherwise systemic problem

that is affecting the success of your process.
Six Sigma Project: This is going to be an effort that is well defined
and that states your problem out in terms that are quantifiable and
which have known expectations.
Statistical problem: This is a data-oriented problem that will use
data and facts to help figure it out.
Statistical solution: This is again a solution driven by data and has
known risk and confidence levels. This is in comparison to “I think”
solutions that may have been used in the past:
Control plan: This is a method that you can use that will assure the
long-term sustainability of your solution for the problem. You do
not want to come up with a solution that seems to work today, but
then does not work a few months or so down the line. You want to
go with a solution that can work for in the long-term and still
provide you with some great results.
 Practical solution: This type of solution is not seen as irrational,
expensive, or complex. The best part is that it can be implemented
without a lot of problems or a wait time.
Results: These are the tangible results that you get. You will be able
to measure it out financially or in other ways that show how it is
benefiting the company.

Getting started on a new project can sometimes be the hardest part. You
want to make sure that you are working on a project that can help the
business out, and that will let you use the Six Sigma methodology to get it
done.
 Chapter 7: Transform Your Problem
The first step that we talked about was to scope out the project that you
want to work on in a business; it is now time to move on to the second step.
After you have been able to take the particular problem or process that you
want to fix in your company and framed it to be a potential project with Six
Sigma, it is time for the problem to go through a change. It is going to
transform from a business problem that is practical over to what is known
as a statistical problem.

The reason that it changes between these two types of problems is so that
you are able to identify a statistical solution. This is easier to understand in
some cases, and you will then be able to move it back to a practical solution
after you receive the data and the information.

This is why when you define the project, you need to make sure that you
are stating it out using some statistical language. This ensures that you and
others on the team are going to use data, and only data, to help solve it.

Data is not going to lie to you unless you knowingly choose to read it or use
it in the wrong way. You will get real results from the data, and you can
make better decisions from it. Often changing the problem into some form
of data is going to make a big difference in how big the problem seems to
you. You may see that customers are not coming back to you, but when you
can see how many customers you have lost, or how much this translates to
in dollar amount, you may see that it is actually quite a bit of the problem.

Data also helps you to use the facts at hand. Too many times in business it
is easy to use your intuition, some best guesses, and even your gut feelings
in order to address the problem. This is a big issue when you want to
improve the efficiency of your business and get results. This is what Six
Sigma can do to help you succeed.

You will quickly realize that, in business, you are not able to solve real-life
business problems simply by throwing your time and your money at them.
This seems to be the way that some businesses are choosing to handle
things, though, and it is not going that well in terms of customer satisfaction
and profits for them.

What you need instead is some practical solutions. A project that uses Six
Sigma can provide you with a good solution that is not complex, will not be
too hard for you to implement into your current business model, and will
not require extensive resources in order to get it to provide you with the
improvements that your business needs.

Transforming your problem is one of the best steps that you can do. It will
give you some data that will help you to see the full extent of the project
and will ensure that you are actually handling the project. You will then be
able to take that data and turn it back into a practical solution later on, but
for now, just find ways to turn the problem that we discussed in the first
chapter and turn it into a statistical solution.
 Chapter 8: Knowing Your Goals and Your Needs
In order to get the maximum benefits from your Six Sigma projects, you
need to be aware of things such as the strategic goals, objectives, and needs
of the business. These always need to be in your mind when you are trying
to figure out which problems should be solved with this process.

You will start out this step by finding out which areas of the business must
be improved in order to meet the specific goals of the business. Of course,
if you do not know these, you will need to meet with the top management
of the company in order to figure out what they are. Otherwise, you will
start trying to solve problems that lead the business away from its goals.

This approach is going to lead you to determine which problems

specifically you need in order to improve the performance of a company.
Then you can move on to determine the statistical solution to the problem
before implementing the solution and realizing the benefits from the work.

From here, you may be confused as to where you should start. A good place
to start is with an assessment of the higher-level needs of the organization.
You can also use any knowledge that you can get from the voice of the
people and voice of the business. With the VOC, you are looking at all the
expectations and needs that the customers already have for your products.
On the other hand, the VOB is when you look at the expectations or the
needs of a business.
The basic idea that you need to keep in mind is that you should do an
assessment of the VOB and the VOC in order to see where there are any
gaps. These gaps are going to be areas where the expectations of the
customer and the expectations of the business do not line up well together.

Zeroing in on the problem areas is going to be key to helping you out here.
You also need to have all the information organized and present to help you
with this. To make things easier, you can always look for some themes in
the information, such as:
 If there are any issues with invoicing or with accounts receivable
If there are any issues with capacity constraints
Look through any complaints from the customers and see if there
are some common threads or themes with those that the company
can address
The responsiveness or the cycle time of the business and if it aligns
with what the customer expects
If there are excessive levels of inventory for the business
If there are any services that are defective or ineffective for the
customer
If the yield or subsequent rework or scrap that you need to work on
How many times a product is returned and the costs for warranty
and how these add up for the company and could be costing them
more money in the long run

All of these can be issues for a company, but they often have one or two
that seem to cause the biggest waste and loss of profits. Being able to know
the goals and the needs of a company, and then zeroing in on the ones that
need to be improved the most will help you to make Six Sigma work the
best for you.
 Chapter 9: Determine Who is Responsible for
Each Project Part
In addition to working on the steps that we have talked about in the other
chapters, you need to be able to determine who is going to be responsible
for each part of the project. Problems that may start out in the functional
area can transform from line managers on through to the owner.

Project deliverables, accountabilities, and responsibilities should be divided

between managers and the different Belts (the yellow, green, black, and
master black that we talked about before), who are going to need to perform
a variety of activities for problem-solving. Managers, including the process
owner, will be in charge of figuring out the focus and the priority of this
process.

On the other hand, the non-management personnel are going to be the ones
who are responsible for implementing the solution that was determined
before and then seeing the benefits.

All of these parts need to come together. The managers and the
nonmanagers need to all work together through the Six Sigma methodology
in order to see success. These relationships can help ensure that the
deliverables from Six Sigma are not going to end up falling through the
cracks.

As you can imagine, the whole methodology of Six Sigma needs to be a

team effort. Even when you are just at the beginning and working on the
Define phase, the phase where managers will identify the project to work
on, the Belts are still there to assist.
Of course, those who are the Belts are only going to have about 20 percent
responsibility when it comes to defining and then managing the
improvement, while their managers will be closer to 80 percent. Later,
when you reach implementation, these percentages are going to reverse as
the Belts do the work to make sure the solution is working to fix the
problem. This is why both parts are so important and why they need to be
involved in all the parts of the Six Sigma process.

The managers, including the owner, will be able to determine who is in

charge of each different part when it comes to doing each part. They can
assign based on the job that needs to be done, which belts they have present
in the business and more. However, before the project is even started, it is
important that everyone is on board and they understand what needs to be
done. This ensures that Six Sigma can be done properly and that nothing
slips through the cracks.
 Chapter 10: Picking Out the Solution,
Implementing, and Following Up
One way to ensure that you can implement the Six Sigma project is to start
with a pilot project. This helps you to figure out what problems are present
in the business and what you can work on for them. You can also determine
who will carry out the work and get their input through it all. Remember
that Six Sigma is only going to work well if everyone in the business is
involved in the whole process.

From here, we need to not only look at the problems that are going on with
the business and that need to be improved, but we also need to pick out a
solution, implement that solution, and make sure that the proper follow up
occurs so that things don’t get messed up or go back to how they were
before. Let us look at each of these parts and see how they work with the
Six Sigma methodology.

Picking out a solution to your problem

At some point, you are going to need to come up with some solutions to the
problem you are choosing to fix. How you do this is going to depend on the
problem you are fixing, but often there are more than one available solution
from which to choose. So, how are you going to choose the right one based
off all the choices you have?

This is where you need to go back and look at some of the tools that come
with Six Sigma and use them with your data. This way, you will easily be
able to see what will be the best solution to make you more efficient, reduce
waste, and help you to make more profits in the process. In the end, you
should end up with just one solution to handle the problem.
Implementing the solution
Now that you have taken some time to look at all of the different solutions
that are available and you have chosen the one that you would like to work
with, it is time to implement the solution. This is the step where everyone
really needs to be on board with each other. If not, things are not going to
be implemented right and your Six Sigma methodology will not work the
way that you want.

You and the others on your team can come up with the procedures that need
to be followed in order to come up with a good implementation of your
solution. This could be new training for the employees, or a new way that
you do the manufacturing of a product. It could be many other things.
Nevertheless, you have to look at the solution and find a way to implement
it so everyone is on the same page.

Following up to see if it works

Hopefully, the solution that you decided to implement is going to work well
for you. It will be a solution that you can implement easily and that your
employees and customers will enjoy. It will take away some of the issues
that you were having before and will ensure that you are able to be as
efficient as possible with your business.

However, in order to make sure that this is working for your business, you
need to have plenty of evaluation and follow up. This helps you to see that
the solution is being implemented properly and that things are actually
getting fixed.

As your project finishes up, an evaluation is important because it is going to

detail what worked well and then what was causing you some problems.
The workers who help with this are going to be a big source for you when it
comes to evaluation parameters and criteria.

You will need to have some method in place to help you ensure that the new
procedures are implemented the right way. Your managers should know
how to do these evaluations and how to report them back, and even fix the
behavior if needed.
The whole point of doing Six Sigma is to make sure that you get rid of the
defects of your business and provide better service to your customers. If
you come up with the solution and do all of the other parts of this process,
but then you do not follow up and make sure that the solution you picked is
actually being used, then you just wasted a lot of time and effort in the
process.

Six Sigma is a process that is going to take a lot of time and effort on your
part. It is not always the easiest thing in the world and it can cost money
and time to make happen. However, if you are ready to provide a better
experience for the customer, provide the best products possible, and reduce
your overhead so you can make more profits, then Six Sigma is the option
for you.
 Chapter 11: Common Issues with Implementing
Six Sigma
Many people in the business world have been talking about Six Sigma and
how great it has been for them. Many of the organizations who choose to
implement this method have found that it can improve their processes,
services, and products. Having the ability to reduce their defects has helped
these companies to increase their profitability, customer satisfaction, and
productivity.

However, there are going to be some obstacles that can show up, and these
will often stand in the way of being able to implement Six Sigma properly.
You need to make sure that you recognize some of these hurdles and that
you know how to address them if you want to be able to make Six Sigma
work for you. Here are some of the common issues that sometimes come up
when you are implementing Six Sigma and how you are able to fix them.

Lack of commitment from leadership

Six Sigma is not a methodology that you can read about once, hand off to
the employees, and hope that it goes well. There needs to be a big effort
among the whole company to make Six Sigma work, and getting
commitment from everyone in management is one of the most important
steps.

A true test to see if a company is truly committed to working with Six

Sigma is going to come when the management decides which employees it
is going to dedicate to the new Six Sigma project. It is always best to go
with your top talent on a Six Sigma project, rather than just picking out
whoever is available.
If you just choose to use some random people in the business who are
available but do not have the right training, then you are already starting the
project off on the wrong foot. Moreover, this can reduce how likely it is that
the project will be a success. A successful Six Sigma project is going to
require leaders who have the dedications to provide money, talent, time, and
resources to this new endeavor.

You will find that taking your top performers and reassigning them from
their current work so that they can work with the Six Sigma project is going
to be the best bet. Sure, you may have to make some short-term sacrifices to
make it work. However, in the end, you will end up getting the most
benefits out of Six Sigma, which can greatly improve your business, when
you choose to do this.

Not understanding how Six Sigma works

It is hard to get a methodology to work well if you do not have a complete
understanding of how it works. Some organizations try to do it simply
because they think they should. Some do it because they see that someone
else was successful, and they want to be successful too. Others just rush
into the project because they are so excited, but they do not have a firm
grasp on what it requires to implement Six Sigma successfully.

The first thing to understand is that you should never implement the Six
Sigma methodology just to keep up with the competition. You should also
not waste your time on it if your only reason is to impress the shareholders.
If you are only planning on using Six Sigma as a cosmetic change, or you
implement it without giving it all the resources that it needs, then you are
just inviting failure into the project from the start.

The best way to overcome this kind of obstacle is to commit to the process
fully from the beginning. You can make sure that you employ and support
the Six Sigma experts on your team to ensure that the new process starts
working, rather than just bringing it on to use the terminology.

These experts, who may work for the company or not, are there to keep the
project focused on the areas where they can make the biggest difference. Do
not waste your time or the time of your team by using Six Sigma to help
with simple changes that will not make that much of a difference. Six
Sigma can do some amazing things for your business, but you have to be
willing to take on the big tasks, the ones that really need to be changed,
rather than the smaller options.

Poor execution
Even if you have some expert guidance to help with this process, there are
times when the project is not going to go well because it was not executed
properly. This poor execution will happen when the improvements are not
aligning with the goals of the organization. It can be an issue when the
project is reactively solving problems, rather than meeting strategic
objectives. Alternatively, it can be when the quality improvement project
focuses too much on the outputs of the project rather than focusing on the
inputs.

When companies that use Six Sigma are able to understand that these
methodologies are not there to act inside a vacuum but are there to work
while aligning to the objectives and goals of the organization, they will find
that it is easier to stay on target.

If you are working on Six Sigma and find that you are not getting the gains
in productivity that you were hoping for or the savings financially, then it
may be time to look for a reason. The reason is not going to be that the
methodology of Six Sigma is ineffective. Instead, it is going to most likely
come from a lack of effective leadership and the fact that the project was
not managed in the way that it should’ve been.

When the leadership learns how to be committed and completely on board

with the methodology of Six Sigma, they work to assign the top talent to
their teams. They put the project through all the right steps, including the
formal selection and the review process, and it provides the required
resources to all people in the process. The odds of seeing success with Six
Sigma are then going to increase quite a bit.

If Six Sigma is used in the proper manner, you are going to see some
amazing results. You will be able to cut out wastes, help your customers out
better, and make more profits in the long term. However, there are times
when a business will take considerable resources to work on Six Sigma, and
they will not see the results they had hoped for. Making sure that these top
issues are not a part of our project can increase your chances of seeing
success.
 Chapter 12: How to Get Six Sigma Certification
Six Sigma is a project management methodology that is there to help
increase profits, ensure product quality, boost morale, and reduce defects.
Many companies use it in order to help them strive to be as close to perfect
as possible. Although there is not really a governing body that will dictate
the rules of Six Sigma, many organizations are going to offer certification
in this methodology. By becoming certified with Six Sigma, you will find
that you are someone to take seriously and that could provide more value to
the company you are already with. Some of the things that you need to do
in order to get Six Sigma certification includes:

Determining the management philosophy

1. Consider what the organization needs: What kind of management
style is going to benefit your organization the most? Is it dealing
with too much waste or overhead in the supply chain? Are there
some issues with staying consistent to get things done? What is the
overall culture in the business?
2. Decide how you would like to optimize the process: You may be
someone who thinks that the best way to make sure quality is there
is to ensure that all the processes are consistent with as few
variations as possible. Others may want to opt for efficiency or
producing a quality product without as much waste as overhead.
3. Determine which certification you want to go with. You can go with
Lean Six Sigma or Six Sigma. The type of management philosophy
you go with will determine the answer to this.
a. Six Sigma is going to define the waste as a variation in the
process of the business. If you believe in a consistent
process, then you should get this certification.
b. Lean Six Sigma is going to be a combination of the Lean
method and the Six Sigma method. It is going to define
waste as anything that does not end up adding value to your
product when it is done. If you would like to be more
efficient, then this is the best option to choose.
Decide the level of certification
1. Determine your role in an organization. This can determine how
high of a certification you should get. Are you someone who
supports the manager or the manager? Does your work involve you
just being able to use Six Sigma on a project?
2. Consider your goals in the future: Even if you are not a project
manager right now, if that is your future goal, then you should
consider this when picking out your certification.
3. Select the certification: There are four levels that you can choose
including Yellow belt, Green belt, Black belt, and Master Black
belt:
a. Yellow Belts: These are those who have just a basic
understanding of the process. They are more of a supporting
role to those with the higher belts. There aren’t many courses
for this because it is so basic and most concentrate on being an
expert in the field.
b. Green Belts: These are the individuals who will work closely
with the Black Belts and are mainly responsible for collecting
data. These individuals will use Six Sigma, but they often have
other responsibilities outside this project, so they still just need
a basic understanding.
c. Black Belts: These are individuals who are project managers.
The other individuals will report to them and they are going to
be the ones who are going to dedicate a lot of time to the
project.
d. Master Black Belts: These will be the experts of the team.
They will be the one that the team will turn to if there are any
errors or if they need to make some corrections along the way.

