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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

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Page 1: Lean thinking

LEAN THINKINGwith

Six Sigma

Cutting Costs, Improving Quality, & Speeding Delivery

byContinuous Process Improvement

Prepared By: Kurt E. RobertsonOrganization Consulting DepartmentSaudi Aramco874-6204

Page 2: Lean thinking

LEAN THINKING with SIX SIGMA

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

Page 3: Lean thinking

LEAN THINKING with SIX SIGMA

PRESENTATION OBJECTIVE

To Provide a brief overview of Lean & Six Sigma.

Lean is a:• physical transformation to your processes

• transformation of your organization cultural

Lean is Team-based Lean takes a Systems Approach

Both Lean and Six Sigma are data driven

Automation shouldn’t be the first answer

Things you should know about Lean:Lean and Six Sigma can be successfully applied in both operations and service environments

Page 4: Lean thinking

LEAN THINKING with SIX SIGMA

LEAN IS ABOUT PEOPLEEMPOWERMENT

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 providesthe focus and direction that ensures that empowerment does not lead to chaos.

Center for Study of Work TeamsHarley Davidson Company

Page 5: Lean thinking

LEAN THINKING with SIX SIGMA

Lean compared to Six Sigma• Lean and 6! 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 theimprovement process something the other does not, and the fusion ofLean and 6! is rapidly gaining popularity.

DO LEAN FIRST before SIX SIGMA 99% of the time

Page 6: Lean thinking

LEAN THINKING with SIX SIGMA

Source: SIX SIGMA RESEARCH INSTITUTEMotorola University Motorola, Inc.

OVERALL YIELD vs SIGMA(Distribution Shifted ±1.5!)# of

Steps ±3! ±4! ±5! ±6!

17

1020406080100150200300400500600700800900

100012003000170003800070000

150000

93.32%61.6350.0825.086.291.580.400.10- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -

99.379%95.73393.9688.2977.9468.8160.7553.6439.3828.7715.438.284.442.381.280.690.370.200.06- - -- - -- - -

99.9767%99.83999.76899.53699.07498.61498.15697.7096.6195.4593.2691.1189.0286.9784.9783.0281.1179.2475.8850.15

1.910.01

99.99966%99.997699.996699.993299.986499.979699.972899.96699.94999.93299.89899.86499.83099.79699.76299.72999.69599.66199.59398.98594.38487.88078.82060.000

LEAN

6 Sigma

Less w

aste -

fewer

steps

- less v

ariation

Complementary Tools

Page 7: Lean thinking

LEAN THINKING with 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 reducing process variabilityvariability and defectsdefects using the five-step DMAIC model. 6! 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.

Combining Lean and Six Sigma

Page 8: Lean thinking

LEAN THINKING with SIX SIGMA

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 with your existing processes. It is a Process and Cultural Transformation

Page 9: Lean thinking

LEAN THINKING with SIX SIGMA

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

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

Middle FruitSix Sigma tools

Low-Hanging FruitLean tools

Ground FruitLogic and Intuition

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

Degreeof

Complexity

Harvesting the Fruit of Lean Six Sigma

Page 10: Lean thinking

LEAN THINKING with SIX SIGMA

Let’s Talk Lean First

And you should Do Lean First in most cases

Page 11: Lean thinking

LEAN THINKING with SIX SIGMA

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• Resources

Page 12: Lean thinking

LEAN THINKING with SIX SIGMA

Lean History

15th Century

The Republicof Venice

1905

“Today and Tomorrow”

byHenry Ford

1945-1973

The ToyotaProduction

System

W. Edwards Deming

1973

Oil Embargo

1974-2005

Books about :JIT

Cellular ManufacturingVisual Factory

Agile ManufacturingFlexible Manufacturing

Synchronous MfgPull Production

Rapid ContinuousImprovement

KaizenGroup Technology

MIT“The Machine That Changed the World”

