Process Improvement Process Improvement MethodologiesMethodologies

References (sources of graphics):References (sources of graphics):(1)(1) Fiore, Clifford, Fiore, Clifford, Accelerated Product Development: Combining Lean and Six Accelerated Product Development: Combining Lean and Six

Sigma for Peak PerformanceSigma for Peak Performance, Productivity Press, NY, NY, 2005., Productivity Press, NY, NY, 2005.(2)(2) Hamilton, Bruce, “Toast Kaizen, An Introduction to Continuous Improvement Hamilton, Bruce, “Toast Kaizen, An Introduction to Continuous Improvement

& Lean Principles,” Greater Boston Manufacturing Partnership, University of & Lean Principles,” Greater Boston Manufacturing Partnership, University of Massachusetts, Boston, MA, 2005 (DVD).Massachusetts, Boston, MA, 2005 (DVD).

(3)(3) Insights On Implementation-Improved Flow: Collected Practices and CasesInsights On Implementation-Improved Flow: Collected Practices and Cases, , Ralph Bernstein, Editor, Productivity Press, 2006.Ralph Bernstein, Editor, Productivity Press, 2006.

(4)(4) Jacobs, Robert F. and Chase, Richard B., Jacobs, Robert F. and Chase, Richard B., Operations and Supply Operations and Supply Management: The CoreManagement: The Core, McGraw-Hill/Irwin, NY, NY, 2008., McGraw-Hill/Irwin, NY, NY, 2008.

(5)(5) Nahmias, Steven, Nahmias, Steven, Production & Operations AnalysisProduction & Operations Analysis, 5, 5thth Edition, McGraw- Edition, McGraw-Hill/Irwin, NY, NY, 2005.Hill/Irwin, NY, NY, 2005.

(6)(6) Nave, Dave, “How to Compare Six Sigma, Lean, and the Theory of Nave, Dave, “How to Compare Six Sigma, Lean, and the Theory of Constraints,” Quality Progress, March 2002, pgs 73 – 78.Constraints,” Quality Progress, March 2002, pgs 73 – 78.

Comparison of Three Commonly Comparison of Three Commonly Adopted Improvement Adopted Improvement MethodologiesMethodologies

See reference, See reference, How To Compare Six Sigma, Lean and How To Compare Six Sigma, Lean and the Theory of Constraintsthe Theory of Constraints

Comparing the main points of the three improvement Comparing the main points of the three improvement methodologies: Six Sigma, Lean Thinking, and Theory methodologies: Six Sigma, Lean Thinking, and Theory of Constraintsof Constraints

Six Sigma ApproachSix Sigma Approach

Define, measure, analyze, improve, control (DMAIC) cycleDefine, measure, analyze, improve, control (DMAIC) cycle

Six Sigma ToolsSix Sigma Tools

Tools common to other quality programs are used in Six Tools common to other quality programs are used in Six SigmaSigma

Failure mode and effects analysis (FMEA)Failure mode and effects analysis (FMEA)– Structured approach to identify, estimate, prioritize, and Structured approach to identify, estimate, prioritize, and

evaluate risk of possible failure at each stage of a processevaluate risk of possible failure at each stage of a process– Risk priority number (RPN) is calculated and is based onRisk priority number (RPN) is calculated and is based on

Extent of damage resulting from failure (severity)Extent of damage resulting from failure (severity) Probability failure takes place (occurrence)Probability failure takes place (occurrence) Probability of detecting the failure (detection)Probability of detecting the failure (detection)

– High RPN items are designated for improvement firstHigh RPN items are designated for improvement first– ExampleExample

Design of experiments (DOE)Design of experiments (DOE)– Statistical approach used for determining the cause-and-Statistical approach used for determining the cause-and-

effect relationship between process variables and an output effect relationship between process variables and an output variablevariable

– Approach allows for experimentation with many variables Approach allows for experimentation with many variables simultaneously simultaneously

Six Sigma QualitySix Sigma Quality

To achieve a Six Sigma quality (according to the To achieve a Six Sigma quality (according to the assumptions used by Motorola and GE) a process must assumptions used by Motorola and GE) a process must produce no more than 3.4 defects per million opportunitiesproduce no more than 3.4 defects per million opportunities

