Download - Six Sigma Vs Kaizen
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6σ &Kaizen
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KAIZEN-The Concept
Kaizen….means improvement Ongoing improvement Involves everyone
Both Managers & Workers
Kaizen Philosophy Our way of life need to be constantly improved
Working life, social life, home life
Kaizen embodies Productivity Improvement Total Quality Culture QC Circles Zero Defects …..etc.
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KAIZEN-The Concept
Masaki Imai
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KAIZEN-The Concept
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KAIZEN
INNOVATION
KAIZEN-The Concept
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Process Oriented Approach Leads to Improved Results
Focus on the process improvement without loosing sight of the expected results.
People Oriented Approach Focus on ….
Discipline Time Management Skill Development Participation and Involvement Morale Communication
KAIZEN-The Concept
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KAIZEN-The Practice
Management Group Individual
Tools Seven QC Tools
New Seven Tools
Professional Skills
Seven QC Tools
New Seven Tools
Common Sense
Seven QC Tools
Involves Managers and Professionals
QC Circles Everyone
Target Systems and Process Group Work area Individual work area
Implementation Cost
Small investment Mostly inexpensive Inexpensive
Results New System and Facility improvement
Improved work procedures
On the spot improvement
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Just In Time- Management Oriented Kaizen Exact number of required units brought to each successive stage
of production at the appropriate time The advantage of JIT
Shortened Lead Time Reduced time spent on non-process work Reduced inventory Better balance between processes Problem clarification
KAIZEN-The Practice
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Group Oriented Kaizen- SMALL GROUP ACTIVTIES Informal, voluntary small groups, organized within the company
Carry out specific improvement activities Many forms:-
QC circles, Suggestion Groups, Workers group……… QC Circles…the most famous
Emphasis on problem solving in the work area Advantages of QCC
Sense of teamwork Improved communication Improved morale Acquire new skills Labor-Management relationship improved
KAIZEN-The Practice
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Individual Oriented Kaizen- SUGGESTION SYSTEM Individual provides suggestion on how to improve his work area. Helps the individual to be Kaizen conscious. Also helps in….
Workers to speak out. Opportunity for management to help workers. An valuable opportunity for two way communication
Suggestions normally covers:- Savings in energy, material and other resources Improvement in working environment Improvements in machines, processes, jigs and tools Improvements in customer services
KAIZEN-The Practice
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KAIZEN- Implementation
Seven Conditions for Successful Implementation of Kaizen Strategy Top management commitment Top management commitment Top management commitment Setting up an organization dedicated to promote Kaizen Appointing the best available personnel to manage the Kaizen
process Conducting training and education Establishing a step-by-step process for Kaizen introduction.
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Figure 2.2 Ideal pattern from innovation
Time
Figure 2.3 Actual pattern from innovation
Time
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INNOVATION plus KAIZEN
KAIZEN
KAIZEN
INNOVATION
INNOVATION
New Standard
New Standard
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KAIZEN and INNOVATION
KAIZEN INNOVATION1. Effect Long-term and business as
usualShort term and dramtic
2. Pace Small Steps Big Steps
3. Time frame Continuous and Incremental Intermittent and non-incremental
4. Change Gradual and constant Abrupt and volatile
5. Involvement Every-one Selected champions
6. Approach Collective group efforts, systems approach
Individual ideas and efforts
7. Mode Maintenance and Improvement Scrap and Rebuild
8. Effort Orientation People Technology
9. Practical Requirements Little investment but great efforts to maintain
Large investment but little effort to maintain
10. Advantage Works well in slow growth economy
Better suited in fast growth economy
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Another comparison of Innovation and KAIZEN
Innovation KAIZEN
Creativity
Individualism
Specialist-oriented
Attention to great leaps
Technology-oriented
Information: closed, proprietary
Functional (specialist) orientation
Seek new technology
Line + staff
Limited feedback
Adaptability
Teamwork (systems approach)
Generalist-oriented
Attention to details
people-oriented
Information: open, shared
Cross-functional orientation
Build on existing technology
Cross-functional organization
Comprehensive feedback
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Six Sigma Was Developed at Motorola in the 1980’s As a Method to Improve Process Quality.
It Was First Used to Improve Manufacturing Process Capability and Then Migrated to Business Processes Capability
Companies That Have Deployed Six Sigma: Bank of America, Motorola, GE, IBM, Kodak and Many More
The Basic Premise Is, All Processes Have Variation. Variation Is the Enemy.
