Cutting costs, improving quality, & speeding delivery through continous improvement

LEAN THINKING
with

Six Sigma
Cutting Costs, Improving Quality, &
Speeding Delivery
By
Continuous Process Improvement
Prepared By: Kurt E. Robertson
Organization Consulting Department
Saudi Aramco
874-6204

The Robertson Guarantee

IF YOU KEEP ON DOING WHAT
YOU HAVE ALWAYS DONE

YOU WILL KEEP ON GETTING
WHAT YOU'VE ALWAYS GOT.
I PROMISE
LEAN THINKING with SIX SIGMA

PRESENTATION OBJECTIVE

To Provide a brief overview of Lean & Six Sigma.
Things you should know about Lean:
Lean and Six Sigma can be successfully applied in both
operations and service environments

Automation shouldn't be the first answer

Both Lean and Six Sigma are data driven

Lean is Team-based Lean takes a Systems Approach

Lean is a:
physical transformation to your processes
transformation of your organization cultural

LEAN IS ABOUT PEOPLE
EMPOWERMENT
Empowerment does not mean total freedom;
it is the ability to make choices within
boundaries. It is focused freedom. A shared
vision of what we want to create provides
the focus and direction that ensures that
empowerment does not lead to chaos.
Center for Study of Work Teams
Harley Davidson Company

Lean compared to Six Sigma
Lean and 6 å are like the Democrats and the Republicans in the U.S.
Congress
- they both think they are right, and that you are wrong if you don't agree with them
- very few from one side ever change sides
- some of their methods and decisions are sub-optimal
- but each adds balance to the process when applied reasonably and
knowledgeably
Lean focuses on:
- reducing the 8 Wastes
- Improving process flow
- Increasing process speed
Lean cannot always bring a process under statistical control
Six Sigma helps:
- reduce process variation (one of the 8 wastes)
- reduce defects
Six Sigma alone cannot dramatically optimize process flow and reduce wastes
Because of their complementary natures , each brings to the
improvement process something the other does not, and the fusion of
Lean and 6 å is rapidly gaining popularity.
DO LEAN FIRST before SIX SIGMA 99% of the time

Complementary Tools
6 Sigma
OVERALL YIELD vs SIGMA
(Distribution Shifted ñ1.5 å )
# of
Steps
1 93.32% 99.379% 99.9767% 99.99966%
7 61.63 95.733 99.839 99.9976
ion
10 50.08 93.96 99.768 99.9966
20 25.08 88.29 99.536 99.9932
40
60
6.29
1.58
77.94
68.81 riat
99.074
98.614
99.9864
99.9796
80 0.40 60.75
sv a
98.156 99.9728
L les
100 0.10 53.64 97.70 99.966
150 --- 39.38 96.61 99.949

ps -
200 --- 28.77 95.45 99.932
E 300 --- 15.43 93.26 99.898

rs te
400 --- 8.28 91.11 99.864
500 --- 4.44 89.02 99.830
A 600
700
---
--- we
2.38
1.28
86.97
84.97
99.796
99.762
N 800 --- fe 0.69 83.02 99.729

s te-
900 --- 0.37 81.11 99.695
1000 --- 0.20 79.24 99.661
wa
1200 --- 0.06 75.88 99.593
3000 --- --- 50.15 98.985
17000
s --- --- 1.91 94.384
Les
38000
70000
--- --- 0.01 87.880
78.820
150000 60.000

Source: SIX SIGMA RESEARCH INSTITUTE
Motorola University Motorola, Inc.


Combining Lean and Six Sigma
Lean reduces cost, improves quality, and speeds delivery by
eliminating non-value added activity in a process by identifying
and eliminating waste .
Six Sigma is a more data-driven approach which aims to
reduce cost, improve quality, and speed delivery by
process variability and defects using the five-step DMAIC
reducing
model. 6 å depends heavily on data mining and data integrity.
Lean Six Sigma: Any combination should maintain the
integrity of each discipline while combining the benefits of
each. Attempting to make one look like a part of the other
Sub-optimizes both . Problem complexity often determines
which to use. Don't use a hammer to crack a peanut shell .


When to use Lean or Six Sigma
Lean is an AXE . Use Lean if:
This is the first and or second pass at identifying and eliminating
waste
Process problems include:
flow
operator cycle time
product lead time
delivery time
quality
costs
You need rapid improvement
You need a mile-wide, inch-deep approach
Six Sigma is a SCALPEL . Use Six Sigma if:
Lean has made a first pass with improvement
Defects and variation still persist and you need refined data analysis
with an inch-wide, mile-deep approach

Lean is not about tinkering withSIX SIGMA existing processes.
LEAN THINKING with your

Harvesting the Fruit of Lean Six Sigma

Difficult-to-Reach Fruit
Production Preparation Process (PPP)
Design for Six Sigma (DFSS )

Middle Fruit
Six Sigma tools

----------------------------------

Low-Hanging Fruit Degree
Lean tools
of
----------------------------------
Complexity
Ground Fruit
Logic and Intuition


Let's Talk Lean First
Do Lean First in most cases
And you should


AGENDA
History
Definition
Goal
Process
Value Stream Mapping
Kaizen
Becoming Lean
Lean and Quality
Metrics
Why Lean Fails
Six Sigma
Resistance
Six Sigma
Your Responsibility
How it ends LEAN THINKING with SIX SIGMA