Getting certified
1. Find a training program: It is likely that you will have to do some
classroom instruction, so look and see if there are some near you to
avoid travel. Always make sure that the program is accredited. No,
there are no formal standards right now, but there are some
 accreditation organizations that can make sure you actually learn
what you need.
2. Enroll in the program: You will attend the right classes and learn the
material that you need to get the belt that you choose.
3. Take the written test: Once you are doing with the training, the next
step is to do the written test. This will check to see if you have
learned what you need about Six Sigma. These tests can take some
time. The Yellow Belt can be two hours, the Green Belt about three
hours, and the Black Belt about four hours.
4. Complete the projects: The final phase of being certified will be the
process of completing a few projects using the Six Sigma
methodology. This is like the “lab” to make sure that you are able to
implement what you learn.

Benefits of being certified

Employees who are certified in Six Sigma can bring many benefits to a
company. You already know how the process works and can be there to
help the project go smoothly. It does not matter which belt you end up
getting, they all are important to implementing a project and ensuring it is
done.

If your current employer is looking at getting started with Six Sigma, it is

definitely worth your time to get a certification. This can ensure that you
are put on the project and can really help to further your career, especially if
you see success. If your current employer is not getting started with Six
Sigma, it is still worth your time. You may be able to use this later on with
another company or whenever your current company decides to look as
well.

That is all there is to it. The amount of time that you take to complete the
certification is going to vary based on which belt you want to get and how
the training centers work in your area. With some time and studying, you
can learn how to make Six Sigma work for your business.
 Chapter 13: Tips to Help with Six Sigma
Six Sigma is a methodology that can do many things for your business. It is
there to help reduce some of the wastes that can come up in your business,
helping you to provide better service and better products to your customers.
However, there are times when you may not know exactly what to do to
ensure you get the most out of Six Sigma. Some of the tips that you should
follow when you first get started include:

Make sure that leadership commitment is there. Make sure that the
top management of the business is committed by getting them
trained. This can talk about the responsibilities of the management
as the Champions, tools used, and an introduction of Six Sigma.
They need to be completely convinced about the benefits of Six
Sigma. In addition, your steering committee should be formed to
ensure:
The organizational goals of the business align with Six
Sigma projects
The resources are all planned for and all roadblocks are out
of the way
One person needs to be there to lead them all and they will be
the Black Belt. Pick someone who would be top of your
organization and can do the best job.
Make sure your leaders are trained. They should be at least Six
Sigma Champions. This two-day training session ensures that they
are ready to help run the group.
Elect the right person to train all the belts. There are tons of
programs out there that promise to be the best, but most of them are
mediocre. You want to pick out one that will actually teach your
employees and help them to do well when Six Sigma is
implemented.
Double check to see what the return on training investment is going
to be. If it is not at least 20 times, then you are going to be wasting
money or you may need to find a new project to work on.
You should start getting the movement going right from the shop
level. You do not want to have just a few Green or Black Belts
doing the work all the time. You should train the operators and
supervisors of the shop floor to use some of the tools and
techniques. They can be trained with the White Belt Program to get
it done. This helps them to feel some ownership in the process and
like they are doing some of the improvements on their own. You can
also reward leaders and team members when they get certification
to help encourage them to get on board as well.
Develop a mentoring process: This can make sure that the right
guidance is done to ensure that all people are trained. In addition, it
can help make sure that course corrections are made on a regular
basis and that all projects are done on time.
Always ensure there is some financial validation of the project.
There should be a financial leader who will sign off on how much
the project will help the business save money. This can be done
during the control phase.
Make sure that when you are using Six Sigma, you never classify it
as the quality manager’s job. The quality manager has a distinct
role, and they are not going to be in a position where they can
manage the process for Six Sigma all on their own. Make sure that
the proper team, with the right training, is set up to handle this.
Create a goal you share in common: Once you have decided that it
is time to implement Six Sigma, the next thing that you should do is
make sure that all of your qualified team members are on the same
page. This common goal can be shown through an executive
directive and it needs to be established for all employees. The point
of doing this is to reduce the variability to help reduce waste.
Standardize the methodology that you want to use: To make sure
that your Six Sigma project is going to be successful, you need to
have it define a standard approach. If you do not do this, then many
individuals on the same team are going to spend their time
redefining it again. Standardizing the process in order to reach Six
Sigma is going to allow the people on your team to focus on
reducing the standard deviation in their own projects, rather than
trying to figure out what method they should be using. This
standardization may take more time in the beginning, but it ensures
there is a common approach, which means execution time of
projects can be reduced. In addition, it can create a language that is
common, allowing for a true culture of teamwork in the business.
Map the plan: To make sure that the program you are doing is
focused and keeps running on time, you need to make sure that the
plan is mapped out completely. You also need to make sure that
your teams for each project are identified and that the process is
scheduled. The organization needs to be aware that process
improvement programs are not going to be implemented within a
few days. It can take a few months to a few years to do this. During
this time, you must make sure that you invest your resources of
money and time wisely.
Set times to present the data: Throughout the implementation of
your new program, there should be frequent reviews and audits.
This is done to ensure that there is some progress being made
through implementation. The data needs to be presented and each
team needs to be able to describe their milestones, progress, any
roadblocks, and the needs and findings that they have.
Create some methodologies for optimizing any processes that are
non-technical: Some invisible processes, such as those that are done
by the departments of finance and purchasing, need to be defined,
measured, quantified, and optimized. This is true despite the fact
that they are nontangible in nature.
Pick the right project: When you are working on Six Sigma, you are
likely to see that there are several projects that you can work on.
However, you do not want to waste your time and resources on a
project that is not going to make a big difference. You want to work
on one that is going to be able to really improve your current
process and earn you money. Make sure that everyone is certified
properly and able to handle the Six Sigma methodology before you
decide on which project you want to work on. This will ensure that
you are picking out the right one that can give you the most bang for
your buck.
Go with a project that meets your company goals. There may be
many projects from which to choose. However, if you are going to
 one that does not align with the goals you have for the organization
or seems to go against what the organization values, then it should
never be picked, regardless of what the Six Sigma process tells you.
Make sure that you really implement a project that works with your
business, or it is going to end up failing, no matter how hard you
work in the process.

When you implement Six Sigma properly, you will be able to reduce any
inefficiencies that are there and in return, it is going to produce very high
yields for your company. Nevertheless, to make sure that you are as
successful as possible, an organization needs to invest wisely, have plans in
place, and have some long-term goals so they know where to go next.

Being able to come up with a comprehensive and cohesive strategy when

you start implementing the Six Sigma methodology is going to ensure that
the company will achieve their business goals.
 Conclusion
Thank you for making it through to the end of Lean Six Sigma: A
Beginner’s Step-By-Step Guide to Implementing Six Sigma Methodology to
an Enterprise and Manufacturing Process. Let us hope it was informative
and able to provide you with all of the tools you need to achieve your goals.

The next step is to start implementing Six Sigma in your business strategy.
Many businesses end up producing a lot of waste in terms of money, time,
and materials. With the help of Six Sigma, you can learn where these
problem areas are for your business and come up with a solution to reduce
this waste. This often results in more efficiency and less waste compared to
other methods. This guidebook took some time to explain Six Sigma and
look over the different steps that you should take to get this methodology
started for your needs. When you are ready to reduce waste and help
increase your profits and efficiency, look through this guidebook, and learn
how to get started with Six Sigma in your business.

Finally, if you found this book useful in any way, a review on Amazon is
always appreciated!
 Lean Enterprise
The Complete Step-by-Step Startup Guide to Building
a Lean Business Using Six Sigma, Kanban & 5s
Methodologies
 Introduction
Congratulations on getting a copy of Lean Enterprise: The Complete
Step-by-Step Startup Guide to Building a Lean Business Using Six Sigma,
Kanban & 5s Methodologies. These days, it is more difficult than ever to
build a business that can remain competitive in a world where customers
can find your competition with just the click of a mouse. While there is only
so much you can do when it comes to adjusting your profit margins, you
can still find success by adjusting the method that will complete the
processes in making your business successful.

Making a business Lean can give it the competitive advantage that

the perpetual buyers’ market takes away. However, it can be more difficult
than it first appears which is why the following chapters will discuss
everything you need to know in order to turn your business into a Lean
mean fighting machine. First, you will learn all about the Lean system, its
many benefits, and how you can get started creating your very own Lean
system. Next, you will learn how to move the process forward in the right
way by ensuring that you have the right goals in mind and that you go about
implementing them in the best way possible.

From there, you will learn how to create a value stream map which
is vital when it comes to ensuring that your business’s various processes are
truly on point before learning how to choose the Lean system that best
supports the flow of production. You will then learn about the importance of
standardization before learning about the several important Lean tools
which you can use to really whip your business into shape.

There are plenty of books on this subject on the market, thanks

again for choosing this one! Every effort was made to ensure it is full of as
much useful information as possible, please enjoy!
Chapter 1: Why Lean Matters to Your Enterprise
Lean principles were first discussed by an MIT student by the name
of John Krafcik in his master’s thesis. Before starting at MIT, Krafcik had
already spent time as an engineer with both Toyota and GM, and he used
what he learned from the Japanese manufacturing sector to posit a number
of standards that he believed could help businesses of all shapes and sizes
operate more efficiently.

The basic idea is that, regardless of what type of business a business

is in, it is still just a group of interconnected processes. These
interconnected processes can be categorized such as primary processes and
secondary processes. The primary processes are those that directly create
value for the business. Meanwhile, secondary processes are necessary to
ensure the primary processes run smoothly. Regardless of the type of
process you look at, you will find that they are all made up of a number of
steps that can be carried out in a way that ensures they work as effectively
as possible and that they need to be viewed as a whole in order for an
effective analysis to be completed.

As a whole, you can think of the Lean process as a group of useful

tools that can be called upon to identify waste in the current paradigm either
for the business as a whole or for its upcoming projects. Specific focus is
also given to reducing costs and improving production whenever possible.
This can be accomplished by identifying individual steps and then
considering the ways they can be completed more effectively. Some tools
that are commonly used in the process include:

5S value stream mapping

error-proofing
elimination of time batching
restructuring of working cells
control charts
rank order clustering
multi-process handling
 total productive maintenance
mixed model processing
single point scheduling
single-minute exchange of die or SMED
pull systems

Beyond these tools, Lean is also comprised of a number of

principles that are loosely-connected around the twin ideas of the
elimination of waste and the reduction of costs as much as possible. These
include:

flexibility
automation
visual control
production flow
continuous improvement
load leveling
waste minimization
reliable quality and pull processing
building relationships with suppliers

When used correctly, these principles will ultimately result in a

dramatic increase in profitability. When given the opportunity, the Lean
process strives to ensure the required items get to the required space in the
required period of time. More importantly, however, it also works to ensure
the ideal amount of items move as needed in order to achieve a stable
workflow that can be altered as needed without creating excess waste.

This is most typically achieved via the tools listed above but still
requires extreme buy-in at all levels of your organization if you ever hope
for it to be effective in both the short and the long-term. Ultimately, the
Lean system is only going to be as strong as the tools your company is
using to implement it, and these tools will only ever be effective in
situations where its values are expressed and understood.
Important principles

While it was originally developed with a focus on production and

manufacturing, Lean proved to be so effective that it has since been adapted
for use in virtually every type of business. Before adopting the Lean
process, businesses have only two primary tenants. The first one focuses on
the importance of incremental improvement while the other one is the
respect for people both external and internal.

Incremental improvement: The idea behind the importance of continuous

improvement is based on three principles. The first is known as the Genchi
Genbutsu and is discussed in detail below. The second is known as Kaizen,
and it has its own chapter later in this book. Finally, in order for continuous
improvement to be truly effective, it is important to understand that you
must lead your business with a clear knowledge of the challenges you are
most likely to face as it is the only way to determine how to deal with them
effectively.

When doing so, it is important to approach each challenge with the

appropriate mindset which is one that supports the idea that every challenge
leads to growth, which, in turn, leads to positive progress. Finally, you will
also want to ensure that you take the time to challenge your preconceptions
regularly as you will never know when your business might end up
operating on an assumption that is no longer true. This is ultimately the best
way to find unexpected waste which will ensure that you really start to
improve internally not just in the short-term but in the long-term as well.

Respect for people: This tenant is both internal and external as it applies
equally to your own people as well as to your customers. Respecting the
customers means going the extra mile when it comes to considering their
problems and listening to what they have to say. When it comes to
respecting your team, a strong internal culture that is dedicated to the idea
of teamwork is a must. This should further express itself in an implied
commitment to improving the team as a means of improving the company
as a whole.
Getting an edge

Prior to the digital age, businesses could determine their sales

margin by starting with all the relevant costs, adding on a reasonable profit
margin and calling it a day. Unfortunately, the prevalence of screens in
today’s society means that everyone is a bargain shopper, simply because it
takes so little effort. This, in turn, means that you are not only competing
against other businesses in your city, county or state, you are now
competing with businesses all around the world as well. As such, there are
only a few options when it comes to squeaking by with any profit margin
whatsoever. Companies can either add additional real or perceived value, or
they can reduce the amount of waste they are paying for as much as
possible.

Most businesses find that it is better to determine their margins by

looking at what customers are likely willing to pay for specific goods or
service and then working backward from there. Ideally, you will be able to
reduce that price by five percent to ensure you are truly competitive in a
cost-conscious world. While it might not seem like much, this extra five
percent is extremely important as customers are constantly on the lookout
for the next sale, regardless of how much is actually being saved. The
mental benefits that come along with being five percent better than those
around them will be more than enough for them to commit to your product
or service over all the rest.

Value add: Regardless of what your business does, you will find that there
are Lean principles that can be implemented in order to improve the overall
amount of value you are providing for your customers while also showing
them you appreciate their business and respect them as individuals. What’s
more, you will be able to address the potential for waste in your
organization while also maintaining flow and work to achieve perfection.

Often, you can manage this by doing something as simple as

listening to your customers’ specific wants and needs which will make it
easier for you to determine what they really value the most when it comes
to the niche your company habits. Value is most often generated by adding
on something tangible that either improves or modifies the most common
aspects of the good or service being provided. The goal is that this
improvement is something the customer is willing to pay for, so when they
receive it for free, they see this as a viable reason for your service to cost
more out of the gate. It is also very important that the added value is very
easy for the customer to claim because otherwise, they will feel that you
have misled them.

