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Transforming Business with Lean Six Sigma
1. Transforming your business operations with the Lean Six Sigma toolkitEntrepreneurial Roundtable University of Chicago Booth School of Business John A. “Jack” Kahler December 21, 2009
2. How do I serve my customers? What value does my work create? All of us are in operations.
3. Kano diagrams plot customer expectations against satisfaction Weston Chicago found that guests were lonely away from home. Introduced successful evening social program. Starwood changed its complimentary massage because guests wanted massage to last longer. Paid massage revenues hit an all-time high, 30% over the previous year Page 3 High Satisfaction Delighted Customers Expectations Met Expectations Not Met Middle of the Road Basic Expectations Low Satisfaction
4. Do you hear the Voice of the Customer? Where to listen: Point-of-use observation User comment sites Interviews & surveys Customer complaints Sales reporting Lost sales or customers What to listen for: Likes & Dislikes Apologies & Forgiveness Wish List What to do with the info: Identify unmet needs Identify Critical-To-Quality requirements Convert VOC to measurable attributes Page 4
5. Value links to both Customer Service and Business Metrics Page 5 How do I serve my customers? What value does my work create?
6. Would you pay for these experiences? Waiting at the doctors office The drive-through kid forgetting your French fries The clerk searching for your file Making 3 copies of your mortgage application Repeating your account number to a customer service rep Calling your Primary Care Physician for a specialist referral Page 6 If you’re a customer of these industries, you already do!
7. The benefits of improvement Increase customer satisfaction Increase available resources Increase cash flow Decrease inventory Decreased lead times Improve the bottom line Page 7
10. The first challenge is seeing waste Page 10 Performing more steps than needed Un-utilized capabilities Under-utilizing people & ideas Not doing It right the first time Walking, Bending, Turning Making more than you can sell People, Products, Information Information, parts, “your turn” Storing parts or material Inventory Over-Processing Capacity Skills Defects Motion Over-Production Transportation Waiting
47. Spaghetti Diagrams diagram movement in a workcell As-Is Process Operator travels 3,215 feet Cycle time 98 minutes Improvements Improved workcell layout Point-of-Use toolboard Improved machine controls Improved inspection equipment and lighting Visual Production Board & instructions, signal for supplies and part removal KANBAN for perishable tools To-Be Process Operator travels 375 feet Cycle time 14.9 minutes Page 13 Stamping Press Steel Decoiler Eject Toolboard Grinder Tool and Die Bench Tool Kanban Grinder Scrap Inspection Table
48. Cellular Operations Arrange workstations and equipment to create a smooth flow with minimal transportation Benefits Flexibility Speed Teamwork Real-time coordination Small batches High-quality of work Page 14
54. SMED/Rapid Changeover Eliminate total wasted time or useless operations Convert Internal into External operations Simplify fittings and time consuming fasteners Work in teams Reduce or eliminate adjustments and test runs. Page 17
55. One Piece Flow matches effort to demand and reveals problems Page 18 14 Days 1 Day
56. Use “Kanban” signals to match production with customer demand Pull system –the actual use of a resource or input dictates when to restock or replenished Kanban –a visual card or sign which is used as signaling system to trigger action Page 19
57. Just In Time JIT -produce only what is required, in the correct quantity and at the correct time Benefits Improve return on investment Reduce inventory (raw material, components, WIP, finished goods) Reduce carrying cost Increase efficiency Page 20
58. Visual Management Visual management allows you to quickly grasp the current situation in real time What to work on next Queue size Current pace Current quality Page 21
59. Why the best golfer changes his swing Be first to “raise the bar” Observe and learn about your business Solve the problems that emerge What’s left were deeper problems Page 22
66. Free and cheap resources Free Six Sigma Material offers good basic instruction and free templates www.six-sigma-material.com www.isixsigma.com has articles, case studies and products geared to the lean six sigma practitioner Several excellent blogs offer instruction, tips, case studies and tools for the Lean Six Sigma community. Here are a few of our favorites: www.gembapantarei.com Improve with Me (passthebuck.wordpress.com) www.productivitycafe.com www.leanblog.org www.evolvingexcellence.com www.worthsolutions.com/leanblog/ Cheap Open Source Six Sigma has a broad array of resources for training and implementation. www.opensourcesixsigma.com Getting Things DONE, The Art of Stress-Free Productivity, by David Allen. There’s also an Outlook Add-In at https://gtdsupport.netcentrics.com The Lean Six Sigma Pocket Toolbookby George, Rowlands et al 2005 McGraw-Hill The Goal, by EliyahuGoldratt & Jeff Cox 1984 North River Press Lean Thinking by James Womack & Daniel Jones 2003 Free Press The Six Sigma Handbook by Thomas Pyzdek 2003 McGraw-Hill Page 29