Resources

Lean History

15 th Century 1905 1945-1973 1973 1974-2005 1973-2005

The Republic "Today and The Toyota Oil Embargo Books about : Boeing
of Venice Tomorrow" Production JIT Danaher
by System Cellular Manufacturing U.S. Navy
Henry Ford Visual Factory U.S. Air Force
Agile Manufacturing Airbus
W. Edwards Flexible Manufacturing Dell Computer
Deming Synchronous Mfg Maytag
Pull Production Whirlpool
Rapid Continuous McDonald's
Improvement Microsoft
Kaizen
Group Technology And most companies
that have tried
MIT Theory of Constraints
"The Machine That and Six Sigma
Changed the World"
"Lean Thinking" LEAN SIX SIGMA
by
James Womack
Time

AGENDA
History
Definition
Goal
Process
Kaizen
Becoming Lean
Lean and Quality
Metrics
Why Lean Fails
Resistance
Your Responsibility
How it ends
Resources

LEAN
Is based on the Toyota Production System
Is the Identification and Elimination of
WASTE in the Process
Got its name from MIT and James Womack's
research team
Is process simplification , and the relentless
removal of waste from all processes
Improves Quality, Cost, Delivery, Safety,
Morale ( QCDSM )
Increases process capacity
Reduces defects
Results in a stable,THINKING with SIXrepeatable, predictable
LEAN
reliable, SIGMA
process

General Rules
1. Lean is about fixing the SYSTEM and transforming the
CULTURE (CM).
2. Lean is about FLOW.
3. Lean is about people , not just about improvement tools.
4. Lean is about YOUR expectations and about what
YOU are willing to tolerate in terms of Q uality, C ost,
D elivery, S afety, and M orale (QCDSM) .
5. Processes rarely get better on their own.
6. Successful processes have rules , standards , &
absolutes .
7. To solve a problem you have to admit you have one.
8. Problems need to be quantitatively defined and their
corrective action quantitatively tracked.
System) .
(Measurement
9. Every project needs a Value Stream Champion.

The System

Planning Material Supply Operations Sales and Marketing

Value Stream

Value Stream


WASTE

Waste is any activity that:
1. The customer isn't willing
to pay for.

2. Doesn't positively change the
form, fit, or function of the product
or service (Value Added)

If it prevents the FLOW
of product or information..


Lean Focus - The 8 Wastes
Lean focuses on identifying and eliminating the 8 hidden wastes common to both
manufacturing and service industries:
1. OVER-PROCESSING: Adding more value to a service or product than
customers want or will pay for. A 15 page report when 1 page would do.
Design Engineer enhancing or modifying customer specifications.
PROCESS
COMPLEXITY
2. MOTION: Needless movement of people (hunting, searching, gathering things).
3. TRANSPORTATION: Unnecessary movement of materials.
4. EXCESS INVENTORY: Work-In-Process (WIP) or raw material (RM) that is in
excess of what is required to produce Just-In-Time (JIT) for the customer.
5. WAITING: Any delay between when one process step/activity ends and the next
step/activity begins.
6. DEFECTS: Any aspect of the product or service that does not conform to
customer needs. (SIX SIGMA) Variation = defects
7. OVER-PRODUCTION: Production of service outputs or products beyond what is
needed for immediate use.
8. UNUSED EMPLOYEE CREATIVITY: Losing time, ideas, skills, improvements,
and learning opportunities by not engaging or listening to your employees.
-- The Toyota Production System

The 9 th Waste - HASTE

- American (or Western adage):
"Haste makes waste."

"If you don't have time to do it right,
when will you have time to do it
over?" -- J. Raymond Robertson


Understanding FLOW


Why Lean?

Business as Usual
CUSTOMER Waste PRODUCT
ORDER BUILT & SHIPPED

Lead-time

Lean Process
CUSTOMER PRODUCT
ORDER BUILT & SHIPPED

Waste

Lead-time (Shorter)

Why Lean?
Typical Value Stream Ratio of
Value-Added to Non-Value-Added Activity
3%
97% NVA VA

Where's
Most Process Improvement
the Real
Teams Attack this . . .
Opportunity?
97% NVA

. . . Achieve this . . .

. . . and Ignore this

Source: C. Fiore; Lean Strategies for Product Development , ASQ, 2003


Excess Inventory
Our corporate body guard against bad processes

A $ea of RM & WIP

Reduce the inventory and see the wa$te !

You can `t be Lean unless your suppliers are Lean.

Who Is Lean??

Fire Fighters
Hospital Emergency Rooms
Lifeguards
Boeing (Leaner)
Where lives are at risk, you will probably find Lean
processes.

What about the rest of us??

Typical Causes of Waste
1. Layout (distance)
2. Long set-up time
3. Poor work methods
4. Lack of training
5. Functional organizations
6. Technology Gaps
7. Little understanding of the
entire process

8. Historic supervisory roles
9. Irrelevant performance measures
10. Lack of workplace organization
11. Supplier quality/reliability
12. Poor communication
13. Avoidable interruptions
14. Complexity
15. More.

Non-Value-Adding Activities
(Operations)

"Non-value-adding" activity (NVA) consumes time and
money...but does not change the value of an item.