Assuming a process follows a normal distribution and given Assuming a process follows a normal distribution and given design limits of design limits of ± 6 ± 6 σσ there would be 2 defective parts per there would be 2 defective parts per billion (0.000000002 fraction defective)billion (0.000000002 fraction defective)

Motorola’s and GE’s value of 3.4 defects per million is due to Motorola’s and GE’s value of 3.4 defects per million is due to the fact that a shift of 1.5 the fact that a shift of 1.5 σσ in the process mean is assumed in the process mean is assumed

An example process An example process

– spec = 1.250 ± 0.005,spec = 1.250 ± 0.005, μ μ = 1.250, = 1.250, σσ = 0.002, UCL & LCL = 3 = 0.002, UCL & LCL = 3 σσ ( (μμ and and σσ estimated from sample parameters) estimated from sample parameters)

– Six Sigma process: Six Sigma process: μμ = 1.250 in, = 1.250 in, σσ = 0.000833 in (0.005 in/6) = 0.000833 in (0.005 in/6)– Six Sigma process with a 1.5 Six Sigma process with a 1.5 σσ shift to the mean: shift to the mean: μμ = 1.25125 = 1.25125

in, in, σσ = 0.000833 in = 0.000833 in

Microsoft Office Excel 97-2003 Worksheet

Process Capability IndexProcess Capability Index

Process capability index (CProcess capability index (Cpkpk))

For (Motorola’s and GE’s) Six Sigma processFor (Motorola’s and GE’s) Six Sigma process

parameterssamplefromestimated

USLor

LSLC pk

,

33min

5.15.15.2min3

5.4

3

5.7min

ororC pk

Example ProblemExample Problem

Microsoft Office Excel 97-2003 Worksheet

Origins of LeanOrigins of Lean

Lean concepts evolved from the JIT philosophy Lean concepts evolved from the JIT philosophy pioneered in Japan by Toyota and embodied in their pioneered in Japan by Toyota and embodied in their Toyota Production SystemToyota Production System

The emphasis of JIT is the elimination of waste The emphasis of JIT is the elimination of waste throughout the supply chainthroughout the supply chain

In the 1990's companies adopted the term lean in In the 1990's companies adopted the term lean in place of JITplace of JIT

The Basis of Lean ThinkingThe Basis of Lean Thinking

Lean means producingLean means producing– What is neededWhat is needed– When it is neededWhen it is needed– With the minimum amount of materials, equipment, With the minimum amount of materials, equipment,

labor, and spacelabor, and space Producing what is required, when it is required, but Producing what is required, when it is required, but

with minimal investmentwith minimal investment The goal of an enterprise adopting leanThe goal of an enterprise adopting lean

– Make each process as efficient and effective as possibleMake each process as efficient and effective as possible– Connecting those processes in a stream or continuous Connecting those processes in a stream or continuous

chain that is focused on flow and maximizing customer chain that is focused on flow and maximizing customer valuevalue

FlowFlow

Flow is defined as continuous movement of products Flow is defined as continuous movement of products and information through a value streamand information through a value stream

The goal of a lean enterprise is to minimize idle time The goal of a lean enterprise is to minimize idle time in the value stream (idle time equates to inefficiency in the value stream (idle time equates to inefficiency and waste)and waste)

Winona Sandwich Company exampleWinona Sandwich Company example– Daily specialDaily special– Custom orderCustom order– Example parametersExample parameters– Other factors could potentially influence process timeOther factors could potentially influence process time

Resource levelsResource levels Material availabilityMaterial availability WIP inventory levelsWIP inventory levels

Winona Sandwich Company Daily Winona Sandwich Company Daily SpecialSpecial

How long before first sandwich ready?How long before first sandwich ready? Majority of time is idle time - no work is being Majority of time is idle time - no work is being

performed on a sandwichperformed on a sandwich Batch processBatch process

– Push systemPush system Completes a predetermined quantity of work from an Completes a predetermined quantity of work from an

established work queue or forecastestablished work queue or forecast Typically, the work queue or forecast is offset to the actual Typically, the work queue or forecast is offset to the actual

customer demand to allow time for production and deliverycustomer demand to allow time for production and delivery