“Lean Thinking”by

James Womack

1973-2005

BoeingDanaher

U.S. NavyU.S. Air Force

AirbusDell Computer

MaytagWhirlpool

McDonald’sMicrosoft

And most companies that have tried

Theory of Constraintsand Six Sigma

LEAN SIX SIGMA

Time

Page 13: Lean thinking

LEAN THINKING with SIX SIGMA

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

Page 14: Lean thinking

LEAN THINKING with SIX SIGMA

" 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, reliable, repeatable, predictable

process

LEAN

Page 15: Lean thinking

LEAN THINKING with SIX SIGMA

General Rules

1. Lean is about fixing the SYSTEM and transforming the CULTURECULTURE (CM).

2. Lean is about FLOW.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 Quality, Cost, Delivery, Safety, and Morale (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. (Measurement System).

9. Every project needs a Value Stream Champion.

Page 16: Lean thinking

LEAN THINKING with SIX SIGMA

The SystemThe System

Value Stream

OperationsPlanning Material Supply Sales and Marketing

Value Stream

Page 17: Lean thinking

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

WASTE

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

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LEAN THINKING with SIX SIGMA

If it prevents the FLOW of product or information….

Page 19: Lean thinking

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Lean Focus – The 8 WastesLean 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: NeedlessNeedless 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 = defects7. 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

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The 9th 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

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LEAN THINKING with SIX SIGMA

Understanding FLOWUnderstanding FLOW

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Business as UsualPRODUCTPRODUCT

BUILT & SHIPPEDBUILT & SHIPPEDCUSTOMERCUSTOMER

ORDERORDER

Lead-time

Waste

Lean ProcessPRODUCTPRODUCT

BUILT & SHIPPEDBUILT & SHIPPEDCUSTOMERCUSTOMER

ORDERORDER

Lead-time (Shorter)

Waste

Why Lean?Why Lean?

Page 23: Lean thinking

LEAN THINKING with SIX SIGMA

97% NVA 3%VA

Most Process Improvement

. . . Achieve this . . .

97% NVA

Teams Attack this . . .

. . . and Ignore this

Typical Value Stream Ratio of Value-Added to Non-Value-Added Activity

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

Where’s the Real

Opportunity?

Why Lean?Why Lean?

Page 24: Lean thinking

LEAN THINKING with SIX SIGMA

A $ea of RM & WIPA $ea of RM & WIP

Reduce the inventory and see the Reduce the inventory and see the wa$tewa$te!!

Excess InventoryOur corporate body guard against bad processes

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

Page 25: Lean thinking

LEAN THINKING with SIX SIGMA

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??

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Typical Causes of Waste

1. Layout (distance)2. Long set-up time3. Poor work methods4. Lack of training5. Functional organizations6. Technology Gaps7. Little understanding of the

entire process

8. Historic supervisory roles9. Irrelevant performance measures10. Lack of workplace organization11. Supplier quality/reliability12. Poor communication13. Avoidable interruptions14. Complexity15. More…

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Non-Value-Adding Activities(Operations)

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

1. SORTING2. COUNTING3. STACKING4. EXPEDITING5. TRANSFERRING6. CHECKING7. TRANSPORTING8. HUNTING, SEARCHING, GATHERING

Page 28: Lean thinking

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Non-value-adding (NVA)(office)

Examples1. CHECKING2. SIGNATURES3. ASKING4. APPROVING5. REVIEWING6. MONITORING7. REWORK8. TRANSPORTING9. DOUBLE HANDLING10.HUNTING, SEARCHING, GATHERING

Page 29: Lean thinking

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Improved product Quality, Cost, Delivery; Improved employee Safety and Morale (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• Standard Work – improve quality, maintenance; simplify processes

The Goal of Lean

Page 30: Lean thinking

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Lean Kaizen Sequence

-5S –Organize the workplace

FLOW: AIWs (Gemba Kaizen) Factory Layout Kaizen

Standard Work: Operator Methodsprocess simplification, quality and maintenance

Equipment Kaizen (TPM)3P, Autonomation

Leveled ProductionLine Balancing

Reduce: lot sizes, setup times, lead times, operator cycle times, inventory

Distribution System Kaizen

One-piece flowPull/Kanban

Takt time

AW

AR

EN

ESS

Processes can be transformedin days, weeks or months, but plan 1- 6 years for the corporatetransformation