1. SORTING
2. COUNTING
3. STACKING
4. EXPEDITING
5. TRANSFERRING
6. CHECKING
7. TRANSPORTING
8. HUNTING, SEARCHING, GATHERING

Non-value-adding (NVA)
(office)

Examples
1. CHECKING
2. SIGNATURES
3. ASKING
4. APPROVING
5. REVIEWING
6. MONITORING
7. REWORK
8. TRANSPORTING
9. DOUBLE HANDLING
10.HUNTING, SEARCHING, GATHERING


The Goal of Lean
Improved product Q uality, C ost, D elivery; Improved
employee S afety and M orale ( Q C D S M) in any
operational or service process.
1. By establishing
(one-piece) Flow
Based in Takt Time
In a Pull environment (JIT)
2. But first I need processes that are:
Stable
Reliable
Predictable
Repeatable
3. I get those processes by establishing:
Awareness - at all levels of the organization
5S - Workplace organization
Value Stream Mapping - information and material flow
Flow - improve plant or office layout
Leveled Production - reduce lot sizes, setup time, lead times,
inventory

Lean Kaizen Sequence

Processes can be transformed
Distribution
in days, weeks or months, System Kaizen
One-piece flow
but plan 1- 6 years Pull/Kanban
Takt time
for the corporate
Equipment Kaizen (TPM)
transformation 3P, Autonomation

Leveled Production
Line Balancing
Reduce: lot sizes, setup times, lead times,
operator cycle times, inventory
AWA
FLOW: AIWs (Gemba Kaizen) REN
Factory Layout Kaizen
Standard Work: Operator Methods ESS
process simplification,
quality and maintenance

- 5S -
Organize the workplace

The Lean Toolbox
1. Value Stream Maps 17. SIX SIGMA
2. Rapid Improvement (Kaizen) 18. Chaku-Chaku / Load-Load
Events 19. Heijunka / Load Leveling
3. Education 20. Bottlenecks
4. Employee Involvement 21. Point-of-Use Delivery
5. Metrics and Alignment 22. DFMA
6. Flow Cells 23. Control Charting
7. Standard Work 24. Pareto Analysis
- Capacity Analysis 25. Histograms
- Takt Time / Cycle Time 26. Root Cause Analysis
Standard Ops Worksheet 27. 5 Why's
- Production Control Board
28. Hypothesis Testing
8. 5S / Visual Controls 29. Supply Chain Management
9. Pull/Kanban Systems 30. Critical Chain Project
10. Brainstorming Management
11. Prioritization 31. 7 Quality Control Tools
12. Spaghetti Chart 32. 7 Management & Planning
13. Poka-Yoke / Mistake Proofing Tools
14. Set-up Reduction 33. Nominal Group Technique
15. Total Productive Maintenance with SIX 34. Production Process
LEAN THINKING SIGMA
16. Change Management Preparation (3P)

How Do I Know Which Tool To Use?

How do you know whether to use Microsoft:
- Excel
- PowerPoint
- Word
- Access
- Project
- Visio
Excel is probably not the best choice for word processing.
Word is probably not the best choice for calculations.
**The KNOWLEDGEABLE, EXPERIENCED use of a tool
is the key to the SUCCESSFUL use of a tool**


AGENDA
History
Definition
Goal
Process
Kaizen
Becoming Lean
Lean and Quality
Metrics
Why Lean Fails
Resistance
Six Sigma
Your Responsibility
How it ends
Resources LEAN THINKING with SIX SIGMA

Team Charter
Dates:
VSM
Impact
RIE Senior Management Sponsor:
Project
Value Stream Champion:
Just Do It Difficulty

Project Description:
Team Leaders and Members:

Potential Implementation Costs:

Business Reason for the Project:
Project Constraints
(Financial, Personnel, Equipment):

Expected ROI:


Definition of a Value Stream
The VALUE STREAM is the entire set of processes or activities
designed to transform the products and services into what is
required by the customer.

The VALUE STREAM

Suppliers Design Procure Make Sell Customers

A Primary Focus is TIME,

Product and / or Service Flow

Information Flow: Quickly SIGMA Directions
In All

Define the Boundaries
start stop

What keeps you awake
at night?

suppliers inputs Value stream outputs customers

Where are the stakes in the ground that
define your Value Stream boundaries?
- We'll focus our efforts between them!


Value $tream Map - Finding the
WA$TE Production Control
90/60/30 day
6 week forecasts
SUPPLIER forecast CUSTOMER
MRP Daily
Weekly
Order
500 ft coils Fax 18400 pieces/month
Daily Ship -12000- L
Weekly Schedule Schedule - 6400- R
Tues. &
Tray = 20 pieces
Thurs. 2 shifts

Ass'y Ass'y
Stampin S. Weld S. Weld
#1 #2 Shipping
g #1 #2
I I I I I I
1 1 1 1 1 Staging
Coils 4600 L 1100 L 1600 L 1200 L 2700 L
5 days 2400 R 600R 850R 640R 1440R
C/T=1 sec C/T=39 sec C/T=46 sec C/T=62 sec C/T=40 sec
C/O=1 hour C/O=10 m C/O=10 m C/O = 0 C/O = 0 .0014% VA
Uptime = Uptime = Uptime = Uptime = Uptime =
85% 100% 80% 100% 100%
27,600 *2 27,600 *2 27,600 *2 27,600 *2 27,600 *2
sec. avail. sec. avail. sec. avail. sec. avail. sec. avail.
5 days 7.6d 1.8d 2.7d 2d 4.5d PLT = 23.6 days
1 sec 39 sec 46 sec 62 sec 40 sec Process Time
(VAT) = 188 sec.