Cost reduction: As the Lean system is already quite big on cutting down on
waste in all of its forms, it should come as no surprise that it has some ideas
when it comes to cost-reducing measures. For starters, it is important to
understand that when it comes to Lean, all the different types of waste can
be broken down into three types.

Muri is the name for the waste that forms when there is too much
variation within common processes. Muda is the name given to seven
different types of waste including:

Transportation waste is formed when parts, materials or information

for a specific task are not available because the process for
allocating resources for active products isn’t where it should be.
Waiting waste is created if a portion of the production chain has
ideal time when they are not actively working on a task.
Overproduction waste is common if the demand exceeds supply, and
there is no plan in place to use this situation to the business’s
advantage. The Lean systems are designed to ensure that this
number reaches zero so supply and demand are always in balance
with one another.
Defective waste is known to appear when some segment of the
standard operating process generates some issue that needs to be
sorted at some point down the line.
Inventory waste is known to appear if the production chain ends up
remaining idle between runs because it doesn’t have the physical
materials needed to be constantly running.
 Movement waste is generated when required parts, materials or
information needs to be moved around successfully to complete a
specific step in the process.
Additional processing waste is generated if work is completed that
does not generate value or adds value for the company.
A commonly added eighth muda is the waste created by the
underutilization of your team. This can occur whenever any member
of the team is placed in a position that doesn’t utilize them to their
full potential. It can also refer to the waste that occurs when team
members have to perform tasks for which they have not been
properly trained.

Muda also comes in three categories, the first of which is muda that
doesn’t directly add value but also cannot be easily removed if the system is
going to continue working properly. When faced with this muda, the goal
should be to work to minimize it slowly as a precursor to removing it
completely. The second type of muda is that which has no real value,
whatsoever, and you should work to remove it directly once you’ve become
aware of it. Finally, the third type of muda doesn’t directly add value but is
required for regulatory purposes of one type or another. While it may be
annoying, this type of muda is unavoidable in most instances and the best
that you can do is ensure you are always updated to any relevant policies.
 Chapter 2: Creating a Lean System
Lean leadership

With so much emphasis placed on improving efficiency, the Lean

process naturally puts a lot of emphasis on team leaders who should be
working hard to directly inspire their teams to adopt the Lean mindset. In
the end, many Lean systems live and die by the leadership involved, which
means it is important that those who are put in charge of leading the Lean
transition are able to not only explain what’s going on but are truly
committed to the work that is being done as well. Some of the things that
Lean leaders should strive to emphasize include:

Customer retention: When it comes to customer retention, Lean leaders

need to take the time to consider not only what their customers want at the
moment, but what they are likely to want in the future as well. Additionally,
it is important to understand what a customer will accept, what they will
enjoy, and what they will stop at nothing to obtain. The Lean leader should
also work to truly understand the many ways the specific wants and needs
of their target audience throughout the customer base.

Team improvement: In order to help their team members be their best, Lean
leaders should always be available to help the team throughout the problem-
solving process. At the same time, they are going to need to show restraint
and refrain from going so far as to take control and just do things on their
own. Their role in the process should be to focus on locating the required
resources that allow the team to solve their own problems. Open-ended
questions are a big part of this process as they will make it possible for the
team to seek out a much wider variety of solutions.
Incremental improvement: One of the major duties of the Lean leader is to
constantly evaluate different aspects of the team in order to ensure that it is
operating at peak efficiency. The leader will also need to keep up to date on
customer requirements, as this is something that is going to be constantly
changing as well. Doing so is one of the only truly reliable ways of staying
ahead of the curve by making it possible to streamline the overall direction
of the company towards the processes that will achieve the best results.

In order to ensure that this is the case, the Lean leader will want to
make time in their schedule to look at the results and then compare them to
the costs as a means of discovering the best ways to use all the resources
available to them at the given time. This will include things like evaluating
the organization as a whole in hopes of making it more efficient and
reliable. It will also involve evaluating the value stream to ensure that it
satisfies the customer on both the macro and micro level.

Focus on sustained improvement: It is also the task of the Lean leader to

ensure that improvements that are undertaken are seen through to the end as
well. This will often include teaching the team members the correct Lean
behaviors to use in a given situation and also approaching instances of
failure as opportunities for improvement and innovation.

Three actuals

Lean leaders typically use a different leadership style than many of

their peers, largely because being a Lean leader requires an understanding
that the best way to analyze a situation is to physically be in the space
where the situation occurred. Once there, the Lean leader needs to consider
what is known as the three actuals, the broadest of which is known as
Genchi and is the issue that led the leader to come to the place in question.
Genbutsu is the idea that it is important to view what is being created or
provided in action before making any moves. Finally, Genjitsu says it is
always best to gather as much information as possible before making a
decision one way or the other.

Creating a Lean system

In order to create a Lean system that lasts, the first thing you will
need to do is consider the absolute simplest means of getting your product
or service out to the public and put that system into effect. From there, you
will need to continuously monitor the processes you have put in place to
support your business in order to ensure that improvement breakthroughs
happen from time to time. The last step is to then implement any
improvements as you come across. While there are plenty of theories and
tools that can help you do go on from there, the fact of the matter is that
creating a Lean system really is that simple. Many of the chapters in this
book will consist of deep dives on various tools that will make this process
as easy to set up and as most likely to stick as possible.

There’s more to business than profits: When using the Lean system, the end
goal is to determine the many ways that it might be possible to improve the
efficiency of your business. While an increase in profits is often a natural
result of this process, this should not be the primary motivating factor
behind undertaking a Lean transformation. Instead, it is important to focus
on streamlining as much as possible, regardless of what the upfront cost is
going to be since you can confidentially expect every dollar you spend to
come back to you in savings.

There are limits to this, of course, and at a certain point, the gains
won’t be worth the costs. To determine where this line is, you can use a
simple value curve to determine how the changes will likely affect your
bottom line. A value curve is often used to compare various products or
services based on many relevant factors as well as the data on hand at the
moment. In this instance, creating one to show the difference between a pre-
and post-Lean state should make such decisions far easier to make.

Treat tools as what they are: When many new companies switch to a Lean
style of doing things, they find it easy to slip into the trap of taking tools to
the extreme, to the point that they follow them with near-religious fervor. It
is important to keep in mind that the Lean principles are ultimately just
guidelines and any Lean tools you use are just that, tools which are there to
help your company work more effectively. This means that if they need to
be tweaked to better serve your team and your customers, then there is
nothing stopping you from doing just that. Your team should understand
from the very beginning the limits and purpose of the Lean tools they are
being provided and, most importantly, understand that they are not laws.

Prepare to follow through: Even if you bring in a trained professional to

help your team over the initial Lean learning curve, it will still ultimately
fall to you, as the team leader, to ensure that the learned practices don’t fall
by the wayside as time goes on. It takes time to take new ways of doing
things and turn them into habits, and it will be your job to keep everyone on
until everything clicks and they start operating via the new system without
thinking about it. Likewise, it is important that you make it clear just why
the Lean process is good for the team as a whole and for the individual team
member as if they are personally invested in it, then it is far more likely that
they will stick with it, even if the going gets tough.
 Chapter 3: Setting Lean Goals
In order to eventually make the right changes to your business, the
first thing you need to do is ensure that you set the right goals. In order to
make sure that your goals will put you on the right track, you need to ensure
they are SMART which means they are specific, measurable, attainable,
realistic and timely.

Specific: Good goals are specific which means you want to be sure that the
goal you choose is extremely clear, especially when you are first starting
out, as goals that are less well-defined are much easier to avoid doing in
favor of activities that provide more positive stimulation in a shorter period
of time. Keeping specific goals in mind will instead make it much easier for
you to go ahead and power through whatever task you are currently
undertaking.

When you aren’t quite sure if the goal you have chosen is specific
enough to actually improve your chance of changing for the better, you may
be able to figure it out by running through the who, why, where, when, and
how of the goal. Specifically, you are going to want to consider who is
going to be involved with you when it comes to the completion of the goal?
What exactly is it that is going to be accomplished? Where will it be taking
place, why it is important that you ensure it is completed as quickly as
possible, and how exactly you can expect to go about doing it. Once you
can answer all five of the big questions, then you know you have a goal that
is specific enough to generate the type of results that you are looking for.

Measurable: SMART goals are those which can be broken down into small,
easily manageable chunks that can be tackled one piece at a time. A
measurable goal should make it easy to determine when exactly you are
headed off track so that you can self-correct as quickly as possible.
Measuring your progress will make it easier for you to keep up the good
work.
Attainable: Perhaps more important than anything else, if a goal that you set
is unattainable, especially the first goal that you set using this system, then
you are going to unknowingly be wasting valuable time and energy while
creating negative patterns that end in failure. What’s more, you will end up
reinforcing fixed mindset ideals, making this a bad choice any way that you
look at it. This means that when it comes to setting goals, you are going to
want to have a clear understanding of the current situation and anything
going on with the business that would make it less likely to succeed as far
as that goal is concerned.

Realistic: A good goal is one that is realistic, in addition to being attainable,

which means that you can expect success without something extremely
unlikely being required to push reality into your favor. An ideal goal is one
that is going to require a good amount of work to achieve, while still
remaining not too difficult as to become unrealistic. Additionally, you are
going to want to shy away from goals that you can meet without putting any
real amount of effort as goals that are too easy can actually be demotivating
as it then becomes easy to continue putting them off until they eventually
fade into oblivion.

Timely: Studies show that the human mind is more likely to actively engage
in problem-solving behaviors when there is a time limit involved in the
successful completion of the task in question. What this means for the goals
you are setting is that if you have a firm completion date in mind for when
you want to have reached your goal, then you will work harder in the period
leading up to that date. This means that you are going to want to pick
completion dates that are strict enough to truly motivate you to do whatever
it is you have in mind, while at the same time, not being so strict that there
is no realistic way that you can complete the task on time. The goal here is
to throw a little extra hustle into your step and not force you to keep a
grueling schedule, thus, ensure that you can always meet the schedule you
set for the best results.

Policy Deployment
 Also known by the name Hoshin Kanri, policy deployment is a way
of ensuring any SMART goals that are set at the management level
ultimately filter down to the rest of the team in a measurable way. Making
proper use of policy deployment will essentially ensure that anything you
are planning to put into effect doesn’t accidentally end up creating more
problems than it ultimately solves. It will also help to ensure as little waste
as possible is generated as a result of things like inconsistent messaging
from management or all around poor communication. The goal in this
instance should not be to force various team members into acting in a
specific way. It is about generating the type of vision for the business that
everyone can appreciate and understand how it pertains to both the team
and the customers.

Implementing the plan: Once all of the relevant SMART goals have been
finalized, the next thing you will want to do is to group them together based
on which members of the team will ultimately be tasked with solving them.
Keep in mind that the fewer number of goals, the more likely it is that they
will be acted upon in a reasonable timeframe. If your goals cannot be
generalized in such a way, it is important to instead begin with the ones that
are sure to make the biggest difference overall and work down the list from
there.

Regardless of what goals you ultimately settle on, it is important

that you take special care to ensure that there are no goals that do not have
one person specifically assigned instructions to keep tabs on the overall
progress while providing status reports when needed. This person should
also be someone who can be counted on to make it clear to the other team
members how important the goal is for the business as a whole and how it
will make things easier in the long run.

Consider your tactics: Those who will be responsible for making the goal a
reality should, in turn, be the ones who decide how the goal can best be
completed by the team as a whole. However, this process should still
include back and forth interaction between all levels of the team just to
ensure that the tactics and the goal align properly. Tactics are likely to
change as the goal heads towards success, which means it should be studied
from time to time to ensure they remain appropriate for the goal in question.

Moving forward: Once the tactics have been agreed upon by all parties, it
will then be time to actually put them into practice. This will be the stage
where the team can really take over, though quality goals should still
require buy-in from relevant parties. During this period it is important to
ensure all communication from management is on message, to properly
ensure that actions and broader goals will continue to align.

Review from time to time: It is important to keep in mind that once the
action is in progress, the team leader will need to change the action as
needed. This means that they will also be monitoring things as they
proceed, hopefully, according to plan. Remember, Lean systems are always
being improved upon, which means your goals and their implementation
should be no different.
 Chapter 4: Simplifying Lean as Much as Possible
All of the products and services that are generated by your business
have a mixture of three different value streams that can ultimately be used
productively if you take the time to understand them fully. These include
the concept to launch stream, the creation of customer stream and the order
to customer stream. In order to ensure you are getting the greatest overall
value out of all of the processes your business finishes, it is important to
look at a value stream map as it is an excellent way to ensure you are
maximizing efficiency at every turn.

The average value stream map will include everything that

ultimately comes together to generate value for the customer including
activities, people, materials, and information. To properly visualize a value
stream, you will want to follow the Plan/Do/Study/Act process, also known
as the Lean cycle. To get started, you will want to plan out the task ahead by
focusing on one goal at a time. From there, you will want to make a list of
everything that will need to be done in order to ensure the task is finished
successfully. This is then followed by the step of following through, the
results being studied, and acted upon as required.

Create your own value stream map

A properly constructed value stream map is a vital part of the

process as it will allow you to see the big picture by mapping out the entire
flow of resources from their disparate starting points all the way through
when they come together and eventually make it into the hands of the
customer. As such, it then makes it far more of a manageable task to
determine the points in the process that are bottlenecking the overall
efficiency of your business’s process and thus, taking the first steps towards
adopting Lean processes.

While one person can certainly work through the following steps,
the value stream maps that prove to be the most effective are often those
created by the entire team, so that those who are the most knowledgeable
about each step will be able to give their two cents as well. Your initial
value stream map should be thought of as a very rough draft and should be
constructed as such, which means planning it out in pencil and expecting
lots of rewriting as you go along.

Consider the process: The first step in this process will be to consider
exactly what it is you will be mapping. For businesses that are first starting
out with the Lean system, you will want to begin by considering the various
processes that are ultimately going to prove to be of the greatest value to the
team as a whole and then work down the list from there. If you still can’t
decide where to start, then you will want to turn to your customers, consider
what they have to say and start with the areas where you regularly receive
the most complaints.

What is known as a pareto analysis is an effective tool at this

juncture as it can make it easier for you to find the right place to start if you
aren’t sure where your efforts will be best put to use. It is a statistical
analysis technique that can prove especially useful if you are looking at a
few different tasks that are sure to generate serious results if only you could
decide which one to use first. The goal, in this case, is to focus on the 20
percent of your business that, if nurtured, could ultimately generate 80
percent of your total results. Your initial value stream map may focus on
only a single service or product or on multiples that share a significant
portion of the process.

Choose your shorthand: The symbols you use to denote various stages of
the process you are mapping don’t really have any hard and firm guidelines
as they are going to be unique to every project and every business.
Regardless of what you and your team ultimately choose, it is important to
create a list of all of the symbols you are using and what they mean so that
anyone who comes in after the fact can easily get caught up. From there, it
is important to stick to the designated symbols and not make anything up on
the fly. Additionally, if the business is working on more than one value
stream map at a time, it is important that the symbols correspond between
the two. Otherwise, things can quickly spiral into illegibility.
Set limits: If taken from a broad enough scope, virtually every value stream
map for your business can be connected to other value stream maps or go
into greater detail. At some point, however, this is going to be
counterproductive and you will have to set limits on what the value stream
map is going to account for if you ever hope to successfully move forward.
Likewise, if you let this part of the process get out of hand, then the map
can lose focus and become less useful as a result.

Start with steps that are clearly defined: After you have a clear beginning
and end for the process you are mapping, the next thing to do is to make a
list of all of the logical steps that need to be taken from start to finish. This
shouldn’t be an in-depth look at every link in the chain, but instead, should
be an overview of the major stages that will need to be looked at more
closely as the process moves towards completion.