Page 31: Lean thinking

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The Lean Toolbox1. Value Stream Maps 2. Rapid Improvement (Kaizen)

Events3. Education 4. Employee Involvement5. Metrics and Alignment6. Flow Cells7. Standard Work

– Capacity Analysis– Takt Time / Cycle Time

Standard Ops Worksheet– Production Control Board

8. 5S / Visual Controls9. Pull/Kanban Systems10. Brainstorming11. Prioritization12. Spaghetti Chart13. Poka-Yoke / Mistake Proofing14. Set-up Reduction15. Total Productive Maintenance16. Change Management

17. SIX SIGMA18. Chaku-Chaku / Load-Load19. Heijunka / Load Leveling20. Bottlenecks21. Point-of-Use Delivery22. DFMA23. Control Charting24. Pareto Analysis25. Histograms26. Root Cause Analysis27. 5 Why’s28. Hypothesis Testing29. Supply Chain Management30. Critical Chain Project

Management31. 7 Quality Control Tools32. 7 Management & Planning

Tools33. Nominal Group Technique34. Production Process

Preparation (3P)

Page 32: Lean thinking

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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**

Page 33: Lean thinking

LEAN THINKING with SIX SIGMA

AGENDA! History! Definition! Goal! Process• Value Stream Mapping• Kaizen• Becoming Lean• Lean and Quality• Metrics• Why Lean Fails• Resistance• Six Sigma• Your Responsibility• How it ends• Resources

Page 34: Lean thinking

LEAN THINKING with SIX SIGMA

Project Description:

Business Reason for the Project:

Potential Implementation Costs:

Dates:

Team Leaders and Members:

Expected ROI:

VSMRIEProjectJust Do It Difficulty

Impa

ct

Value Stream Champion:

Senior Management Sponsor:

Project Constraints (Financial, Personnel, Equipment):

Team Charter

Page 35: Lean thinking

LEAN THINKING with SIX SIGMA

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.

A Primary Focus is TIME,

Product and / or Service Flow

Information Flow: Quickly In All Directions

The VALUE STREAM

Sell Sell CustomersCustomersSuppliersSuppliers Make Make ProcureProcureDesignDesign

Page 36: Lean thinking

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Define the Boundaries

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

Value stream outputs customerssuppliers inputs

start stop

What keeps you awake at night?

Page 37: Lean thinking

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18400 pieces/month

-12000- L

- 6400- R

Tray = 20 pieces

2 shifts

CUSTOMER

Shipping

Staging

Stamping

1

C/O=1 hourC/T=1 sec

Uptime = 85%

27,600 *2 sec. avail.

S. Weld #1

1

C/T=39 sec

Uptime = 100%

27,600 *2 sec. avail.

C/O=10 m

S. Weld #2

1

C/T=46 sec

Uptime = 80%

27,600 *2 sec. avail.

C/O=10 m

Ass’y #1

1

C/T=62 sec

Uptime = 100%

27,600 *2 sec. avail.

C/O = 0

Ass’y #2

1

Uptime = 100%

27,600 *2 sec. avail.

C/T=40 secC/O = 0

Coils5 days

I I4600 L2400 R

I1100 L600R

I1600 L850R

I1200 L640R

I2700 L1440R

500 ft coils

SUPPLIER

Tues. &

Thurs.

Daily Ship Schedule

Production Control

MRP

6 week forecast

WeeklyFax

Weekly Schedule

Daily Order

90/60/30 day forecasts

(VAT) = 188 sec.