Current State
Value Stream Map
Current State - March '02
AREA: Harrier Maintenance Flight (500 Hour Minor)
BUSINESS CASE: VALUE STATEMENT: KEY REQUIREMENTS: MEASUREMENTS: IDEAL STATE:
Improve Harrier Maintenance Flight Identify, remove and repair failed, broken, or Core Manpower Requirements Productivity (hours per unit) ON DEMAND

Operating Performance obsolete parts for Harrier W eapon Platform, Operational Risk Throughput Time DEFECT FREE
functional test, and reapply finish
Quality and Flight Safety On Time Delivery 1 BY 1

Cost of other Platforms Floor Space LOW EST COST

Future State Implementation Pan

Current State Map

Total time: 156 hrs
waiting time: 148 hrs
Value added time: 8 hrs (5%)
No. of steps: 63
Defect rate: 10%
Backlog: 2 weeks LEAN THINKING with SIX SIGMA

Distance traveled: 1.2 km

Spaghetti Charts
Communication and Motion


IN CHARGE OF FOLLOWUP: Project Name
Status of overall completion = % 28

Plan Dates
ACTION Who Comments %Status
Start Finish

PROJECT SUMMARY:

In charge C COMPL
of
Action Department this
BEGIN ET
E
Comments 40
item

ASD / 7/3/200 7/10/200 AAD to AJD:Follow-up this action item and
1 100
MZU 7 7 report completion

AJD /
AAD to AJD: Make sure this is done
ASD 7/3/200 8/10/200
2 MAS: You can decide where the 5
/ 7 7
location of the hotline be.
MZU

ASD / 7/3/200 8/10/200
3 100
MZU 7 7


LEAN AGENDA

History
Definition
Goal
Process
Kaizen
Becoming Lean
Lean and Quality
Metrics
Why Lean Fails
Resistance
Six Sigma
Your Responsibility
How it ends

Kaizen = continuous improvement

RAPID IMPROVEMENT
At the end of the week, a new process should be in place.
Anything else is not rapid improvement. It's a "STUDY".


Rapid Improvement Events (RIE)
Action oriented
- "leaned" process in place and
functioning by close of event
- creativity before capital
Learning by doing
Transform the Value Stream
Structure
- 3-5 days in length
- 3-5 teams cross-functional teams
- 6-8 people per team
- Seven week improvement cycle
3 weeks preparation
1 week execution
3 weeks follow-up


RIE Preparation Checklist
Rapid Improvement Events

By: Date: Prep. % COT:
PREPARATION
Team:

3rd Week Before Event: (% COT: ) 2nd Week Before Event: (% COT: ) 1st Week Before Event: (% COT: )

1) Identify the suppliers and inputs 1) Communicate key metrics, targets, and
1) Select the Value Stream from the
2) Identify the customers and outputs tools to be applied to all team participants
Enterprise
3) Identify the start / stop boundaries 2) Train team participants on improvement
Transformation Plan.
4) Gather facts and data to populate starting process and tools to be applied
2) Select the target area from Value Stream
numbers on Target Progress Report 3) Identify what "triggers" work
Analysis.
5) Populate the Target Progress Report 4) Double check availability of all resources:
3) Determine the focus - which Lean tools
6) Identify top three improvement metrics - equipment or furniture moves
will be applied?
7) Establish improvement targets on top three - computer or phone moves
4) Identify the Team Leader, Co-Leader, and
metrics, be aggressive - 5S, shadowing, kitting
Team Members.
8) Meet with affected stakeholders to - Production Control Boards
5) Assure at least 1/3rd of participants are
communicate Improvement Event schedule, 5) Communicate with affected area, review
from the affected area.
metrics, targets, and tools to be applied items listed on flip chart and ask for
6) Clear participants calendars for the
9) Set a flip chart up in affected area, ask clarification, make sure these are added to
Improvement Event Week.
stakeholders to put ideas for improvement Improvement Newspaper
7) Complete the Team Roster.
on flip chart. Start Improvement Newspaper. 6) Make sure team break-out area is ready:
10) Capture flow stopper information from - flip charts, markers, post-its, VSA blanks
Production Control Boards - forms, stop watches
11) Confirm the availability of any special 7) Make sure Process Champion is set
resources for: to give opening remarks on Monday
- equipment or furniture moves morning
- computer / phone moves 8) Make sure Process Champion is available
- 5S, shadowing, kitting for Team Leader Meetings Monday -
- Production Control Boards Wednesday
12) Obtain any special data collection 9) Schedule Final Presentation with Process
instructions from your Coach such as: Champion and appropriate leadership
- Information from previous Improvement 10) Plan working lunches
Events 11)Confirm all team participants are going to
- Customer critical to quality issues be available full time for entire event
- Safety data 12) Confirm Target Progress Report and
13) Confirm all participants are still available Team Roster are complete
for entire Event week