Consider the flow of information: One important step in the value stream
mapping process that sets it apart from other similar mapping processes is
that each value stream map also accounts for the way that information flows
throughout the process from beginning to end. What’s more, it will also
chart the way information passes between team members as well. You will
also need to ensure it takes into account the ways the customer interacts
with your business, in addition to how frequently such interactions occur.
You will also need to ensure the communication chain includes any
suppliers or any other third parties the company deals with.

Further details: When it comes to breaking the process down to its most
granular level, you may want to include a flow chart with your value stream
map as well. A flow chart is a great way to map out the innermost details of
how a given process reaches completion. This is also an excellent way to
determine the types of muda you are dealing with, so you can consider if
they can be removed from the process.

If you are interested in considering the ways your team physically

moves around your space, then a string diagram can also prove effective. To
generate this type of diagram, you will map out your business’s workspace
by drawing in what each member of the team has to do and where they have
to go in order to fully complete the process. You will want to draw different
team members or different teams in different colors to keep things from
getting too confusing. From there, charting the flow of information as it
relates to this data can lead to surprising conclusions regarding flaws that
might otherwise go unnoticed for years.

Collecting data: When it comes to outlining your initial map of a value

stream, you may find yourself with certain aspects of the process that
require additional data before anything can be determined with any real
degree of certainty. The data that you may need to track down will include:

cycle time
total inventory on hand
availability of the service
transition time
uptime
number of shifts required to complete the process
total available working time

When it comes to collecting this data, it is important to always

remember to go to the source directly and find the details you are looking
for rather than making assumptions. Furthermore, it is important to get the
most updated numbers possible as opposed to looking at older, more readily
available figures or hypothetical benchmarks. This may mean something as
hands-on as physically keeping an eye on every part of the process in
question so you can take relevant notes.

Watch the inventory: Even if you are relatively certain about any inventory
requirements for the process in question, it is vital that you double check
before you commit anything to the value stream map. Minor
miscalculations at this point could dramatically skew your overall results
and essentially nullify all of your hard work if you aren’t careful. This
means you definitely need to adopt a measure twice in order to see the best
results. After all, inventory is prone to building up for a wide variety of
reasons and there is a good chance that you won’t know it until you take a
closer look and do a once over on what’s really on hand. You can also use
this step as an excuse to take stock of exactly what the team is working with
and determine how far it will actually stretch effectively.

Using the data: After you have finished visualizing the steps found in your
most important process, you are now ready to use it as a means of
determining where any problem points might be. You will especially want
to keep an eye out for processes that include redoing any previously
completed work, anything that requires an extended period of resetting
before work can begin again, or long gaps where parts of the team can do
nothing except wait for someone else to finish, those that take up more
resources than your research indicates you should or even just those that
seem to take longer than they should for no particular reason.

Generate the ideal version of the value stream: After you have determined
where the bottlenecks are occurring, you will want to create an updated
value stream map that represents how you want the process to proceed once
you have everything properly sorted. This will provide you with an A to C
scenario, where figuring out the pain points represents B. Ideally, it will
also provide a clue as to how you can go about eliminating the waste from
the process in order to create an idea, which you can really strive for both in
the short and the long-term.

Once you have determined the ideal state for the process, you can
work out a future value stream map that will serve as a plan on how to take
the team from where you are currently to where you need to be. This type
of plan is often broken down into sections that last a few months, depending
on what needs to be done. Additionally, most future value stream maps will
come with multiple iterations because they will need to change several
times as the project nears completion.

When working through various variations of the value stream map,

it is important to pay close attention to the lead time available for various
processes. The lead time is the amount of time it will take to complete a
given task in the process and, if not utilized as efficiently as possible, it can
easily lead to a wealth of bottlenecks. Remember, when it comes to creating
the best value stream map possible, no part of the process is beyond
scrutiny.
 Chapter 5: Lean and Production

When putting together a Lean system for your business, you will
eventually determine where the waste is hiding in your current processes,
which is when it will be time to consider what can be done about the flow
of the process. Often, the answer will come in either the form of a
continuous flow model or a batch model.

Continuous flow model: The ideal version of the continuous flow model
sees the customer order a product or service before the necessary steps are
taken to generate the product or service that is being paid for. The product
or service is then delivered to the customer who then pays for their order.
The end result here is that there is no downtime between when the customer
puts in their request and when it is completed. Furthermore, every step is
going to smoothly flow into the next as a means of ensuring that overall
downtime is reduced as much as possible.

The biggest upside to the continuous flow model is that it allows

business to make assumptions and plan for the future based on a profit level
that prioritizes continuity and stability. A continuous flow setup also
features less waste than other types of processes. The biggest downside,
however, is that this type of scenario can be difficult to produce reliably as
every step in the process is rarely equal, regardless of how clear the value
stream map might be. If you are striving to create a continuous process
scenario, then you should be aware that new problems can also appear
quickly if your available margin for error begins to shrink.

In order to persist despite these drawbacks, you will want to do your

best to attack these problems head-on and be determined to push through
them if you hope to find success. Additionally, if you hope to choose this
route, it is important to start your journey to a Lean system with this in
mind, as a continuous system is only going to work if every part of the
system is completely in sync with all the rest.
 Heijunka is a useful tool when it comes to facilitating this process as
it promotes leveling out the quantity and quality of the process over a
prolonged period of time in hopes of making everything as efficient as
possible and, what’s more, to expressly prevent batching. While it might
sound complicated, in reality, this process can be as simple as making sure
your team has all of the storage space they need to organize the various
parts of the project. They store them in folders that are organized based both
on the frequency of use as well as the due date. Folders that are currently in
use can be stacked vertically on top of one another while those that are idle
can be stored horizontally out of the way somewhere. There are also
numerous other types of organizational methods that promote heijunka, so it
can be helpful to explore them all to see what offers the most benefit to
your business.

Batch production: Unlike with the continuous flow model, with the batch
production model, the steps in the process to create the product or service
are all completed in bulk one after the next. This makes it the superior
choice when it comes to situations where what the process generates is
evergreen as this will allow it to be stockpiled as a direct counter to erratic
customer demand. Depending on the specifics of your business, batch
production can also dramatically decrease the associated production costs as
few team members can move from step to step instead of having all the
steps operating at once. It also provides lots of opportunities when it comes
to cross-training.
As a general rule, you can count on batch production to be less
productive when there are a greater number of individual steps that are
required to complete the process. This is because the starting and stopping
times would need to be calculated for each which can add up quickly if
batch sizes are quite large. This can also potentially create a delay if a
customer places a large customized order when a batch is already in the
middle of production.

Takt time
 Short for the word Taktzeit, Takt time is a variation of the Japanese
principle of measuring time, despite its German name. Despite the fact that
it is primarily used in production environments, it can have a beneficial
effect on most tasks performed in a business environment as well.
Specifically, Takt time is the time it takes for a team to start a new process
after completely finishing the last, assuming the production rate is equal to
the rate of customer demand.

Determining takt time: If your team completes processes one at a time

throughout the workday, the takt time of that process can then be
determined by taking the time that has elapsed between two processes,
assuming of course that demand is still being met. This means it can be
written as T = Ta/D. In this case, T is your Takt time, Ta is the amount of
time available to finish processes, and D is the amount of demand that the
process experiences.

You will not want to automatically take these results as fact,

however, as it is rare to find a team that can run at peak efficiency at all
times. As such, when it comes to determining an accurate takt time, you
will want to add in some wiggle room here to compensate for the fact. From
there, you will want to adjust your takt time based on additional customer
requirements or team demands.

Takt time benefits: Once you have determined the accurate takt time
for your business’s processes, you will find that a number of additional
beneficial options open up to you. First and foremost, you will find that it is
clear which steps in the process are the bottlenecks which will make it
easier to take steps to mitigate them specifically. Likewise, if you have any
processes that typically go off the rails, that problem will be made apparent
as well.

As a general rule, takt time places additional emphasis on steps that

add value to the process as a whole, which makes it easier to use if you are
looking for muda to remove from the process. What’s more, once the team
gets used to the concept of takt time, they will find that it is much easier to
track how productive they are being throughout the day.
 Be aware: Takt time is not a set-it and forget-it type of affair which
means that if you find that your demand changes dramatically, then you will
need to recalibrate all of your takt time to adjust for this fact. This also
means that if your demand isn’t relatively stable, then determining your takt
time might not be very beneficial on its own. If you try and force your
process into a takt timetable and it isn’t a good fit, then all you will end up
doing is causing even more waste in the long run.

Likewise, you will need to be aware of the way in which the

products or services produced by your processes fit together or else, you
risk creating bottlenecks anyway which will throw off the accuracy of your
takt time. As a general rule, the shorter the takt time, the greater the amount
of strain that resources including both machinery and people will
experience on a regular basis.
 Chapter 6: Run a Lean Office
One of the truly great parts of the Lean system is the potential it
holds when it comes to standardization, specifically when it comes to
minimizing waste. Much like when it comes to setting goals, setting work
parameters that are clearly standardized makes it easier to answer specific
questions about the process. This should include things like who will follow
through on the process once it has been outlined, how many people will it
take, what will the end result be, what the metrics for success should be,
what is required to meet them, how long the process will take and more.
These are all questions that ultimately need to be asked in order to
guarantee your standardization measures don’t end up creating new
problems instead of solving existing ones.

Workflow standardization is not expressly designed to ensure that

processes are completed as quickly as possible. Rather, it is about utilizing
the most effective practices possible in order to ensure they are completed
with the same level of reliable quality each and every time. You will also do
well to remember that standard practices will naturally change over time as
improvements to safety, quality, and productivity are found. You will want
to take care to avoid becoming so reliant on a single type of standardization
that you end up actually allowing it to hold you back from future progress.

With that being said, it is also important to avoid falling into the trap
of undertaking a round of standardization solely for standardization’s sake.
Instead, it is important to consider if standardization is really the right
choice by considering the various processes already in place and asking
yourself if they would be of a higher quality, performed to a higher safety
standard or completed with less waste. If you move forward, and this is not
the case, then all you are doing is inviting in waste.

Furthermore, standardization should involve more than simple

instructional documents. It should be created from the input of those who
perform the processes on the regular and then combined with a fresh round
of customer feedback to ensure all bases are covered. The reasons for the
standardization process should be clear to everyone involved before getting
started for the best results.

KPIs

KPIs, also known as key performance indicators, are extremely

useful when it comes to determining the ideal steps to take during the
standardization process. KPIs are also useful when it comes to measuring
the overall success of the process as a whole based on numerous different
metrics. Choosing the right KPI to focus on is a matter of considering what
metrics you value most at the moment as well as in the long-term. There are
a wide variety of indicators to choose from, all of which are useful in
different circumstances and when it comes to accurately defining specific
values. Essentially, each KPI can be considered an object which is useful in
various value-add scenarios.

Choosing indicators: When it comes to identifying the KPIs you want to

use for your business, the first thing you will need to do is ensure that your
process is already well-defined as this will help you have a true handle on
the specifics of every aspect of the process as well as the best ways to
determine the ideal means of completion. It is important to only stick with
indicators that are relevant to the goal you are currently working towards.
Otherwise, they can easily be altered dramatically by factors that are
literally outside of your control.

Much like with your goals, it is important that your KPIs are
SMART and that they clearly indicate specific information for a specific
purpose. You will also want to choose options that are easily measured
while still providing accurate results if at all possible. Much like goals,
KPIs are useless if they are not realistically achievable. The most effective
KPIs are those that are relevant to the success of the business in the moment
or in the future while also including an element of time that has specific
periods as they relate to the data.
 Be aware: It is also important to keep in mind that while
determining specific KPIs isn’t too difficult, keeping track and compiling
the relevant data can be more difficult than it first appears. Furthermore,
additional values, including those for things such as staff morale, are
difficult to gauge accurately. Before you invest resources into generating
KPIs, it is important to first make sure they are adequately measurable and
useful. Otherwise, you will be on your way to creating even more waste.

You will also need to ensure the focus remains on keeping the KPIs
on the data that they are detailing and use it as a means of determining the
overall health of the business as opposed to a set of numbers that can only
move one way. If your team ends up too focused on reaching a
predetermined KPI, the data they return will be biased and inaccurate.
 Chapter 7: Kanban
Kanban is a method of scheduling that is often used once a Lean
system has been put in place. It serves as a type of inventory management
whose end goal is to minimize waste in the supply chain. It also tends to
come in handy when it comes to pinpointing problems as it makes these
problem areas stand out more than they otherwise would. You will also find
it useful when it comes to locating the upper end of work related to
inventory that is currently underway to ensure the process doesn’t overload.

This is a demand-driven system which means, it is often

implemented as a means of ensuring quicker turnaround times while at the
same time limiting the required inventory and increasing the overall level of
competitiveness between the implementation team. It was first put into
effect by Toyota in the 1940s after the company performed a study on
supermarkets and decided to use similar practices in order to keep their
factories optimally stocked at all times. This eventually became one of the
core Kanban ideas of keeping inventory amounts level with consumption
rates. Additional supplies are then added based on a predetermined set of
signals to ensure that stock remains near the ideal level at all times instead
of dipping low or overflowing at certain points. The signals in question are
all based upon customer signals which means they can change at the
moment if needed.

Kanban rules

Each process creates an amount set by the Kanban.

Following processes collects the number of items set by the
Kanban.
Nothing is created or moved with a Kanban.
Kanban is attached to related goods.
Defective products are not counted in the Kanban.
The fewer the Kanban, the more sensitive the system is.
 Kanban cards: Kanban cards are the means by which signals are
used to keep the entire team on track as it moves through the process. While
they were actual cards when the system was created, these days, there is a
wide variety of software out there that will provide the relevant signals
without bringing physical cards into the process. Kanban cards generally
represent consumption via a lack of cards in one area which, by necessity,
drives another part of the process to do what needs to be done in order to
pass the relevant cards along.

These days, the electronic Kanban system is even more effective

than its physical predecessor, making it a sure thing to ensure that cards get
where they need to be when they need to be there. These systems often
mark set types of inventory with specific barcodes that are then scanned
throughout the process. Each scan then sends a specific message to the
Kanban program which routes it as needed.

Kanban types: There are two main varieties of Kanban systems

namely production systems and transportation systems. Production systems
are sent as a means of authorizing production or a specific number of items,
while the transportation systems are used as a means of authorizing the
movement of specific items once they have been created.

Three bin system: An example of a basic type of kanban system is

the simple three bin system for the supplied parts in scenarios where
manufacturing does not take place in-house. One bin represents the factory
floor (or the primary point of demand anywhere else), the second bin
represents the factory store (the control point for the inventory), and the
final bin represents the supplier. The bins then can have removable cards
containing relevant product details along with any other important
information.

When the factory floor bin empties out because the relevant parts
were all taken up by various parts of the manufacturing process, the empty
bin, and thus its kanban card, are then returned to the factory store (also
known as the inventory control point). The factory store then replaces the
empty factory floor with the full factory store bin which also contains its
own kanban card. The factory store then sends the empty bin and its related
kanban card on to a supplier. This, in turn, causes the full product bin from
the supplier to eventually replace the empty bin on the factory floor and the
process starts all over again. Thus, the process never runs out of product.
This could also be described as a closed loop, since it provides the exact
amount required, with only one spare bin so there is never oversupply. This
'spare' bin allows for uncertainties in supply, use, and transport in the
inventory system. A good kanban system calculates just enough kanban
cards for each product. Most factories that use kanban use the colored board
system
 Chapter 8: 5s
When it comes to determining what wasteful processes you are
dealing with, it is important to ensure the work environment is in optimum
shape for the best results. The 5S organizational methodology is one
commonly used system based around a number of Japanese words that,
when taken together, are first rate when it comes to improving efficiency
and effectiveness by clearly identifying and storing items in their designated
space each and every time.