.0014% VA

1 sec 40 sec62 sec46 sec39 sec Process TimePLT = 23.6 days5 days 7.6d 1.8d 2.7d 2d 4.5d

Value $tream Map – Finding the WA$TE

Page 38: Lean thinking

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Current StateValue Stream Map

Improve Harrier Maintenance Flight Operating Performance

Identify, remove and repair failed, broken, or obsolete parts for Harrier Weapon Platform, functional test, and reapply finish

ON DEMAND

DEFECT FREE

1 BY 1Cost of other Platforms Floor Space LOWEST COST

On Time Delivery

Core Manpower Requirements

Current State - March '02AREA: Harrier Maintenance Flight (500 Hour Minor)

BUSINESS CASE: VALUE STATEMENT: KEY REQUIREMENTS: MEASUREMENTS: IDEAL STATE:

Operational RiskQuality and Flight Safety

Productivity (hours per unit)Throughput Time

Future State Implementation Pan

Page 39: Lean thinking

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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

• Distance traveled: 1.2 km

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Spaghetti ChartsCommunication and Motion

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

Plan DatesACTION Who

Start Finish

PROJECT SUMMARY:

Action DepartmentIn charge

of this item

BEGINCCOMPL

ETE

Comments 40

1 ASD / MZU

7/3/2007

7/10/2007

AAD to AJD:Follow-up this action item and report completion 100

2

AJD / ASD / MZU

7/3/2007

8/10/2007

AAD to AJD: Make sure this is done MAS: You can decide where the location of the hotline be.

5

3 ASD / MZU

7/3/2007

8/10/2007 100

Comments %Status

Page 42: Lean thinking

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LEAN AGENDA

! History! Definition! Goal! Process! Value Stream Mapping• Kaizen• Becoming Lean• Lean and Quality• Metrics• Why Lean Fails• Resistance• Six Sigma• Your Responsibility• How it ends• Resources

Page 43: Lean thinking

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Kaizen = continuous improvement

•• RAPIDRAPID IMPROVEMENT• At the end of the week, a new process should be in place.• Anything else is not rapid improvement. It’s a “STUDY”.

Page 44: Lean thinking

LEAN THINKING with SIX SIGMA

Project Description:

Business Reason for the Project:

Potential Implementation Costs:

Dates:

Team Leaders and Members:

Expected ROI:

VSMRIEProjectJust Do It Difficulty

Impa

ct

Value Stream Champion:

Senior Management Sponsor:

Project Constraints (Financial, Personnel, Equipment):

Team Charter

Page 45: Lean thinking

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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

Page 46: Lean thinking

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Rapid Improvement Events

By: Date: Prep. % COT:

Team:

3rd Week Before Event: 2nd Week Before Event: 1st Week Before Event:

PREPARATION

(% COT: ) (% COT: ) (% COT: )

1) Select the Value Stream from the EnterpriseTransformation Plan.2) Select the target area from Value StreamAnalysis.3) Determine the focus - which Lean toolswill be applied?4) Identify the Team Leader, Co-Leader, and Team Members.5) Assure at least 1/3rd of participants arefrom the affected area.6) Clear participants calendars for the Improvement Event Week.7) Complete the Team Roster.

1) Identify the suppliers and inputs2) Identify the customers and outputs3) Identify the start / stop boundaries4) Gather facts and data to populate startingnumbers on Target Progress Report5) Populate the Target Progress Report6) Identify top three improvement metrics7) Establish improvement targets on top threemetrics, be aggressive8) Meet with affected stakeholders to communicate Improvement Event schedule, metrics, targets, and tools to be applied9) Set a flip chart up in affected area, ask stakeholders to put ideas for improvementon flip chart. Start Improvement Newspaper.10) Capture flow stopper information from Production Control Boards11) Confirm the availability of any specialresources for:- equipment or furniture moves- computer / phone moves- 5S, shadowing, kitting- Production Control Boards12) Obtain any special data collection instructions from your Coach such as:- Information from previous Improvement Events- Customer critical to quality issues- Safety data13) Confirm all participants are still availablefor entire Event week