RIE Daily Checklist
Rapid Improvement Events
TEAM DAILY CHECKLIST

Day One. Day Two. Day Three. Day Four.
1. Review team goals and objectives, create Day 1 plan. 1. Identify wastes to attack. 1. Train Stakeholders on new cell layout and standard 1. Train Stakeholders on new cell layout and
work. standard work
2. Meet with Cell Stakeholders and review goals. 2. After TAKT time/Cycle time bar charts.
(loading diagram) 2. Assign a team member to each Stakeholder. 2. Assign a team member to each Stakeholder.
3. Before Data, Documentation and "Tools"
TAKT Time Calculation 3. Create plan for new cell layout. 3. Run new cell. 3. Run new cell.
Before Time Observations
Before Cycle Time Bar Charts (Loading Diagrams) 4. Meet with Stakeholders, review progress and plans 4. Fix problems immediately. 4. Create/post Key Point, Work Combination Sheets,
Before Standard Work Sheet/Cell Layout solicit ideas and concerns. Standard Work Sheet, Production Control Board,
Before WIP Count ($ and pieces) 5. Create production control board. and Kaizen Newspaper.
Before 6S Audit 5. After standard work combination sheets.
Before Safety Audit 6. Work on 6-S and safety issues. 5. Fix problems immediately.
Before Work Combination Sheets (one per operator) 6. Notify support groups by 2.00 PM of required
support. 7. Create/post Key Point, Work Combination Sheets, 6. After 6-S and safety audits.
4. Take a "Waste Walk", to further identify opportunities. Standard Work Sheet, Production Control Board,
7. Daily recap. and Kaizen Newspaper. 7. Off shop floor by 1:00.
5. Daily recap.
8. Create daily plan for Wednesday. 8. Daily recap. 8. After area pictures and Team picture.
6. Meet with Stakeholders and review progress.ideas.
9. Team Leader/Co Leader. How late do we stay? 9. Create daily plan for Thursday. 9. Prepare final presentation.
7. Create daily plan for Tuesday.
10. Daily Team Leader meeting. 10. Team Leader/Co Leader. How late do we stay? 10. Complete Team/Event binder.
8. Team Leader/Co-Leader. How late do we stay?
11. 6-S meeting area. 11. Daily Team Leader meeting. 11. 6-S meeting area.
9. Daily Team Leader meeting.
12. Implement plan/create cell. 12. 6-S meeting area. 12. Inventory kit boxes and find missing articles.
10. 6-S meeting area.

** Team Leaders need to assign action items ** Team Leaders need to assign action items ** Team Leaders need to assign action items ** Team Leaders need to assign action items
to specific people on the teams and require to specific people on the teams and require to specific people on the teams and require to specific people on the teams and require
with SIXup reports on progress at a minimum
follow increments.
follow up reports on progress at a minimum
of two hour increments.
follow up reports on LEAN
progress at a minimum
of two hour increments. of two hour
SIGMA follow up reports on progress at a minimum
of two hour increments.
THINKING

The 5S Principles:
Proper arrangement and orderliness

"Good factories (workplaces) develop beginning
with the 5Ss; bad factories fall apart beginning with
the 5Ss." -Hiroyuki Hirano

5S Workplace Organization
1. SORT (seiri): Clearly distinguish what is necessary & what is not. Remove
what does not support an organized, visual and Lean workplace.
2. SIMPLIFY (seiton): Ensure everything required to do the task has a visually
designated location, is available, functional, and can easily be seen, reached
and returned in the sequence used; Consider an operating room or fire
engine. Mark/label locations clearly.
3. SWEEP (seiso): Keep the work area, tools and equipment - Floors,
machines, desks, files, equipment - organized, organized, repaired (TPM),
and visually marked.
4. STANDARDIZE (seiketsu): Maintain & improve the first 3S's. Establish
procedures so storage and cleaning actions are consistently applied by
everyone.
5. SUSTAIN (shitsuke): Hold the gains. Achieve the discipline/habit of
following the correct procedures. From this new level of efficiency, start
again.


Visual Controls
A Major Element of 5S
Visual controls:
- Answer a question before it is asked
- Help spot abnormalities in the system
- Examples:
Medical - Moment of Truth
KSA/Bahrain Causeway booth lights:
- Avg and Std Dev


The 5S's
Low Level of 5S
1. Sort
Needed from the
unneeded
2. Shine
Clean, scrub, and fix
3. Set in order
High Level of 5S
A place for
everything
4. Standardize
A plan to sustain
5. Sustain
Following through LEAN THINKING with SIX SIGMA

Standard Work Board
TAKT time & Delivery Performance Measure

Andon Flag

Cell Key Measures
6S Layout
and
Assignments
Corrective Action
Matrix and Plan

Standard Work Bar Chart

Shadow Hand Tools


Signal Lights


Visual Management

Shadowing Labeling Foot-printing

LEAN THINKING with SIX SIGMA Production
Color Schemes
Striping Control Boards

Visual Controls


Other Visual & Audio Controls
Visual and Audio controls answer questions before they are asked.
1. Clock
2. Traffic lights with a timer
3. Traffic Lines/ lights/signs
4. Sounds announcing break time
5. Call to Prayer
6. Score boards at sporting events
7. Arrival/Departure boards in airports
8. Lights indicating machine or process condition
9. Lights and siren on emergency vehicles
10. Gauges on medical & industrial equipment
11. Big teeth on a snarling lion
12. Take-a-Number systems
13. Colored caps on milk bottles

Point-of-Use Strategy: 7 Elements of Surgery

Information Hand
Tools

Instruments
Power
Tools

7 Elements
Supplies
Of Surgery

Fixtures

Fasteners


Supermarket Pull System

Kanban Kanban

Supplying Customer
Process product product
Process

Supermarket

Customer Process goes to supermarket and withdraws what it needs when it
needs it.
Supplying Process produces to replenish what was
withdrawn.
Purpose: Controls production at supplying process without tying to
schedule. Controls production between
flows.