About Six Sigma
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Six Sigma Philosophy
Know What’s Importantto the Customer (CTQ)
Reduce Defects (DPMO)
Center Around Target (Mean)
Reduce Variation (Standard Deviation)
?
GE Company Proprietary
November 1998
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• Business Definition A break through strategy to significantly improve customer
satisfaction and shareholder value by reducing variability in every aspect of business.
• Technical Definition A statistical term signifying 3.4 defects per million opportunities.
SIX SIGMA-Definitions
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SIX SIGMA DEFINATIONS
If your yield is… Your DPMO is…. Your Sigma is…
30.9% 690 000 1σ
69.2% 308 000 2σ
93.3% 66 800 3σ
99.4% 6 210 4σ
99.98% 320 5σ
99.9997% 3.4 6σ
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SIX SIGMA-Definitions
In brief, Six Sigma is a process control method to improve the quality of products or services in a continuous manner.
This method uses six standard deviations of a normal distribution as the limits of customers’ acceptance of the system’s products.
This method is applicable to manufacturing as well as service industries.
With six sigmas, only 3.4 defects per million are allowed, or an acceptable level of 99.9997% is required
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Six Sigma Performance
With 99 % Quality With Six Sigma
Quality
For every 300000 letters delivered
3,000 misdeliveries 1 misdelivery
For every week of TV broadcasting per channel
1.68 hours of dead air 1.8 seconds of dead air
Out of every 500,000 computer restarts
4100 crashes Less than 2 crashes
Source: The Six Sigma Way by Peter Pande and Others
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Who is Implementing Six Sigma
At least 25% of the fortune 200 claim to have a serious six sigma program - Michael Hammer.
Financial - Bank of America, GE Capital, Electronics - Allied Signal, Samsung, Sony
Chemicals - Dupont, Dow Chemicals
Manufacturing - GE Plastics, Johnson and Johnson, Motorola, Nokia, Microsoft, Ford.
Airline - Singapore, Lufthansa, Bombardier
And hundreds of others in Americas, Europe, Sub Continent.
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Six Sigma Results
Company Annual Savings
General Electric $2.0+ billion
JP Morgan Chase *$1.5 billion (*since inception in 1998)
Motorola $ 16 billion (*since inception in 1980s)
Johnson & Johnson $500 million
Honeywell $600 million
Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %
For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35 million.
Investment: salary of in house experts, training, process redesign.
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Key Concepts of Six Sigma
At its core, Six Sigma revolves around a few key concepts. Critical to Quality: Attributes most important to the customer Defect: Failing to deliver what the customer wants Process Capability: What your process can deliver Variation: What the customer sees and feels Stable Operations: Ensuring consistent, predictable processes to
improve what the customer sees and feels Design for Six Sigma: Designing to meet customer needs and
process capability
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Dissecting Process Capability
Defects
Process Capability
Inadequate Design Margin
Inadequate Process
Capability
Unstable Parts & Materials
Defects Acceptable
Premise of 6 Sources of variation can be: Identified Quantified Eliminated or Controlled
LSL USL
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Define
Control
Improve Analyze
Measure
Define the problem and customerrequirements.
Measure defect rates and documentthe process in its current incarnation.
Analyze process data and determinethe capability of the process.
Improve the process and removedefect causes.
Control process performance andensure that defects do not recur.
“Common sense” doesn’t mean “commonly done” or when done, done well.
Six Sigma Methodology
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ControlControlDefineDefine MeasureMeasure AnalyzeAnalyze ImproveImprove
Establish standards to maintain process;
Design the controls, implement and monitor.
Evaluate financial impact of the project
Identify, evaluate and select projects for improvement
Set goalsForm
teams.
Collect data on size of the selected problem,
identify key customer requirements,
Determine key product and process characteristic.
Analyze data, establish and confirm the “ vital few “ determinants of the performance.
Validate hypothesis
Improvement strategy
Develop ideas to remove root causes
Design and carry out experiments,
Optimize the process.
Final solutions
Project Phases
Six Sigma Methodology
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Six Sigma – Case Study Service Organisation
Background
M/s Alpha Inc. manages out bound cargo from a distribution centre to different stores.
Deliveries made on trucks - owned and hired. Customers dissatisfied at delivery schedules. Leadership decision to deploy Six Sigma; Team of 1 Black Belt and 3 Green Belts formed Sponsor of the project – Distribution Manager
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Define - Critical to Quality (CTQ)
Focus on customers generating annual revenue of USD 400,000/-.