1) Communicate key metrics, targets, and tools to be applied to all team participants2) Train team participants on improvementprocess and tools to be applied3) Identify what "triggers" work4) Double check availability of all resources:- equipment or furniture moves- computer or phone moves- 5S, shadowing, kitting- Production Control Boards5) Communicate with affected area, review items listed on flip chart and ask for clarification, make sure these are added to Improvement Newspaper6) Make sure team break-out area is ready:- flip charts, markers, post-its, VSA blanks- forms, stop watches7) Make sure Process Champion is setto give opening remarks on Mondaymorning8) Make sure Process Champion is availablefor Team Leader Meetings Monday - Wednesday9) Schedule Final Presentation with ProcessChampion and appropriate leadership10) Plan working lunches11)Confirm all team participants are going to be available full time for entire event12) Confirm Target Progress Report and Team Roster are complete

RIE Preparation Checklist

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RIE Daily ChecklistRapid Improvement Events

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 itemsto 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 requirefollow up reports on progress at a minimum follow up reports on progress at a minimum follow up reports on progress at a minimum follow up reports on progress at a minimumof two hour increments. of two hour increments. of two hour increments. of two hour increments.

TEAM DAILY CHECKLIST

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LEAN AGENDA

! History! Definition! Goal! Process! Value Stream Mapping! Kaizen• Becoming Lean• Lean and Quality• Metrics• Why Lean Fails• Resistance• Six Sigma• Your Responsibility• How it ends• Resources

Page 49: Lean 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

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5S Workplace Organization1. 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.

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Visual ControlsA 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

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The 5S’s

1. SortNeeded from the unneeded

2. ShineClean, scrub, and fix

3. Set in orderA place for everything

4. StandardizeA plan to sustain

5. SustainFollowing through

Low Level of 5S

High Level of 5S

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Standard Work Board

6S Layout and Assignments

Standard Work Bar Chart

TAKT time & Delivery Performance Measure

Andon Flag

Cell Key Measures

Corrective Action Matrix and Plan

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Shadow Hand Tools

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Signal Lights

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LabelingShadowing

Color SchemesStripingProduction

Control Boards

Foot-printing

Visual Management

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Visual Controls

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Other Visual & Audio Controls

1. Clock2. Traffic lights with a timer3. Traffic Lines/ lights/signs4. Sounds announcing break time5. Call to Prayer6. Score boards at sporting events7. Arrival/Departure boards in airports8. Lights indicating machine or process condition9. Lights and siren on emergency vehicles10. Gauges on medical & industrial equipment11. Big teeth on a snarling lion12. Take-a-Number systems13. Colored caps on milk bottles

Visual and Audio controls answer questions before they are asked.

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Point-of-Use Strategy: 7 Elements of Surgery

7 ElementsOf Surgery

Information

Instruments

Supplies

Fasteners

Hand Tools

Fixtures

Power Tools

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Supermarket Pull System

•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.

Supermarket

Supplying Process

Customer Process

product product

KanbanKanban

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Pull/Kanban SystemsPull/Kanban Systems

PullPull

• On Demand– Upstream Supplier– Downstream User– Visual Trigger

• Sequenced– Use FIFO lanes

• Replenished– Create supermarkets

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Traditional vs Cellular Flow

Traditional flow Cellular flowDept 1

Dept 2

Dept 4

OUT

DONE

OUT

OUT

OUT

IN

IN

IN

IN

DONE

IN

•Demand paced production

•Value-adding steps in order

•No stops, piles, or back-ups

•Flexible

•Less transportation

•Less work-in-process

4 3

1 2Dept 3

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U – Shaped Cell

RM

FG

Andon

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Other Important Lean Tools

1. Setup Reduction2. Standard Operations3. 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 reduction7. Mistake proofing (Poke Yoke) (Example:

mobile SIM card)8. 5 Whys9. Self-Inspection and Acceptance (SI&A)

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Lean Implementation Sequence

-5S –Organize the workplace

FLOW: AIWs (Gemba Kaizen) Factory Layout Kaizen

Standard Work: Operator Methodsprocess simplification, quality and maintenance

Equipment Kaizen (TPM)3P, Autonomation

Leveled ProductionLine Balancing

Reduce: lot sizes, setup times, lead times, operator cycle times, inventory

Distribution System Kaizen

One-piece flowPull/Kanban

Takt time

AW

AR

EN

ESS

PEOPLE

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LEAN AGENDA

! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean• Lean and Quality• Metrics• Why Lean Fails• Resistance• Six Sigma• Your Responsibility• How it ends• Resources