Pull/Kanban Systems

Pull

On Demand
- Upstream Supplier
- Downstream User
- Visual Trigger
Sequenced
- Use FIFO lanes
Replenished
- Create supermarkets with SIX SIGMA
LEAN THINKING

Traditional vs Cellular Flow
Dept 1 Traditional flow Cellular flow
Dept 2 DONE 4 3
IN OUT
OUT

IN IN
1 2
Dept 3

Dept 4
Demand paced production
OUT IN IN
Value-adding steps in order
OUT
No stops, piles, or back-ups
DONE Flexible
Less transportation
Less work-in-process


U - Shaped Cell

Andon

RM

FG


Other Important Lean Tools

1. Setup Reduction
2. Standard Operations
3. Times
- Operator Cycle Time
- Product Lead Time
- Waste Time
- Takt Time (customer driven)
4. Total Productive Maintenance (TPM)
5. Production Preparation Process (PPP)
6. Bottleneck reduction
7. Mistake proofing (Poke Yoke) (Example:
mobile SIM card)
8. 5 Whys
9. Self-Inspection and Acceptance (SI&A)


Lean Implementation Sequence

Distribution
System Kaizen
One-piece flow
Pull/Kanban
Takt time

PEO Equipment Kaizen (TPM)
3P, Autonomation
PLE
Leveled Production
Line Balancing
Reduce: lot sizes, setup times, lead times,
operator cycle times, inventory
AWA
FLOW: AIWs (Gemba Kaizen) REN
Factory Layout Kaizen
Standard Work: Operator Methods ESS
process simplification,
quality and maintenance

- 5S -
Organize the workplace

How Does Lean Help Quality?
RULE #1: Do not make, accept or pass on a defect.
RULE #2: Inspection is the enemy of quality.
RULE #3: The operator is responsible for identifying,
tracking and correcting his defect rate.
By using standard work, reducing bottlenecks, and using
other Lean tools, Lean makes processes
- stable
- reliable
- predictable
- repeatable
The HIDDEN FACTORY: Lean will not succeed without
addressing and correcting variation and its resulting defect
rate, because FLOW cannot exist in a process with a high
defect rate.

Our processes have THINKING with SIX SIGMA
LEAN high defect

TOLERATE high defect rates
rates because we

Implementation Metrics
Leading Indicators

1. Cycle Time
2. Inventory (amount, turn rate, IRA)
3. Productivity
4. Square Feet (foot print)
5. Set-up Time
6. Product Lead Time
Lean is data driven
7. People Travel
8. Product Travel
9. Volume
10. Crew Size
11. Safety/Ergonomics

METRICS - The Forensics of CPI

1. What gets measured gets fixed .
2. If you can measure it, you can change it.
3. Metrics drive behavior . Tell me how you will measure me and I will tell
you how I will perform.
4. The folly of rewarding A while hoping for B .
5. Measure first, then manage.
6. Leading indicators versus Lagging indicators (NDE)- Always reviewing
the past , and not guiding the future . Manage the leading indicators,
and the lagging indicators will be O.K.
7. Problems must be quantified, exposed and confronted . Lean cannot
remedy an unacknowledged or hidden problem.
8. Don't measure effort and process compliance. Measure results.
9. What you allow, you encourage.
10. Your Recommendations are only as good as your analysis. Your
analysis is only as good as your data. Your data is only as good as you
measurement system. Data Integrity is the foundation of a credible
project. LEAN THINKING with SIX SIGMA

Reasons Lean Fails
1. No sense of urgency (burning platform)
2. Looking for a quick fix (lean pill)
3. No leadership commitment and support
Awareness
Full-time practitioners
4. No education and awareness among the employees
and management. (CM)
5. No understanding of Lean (flavor of the month)
6. No Sensei (Do-It-Yourself Lean)
7. No Value Stream Map
8. No implementation or sustaining plan (PM)
9. No customer and supplier involvement in the
improvement process.

Managing Resistance
Traditional Situation Leading Change

Increasing Increasing Increasing Increasing
Neutral Neutral
resistance cooperation resistance cooperation

Critical mass

Early adopters
Anchor
draggers Strong pull
from early
"Uncommitted adopters
Mass"

You cannot ignore the anchor draggers!

Management Management
attention attention

"The focal point really shouldn't be on THINKING with SIX SIGMA but on getting
LEAN managing resistance,
people about the benefits of the change." -- Jeff Hiatt, president and CEO of Prosci
excited

How Do You Know When You are Lean?

40% reduction in assembly hours per unit
60% reduction in lead time You never get Lean,
92% reduction in line move time with SIX SIGMA
LEAN THINKING you only get Leaner

Some Lean Successes
Helicopter BCD Check: Reduced TAT from 28-
14 days
Surveying Services: Exponentially increased
flying hours for the photography aircraft. 10%
increase in one week
Wellhead Turnover: Days to turnover reduced
Material Supply: Staging time reduced, scanners
repaired, forklifts replaced.


Lean in Project Mgt and Construction
Studies involving international companies suggest a 25% improvement in construction
productivity would be the low-hanging fruit. The main findings of the study are:
1. Avoidable Interruptions: Over 60% of workdays contain avoidable interruptions with
a loss in man-hours of 10-40%.
2. Overtime : causes approximately 5% loss in productivity for every 5 hours of overtime
per week.
3. Over-manning: 10% productivity loss for every 25% unplanned increase in labor
force.
4. Days of Week: Productivity on Tuesdays, Wednesdays and Thursdays
(Thursday/Friday/Sat in the West) can be 15% lower than that of the remaining part of
the working week.
5. Productivity: can vary by up to 400% (from day to day) for same crew, and over 25%
amongst crews performing similar activities under the same circumstances. Major
causes of productivity variation are interruptions, quality of labor force, and motivation.