Customer needs Improved delivery performance
Level 1 CTQ Timely delivery
Level 2 CTQ On time delivery to schedule
Level 3 CTQ Delivery within +/- 1 hour of scheduled delivery time
Current process sigma level - 2.43 or 175889 DPMO
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Define - Goal Statement
Reduce number of delayed deliveries by 50 % by 31st December Y 2002 to better meet customer requirement of timely delivery defined as within +/- 1 hour of scheduled delivery.
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Define - Performance Standards
Output unit A scheduled delivery of freight
Output characteristic Timely delivery
Project Y measure Process starts when an order is received
Ends when goods are received & signed for at customers desk.
Process measurement – Deviation from scheduled delivery time in minutes.
Specification limits LSL = -60 minutes
USL= +60 minutes
Target Scheduled time or zero minutes deviation
Defect Delivery earlier or later than 1 hour.
No. of defect opportunities per unit
1 opportunity for a defect per scheduled delivery of freight.
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Define - SIPOC Diagram
Supplier Stores Manager
Input Stores Order
Process Steps (high level)
Receive order
Plan delivery
Dispatch Driver with goods
Deliver goods to stores
Receive delivery
Output Received freight with Documents
Customer Store Manager
• Detailed process maps drawn
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Measure and Analyze
Driver and Distance identified as key factors influencing delivery performance.
Driver selected for focus. Potential root causes as to why Driver influenced the
time: Size of the vehicle Type of engine Type of tyres Fuel capacity
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Experiments designed and conducted using truck type and tyre size.
Findings: Larger tyres took longer time at certain routes where area
was cramped and time lost in maneuvering. High incidence of tyre failures since tight turns led to stress
on tyres thus increasing number of flat tyres. Team modified planning of dispatch process by routing
smaller trucks at more restrictive areas.
Improve
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Test implementation. Process sigma level up from 2.43 or 175889 DPMO to 3.94
or 7353 DPMO. Performance still fell short of best in class 4.32 or 2400
DPMO. Improvement led to significant customer satisfaction. Process continually monitored and data on new cycle times,
tyre failure collected as per defined methods and frequency, analysed and monitored.
Customer satisfaction measured and monitored.
Control
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Key Lessons Learnt Define
Difficulty in identifying the right project and defining the scope;
Difficulty in applying statistical parameters to Voice of the Customers;
Trouble with setting the right goals; Measure
Inefficient data gathering; Lack of measures; Lack of speed in execution;
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Key Lessons Learnt Analyse
Challenge of identifying best practices Overuse of statistical tools/ under use of practical knowledge Challenge of developing hypotheses
Improve Challenge of developing ideas to remove root causes Difficulty of implementing solutions
Control Lack of follow up by Managers/ Process Owners Lack of continuous Voice of the Customer feedback Failure to institutionalize continuous improvement.
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Key Lessons Learnt
“ Define “ ranked most important step but gets the lowest resource allocation
Project scoping and its definition is critical to its success/ failure; “Measure” is considered most difficult step and also gets the highest
resources
Source: Greenwich Associates Study Y 2002
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Versatile Breakthrough improvements Financial results focus Process focus Structured & disciplined problem solving methodology using
scientific tools and techniques Customer centered Involvement of leadership is mandatory.
Training is mandatory;
Action learning (25% class room, 75 % application)
Creating a dedicated organisation for problem solving (85/50 Rule).
What Makes Six Sigma Different?
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Benefits of Six Sigma
Generates sustained success Sets performance goal for everyone Enhances value for customers; Accelerates rate of improvement; Promotes learning across boundaries; Executes strategic change
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Six Sigma & Kaizen- The Difference
KAIZEN SIX SIGMA
Quality Improvement YES YES
Continuous Improvement YES YES
Approach Improve Existing System
Human Based
Improve Existing System
Statistical Method
Improvement Framework-DMAIC
Implementation Simpler and Low cost Difficult and High Cost
RELIES UPON GROUP DYNAMICS
FIXED PLAN OF IMPLEMENTATION
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Kaizen Six Sigma Japanese Origin Western Origin Culture Methodology (or Culture) Kaizen Umbrella Road Maps Continuous Improvement Immediate Perfection Mistakes as Possibility for Improvement Reducing Variation and
Defects Long-term Results Short-term
Results Possible Every Possible Improvement Prioritising
Projects Providing Quality Ensuring Profitability Participation of Every Single Employee Creation of Project
Teams
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