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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 high defect rates because we TOLERATETOLERATE high defect rates

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AGENDA! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean! Lean and Quality• Metrics• Why Lean Fails• Resistance• Six Sigma• Your Responsibility• How it ends• Resources

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Implementation MetricsLeading Indicators

1. Cycle Time2. Inventory (amount, turn rate, IRA)3. Productivity4. Square Feet (foot print)5. Set-up Time6. Product Lead Time 7. People Travel8. Product Travel9. Volume 10. Crew Size11. Safety/Ergonomics

Lean is data driven

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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.

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AGENDA! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean! Lean and Quality! Metrics• Why Lean Fails• Resistance• Six Sigma• Your Responsibility• How it ends• Resources

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Reasons Lean Fails1. 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 Map8. No implementation or sustaining plan (PM)9. No customer and supplier involvement in the

improvement process.

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AGENDA! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean! Lean and Quality! Metrics! Why Lean Fails• Resistance• Six Sigma• Your Responsibility• How it ends• Resources

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ManagementManagementattentionattention

Critical mass

ManagementManagementattentionattention

LeadingLeading ChangeChange

Increasing Increasing resistanceresistance

IncreasingIncreasingcooperationcooperationNeutralIncreasingIncreasing

resistanceresistanceIncreasingIncreasingcooperationcooperation

Neutral

Early adopters

Traditional SituationTraditional Situation

Anchor Anchor draggersdraggers

"UncommittedMass"

Strong pull from early adopters

You cannot ignore the anchor draggers!

Managing Resistance

“The focal point really shouldn’t be on managing resistance, but on getting people excited about the benefits of the change.” -- Jeff Hiatt, president and CEO of Prosci

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• 40% reduction in assembly hours per unit• 60% reduction in lead time• 92% reduction in line move time

How Do You Know When You are Lean?

You never get Lean,

you only get Leaner

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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.

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Lean in Project Mgt and ConstructionStudies 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 ServicesSaudi Aramco, Saudi ArabiaTel. 874-3800 (Work)International email: [email protected]

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BOEING 737 FINAL ASSEMBLYBEFORE

LEAN IMPLEMENTATION

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The Boeing 737 Moving Line

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LEAN AGENDA! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean! Lean and Quality! Metrics! Why Lean Fails! Resistance• Six Sigma• Your Responsibility• How it ends• Resources

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•It is a process capability measure

•It is a commercial program

•Packaged at Motorola in 1985

•May lead to “Analysis Paralysis”

SIX SIGMA

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Lean Focus – The 8 WastesLean 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 = defects7. 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.

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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.

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

Lean Six Sigma Process ImprovementLean Six Sigma Process Improvement

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Dissecting DMAIC

MeasureDefine ImproveAnalyze Control

what is important to the customer?:Project SelectionTeam FormationEstablish Goal

how well we are doing?:Collect Data

Construct Process FlowValidate Measurement System

the process:Analyze Data

Identify Root Causes

the process gains:Ensure Solution is

Sustained

the process performance measures:Prioritize root causes

Innovate pilot solutionsValidate the improvement

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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.

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Waste & Process Variation - The True Costs

Lost Opportunity

ScrapReworkInspection

Warranty

Rejects

Lost sales

Late delivery

Engineering Change Orders

Long cycle times

Expediting costsExcess inventory

Traditional Cost of Poor Quality (COPQ)

Hidden Cost of Poor Quality (COPQ)

(measurable)

(measured)

Lost Customer Loyalty

Longer Set-ups

Customer Dissatisfaction

Field Modifications

Customer Productivity LossLengthy Installs

Employee Morale, Productivity, Turnover

Travel & Living Expenses

Overtime

Penalties & damages

More receivables

Margin slippages

(intangible)

Sales compromises

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Understanding & Reducing VariationUnderstanding & Reducing Variation

Lower Specification Limit

Upper Specification Limit

# of

Goa

ls

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Customers have Customers have a target in mind, a target in mind, but will allow but will allow some variation some variation within the Spec within the Spec RangeRange

UpperSpecification

Limit(customer)

Lower Specification

Limit(customer)

Target

What Does Sigma Level Mean?