Dr. Rashad Zakieh (PMP)
Operations Services
Saudi Aramco, Saudi Arabia
Tel. 874-3800 (Work) LEAN THINKING with SIX SIGMA
International email: rashadzakieh@hotmail.com

BOEING 737 FINAL ASSEMBLY
BEFORE
LEAN IMPLEMENTATION


The Boeing 737 Moving Line


LEAN AGENDA
History
Definition
Goal
Process
Kaizen
Becoming Lean
Lean and Quality
Metrics
Why Lean Fails
Resistance
Six Sigma
Your Responsibility
How it ends

SIX SIGMA
It is a process capability measure
It is a commercial program
Packaged at Motorola in 1985
May lead to "Analysis Paralysis"


Lean Focus - The 8 Wastes
Lean focuses on identifying and eliminating the 8 hidden wastes common to both
manufacturing and service industries:
1. OVER-PROCESSING: Adding more value to a service or product than
customers want or will pay for.
2. MOTION: Needless movement of people (looking for things).
3. TRANSPORTATION: Unnecessary movement of materials.
4. EXCESS INVENTORY: any work-in-process or raw material that is in excess of
what is required to produce just-in-time for the customer.
5. WAITING: Any delay between when one process step/activity ends and the next
step/activity begins.
6. DEFECTS: Any aspect of the product or service that does not conform to
customer needs. (SIX SIGMA) Variation = defects
7. OVER-PRODUCTION: Production of service outputs or products beyond what is
needed for immediate use.
8. UNUSED EMPLOYEE CREATIVITY: Losing time, ideas, skills, improvements,
and learning opportunities by not engaging or listening to your employees.


Understanding Variation

Variation
means that a process or product does not
produce the same results every time it is
measured
is always present at some level
is inherent in every process or product
is our enemy in delivering services or
manufacturing products,
reduction helps to improve quality, reduce
costs, increase profits, and increase customer
satisfaction.

Lean Six Sigma Process Improvement

Lean Six Sigma uses the DMAIC process for
Project Management
Project Execution


Dissecting DMAIC

Define Measure Analyze Improve Control

the process: the process gains:
what is important
to the customer?: Analyze Data Ensure Solution is
Identify Root Causes Sustained
Project Selection
Team Formation
Establish Goal

the process performance measures:
how well we are doing?: Prioritize root causes
Collect Data Innovate pilot solutions
Construct Process Flow Validate the improvement
Validate Measurement System

Y = f(x)
Y= f(x) , refers to a problem or process output (Y) , that is
the result of one or more process inputs (Xs) . Eliminating
or improving the Xs reduces or eliminates the problem
(Y) . Controlling the Xs provides a process that is more
- Predictable
- Reliable
- Capable
- Repeatable, and
- Dependable
The results are a Y that can be forecast, and a proactive
rather than reactive work environment.


Waste & Process Variation - The True Costs
Scrap
Inspection Rework
Traditional Cost of
Warranty Field Modifications
Poor Quality (COPQ)
Rejects (measured) Penalties & damages

Hidden Cost of Lost sales
Poor Quality (COPQ) times
Long cycle Overtime
Margin slippages (measurable) Late delivery
More receivables
Travel & Living Expenses
Longer Set-ups Lost Opportunity
Excess inventory
Expediting costs
Lengthy Installs
(intangible)
Customer Productivity Loss
Sales compromises
Engineering Change Orders
Lost Customer Loyalty
Customer Dissatisfaction
Employee Morale, Productivity, Turnover


Understanding & Reducing Variation

# of
Goals

Lower Specification Upper Specification
Limit LEAN THINKING with SIX SIGMA Limit

What Does Sigma Level Mean?

Example
Lower Upper
Specification Specification
Limit
(customer)
Limit
(customer)
Customers have
Target a target in mind,
but will allow
some variation
within the Spec
Range


Example

Lower Upper
Limit
Target Limit Actual
Measurement has
Considerable
Variation
Defects Defects - Resulting in
Scrap, Waste,
Late Deliveries,
and Customer
Dissatisfaction

Lower Upper
Target Limit
Limit
How Capable is
our Process to
Produce within
Defects Defects
Spec?

Sigma Defects %
Level Per Mill. In Spec.
2 308,500 69.1

On Average it's OK -it's a Variation issue
On Average it's OK - it's a Variation issue
BEWARE OF AVERAGES


Lower Upper
Limit Limit Reducing
Variation is
Clearly the Key
to Improving
Process
Capability

Sigma Defects %
3 66,800 93.3


Causes of
Variation Include
Lower Upper
Specification Specification a Variety of
Limit Limit
Factors, such as:

1. Machines
2. People
3. Material
4. Environment
5. No Standard
Sigma Defects % Work.
4 6,200 99.4

Variation Causes
Errors, which
Lower Upper Cause Defects,
Limit Limit which Lead to
Rework, and to
Processes which
are not
Stable
Reliable,
Repeatable, and
Sigma Defects %
Predictable.
5 233 99.98

Reducing
Variation
Lower
Specification
Upper
Specification
Reduces Errors,
Limit Limit and the
Resulting
Defects and
Rework, and
therefore leads
to Improved
Process
Sigma Defects % Capability
6 3.4 99.9997

Variation = Unpredictable Processes

Work Order Process
Mean
Improved Process

Existing Process

1 50 100
Output Variation in weeks

Contracting process
Material Delivery process
Time to sink a well
Wife's shopping bill
Wife's shopping time
Customers Remember the Extremes (Variation), not the Average

ENTITLEMENT

Improved Process

Upper Mean
Specification
Entitlement Limit

Existing Process

1 50 100
Output Variation in weeks

LSS Helps Us Consistently Deliver the Best We Can Do.