The goal here is to allow for standardization across a variety of

processes which will ultimately generate significant time savings in the
long-term. The reason it is so effective is that each time the human eye
tracks across a messy workspace, it takes a fraction of a second to locate
what it is looking for and process everything around it. While this might not
be much if it happens now and then, if it is happening constantly across an
entire team, then it can add up to serious time loss when taken across the
sum total of the process in question

Sorting: Sorting is all about doing what can be done in order to

always keep the workplace clean of anything that isn’t required. When
sorting, it is important to organize the space in such a way that it removes
anything that would create an obstacle towards the completion of the task at
hand. You will want to ensure that process-critical items all have a unique
space that is labeled as well as a space that is designated for those things
that simply don’t fit anywhere else. Moving forward, this will make it easier
to keep the space free of new distractions. Nevertheless, it will still be
important to encourage team members to prune their personal space
regularly to keep new obstacles from popping up.

Set in order: When it comes to organizing the items in the

workspace themselves, it is important to ensure all the items are organized
in the order that they will most likely be used. While doing so, it is
important to take care to ensure that everything required for the most
common steps remains readily at hand to reduce movement waste as much
as possible. Over time, keeping things in the same place will ensure that the
process can be completed faster each time as muscle memory takes over,
and team members are able to reach for things without looking for them.

It is important to keep an open mind during this step since ensuring

that the workspace is set up in such a way that ease of workflow is
promoted may require more than a simple organization, it may require a
serious rework of existing facilities. Additionally, ensuring everything is
arranged correctly will make it easier for you to create steps for each part of
the process that anyone new to that part of the process can follow.

Shine: Keeping the workspace clean is an essential part of

maintaining the most effective workspace possible. It is important to
emphasize the importance of daily cleaning both for the overall efficiency
boost and its ability to ensure that everything is where it is supposed to be
so that there are no issues the next time they are needed. This will also
provide an opportunity to have a regular maintenance if any is needed,
which will serve to make the office a safer place for everyone. The end goal
should be that any member of the team should be able to enter a new space
and understand where the key items are located in less than five minutes.

Standardize: The standardize step is all about making sure the

organizational process itself is organized in such a way that it can be
applied throughout the entire business structure. This will make it easier to
maintain order when things get hectic and also ensure that everyone can be
held to the same reliable standard.

Sustain: Sustaining the process is vital as taking a week or more to

properly get everything in order only to have it all fall apart six months later
is going to accomplish nothing in the long-term. As such, it is important to
ensure that the organization is a vital part of the DNA of the business in
moving forward. If things are truly sustainable in this regard, then team
members will be able to successfully move through the process without
expressly being asked to. Unfortunately, you won’t be able to expect this
type of sustainability overnight. It will require plenty of training and an
adoption of the idea as part of the business’s culture.
 Great starter tool: If your plan for your business is to transition to
additional advanced Lean concepts over time, then 5S is a great way to start
moving employees in that direction. It is especially effective with
employees who are extremely stuck in their ways as, once they initially get
on board, they will be hard pressed to deny the benefits in completion times
that come with the improved organizational version. This, in turn, will make
it easier for them to get on board with additional changes that may come in
the future.

As a rule, when rolling out a new system like this, you can expect
team members to only care about two things, the way the new system is
going to affect them specifically and if the Lean process has actually seen
results. This is also what makes 5S a great starting point as it has easily
understandable answers for each that anyone can understand once they see
the first workspace transformed for efficiency.

Knowing if 5s is right for your business: While 5S is a great choice

for some businesses, it is not a one-size-fits-all solution, which means it is
important to understand both of its strengths and its weaknesses when
moving forward. Perhaps its biggest strength is that when implemented
successfully, it is sure to help your team define their processes more easily
while also helping them claim more ownership of the processes they are
associated with as well. This extra structure also has the potential to lead to
a much greater degree of personal responsibility among team members
which will lead to a greater feeling of accountability throughout the
process. When everything goes according to plan, this will then lead to
further improved performance and better working conditions for everyone
involved.

What’s more, implementing 5S also has the potential to more likely

make long-term employee contributions thanks to an internalized sense of
improvement. Ideally, this will continue until the idea of continuous
improvement becomes the order of the day. When done correctly, using 5S
will also provide further insight into the realm of value analysis, equipment
reliability, and work standardization.
 On the other hand, the biggest weakness of 5S is that if it, and its
purpose, are not communicated properly, then team members can make the
mistake of seeing it as the end goal and not a means to an end. 5S should be
the flagbearer for success to come in the future, not the sum total of a
company’s journey into Lean processes. Specifically, businesses whose
movement is constrained significantly by external factors will have a hard
time using 5S, and companies that currently have a storage problem would
do well to solve it before attempting a 5S transition.

Additionally, just because 5S is a great fit for many companies

doesn’t mean that it will be the best choice for your team. This is especially
true for smaller teams or for teams where team members wear many hats.
Just because it is a popular way to implement Lean principles doesn’t mean
that it is going to be right for everyone. Moving ahead anyway and
enforcing organization simply for the sake of organization won’t do much
of anything when it comes to generating real results. Instead, it will only
generate new waste and it will only continue to do so before it is abandoned
entirely.

This is especially true for businesses that run on a wide variety of

human interaction, various management styles, and other management
tools. However, when the various aspects work together properly, they will
actually end up generating extra value for the customer which is a vital part
of any successful business. If you blindly press forward with a 5S mentality,
however, then it can become easy to lose sight of the outcome for the
customer in pursuit of a perfect outcome or a perfect implementation of 5S
principles.

Above all else, when implementing 5S, it is important that you

stress to your team that 5S is something that should be part of the natural
work routine and standard best practices, not an additional task to be done
outside of daily work. The goal of 5S is to enhance the effectiveness of the
workflow at every step in the process. Separating out the 5S into its own
separate layer is the complete opposite of what the process stands for.
 Chapter 9: Six Sigma
Six Sigma is the shorthand name given to a system of measuring
quality with a goal of getting as close to perfection as possible. A company
operating in perfect synchronicity with Six Sigma would generate as few as
3.4 defects per million attempts at a given process. Zshift is the name given
to the available deviations between a process that has been completed
poorly and one that has been completed perfectly.

The standard Z-shift is one with a number of 4.5, while the ultimate
value is a 6. Processes that have not been viewed through the Six Sigma
lens typically earn around a 1.5.

Zshift Levels: A Six Sigma level of 1 means that your customers

will get what they expect roughly 30 percent of the time. A Six Sigma level
of 2 means that roughly 70 percent of the time, your customers will get
what they expect. A Six Sigma level of 3 means that roughly 93 percent of
the time, your customers will be satisfied. A Six Sigma level of 4 means
that your customers will be satisfied more than 99 percent of the time. A
Six Sigma level of 5 or 6 indicates a satisfaction percentage of even closer
to 100 percent.

Six Sigma Certification Levels: Six Sigma is broken into numerous

certification levels depending on the amount of knowledge the person in
question has regarding the Six Sigma system. The executive level is made
up of management team members who are in charge of actively setting up
Six Sigma in your company. A Champion in Six Sigma is someone who can
lead projects and be the voice of those projects specifically.

White belts are the rank-and-file workers; they have an

understanding of Six Sigma, but it is limited. Yellow belts are active
members on Six Sigma project teams who are allowed to determine
improvements in some areas. Green belts are those who work with black
belts on high-level projects while also running their own yellow belt
projects. Black belts lead high-level projects while mentoring and
supporting those at other tiers. Master black belts are those who are
typically brought in specifically to implement Six Sigma and can mentor
and teach anyone at any level.

Implementation: Giving your team a compelling reason to try Six Sigma is

vital to the overall success of the process. In order to ensure that Six Sigma
is properly implemented, it is important that you properly motivate your
team by explaining how crucial the adoption of a new methodology really
is. The most common choice in these situations is to create what is known
as a burning platform scenario.

A burning platform is a motivational tactic wherein you explain that

the situation the company now finds itself in is so dire (like standing on a
burning platform) that only by implementing Six Sigma is there any chance
of long-term survival for the company. Having stats that back up your
assertions is helpful, though, if times aren’t really so tough, a bit of
exaggeration never hurt. Adapting to Six Sigma can be difficult, especially
for older employees and a little external motivation can make the change
more palatable.

Ensure the tools for self-improvement are readily available: Once the initial
round of training regarding Six Sigma has been completed, it is important
that you have a strong mentorship program in play while also making
additional refresher materials readily available to those who need them. The
worst thing that can happen at this point is for a team member who is
confused about one of the finer points of Six Sigma to try and find
additional answers only to be rebuffed due to lack of resources.

Not only will they walk away still confused, but they will also be
rebuffed for trying and not rewarded for taking an interest in the subject
matter. A team member who cannot easily find answers to their questions is
a team member who will not follow Six Sigma processes when it really
counts.

Key principles: Lean Six Sigma works based on the common acceptance of
five laws. The first is the law of the market which means that the customer
needs to be considered first before any decision is made. The second is the
law of flexibility wherein the best processes are those that can be used for
the greatest number of disparate functions. The third is the law of focus
which states that a business should only focus on the problem the business
is having as opposed to the business itself. The fourth is the law of velocity
which says that the greater the number of steps in a process, the less
efficient it is. Finally, the last is the law of complexity which says that
simpler processes are always superior to more complicated ones.

Choosing the best process: When it comes to deciding what process to

apply the Six Sigma treatment to, the best place to start is with any
processes that are already defective and need work to reduce the number of
times they occur. From there, it will simply be a matter of looking for
instances where takt time is out of whack before looking into those steps
where the number of available resources can be reduced as well.

Methodologies: There are two main ways to get the most out of Six Sigma,
DMADV and DMAIC.

DMAIC is an acronym that is useful when it comes to remembering

five phases that can be useful when it comes to creating new processes.

Define what the process should do based on customer input.

Measure the parameters that the process will adhere to and ensure it
is being created properly by gathering relative information.
Analyze the information you have gathered.
Improve the process based on the analysis you have completed.
Control the process as much as you can by finding ways to reliably
decrease the appearance of delinquent variations.

DMADV, on the other hand, also has five phases that correspond to
the DMAIC phases.

Define the solutions the process should be providing.

Measure the specifics of the process to determine its parameters.
Analyze the data you have collected up to this point.
 Design the new process using your analysis.
Verify the results as needed.

Deciding if Six Sigma is the right choice: While the Six Sigma
system has something to offer teams of all shapes and sizes, that doesn’t
mean that it is going to be the best fit for all of them. This is especially true
as implementing it successfully depends on numerous different specifics,
starting with the conviction of those who are looking to implement the
system in the first place as well as the company’s overall culture. This is
why it is best to start with something less high-impact like 5S as a way to
ease your team into things that are more of an overall change like Six
Sigma.

When deciding if a Six Sigma transition is feasible, it is important to

ensure that it is not seen as a fad and can instead be seen as an evolution of
the ideals already in place. Generally speaking, the more involved the team
leadership is from the beginning, the more onboard the rest of the team will
be as well. It is important that the company culture is perceived to be one
that supports this sort of positive change and to remember that if the
management team can’t come to a consensus on the new program, then it is
sure to be dead in the water. This doesn’t mean that absolutely every
member of the team needs to be committed to the idea of Six Sigma from
the start, but it does mean that the change needs to be institutional so the
public front always needs to appear united.

After all, Six Sigma was founded on the idea of leaders mentoring
those beneath them in order to ensure Six Sigma works as it should, but this
need to be a full-time job for some people, at least until the new habits start
to solidify among the team as a whole. Once this occurs, you can then count
on the team members to keep one another on track. To ensure they get to
this point, you are going to want to let them know that their progress is
being tracked so that every team member constantly feels as though they
are improving up until the point where they internalize the Six Sigma
principles.
 Conclusion
Thank you for making it through to the end of Lean Enterprise: The
Complete Step-by-Step Startup Guide to Building a Lean Business Using
Six Sigma, Kanban & 5s Methodologies. Let’s hope it was informative and
able to provide you with all of the tools you need to achieve your Lean
implementation goals. Just because you’ve finished this book doesn’t mean
there is nothing left to learn on the topic. Expanding your horizons is the
only way to find the mastery you seek.

When it comes to implementing Lean techniques successfully, it is

important to be realistic when it comes to the timeframe required to not just
ensure the entire team is up to speed, but that they have internalized the
core Lean principles you are trying to instill. You will need to take a long
hard look at your team and your business as a whole and decide where the
most work is going to need to take place. Every business has limited
resources, after all. It is important to think wisely prior to allocating them.

While you can easily get sucked into a pattern of changing

everything, in order to ensure your business really is as Lean as possible,
you should keep in mind that discretion is the better part of valor and you
should be sure to start by focusing on those things that will end up doing the
most good before moving on from there. Don’t forget, change for the sake
of change won’t do anyone any good and will likely serve to create more
waste than it will eliminate. Ultimately, it is important to remember that
creating a Lean business is a marathon, not a sprint, which means slow and
steady wins the race.
Finally, if you found this book useful in any way, a review on
Amazon is always appreciated!
 Lean Analytics
The Complete Guide to Using Data to Track,
Optimize and Build a Better and Faster Startup
Business
 Introduction
Congratulations on getting a copy of Lean Analytics: The Complete Guide
to Using Data to Track, Optimize and Build a Better and Faster Startup
Business and thank you for doing so.

The following chapters will cover everything you need to know to get
started with the process of Lean Analytics. The Lean Support system is a
great way to ensure that your business is as efficient as possible by
eliminating the amount of waste that is present. The Lean Analytics section
is going to help with data collection and analysis. Thus, you’ll determine
where the waste is present, and this will help you to pick the right metrics to
implement.

This book will discuss Lean Analytics and how its processes can help you
reduce waste and find the best strategy to improve your business. It is just
one step in the Lean Support System, but it is an extremely critical step.
This guidebook will provide you with the information that you need to get
started so that you can become an expert in Lean Analytics in no time.

There are plenty of books on this subject on the market, so thanks again for
choosing this one! Please enjoy!
Chapter 1: What is Lean Analytics?
The central idea behind Lean Analytics is on enabling a business to track
and then optimize the metric that will matter the most to their initiative,
project, or current product.

There is often a myriad of methods to improve your product, but you may
not have the time to work on all of them. With Lean Analytics, you will
learn how to find and address the one thing that will make the biggest
difference.

Setting the goal of focusing on the right method will help you see real
results. Just because your business has the ability and the tools to track
many things at once, does not mean that it would be in your best interest to
do so.

Tracking several types of data simultaneously can be a great waste of

energy and resources and may distract you from the actual problems.
Instead, you will want to focus your energy on determining that one vital
metric. This metric will make the difference in the product or service that
you provide.

The method in your search for this metric will vary depending on your field
of business and several other factors. The way that you’ll find this metric is
through an in-depth understanding of two factors:

The business or the project on which you’re presently working.

The stage of innovation that you are currently in.

Now that we have a basic understanding of Lean Analytics and what it

means let’s take some time to further explore and see its different parts.

What is Lean?
Lean is a method that is used to help improve a process or a product on a
continuous basis. This works to eliminate the waste of energy and resources
in all your endeavors. It is based on the idea of constant respect for people
and your customers, as well as the goal of continuously working on
incremental improvements to better your business.