– High inventoryHigh inventory– High degree of riskHigh degree of risk– Yet a great convenience for customers in a hurryYet a great convenience for customers in a hurry

No flowNo flow

Single-piece Flow ProcessSingle-piece Flow Process

Winona Sandwich Company Custom orderWinona Sandwich Company Custom order Single-piece flow processSingle-piece flow process

– Process of creating a sandwich is triggered only when a Process of creating a sandwich is triggered only when a customer order initiates the processcustomer order initiates the process

– Pull SystemPull System Completes a quantity of work that is directly linked to Completes a quantity of work that is directly linked to

customer demandcustomer demand Materials are staged at the point of consumptionMaterials are staged at the point of consumption As materials are consumed, signals (kanban) are sent to As materials are consumed, signals (kanban) are sent to

previous steps in the process to pull forward sufficient previous steps in the process to pull forward sufficient materials to replenish only those that have been consumedmaterials to replenish only those that have been consumed

Total flowTotal flow Ultimately selection of the model to be implemented Ultimately selection of the model to be implemented

should be dictated by marketplace demands with the should be dictated by marketplace demands with the goal of maximizing customer valuegoal of maximizing customer value

Customer ValueCustomer Value

Customer value refers to specific activities that add Customer value refers to specific activities that add value to the products and services customers buyvalue to the products and services customers buy

Determination of what is value-added is made from Determination of what is value-added is made from the customer’s perspectivethe customer’s perspective

Under lean philosophy for an activity to be value-Under lean philosophy for an activity to be value-added it must meet the following three criteria:added it must meet the following three criteria:(1) The customer must be willing to pay for the activity(1) The customer must be willing to pay for the activity(2) The part or the object must change (movement?, (2) The part or the object must change (movement?,

inspection?)inspection?)(3) It must be done right the first time(3) It must be done right the first time

Non-value-added activity → wasteNon-value-added activity → waste Football game illustrationFootball game illustration Viewing a process in the context of what is truly value-Viewing a process in the context of what is truly value-

added, a different perspective will emerge for the added, a different perspective will emerge for the opportunities for improvementopportunities for improvement

WasteWaste

A key tenet under the philosophy of lean and continuous A key tenet under the philosophy of lean and continuous improvement is to minimize non-value-added tasks and improvement is to minimize non-value-added tasks and eliminate the sources of wasteeliminate the sources of waste

Seven sources of waste, DOTWIMP (Seven sources of waste, DOTWIMP (ref:ref: Fiore, CliffordFiore, Clifford))

Types of WasteTypes of Waste Factory Waste ExampleFactory Waste Example

DefectsDefects - Part failing functional test- Part failing functional test

- Part feature violating drawing dimensions- Part feature violating drawing dimensions

Over-productionOver-production - Machining parts with no usage - Machining parts with no usage requirementrequirement

TransportationTransportation - Moving parts from one machine to - Moving parts from one machine to anotheranother

WaitingWaiting - Partially machined parts on the shop floor - Partially machined parts on the shop floor queued for the next operationqueued for the next operation

InventoryInventory - Completed parts that have not been - Completed parts that have not been purchasedpurchased

MotionMotion - Extra process steps- Extra process steps

ProcessingProcessing - Part inspection- Part inspection

Required Waste vs Pure WasteRequired Waste vs Pure Waste

Waste can be further classified as required waste and Waste can be further classified as required waste and pure wastepure waste

Required waste represents activities that do not meet Required waste represents activities that do not meet the three criteria for a value-added task but are still the three criteria for a value-added task but are still necessary to support the creation of a productnecessary to support the creation of a product

Activities may be mandated by the customer and/or Activities may be mandated by the customer and/or government regulation (i.e. inspections/tests)government regulation (i.e. inspections/tests)