sure
Lower
Mea y Upper

Limit
evel is a bilit
Limit

a L ss Capa
Sigm roce
of P
Sigma Defects %

2 308,500 69.1
3 66,800 93.3
4 6,200 99.4
5 233 99.98
6 3.4 99.9997

Practical Meaning of Six Sigma

3.8-Sigma
3.8-Sigma 6-Sigma
6-Sigma 3.4 defects per
million
99% Good
99% Good 99.99966% Good
99.99966% Good opportunities

20,000 lost articles of mail per hour Seven articles lost per hour

5,000 incorrect surgical operations per 1.7 incorrect operations per week
week

Two short or long landings at most One short or long landing every five
major airports each day years

200,000 wrong drug prescriptions each 68 wrong drug prescriptions per year
year


Six Sigma Project Management Checklist

Define
Define Measure
Measure Analyze
Analyze Improve
Improve Control
Control

Identify Sponsor and other Create Fishbone Analyze Process Flow Develop solution options Perform Capability
key stakeholders Tie to defined Critical Path Improve control of Analysis of improved
Form project team defect Value-added significant root causes process
Team leader Collect Data steps Re-design process to Develop and Implement
Team members Ys (results) with Non value- obtain required a Control Plan
Tour process Xs (data tags) added steps capability Complete Project
Clarify project Evaluate Measurement Opportunities Perform DOE as Closure Package
Problem statement Systems Analyze Data required Update financial
Goal statement Gage R&R, Graphical tools Evaluate options and select benefits statement as
Process output = Y Understand detailed Hypothesis final solution required
Define process process Tests Prioritization matrix Get OCD focal
boundaries Detailed process Interrelationship Determine measurement final evaluation
High level map map w/ rework Digraph (if system for improved process List best practices
(SIPOC) loops appropriate.) Create implementation plan Identify lessons
Define project boundaries Describe Process Regression Update FMEA learned
Resources Numerical analysis Update financial benefits
Authority statistics Identify and collect statement Use SPC Charts
Determine project timeline Graphs: Time, additional required data Contact Six Sigma Hand off project to
Identify CTQ Customer Hist., Pareto, etc. Identify significant Xs OCD for concurrence process owner
Requirements Create control Tie to root Obtain buy-in / support for Create follow up
Define the Defect chart cause analysis improvement actions action plan
Define defect Establish Process Draw Conduct pilot / testing to Develop Final report out
measure Capability conclusions verify results Standard
Develop estimate of DPMO or % Perform FMEA Implement improvements template
potential financial benefit if Defects Update charter as Collect data to verify
project goal is achieved Calculate Z required improvement
Gain Sponsor Approval of Update Charter Develop Analyze Communicate results
Project Charter as required report out Update Charter
Identify Pull and Push Develop Define/Measure Standard as required
Leveraging opportunities report out template Develop Improve report out
Standard template For Sponsor

Project Champion Master Black Belt

You Turn the Gears

# of Teams Chartered
Value Stream # of Events
Penetration
ultiple Passes Full-Time Resources
Discipline to the Process

Results
Critical Mass
Internal Experts
Self-sustaining Lean Culture
DEPLOYMENT METRICS

Leadership's Role
Senior Leadership
1. Create the Vision
- Where are we going and why are we going there?
2. Align the Organization
- Goals and Objectives
- One Plan - One Initiative
3. Participate in the Process
- Don't just "talk it" , WALK IT
4. Commit Resources
- Right quantity and caliber
5. Educate the Workforce
6. Communicate
- Vision, Results, Lessons Learned


Leadership's Role
The Manager's Role
1. Help pick the right value streams, projects and teams
2. Follow the method
Remove barriers to change
Have one plan
3. Clearly define roles and responsibilities
4. Support the Education & Training of your employees
5. Communicate
Engage the workforce in dialogue about Lean.
Walk the walk, talk the talk.
Host and participate in continuous process improvement activities.
Be a cheerleader.
Emphasize quality, 5S, identification and elimination of waste.
Demand follow-up and sustained improvement.


The Results
REMEMBER: It is CONTINUOUS Process Improvement

COST, QUALITY , DELIVERY , SAFETY , MORALE
Lean Increases Capacity
- Your process can produce the same amount with fewer people.
- Your process can produce more with the same number of people.
No more band aid solutions that become tomorrow's problems.
You come much closer to solving your process problems for the last
time
In a process with
- Continuous Flow
- Based on Takt Time
- in a Pull Environment


Lean or Six Sigma Goal:
Breakthrough Performance Focused on things that matter

Current State Process
Lean or Six Sigma
Breakthrough
Defect
s,
cost, l
time,
waste

Improvement Period

Future State Process

Time


Reading List
Lean Thinking
The Machine That Changed the World
Better Thinking, Better Results
Gemba Kaizen
High Velocity Culture Change
Learning to See
5 Pillars of the Visual Workplace
The Goal
Critical Chain
The Gold Mine THINKING with SIX SIGMA
LEAN

WEBSITES
- www.productivityinc.com
- www.productivitypress.com
- www.qualitypress.asq.org
- www.sme.org
- www.asq.org
- www.crcpress.com
- www.lean.org
- www.nwlean.net
- www.pmi.org
- www.qualitydigest.com
- www.isixsigma.com

Cutting costs, improving quality, & speeding delivery through continous improvement

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Cutting costs, improving quality, & speeding delivery through continous improvement

Similar to Cutting costs, improving quality, & speeding delivery through continous improvement (20)

Recently uploaded

Recently uploaded (20)

Cutting costs, improving quality, & speeding delivery through continous improvement