Lean is a methodology that is vast and covers many aspects of business.

This guidebook will spend sufficient time discussing a specific part of Lean,
Lean Analytics. Here, you can learn how to make the right changes. Of
course, you will need a working understanding of where to start, and Lean
Analytics can help.

Lean is a method that was originally implemented for manufacturing. The

idea was to try to eliminate wastes of all kinds in a business, allowing them
to provide great customer service and a great product while increasing
profits at the same time. Despite its beginnings, the Lean methodology has
expanded to work in almost any kind of business. As long as you provide a
product or a service to a customer, you can use the Lean methodology to
help improve efficiency and profits.

For instance, how will you determine which metric will help you succeed?
Which metric will prove to be the best and result in the most improvement
compared to others? How will the metric help, how should it be
implemented, and how can you ascertain if it’s successful in the end? Lean
Analytics can help you gather the necessary information to find and work
with the right metric.

Lean Analytics

Lean Analytics is part of the methodology for a lean startup, and it consists
of three elements: building, measuring, and learning. These elements are
going to form up a Lean Analytics Cycle of product development, which
will quickly build up to an MVP, or Minimum Viable Product. When done
properly, it can help you to make smart decisions provided you use the
measurements that are accurate with Lean Analytics.
Remember, Lean Analytics is just a part of the Lean startup methodology.
Thus, it will only cover a part of the entire Lean methodology. Specifically,
Lean Analytics will focus on the part of the cycle that discusses
measurements and learning.

It is never a good idea to just jump in and hope that things turn out well for
you. The Lean methodology is all about experimenting and finding out
exactly what your customers want. This helps you to feel confident that you
are providing your customers with a product you know they want. Lean
Analytics is an important step to ensuring that you get all the information
you need to make these important decisions.

Before your company decides to apply this methodology, you must clearly
know what you need to track, why you are tracking it, and the techniques
you are using to track it.

Focus on the fundamentals

There are several principles of Lean that you will need to focus on when
you work with Lean Analytics. These include:

A strive for perfection

A system for pull through
Maintain the flow of the business
Work to improve the value stream by purging all types of waste
Respect and engage the people or the customers
Focus on delivering as much value to the customer as effectively as
possible

Waste and the Lean System

One of the most significant things that you will be addressing with Lean
Analytics, or with any of the other parts of the Lean methodology, is waste.
Waste is going to cost a company time and money and often frustrates the
customer in the process. Whether it is because of product construction,
defects, overproduction, or poor customer service, it ends up harming the
company’s bottom line.

There are several different types of waste that you will address when
working with the Lean system. The most common types that you will
encounter with your Lean Analytics include:

Logistics: Take a look at the way the business handles the

transportation of the service or product. You can see if there are is
unnecessary movement of information, materials, or parts in the
different sections of the process. These unnecessary steps and
movements can end up costing your business a lot of money,
especially if they are repeated on a regular basis. This will help you
see if more efficient methods exist.
Waiting: Are facilities, systems, parts, or people idle? Do people
spend much of their time without tasks despite the availability of
work or do facilities stay empty? Inefficient conditions can cost the
business a lot of money while each part waits for the work cycle to
finish. You want to make sure that your workers are taking the
optimal steps to get the work done, without having to waste time
and energy.
Overproduction: Here, you’ll need to take a look at customer
demand and determine whether production matches this demand or
is in excess. Check if the creation of the product is faster or in a
larger quantity than the customer’s demand. Any time that you make
more products than the customer needs, you are going to run into
trouble with spending too much on those products. As a business,
you need to learn what your customer wants and needs, so you make
just the amount that you can sell.
Defects: Determine the parts of the process that may result in an
unacceptable product or service for the customer. If defects do exist,
decide whether you should refocus to ensure that money is not lost.
 Inventory: Take a look at the entire inventory, including both
finished and unfinished products. Check for any pending work, raw
materials, or finished goods that are not being used and do not have
value to them.
Movement: You can also look to see if there is any wasted
movement, particularly with goods, equipment, people, and
materials. If there is, can you find ways to reduce this waste to help
save money?
Extra processing: Look into any existing extra work, and how
much is performed beyond the standard that is required by the
customer. Extra processing can ensure that you are not putting in
any more time and money than what is needed.

How Lean can help you define and then improve a value stream

Any time that you look at the value stream, you will see all the information,
people, materials, and activities that need to flow and cooperate to provide
value to your customers. You need these to come together well so that the
customer gets the value they expect, and at the time and way, they want it.
Identifying the value stream will be possible by using a value stream map.

You can improve your value stream with the Plan-Do-Check-Act process.
This strategy can be used upfront so that you can design the right processes
and products before they reach their finished form. Additionally, the
strategy helps you to create an environment that is safe and orderly and
allows easy detection of any waste.

Another method of creating this environment is the 5S+ (Five S plus): sort,
straighten, scrub, systematize, and standardize. Afterward, ensure that any
unsafe conditions along the way are eliminated.

The reason that you will want to do the sorting and cleaning is to make it
easier to detect any waste. When everything is a mess, and everyone is
having trouble figuring out what goes where, sorting and cleaning can
address waste quite fast. There will also be times when you deem
something as waste and then find out that it is actually important.

When everything is straightened out, you can make more sense of the
processes in front of you. Afterward, you can take some time to look deeper
into the system and eliminate anything that might be considered as waste or
unsafe, and spend your time and money on parts of the process that actually
provide value for your customer.
 Chapter 2: The Lean Analytic Stages Each
Company Needs to Follow
To be successful with Lean Analytics, you’ll need to follow several
different stages. You won’t be able to move on to the next stage if you do
not complete the preceding step. There are five in particular that you will
need to focus on to get work done with this section of the Lean support
methodology. The five stages are:

Stage 1: The initial stage is where you will concentrate on finding

the problem for which people are searching for a solution. A
business that focuses on business to business selling is going to find
this stage critical. When you address this problem, then you can
move on to the next stage.
Stage 2: For this stage, you are going to create an MVP product that
can be used by early adopter customers. This stage is where you are
aiming for user retention and engagement, and you can spend some
time learning how this will happen when people start to use the
product. You can also learn this information based on how the
customer uses your site and how long they stay. You’ll take some
time at this stage because you will need to experiment and also may
need to go through and choose from a few different products before
you get the one that is right for you. Once you have this
information, you can move on.
Stage 3: Once you find out how the early adopter customers are
going to respond to a product or service, it is time to find the most
cost-efficient way to reach more customers. Once you have a plan
ready to get those customers, and then more of them start
purchasing the product, then you can move to the next stage. You
would not want to go with a product that may be popular but costs a
ton of money, which will cut into your revenues and can make it
difficult to keep growing in the future.
Stage 4: You are now going to spend some time on economics and
focusing on how much revenue you are making. You want to be able
to optimize the revenue, so you need to calculate out the LTV:CAC
ratio. LTV is the revenue that you expect to get from the customer,
and the CAC is the cost that you incurred to acquire that customer.
You can find this ratio by dividing your LTV by the CAC. Your
margins are doing well if you get an LTV that is three times higher
than the CAC. The higher the margins you get, the better because
that means you are going to earn more in profits from the endeavor.
Stage 5: In the final stage, you will then take actions that are
necessary to grow the business. You can continue with your current
plan if you are making a high enough margin from the previous
steps, or you may need to make some changes to ensure that you
can earn enough revenue to keep the business growing. You can also
spend time making plans on where you would like to concentrate on
in the future to increase the growth of your business and help it
expand. The main goal for your business is to keep growing and
increase revenue. This step helps you to reevaluate what you have in
your current plan and decide if it is working for you or if you need
to go with a different option.
Chapter 3: The Lean Analytics Cycle
The Lean Analytics Cycle is vital in helping you get started on this part of
the Lean support methodology with your business. There are four steps that
will come with this process, and following each one can be crucial in
ensuring that this works for you.

The best way to think about the Lean Analytics Cycle is like the scientific
method. You need to do some thinking to determine what needs to be
improved in your business, form a hypothesis to help lead your findings,
and then perform experiments to see if that is the right process for you to
keep following. If things don’t work out, you don’t just give up. You will
continue to find new experiments, going with the same hypothesis if it
works (otherwise you’ll need to form a new hypothesis) until you find the
right solution.

The Lean Analytics Cycle will be incredibly helpful when you begin going
through the entire process. Let’s take a look at the steps that you need to
fulfill to use the Lean Analytics Cycle.

What do I need to improve?

Before you can do anything with the Lean Analytics Cycle, you must really
understand your business. You need to know all the important aspects of
your business, in addition to knowing what you want to change.

During this first step, you may need to talk to other businessmen to help
you find what metric you should use, based on what is most relevant to your
business right now. You may also want to take a look at your business
model to find out what metric will work best for you.

After you have time to choose a metric, you should connect it to the KPI or
the Key Performance Indicator. An example of this is the metric that is seen
as a conversion rate if the KPI is the number of people who currently
purchase the product.
To make this step easier, the first thing that you would want to do is write
down three metrics that are important for your business. Afterward, write
down the KPI that would be measured for each metric.

Never try to implement the Lean system without understanding the most
important processes that need to be improved. Sure, you could probably
make a long list of things that you may want to improve in your business.
But you won’t really see the benefits of the Lean system if you don’t pick
things that are important to the overall functioning of your business. Look
closely at what your business needs to improve, and pick the one that is the
most important before moving on.

Form a hypothesis

This is a stage where a level of creativity needs to come into play. The
hypothesis is going to give you the answers that you need to move forward.
You will need to look for inspiration, and you can find it in one of two
ways. You can look for an answer for something like “If I perform ___, I
believe ____ will happen, and ____ will be the outcome.”

The first place you can look into is any data that you have available. Often,
this data will provide you with the answer that you need. If you do not have
data at all, you may need to do some studying of your own to come up with
an answer. You could use some of the strategies from your competitors,
follow the practices that have worked well for others, do a survey, or study
the market to see what the best option will be.

What you need to keep in mind here is that the hypothesis is there to help
you to think like your audience. You want to keep asking questions until
you understand what they are thinking, or learn to understand the behavior
of your audience or customer.

Conduct an experiment
After you have taken the time to form a hypothesis, it is time to test it out
with the help of an experiment. There are three questions that you need to
consider to get started with an experiment:

Who is the target audience? You need to carefully consider who

your customers are and whether or not they are the right customers,
or if you should look somewhere else to get better results. Also,
think about some of the ways that you reach them, and if there are
better ways to do this.
What do you expect the target audience to do? This often
includes purchasing the product, using the product, or something
similar. You can then figure out if the audience understands what
you want them to do; is it easy for them to do this action, and how
many of the target audience are completing the task?
Why do you think they should accomplish the action? Are you
providing them with the right motivation to accomplish the task? Do
you think that the strategy is working? If they aren’t being
motivated enough by you, are they doing these things for the
competitors or otherwise?
Answering these questions is vital because they may help you understand
your customer better than ever before. Creating your experiment during this
stage does not have to be difficult. Try using the following sentence to help
you get started:

“WHO will do WHAT because WHY to improve your KPI towards the
defined goals or target.”

If you have gone through and come up with a good hypothesis in the
previous step, then it shouldn’t be too hard to create a good experiment as
well. Then, once you have the experiment, you can go through and set up
the Lean Analytics so that you can measure your KPI and carry on in the
experiment.

Measure your outcomes and make a decision

You can’t just get started with an experiment and then walk away from it.
You need to measure how well it goes to determine if it is truly working; if
some changes are needed; or if you need to work from scratch. You can
then make a decision on the next steps you need to take. Some of the things
to look for when measuring the outcomes during this stage include:

Was the experiment a success? If it is, then the metric is done. You
can move on to finding the next metric to help your business.
Did the experiment fail? Then it is time to revise the hypothesis.
You should stop and take some time to figure out why the
experiment failed so that you have a better chance at a good
hypothesis the next time.
The experiment moved but was not close to the defined goal. In
this scenario, you will still need to define brand new experiment.
You can stay with the hypothesis if it still seems viable, but you
would need to change up the experiment.
 Chapter 4: False Metrics vs. Meaningful Metrics
One of the prerequisites for working with Lean Analytics is understanding
that most people are using their data wrong. When you don’t use your data
correctly, you are not going to be able to come up with patterns,
opportunities, or results that are achievable.

There are two points that come with this idea. These two points are:

There are many companies, as well as people, who will label

themselves with descriptions like “data-driven.” Sure, they may use
up a lot of their resources on compiling data. However, they then
miss out on the “driven” part. Few are actually going to base a
strategy on the information that they acquire from the data. They
may have the right data, but they either don’t understand it or
choose to react to it incorrectly.
Even if the actions of a company or person are driven by data, the
problem of using wrong data still exists. Often, they will
oversimplify these metrics and then use them according to the
convention. Keep this in mind: just because other people do this or
have done this doesn’t mean it is going to prove useful to the goals
that you have. Consequently, the data is going to become garbage in,
and then the analysis is garbage out. This is often known as false
data.

As a business who is interested in working with Lean Analytics, it is

important to learn the difference between false metrics and meaningful
metrics. If you follow false metrics, you are going to be following a strategy
that is not going to help you reach your goals, which will mean a lot of
time, effort, and resources wasted.

The biggest false metrics to watch out for

As a business that is trying to cut out waste and ensure that you provide the
best customer service and the best products possible, you must always
ensure that you watch out for some of the false metrics that may come up.
Many people who don’t understand how data works will be taken in by
these false metrics that, in reality, will mean wasted time and resources.
Some of the most common false metrics for you to watch out for include:

The number of hits: Just because you have a website that is

attractive and contains many points of interest, doesn’t necessarily
mean that it will tell you what the users are really interested in. You
should not focus on the number of hits your website gets. This may
make you feel good about your website, and it can be neat to see
how many people come and visit your website. But you need to
focus more on what the customer is interested in or looking for.
Page views: This metric refers to how many pages are clicked on a
site during a given time. This is a slightly better than hits, but you
typically don't want to waste your time with this metric. In most
cases, unless you are working with a business that does depend on
page views, such as advertising, the better metric for you to use is to
count people. You can do this with tools that will provide
information on unique visitors per month.
Number of visitors: The biggest problem with this metric is that it
is often too broad. Does this type of metric talk about one person
who visited the same site a hundred times, or a hundred people who
visited once? You most likely want to look at the second group of
people because you’ve obtained more impressions. Otherwise, just
looking at the number of visitors will not give you this information.
Number of unique visitors: This is a metric that is going to tell you
how many people got to your website and saw the home page. This
may sound good at first, but it is not going to give you any valuable
information. You may also want to find out things like how many
visitors left right away when they saw the page or how many stayed
and looked around. Unique visitors can help you see that some new
people are coming onto your website and checking things out but
they don’t really tell you much about those visitors or what they are
doing.
Number of likes, followers, or friends: This is a good example of
a vanity metric that is going to show you some false popularity. A
better metric that you can go with is the level of influence that you
have. What this means is how many people who will do what you
want them to do. While it is good to have followers and likes on
your page to show that people are looking at your content, it is not
as important as some of the other metrics that you can pick.
Email addresses: Having a big list of email addresses is not a bad
thing by itself. But just because you have this large list does not
mean that everyone on it is going to open, read, and act on the
messages that you send out. You want to make sure that the email
addresses that you do have are high quality and are from people
who actually want to hear from you, even if that means your email
list is a little bit smaller. If you are collecting emails, strive to get
addresses from people who are actually interested in your product
and services. Don’t just collect emails so you can boast of a large
list.
The number of downloads: This is a common metric that is used
for downloadable products. While it can help with your rankings in
the marketplace when you are in the app store, the download
number is not going to tell you anything in depth, and it won’t give
you any real value. If you would like to get some precise answers
here, you can pick some better metrics. The Launch Rate is a good
place to start because it will show the percentage of those who
downloaded, created an account, and then used the product. You can
also use something like Percentage of Users Who Pay so you can
see how many actually pay for anything.
Time spent by customers on a page or website: The only time that
this is going to be useful is for businesses that are tied directly to the
behavior of the engaged time. For example, a customer could spend
a lot of time on your web page, but what if they are spending that
time on the help pages or on the complaints pages? This is not
 necessarily a good thing for your business, so this metric is not the
best one for you to go with.