Example

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Actual Actual Measurement hasMeasurement has

Considerable Considerable VariationVariation

-- Resulting in Resulting in Scrap, Waste,Scrap, Waste,

Late Deliveries, Late Deliveries, and Customer and Customer Dissatisfaction Dissatisfaction

UpperSpecification

Limit

Lower Specification

Limit

Defects Defects

Target

What Does Sigma Level Mean?Example

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On Average it’s OK - it’s a Variation issueOn Average it’s OK - it’s a Variation issue

How Capable is How Capable is our Process to our Process to Produce within Produce within

Spec?Spec?

22!!

UpperSpecification

Limit

Lower Specification

Limit

Defects Defects

Target

Sigma Defects %Level Per Mill. In Spec.

What Does Sigma Level Mean?

BEWARE OF AVERAGES

2 308,500 69.1

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Reducing Reducing Variation is Variation is

Clearly the Key Clearly the Key to Improvingto Improving

Process Process Capability Capability

UpperSpecification

Limit

Lower Specification

Limit

33!!Sigma Defects %Level Per Mill. In Spec.

3 66,800 93.3

What Does Sigma Level Mean?

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Causes of Causes of Variation Include Variation Include a Variety of a Variety of Factors, such as:Factors, such as:

1.1. Machines Machines 2.2. People People 3.3. MaterialMaterial4.4. EnvironmentEnvironment5.5. No Standard No Standard

Work. Work.

UpperSpecification

Limit

Lower Specification

Limit

44!!Sigma Defects %Level Per Mill. In Spec.

4 6,200 99.4

What Does Sigma Level Mean?

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Variation Causes Variation Causes Errors, which Errors, which

Cause Defects, Cause Defects, which Lead to which Lead to Rework, and to Rework, and to

Processes which Processes which are notare not

••StableStable••Reliable, Reliable, ••Repeatable, and Repeatable, and ••Predictable. Predictable.

UpperSpecification

Limit

Lower Specification

Limit

55!!Sigma Defects %Level Per Mill. In Spec.

5 233 99.98

What Does Sigma Level Mean?

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Reducing Reducing Variation Variation

Reduces Errors, Reduces Errors, and the and the

Resulting Resulting Defects and Defects and Rework, and Rework, and

therefore leads therefore leads to Improvedto Improved

Process Process Capability Capability

UpperSpecification

Limit

Lower Specification

Limit

66!!Sigma Defects %Level Per Mill. In Spec.

6 3.4 99.9997

What Does Sigma Level Mean?

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Variation = Unpredictable Processes

Output Variation in weeks

Existing Process

MeanWork Order Process

501 100

Customers Remember the Extremes (Variation), not the Average

Improved Process

• Contracting process• Material Delivery process• Time to sink a well • Wife’s shopping bill• Wife’s shopping time

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ENTITLEMENT

Output Variation in weeks

Existing Process

Mean

501 100

Improved Process

Entitlement

UpperSpecificationLimit

LSS Helps Us Consistently Deliver the Best We Can Do.

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UpperSpecification

Limit

Lower Specification

Limit

Sigma Defects %Level Per Mill. In Spec.

2 308,500 69.13 66,800 93.34 6,200 99.45 233 99.986 3.4 99.9997

66!!Sigma Level is a Measure

Sigma Level is a Measure

of Process Capability

of Process Capability

What Does Sigma Level Mean?