The most obvious examples of pure waste (greatest The most obvious examples of pure waste (greatest opportunity for improvement) are associated with the opportunity for improvement) are associated with the idle time and wait time within a processidle time and wait time within a process

Pure waste activities represent the top priority for Pure waste activities represent the top priority for eliminationelimination

VideoVideo

Single Minute Exchange of Die Single Minute Exchange of Die (SMED)(SMED)

Tool/die changeovers disrupt production – production is Tool/die changeovers disrupt production – production is stopped while tools/dies are changedstopped while tools/dies are changed

Idea behind SMED (originated at Toyota around 1970 by Idea behind SMED (originated at Toyota around 1970 by Shigeo Shingo) is that a significant portion of the die-Shigeo Shingo) is that a significant portion of the die-changing operation can be done off-line while the previous die changing operation can be done off-line while the previous die is still in place and the line continues to operateis still in place and the line continues to operate

Die-changing operation is divided into two components: inside Die-changing operation is divided into two components: inside exchange of die (IED) and outside exchange of die (OID)exchange of die (IED) and outside exchange of die (OID)

OID portion is performed while the line is operating in OID portion is performed while the line is operating in advance of the actual exchange – the goal is to structure die advance of the actual exchange – the goal is to structure die change so that there are as many steps as possible in the OID change so that there are as many steps as possible in the OID portionportion

Tool/die changeovers typically reduced from hours to minutesTool/die changeovers typically reduced from hours to minutes Additional rules for reducing set-up times (Kodak)Additional rules for reducing set-up times (Kodak)

– Eliminate, simplify, automate steps – only in that orderEliminate, simplify, automate steps – only in that order– One way, the right way, the same way – every timeOne way, the right way, the same way – every time– Build the required level of precision in the system – not the setup Build the required level of precision in the system – not the setup

(convert adjustments into settings)(convert adjustments into settings)

Five S (5S) MethodologyFive S (5S) Methodology

5S transforms and maintains a work environment that 5S transforms and maintains a work environment that supports lean implementationsupports lean implementation

Additional Benefits of 5S Additional Benefits of 5S MethodologyMethodology

5S provides the foundation for creating discipline in 5S provides the foundation for creating discipline in the workplacethe workplace

It helps cultivate relationships in the company and It helps cultivate relationships in the company and raises employee moraleraises employee morale

Work areas that are neat and clean will gain credibility Work areas that are neat and clean will gain credibility with customers, suppliers, and visitors to the companywith customers, suppliers, and visitors to the company

Value StreamValue Stream

The value stream represents the linkage of all value-The value stream represents the linkage of all value-added and non-value-added activities associated with added and non-value-added activities associated with the creation of a product or service desired by a the creation of a product or service desired by a customercustomer– In manufacturing: raw materials In manufacturing: raw materials → → finished productfinished product– In product development: design concerns In product development: design concerns → → technical technical

data package (drawings)data package (drawings) The goal in reviewing/studying the value stream is to The goal in reviewing/studying the value stream is to

maximize customer valuemaximize customer value

Value Stream MapValue Stream Map

Benefits of Developing a Value Benefits of Developing a Value Stream MapStream Map

Allows more than just the visualization of the activities in the Allows more than just the visualization of the activities in the processprocess

Helps identify the sources of waste and impediments to flowHelps identify the sources of waste and impediments to flow Helps identify the information flows as well as the product Helps identify the information flows as well as the product

and material flows in a processand material flows in a process Helps reduce “cherry picking” of improvement projectsHelps reduce “cherry picking” of improvement projects

Five Lean PrinciplesFive Lean Principles

(1) Specify value in the eyes of the customer(1) Specify value in the eyes of the customer (2) Identify the value stream and eliminate the waste(2) Identify the value stream and eliminate the waste (3) Make value flow at the pull of the customer(3) Make value flow at the pull of the customer (4) Involve and empower employees (there is no (4) Involve and empower employees (there is no

better source of insight than the employees who are better source of insight than the employees who are performing the work)performing the work)

(5) Continuously improve (kaizen) in pursuit of (5) Continuously improve (kaizen) in pursuit of perfectionperfection