If you want to pick out a metric that will actually help your business get
ahead, then you must make sure that you avoid some of these false metrics.
They may look good on the surface, but in reality, they are just giving you
information that could be pretty useless, and you will end up wasting a lot
of time and money to follow them.
 Chapter 5: Recognizing and Choosing a Good
Metric
Part of the Lean Analytics methodology is finding a good metric to help
you out. The Lean Analytics Cycle is a measurement of movement towards
a goal that you already defined. So, once you have taken the time to define
your business goals, then you must also think about the measurements you
can make to progress towards the goals.

This can be hard to do. How are you supposed to find a good metric that
can make sure you go towards the goals that you set out? Some of the
characteristics that you can look for when searching for a good metric
include:

Comparable: You know that you have a metric that is good if it is

comparable. You want to be able to compare how things have
changed in the last year, or even from one month to another. This
gives you a good idea if there have been any changes, positive or
negative, with your business process, customer satisfaction, and
more. You can ask yourself these questions about the metric to help
test for this:
How was the metric last year, or even last month?
Is the rate of conversion increasing? You can use the Cohort
Analysis to help with conversion rate tracking.
Understandable: The metric that you use should never be complex
or complicated. Everyone should be able to understand what it is.
This ensures that they know what the metric is measuring.
Ratio: You should never work with absolute numbers when you are
working with metrics. If you find that you have those, you should
try to convert them to make comparisons easier, which in turn
makes it easier to make decisions.
Adaptability: If you have chosen a good metric, it should change
the way that the business changes. If you notice that the metric is
 moving, but you have no idea why it is moving, then it is never a
good metric. The metric should move with you, not randomly on its
own, or it won’t be a secure one to use.

Types of Metrics

There are two metric types that you are able to use when doing Lean
Analytics. These include qualitative and quantitative metrics. To start,
qualitative means that the metric has a direct contact with your customers.
This would be things such as feedback and interviews. It is going to provide
you with some detailed knowledge of the metric.

You can also work with quantitative metrics. These are more of a number
form of metrics. You can use these to ask the right types of questions from
the customer.

Of course, both of these methods have other things under them that make
them easier to use. You will find that both of these methods have actionable
and vanity metrics.

Vanity metrics will not end up changing the behavior of the thing
you are concerned about. These are a big waste of your time, and
you should avoid them as much as possible. They seem to provide
you with some good advice and something that you can act upon,
but often they don’t lead you anywhere and can make things more
difficult. If you are working with a company to help you determine
your metrics, be very wary if they start touting the benefits of
following any of the vanity metrics.
Actionable metrics are going to end up changing the behavior of
the thing you are concerned about. These are the types of metrics
that you want to work with on your project. They are metrics that
can lead you to the plan that you should follow and can make it
easier to come up with a strategy to make your business more
efficient.
 Reporting metrics is a good way to find out how well the business
is performing when it does even everyday activities.
Exploratory metrics are going to be useful for helping you to find
out any facts that you do not know about the business.
Lagging metrics are good to work with when you want more of a
history of the organization and you want as many details as possible
to help with a decision. The churn of a company can be a good
example of the lagging metrics. This is because it is going to show
you how many customers have canceled their orders for a specific
amount of time.
Leading metrics are good because they can help provide you with
the information that you need to make future forecasts for the
business. Customer complaints can be a good example of leading
metrics because it can help you to predict how a customer will react.
You will need to determine which kind of metric you want to use based on
the problem or project that you are working on. Working with one metric is
usually best. Doing so will help keep you on track, so you know what to
look for. Don’t waste your time trying to work on more than one metric.
You will only get confused and end up with no clear idea about the strategy
to follow.
 Chapter 6: Simple Analytical Tests to Use
Another thing that you should concentrate on to do well with Lean
Analytics is to have some familiarity with the tests that are used. These tests
are helpful because they are going to be used to help you examine any
assumptions that you are trying to use here. These tools can also be used to
help you identify customer feedback so you can respond to them properly.
Let us take a look at some of the best analytical tests that you can use when
working with Lean Analytics.

Segmentation

The first test is segmentation. This process involves comparing a set of data
from a demographic bucket. You can divide up the demographics in any
manner that you choose such as gender, lifestyle, age, or where they live.
You can use this information to find out where people are purchasing a
particular product; if there are different buying behaviors between female
and male customers; and if your target audience seems to be in a certain age
group or not.

The reason that you want to build up a user segment is to make it easier for
the data to be actionable. Analytics can teach you a ton about the people
who purchase from you, but there is often a lot of information there, and it
can be hard to draw good conclusions from this information. After all,
while this information from the past can be useful, it isn’t going to be the
best to tell you how to improve either retention or conversion rate.

This is where the process of segmentation is going to come into play. When
you learn how to filter out the audience, you will then be better able to
create a plan to make new products that serve them the most. Analytics can
give you the information that you need, but segmentation can help you to
act.

For example, you may have a conversion rate that seems average or good,
but it could be from a combination of one group that converts really high
and consistently so, and then another group that seems to never convert at
all. You could be wasting a lot of money on that second group where you
are hardly getting anybody to convert at all. Segmentation can be used to
help you understand what things you are doing the right way when
engaging the first group, and can give you a plan on how you can improve
to work on that second group.

With segmentation, you don’t want to only look at the data to learn some
more about your users, but you also want to come up with data that you can
act upon. Segmentation can help you with this. You will be able to divide
up the people in your customer base and learn how to advertise to them
better than ever before.

Remember that not all customers are going to be the same. There are some
of your customers who may purchase something once, and they aren’t
regular customers. While it is still good to reach out to them, you want to
learn who your regular audience is, what they respond to, and what keeps
them coming back. This is going to ensure that you keep them coming back
and earn as much profit as possible.

So, how do you create a segment of your customers? There are many
different options that you can use when creating a segmentation. But let’s
look at the process that you can use to create a segmentation for your Lean
Analytics project. The steps you need to use include:

Define the purpose of your segmentation: You should first figure

out how you want to use your segmentation. Do you want to use it
to get more customers? Do you want to use it to manage a portfolio
for your current customers? Do you want to reduce waste, become
more efficient, or something else? Defining your purpose can make
it easier to know how you should segment out your customers.
Identify the variables are the most critical: These are going to
help influence the purpose of your segmentation. Make sure that
you list them out in order of their importance, and you can use
options like a Decision tree or Clustering to help. For example, if
 you want to do a segmentation of products to find out which ones
are the most profitable, you would have parameters that are revenue
and cost.
Once you have your variables, you will need to identify the
threshold and granularity of creating these segments. These
should have about two to three levels with each variable identified.
But sometimes you will need to adapt based on the complexity of
the problem you are trying to solve.
Assign customers to each of the cells. You can then see if there is a
fair distribution for them. If you don’t see this, you can look for the
reasons why, or you can tweak the thresholds to make it work. You
can perform these steps again until you get a distribution that is fair.
Include this new segmentation in the analysis and then take some
time to look it over at the segment level.

Cohort Analysis

The Cohort Analysis is a test involves comparing sets of data using a time
bucket. In this test, there will be differences in behavior between customers
who arrived at the free trial stage of your process, versus those who showed
up at the initial launch, and then those who are in the full payment stage.

Each of these is significant because it helps you to figure out which

customers are likely to come back and be full-fledged customers when in
the future. Those that show up in the initial stages when the product is free
are often not the customers you are going to see when sales actually start.
They may have just wanted to try it out and didn’t really have an investment
in the product.

Those that are in the later two stages can be customers who are better for
you to work with. They will be the most interested in the product because
they invested some money to get it. You really want to study these using the
cohort analysis to figure out who your real customer base is and how they
behave so that you can better market to them later on.

A/B Tests

A/B testing is a process where you examine an attribute between two

choices. This could be something like an image, slogan, or color so that you
can figure out which option is the most effective choice.

Let’s say that you had two products that you are comparing and you want to
find out which ones customers liked the best. Did they choose one product
over the other and why? Did they respond better to the choice that was in
green or the one in blue?
For this test to really work, you must assume that everything else is going to
stay the same. So, it would have to be the same product, but there is one
variable that is different between them. You could put up a website, for
example, and have a red background on one version and a yellow
background on another. Then you could use A/B testing to figure out which
one the customer responded to the best out of those choices.

In addition, you can also work on multivariate analysis. This is pretty much
the same thing, but instead of going through and testing out one attribute,
you will go through and compare several changes against another group of
changes to see which is the most effective. This one will require there to be
a few changes in the second product compared to the first to be the most
effective.

There are several keys that you need to have in place when you are ready to
do an A/B test. These include:

Know the reason that you are running this A/B test.
The item that you are testing needs to be noticeable to the audience.
If you make a minor change that no one is going to notice, then your
results are not going to be that reliable.
 Stick with testing just one variable at a time. If you go through and
do multivariate testing, or test more than one thing at a time, you
will run into trouble. You may not know for sure which variable is
causing the changes you see.
Your test needs to end up being statistically significant. This means
that it must have a sample size that is big enough to test and know
that the results are valid within a certain margin of error.

Let’s take a look at an example of how to do this. We are going to use this
test on a website that you are trying to improve. There are two main ways
that you can do this including:

You will test the pages on separate pages.

You will use JavaScript to conduct the test inside the page, so you
don’t need two different URLs to do it.

The first option is going to mean that you will need to have two different
URLs for the pages that you are testing out. You can make them similar
names, but make sure that there is some way that you can keep track of
them and not get the two confused.

With the second option, you will need to have some experience working
with JavaScript. You can then place some of this code on the website so that
it can dynamically serve one option or the other.

The method that you choose is often going to depend on the one that you
like the most and which tools you want to use. Both of these will give you
some valid results, but you will find that implementing each of them takes a
different amount of time to set it up.
Chapter 7: Step 1 of the Lean Analytical Process:
Understanding Your Project Type
Now that we have taken a look at some of the different part of Lean
Analytics, it is time to take a closer look at how the process works. These
can help you to get started with the Lean Analytics stage for your business
and ensure that you are getting the most out of Lean.

The first step that we are going to look at is understanding your business or
your project type. How are you supposed to pick out the right metrics if you
have no idea what kind of business or project type you are working on? You
must really understand the project at hand so that you can choose a fantastic
metric that can show you results.

There are six general business types that you can fit into, and they all will
have metrics that are going to work best or matter the most, for each one. If
you see that your business or project is on this list, your job will be simple.
You just need to focus your attention towards understanding the priorities of
what needs to be measured. This can include in-depth external research.

However, if you have a business that is not on this list, this doesn’t mean
you are out of luck and can’t do anything. You can just use some of the
information that is in this chapter as an example and build up your own
understanding and metrics from this chapter.

E-commerce

The first type of business is going to be e-commerce. These are growing

like crazy right now as many customers are looking for the things they want
to buy online more and more. And many companies find that they can make
large profits by offering their products and services online to these
customers. An e-commerce business is going to be any that has their
customers buy from a web-based store. This could include businesses such
as Expedia.com, Walmart.com, and more.

The strategy for this type of business is that you need to understand the
customer relationship that you want. This means that you are going to focus
either on new customer acquisition or customer loyalty? You have to decide
between these two because this is going to help with all other decisions that
you make with this type of business.

There are many metrics that you can choose to go with in an e-commerce
business. Some of the typical ones that other companies have chosen in this
industry include:

Inventory availability
Shipping time
Mailing list and how effective it is
Virality
Search effectiveness
Shopping cart abandonment
Revenue that you make on each customer
The amount you spend to get new customers
Shopping cart size
Repeat purchase
Conversion rate
The best metrics

Of course, there are several metrics that will work the best and will provide
you with the best return on investment, when working with an e-commerce
site. The best metrics to use here include:

Conversion rate: This is the percent of all visitors to your site who
also purchase something. The average conversion when it comes to
online retail is 2%. There are some that can do better though. For
example, Tickets.com is over 11%, and Amazon.com is at almost
10%.
 Shopping cart abandonment: It is typical that 65% of the shoppers
to your website are going to abandon their carts. Many of these are
because of the high costs of shipping, and others are from the high
price of all the items in their cart. You should definitely take some
time to analyze any shopping cart abandonment that is happening in
your business so that you can learn why you are losing these
customers.
Search effectiveness: The majority of your buyers are going to
have to search to find what they need. If you make your search more
effective, it can help your customers find what they want, rather
than having them leave in frustration. Remember that about 79% of
your total shoppers will use the search engine for half of the goods
they want.

Software as a service

These types of companies are going to sell software in downloadable form

or as a subscription. This can be things such as Skype, Evernote, Basecamp,
Adobe, and more. They are not selling a physical product to someone, but
these software programs are still pretty important for most people to get
work done or to do other things on their computers.

The strategy with this one is that most software is going to consist of
products that are on a subscription which means that retaining the
customers is important. Your success is going to really depend on building
up a loyal base of customers faster than those customers disappear.

There are some metrics that you can use to make this happen. Some of the
most common metrics that are used with this type of business model
include:

Reliability and uptime

Upselling
Virality
Customer churn
 Customer lifetime value
Cost of getting new customers
The amount of profit you make per customer
User conversion
User stickiness
User enrollment
User attention

The best metrics

Just like last time, you are able to use any of the metrics that are above, but
there are some that could be the best for helping you reach your overall
goals. Some of the best metrics to use with a software company includes:

Paid vs. free enrollment: You will find that your enrollment rate is
going to change depending on whether or not you asked for credit
card information in the free stage or not. The former is going to get
an average signup rate of 2 percent, and then 50 percent often end
up buying. When you do not ask, the average may increase to ten
percent, but only 25 percent purchase the product.
Growing revenues and upselling: Some of the best software
providers are able to get 2 percent of their paying subscribers to
increase what they pay each month. Being able to grow your
customer revenue by 20 percent in a year can be achieved if you
work towards it.
Churn or attrition rate: This is the percent of your customers who
are leaving. Going across the industry, the top companies usually
have an attrition rate between 1.5 and 3 percent each month. If you
have a percentage that is higher, then you need to find ways to make
the customers stay.

Mobile app companies

These are companies that are going to provide apps to be used on mobile
devices like Android and iPhone. Some of the companies that can fall under
this category would be ones like WhatsApp and Instagram.
The strategy that you want to go with here is to find the right target
audience. There are a lot of ways for your app to make money, but you will
find that the majority of your revenue is going to come from a smaller
group of customers, rather than from the population as a whole. You should
focus your analysis as well as the metrics you use to help you better
understand those customers.