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6-Sigma99.99966% Good

6-Sigma99.99966% Good

• 20,000 lost articles of mail per hour

• 5,000 incorrect surgical operations per week

• Two short or long landings at most major airports each day

• 200,000 wrong drug prescriptions each year

• Seven articles lost per hour

• 1.7 incorrect operations per week

• One short or long landing every five years

• 68 wrong drug prescriptions per year

3.8-Sigma99% Good3.8-Sigma99% Good

#

$

3.4 defects per million

opportunities

Practical Meaning of Six Sigma

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"Develop solution options•Improve control of significant root causes•Re-design process to obtain required capability•Perform DOE as required

"Evaluate options and select final solution

•Prioritization matrix"Determine measurement system for improved process"Create implementation plan"Update FMEA"Update financial benefits statement

•Contact Six Sigma OCD for concurrence

"Obtain buy-in / support for improvement actions"Conduct pilot / testing to verify results"Implement improvements"Collect data to verify improvement"Communicate results"Update Charter

•as required"Develop Improve report out

•For Sponsor

"Analyze Process Flow•Critical Path•Value-added steps•Non value-added steps•Opportunities

"Analyze Data•Graphical tools•Hypothesis Tests•Interrelationship Digraph (if appropriate.)•Regression analysis

"Identify and collect additional required data"Identify significant Xs

•Tie to root cause analysis•Draw conclusions

"Perform FMEA"Update charter as required"Develop Analyze report out

•Standard template

"Create Fishbone•Tie to defined defect

"Collect Data•Ys (results) with Xs (data tags)

"Evaluate Measurement Systems

•Gage R&R, "Understand detailed process

•Detailed process map w/ rework loops

"Describe Process•Numerical statistics•Graphs: Time, Hist., Pareto, etc.•Create control chart

"Establish Process Capability

•DPMO or % Defects•Calculate Z

"Update Charter•as required

"Develop Define/Measure report out

•Standard template

AnalyzeAnalyze ImproveImprove ControlControlMeasureMeasure

"Identify Sponsor and other key stakeholders"Form project team

•Team leader•Team members

"Tour process"Clarify project

•Problem statement•Goal statement•Process output = Y

"Define process boundaries

•High level map (SIPOC)

"Define project boundaries•Resources•Authority

"Determine project timeline"Identify CTQ Customer Requirements

•Define the Defect•Define defect measure

"Develop estimate of potential financial benefit if project goal is achieved"Gain Sponsor Approval of Project Charter"Identify Pull and Push Leveraging opportunities

DefineDefine

"Perform Capability Analysis of improved process"Develop and Implement a Control Plan"Complete Project Closure Package"Update financial benefits statement as required

•Get OCD focal final evaluation

"List best practices•Identify lessons learned

"Use SPC Charts"Hand off project to process owner

•Create follow up action plan

"Develop Final report out•Standard template

Project Champion Master Black Belt

Six Sigma Project Management Checklist

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LEAN AGENDA

! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean! Lean and Quality! Metrics! Why Lean Fails! Resistance! Six Sigma! Your Responsibility• How it ends• Resources

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You Turn the Gears

# of Teams Chartered# of Events

Full-Time ResourcesDiscipline to the Process

Value StreamPenetration

Multiple Passes

ResultsCritical MassInternal ExpertsSelf-sustaining Lean Culture

DEPLOYMENT METRICS

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Leadership’s RoleSenior Leadership1. 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 Workforce6. Communicate

– Vision, Results, Lessons Learned

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The Manager’s Role1. Help pick the right value streams, projects and teams2. Follow the method

• Remove barriers to change• Have one plan

3. Clearly define roles and responsibilities4. Support the Education & Training of your employees5. 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.

Leadership’s Role

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LEAN AGENDA

! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean! Lean and Quality! Metrics! Why Lean Fails! Resistance! Six Sigma! Your Responsibility• How it ends• Resources

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The Results

• 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

REMEMBER: It is CONTINUOUS Process Improvement

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Time

Def

ects

, cos

t, l t

ime,

was

te

Lean or Six SigmaBreakthrough

Future State Process

Improvement Period

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

Current State Process

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LEAN AGENDA

! History! Definition! Goal! Process! Value Stream Mapping! Kaizen! Becoming Lean! Lean and Quality! Metrics! Why Lean Fails! Resistance! Six Sigma! Your Responsibility! How it ends• Resources

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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

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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

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LEAN AGENDA

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

Page 115: Lean thinking

SHUKRAN JAZEELAN