There are many metrics that you are able to use as an app company. Some
of the most common options include:

Customer lifetime value

Churn rate
Ratings click-through
Virality
The revenue you make from each paying user
The revenue you make for each user
Percentage of users who end up paying
How much it costs to get the customers
Launch rate
Downloads

Best metrics

Of course, there are many metrics that you can choose to look at when it
comes to being an app company, but a few of them are going to provide you
with the most information and can help your business to really grow. Some
of the best metrics you can use include:

Downloads and the app launches: The number of people who

download the product and then activate it will fit in here. It is
known that quite a few people who decide to download an app will
then never activate it or use it at all, especially if the app is free.
The cost to get new customers: You can follow a general rule to
have a budget of 75 cents per user in your marketing initiatives to
help attract new customers. You should always make sure that the
cost to get new customers is lower than what you will earn on them.
So, if you will only earn 50 cents on a customer, then you shouldn’t
spend 75 cents on each one.
The average revenue you earn per customer: This is often going
to be determined through the business model. For example,
Freemium apps, or apps that you receive revenue from engagement
in the app, will often have a higher revenue per user compared to
those that are premium apps.

Media site companies

If you are in this industry, you have a website that is going to provide some
information, such as articles, in return for earning advertising or any other
type of revenue. These would include most blogs and other sites like
CNN.com, CNET, and more.

Media sites need to really understand the source of their revenue. It is not
coming directly from their readers or the people who use their “product,”
but it is coming from advertisers who are trying to reach those readers. So,
if you are a media site company, you would get revenue from affiliates,
click-based advertising, display advertising, and sponsorship. You would
want to design your key metrics to work for this.
Some of the different metrics that you can choose to work with for a media
site company include:

Page inventory
Pages per visit
New visitors
Unique visitors
Content and advertising balance (you don’t want too much
advertising on the page, or it takes away from the content and keeps
the customer away).
Click through rates
Ad rates
Ad inventory
Audience and churn

Best metrics

Click through rate: This is the number of users that are going to
click on a link out of all the users who check out the page. The
average click-through rate for a paid search in 2010 is 2 percent, but
some companies can get higher. If you see that you are at one
percent, then it is time to make some changes. But if you are above
that number, you are doing really well.
Engaged time: This is how long your reader will stay on the site
and look through the content and the ads. Most media sites are
going to aim for 90 seconds for content pages, and a little less with
landing pages. If you find that your visitor is not spending more
than a minute on the content pages, then it is likely your content is
not engaging them.
Content optimization for media: This one means taking the
content that you already have and changing it so that it works on
 other venues, such as podcasts and video. You should track how
others are using the materials you have because this can help you
find some new opportunities to use.

User-generated content business

If you have a community that is engaged, they are going to contribute free
content. And this same engagement is going to provide you with ads as well
as other revenue sources. Some examples of companies that work with this
include forums, Wikipedia.com, Reddit.com, Facebook.com, and Yelp.com.

The strategy that you should use is one that takes into account user
engagement. This business is going to be successful when its visitors
become regular contributes, and they interact with others in the community
and provide quality content. User engagement tiers to measure involvement
can be good as well.

Some of the different metrics that you may want to use with user-generated
content include:

Notification and mail effectiveness

Content sharing
Value of the content that is created
Content creation
Engagement funnel changes
How many engaged visitors you have

The best metrics

Time on the site each day: Here you are going to measure how
long the average user is on your site and engaged on a typical day.
This is a good thing to measure for engagement and stickiness. The
average number is about 17 minutes a day, though Facebook is
 usually an hour, and Tumblr and Reddit are 21 and 17 minutes
respectively.
Spam/Bad Content: With these kinds of communities, you need to
make sure that good content is always uploaded. You will have to
spend time and money to keep bad content and fraudulent content
off the site. You can measure what you think is good and bad and
then build up a system to help keep up with this. You can also spend
your time watching out for quality decline and then fix it before it
ends up ruining your community.

Two-sided marketplace business

These kinds of businesses are going to connect buyers and sellers, and they
will earn a commission on the work. It is kind of a variation of the e-
commerce store. Some options of this would include Priceline.com,
Airbnb.com, Ebay.com, and Etsy.com.

The strategy with this business is that you need to be able to attract in two
different customers, the buyers and the sellers. The best bet is to focus on
those that have the money to spend first. If you can find a group of people
who want to spend their money, then those who want to make money will
pretty much line up to do it.

Some of the metrics that you are able to use when it comes to a two-sided
marketplace business include:

The volume of sales and the revenue you earn

Pricing metrics
Ratings and any signs of fraud showing up
Conversion Funnels
Search effectiveness
Inventory growth
Buyer and seller growth
Best metrics

Transaction side: Sellers usually won’t have the money or time to

analyze pricing and the effectiveness of their copy and pictures. As
the owner, you will have the aggregate data from all your sellers,
and you can use this information to help them with this analysis.
Transaction size is the same as the purchase size, and of course, it is
going to differ based on your business type. You should help your
sellers measure it so that they can understand the behavior of your
buyer and use it to sell more items.
Top 10 lists: You can make top ten lists to help your buyers find the
best products, and your sellers to know what is going on in the
industry and what they can do to be more profitable.

As you can see, there are many different types of businesses out there. And
it is likely that your business is going to fit somewhere in this list. If it does,
then there is an outline that you can use for developing a good strategy.
Even if you don’t, you can combine a few of these strategies to help you
come up with the metrics, and the plan, that you need to succeed.
Chapter 8: Step 2: Determine Your Current State
Now that you know which business type you are in, it is time to move on to
the second step of Lean Analytics. This one is going to require you to
determine which innovation stage you are in right now. The one metric that
means the most to you right now is a function of time. It is going to change
as your project keeps moving on through the different stages of innovation.
There are several different stages of innovation that you can work with.
These include:

Stage 1: Empathy or is this a real problem?

In this stage, you are going to identify a problem in your business and then
get inside the head of your potential user. You should be in their shoes and
understand why there is a problem and what they are thinking. You may
need to spend some time talking to potential customers to help with this
stage. The more that you are able to talk to your potential customers and
others in the market about the product or service you want to offer, the
better off you will be. This can give you some real insights that can drive
your business forward.

You need to focus on any metrics that are going to help you to determine
whether or not the problem is harmful to your business. The metric needs to
also determine if there are enough people who care about this problem. If
only a few people see it as a problem, then it probably isn’t worth your time
taking care of it. But if a big percentage sees this as a problem, then it is
something to take care of. You can also use metrics that will see what the
success rates of your existing solutions are and if you need to change some
of them.

Stage 2: Stickiness or do I have a good solution?

In this stage, you are going to start by making a Lean prototype of your
solution to the problem you found in the previous step. You have to ask
yourself whether or not people will pay for this. This is when you can gain
feedback from small focus groups and testers. Based on that information,
you can make adjustments and changes to the solution until you get it right.

You are going to need to focus on any metric that proves your solution will
encourage the user to engage and also come back to your business.

Stage 3: Virality or does this solution provide value to enough people?

Once you have a solution and a product and they are seen as effective, you
need to decide whether its value adds enough that the customer will tell
others about it. Remember that word of mouth endorsements are valuable as
a precursor to growth measurement and as free advertisement for the
business. You can work for endorsements that are either natural (the
customer enjoys the product or service enough that they just give out
recommendations to their friends) or ones that are incentive-based (such as
giving the product for free or at a discount).

For this one, you need to focus on metrics that are able to measure out if
you are getting any new customers from your existing ones. And you want
to know how many of these referrals are happening. You can also take a
look at metrics that can check for how long it takes for news to spread or
the cycle time.

Stage 4: Revenue or can I make this profitable?

Now you need to work on how much revenue you can expect from selling
the product or service that you created in the last step. You can work on
prices, standardization, control costs, and margins. You need to take the
time in this step to prove that you are able to make money in a self-
sustaining and scalable way, or this is not the solution for you.

This one is going to need you to focus on metrics that can tell you the net
revenue that you are able to earn for each customer. The net is going to be
the revenue that you make per customer minus the amount you spent to get
that customer.
Stage 5: Scale or can we expand to a bigger audience?

Now that you have a product, you showed that it is effective, and you have
a business model in place to show that it is going to be functional and
profitable, you can now invest and expand it into new markets. This can
include new geographies, channels, and audiences as well.

If you are dealing with a project or business that is oriented on efficiency,

you need to focus on metrics that are able to reduce costs. If you are
working in a business or project that is differentiation oriented, you will
want to focus on metrics that will track margins for you.

What can I do with these innovation stages?

Now that you know a little bit more about these innovation stages, it is time
to figure out where you are and learn what you can do with each one. The
steps that you should take from here include:

Look through the stages above and determine where your business
or project is right now.
Refocus on the things that you should be measuring at the stage you
are in.
If you find that your project does not fit into this framework, then it
is important to remember that all innovative endeavors are going to
follow a pattern of stages as well as maturity through time. Are you
able to borrow this framework and leverage it in some manner so
that you can figure out what stage your project is in right now? This
can really make a difference in helping you to understand what you
really need to be focusing on right now.

Knowing where you are in the innovative stage can make a big difference.
When you look at the five stages above, you will have a clear outline of
what you need to focus on and what needs to be done to keep you moving
forward. If you have no idea where you are right now, then how are you
supposed to know what steps to take to get to the next level? Always have a
good idea of where you are in the innovation process, and then you have a
clear picture of where you should go next and can keep on track.
 Chapter 9: Step 3: Pinpoint the Most Pressing
Metric
To help you to be successful with any type of innovative project, the key is
to focus. Consequently, you can’t spend your time on too many metrics
because this is going to make you feel distracted and you are going to lose
all your focus.

In the first few stages of innovation, it is often best to reduce the number of
metrics that you track. If you can, you should focus on just one metric, the
one that matters the most right at the moment. The metric that is the
highest-priority is usually related to the most important project or business
need.

For example, a subscription software company may be in the virality stage,

and they are trying to gain traction with it. They may decide that the net
adds metric is the one that will help them out the most. Remember that Net
Adds = Total of New Paid Subscribers – Total That Cancelled.

There may be other metrics that your company can use, but you need to just
focus on one. You will need to figure out what problem is the most pressing
or the most important right now, and then go with a metric that fits with this
the most.

How can I find that one metric?

Some of the steps that you can use to find the one metric that matters the
most right now include:

Write down the top three to five metrics that you really like, and you
often track.
How many of these metrics are actually any good and help you out?
How many do you use to make business decisions? How many of
those would actually be vanity or false metrics?
 What stage are you at with the business or the project? Do you
really understand what matters in the business model? Can you
discard any of the metrics that aren’t really adding value to you right
now?
Are there any other metrics that are not on your list that you can
think of and that you think could be more useful right now?
Once you have written down all those metrics, you can go through
the list and cross off any bad or false metrics. Add any new good
ones that you think of on the bottom.
Now that you have a list, you should go through and pick the one
metric that you absolutely can’t live without to help you with the
project in its current stage.

What to do after optimizing that one metric

Once you have the metric and the project at a level where you are happy
with the numbers, you must remember that you will need to continue
measuring them. You never know when that project or that metric will need
to be changed up again to help you in the future. But you can rest assured
knowing that the process is now controlled and optimized. What this means
is that you are now at a point where you are achieving a certain level of
results.

Now you are able to go back to your list and work on the metric that is the
next highest priority. This is going to be the next highest priority of your
business, or the next biggest project need. You can review through the
innovation stage you are currently at and the business or project type, and
then you can determine which point of interest you should focus on.

Remember that the goal here is to only work on one metric at a time. There
may be several metrics that need to be addressed in your business. Keep
your focus on one at a time.
Sure, you can go through and write out a list of the different things that
need to be addressed at some point, and Lean Analytics is a good time for
this because it can help you see what problems are there. But you should
pick the one that is the most pressing and work on that one first.

After you have time to complete the Lean Analytics stage on this problem
and you have a winning strategy in place for it, then you can move on to the
next step of picking out a new project to work on. You can implement this
process on as many projects as you would like. Just make sure that you are
only working on one at a time.
 Chapter 10: Tips to Make Lean Analytics More
Successful for You
Getting started with Lean Analytics is something that can take some time to
get used to. It is going to provide you with great results and a winning
strategy that is sure to get you ahead. But for those who are just starting out
with this stage, or who are just getting started with the whole idea of the
Lean system, you may need some help to get going on the right foot. Here
are some great tips that you can follow to ensure that you are doing well
with Lean Analytics and to ensure it is as successful as possible for you:

If you are doing an A/B test, you need a lot of users: You are not
going to get any good results from you A/B test if you don’t have a
lot of users to help you out. This means that it is not going to work
all that well if you are a small startup or if there are not a lot of
people you can measure. You should have a minimum of 10,000
events before you attempt this kind of test. These events can include
visits or people who use a feature. Make sure that you are able to get
this many users to help you out before you get started.
Make big changes: If you are not able to see the changes from a
few feet away, it is likely that the people you are testing with the
A/B test won’t either. For example, A/B tested 41 different shades
of blue. The results were not the best because there were just too
many different shades and for most people, they looked too similar.
You need to make big changes before you do an A/B test, or it won’t
work well for you.

Measure the tests properly: You are not going to get the right
results if you are not properly measuring the tests. You need to have
the right metric in place. Also, make sure that you never stop a
running test too early, or you may miss out on some of the important
results that you need.
Use the tools that you need: Lean Analytics has a ton of tools that
you can use to make it successful. Make sure that you are properly
trained to handle each part and that you don’t miss out on some
important tools that can make this more successful.
Know where your business is now: How are you supposed to have
any idea of what kind of project to work on and what metrics to use
if you don’t have a good understanding of your business? Make sure
that you know the overall goals and vision of the business. This can
help you to spot some of the problems that you need to fix and can
make it easier to ensure that whatever changes you do decide to
make are going to go along with what your business is all about.
Understand the different metrics: You should spend some time
looking at the different metrics that are available for you to use on
your project. Each one can be great, but it does depend on the type
of business that you are running and the project that you want to
work with. You need to learn which metric is going to be the right
one for you.
Add this into the Lean Support System: Many people are fond of
the Lean Support System. This allows them to get rid of a lot of the
waste that their company may have, and can make them more
efficient. But you need to do Lean Analytics first to see success.
This helps you to gather the information that is needed and then sort
through it and analyze it. Then you can use this information to come
up with the best plan to handle your problem. If you just jump into a
strategy without the resource, it is likely that you won’t see results
at all.
Focus on the main problem first: If you are like many businesses,
there are probably many problems that you need to solve. But you
don’t have the time and resources to do all of them at the same time.
When you get started with Lean Analytics, you must figure out what
the main issue is, the one that will have the biggest impact on your
profits, and work with that first. Once you have successfully
implemented Lean Analytics and worked on the problem, then you
 can go back and see if there are any other problems that need to be
addressed.
Get rid of the waste: Remember that the most important thing that
you will do with the Lean system is get rid of waste. And the data
that you collect in the Lean Analytics stage is meant to help you to
find the waste and learn how to get rid of it. Take a look at some of
the most common types of waste that businesses may experience
(and that we listed in an earlier chapter) to give you a good idea of
where to start.

Lean Analytics can be a great way for you to get a strategy together that
will help your business become more successful. If you follow these tips
and some of the strategies that we talk about in this guidebook, you are sure
to see some amazing results in no time.
 Conclusion
Thank you for making it through to the end of Lean Analytics: The
Complete Guide to Using Data to Track, Optimize and Build a Better and
Faster Startup Business, let’s hope it was informative and able to provide
you with all of the tools you need to achieve your goals.

The next step is to start the process of implementing Lean Analytics into
your own business. Learning how to make changes so that you can be more
cost effective and provide better service to your customers all starts with
Lean Analytics. This stage asks you to search for the data you need and
analyze it so you know what step to take next. You can’t come up with a
plan for improving your business without the help of Lean Analytics to
make it possible.

Finally, if you found this book useful in any way, a review on Amazon is
always appreciated!